Call from Brussels: Europe will honestly share the increasingly scarce gas. But now that European gas consumption has to be sharply cut, the question becomes: how do you determine how large everyone’s share can still be?
In preparation for a possible total interruption of the Russian gas supply, the European Commission presented plans on Wednesday to limit the damage and spread it across the EU. The hottest part is the 15 percent savings target that it imposes on all member states – initially voluntary but enforceable in an ’emergency’.
The proposal is sensitive because, for the first time, Brussels is heavily involved in the energy consumption of Member States. But also because theflat tax‘ which the Commission proposes does not feel equally fair to everyone. The unequal starting positions and differing views on what should be prioritized do not make the implementation of the plan a running race.
By distributing the pain fairly and by letting everyone do their part, Brussels wants to avoid the most dramatic consequences of a gas stop. “The choice we have today is to show solidarity now, or to wait until it is forced on us – with much higher costs,” said European Commissioner Frans Timmermans (Climate) on Wednesday.
The idea: everyone in the EU is ultimately better off by saving in time, replenishing stocks and coordinating well. The damage can then be limited to a European GDP loss of 0.4 percent, compared to a maximum of 1.6 percent in a chaotic situation.
Alarm button
This partly explains the alarmist tone that Brussels took on Wednesday. Commission President Ursula von der Leyen spoke of an “energy war”, Russian “blackmail” and a possible “emergency”. It is language that should prepare member states and citizens for the first stages of a war economy, in which energy is rationed for everyone. Whether the gas tap actually closes quickly is not even relevant. “The faster we act, the more we save, the more secure we are in winter.”
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European gas supplies are now 64 percent full, while the target for November is 80 percent. And even that level will be insufficient if Russia turns the tap completely off.
If the need really comes down, Brussels wants to be able to press some sort of alarm button that makes the voluntary targets mandatory. That horse remedy should put pressure behind the goals – but also offer a foothold in case the bottom has really been reached and painful distribution issues arise. “Our worst enemy is fragmentation,” said von der Leyen, referring to the chaos at the start of the corona pandemic. Within the EU, the principle of solidarity applies to energy: Member States must help each other when there are shortages. But how this works out in practice has never been tested, and there is great concern for chaos and political tension.
In order to achieve the savings targets, the European Commission provides member states with a series of recommendations and principles. These will initially focus entirely on industry, by far the most important gas user. Where possible, companies should switch to other forms of energy, which in practice often means more coal. But in dire need, some sectors may also have to be shut down. Which exactly those are, Brussels leaves in the middle. She does, however, recommend looking primarily at the social importance: companies that are crucial for the food supply and healthcare, for example, should be put in charge later than others.
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In principle, households are not affected: they fall under the ‘protected consumers’ category, just like hospitals, for example, which always receive priority. Even if the Russian gas were to disappear completely, there would still be enough to continue supplying that group. But, Brussels could not emphasize enough on Wednesday: everyone can contribute. Citizens too, by taking shorter showers or lowering the thermostat.
Moral apple
But Brussels can do no more than a moral appeal here – to growing inconvenience in some Member States. For example, in Germany, where the call is growing louder that more must also be demanded of citizens – before they are by definition placed above industrial production. It becomes politically sensitive especially if citizens from another EU country are given priority over ‘own’ companies. In any case, industrial sectors will compete against each other in the coming period who is most indispensable to the economy and should be spared.
What is particularly inconvenient is that all Member States are being imposed the same reduction target: from Germany, which has made itself highly dependent on Russian gas in recent decades, to Portugal, which barely uses Russian gas. The reduction target is compared to the past five years – meaning that the Netherlands is in principle already ready. Southern European member states are already complaining that they have to save money to help German industry through the winter. Just like in Poland, which is already cut off from Russian gas but has its own gas reserves in good order.
Von der Leyen admitted on Wednesday that some member states are “more vulnerable” than others. “But all Member States suffer from internal market distortions.” Timmermans emphasized that a uniform target is the “simplest and fastest”.
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Nevertheless, the level of the target was negotiated until the last minute in Brussels. And when European energy ministers meet next week to discuss the plans, it will undoubtedly spark the most discussion. Ultimately, the proposal can also be implemented without unanimous consent. But people in Brussels prefer not to think too much about that scenario. If Europe has to continue divided on this theme, winter will look even more terrifying.