The European Union should consider issuing eurobonds for energy, not only for defense through the SAFE instrument. That is the view of Luca Squeri, member of Chamber of Deputies and Head of the Energy Department at majority party Forza Italia, who spoke to Decode39 following the government’s recent fuel decree aimed at addressing rising pump prices.
Q: The new fuel decree cuts excise duties only on diesel. How did the government arrive at this decision?
A: The decision was based on a very concrete fact: at this stage, diesel prices have risen much more sharply than gasoline prices. We also have to consider that diesel is the most widely used fuel, not only in freight transport but also by private motorists.
- The first concern, therefore, was that the issue could spread from the freight supply chain to the prices families ultimately pay for everyday goods. I support the government’s decision because, at a time when resources are limited, it made the courageous choice to direct available funds where the emergency is most acute.
- We are talking about a €0.17 reduction, which is significant. As we know, it was financed partly through higher VAT revenues generated by increased taxable prices and partly through resources found within the state budget. That is the reasoning behind the decision, and I fully agree with it.
Q: Could additional measures be considered on August 4? If so, what might they look like?
A: It was only logical for the government to adopt a temporary measure so that it could assess how the crisis that triggered these price increases evolves. Of course, we all hope for a significant improvement in the geopolitical situation, although there are not many reasons to be optimistic at the moment. That said, if high oil and fuel prices persist, I expect that further measures will follow.
Q: Why have oil prices and fuel prices not moved in parallel?
A: When the situation improved recently and oil prices fell while fuel prices did not, we analyzed the reasons behind that divergence. In the current geopolitical environment, we are facing a shortage of refining capacity, both because of attacks on refineries in the Middle East and because of strikes on refineries in Russia.
- Reduced refining capacity means reduced supply, and that pushes prices higher. If these difficulties continue, decisions will have to be made based on the resources available. At the same time, I believe there must increasingly be a principle of optimizing the resources allocated to citizens.
- The government has now chosen to focus on diesel because it has increased the most and is the most widely used fuel. A further criterion could be to target specific categories of citizens, on the principle that lower-income households should receive greater support through mechanisms similar to those already used in the past.
Q: Given the crisis around the Strait of Hormuz and its serious implications for energy markets, should Europe adopt a new strategy?
A: We did not need the Strait of Hormuz crisis to answer that question positively. The crisis has simply highlighted even more clearly a need that Europe has been trying, with difficulty, to address. Europe should have a common energy policy that does not leave individual member states to deal with these situations on their own. We often talk about the European energy mix, and indeed there are many common rules in this area. Unfortunately, there is a gap between the rules that are adopted and the reality of the problems each country has to deal with.
- I often use Spain as an example because some people present it as a model for Italy, while forgetting that Spain is fundamentally different from our country. It has 200,000 square kilometers more territory—roughly nine times the size of Lombardy—10 million fewer inhabitants, and significantly lower energy consumption, both because of its population and because of its manufacturing sector.
- Even so, Spain’s installed solar photovoltaic capacity is actually lower than Italy’s. Spain has 41 gigawatts of installed capacity, while Italy has 43 gigawatts. Spain does have much more wind power because it has much stronger wind resources. But those who point to Spain only to criticize Italy’s energy policy never mention the real difference: around 20% of Spain’s electricity comes from nuclear power.
- This is a clear distortion of the debate. I may have gone off on a tangent, but the point is that every member state has its own circumstances and its own path toward the energy transition. For that reason, Europe should pay greater attention to the specific characteristics of each national situation while pursuing the common objective of reducing dependence on fossil fuels—oil and natural gas.
Q: Should Europe consider issuing eurobonds for energy, in addition to those created to finance defense through SAFE?
A: In my view, yes—but under specific conditions. Europe is already doing this for defense, which is clearly a strategic infrastructure for the continent. I see no reason why the same approach should not be applied to energy. However, those resources should be used exclusively to build infrastructure that supports greater independence from fossil fuels while improving the efficiency of the energy system.
- They should certainly not be used simply to reduce excise duties. Rather, they should finance infrastructure that promotes real integration, not just regulatory integration. That would represent a concrete step forward and allow Europe to provide meaningful answers in pursuit of this objective. Otherwise, we risk putting ourselves at a competitive disadvantage.
Q: In what sense?
A: We have to compete with Asia and, frankly, with the United States as well. From an energy perspective, both have freed themselves from the burden of CO₂ taxation, while Europe continues to make it a central pillar of its policy. This means that we are already less competitive because we lack the energy resources that make others competitive—in practical terms, they have nuclear power, oil and natural gas, while we largely do not, with the exception of Norway.
- If, on top of this structural disadvantage, we continue to burden ourselves by taxing fossil fuel use, we risk falling even further behind in a competition that is becoming increasingly intense. That brings me back to your original question. European financial instruments that provide breathing space and enable the construction of a more effective, comprehensive and integrated energy infrastructure across member states are a choice that should be made without hesitation, precisely because they would provide concrete answers to a very real problem.
