N. Peter Kramer’s Weekly Column
After last week, EU heads of government failed to reach an agreement after 10 hours of discussion, they passed the hot issue to an emergency meeting of EU energy-ministers. They largely backed the position of 11 member states in rejecting proposals from Spain, France and some other southern member states for fundamental reforms to the EU’s energy market. The eleven, including Germany, believe that no hasty decisions should be taken.
They see, as the European Commission does, high energy prices as a temporary and global phenomenon. In their opinion, it is not wise to intervene in the market. European Commissioner Kadri Simson (energy) said that the current price hike was temporary and ‘caused by the extraordinary global gas demand, not our EU market design’.
Spain’s energy minister Sara Aagesen Munoz tried to find backing for joint EU purchasing of gas, along the same line as the EU’s successful common procurement of COVID-19 vaccines. But her Dutch colleague Stef Blok said, common purchasing ‘is no guarantee for a lower price’ and added: ‘If the demand in Asia is high and the EU is willing to pay less, gas producers will decide to deliver where they pay more’.
The Commission’s ‘toolbox’ of short-term measures available to member states was widely endorsed. It relies mainly on temporarily cutting national energy taxes that typically account for around a third of power bills. No one at the table in Luxembourg expected anything from ‘Brussels’ in the short term. It stays the responsibility of member states themselves to ease the pain for household and entrepreneurs.
But the discussion about the energy crisis is certainly not over yet. It is clear that in the long term, the southern member states in particular want to take drastic action to prevent a recurrence. Later this year, the subject will be back on the agenda of energy ministers and EU leaders.
