EU leaders are divided over how to respond to the energy crisis

EU leaders are divided over how to respond to the energy crisis

couple Jason Hovet, Sabine Siebold and Robert Muller

PRAGUE (Reuters) – Disagreements between European Union leaders over nationally decided gas price caps and tariff shields resurfaced in Prague on Friday, with Poland in particular accusing Germany of showing restraint and “selfishness” in its response to the energy crisis to show caused by the Russian invasion of Ukraine.

A majority of member states have urged Brussels to propose a gas price cap, but the devil is in the details: some countries want a measure that covers all purchases, while others would like to limit it to gas used to generate electricity.

Gas prices have skyrocketed since the European Union started weaning itself off Russian gas, which made up 40% of its imports before the war – compared to around 10% today. Even though they’ve come down a bit lately, they’re still 200% higher than September 2021.

Their ceiling is not unanimous. In particular, Germany, Denmark and the Netherlands oppose the principle, fearing that it will make their care more difficult and reduce incentives for sobriety.

Austrian Chancellor Karl Nehammer, arriving at the EU summit in Prague, insisted that any cap should take into account the interests of producers.

“Negotiations are going on. And they will be intense because our goal is (…) to support the energy suppliers so that the gas supply does not decrease,” he said.

Czech Prime Minister Petr Fiala called for a limited cap on gas consumption in power plants, while his Luxembourg counterpart Xavier Bettel warned of a situation that would prevent EU countries from entering the global market.

“German egoism”

European Council President Charles Michel said he did not expect a decision on the matter this Friday but at the next summit on October 20-21.

In this context, Polish Prime Minister Mateusz Morawiecki has heavily criticized the €200 billion tariff shield recently unveiled by Germany.

“German egoism must be shelved,” the Polish head of government grumbled, warning against driving a wedge between the rich countries that can afford high budget spending and the others.

However, Belgian Prime Minister Alexander De Croo pointed out that without a common response, member states would have to take their own measures to protect businesses and households from the consequences of rising energy prices.

“You can’t ask people to fend for themselves in the cold,” he said. “The real solution is that we act together in the markets and there is no longer a need for national aid plans.”

Faced with this bickering, EU Economic and Financial Affairs Commissioner Paolo Gentiloni reminded that the last thing the EU can afford in the current geopolitical context is “fragmentation, a division between European countries”.

However, the picture is not entirely bleak. With a gas storage tank that is 90% full, the Twenty-Seven are equipped to get through the winter without any problems, stressed the President of the European Commission, Ursula von der Leyen.

“We have a first line of defense for our internal market,” she said. “Now is the time to discuss ways to limit energy price spikes and energy price manipulation by (Russian President Vladimir) Putin.”

(Reporting by Jan Strupczewski, Kate Abnett, Jason Hovet, Alan Charlish, Sabine Siebold, Michel Rose, Michael Kahn, Pawel Florkiewicz, Marine Strauss, Sudip Kar-Gupta, Charlotte van Campenhout; French version Tangi Salaün, editing by Sophie Louet)


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