Tuesday, 5 July, 2022
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Italy’s Draghi says EU should cushion energy inflation blow

PARIS: Italian Prime Minister Mario Draghi on Thursday suggested an EU-wide scheme to protect citizens from higher energy costs resulting from Russia's invasion of Ukraine.

"We must consider replicating some of the joint tools that have helped us recover swiftly from the pandemic," Draghi told delegates gathered in Paris for a meeting of the Organisation for Economic Cooperation and Development (OECD), reports BSS.

He highlighted that inflation in the eurozone single currency area reached 8.1 percent in May -- much of it driven by higher prices for energy including oil and gas following Moscow's assault on its neighbour.

"Rising inflation is not wholly the sign of overheating (in the economy), but largely the result of a series of supply shocks," Draghi said.

The former European Central Bank chief said the SURE unemployment support scheme, agreed by EU nations in 2020 as the first pandemic wave was breaking over the continent, could serve as a model.

It provided up to 100 billion euros ($107 billion) across the bloc to buttress national budgets sapped by the sudden need to aid large numbers of people with measures like short-time work schemes.

SURE "provided cheap and stable loans to the EU member states so that they could save jobs and support incomes", Draghi said.

"A similar instrument -- this time targeting energy -- could ensure vulnerable countries have more room to help their citizens at a time of crisis" as well as "shore up popular support for our joint sanctions" against Russia, he added.