The EU has adopted a "Roadmap" to curb Energy Prices

World » EU | October 21, 2022, Friday // 10:29
Bulgaria: The EU has adopted a "Roadmap" to curb Energy Prices

EU leaders agreed on a "roadmap" aimed at introducing measures within weeks to protect European consumers from rising energy prices. The agreement came after 11 hours of arguing over various proposals to lower energy bills as gas prices skyrocketed because of the war in Ukraine.

The bloc's 7 member states have been arguing for months over what joint initiatives to adopt, torn apart by significant differences in the countries' energy mixes. While the announcement of the summit text demonstrated public unity, it was clear that the negotiations ahead would remain difficult. They will continue next week with a meeting of EU energy ministers in Luxembourg.

The summit agreement offers "a solid roadmap for further work on the topic of energy prices," European Commission chief Ursula von der Leyen told a news conference. The published text calls on the European Commission and EU countries in the coming weeks to find ways to protect consumers from high prices "while preserving Europe's global competitiveness... and the integrity of the single market". European Council President Michel said the "energy crisis poses a threat to the EU's internal market" and stressed that "maximum coordination" is needed to protect the market. At least 15 EU countries, more than half of the bloc, are pushing for an ambitious price cap and are increasingly troubled by strikes and cost-of-living protests spreading across France, Belgium and other member states. But the idea of ​​capping prices has met resistance from Germany, the EU's biggest economy, which fears gas supplies could eventually be diverted to more lucrative markets in Asia. Several smaller economies are also angry that the German government won't support a gas cap and is helping its citizens pay high prices with a 200 billion euro bailout package. Ultimately, the agreed text states that a "cost-benefit analysis" of the electricity price cap should be carried out and its impact outside Europe assessed.

French President Emmanuel Macron, who went to the meeting saying Germany was self-isolating, expressed satisfaction with the outcome: "The next two or three weeks will allow the Commission to introduce and implement these mechanisms." He said it sends "a very clear signal to the markets about our resolve and our unity." German Chancellor Olaf Scholz said "good progress" had been made: "We wanted together to limit the fluctuations that could be caused by speculation."

Franco-German disagreements

There was, however, no possibility of concealing the simmering Franco-German discord. That became more evident on Wednesday when the two countries delayed a regular meeting between their ministers. French Economy Minister Bruno Le Maire sought to downplay fears of a rift at the heart of Europe, telling the Frankfurter Allgemeine Zeitung newspaper that "no one could split the Franco-German couple". As he said, there is a need for a "strategic redefinition" of the bilateral relationship to create a "new alliance".

Another sign of friction between the two countries was France's decision not to consult with Germany before agreeing with Spain and Portugal to scrap the planned gas pipeline that Berlin has been pushing for years. The leaders of the three countries met and "decided to abandon the MidCat project and instead prioritize the green energy corridor connecting Portugal, Spain and France to the EU's energy network." The MidCat project, which emerged a decade ago, calls for the construction of an overland gas pipeline that would connect gas terminals in Spain and Portugal, via France, to European networks supplying gas to Germany and other countries. In its place, they said, would be laid an underwater pipeline called BarMar - from Barcelona in Spain to Marseille in France. Initially, it will be used for natural gas, but over time, more and more hydrogen will be relied on as more climate-friendly. But the agreement released by Macron and his Spanish and Portuguese counterparts did not present a timetable for the completion of BarMar and did not say how it would be financed, leaving experts skeptical.

Another reason for Germany's concerns is that the energy deal reached supported joint purchases by the EU's energy giants to drive lower prices to fill reserves, as long as "national needs" are taken into account. The agreement also sets out restrictions aimed at "preventing increased gas consumption".

Another point of German concern is the power the European Commission is being given to establish a pricing "corridor" on Europe's main gas index to intervene when prices get out of control.

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Tags: EU, prices, energy, gas
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