Leaders on the Verge of Social Crisis: Hard Bargaining and Fights on Energy at the Summit

Europe is on the brink of a social crisis due to skyrocketing oil, gas and electricity prices, with its leaders unable to reach an agreement for energy markets.

EU leaders are meeting today and Friday in Brussels to try to overcome their differences and finally arrive at a common response to the energy price flare-up, which is causing now social effervescence.

The war in Ukraine and the sanctions imposed on Russia caused oil, gas and electricity prices to rise sharply. However, since February, Europe has been slow to react, weighed down by the diverging interests of its member countries.

But the issue has taken hold dimensions of an existential crisis for society.

Thousands of European businesses fear for their very survival as they face competition from the US and Asia, where prices have remained more subdued. In Germany and France, thousands of people recently took to the streets to protest against the austerity wave.

Diplomats expect very long negotiations between the 27 heads of state and government.

The Spanish Minister of Ecological Transition, Teresa Ribera, openly criticized the work of the European Commission during an interview she gave to Agence France-Presse.

“The proposals are still a little timid: concrete measures continue to be lacking for the vast majority of issues. A real effort has been made for a year (…) but it is disheartening to see how slow and laborious Europe’s response is to the challenge we are called to face,” he said.

At the previous summit in Prague at the beginning of October, several leaders took issue with the German president of the Commission, Ursula von der Leyen. The head of the Polish government, Mateusz Morawiecki, went so far as to accuse her openly that it is cut only for German interests.

“Seven months late they brought us recession”the acting Prime Minister of Italy, Mario Draghi, stated for his part.

But the president of the European Commission has been tasked with a very difficult task, overcoming the differences of the 27, with each country having its own energy mix, some relying on nuclear power and others on plants burning gas — or even coal — to to generate electricity.

Controversies continue over the issue of the possible imposition of a ceiling on the price of gas used for energy production. A measure of this nature is already in place in Spain and Portugal; it has allowed prices to fall.

“Let’s move faster”

Several countries, including France, claim to extend this mechanism, the so-called “Iberian”, to the scale of the entire EU. However, Germany is opposed, as are Nordic countries (Denmark, the Netherlands…), as they do not see with no good eye on government interventions in the markets. Berlin also considers that the artificial reduction of gas prices would harm the goal of energy restraint, that it would lead to greater consumption in Europe.

The draft conclusions of the European Council, however, ask the Commission to prepare a proposal for the specific mechanism.

“The Iberian model is worth studying. There are still outstanding issues, but I don’t want to skip anything,” Mrs von der Leyen said on Wednesday.

“It is necessary to move faster on this matter. We should not be obliged to ask the Commission four times for the same thing in order to receive a proposal”, decided Mrs. Ribera for her part.

The president of the European Commission submitted this week and other suggestions: to organize joint gas volume markets, to introduce new rules to enforce the sharing of gas in Europe to help countries with the greatest difficulties, and to promote reform of the TTF (the European “Gas Exchange”), a reference mechanism in transactions of managers.

A lot of “progress” has been noted, but there has been no “agreement” on fundamental issues, a European diplomat acknowledged. “Priorities differ: Germany emphasizes security of supply because it can afford higher prices, but many other countries cannot face such costs,” he explained.

True to his deliberately provocative tone, Hungarian Prime Minister Viktor Orbán openly expressed his skepticism last night. “Brussels’ latest plan to buy gas together reminds me of that time we agreed to buy vaccines together. Slow and expensive. I expect a huge debate at the European Council,” Mr Orban said via Twitter.

The Mitsotakis message at the Summit

At the European Council Summit, Prime Minister Kyriakos Mitsotakis will send a message to his counterparts that the EU must send a clear, unified message to the energy markets how it will protect its citizens and its businesses from extreme price fluctuations and how it is required to act decisively, now having in its arsenal a mechanism that will establish a limit on the price of natural gas.

The government considers the set of proposals presented by the European Commission to be positive, an important step in the direction of the European response to the problem, which requires a comprehensive response, as Kyriakos Mitsotakis had underlined in March with his letter, which included a six-point plan, to the Commission President Ursula von der Leyen.

The Prime Minister will be in favor of the European Commission’s package of proposals to proceed to the implementation stage, once approved by the Council of Energy Ministers, in order to finalize the technical details of the price correction mechanism.

The fact that the price of natural gas is falling is partly related to that the debate in the EU on the price cap remains open, emphasizes Maximus.

AMPE –

Read the News today and get the latest news.
Follow Skai.gr on Google News and be the first to know all the news.