For instance, the European Commission, under the framework of the RePowerEU initiative, has proposed a plan to reduce the EU’s demand for Russian gas by 60% by the end of 2022. There are two main pillars to this initiative. First, diversifying gas supplies by increasing imports from non-Russian suppliers, including liquefied natural gas (LNG). Spain has a key role to play here, given that it accounts for 25% of the EU’s regasification capacity. However, to fully exploit this capacity investment will be required in cross-border interconnections to eliminate the existing bottlenecks. Second, reducing the EU’s reliance on fossil fuels more swiftly by accelerating the roll-out of renewables and boosting energy efficiency. The European Commission also proposes requiring that storage facilities be filled to at least 90% of their capacity by 1 October each year, before the winter season begins. Under the plan, options would also be explored to optimise the design of the electricity market in view of the foreseeable changes in the production mix. A further possibility is to temporarily ease the State aid framework for the business sector and establish certain temporary limits on retail electricity prices. All this with the aim of addressing the rise in electricity prices. More broadly, the war has abruptly awoken Europeans to the need to accelerate European integration if we want the continent to be an important player on the global stage, capable of deciding its own future and defending its values.
Third, we adjusted what has come to be known as our “chained forward guidance”. Indeed, in recent months the Governing Council had been explicitly stating its expectation that net purchases would end shortly before it starts raising policy interest rates. However, in our meeting last week, we agreed that any adjustments to the key ECB interest rates will be take place some time after the end of our net purchases under the APP and will be gradual. The change from “shortly before” to “some time after” maintains the sequential process we intend to follow in adjusting our instruments, but widens the possible time interval between these two events (the end of net purchases and the point at which we start raising our interest rates). This increases the flexibility with which we can implement our decisions in such an uncertain economic and geopolitical context. The gradual adjustment of interest rates is indicative of the Governing Council’s commitment to avoiding abrupt changes to monetary policy instruments. 6  Domestic policies Domestic economic policies must also have a vital role to play at the current juncture. First, it is important for domestic fiscal policy to exploit its ability to act in a very granular and targeted manner and to focus on supporting the households, businesses and sectors most affected by this combination of shocks. This includes particularly lowerincome households, which bear the brunt of the impact of inflation, and more energyintensive firms.