Filenews 8 September 2022
The European Commission surprised to some extent and divided the Union's member countries with the five proposals it presented on Wednesday to tackle the energy crisis, according to six diplomats cited by Politico.
This is likely to give Commission President Ursula von der Leyen room for manoeuvre ahead of her speech next week, where she is expected to push for a pan-European effort to bring gas and electricity prices under control. EU energy ministers will discuss the issue of prices at the extraordinary meeting scheduled for Friday.
Von der Leyen presented five "immediate" moves that will help ease the energy crisis in Europe:
- cap on the price of Russian gas
- mandatory measures to reduce the demand for electricity
- a revenue cap for low-cost power companies with "windfall revenues" directed towards consumer support
- a solidarity tax on fossil fuel companies that show significant profits
- and facilitating ways of relying on shocking utilities.
Of these, two measures are supported by both the Commission and EU member states, according to statements by several diplomats after the meeting of EU ambassadors.
The first is to provide credit to utilities to cope with the surge in liquidity required by energy transactions amid the current environment of high energy prices.
The second is the taxation of the over-profits of energy producers from low-cost sources - although EU ambassadors have asked for guarantees that the revenues from this tax will remain in the countries that they should. The definition of the details matters, as power plants that are paid to operate or not according to the needs to balance the grid usually do so at the request of their country's utilities.
Instead, the most controversial proposal concerns the cap on Russian gas - a measure aimed at the Kremlin's economic punishment for its war in Ukraine - with European countries expressing "very contradictory views", according to a European diplomat cited by Politico.
Germany said it was "sceptical" about the proposal. Hungary, Russia's closest ally to the EU, expressed its opposition, as did Slovakia and at least two other countries, according to diplomatic sources.
Other countries, such as Poland and Italy, want the Commission to go even further and put a global cap on the prices of gas imported into the EU. Ursula von der Leyen said this is something the Commission is considering - but Brussels is generally against this proposal for the time being, as it is more complicated than targeting only Russian gas.
Meanwhile, although Norway, which is now the bloc's largest supplier of gas, has declared itself open to a price cap, the question is the stance of the US, where Democrats face a difficult battle in November's midterm elections.
Hungary also wants any energy package to be approved unanimously, and not by a majority as foreseen by the emergency procedure, as the Commission wants, according to a European diplomat.
Moreover, Poland's call for reform of the Emissions Trading System, to which it attributes the surge in energy prices, does not find a listening ear in Luxembourg, Ireland, Germany, Finland and Sweden, according to a senior diplomat.
On the other hand, the proposal to reduce electricity demand is popular, but although Ursula von der Leyen's proposal speaks of mandatory declarations, countries such as Bulgaria, Hungary, Greece and Poland want them to be optional.
The Commission did not address the issue of decoupling gas prices from electricity prices, although this is something that many countries want.
EU countries were largely taken aback by von der Leyen's haste to announce the Commission's proposals even before Friday's summit, where it was expected that existing ideas for tackling the continent's energy crisis would be discussed.
EU ambassadors expressed their displeasure that the head of the Commission presented her proposals as experts discuss the technical details ahead of Friday's meeting. "It is unfortunate that it happened at the same time that member states are discussing the next steps," a European diplomat said.
However, despite all the grumbling, European countries broadly agreed that von der Leyen did the right thing by taking the reins of the debate.
Source: Capital.gr
