EU: “Low expectations” for an agreement of the “27” on a ceiling on natural gas

“A puzzle for strong solvers” is how an agreement will be reached between the “27” on a ceiling on the price of natural gas. How, when and if and to what extent it will be enforced ceiling on the price of natural gas on a European scale it will dominate yet another council of European Union energy ministers, who want a joint plan to bring down high energy prices but have been unable to reach a compromise for weeks now.

The 27 will consider the next moves to tame prices and protect consumers from skyrocketing bills as Europe heads into a winter with tight gas supplies from Russia, a crisis over rising living costs, the threat of recession looming .

“We must quickly find a solution, applicable throughout the European Union,” a European Union official summarized. “National solutions are not the way forward,” he warned.

Energy ministers meeting today in Prague will try to come up with clear guidelines on what the European Commission should propose to the European Council as part of EU measures to tackle the issue.

But the 27 can’t seem to agree for what exactly they want.

With gas prices nearly 90% above where they were a year ago, most governments say they want a cap but disagree on its design and scope. Some countries, such as Germany, the EU’s biggest gas market, remain opposed to the idea.

Last week’s Summit was not very clear on what the next steps are. The talks “moved in all directions,” a European diplomatic source said — ceilings were proposed on the price of gas in general, gas transported through pipelines, gas used to generate electricity…

Another diplomatic source pointed out that there was no sign of “unity” at the Summit. “I would say expectations are low,” he added ahead of today’s council.

Others expressed hope that a consensus was beginning to emerge. According to an official, several countries are leaning towards the “Iberian model”, imposing a cap on the gas used to generate electricity, in the first phase.

Spain and Portugal implemented this scheme in June, managing to reduce electricity prices in their markets. The idea is gaining supporters, but some countries are concerned that it will increase demand, as found in Spain after it was implemented.

EU member states have been quick to implement the retention of part of the surplus profits of electricity producers in favor of consumers, as well as the joint imposition of restrictions on the consumption of electricity and natural gas.

But the pressure to adopt measures with application throughout the EU intensifies, especially after Germany announced how it will spend up to 200 billion euros to protect its consumers and businesses from high energy costs, which has upset other governments as support measures prove to be very uneven from country to country.

RES-EMP

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