The president of the European Comission, Ursula von der Leyenannounced this Wednesday that Brussels is “prepared to discuss” a gas price cap which is used to generate electricity, with a view to reducing the effect on price escalation across Europe.
“We have to limit this inflationary impact of gas throughout Europe. That is why we are prepared to discuss a cap on the price of gas used to generate electricity. This cap would be a first step on the way to a structural reform of the electricity market“Von der Leyen told the European Parliament in Strasbourg.
Von der Leyen’s announcement comes after a majority of European Union countrieswith Italy, France, Spain and Belgium in the lead, redoubled last Friday the pressure on the European Commission to intervene in the gas market despite opposition from Germany.
The president of the European Commission has stressed that this limit on the price of gas “must be designed correctly to ensure security of supply” and that this is a temporary measure to respond to the fact that the index TTF Dutch of Amsterdam of reference in Europe no longer correctly represents the European market, with more presence of liquefied natural gas (LNG).
Von der Leyen has recalled that Brussels had already offered this option in March to “send the signal that the EU will not pay any price for gas”and has pointed out that already then it was evaluated that it would have “an immediate impact on price levels” and, in parallel, “disadvantages” in terms of security of supply.
We need to protect the fundamentals of our economy, and in particular our single market… Without a common European solution, we risk fragmentation.”
“The situation has evolved critically. Today, compared to March, more Member States are open to this and we are better prepared”, assured the German, who has advanced that they will also work together with the Member States to reduce volatility and the impact of Russian price manipulation. Von der Leyen has asserted that the current crisis requires “exceptional emergency measures” and that the EU act “more united than ever” and “in solidarity”.
“We need to protect the fundamentals of our economy, and in particular our single market. This is the strength of the EU, where its wealth comes from. Without a common European solution, we risk fragmentation“Von der Leyen said.
Aid and cap on the price of gas
The comment seems to be veiled reference to the macro package of 200,000 million euros in public aid approved by Berlin to lower the energy bill of the Germans, which has already received criticism from some voices, both in the capitals and within the European Commission, for its potential impact on competition to the detriment of the poorest countries in the bloc.
