France backs EU windfall tax to ease soaring energy prices

Sept. 5 (UPI) -- French President Emmanuel Macron announced Monday his nation will join Germany in supporting a European Union windfall tax on energy companies' "excessive" profits to rein in soaring gas, coal and oil prices for consumers.

Macron told reporters he supports the levy and hopes the EU agrees to it, after speaking on the phone with German Chancellor Olaf Scholz.

"We support a European mechanism which we'd ask for from European energy operators whose production costs are far lower than market sale prices," Macron said after his call with Scholz. "This is the approach that France supports, and it's the approach that France and Germany support."

On Sunday, Scholz unveiled a $65 billion package and announced Germany would impose an energy windfall tax to help households and businesses "get through this winter" as Russia's war in Ukraine rages on. Scholz blamed Russia President Vladimir Putin for Germany's high energy prices, saying Russia "has broken its contract" and was "no longer a reliable energy supplier." Before the war, Germany had relied on Russia for 55% of its fossil fuels. That has dropped to 9.5% since February's invasion.

Adding to the urgency, Russia announced Friday it would shut off gas flows through the Nord Stream 1 pipeline indefinitely. Russia's state energy giant Gazprom said it detected an oil leak at its Portovaya compressor station. The pipeline supplies Germany and 35% of Europe. Friday's announcement sent gas prices soaring and pushed the euro to its weakest level since 2002.

Russia has used oil and gas as a leveraged point in negotiations over penalties for its invasion of Ukraine. It had previously threatened to cut off oil exports to countries that implement a price cap. Gas flows through Nord Stream 1 have fallen to 20% of their capacity since June.

EU energy ministers are currently working on a set of emergency energy measures and will meet this Friday to discuss possible solutions that include capping natural gas prices, halting power derivatives trading, as well as the special windfall tax.

The windfall tax "is the most fair and the most effective approach," Macron said. "If such an approach doesn't happen on a European level, then we will look at it at the national level."