London Daily

Focus on the big picture.
Saturday, Jun 13, 2026

Soaring energy costs trigger radical market shake-up in Brussels

Soaring energy costs trigger radical market shake-up in Brussels

Von der Leyen wants to rip up electricity markets and raise cash from power firms to help consumers.

Energy companies will be hit with a cap on profits to raise €140 billion to help struggling consumers with rocketing bills, under plans for a sweeping overhaul of EU power markets that are “no longer fit for purpose,” Ursula von der Leyen said on Wednesday.

In an annual State of the Union speech dominated by the war in Ukraine — the European Commission president even wore an outfit to match the country’s blue and yellow flag — von der Leyen promised “comprehensive reform” of the bloc’s electricity market, and a new task force to examine how to cap the price of gas.

Those are calls the EU leader has made before, but there’s a growing sense that keeping energy prices down is key to the EU’s long-term ability to continue supporting Ukraine in its existential fight with Russia.

Von der Leyen also suggested rewriting the European Union’s founding treaties to shake up the way the bloc’s leaders make decisions, an idea bound to cause arguments, especially in countries like Poland, where the effort will be seen as a Brussels bid to impose rules on the nationalist government.

Von der Leyen’s blueprint is designed to help the EU weather the storm of rocketing inflation, runaway power prices and a war on its borders that she said is putting the future of democracy at risk.

“We will be tested — tested by those who want to exploit any kind of division between us,” von der Leyen told members of the European Parliament in Strasbourg. The bloc is facing not just a security threat from Russia’s invasion of Ukraine, but a broader war, she said.

“It is a war on our energy. It is a war on our economy. It’s a war on our values. It’s a war on our future,” she said. “It is about autocracy against democracy and I stand here with the conviction that with the necessary courage and with the necessary solidarity Putin will fail and Ukraine and Europe will prevail.”

The wide-ranging annual address is a chance for the Commission president to set out her legislative and political priorities for the year ahead. This time, there was one big preoccupation: how to respond to the crisis triggered by Russia’s invasion of Ukraine.

First, von der Leyen offered deeper economic support for Ukraine itself. While she stopped short of major new pledges on funding supplies of weapons or hitting Russia with more sanctions, she said she would work to open up the EU’s single market to give Ukraine “seamless access.”

“Today, I am going to Kyiv to discuss all this with President Zelenskyy,” she said, as the Ukrainian leader’s wife Olena Zelenska listened as a guest of honor in the Parliament chamber.

The most urgent part of von der Leyen’s address focused on the energy crisis now gripping the EU. The electricity market is “not fit for purpose anymore,” she said.

Von der Leyen said the bloc must decouple gas prices from the cost of electricity — currently, the EU’s pricing structure ties all power costs to the price of gas, a move meant to encourage more sustainable energy use.

Ukraine’s first lady Olena Zelenska listened as a guest of honor in the Parliament chamber


But after the war threw the energy market into disarray, countries like Spain started calling for the EU to decouple the link between gas and electricity pricing. Until this summer, though, the idea was given short shrift from Brussels.

“Consumers should reap the benefits of lower-cost renewables,” she said.

A levy on soaring profits for utilities generating power from low-cost sources and from fossil fuel companies will raise €140 billion to help families across the bloc who face impossibly high bills, she said.

“In these times it is wrong to receive extraordinary record profits benefitting from war and on the back of consumers,” she said.

The EU will continue cutting its reliance on Russian energy by relying on gas suppliers like Norway and the U.S. and beefing up its gas storage.

“Russia keeps on actively manipulating our energy market … This market is not functioning anymore,” she said.

Von der Leyen’s speech also included:

— A relief package for small family businesses, including rewriting late payment rules so firms don’t go bust because invoices have not been paid

— Backing for French President Emmanuel Macron’s plan for a European “Political Community”

— A Critical Raw Materials Act, to help the bloc develop an industry for minerals used in electric vehicle batteries, for example

— Plans to deepen ties with “like-minded partners,” especially aspiring EU members Ukraine, Moldova and Georgia

— A pledge to fight for democracy, taking on internal EU threats to rule of law standards. A new Defense of Democracy Act will be published

— A call for a new European Convention, a gathering that would mark a step toward changing the bloc’s founding treaties to overhaul decision-making.

