Experts in wind-power as well as politicians throughout Europe aim to boost green energy by encouraging clearer regulations and increased investment despite the region’s continuous struggle with the debt crisis.
Danish Prime Minister Helle Thorning-Schmidt opened this year’s European Wind Energy Association event, explaining that wind power should be a primary focus as a source for European growth. He called on political leaders to remain focused on green energy and its crucial role in global development.
“In times of crisis, political priorities tend to shift,” he said. “There is a danger that long-term objectives give way to short-term goals. There is a danger that green ambitions are lowered. I know this is a concern throughout the green industry,” he continued.
Countries such as Spain have strengthened this trepidation, discontinuing all government support for renewable energy products with hopes of lowering its deficit. Thorning-Schmidt claims this action will actually result in additional money loss.
“We will save money when we use less energy,” he explained. “And we will save money when we are less vulnerable to rising oil, coal and natural gas prices. The cost of inaction today will only increase in the future.”
The Dutch government is asking the European Commission to look at other ideas rather than its proposed tax on financial trades. The Netherlands Bureau for Economic Policy Analysis, the Dutch financial markets regulator AFM and the Dutch central bank have all concluded that the tax would hurt their economy.
As Dutch Finance Minister Jan Kees de Jager wrote in a letter to the Dutch parliament, “The analyses from CPB, DNB and AFM make clear that the tax is not an efficient way to make the financial sector contribute well to government income. Besides that, the tax does not help to make the financial sector more stable.”
The proposal offered by the commission wanted to create a transaction tax to help governments to deal with their finances after the bank bail outs in 2008. The commission predicted that the tax would generate an estimated EUR57 billion in revenues if it were introduced across the board in all 27 EU countries.
The CPB, however, says that the tax would raise unemployment by .5% and suppress the Dutch GDP by somewhere between .4% and 1.2%. The Dutch Finance Minister has argued that the tax would hit the Netherlands harder than other countries because it has a larger financial sector.
Good news for Europe as China decides to invest in the region’s bailout funds and maintain its holdings of euro assets. As a result, currency gains have already become apparent, while Asian stocks also increase thanks to a more optimistic outlook.
“China will always adhere to the principle of holding assets of EU sovereign debt,” said Zhou Xiaochuan, Governor of People’s Bank of China. “We would participate in resolving the euro crisis,” he said.
The news may deter European finance ministers from their continuous pressure on Greece for budget cuts, as a second bailout is in the making. China’s risk is supporting the economy of its primary export market as global economy continues to hinder Chinese growth in other regions.
“Wen and Zhou are giving the best support China can offer now, which is to send out positive messages such as promising not to cut euro assets and to buy European bonds to help bolster market confidence,” Shen Jianguang of Mizuho Securities Asia said. “How much and when China will buy will depends on its foreign-exchange investment strategy- when they find the pricing and exchange rate favorable.”
