M.ows the EU to react together to the gas prices that have risen rapidly in the past few weeks? The euro finance ministers did not agree on this at their meeting on Monday in Luxembourg – probably mainly because they did not find a common reason in the analysis of the causes. The ministers of France, Spain and Greece in particular called for a European “strategy” to counter the high prices because they do not believe that they will soon decline. Other Member States oppose such a common response.
The EU Commission tends towards a middle ground. Economic Commissioner Paolo Gentiloni said after the meeting that the high energy prices were largely due to one-off effects that had to do with the economic consequences of the corona pandemic. The currently particularly high demand for gas is offset by a supply infrastructure that has not yet been fully restored. Only about a fifth of the price increase was due to EU emissions trading, said the Italian. In doing so, he reacted to fundamental criticism from Poland, for example. The government in Warsaw is resisting the planned expansion of emissions trading to include buildings and transport. Its declared purpose is to make energy generated from oil and gas more expensive in the fight against climate change.
“Temporary and targeted”
Nonetheless, the Commission wants to react to the high energy prices and the advances made by various Member States in order to contain the discussion. His authority will present the first proposals in the coming week, and a second part will follow in December. The “toolbox” of instruments against the high prices, which the Commission originally wanted to present this Tuesday, should above all ensure that possible aid actions by the member states are “limited in time and targeted,” said Gentiloni. They should not violate EU state aid rules and the internal market. The position of his authority on emissions trading is “certainly not revolutionized” by the proposals.
According to the head of the Eurogroup, Irish Finance Minister Paschal Donohoe, the heads of department agreed that households with low incomes should be compensated for the high energy prices. A number of Member States have already started this in the past few weeks. France also put a cap on gas prices. In Luxembourg, Finance Minister Bruno Le Maire called for stricter EU regulation of the European gas market. This would allow the EU to achieve greater independence from gas suppliers such as Russia. Anyone who claims that the high prices are a temporary phenomenon and do not have to be regulated jointly “must explain this to the citizens who have to spend several hundred euros more each year on their heating”.
Spain’s Finance Minister Nadia Calviño said that the price of gas would remain high over the long term. She repeated the Spanish demand that the EU should jointly build a “strategic gas reserve”. This means that the EU countries buy gas together, similar to the procurement of Covid vaccine. In this way, the 27 member states could speak with one voice when negotiating with natural gas suppliers, said Calviño, referring to Russia. Gentiloni left open whether the Commission would support such demands. According to Donohoe, they were not discussed in detail in the Eurogroup.
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