Summit: Against Macron – Scholz – What Berlin achieved – What is foreseen for the ceiling on natural gas

After many hours of behind-the-scenes “bargaining”, tension and Franco-German feuds, the heads of state and government of the European Union agreed today to draw up a “road map” and put into place in the coming weeks measures to limit the ignition of energy prices, while they found and “golden ratio” for the thorny issue of the cap on natural gas. Athens expressed its satisfaction with the European energy agreement, with which “measures to limit energy prices” were decided.

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

Although after tough talks, the EU sought to project its unity, many of the points in the text of the conclusions remain to be clarified and the negotiations in the coming weeks are said to be difficult.

“We now have a very good road map,” assured the president of the European Commission, Ursula von der Leyen, while the president of the European Council, Charles Michel, spoke of an “agreement on a package of measures”, but the details of which have yet to be clarified.

However, the German chancellor made it clear that if the energy ministers cannot agree on the final version of the plan, a new Summit will be needed on the issue.

According to French President Emmanuel Macron, the mechanisms described in the conclusions of the Summit could be implemented “at the end of October, beginning of November”. He believes that the leaders “sent a very clear message today to the markets about (their) determination and (their) unity”.

“Message to Markets”

As stated in the text of the conclusions of the European Council made public after the end of the first day of the Summit, the heads of state and government ask the Commission to submit to them, “urgently”, “concrete decisions” on measures, including interventions to prevent “volatility” of gas prices.

The 27 agreed to joint gas purchases, at EU level, on the grounds that they would be “voluntary”, but would cover at least the “mandatory” level of 15% of the EU’s storage infrastructure filling targets ahead of winter 2023.

They also called for “accelerated negotiations” with “credible” suppliers such as Norway and the US so that member states “benefit from the economic weight of the EU” cumulatively rather than competing on the global market, risking raising the fever in the markets.

As well as a measure to set wholesale prices on the so-called “gas exchange”, leaders are also calling for a concrete plan for a “temporary” mechanism to cap the price of gas used to generate electricity — a measure already in place in Spain and in Portugal and France was calling for it to be extended to the whole of the EU.

Nevertheless –concession to secure German consent—, this mechanism will be accompanied by guarantees “avoidance of any increased gas consumption”. Any possibility of the EU subsidizing electricity exported to its neighboring countries (Norway, United Kingdom, Switzerland…) should also be prevented.

Macron – Soltz, appeasement after the fight

Asked about “the Franco-German axis”, the engine of European cooperation that seems to have been damaged, Mr Macron said the tete-a-tete they had during the session with the German chancellor had allowed “a lot of things to be clarified”. .

A few hours earlier, he estimated that Berlin followed an “isolationist” path, appearing to blame the German government for the EU’s difficulties.

“I think that the isolation” of Berlin is not good, neither for Germany, nor for Europe, he stressed. “Our role is to do everything so that there is European unity and Germany is part of it,” he added.

“It’s very clear that Germany always acts in a very solidary way,” countered Olaf Solz.

The German chancellor was accused of “selfish” behavior when he announced at the end of September a €200 billion support plan for the German economy, without any coordination with his European partners.

Also without coordination with Berlin, Paris announced on Thursday that new infrastructure would be built after years of the plan being stalled: France, Spain and Portugal agreed to replace the plan for the MidCat pipeline by an undersea pipeline, which will connect Barcelona to Marseille and carry gas and later hydrogen.

The MidCat project, launched in 2003, was supported by Lisbon, Madrid and Berlin, but met with resistance in France. It was intended to connect the gas networks of France and Spain with a 190 km pipeline.

In the middle of the night, after some 12 hours of negotiations by 27, Emmanuel Macron and Olaf Scholz showed an appeasement mood, with the German chancellor speaking of an “intense and fruitful” relationship. The two leaders have met on Wednesday in Paris.

RES-EMP

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