The most controversial proposal is the cap on the price of Russian natural gas, which is largely aimed at financially punishing the Kremlin.
“Divided” were the reactions of EU member states to the proposals presented yesterday by the president of the European Commission, Ursula von der Leyen, to address the energy crisis, six diplomats commented to Politico.
Von der Leyen proposed five “immediate” moves to help smooth Europe’s energy crisis:
- price ceiling on Russian natural gas
- mandatory measures to reduce electricity demand
- a cap on the revenue of companies that generate electricity from low-cost sources with these “windfalls” going back to consumers
- solidarity tax on fossil fuel companies making big profits
- facilitating support to troubled utilities.
Two of those proposals are viewed positively by both the Commission and EU countries, several diplomats said after a meeting of EU ambassadors: the first is that credit is provided to utilities to respond to the current high-price environment.
The second is the taxation of excess profits, although EU ambassadors wanted assurances that the proceeds of such taxes would remain in the same country.
The sentence marked as controversial is the one about the ceiling on the price of Russian natural gas, which is largely aimed at financially punishing the Kremlin for the war in Ukraine. If that happens, the Russian president has threatened to turn off the taps completely.
Member countries have “very contradictory views,” a European diplomat told Politico.
Germany has said it is “skeptical” about the idea. Hungary, Russia’s closest EU ally, is against it, as are Slovakia and at least two other countries, diplomats said.
Others, including Poland and Italy, want the Commission to go further and cap the price of all gas imported into the EU.
Von der Leyen said this was something the Commission was “looking at”, but Brussels was broadly opposed to the idea.
While Norway, now the EU’s biggest natural gas supplier, has left open the possibility of being positive about a cap, there are doubts about the US.
Hungary wants the deal to be approved unanimously rather than by the emergency procedure that requires a majority as the Commission wants, a diplomat said.
The idea of ​​reducing electricity demand is popular, but while von der Leyen’s proposal calls for the reductions to be mandatory, countries such as Bulgaria, Hungary, Greece and Poland want such measures to be optional.
The Commission did not deal with the issue of decoupling gas and electricity prices, although this is something many countries want to see happen.
Many countries were taken by surprise by von der Leyen’s suddenness in making the announcements as national experts discussed technical details ahead of a meeting of energy ministers on Friday. “It was unfortunate that the announcements were made at the same time as member states were discussing the way forward,” said an EU diplomat.
But despite the grumbling, the capitals broadly agreed that von der Leyen was right to take the reins of the debate.
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