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During the time of energy crisis why would the integrated energy market be the highest priority? Is it more important to trade, or to keep economy running utili

by bitL 4y ago

During the time of energy crisis why would the integrated energy market be the highest priority? Is it more important to trade, or to keep economy running utilizing whatever local advantages available?

dmw_ng 4y ago
That is true, and why not also ignore the frictions created by a single currency, free movement of labour and people, or the harmonization of judicial systems during times of crisis. Surely under such strain, it is only fair that Germany no longer subsidizes Italian public debt, institute border controls for the transport of gas and oil, eventually instituting controls for all energy-derived products of any kind where a pricing inefficiency is being exploited by any neighbour. It would mean Putin responded to our sanctions by destroying 70 years of European cooperation, and doing so without even so much as firing a single bullet. Energy is the economy, and the failure of an integrated energy market means the failure of so much more.
- bitL 4y ago
  That sounds like a fallacy of composition. Energy market is just one part of the whole and right now a very weak part. Capping the profits/restructuring the market temporarily would benefit the whole more than keeping running the same old approach that is literally destroying the economy right now.
PeterisP 4y ago
There is an energy crisis across all regions of Europe; disrupting trade may help some places but hurt others much more and would make it worse in aggregate, so EU treaties prohibit that. I mean, whenever electricity is being exported at high cost, that high cost is an indication that this other place has it even worse; and blocking trade would make electricity cheaper at the exporting place, but cause a larger spike (and possibly even blackouts with the associated economic disruption) at the importing place and also remove the economic incentives to increase surplus production at places who can do it cheaper than others.
- bitL 4y ago
  That's in theory; in practice there is a bunch of resellers that are making crazy amount of money due to "merit pricing" that makes sense in a stable market, but not now. The places you mention are much worse off than by a simple price ceiling per electricity type.

by bitL 4y ago

dmw_ng 4y ago

That is true, and why not also ignore the frictions created by a single currency, free movement of labour and people, or the harmonization of judicial systems during times of crisis. Surely under such strain, it is only fair that Germany no longer subsidizes Italian public debt, institute border controls for the transport of gas and oil, eventually instituting controls for all energy-derived products of any kind where a pricing inefficiency is being exploited by any neighbour. It would mean Putin responded to our sanctions by destroying 70 years of European cooperation, and doing so without even so much as firing a single bullet. Energy is the economy, and the failure of an integrated energy market means the failure of so much more.

bitL 4y ago
That sounds like a fallacy of composition. Energy market is just one part of the whole and right now a very weak part. Capping the profits/restructuring the market temporarily would benefit the whole more than keeping running the same old approach that is literally destroying the economy right now.

PeterisP 4y ago

There is an energy crisis across all regions of Europe; disrupting trade may help some places but hurt others much more and would make it worse in aggregate, so EU treaties prohibit that. I mean, whenever electricity is being exported at high cost, that high cost is an indication that this other place has it even worse; and blocking trade would make electricity cheaper at the exporting place, but cause a larger spike (and possibly even blackouts with the associated economic disruption) at the importing place and also remove the economic incentives to increase surplus production at places who can do it cheaper than others.

bitL 4y ago
That's in theory; in practice there is a bunch of resellers that are making crazy amount of money due to "merit pricing" that makes sense in a stable market, but not now. The places you mention are much worse off than by a simple price ceiling per electricity type.