French PM Elisabeth Borne urged businesses to cut energy use or face possible rationing this winter if Russia halts gas deliveries.
“It’s urgent to stop any energy consumption that isn’t indispensable immediately,” Borne told business leaders at a conference near Paris on Monday. If not, “there could be brutal gas outages overnight and serious economic and social consequences”, she said, adding “companies would be the first hit” by rationing.
She called on the government and businesses to work together on plans to lower energy use to avoid shortages and blackouts and pledged to detail various scenarios at the start of October when she has a clearer view of risks and progress on energy-saving plans.
One possibility was to create a new market for rights to consume energy. She also hinted that the government might take measures to help companies that would be “too strongly impacted” by potential rationing.
The French government and its European neighbours are seeking to shield consumers and businesses from a surge in energy prices on wholesale markets caused by a progressive reduction in Russian gas supplies and a much higher than usual number of outages at Electricite de France SA’s ageing nuclear reactors. President Emmanuel Macron warned French people last week they faced “the end of the time of abundance”.
Thanks to nuclear energy, which accounts for most of the country’s electricity production, France “is less exposed than other European nations, but let’s not believe for one second that our nation would face no risk”, Borne told the Medef business conference.
“We already know that we have less gas this winter than in previous years. Our nuclear power plants are facing difficulties and a quick restart of reactors that are offline is key to avoid cuts.”
The government has already spent more than 25bn euros (about R420.79bn) on a so-called energy tariff shield to protect consumers from surging oil and natural gas costs by capping price rises and plans to spend at least 20bn euros more in tax cuts, increased pensions and other measures as part of an anti-inflation package adopted earlier this month. It’s also subsidising fuel at the pump.
Macron has asked his government to provide a plan on how to tame energy consumption in the coming weeks. Borne added it would unveil a new plan to curb emissions by year-end.
Borne has said the government will keep protecting French people from energy price hikes and add targeted measures for poorer households. She has reiterated Macron’s goal to bring the deficit below 3% of GDP by the end of his mandate in 2027.
On Monday, Borne also repeated a target to reach “full employment,” which Macron’s advisers have described as about 5% unemployment. The government will soon propose a bill to lower protections for unemployed people when joblessness is low, she said.
More stories like this are available on bloomberg.com
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.