European Union leaders struggled to find immediate solutions on how to deal with the ongoing energy crisis but have avoided an open rift between Germany and France that would have exposed EU divisions as it confronts Russian President Vladimir Putin over his war in Ukraine.
After day-long talks in Brussels dragged well into the night, the 27 EU leaders papered over divisions between some of the biggest member states and at least agreed to continue working on ways to impose a gas price cap in case of big price increases.
French President Emmanuel Macron highlighted his work with German Chancellor Olaf Scholz to create a veneer of unity after talks that started early Thursday.
He said that together with close technical advisers, “I will see Chancellor Scholz in Paris next week so that we can move forward, with our teams, on all the issues.”
Sur l’énergie, les objectifs de ce Conseil européen sont atteints : pour faire baisser les prix, tous les outils sont en place. L’Europe unie et en action pour ses citoyens ! pic.twitter.com/aTDXUWMn1k
— Emmanuel Macron (@EmmanuelMacron) October 21, 2022
'Shared determination'
Scholz said the main issue was curbing “spikes” in gas trading that may last only a few hours but still send prices excessively upward.
He said measures to counter that should be further examined.
When the axis between Paris and Berlin is aligned, usually the rest of the EU follows.
“There is a strong and unanimously shared determination to act together, as Europeans, to achieve three goals: lowering prices, ensuring security of supply and continuing to work to reduce demand," said summit host Charles Michel, the EU Council president.
Diplomats said the execution of the proposals, including the possibility of a price cap, should be first properly assessed by energy ministers next Tuesday and might even need a new summit of leaders in the coming weeks.
EU 'gas pool' proposal
To make sure the runaway cost of gas doesn’t further tank struggling EU economies, the Commission has proposed a system of pool buying gas and offered a compromise that would allow for a correction mechanism to kick in in exceptional circumstances.
Countries like the Netherlands and Germany were loathe to start such market intervention, but agreed to study a system that would be failproof and not allow suppliers to stop delivering and go to more lucrative markets.
In addition, the leaders are also pushing for the creation of a new LNG gas index better reflecting the market following the drastic reduction of imports of pipeline gas from Russia.
Divisions were so big at the start of the summit that agreeing on further exploration of the plan proposed by the Commission was seen as almost an achievement in itself.
Hungarian Prime Minister Viktor Orban said a price cap would send suppliers away.
The “gas price cap is like going to a bar and telling the bartender you want to pay half price for your beer. Not going to happen,” he said on Twitter.
Orban's Twitter account appears to have been suspended, but his spokesperson has taken to social media to underline Hungary's position on gas caps.
A big battle is expected at #EUCO over the @EU_Commission’s proposal to introduce a price cap on gas, which is essentially a new #sanction that would threaten Europe’s #EnergySecurity & increase prices. We must defend 🇭🇺Hungary’s national interests & stand our ground in Brussels! pic.twitter.com/o7d37Og9nv
— Balázs Orbán (@BalazsOrban_HU) October 20, 2022
France and Germany to work towards consensus
The traditional driving duo of the EU – Germany and France – were in opposing camps, with Germany expressing doubts and holding off plans for the price cap, while most others want to push on.
Scholz said any dispute was on the method, not the goal. “Prices for gas, for oil, for coal, must sink; electricity prices must sink, and this is something that calls for a joint effort by all of us in Europe,” he said.
Natural gas prices spiralled out of control over the summer as EU nations sought to outbid one another to fill up their reserves for winter.
The member states have already agreed to cut demand for gas by 15 percent over the winter. They have also committed to filling gas-storage facilities to at least 80 percent of capacity by November and – as a way of reducing gas-fired power generation – to reducing peak demand for electricity by at least 5 percent.
The question of possible EU gas-price caps has moved steadily up the political agenda for months as the energy squeeze tightened, with 15 countries such as France and Italy pushing for such blunt intervention.
