London Daily

Focus on the big picture.
Wednesday, Jan 07, 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
Béla Tarr, Visionary Hungarian Filmmaker, Dies at Seventy After Long Illness
UK and France Pledge Military Hubs Across Ukraine in Post-Ceasefire Security Plan
Prince Harry Poised to Regain UK Security Cover, Clearing Way for Family Visits
UK Junk Food Advertising Ban Faces Major Loophole Allowing Brand-Only Promotions
Maduro’s Arrest Without The Hague Tests International Law—and Trump’s Willingness to Break It
German Intelligence Secretly Intercepted Obama’s Air Force One Communications
The U.S. State Department’s account in Persian: “President Trump is a man of action. If you didn’t know it until now, now you do—do not play games with President Trump.”
Fake Mainstream Media Double Standard: Elon Musk Versus Mamdani
HSBC Leads 2026 Mortgage Rate Cuts as UK Lending Costs Ease
US Joint Chiefs Chairman Outlines How Operation Absolute Resolve Was Carried Out in Venezuela
Starmer Welcomes End of Maduro Era While Stressing International Law and UK Non-Involvement
Korean Beauty Turns Viral Skincare Into a Global Export Engine
UK Confirms Non-Involvement in U.S. Military Action Against Venezuela
UK Terror Watchdog Calls for Australian-Style Social Media Ban to Protect Teenagers
Iranian Protests Intensify as Another Revolutionary Guard Member Is Killed and Khamenei Blames the West
Delta Force Identified as Unit Behind U.S. Operation That Captured Venezuela’s President
Europe’s Luxury Sanctions Punish Russian Consumers While a Sanctions-Circumvention Industry Thrives
Berkshire’s Buffett-to-Abel Transition Tests Whether a One-Man Trust Model Can Survive as a System
Fraud in European Central Bank: Lagarde’s Hidden Pay Premium Exposes a Transparency Crisis at the European Central Bank
Trump Announces U.S. Large-Scale Strike on Venezuela, Declares President Maduro and Wife Captured
Tesla Loses EV Crown to China’s BYD After Annual Deliveries Decline in 2025
UK Manufacturing Growth Reaches 15-Month Peak as Output and Orders Improve in December
Beijing Threatened to Scrap UK–China Trade Talks After British Minister’s Taiwan Visit
Newly Released Files Reveal Tony Blair Pressured Officials Over Iraq Death Case Involving UK Soldiers
Top Stocks and Themes to Watch in 2026 as Markets Enter New Year with Fresh Momentum
No UK Curfew Ordered as Deepfake TikTok Falsely Attributes Decree to Prime Minister Starmer
Europe’s Largest Defence Groups Set to Return Nearly Five Billion Dollars to Shareholders in Twenty Twenty-Five
Abu Dhabi ‘Capital of Capital’: How Abu Dhabi Rose as a Sovereign Wealth Power
Diamonds Are Powering a New Quantum Revolution
Trump Threatens Strikes Against Iran if Nuclear Programme Is Restarted
Apple Escalates Legal Fight by Appealing £1.5 Billion UK Ruling Over App Store Fees
UK Debt Levels Sit Mid-Range Among Advanced Economies Despite Rising Pressures
UK Plans Royal Diplomacy with King Charles and Prince William to Reinvigorate Trade Talks with US
King Charles and Prince William Poised for Separate 2026 US Visits to Reinforce UK-US Trade and Diplomatic Ties
Apple Moves to Appeal UK Ruling Ordering £1.5 Billion in Customer Overcharge Damages
King Charles’s 2025 Christmas Message Tops UK Television Ratings on Christmas Day
The Battle Over the Internet Explodes: The United States Bars European Officials and Ignites a Diplomatic Crisis
Princesses Beatrice and Eugenie Join Royal Family at Sandringham Christmas Service
Fine Wine Investors Find Little Cheer in Third Year of Falls
UK Mortgage Rates Edge Lower as Bank of England Base Rate Cut Filters Through Lending Market
U.S. Supermarket Gives Customers Free Groceries for Christmas After Computer Glitch
Air India ‘Finds’ a Plane That Vanished 13 Years Ago
Caviar and Foie Gras? China Is Becoming a Luxury Food Powerhouse
Hong Kong Climbs to Second Globally in 2025 Tourism Rankings Behind Bangkok
From Sunniest Year on Record to Terror Plots and Sports Triumphs: The UK’s Defining Stories of 2025
Greta Thunberg Released on Bail After Arrest at London Pro-Palestinian Demonstration
Banksy Unveils New Winter Mural in London Amid Festive Season Excitement
UK Households Face Rising Financial Strain as Tax Increases Bite and Growth Loses Momentum
UK Government Approves Universal Studios Theme Park in Bedford Poised to Rival Disneyland Paris
UK Gambling Shares Slide as Traders Respond to Steep Tax Rises and Sector Uncertainty
×