Central European States Provide Financial Assistance for Gas
Gas prices continue to rise in Europe, creating a geopolitical rift between Eastern and Western Europe (Flickr).
Several Eastern European governments have announced their plans to subsidize heating costs for their citizens in order to address the ongoing energy crises. Both Moldova and Bulgaria announced on November 3 that they will be providing financial assistance to those who cannot afford their gas bills this month, after Russian natural gas provider Gazprom’s prices have made heating too expensive for many residents.
According to Balkan Insight, the Moldovan government plans to compensate families for high gas prices after coming to an agreement with Gazprom. The agreement, which was finalized less than two weeks ago according to Reuters, locks in gas prices at $450 per 1,000 cubic meters. Balkan Insight noted that this price stands as an improvement upon the price in October, which was $790, but it is still far from $300, which was the price last quarter.
“The government wants to allocate about 400 million lei ($22 million) to an aid mechanism for low-income families, and would also like to compensate everyone through the gas bill,” said an energy expert at IDIS Viitorul to Balkan Insight.
Bulgaria is adopting a similar measure. According to the Sofia Globe, the cabinet approved a measure to allocate 450 million Bulgarian lei ($266 million) to cover the cost of electricity for around 630,000 consumers in mid-October. A week later, Sofia News noted that the government allocated an additional 15 million Bulgarian lei ($8 million) to cover more than 50,000 low-income families’ energy bills.
Other Eastern European states are struggling to grapple with incoming high energy prices caused by a shortage of natural gas flowing from Russia. Radio Free Europe/Radio Liberty (RFE/RL) noted that North Macedonia, for example, announced temporary funding for energy companies and introduced caps on electricity use for businesses.
Concern over Eastern European families’ ability to heat their homes this winter remains at an all-time high. During the pandemic, gas supply from Russia fell about 50 percent due to low demand, according to RFE/RL. Although demand has picked up, supply remains low, driving up prices throughout Europe. Many blame the critically low gas supply from Russia on geopolitical maneuvering from Russia. RFE/RL also noted that analysts claim that Putin has used high prices to urge Germany and the rest of the EU to speed up its approval of the Nord Stream 2 pipeline.
Reactions of European countries to Russian manipulation have been mixed. According to CNN, while Western countries have been using the crisis as a rationale for delving further into green energy, lower-income Eastern European states including Moldova and Hungary have been forced to sign additional contracts with Gazprom to avoid massive heating problems this winter.
Amid the crisis, RFE/RL stated that Moldova signed a five-year contract with Gazprom on October 30, while Hungary signed a 15-year contract with the company a month earlier. Hungarian Foreign Minister Peter Szijjarto defended the country’s decision, which was highly criticized by anti-Russian EU members.
"You cannot heat homes with political statements," said Szijjarto in a news statement reported by RFE/RL.