EU leaders promise “urgent” measures to put a ceiling on rising energy prices

They entrust Brussels with a “concrete” proposal with an evaluation of the cost of the extension of the Iberian exception

BRUSSELS, 21 (EUROPE PRESS)

The heads of state and government of the European Union have promised this Friday “urgent” measures to intervene in the energy market by supporting proposals from Brussels such as the compulsory joint acquisition of at least 15 percent of the reserves and the flexible limit for the price of gas purchases, while entrusting the Community Executive with a “concrete” proposal to generalize the ‘Iberian exception’ to the rest of the European Union.

“Unity and solidarity prevail. Agreement to work on measures that contain energy prices for homes and businesses”, wrote the President of the European Council, Charles Michel, at the end of the first day of the summit after eleven hours of Twenty-seven meeting focused on the need to intervene in the market and put a ceiling on gas prices.

Lithuanian President Gitanas Nauseda has reported that leaders have tasked the European Commission and energy ministers with preparing “urgent decisions” on gas price caps, joint purchases and a reference price. “Our unity is crucial”, he has clinched it.

Spain appreciates that a text on energy has been agreed upon but believes that it does not include sufficient ambition, according to government sources.

“The Commission has had the support of all the proposals it has made and we have asked it to go even further, so in two or three weeks the Commission will have to present them concretely,” said French President Emmanuel Macron. who has trusted that “at the end of October, beginning of November” the first measures will be underway.

After the consensus on the general lines of the necessary measures, the turn will pass next Tuesday to the EU energy ministers who will discuss the technical issues to try to specify the development of the proposals.

The text of conclusions adopted by the leaders includes the determination of the block to remain “united” to take “the necessary measures as a matter of urgency”, for which they demand to intensify the work to reduce energy demand, ensure supply and lower prices .

In this context, the leaders ask the Executive of Ursula von der Leyen and the Ministers of Energy to make urgent decisions regarding the measures proposed last Tuesday by Brussels, but also about other “additional” ones, says the text, which includes among the tasks to explore the extension of the so-called ‘Iberian model’ that allows Spain and Portugal to limit the price of gas used to produce electricity.

The leaders also list as measures to be developed by the ministers in the coming weeks the keys to the European Executive’s proposal, including obliging Member States to acquire at least 15 percent of their energy reserves through joint purchases and the creation of an alternative index for “early 2023” that more reliably reflects gas market conditions.

In the meantime, they will also have to decide on the details of a temporary, flexible cap on the price of gas purchases that can be used immediately.

The list of decisions on which the leaders ask to advance in the coming weeks includes working on a common temporary framework to limit the price of the gas used in the generation of electricity, taking into account an analysis of the cost benefit of the initiative and taking care not to encourage consumption.

In addition, the Twenty-seven advocate close coordination and common solutions to achieve the bloc’s objectives without compromising the level playing field and the integrity of the Single Market. They also reiterate their call for the Commission to speed up work on a structural reform of the energy market.

FINANCIAL RESOURCES

Regarding the specific instruments to finance the drop in prices, something that countries such as Italy and France have been demanding, Von der Leyen acknowledged at a press conference that the Member States have different fiscal space, but he defended the existing funds in the different European budgets and programs to meet the cost of emergency measures.

Thus, he recalled that 40,000 million are still pending from the previous budget that Brussels will make more flexible to face the escalation of prices, and has indicated that the ‘RepowerEU’ program can also be used in investments in interconnections and energy infrastructures.

For his part, the Dutch Prime Minister, Mark Rutte, has said “he is open” to evaluating a future proposal from the European Commission on additional financing mechanisms, although he has assumed that this point will not be reached given the number of items available to cover price intervention measures.

“We call for financial solidarity so that the Commission, in the coming weeks, makes proposals either on guarantee mechanisms as was done with the SURE plan during the pandemic or to be able to use unused loans, especially RepowerEU funds with some flexibility”, summarized the French president, Emmanuel Macron.

The Belgian Prime Minister, Alexander de Croo, for his part, has valued the “openness” of the countries that were “more skeptical” so that the Ministers of Energy can agree on measures that, in any case, could have been agreed by qualified majority, that is, without the unanimity of all, in a veiled reference to the resistance of Germany and the Netherlands to the mechanism to limit the price of gas.