Because the EU is struggling to keep its energy crisis under control

On Friday, the energy ministers of the 27 EU members met for an urgent discussion on the situation of energy supply in the block. The only thing they agreed on was the implementation of a cap on the revenues of power companies that do not use gas to generate energy.

What they disagreed with was everything else the Commission suggested last week, including a cap for Russian gas, a cap for final energy prices and direct intervention in EU electricity markets. . It is difficult to get 27 countries to agree on so many things without any compromise. This is why EU survival plans for the winter may never work as planned.

Last week the European Commission, led by Ursula von der Leyen, proposed EU Member States impose a cap on Russian imports of natural gas, a mandatory reduction in energy consumption throughout the bloc and a cap on the revenues of electricity companies that do not use gas.

The Russian gas price ceiling was one of the elements that divided the EU in Friday’s discussions after Russian President Vladimir Putin warned that any country that imposes a ceiling on Russian oil or gas would stop. receive it.

Some EU members argued for a gas price cap for all gas imports into the bloc, following a similar suggestion from Poland earlier this month. About 15 EU members were in favor of this move, but others were skeptical. And they were right to be skeptical: Norway, the EU gas savior, did it reported he would not accept a limit on the price he gets for his gas.

“It is not a solution that we would propose, we do not think it meets the challenges of the EU”, said Prime Minister Jonas Gahr Stoere, adding: “I tell my European colleagues that I am not the one who sells the gas.”

The problem is that the European Union doesn’t have all the time in the world to discuss how to save its economy and citizens from this winter’s blackouts. And like Bloomberg underlined in a recent analysis of the situation ahead of the meeting of energy ministers, speed is not one of the things the European Union is known for.

The Belgian Prime Minister said it bluntly. “A few weeks like this and the European economy will come to a halt. Recovering from this will be much more complicated than intervening in the gas markets today,” he told Bloomberg last week. “The risk of this is deindustrialization and the serious risk of fundamental social unrest.”

The protests are already a fact. Tens of thousands he took took to the streets in the Czech Republic earlier this month to protest the government’s energy and foreign policy. Thousands of people are protesting against high energy prices in Germany and Italy as well. In France, police stopped an illegal protest this weekend, arresting several dozen people.

As the weather starts to get colder, these protests could grow and multiply too. This makes the task of EU governments even more urgent. Yet there are already internal differences that would be difficult to resolve in a short time.

Croatia, for example, plans ban exports of natural gas, which has put its neighbor – and gas customer – Hungary in crisis. Germany’s neighbors are not happyalso, after Berlin stated that it would not change its mind about the remaining nuclear reactors and will retire them as planned.

“I want to make sure I can provide everything to get through the winter,” said EU Internal Markets Commissioner Thierry Breton last week. “I think it is important that every country, which has the ability to do it right in this period, does everything possible. And it is also a question of solidarity”.

Germany clearly doesn’t see things the same way, and it appears that the only one currently seeing things like Germany is its neighbor France: the two Sealed an agreement that will see France send gas to Germany and Germany return electricity. The rest of Germany’s neighbors, however, remain reluctant to conclude solidarity agreements with the EU’s largest and currently most vulnerable economy.

Even at the best of times, the decision-making process in the European Union takes a long time. This is perfectly understandable: getting 27 states with their own national interests to agree on a course of action is often a challenge and compromises must be made.

This time around, there is little room for compromise and even less time to establish a course of action. The deal on a gas price cap seems to be out of the question if the EU is to move quickly. The only thing that can be agreed quickly would be an intervention on the energy markets to limit prices because consumption ceilings would be a challenge to negotiate.

“This is not the time to have major debates on the energy markets. We just need solutions right now,” said Marco Mensink, CEO of the European Chemical Industry Association Cefic, quoted by Bloomberg last week. “The situation is very alarming: this is the future of the industry in Europe. Companies are closing production as we speak and, with these prices, they will not reopen.”

By Irina Slav for Oilparmi

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