Finance
EU Needs Energy Union to Compete With US and China, Eurogroup Chief Says
Published by Global Banking & Finance Review®
Posted on April 16, 2026
3 min readLast updated: April 16, 2026
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Eurogroup chair Kyriakos Pierrakakis told the IMF spring meetings on April 16, 2026 that a fully integrated EU energy union is essential to reduce energy prices—currently 2–3× higher than in the U.S. and China—and make reforms from the Draghi and Letta reports viable.
EU Must Advance Energy Union to Lower Prices and Boost Competitiveness
The Importance of a Unified European Energy Market
By Jan Strupczewski
Calls for Reform at the IMF Meeting
WASHINGTON, April 16 (Reuters) - A European energy union is a prerequisite to other reforms that the European Union is planning to stay competitive against the U.S. and China, Kyriakos Pierrakakis, the chairman of the euro zone's finance ministers' group, said on Thursday.
Speaking at the International Monetary Fund in Washington, Pierrakakis said the EU had to create a real energy union that would allow energy to flow easily across borders to lower electricity prices across the single market of 450 million people.
Competitive Disadvantages Due to High Energy Prices
European energy prices are two to three times higher than in the U.S. or China, putting the 27-nation EU at a big competitive disadvantage to global competitors.
"Advancing the energy union in Europe ... will have a direct ... positive impact, both energy-wise, but I would say competitiveness-wise. We need that ... to be able to implement the whole vision of the Draghi and Letta reports," Pierrakakis told a seminar during the International Monetary Fund and World Bank spring meetings in Washington.
Key Reports and Proposed Reforms
The Draghi and Letta Reports
In 2024 two former Italian prime ministers - Mario Draghi and Enrico Letta - prepared reports on how to boost Europe's competitiveness and make the EU's single market work better, recommending dozens of reforms.
Major Recommendations
Among them are efforts to consolidate the EU's 27 national capital markets into a single one, introduce a special legal regime for pan-European companies that would be the same across the bloc, and launch a digital euro that would be a European-controlled means of online payments.
"But without the deployment of a full-scale energy union, we won't be able to generate the necessary conditions to be able to achieve these previous elements of policy," Pierrakakis said.
The Energy Union Project: Progress and Challenges
History and Objectives
The EU's energy union is a project that has been running since 2015 to coordinate national energy policies and create a single, integrated market for power and gas, allowing electricity from one part of the continent to be easily sold and transferred to another.
Obstacles and Urgency
Progress requires large investment in modernizing and connecting national European electricity networks, joint purchasing and storage, as well as overcoming vested interests of national energy sectors and other political obstacles.
The plan has become all the more urgent after the energy crisis of 2022 caused by the Russian invasion of Ukraine and, more recently, by the closure of the Strait of Hormuz, the gateway for a fifth of the world's oil and gas, as a result of the U.S.-Israeli war with Iran.
(Reporting by Jan Strupczewski; Editing by Paul Simao)
Key Takeaways
- •EU industrial energy prices are 2–3 times higher than in the U.S. and China, undermining competitiveness (imf.org)
- •A true Energy Union—integrating grids, pooling procurement, storage and investment—is needed to lower costs and support single‑market reforms(en.wikipedia.org)
- •Draghi (Sept 2024) and Letta (Apr 2024) reports stress that lowering energy costs is a precondition for wider competitiveness reforms like capital market union and digital euro(dlapiper.com)
References
Frequently Asked Questions about EU needs energy union to compete with US and China, Eurogroup chief says
1Why does the EU need an energy union?
The EU needs an energy union to lower electricity prices and enhance its competitiveness against the US and China.
2What challenges prevent the creation of a full EU energy union?
Challenges include the need for investment in infrastructure, overcoming national interests, and political obstacles.
3How do EU energy prices compare to those in the US and China?
EU energy prices are two to three times higher than in the US or China, putting Europe at a competitive disadvantage.
4What reforms are linked to the establishment of an EU energy union?
Reforms include integrating national capital markets, launching a digital euro, and a unified legal regime for companies.
5Why has the urgency for an energy union increased recently?
Recent crises, such as the Russia-Ukraine war and the closure of the Strait of Hormuz, have highlighted the need for energy security.