EU leaders lock horns over response to energy price spike

A preparatory note ahead of that meeting, seen by Reuters, said ministers would debate "what further measures at EU and Member State level, including the use of EU financial tools, could be envisaged". The price spike has also stoked familiar tensions over the EU's policies to fight climate change, with Poland calling for Brussels to change or delay some planned green measures.


Reuters | Updated: 22-10-2021 02:59 IST | Created: 22-10-2021 02:58 IST
EU leaders lock horns over response to energy price spike
Representative image Image Credit: Flickr

EU leaders on Thursday struggled to agree a common response to soaring energy prices, which have exposed familiar rifts over the bloc's climate change goals and divided countries on whether the price crunch warrants an overhaul of EU energy market rules. The European Commission last week published a "toolbox" outlining the national measures governments can take and said Brussels would look into longer-term options to address price shocks.

EU leaders debated those options on Thursday, but remained split over how the bloc should tackle soaring energy prices, as their citizens face higher bills with winter approaching. Most EU countries have already drawn up emergency action plans to shield consumers, including energy tax cuts and subsidies for poorer households.

A draft of their summit conclusions, seen by Reuters, invites countries to urgently use the toolbox "to provide short-term relief to the most vulnerable consumers and to support European companies". Longer-term measures, however, are more contentious.

In what EU diplomats said was a response to a push from the Czech Republic, the summit conclusions were updated late on Thursday to invite the European 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 (ESMA)." The Commission should then assess "whether certain trading behaviours require further regulatory action," the draft conclusions said.

Poland, the Czech Republic and Spain have previously asked the EU to limit financial speculators' participation in the carbon market, which they say said has helped push CO2 prices to record highs. Poland is also wants Brussels to investigate whether the behaviour of Russia's Gazprom has pushed up European gas prices. The Commission has already agreed to study both issues, but not committed to take immediate action.

FAMILIAR TENSIONS European gas prices have hit record highs as tight supply has collided with economies emerging from the COVID-19 pandemic, amid surging CO2 prices and lower-than-expected gas deliveries from Russia.

Spain, Italy and Greece are also pushing for an EU response to the price spike, including by launching joint gas buying among EU countries to form strategic reserves. Others, including Germany and the Netherlands, are wary of overhauling EU regulations in response to a short-term crisis. The Commission said gas prices were expected to stabilise at a lower level by April.

The debate over how to response to the energy price spke will be picked up at an emergency meeting of EU energy ministers on Oct. 26. A preparatory note ahead of that meeting, seen by Reuters, said ministers would debate "what further measures at EU and Member State level, including the use of EU financial tools, could be envisaged".

The price spike has also stoked familiar tensions over the EU's policies to fight climate change, with Poland calling for Brussels to change or delay some planned green measures. Hungarian Prime Minister Viktor Orban on Thursday dismissed EU climate policy plans as a "utopian fantasy". That view is at odds with other countries that say high gas prices should speed up Europe's shift to renewable energy to reduce countries' exposure to volatile fossil fuel prices.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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