EU leaders divided over response to energy crisis


by Jason Hovet, Sabine Siebold and Robert Muller

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

A majority of Member States have asked Brussels to propose a gas price cap, but the devil is in the details, with some countries calling for a measure covering all purchases while others would like to limit it to gas used to generate electricity.

Gas prices have soared since the European Union began to wean itself off Russian gas, which before the war accounted for 40% of its imports – compared to around 10% today. Even though they have recently decreased a bit, they are still 200% higher than September 2021.

Their ceiling is not unanimous. Germany, Denmark and the Netherlands in particular are opposed to the principle because they fear that it will complicate their supply while reducing incentives for sobriety.

On his arrival at the EU summit in Prague, Austrian Chancellor Karl Nehammer insisted that any capping measure take producers’ interests into account.

“The negotiations are continuing. And they are going to be intense because our objective is to support (…) the energy suppliers so that the supply of gas does not decrease,” he said.

Czech Prime Minister Petr Fiala pleaded for a limited cap on gas used in power plants, while his Luxembourg counterpart Xavier Bettel warned of a situation that would prevent EU countries from getting supplies on the world market.

“GERMAN SELFISHNESS”

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

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

“German selfishness must be shelved,” railed the Polish head of government, warning against driving a wedge between the rich countries that can afford large budget expenditures, and the others.

Belgian Prime Minister Alexander De Croo nevertheless pointed out that in the absence of a common response, Member States had to take their own measures to protect businesses and households from the consequences of soaring energy prices.

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

Faced with these bickering, the European Commissioner for Economic and Financial Affairs, Paolo Gentiloni, recalled 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 gas storage now 90% full, the Twenty-Seven are equipped to get through the winter without too many problems, underlined 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 the manipulation of energy prices 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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