EU leaders will try this Friday to advance solutions to contain gas prices

PRAGUE, Oct. 6 (from special envoy Laura García Martínez) –

The Heads of State and Government of the European Union will seek solutions this Friday in Prague to reduce energy prices and guarantee security of supply in the coming months with a ‘road map’ on the table proposed by the European Commission that includes ideas to limit the price of gas, including the extension of the so-called ‘Iberian exception’ to the block as a whole.

“The energy crisis is serious and has entered a new phase. Only a common European response can reduce energy costs for families and businesses and provide energy security for this and next winter,” wrote the head of the Community Executive, Ursula von der Leyen, in his letter to the leaders.

In it, the German company details the keys to a ‘roadmap’ for the Twenty-seven to take measures to limit gas prices and ensure energy supply despite the break with Russia, although it warns of the need to “protect the Single Market” and to arrive at a “European, united and common” response to avoid “serious fragmentation”.

No decisions will come out of this Friday’s meeting because it is an informal meeting, but it will serve to unblock the talks on how to limit gas prices, for which there are various sensitivities between the capitals, two weeks before Brussels hosts a new summit, this time formal and with room for decisions, on October 20 and 21.

The debate also comes at a time when several countries have been upset by the aid plan of 200,000 million euros that Germany has announced to reduce the energy bill of homes and businesses.

“Some proposals from some Member States are bad for competition in the European market and we must avoid it. United we remain divided, we fall,” Polish Prime Minister Mateusz Morawiecki warned about the German plan, speaking to the press on the eve of the meeting. European summit, about whose chances of success he was “cautiously optimistic”.

The Prime Minister of Latvia, Krisjanis Karins, is another of the leaders who has publicly shown his misgivings about the German plan, about which he has said that, although all the partners are adopting support packages, “the German economy is so big that could be potentially distorting.” “We have to work together to ensure that we maintain the level of competition between the Member States,” he asked.

The German chancellor, Olaf Scholz, has defended the design of the aid announced upon his arrival at the meeting of the European Political Community in Prague the day before the EU summit and has found the support of delegations such as the Dutch one. The Prime Minister of the Netherlands, Mark Rutte, has said that he had heard critical voices but that, without a doubt, he was not part of them.

In this context, the leaders will examine, for example, launching a mechanism similar to the ‘Iberian exception’ of Spain and Portugal to limit the price of gas in the price formation system of the electricity market.

But Von der Leyen has also asked to study the price of gas “beyond the electricity market” and has promised to work with the Member States to reduce the price of gas purchases in order to “limit volatility” and “the impact of Russian manipulation”.

In recent days, fifteen countries, including France, Spain or Poland, have signed a letter calling for measures to put a cap on gas imports to the European Union, going beyond Brussels’ initial idea of ​​only limiting the prices of purchases from Russia, which collides with the reserves of Germany and the Netherlands.

They will also explore developing a more representative reference price for liquefied natural gas (LNG) than the European reference index, the Dutch TTF (Title Transfer Facility), which reflects “more precisely” market conditions, accelerate work to guarantee the proper functioning of financial markets and limit excessive price volatility.

Although the need for a reform of the energy market will mark the debate on Friday, the leaders will also dedicate part of their meeting to analyzing the situation in Ukraine and how to maintain over time the support that the EU offers to this country in the face of the Russian invasion, with military, economic and financial means.