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For the first time since the end of June, the 27 EU leaders met at a summit today. They meet in Prague. There is much to discuss. The agenda includes the situation in Ukraine and the economic situation in the European Union.
But most of the attention will be on finding solutions to the energy crisis. Leaders have been baffled about this for months. The EU member states mainly want to radiate unity towards Russian President Putin. Practice proved unruly, and mutual divisions became more and more apparent.
Member States now openly accuse each other of lack of solidarity. Yesterday, Polish Prime Minister Morawiecki called Germany, the largest country in the European Union, selfish. “EU energy policy cannot be dictated by Germany.” It indicates Germany’s refusal to agree to the gas price cap.
Since March, southern EU states in particular have been demanding such a ceiling. By capping the price, the hope is that the sharply increasing energy costs of its residents will come to an end. In the meantime There are fifteen countries that demand such a price ceiling. Germany opposes this, and the Dutch government is not happy either, although EU diplomats stress that the Netherlands is “not ideological” in it.
One concern is that this cap will cause ships carrying liquefied gas (LNG) to sail through the European Union to countries willing to pay more. They fear that market intervention will then reduce the union’s gas consumption. So far, the European Commission has also been hesitant about such a price cap.
last week European Union energy ministers have taken measures that are deeply interfering with the European energy market. Cutting profits for companies that profit excessively from high gas prices should generate around €140 billion. With this money, EU governments can compensate citizens and businesses. It sounds like an impressive number, but Germany announced this weekend that it will release at least $200 billion in measures to reduce the consequences of the energy crisis on its citizens and companies. The country has also been criticized for this, including from Italy.
In Prague, there are also discussions on ways to jointly purchase gas for the European Union. Until now, the countries were competing against each other, which only increased the price of gas. The idea is that you can prevent this by negotiating as a bloc. It reminds us of the beginning of the Corona crisis. Then each country tried to buy as many face masks as possible, driving up prices. Later, the European Commission negotiated with the vaccine makers on behalf of the 27 member states.
Just as in the Corona crisis, there are once again votes for a European fund. This week, two European commissioners defended it borrow together in the European Union. In this way they want all EU countries to have the means to guide businesses and citizens through the energy crisis. They wrote that the energy crisis once again calls for European solidarity. “We do better and protect our citizens better when we stand in solidarity.”
In response, the Netherlands indicated that there are still billions of other funds left. “I don’t think it is necessary to create a new fund for every crisis,” Finance Minister Kaag said of the idea. Germany has also indicated that it wants to use other money already available before borrowing again.
pressure is increasing
What should be done to face the energy crisis? As winter approaches, pressure is mounting on European leaders to come up with common responses. The Netherlands emphasizes that all options are open, as long as three conditions are met. The security of supply may not be compromised, more gas may not be consumed and actions may not reduce sustainability.
Today in Prague it is likely to become clearer in which direction solutions are being sought. Next week, more detailed plans will come from the European Commission, which leaders will discuss at the upcoming EU summit on October 20-21. Then it must also become clear how far European solidarity really extends.
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