Common Energy Policy (not!)

The Wall Street Journal Europe today carries a long article about the forthcoming meeting in Jeddah about the rocketing oil prices. Unfortunately, most of it is for subscribers only, so I shall have to copy out the relevant passages.

The problem with European countries, sigh the authors, is that they all want different solutions but each solution would require 27 votes to put into effect, which leads to an impasse. What they do not add because they have, to some extent, swallowed the theory that only a united Europe can show strength in the world, is that in this, as in many other matters, the EU has usurped the power of its member states without putting anything else into place.

The summits in Brussels and Jeddah are unlikely to provide any sweeping, short-term solutions for Europe, because EU countries disagree sharply about the root causes of the run-up in fuel prices. Almost every country is trying to attack the problem in different ways.

Austria has proposed a European Union-wide tax on what it calls oil speculators. French President Nicolas Sarkozy has proposed cutting the slaes tax on fuel across the EU. These measures would require unanimous agreement from all 27 countries. UK officials say Mr Brown, for one, is unlikely to agree. He is pressing for more dialogue with producer nations and more focurs on energy efficiency to cut consumption, a UK official said on Tuesday.

Italy's government,f aced with a threatened transport strike later this month, on Wednesday approved a slate of measures to lower fuel prices. These include custs in road and fuel taxes, as well as rise in the corporate tax rate for oil companies that do business in Italy to 33% from 27%. The government says this and a tax on companies such as Eni SpA will be transferred to low-income households.

Mr Brown is under pressure over fuel prices at home, after truckers caused chaos in central London earlier this month and a fuel-deliver strike led to shortages in some parts of the country. so far, Mr Brown has spurned calls for tax cuts and has stressed the need to find global solutions to rising fuel prices - hence the trip to Jeddah, where he is expected to try to persuade Saudi Arabia to pump yet more oil.

Absolutely nothing in this world would make Mr Brown, erstwhile catastrophic Chancellor of the Exchequer, now catastrophic Prime Minister, to consider tax cuts. Hell will undoubtedly freeze over first.

However, one can't help thinking that the Italian solution of raising taxes on oil companies who are operating in Italy in order to redistribute the loot (not forgetting, one must assume, the many denizens of the Italian state in the process) may take the biscotti in stupidity. What will happen if the companies decide they do not really want to pay and start looking round for alternatives?

In the meantime, here is an article by Edward Lucas, author of "The New Cold War" on Europe's growing reliance on Russian energy supplies, that are not growing in accordance with demand.