The IMF has urged European governments to pass on rising energy costs to consumers to encourage “energy saving” and a shift towards greener power while protecting poorer households.
European governments, which have tried to shield households from soaring costs with price controls, tax cuts and subsidies “should allow the full increase in fuels costs to pass to end users to encourage energy saving and switching out of fossil fuels”, the assistant director in the IMF’s European department, said.
Writing in an IMF blog post on Wednesday, Oya Celasun added that at the same time governments should put relief measures in place to support low-income households — which are least able to cope with spiking energy prices — was “a priority”.
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