The decision to impose some kind of cap on the price of gas is making its way in the European Union, although with resistance. With the Kremlin-fueled energy crisis wreaking havoc on homes, the Twenty-Seven have focused on finding common ground to attack high electricity prices. Despite the division and the reluctance of Germany, which defends that the measure could have a serious impact on supply, the idea of limiting the price of gas accumulates more and more consensus. With several models on the table and other recipes that advocate implementing a joint purchasing mechanism, the Twenty-seven urged the European Commission this Friday at a summit in Prague to present a package of specific proposals to execute in the short term. They also ask to address long-term measures to redesign the electricity market, gas sets electricity prices today.
The fear that skyrocketing prices will lead to a wave of social unrest has made European leaders firm. The Heads of State and Government are seeking urgent measures to accompany savings and tax initiatives to address the crisis. Meanwhile, the Union is already clearly accusing Russian President Vladimir Putin of waging an energy war against the Union. “Russia has launched an energy missile on the European Union and on the world”, remarked the President of the European Council, Charles Michel, at the end of a meeting in which the EU has once again shown its strong support for Ukraine. The meeting has had the intervention by videoconference of the Ukrainian president, Volodímir Zelenski, who has urged the leaders to stand firm in their support of kyiv.
The European Commission, which these days has opened up for the first time to put a cap on the price of gas and has proposed different formulas to do so, will present another package of ideas to the EU leaders at a new summit in Prague in two weeks . Winter is at the doors, and the sense of urgency flies over everything. The risk of runaway prices triggering an EU recession is very real. The limit on the price of gas, in any case, would not be the only path followed by the EU leaders, but rather one more tool in a broad and diverse package, several diplomatic sources point out.
Most Member States want to put a ceiling on gas prices, but they do not agree on how and when. They have put various options on the table, ranging from a maximum price for the gas used to generate electricity to a “flexible corridor”, as planned by Italy, Belgium, Greece and Poland, which propose that the limit fluctuate according to global prices. to ensure that the Union continues to attract supplies. “We need to intervene in the market”, launched the Belgian Prime Minister, Alexander De Croo. “We can no longer afford these prices,” he added.
Spain, a pioneer in proposing an intervention in the energy markets and in measures that limit prices, defends the formula for the entire EU. The proposals to achieve this are diverse, recalled President Pedro Sánchez, who has listed some of those launched by the President of the European Commission, Ursula von der Leyen, in a letter to the Twenty-seven this week. “There are many options, it is not the same as liquefied natural gas, the one that goes through the pipeline, if we only do it from Russia, or what index serves as a reference for us Europeans to create something that protects the industry”, has Sanchez explained. “There is a vast majority of countries that are for the task of examining these proposals and endorsing them, and among those is Spain”, he has sentenced.
Reaching an agreement is also essential for the Italian Prime Minister, Mario Draghi, who will leave the post in a few weeks. The Italian has proposed to leave the work done before leaving. “We will hold all the necessary summits and councils to find a solution”, he remarked in Prague.
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Meanwhile, Germany is very reluctant to the proposal, which does not have the favor of the Netherlands either. Berlin does not want to compromise its bargaining power on secret supply contracts. The European Commission has, in fact, called for more transparency in these pacts. Germany does not want to reveal their cards, which are very good. He also assures that the mechanism would make it difficult to buy the gas he needs to get through the winter and would dampen the incentives to reduce consumption. “Any market intervention automatically raises questions about the security of supply,” German Chancellor Olaf Scholz insisted on Friday. “We have to discuss a lot. [sobre el tope al precio del gas] and be prepared”, he added.
The EU has managed to gradually wean itself off Russian gas. At the beginning of the Kremlin’s war in Ukraine, which has lasted seven months, gas imports from the Eurasian country were at 41%. Now they are at 7.5%, according to data from the European Commission. And with the saving measures put in place, winter does not seem so complicated in terms of supply: European reserves are at 90%, 50% fuller than last year at this time, President Von der They read. However, prices are still through the roof: they are now 200% higher, on average, than a year ago, despite the fact that the initiatives already in force and the mere idea of putting the debate on the table have already managed to reduce them.
The risk now is that in order to deal with the problem the divisions within the Union begin to sharpen and that each one of the Twenty-seven goes their own way. That, warns Brussels, puts the internal market at risk of fragmentation. For this reason, with the learning of the coronavirus crisis still fresh, both the southern flank and Poland have been especially bothered by the rain of millions that Germany, to prop up its economy, has deployed with its energy aid plan of up to 200,000 million euros. . This package includes gas and electricity price caps.
“The richest country, the most powerful in the EU, is trying to use this crisis to gain a competitive advantage for its businesses in the single market,” Polish Prime Minister Mateusz Morawiecki criticized Germany. “This is not fair,” he added. The French president, Emmanuel Macron, has recognized the “tensions” that the German measure has raised between the countries that can finance such lucrative support packages. Paris maintains that the best recipe would be to let member states take advantage of the European support fund for covid-19.
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