“It is not good for Germany or for Europe that it isolates itself. It is important that with proposals that are the subject of a broad consensus we can find unanimity & rdquor ;. The words of the President of France, Emmanuel Macronupon their arrival at the European Council that takes place this Thursday and Friday in Brussels, confirm what is the main obstacle that the Twenty-seven face in trying to close a minimum agreement on the new package of measures to intervene in the gas market: Berlin and its refusal to accept a price cap for fear that suppliers will choose to sell the hydrocarbon in other countries that offer better prices. “It will probably be difficult, but it is very important that today or tomorrow we send a strong signal that we are determined to act together and have a positive impact”, claimed the President of the European Council, Charles Michael.
“Our role is to do everything possible so that there is European unity and that Germany is part of it. I really hope that we can find that path of convergence & rdquor ;, the German chancellor insisted upon his arrival, Olaf Scholz, rejecting the criticism from other capitals, intensified after the massive aid package of 200,000 million announced by its Executive to support citizens and companies, and insisting that its support for Europe is indisputable. “We pay 26% of the budget and we are developing many solidarity mechanisms as we did in the previous coronavirus crisis, with instruments such as the recovery fund & rdquor ;, he has defended himself by claiming cooperation with other consumer partners, such as South Korea and Japan, and with supplier countries.
An insufficient solution in the eyes of a majority of countries that have once again defended putting a cap on the price of gas. This is the case of the acting Italian Prime Minister, mario draghi, which has taken advantage of its last intervention in the European Council, according to diplomatic sources, to demand measures that alter the dynamics of prices and prevent capitals with greater fiscal margin, such as Berlin, from acting on their own. Otherwise, the risk will be “market fragmentation & rdquor; and “recession”, has alerted. As he did two weeks ago, the Italian has once again called for the creation of a powerful common fund that can be used “not only for investments but also to mitigate (high) prices.”
dynamic price cap
The starting point for the negotiation this Thursday was the proposal presented on Tuesday by the European Commission to intervene in the gas market based on three elements: joint gas purchases of at least 15% of the natural gas destined for storage, a dynamic and temporary price cap of gas – until next spring – while a new price index is designed and negotiated – an alternative to the Dutch TTF to which contracts in Europe are indexed – to avoid volatility and combat manipulation by Russia, and the binding commitment of solidarity of the Member States to assist another partner in the event of energy emergency.
All the elements appear in the draft conclusions on which they have begun to negotiate this Thursday and in which there is no general cap on the price of gas but the order to Brussels to urgently take into consideration a temporary European framework to limit the price of gas in electricity generation to a level that helps lower the price of electricity without increasing gas consumption. Although some ideas elicit more consensus, the Twenty-seven continued at the close of this edition retouching the text to try to achieve a minimum agreement, although clearly without a cap on gas prices.
Criticism of Orban
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“The European Commission’s proposal on the gas price cap is like going to a bar and telling the bartender that you want to pay half for your beer. It’s not going to happen. Customers cannot reduce energy prices, only diversification and competition can & rdquor ;, the Prime Minister of Hungary said in a message on Twitter, Viktor Orban, which also rejects compulsory joint purchases of gas. Also the Dutch Prime Minister, Mark Ruttereluctant to impose ceilings, expressed his doubts as soon as he arrived in Brussels, although without taking a stand against the Brussels initiative.
“The Netherlands is analyzing the proposals presented by the European Commission with an open mind. Any measure we take must really lead to lower prices, guarantee security of supply, keep the energy transition moving and maintain the incentive to save energy & rdquor ;, he has indicated insisting that his country, before accepting anything, wants to be sure of that the measure works. “There have been many summits in which we have heard many ‘no’s’. Perhaps today is a summit in which we can hear a little more the ‘yes’, the things that are possible & rdquor ;, the Belgian Prime Minister said hopefully, Alexander de Croowhich it supports as well as fifteen other countries, including Spainset a general cap on the price of gas.