Aid and energy demand | Economy

It is costing – and in what way – to return to a certain economic and financial normality after the acute phase of the pandemic. Inflation and market interest rates are two blows on the table to understand that not everything can be fixed with easy money or spending. It is necessary to change the structure and, above all, bear the cost of doing it today for a better tomorrow. At the moment, European governments are discussing with Brussels measures to reduce external energy dependence and the bill that consumers and companies pay for it. However, when you do not have your own solutions, each measure is like pulling the blanket to cover your chest and expose your feet, be they your own or those of your neighbor, because the EU is interconnected.

Economists dispute the adequacy of some measures taken to reduce the cost of energy. One premise is to define the objective. It may be to reduce energy dependence on Russia. You can try to reduce what citizens and companies pay. Another purpose is simply to reduce inflation. The problem is to whom and how to direct the measures and achieve these objectives. Spain will spend 16,000 million in subsidies for energy. It has also achieved the “Iberian” exception for its energy mix. Discuss with the EU a plan to further reduce the cost of electricity.

Subsidizing fuel at service stations, although it reduces expenses for companies and families, makes it difficult to reduce energy dependence and temper inflation. This helps end users maintain a high level of consumption. It should be moderated. We should let the price signals trade when they go up as well. Above all, regarding a good that is scarcer today than a year ago. Demand should not be artificially maintained. In the short term we can apparently moderate the price. By maintaining consumption, the long-term price will continue to be high. The non-subsidized price remains high. With the discount, a higher price is paid than a year ago. It’s not free. Part of the return to normality –as is the rate hike in the face of skyrocketing inflation– must also be assuming that fiscal spending is not infinitely stretchable gum.

There are crucial nuances. Part of the users are carriers and other strategic professionals for the functioning of the economy. Without a subsidy, they have a negative or hardly acceptable business margin and it is logical to support them now. However, it is convenient for other users to moderate our energy consumption. A broader framework should be considered: if we all want to move towards an economy based on renewable energies and drastically reduce energy dependence in countries like ours, we must assume a certain responsibility. It is not free or easy. There is a lack of pedagogy in this regard, even acknowledging that it is difficult because explaining the cost of energy and how to reduce it is not an easy task for governments and those responsible for energy companies. In any case, the concept of energy saving must become much more visible in the coming months.