After about five hours of discussions, the EU27 Heads of State or Government managed to agree on conclusions on soaring energy prices, on Thursday 21 October, just before midnight.
Structural measures versus cyclical measures
“There are many options on the table”, Belgian Prime Minister Alexander De Croo warned directly upon his arrival at the summit.
On the one hand, Spain, Greece, and France insist on going beyond the European Commission’s “toolbox”(see EUROPE 12811/1), by taking action at European level.
Among other things, they advocate for the joint purchase of fossil gas, the formation of a strategic gas reserve, and the revision of the energy market in order to decouple the price of electricity from that of petrol (see EUROPE 12816/1).
“Although we are already taking action at national level, we need European action”, said Spanish Prime Minister Pedro Sánchez, calling for “faster action”.
“It is necessary to address the problem at a more structural level”, his Greek counterpart, Kyriakos Mitsotakis, agreed.
Other Member States—Germany, Luxembourg, Denmark, Finland, Sweden, Portugal, Lithuania, Latvia, Austria, and the Netherlands—are reluctant to touch the European energy market (see EUROPE 12806/6).
“I think we have to react with caution. We should not completely deactivate the market, but provide for more market”, said German Chancellor Angela Merkel, arguing for social support mechanisms.
ETS targeted
Poland and the Czech Republic blame the Emissions Trading System (ETS), which they say is subject to speculation, driving up energy prices.
This was reportedly a sticking point during the discussion, with the Czech Prime Minister, Andrej Babiš, who had insisted on including it in the conclusions.
In the end, the adopted text “invites the Commission to study the functioning of the gas and electricity markets, as well as the EU ETS market, with the help of the European Securities and Markets Authority” (a measure already announced by the institution—see EUROPE 12811/1).
“Subsequently, the Commission will assess whether certain trading behaviours require further regulatory action”, the document goes on to state.
This is a new paragraph compared to the draft conclusions that had been circulating (see EUROPE 12816/1).
Poland, supported by Hungary, is also calling for the Commission’s proposed July climate legislation package (‘Fit for 55 package’—see EUROPE 12762/1) to be reviewed or postponed in view of the current context.
“Energy prices will be skyrocketing, and European democracy will be endangered by this legislation package (...) The plan has to be reconsidered and withdrawn”, Hungarian Prime Minister Viktor Orbán said upon his arrival at the summit. He said the ‘Fit for 55’ package “will be the death of the European middle class”.
Contrary to their Hungarian counterpart, Ms Merkel and Mr De Croo called for a clear distinction between the challenge of rising energy prices and the ‘Fit for 55’ package.
The adopted text does not mention the package.
Taxonomy, the surprise guest
The debate between the leaders also included a number of exchanges of views on nuclear and fossil gas issues.
In particular, the Prime Minister of the Netherlands, Mark Rutte, is reported to have expressed his support for the inclusion of the latter in the EU taxonomy, thus joining about 10 other Member States (see EUROPE 12810/24).
Austria’s new Chancellor Alexander Schallenberg, on the other hand, insisted that the current surge in energy prices should not make nuclear power “attractive”.
The beginning of a long process
At Spain’s request, the conclusions state that the European Council will “monitor the situation” and come back to it in December.
See the European Council conclusions: https://bit.ly/3E0LGPh (Original version in French by Damien Genicot with the editors)