France, EU to pursue total energy independence from Russia: French finance minister

By Shweta Desai

PARIS (AA) - France’s finance minister said Wednesday that his country and the EU will pursue ‘total energy independence’ from Russia in the coming decade.

“The war on Ukraine is a geopolitical shock that is causing an energy shock and we are feeling this in everyday lives with the high cost of fuel and gas. The energy shock of 2022 can be compared in its intensity, brutality to the oil shock of 1973,” Bruno Le Marie said at the opening ceremony of an EU ministerial conference on strengthening European energy independence and devising ways for a successful ecological transition.

The ongoing energy crisis in the face of international sanctions against Russia that is testing Europe’s dependence on Russian oil and gas is reminiscent of the 1970s era, said Le Maire.

An oil embargo by Arab oil-producing countries in October 1973 in retaliation for support for Israel during the Yom Kippur War, forced the US and the western European countries to reassess their fuel dependence on the Middle East.

He said France and the EU should pursue similar goals to achieve energy independence in the next 10 years.

But Le Maire confessed that sudden independence will not be possible. “We need to move step by step to reach this strategic goal by protecting businesses, accompanying measures for households, and adaptation of the energy consumption model.”

- Avoiding stagflation

Among the short-term proposals are diversifying supplies and sources of gas for Europe and protecting low and middle-income households from skyrocketing fuel prices with aid support.

Le Maire also stressed the need for the EU to have a new infrastructure, citing Germany’s development of LNG terminals.

The cost of 1 liter of oil (1 quart) in France is approximately €1.93 ($2.13) and experts predict prices to cross €2.20 ($2.44) in the coming days. The cost of fuel for daily commutes is hitting the general public hard, especially those living in rural areas who depend on their private vehicles.

But Le Maire said he is opposed to a blanket relief measure for all French people in the form of a public aid plan, similar to the one during the coronavirus crisis.

It will not be a right response to the energy crisis as it will cause even more inflation, he said.

“It will be pouring oil into the fire. It will aggravate inflationist shock,” he said.

He indicated it will be crucial to avoid mistakes made by the West in 1973 that caused inflationary shock and led central banks to hike interest rates, killing economic growth.

“That gave us stagflation. That's precisely what we don't want to experience again in 2022,” he said.

It will be pertinent for Europe to follow a timeline to achieve energy autonomy, he said.

France will host a summit Friday of EU heads of state in Versailles to further discuss a timeline to achieve energy autonomy.