Source: Belga, own reporting
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The highly technical negotiations on the energy market dragged on for nine hours on Friday – quite exceptional for the second day of a European summit. In the end, all 27 leaders agreed to the proposal that the Commission, together with the energy sector, will examine a series of potential short-term measures. “It’s an important topic. A number of European councils have therefore already been involved. But that was also necessary to arrive at concrete decisions. And I can say that we are very satisfied in our country,” Prime Minister Alexander De Croo said during his own press conference after the European Council’s consultations.
According to De Croo, three important decisions were made today. The first is the group purchase of gas. “The European Commission can now purchase gas on behalf of the 27 member states,” said De Croo. As an example, he referred to the decision of the United States that this year 15 billion cubic meters of gas going to deliver. “Less Russian gas, more American gas,” the prime minister said. He did clarify that this system will be voluntary. Not every country has the same needs. De Croo also compared it to the group purchases of vaccines during the pandemic. Although this is a more complicated file, he said.
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Secondly, there will be a solidarity mechanism. This means that the European member states will ensure that all reserves are sufficiently replenished in the winter so that no one is left out in the cold. “For us this is less important because we are well connected in terms of gas supply.” There was already little discussion about this solidarity mechanism.
And the final decision is a pricing mechanism. For example, there will be a price ceiling for gas. According to De Croo, this decision is mainly due to the fact that the introduction will never be just a political decision, but will take place in consultation with the industry. “That was necessary to win over Germany and the Netherlands,” he said. “You have to see the price mechanism together with the group purchases. That has always been a big stick and should give us more leverage in the negotiations.”
“Ensure peace and security”
The one who reacts enthusiastically to the entire agreement is federal energy minister Tinne Van der Straeten (Green). “Thanks to the joint purchase, we are capping the European gas price and taking a weapon from Putin. This is how we protect our families and businesses against rising prices,” she says. “The gas market has gone completely off the rails and thanks to the joint purchase we provide peace of mind and security.” PS chairman Paul Magnette also spoke out on Friday as an outspoken supporter of a ceiling on European energy prices. According to Prime Minister De Croo, the ‘cap’ as agreed is only temporary. “This is not a measure that you will still need in five years.”
Germany and the Netherlands skeptical
Germany and the Netherlands remain skeptical about the price caps. “There are some countries that have very strong ideas about market intervention and price caps. Others, including Germany, are very skeptical,” said German Chancellor Olaf Scholz. According to the chancellor, it is good that the European Commission will continue to study the situation in consultation with the energy companies. However, he expects that the debate will not be over immediately.
Dutch Prime Minister Mark Rutte also noted that the member states are “very divided” regarding various options to keep prices down. The Netherlands itself is not in favor of capping the gas price, because it could delay investments in renewable energy and endanger security of supply.
“If you say to Putin: we will not pay 100, but only 80 for your gas, a number of countries, including the Netherlands, say that security of supply is not compromised. If Putin says that he will not deliver, then you also have a problem,” Rutte said.
Rutte hopes that a dialogue with energy suppliers and experts can bring more clarity to the debate. He already drew one conclusion on Friday. “There is no ‘one size fits all’”, because there is also no single European energy market and the differences between the various Member States and regions are very large.
Exception for Spain and Portugal
The conclusions of the EU agreement state that the Commission is prepared to examine the compatibility of temporary national emergency measures in the power markets, including taking into account interconnectivity. That passage is tailor-made for Spain and Portugal, a peninsula with very few connections to the European energy market. Spanish Prime Minister Pedro Sanchez spoke of an “exception regime” that “will allow our governments to lower energy prices”.
(sgg)
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