Commission pledges to move on gas price cap proposal…
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BY CHARLIE COOPER, JAN CIENSKI AND BARBARA MOEN
POLITICO EU
NOVEMBER 11, 2022 3:24 PM CET
The European Commission on Friday promised to put forward a proposal on setting a “temporary gas price cap” ahead of a meeting of EU energy ministers on November 24, according to a Commission letter to EU ambassadors obtained by POLITICO.
The Commission has come under fierce pressure from a grouping of 15 member countries as well as European Council President Charles Michel to propose a gas price cap to rein in prices destabilized by Russia’s invasion of Ukraine. The Commission is opposed, as is a group of countries led by Germany and the Netherlands, which fear low prices will dissuade gas exporters.
An EU diplomat said a “crucial mass” of member countries wants “the full proposal to be tabled” before the November 24 meeting.
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“The EU needs to have a mechanism in place that limits episodes of excessive gas prices such as those that we have known in August,” says the letter signed by Commission President Ursula von der Leyen and Czech PM Petr Fiala, whose country holds the Council presidency.
The Commission letter also says the EU needs to prepare for next winter when there will likely be almost no Russian gas on the market.
“Over next year, markets are likely to remain tight,” it says.
The Commission plans to boost efforts for countries to jointly buy gas and to look for gas from other suppliers.
Finally, the Commission aims to put forward a legislative proposal to “reduce the impact of gas on electricity prices” by early next year.
Russia will lose the energy war Putin started
It’s no exaggeration to say that things look dire for the country’s energy sector.
Russian President Vladimir Putin's energy strategy may hit EU economies in the short-term, but could backfire in the long-term | iStock
NOVEMBER 11, 2022 5:00 AM CET
Agathe Demarais is the global forecasting director at the Economist Intelligence Unit. Her new book on the global ripple effects of U.S. sanctions, “Backfire,” will be released next week.
Russia has turned energy supply into an economic weapon. The strategy is obvious in Ukraine, where Russian drones and missiles are bombing power plants. But it’s also evident in Europe, where Moscow has turned off gas taps and possibly blown up a gas pipeline.However, Russian President Vladimir Putin’s master plan now looks set to backfire.
In the short term, Putin will, indeed, inflict economic damage on European Union countries — that much is inevitable. But in the long run, Russia simply can’t win this energy war. Putin’s maneuver will only accelerate the demise of his country’s energy sector, and precipitate the loss of its coveted status as a global energy superpower.
Russia’s weaponization of energy has three objectives. The first, which was applicable when the gas taps were still more or less open, was to create uncertainty and prevent EU countries from preparing for what lay ahead.