Meeting in Prague for an informal EU summit, the EU27 heads of state or government failed, on Friday 7 October, to agree on clear guidelines for joint emergency measures to tackle soaring energy prices.
This is due to the continuing divisions over the modalities for the introduction of a gas price cap (see EUROPE 13036/2, 13033/2).
No joint text was communicated at the end of the meeting, despite a draft declaration prepared by Charles Michel’s team ahead of the summit (see EUROPE 13034/1).
Like French President Emmanuel Macron, some leaders have acknowledged that there is still no consensus at this stage on a mechanism to cap gas prices.
The Spanish Prime Minister, Pedro Sánchez, said that the generalisation of the Iberian system to the whole of the EU is gaining support from more and more countries. This mechanism makes it possible to limit the price of gas used for electricity generation (see EUROPE 12968/4), an option now being considered by the Commission (see EUROPE 13036/2).
Fearing that a cap would cause a diversion of European gas imports to other regions, German Chancellor Olaf Scholz put more emphasis on the importance of “discussing with other consumer countries like Japan and Korea”.
More convergence?
It is true that the purpose of the meeting was not to adopt conclusions (informal format), but rather to advance discussions between Member States and express their determination to act in a united manner to tackle the energy crisis.
This summit will have allowed for to better understand “the different opinions and sensitivities” and to note “a shared desire to be mobilised with a common ambition to bring down prices”, said the President of the European Council, Charles Michel.
According to him, this summit “should be seen as a strategic step that leads us to the next European Council (20-21 October), which should be an opportunity to take steps forward in terms of taking the necessary measures”.
The Czech Prime Minister Petr Fiala agreed, saying that the Member States were “approaching a common solution” and that he was ready to organise as many meetings of EU energy ministers as necessary.
Proposals expected in the coming weeks
Pressed by some 15 Member States for a cap on the price of gas for all wholesale transactions (see EUROPE 13031/8), European Commission President Ursula von der Leyen said that discussions had addressed a range of options such as the establishment of a price corridor negotiated with EU gas suppliers or reducing the influence of gas in electricity price formation.
She then announced that the institution will present more detailed proposals in the coming weeks as part of the roadmap sent to Member States before the summit (see EUROPE 13036/2, 13037/16).
While the gas cap continues to divide, there is “a broad support” on the need to make joint gas purchases at the end of the winter “when our stocks are exhausted”, in order to “avoid outbidding each other” and to have a “collective bargaining power”, the Commission President stressed.
Germany was singled out.
Many leaders also called for unity and solidarity among Member States, some of them explicitly targeting Germany for its €200 billion support plan for households and businesses (see EUROPE 13034/5).
“My message to Germany is: be united, be in solidarity with all the others, because during difficult times everyone has to agree on a common denominator and not on a denominator which is suitable to only one country”, said the Polish Prime Minister, Mateusz Morawiecki. The day before, he had castigated Berlin’s “egoism”.
Several Member States are concerned that such extensive national measures could distort competition and jeopardise the EU market.
“What is important is that we preserve a level playing field”, said the Prime Minister of Luxembourg, Xavier Bettel, while assuring that he had no problem with the implementation of national measures, “if they are in line with European rules”.
For his Latvian counterpart, Krišjanis Kariņš, the game is distorted when the government of a Member State is able “to give more subsidies, which makes its companies more competitive with its neighbours”.
Stressing the need to avoid fragmentation of the Single Market, Ms von der Leyen said that “we will be looking at additional funding to be channelled through REPowerEU”.
Mario Draghi, for his part, expressed his support for the proposal put forward by European Commissioners Thierry Breton and Paolo Gentiloni, in which they launch the idea of a European financial mechanism along the lines of the ‘SURE’ initiative to support national unemployment insurance schemes (see EUROPE 13035/31).
“This is what is needed to put all countries on an equal footing, those that have the budgetary room for manoeuvre and those that do not”, he said.
This position is also shared by Mr Macron, who stressed that economic support for businesses and households “should not be through subsidies, but through guarantees or loans that correspond to mechanisms decided during the Covid crisis”. (Original version in French by Damien Genicot with Camille-Cerise Gessant, Léa Marchal and Mathieu Bion)