EU ministers mull windfall tax on excessive profits of power companies during Hormuz crisis

Half a dozen states have requested a discussion of an EU-wide windfall tax on power companies that have made excessive profits during the energy crisis, Tánaiste Simon Harris has said. Harris said these states had a genuine view on the issue and said he was very eager to facilitate a debate on the matter with Eurogroup finance ministers, as part of his remit during Ireland’s presidency of the EU Council. At the Eurogroup meeting in Dublin Castle, Harris said there was a “dawning reality” of a small number of companies making extraordinarily large profits as a result of the energy crisis caused by the war in the Middle East. “[The profits] are not on the basis of enterprise or innovation, but are based simply on the fact that the Strait of Hormuz is closed,” he said.READ MORE“At the same time, households and businesses are really, really under pressure, and there’s the inflationary impact of that as well.”He said it was yet to be determined if there was a consensus across EU countries on the issue. “My job as president of Ecofin is to act as an honest broker, facilitate discussion, and so we’ll have that initial discussion today,” he added.Speaking a little later, European Central Bank president Christine Lagarde said energy prices were a “significant variable” in the bank’s projections.“It is obviously having an impact on not only consumers and investors, but also the determination that we have to bring inflation to the 2 per cent target,” she said.“Having said that, we think that we are well positioned in order to respond to more data, more information, more numbers to have a good assessment of changes. But when I say that uncertainty defines our horizon, it fully justifies that we address the situation meeting-by-meeting, with good analysis, good data, good numbers, so we can [respond] adequately.”What is driving the abuse and intimidation of politicians here?The Eurogroup president, Greek finance minister Kyriakos Pierrakakis, said the single currency economy had proved stronger than was expected at the beginning of this year. “Growth in the second quarter was better than projected, and on current evidence, this momentum should continue,” he said. “Europe has shown this resilience. The task is now to turn this resilience to strength, because at the same time, the challenges are multiplying.”He referred to the war in the Middle East’s impact on fossil fuel prices and said the EU needed to accelerate its path towards greater energy independence. EU commissioner on energy Valdis Dombrovskis said several member states had already put forward initiatives for windfall taxes. He said that, from the consumer perspective, the commission was ready to support member states in this regard.