Energy crisis measures must reach the Roma

Zeljko Jovanovic is the director of the Open Society Roma Initiatives Office.

As European households brace for energy shortages, Ilie Vasilescu, a construction worker from Ialomita, Romania, is despondent that he will have to choose between heating his small home and paying for his son’s university fees.

Vasilescu, like thousands of others, suffered from hardships during the pandemic and, before he could enjoy a small rebound in financial security, he is now facing a winter of fuel and energy crises. It is all the more concerning that Vasilescu is in a better position than the more than 422,000 households that are estimated as being informally or illegally connected to the electricity grid in Romania.

And at the bottom of the socio-economic ladder are the 10% of the Roma population in Europe with no access to electricity at all. They are among the most vulnerable people in Europe. A third are unemployed and 43% are classed as working poor.

While negotiating to ensure the security of supply and lower prices, European leaders must not forget those who need their support the most. Many of the 35 million EU citizens, (approximately 8% of the EU population) who struggled to keep their homes adequately warm in 2020, are unprepared for this winter of energy crisis where prices are reported to be ten times higher for Germany and France, the biggest European economies and are at record high levels across Europe.

Those in poverty have been repeatedly let down by European governments and the EU. During the financial crisis, the priority was to provide support to “too-big-to-fail” entities while those too-little-to-matter were left to suffer at the hands of austerity policies.

Similarly, the green Just Transition and COVID-19 recovery policies, though enjoying public investment, in many cases are not tailored to reach the most vulnerable. This is particularly acute for those in the informal economy, especially in the sectors of agriculture, retail, manufacturing, arts and culture.

They contribute a significant share to the national GDP: 30% in Romania and Bulgaria, 20% in Italy, Spain, and Hungary, and 10-13% in France and Germany but gain little social protection. Moreover, they often live in informal, unhospitable, uninsulated and energy-deficient housing that in turn makes their energy costs relatively higher.

Fair response

Like Putin’s Russian approach towards the European countries, some local politicians in Europe have been weaponising energy for votes. A local mayor in Luica, Romania, promised to connect the Roma community to the electricity grid during electoral campaigns. He even brought electricity cable pillars to show his promise was serious, but after he was elected, he removed them.

Similarly in Nis, Serbia, the local Roma community received access to electricity in the run-up to elections that was promptly disconnected after the elections, with debt and illegality of the connections give as the reasons. They launched protests against this injustice but got no support.

To reach the most vulnerable in the energy crisis, we should implement a fair response to the crisis plan, as proposed by Philip Lane, the European Central Bank’s Chief Economist. Lane has explained that not only from the point of view of fairness but also from a macroeconomic perspective, governments should support the income and consumption of those households and firms that are suffering the most through higher taxes. That will have less of an effect on inflation instead of increasing deficits.

The proposed EU measures do not include a higher tax on the rich citizens but include three measures: the mandatory decrease of energy demand by 5%, an energy price cap and a solidarity contribution on the profits of businesses active in the crude petroleum, natural gas, coal, and refinery sectors.

As the national governments decide the crisis measures, they should have three imperatives in mind to combine short-term necessities and long-term solutions.

First, the 5% reduction must not lead to electricity cuts to those who have been facing energy poverty already, both in formal and informal economies.

Second, the redistribution of the public revenues from the energy cap and solidarity levy - estimated at €140bn within the EU - should be redistributed according to Lane's fairness principle that is not only morally but macroeconomically justified. Government support through lower bills and direct financial support will be vital for those in the worst conditions.

Third, the crisis measures need to be combined with the funds for the green transition and COVID-19 recovery. For example, the energy poor need to be given a chance to salvage their income and be more competitive in the green economy to be able to afford energy supply. Governments can increase the efficiency of their homes or legalise their electricity grid connection. The green real estate renovation wave needs to prioritize those suffering from energy poverty.

While negotiating to find practical solutions for the energy crisis facing us, EU leaders should ask themselves if their support will be “fair” and help the likes of Vasilescu. Will the energy crisis measures reach those who need them the most?

For a united and robust Europe, we must demand a fair response to our energy challenges.