EU emergency powers to force companies to prioritise production and stockpiles

European wind farm - Image Bear Fotos / Shutterstock.com

The EU is to use emergency powers to deal with the energy crisis in Europe that has arisen as a result of the war in Ukraine.

The announcement on Monday, September 19 indicated that the European Commission is to give emergency powers to members of the bloc to deal with the energy crises. Those powers will allow governments to intervene where necessary it is deemed necessary in the production of strategic and key products, as well as to force companies to stockpile such items.

The proposed Single Market Emergency Instrument has been proposed to deal with the bottlenecks and supply chain problems that have arisen as a result of the pandemic and more recently Russia’s invasion of Ukraine.

These measures are similar to those that have been adopted in the US and in Japan, where both governments have taken steps to protect their supply of key components.

The draft rules, which are likely to be criticised by business organisations and some member countries, allow for the EU and its members to reorganise supply chains and increase supplies of crisis-relevant goods as quickly as possible.

This could see the EU prioritising the manufacture of items it considers critical, as it could the expansion or repurposing of production facilities. The moves are reminiscent of those taken during World War II, although the Commission has been at pains to point out that the time and the needs are different.  

What is unclear is whether the EU will be able to push through the proposal given that it may breach many other regulations and could expose company secrets. Doing so would according to some, see the EU taking a more interventionist approach as is the case in countries like China.

The Commission and many experts disagree, however, saying that the pandemic and the war in Ukraine have highlighted the need for the bloc to become more self-sufficient in protecting its economy and its people.

This could see more EU money being directed into projects that are beneficial for the bloc such as renewable energy and semiconductor manufacture, with some economists believing that the global marketplace has left Europe and the West behind in these areas.

Included in the proposal are fines and sanctions for those companies and organisations that do not comply with the EU’s use of emergency powers.


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Written by

Peter McLaren-Kennedy

Originally from South Africa, Peter is based on the Costa Blanca and is a web reporter for the Euro Weekly News covering international and Spanish national news. Got a news story you want to share? Then get in touch at [email protected]

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