Newsletter

Related Articles

0:00
0:00
Close
UK Competition Watchdog Investigates Ryanair Family Seating Charges
Imperial College Study Links London Emissions Charges to Lower Hospital Admissions
Scottish First Minister Launches US Trade Initiative Ahead of World Cup Match in Boston
Fifteen Million Workers Gain Expanded Sick Pay Rights Under UK Reforms
British Retail Investors Secure Record Participation in SpaceX Share Offering
Keir Starmer and Micheál Martin Coordinate Response to Northern Ireland Violence
NHS Prepares for Major Disruption as Resident Doctors Announce Four-Day Strike
Bank of England Expected to Hold Rates as Energy Costs Complicate Inflation Outlook
Britain Moves to Ban Under-16s From High-Risk Social Media Platforms and AI Chatbots
UK Economy Contracts as Middle East Conflict Weighs on Growth
Defence Secretary John Healey Resigns Over Military Spending Dispute With Treasury
Prime Minister Keir Starmer Faces Leadership Crisis After Senior Cabinet Resignations
NHS Trust Secures Funding for AI Tool to Detect Heart Failure Earlier
Government Unveils £4.5 Billion Investment Plan for Walking and Cycling Infrastructure
Nationwide Reports UK House Prices Falling as Borrowing Costs Remain Elevated
Centre for Social Justice Says Two Million Britons Are Using Illegal Loan Sharks
UK Carmakers Warn EU Local Content Rules Could Damage British Manufacturing
UK Government Imposes Emergency Ban on Seven Potent Synthetic Opioids
Royal Navy Completes Major North Atlantic Anti-Submarine Exercise Off Norway
NHS Figures Show Nearly 3,000 Patients a Day Receiving Care in Hospital Corridors
CBI Cuts UK Growth Forecast as Middle East Tensions Drive Inflation Risks Higher
Dan Jarvis Appointed UK Defence Secretary Following Major Government Reshuffle
University College London Study Links Physical Punishment to Higher Risk of Bullying
East Midlands Railway Unveils First Refurbished Train in £60 Million Modernization Programme
RNLI Issues National Water Safety Appeal Ahead of Expected Heatwave
Climate Change Raises Subsidence Risks for Millions of Homes Across Southeast England
Manchester Advances Plans for Underground Piccadilly Station With £1 Million Funding Commitment
Anti-Immigration Violence Continues in Belfast Amid Heightened Security Concerns
UK Law Locks Great British Railways Into Public Ownership
Office for National Statistics Adopts Supermarket Checkout Data for Inflation Measurement
Applied Atomics Launches With $500 Million Space Infrastructure Order Book
BYD Plans Nationwide Rollout of Ultra-Fast EV Charging Network
UK House Prices Unexpectedly Fall in May
CBI Warns UK Growth Is Becoming Increasingly Dependent on Public Spending
Makerfield By-Election Fuels Speculation Over Labour’s Future Leadership
Britain Declines to Join EU SAFE Defence Fund
UK Unveils 2040 Emissions Target Despite Strong Political Opposition
Government Orders Full Review of Palantir’s NHS Data Contract
UK Borrowing Costs Climb as Markets Price in Further Bank of England Rate Rises
Resident Doctors Confirm Five-Day NHS Strike Across England
Violent Anti-Immigrant Riots in Belfast Spark Political and Diplomatic Tensions
United Kingdom Sees Recovery in Horizon Europe Research Funding Share to 9.3 Percent
UK Inflation Holds at 2.8 Percent as Office for Budget Responsibility Flags Persistent Price Pressures
United Kingdom Launches National Anti-Fraud Framework to Combat Rising Pension Scam Losses
United Kingdom Expands Sanctions on Israeli Groups While Funding Palestinian Authority Salaries and Gaza Mine Clearance
United Kingdom Issues Three-Month Ultimatum to Major Technology Firms Over Child Online Safety Controls
United Kingdom Government Moves Toward Blanket Social Media Ban for Children Under Sixteen
Widespread Anti-Immigration Rioting Erupts Across Belfast After Knife Attack Linked to Asylum Seeker
Farmers Warn of Crop Losses Following Months of Unseasonal Rainfall
Civil Aviation Authority Launches Review of Regional Airport Operations
×