By Associated Press
PRAGUE: European Union leaders converged on Prague Castle on a crisp Friday morning to try to bridge significant differences over a natural gas price cap as winter approaches and Russia’s war on Ukraine fuels a major energy crisis.
The price cap is one of several measures the 27-nation bloc is preparing to contain an energy crisis in Europe that is driving up prices for consumers and businesses and which could lead to rolling blackouts, shuttered factories and a deep recession over the winter.
As the Europeans bolster their support for Ukraine in the form of weapons, money and aid, Russia has reduced or cut off natural gas to 13 member nations, leading to surging gas and electricity prices that could climb higher as demand peaks during the cold months.
Standing in the way of an agreement is the simple fact that each member country depends on different energy sources and suppliers, and they’re struggling to see eye-to-eye on the best way ahead.
Latvian Prime Minister Krisjanis Karins summed up the challenge for the EU as it considers a possible gas-price ceiling.
“A price cap on gas, if that could be achieved, would be grand — with the caveat that we cannot endanger security of supply,” Karins said. “So we cannot set the price so that no one would sell gas into Europe.”
Belgian Prime Minister Alexander De Croo said he hoped the “last hurdles” to a price cap would be overcome at the meeting, but also that a joint path of action should be agreed to send two important messages.
“One to the energy markets, to make it clear we no longer accept these prices, we will not continue to pay this market manipulation. Secondly, an important signal to our populations, to our companies, that we are going to tackle the problem at the root,” he said.
In a choreographed moment, French President Emmanuel Macron, Dutch Prime Minister Mark Rutte and German Chancellor Olaf Scholz entered Prague Castle together on foot, walking past a small but noisy crowd of pro-Ukraine demonstrators.
A group of 15 member countries has urged the EU’s executive branch, the European Commission, to propose a cap on gas prices as soon as possible, but the idea has not secured unanimous support, with Germany notably blocking.
For now, the commission says, Europe’s gas storage capacity stands at about 90%, even as Russian gas supplies to the EU declined by 37% between January and August, with the U.S. and Norway stepping in to provide liquefied natural gas. But those replacement supplies have not been cheap.
“I therefore recommend stepping up negotiations with our reliable suppliers to reduce the prices of imported gas of all kinds,” commission President Ursula von der Leyen said in a letter to the leaders ahead of Friday’s summit in the Czech capital.
Von der Leyen also recommended that countries work together to “develop an intervention to limit prices in the natural gas market,” where prices have fluctuated wildly over jitters about the war and potentially uncoordinated national responses to the problem.
As high gas prices drive up electricity prices, von der Leyen said, the EU should also work on a temporary cap on the price of gas that is used to generate electricity.
She also called for the EU to boost its energy independence by investing in infrastructures such as pipelines and efficiency measures like the installation of better home or building insulation and heat pumps. Pipelines, power stations and transmission cables must also be better protected, she said.
For now, a breakthrough on the price cap seems a distant prospect, but the leaders may make enough progress to conclude some kind of agreement when they meet again in Brussels on Oct 20-21.
For all its difficulties, sealing a deal on gas is another key to resisting what the Europeans believe to be Russia’s manipulation of the energy markets in an attempt to weaken their resolve to support conflict-ravaged Ukraine.
The EU agreed to a new package of sanctions against Russia on Thursday, hitting trade, notably in the tech sector, slapping travel bans and asset freezes on 30 more officials, and targeting seven organizations. But the bloc is running out of economic ammunition to punish Russia with.
“We have to decrease the prices of energy. But it is an economic issue as much as a security issue,” EU foreign policy chief Josep Borrell said. “Energy is becoming the most important geostrategic issue today, related with the war, but also with the balance of power in the world.”
PRAGUE: European Union leaders converged on Prague Castle on a crisp Friday morning to try to bridge significant differences over a natural gas price cap as winter approaches and Russia’s war on Ukraine fuels a major energy crisis.
The price cap is one of several measures the 27-nation bloc is preparing to contain an energy crisis in Europe that is driving up prices for consumers and businesses and which could lead to rolling blackouts, shuttered factories and a deep recession over the winter.
As the Europeans bolster their support for Ukraine in the form of weapons, money and aid, Russia has reduced or cut off natural gas to 13 member nations, leading to surging gas and electricity prices that could climb higher as demand peaks during the cold months.
Standing in the way of an agreement is the simple fact that each member country depends on different energy sources and suppliers, and they’re struggling to see eye-to-eye on the best way ahead.
Latvian Prime Minister Krisjanis Karins summed up the challenge for the EU as it considers a possible gas-price ceiling.
“A price cap on gas, if that could be achieved, would be grand — with the caveat that we cannot endanger security of supply,” Karins said. “So we cannot set the price so that no one would sell gas into Europe.”
Belgian Prime Minister Alexander De Croo said he hoped the “last hurdles” to a price cap would be overcome at the meeting, but also that a joint path of action should be agreed to send two important messages.
“One to the energy markets, to make it clear we no longer accept these prices, we will not continue to pay this market manipulation. Secondly, an important signal to our populations, to our companies, that we are going to tackle the problem at the root,” he said.
In a choreographed moment, French President Emmanuel Macron, Dutch Prime Minister Mark Rutte and German Chancellor Olaf Scholz entered Prague Castle together on foot, walking past a small but noisy crowd of pro-Ukraine demonstrators.
A group of 15 member countries has urged the EU’s executive branch, the European Commission, to propose a cap on gas prices as soon as possible, but the idea has not secured unanimous support, with Germany notably blocking.
For now, the commission says, Europe’s gas storage capacity stands at about 90%, even as Russian gas supplies to the EU declined by 37% between January and August, with the U.S. and Norway stepping in to provide liquefied natural gas. But those replacement supplies have not been cheap.
“I therefore recommend stepping up negotiations with our reliable suppliers to reduce the prices of imported gas of all kinds,” commission President Ursula von der Leyen said in a letter to the leaders ahead of Friday’s summit in the Czech capital.
Von der Leyen also recommended that countries work together to “develop an intervention to limit prices in the natural gas market,” where prices have fluctuated wildly over jitters about the war and potentially uncoordinated national responses to the problem.
As high gas prices drive up electricity prices, von der Leyen said, the EU should also work on a temporary cap on the price of gas that is used to generate electricity.
She also called for the EU to boost its energy independence by investing in infrastructures such as pipelines and efficiency measures like the installation of better home or building insulation and heat pumps. Pipelines, power stations and transmission cables must also be better protected, she said.
For now, a breakthrough on the price cap seems a distant prospect, but the leaders may make enough progress to conclude some kind of agreement when they meet again in Brussels on Oct 20-21.
For all its difficulties, sealing a deal on gas is another key to resisting what the Europeans believe to be Russia’s manipulation of the energy markets in an attempt to weaken their resolve to support conflict-ravaged Ukraine.
The EU agreed to a new package of sanctions against Russia on Thursday, hitting trade, notably in the tech sector, slapping travel bans and asset freezes on 30 more officials, and targeting seven organizations. But the bloc is running out of economic ammunition to punish Russia with.
“We have to decrease the prices of energy. But it is an economic issue as much as a security issue,” EU foreign policy chief Josep Borrell said. “Energy is becoming the most important geostrategic issue today, related with the war, but also with the balance of power in the world.”
