How EU countries are reacting to high gas prices

An eco tax on fuels led to violent protests in France back in 2018 and 2019. This is why Paris intends to allow for no more than a 4% increase in electricity costs this year. State-owned utility EDF has been forced to provide cheaper power to households, with the state paying €8 billion ($8.9 billion) in compensation.

Whether as former ECB chief or Italy's prime minister — Mario Draghi likes to pony up money to make it easier for citizens. As early as last September, Italy spent €3 billion on fighting poverty caused by soaring energy prices. The country paid the gas and electricity bills for millions of smaller firms and poorer households. Value-added tax (VAT) on gas was reduced to just 5%, from over 20%.

Germany hasn't been as generous as some of its neighbors. The federal government is handing out one-time payments to poorer households to cushion them from the impact of soaring energy prices. The initiative is expected to cost the government about €130 million.

Last summer, Madrid halved the value-added tax on electricity, now standing at 10%. In September, it was even reduced to the EU's minimum of 0.5%. The government wants to prevent poorer families from being cut off from electricity supply. Utilities profiting from the hike in gas prices have been called upon to give their extra earnings back to consumers.

Gas prices have doubled in Greece within just one year, while electricity costs went up 35% and heating oil soared 35%. Despite Greece sitting on empty coffers as a result of its 2010 debt crisis, the country is using hefty subsidies to lessen the impact of the ongoing price spiral. In January alone, the government allocated €400 million to this end.

Value-added tax on fuels has already been lowered in Poland, and VAT on food items will be suspended as of February 1.While a big proportion of petrol at the pumps in Poland comes from German refineries, Germans living near the border stand to profit even more from the difference in fuel prices. They can save at least 20% when filling up their cars.

It's still unclear to what extent the new prime minister, Petr Fiala, will implement the plans of his predecessor, populist billionaire Andrej Babis. Sales tax on electricity and gas is to be reduced in the first phase and completely done away with as of 2023. There's already a groundswell of opposition to the EU's Green Deal, which consumers say is partly to blame for the price hike.