EU panics over gas prices hikes – Von der Leyen forced to delay major announcement

Gas prices: Putin ‘going to keep squeezing’ says expert

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

The EU Commission President was expected to make an announcement on energy today, but Mrs von der Leyen has delayed the event until next week, in a bid to listen to panicking EU leaders’ proposals at tonight’s summit in Slovenia.

The Commission is expected to propose a “toolbox” by mid-October to help Member States put in place short-term measures to tackle the current surge in gas and electricity prices.

Eurozone finance ministers meeting in Luxembourg on Monday discussed the sharp rise in energy prices, for which France, Spain and Greece are calling for a European response.

In addition to the measures several Member States have already taken or are preparing to take to reduce the impact of rising gas and electricity prices on the bills of citizens and businesses, “it is also time to have a European response,” said French Minister Bruno Le Maire on his arrival in Luxembourg.

“This is not an issue that we can tackle at national level. We need a coordinated European response,” added his Spanish colleague, Nadia Calvino.

The Frenchman pointed to a major flaw in the European energy market: The alignment of electricity prices with those of gas, which in his view creates an “unfair and inefficient” situation for both citizens and companies, but also unacceptable in the context of the fight against climate change.

In addition to decoupling gas and electricity prices, Bruno Le Maire proposed better regulation of gas stocks, which Nadia Calvino sees in the creation of a European strategic gas reserve, with joint purchases to better stand up to the major international suppliers.

The idea would also be to establish a direct link at a European level between the average electricity production costs in each country and the prices paid by consumers, via long-term contracts or regulated tariffs, as several Member States have already.

Faced with the volatility of the gas market, Le Maire once again praised nuclear energy, which his country wants the EU to recognise as environmentally friendly, something that other countries, led by Germany, refuse.

READ MORE: German economy slowdown as car economy plunges

“I think it is important to recognise the role of nuclear energy – a low-CO2 energy – in our overall energy mix and our decarbonisation efforts,” said European Commission Vice-President Valdis Dombrovskis.

On Tuesday, Italy also joined his French, Spanish and Greek counterparts and called for a joint EU energy “storage”.

Italy’s Europe Minister Vincenzo Amendola said the EU should jointly purchase energy for common gas and oil stores that would be used to counteract price spikes.

Spanish Prime Minister Pedro Sanchez also called for a “strategic gas reserve”.

Brexit LIVE: Biden and VDL gang up on Boris over hated deal [LIVE BLOG]
France plots Brexit fight against UK over fishing rights [INSIGHT]
Brexit ultimatum as Frost sets NEW Article 16 deadline [ANALYSIS]

EU leaders will discuss proposals at an EU summit this evening.

And environment ministers will also discuss the deepening crisis at their meeting in Luxembourg on Wednesday.

The ministers will also carefully examine the impact of rising inflation, which rose from 3 percent in August to 3.4 percent in September in the eurozone, according to a flash estimate by the statistics office Eurostat.

But this does not seem to worry them too much.

While policymakers see this as an effect of higher energy prices, they see it as being more broadly related to the strong post-Covid economic recovery and therefore temporary in nature.

EU Economy Commissioner Paolo Gentiloni has said he expects inflation to ease next year.

Additional reporting by Maria Ortega

Source: Read Full Article