Because Europe flopped on the price cap for gas
The European Union's energy ministers have not reached an agreement on the gas price cap, criticizing the Commission's proposal. Here are the causes and consequences
New planetary fool of the European Union, which once again trips over itself.
The energy ministers of the member states of the Union, meeting last week in Brussels, could not find an agreement on the Commission's proposal for a ceiling on the price of gas and have postponed the matter to next December 13th.
On the other two issues under discussion yesterday (joint gas purchases and acceleration on renewable sources) in reality the agreement was reached, but the related regulation was not approved because a group of States expects that the final package should include, at the same time, also the regulation on the price cap.
THE COMMENT OF MINISTER PICHETTO FRATIN
It was expected that at least joint gas purchases would immediately receive the go-ahead from the Energy Council, but this did not happen. It was the Minister of the Environment and Energy Security, Gilberto Pichetto Fratin, upon arriving at the meeting in Brussels, who clarified the changed situation to the waiting reporters: "We have just finished a meeting between the countries critical of the Commission's proposal ( on the price cap, ed.) . There is agreement not to adhere to the proposal presented by the European Commission and to evaluate overall both the proposal on the price cap and the other terms of the agreement on other issues such as solidarity and transparency but all in one block”.
WHAT THE EU COUNCIL SAID ABOUT THE GAS PRICE CAP
Arriving in trickles in front of journalists before the meeting, other European ministers expressed themselves in a very critical way. The Spanish Minister for Ecological Transition, Teresa Ribera, judged the Commission's proposal on the price cap a "joke in bad taste", slightly less severely than her Polish colleague Anna Moskwa who defined it "an unacceptable joke". The excessively high limit (275 €/MWh) and the improbable conditions for its activation make the ceiling proposed by the Commission practically inapplicable, therefore non-existent. Many countries would like the threshold lowered to 120-150 €/MWh and less stringent conditions for its launch.
THE WORDS OF THE MINISTERS
As the current president of the European Union, the Czech Jozef Síkela, said, "until yesterday the problem was that the Commission had not made a proposal on the price cap, today the problem is that the proposal has arrived". A proposal which, as it is inapplicable, is perfectly fine for Germany (which in reality does not want the price cap), but not for the fifteen per-cap countries, including Italy, France, Belgium and obviously Spain and Poland.
THE PRICE CAP NODE ON GAS
The situation is very complicated: whatever type of price cap the Commission proposes, the result would be to cause disturbances in gas prices and supplies, as is now universally recognized. At the same time, however, the Commission is obliged, by the Council's decision of 20 October, to propose a price cap that does not cause disturbances. A sort of diabolical Comma 22, in short, from which it seems impossible to get out rationally, unless someone gives in. But no one wants to give in. The public pressure on governments to do “something” (anything) to curb high energy prices is obviously considerable. However, some governments do not intend to endorse a mechanism, that of the price cap, which would bring more problems than solutions. For this reason the ceiling proposed by the Commission, with such high values and impossible conditions, was intended to be a formal compromise, which however in practice has become the target of the insults of those who invoked the device.
THE CLASH BETWEEN THE COMMISSION AND THE EU COUNCIL
Now the question becomes political because it is the occasion of a serious institutional clash between the Commission and the Council, as well as between member states of the Council. Confusion reigns supreme, also given the personal antipathy between the presidents of the two bodies, who hardly speak to each other. Above all, it appears increasingly clear that the conclusions of the last European Council of 20 October, which the local press had celebrated as Mario Draghi's latest triumph, turned out to be what La Verità had immediately highlighted, i.e. a big problem. We are facing yet another proof that no decent solution can come from Brussels to the energy crisis triggered by the Union itself with its irresponsible decisions. The current moment would require healthy pragmatism at the national level.
THE PRESS CONFERENCE
At the end of the meeting, the German climate undersecretary Sven Giegold flaunted optimism about the possibility of reaching a compromise. In the official press conference, a very embarrassed Kadri Simson, energy commissioner, flanked by the current president of the European union Síkela, tried to clarify that an agreement on the price ceiling was not expected to be reached yesterday, shifting the focus on the agreement reached on the subject of solidarity and acceleration on renewable sources. But the journalists' questions were almost all about the price cap and the answers of the two representatives of the Union, clearly in difficulty, appeared weak and not at all convincing.
RUSSIA'S MOVES ON GAS
In the meantime, the Russian government is moving forward and, as reported by the TASS news agency, is letting it be known that it will no longer supply gas and oil to those who adhere to the price cap mechanisms. In fact, these days we are also working on the other ceiling, the one on the price of Russian oil. In Brussels there is also a dispute over this, with a part of countries for which a maximum price of 60-70 dollars a barrel seems reasonable and a less large (but very aggressive) group of countries led by Poland, which would like a ceiling of 30 dollars a barrel. Certainly, so far, there is only that Hungary has succeeded in evading any obligation.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/unione-europea-price-cap-gas-figuraccia/ on Tue, 29 Nov 2022 09:46:41 +0000.