EU leaders divided on gas price cap at energy crisis summit

BRUSSELS: European Union leaders struggled to find immediate practical solutions at their summit Thursday called to grapple with the energy crisis fueled by the war in Ukraine and maintain a united front in the face of Russian President Vladimir Putin coercion.
After lengthy talks in Brussels dragged well into the night, the 27 EU leaders could not bridge divisions between some of the biggest member states and failed to impose a gas price cap to counter Russia’s strategy to choke off gas supplies to the bloc at will.
They agreed, however, to keep working to find a compromise on a list of measures based on proposals unveiled earlier this week by the European Commission, the EU’s executive arm, which were discussed in depth and tweaked at the summit.
“There is a strong and unanimously shared determination to act together, as Europeans, to achieve three goals: lowering prices, ensuring security of supply and continuing to work to reduce demand,” said meeting host Charles Michel, the EU Council president.
Diplomats said the impact of the proposals, which include the possibility of a price cap, should be properly assessed by experts before approval, and leaders insisted any deal would need to take into account their different energy mixes.
“There is a lot of work ahead,” said Belgian Prime Minister Alexander De Croo. “We are pushing ourselves into unchartered territory, where we don’t have experience yet.”
The bloc’s energy ministers will meet next week to further discuss the benchmarks set out by leaders.
To make sure the runaway cost of gas doesn’t further tank struggling EU economies, the Commission has proposed a system to pool buying of gas and offered a compromise that would allow for a correction mechanism to kick in in exceptional circumstances.
In addition, it is pushing for the creation of a new LNG gas index better reflecting the market following the drastic reduction of imports of pipeline gas from Russia.
Divisions were so big at the start of the summit that agreeing on further exploration of the plan proposed by the Commission was seen as almost an achievement in itself.
Hungarian Prime Minister Viktor Orban said a price cap would send suppliers away. The “gas price cap is like going to a bar and telling the bartender you want to pay half price for your beer. Not going to happen,” he said on Twitter.
The traditional driving duo of the EU — Germany and France — weres in opposing camps, with Germany expressing doubts and holding off plans for the price cap, while most others want to push on.
French president Emmanuel Macron said he worked hard with German Chancellor Olaf Scholz in bilateral exchanges to get a breakthrough on the issue.
Macron, who will meet again with Scholz next week in Paris, said it was “France’s role to create unanimity between positions.”
Scholz said any dispute was on the method, not the goal. “Prices for gas, for oil, for coal, must sink; electricity prices must sink, and this is something that calls for a joint effort by all of us in Europe,” he said.
The Netherlands feared that if a price cap was set too high, supplies would simply sail by Europe and go elsewhere. “Everyone wants the gas price to come down, but you want to make sure that gas imports keep coming,” Prime Minister Mark Rutte said.
Natural gas prices spiraled out of control over the summer as EU nations sought to outbid one another to fill up their reserves for winter. The member states have already agreed to cut demand for gas by 15 percent over the winter. They have also committed to filling gas-storage facilities to at least 80 percent of capacity by November and — as a way of reducing gas-fired power generation — to reducing peak demand for electricity by at least 5 percent.
The question of possible EU gas-price caps has moved steadily up the political agenda for months as the energy squeeze tightened, with 15 countries such as France and Italy pushing for such blunt intervention.
And where Angela Merkel was the soothing voice often brokering a compromise during her 16 years as German chancellor, her successor Scholz is now at the heart of a division in the bloc.
Germany and the Netherlands maintain that market interventions like excessive price caps could hurt both the availability of natural gas and incentives for governments and consumers to save it.
At the opening of the summit, the need for rock-solid EU unity in confronting Russia was highlighted by Ukrainian President Volodymyr Zelensky, who addressed the 27 national leaders by video conference from Kyiv, asking for continued help to get his nation through the winter.
Russia is increasingly relying on drone strikes against Ukraine’s energy grid and civilian infrastructure and sowing panic with hits on Ukrainian cities, tactics that European Commission President Ursula von der Leyen called “war crimes” and “pure terror” on Wednesday.
Diplomats are already assessing more sanctions to come. But Orban’s perceived friendliness toward the Kremlin makes life tougher. Even though the previous EU sanctions targeting Russia have been approved unanimously, it has increasingly become difficult to keep Orban on board by agreeing to exemptions.