Throwing cash at energy crisis

As the European winter draws closer and countries struggle to wean themselves off Russian energy, governments are increasingly having to com [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( As the European winter draws closer and countries struggle to wean themselves off Russian energy, governments are increasingly having to compensate by throwing money at the problem. For all the talk about rapid self-sufficiency, or of securing alternate sources of oil and gas, supply remains tight, as do prices. OPEC announced a supply cut yesterday, if only a small one. Russian President Vladimir Putin is keeping the Nord Stream pipeline offline, which will make it harder for Germany for one to meet its goal of filling natural gas storage sites to nearly-full before long. Key reading: - [Truss Drafts £130 Billion Plan to Freeze UK Energy Bills]( - [EU Mulls Gas Price Caps and Benchmarks to Combat Russian Squeeze]( - [EU’s Von der Leyen Pledges Liquidity Help for Power Producers]( - [Germany Keeps Its Nuclear Plants Alive as EU Seeks Crisis Fixes]( - [Can Europe’s $375 Billion in Relief Keep People Warm Enough?]( - Follow our rolling coverage of Europe’s energy crisis [here](. With prices so high and quick supply fixes elusive, governments in the European Union and the UK are coming around to the realization that they are going to have to work harder to defray the hit to households and companies. German Chancellor Olaf Scholz’s coalition has agreed on a relief plan worth about $65 billion, including increased payments to vulnerable people. Even in the UK, where Liz Truss ran her Tory leadership campaign with a heavy focus on tax cuts vs handouts or price caps, a draft plan for the incoming prime minister (obtained exclusively by Bloomberg’s [Alex Wickham]() would see electricity and gas bills frozen around current levels, at a cost of up to $150 billion over 18 months. Demand is unlikely to slow enough to compensate for supply challenges, even as factory activity is hurt and ordinary people take shorter showers and turn off appliances in forlorn efforts to reduce bills they can’t pay. Capping household energy bills could in fact see demand increase. Government balance sheets are already weighed down by years of pandemic aid. Difficult conversations about raising taxes or cutting spending will be put off further by the imperative to keep people out of energy poverty and limit company collapses. With lasting supply solutions potentially years away, politicians of all stripes will have to throw budget discipline out the window. Putin’s legacy may be a fiscal cliff that only arrives well after his war in Ukraine is over. — [Rosalind MathiesonÂ]( Retail stores with their main lighting switched off to save energy along the Passeig de Gracia in Barcelona on Aug. 11. Photographer: Angel Garcia/Bloomberg Click [here]( to follow Bloomberg Politics on Twitter and share this newsletter with others. They can sign up [here](. Global Headlines Time constraint | Ukrainian Prime Minister Denys Shmyhal called on the country’s allies to help Kyiv [finish]( the war as soon as possible because drawing out the conflict favors Russia’s forces. Moscow is interested “to take more time,” which is “a challenge for all of us,” Shmyhal told Bloomberg TV in an interview. - Russia may face a longer and deeper [recession]( as the impact of US and European sanctions spreads, according to an internal report prepared for the government. Firefighters douse the rubble of a restaurant destroyed by a missile strike in Kharkiv on Sunday. Photographer: Sergey Bobok/AFP/Getty Images Trump win | A US federal judge’s decision to grant Donald Trump’s request for a neutral third party to review documents seized by the FBI from his Florida home [was a win]( for the former president. As [Erik Larson]( explains, it may allow him to push his own narrative about the search ahead of the midterm elections in November while the case against him is stuck in legal limbo. - Senate Democrats, fresh off a string of legislative victories, return to Washington this week with a packed agenda before the midterms. [Here]( are some of the key items. Scientists are racing to gather data from shrinking glaciers as global warming melts ice from the Alps to the Himalayas with deadly consequences. [Jeff Black]( reports on how Switzerland has become a [front-row seat]( to watch the unfolding effects of climate change on mountain ecosystems. More lockdowns | China imposed lockdowns in parts of Guiyang after the city of 6.1 million reported an [increase]( in Covid-19 cases. The capital of the southern Guizhou province is home to operations for automakers and a battery manufacturer, raising the prospect of fresh disruption to production amid China’s stringent Covid Zero policy. Chengdu extended a stay-at-home order for its 21 million residents through tomorrow. - China [postponed]( an important annual financial forum in Shanghai this week, according to local officials, as the country battles a new wave of the virus. Best of Bloomberg Opinion - [Liz Truss Can’t Escape Boris Johnson’s Legacy: Therese Raphael]( - [Some Israelis More Scared of Netanyahu Than Iran: Zev Chafets]( - [Fauci Proved an Unlikely Avatar of Polarization: David A. Hopkins]( Lost wealth | The US government promised the leaders of the Osage Nation more than a century ago that all the mineral rights to their nearly 1.5 million-acre reservation would be put in a federally managed trust. Instead, as [Rachel Adams-Heard]( writes, Washington’s policies allowed a [massive transfer]( of the Native Americans’ land and wealth to outsiders that the Osage Nation is now working to get back. Explainers you can use - [What It Means That Trump Will Get a ‘Special Master’]( - [‘The System Pushed Me Out’: US Faces Great Teacher Resignation]( - [How Gift Cards Keep the Lights On When Power Is Short]( Fuel protests | Thousands of people protested across Indonesia to pressure the government to reverse a decision that raised [fuel prices]( by more than 30% in Southeast Asia’s largest economy. The demonstrations will test President Joko Widodo’s ability to stand firm on the hike meant to ease pressure on the state budget. Check out “Bedrock, USA,” a podcast about political extremism, small town life and the fight for democracy. It explores how far-right ideologies enter into local politics — sometimes quietly, other times at full volume — and what it takes for regular people to fight back. Listen to “Bedrock, USA” on [Apple Podcasts](, [Spotify](, or wherever you get your podcasts. News to Note - The EU’s chief diplomat Josep Borrell has played down the prospect of a rapid revival of the Iranian nuclear deal, saying the chances of an agreement between Tehran and world powers had [faded](. - Kenya’s Supreme Court [upheld]( William Ruto’s victory in last month’s presidential election, dismissing rival Raila Odinga’s claims that the vote was marred by rigging and irregularities. - Xi Jinping will travel to Kazakhstan next week for a state visit, Interfax reported, the Chinese president’s [first trip]( abroad in more than two and a half years. - Angola’s Constitutional Court [rejected]( a request by the runner-up in last month’s election to consider the final vote count invalid, paving the way for Joao Lourenco to be sworn in for a second term as president of Africa’s second-biggest oil producer. - The Solomon Islands accused Australia of trying to “[influence](” its lawmakers ahead of a vote on a constitutional amendment to delay elections until 2024, after Canberra offered to fund the Pacific nation’s next national ballot. And finally ... Nigeria has turned to a man it [previously hunted]( as a thief and enemy of the state, recruiting him to curb rampant theft and sabotage on the oil pipelines he used to blow up, [William Clowes]( writes. The state-owned energy firm hired security companies linked to Government Ekpemupolo, one of the most feared of the Niger Delta’s onetime warlords, to stem the losses that have slashed production to the lowest level in about half a century. Soldiers walk past holes dug by vandals to steal oil from pipelines near Lagos harbor. Photographer: Pius Utomi Ekpei/AFP/Getty Images Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022