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Energy: EU agreement on a “roadmap” that remains to be developed

European Union leaders agreed on Thursday night on a "roadmap" to put in place, in the coming weeks, measures to curb soaring energy prices.

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The war in Ukraine and the sanctions imposed on Russia have caused a shock to oil, gas and electricity prices. But since February, Europe has been slow to react, weakened by the divergent interests of the member states.

If, after bitter negotiations, the bloc wanted to present a united front, many points remain to be decided, and the negotiations of the next weeks are expected to be difficult.

“We now have a very good roadmap,” said Commission President Ursula von der Leyen, while European Council President Charles Michel referred to “an agreement on a package of measures” that must now be “dealt with in a detailed manner. But German Chancellor Olaf Scholz made it clear that if the energy ministers could not agree on a final version, a new summit of heads of state would be necessary.

“Message to the markets”

According to French President Emmanuel Macron, the envisaged mechanisms could be implemented “at the end of October, beginning of November.” He believed that the leaders had “sent a very clear signal to the markets of (their) determination and (their) unity.

According to the conclusions issued at the end of the meeting, the heads of state and government ask the Commission to submit “urgently” “concrete decisions” on a set of measures, including interventions to tame the volatility of gas prices.

The EU-27 have agreed to promote EU-wide joint gas purchases, with the idea that they remain “voluntary” but cover at least a “mandatory” target level of 15% of the EU’s winter 2023 stockpile targets.

They also called for “accelerating its negotiations” with “reliable” producer countries such as Norway and the United States, to “take advantage of the economic weight” of the EU as a whole rather than competing on the world market at the risk of feeding price fever.

In addition to a measure to regulate the wholesale price of natural gas transactions, the leaders are also asking for a specific project for a “temporary” mechanism to cap the price of gas used to produce electricity – a mechanism already in place in Spain and Portugal, and which France has called for to be extended to the whole of the EU.

But, in a concession to Germany, this mechanism will have to be accompanied by safeguards to “avoid any increased consumption of gas”. It will also have to avoid that the EU subsidizes electricity that would ultimately be exported to neighboring countries (Norway, United Kingdom, Switzerland …).

Macron/Scholz, appeasement

Asked about the Franco-German couple, the engine of European cooperation that seems to be broken down, Mr. Macron said that his tête-à-tête with the German chancellor had made it possible to “clarify many things.

A few hours earlier, he had said that Berlin was playing a solitary game, seeming to blame the Germans for the European difficulties.

“I think that it is not good for Germany or for Europe if it isolates itself (…). Our role is to do everything to ensure that there is European unity and that Germany is part of it,” he said.

“It is very clear that Germany has always acted in a very supportive way,” replied Olaf Scholz. The chancellor had been accused of selfishness after announcing a 200 billion euro support plan for the German economy at the end of September, which had not been agreed with his partners.

Without consulting Berlin, Paris announced an infrastructure project on Thursday after years of stalemate: France, Spain and Portugal announced an agreement to replace the MidCat gas pipeline project with an undersea pipeline between Barcelona and Marseille, designed to transport gas and then green hydrogen.

Initially launched in 2003, this MidCat project (for Midi-Catalogne), was defended by Lisbon, Madrid and Berlin but was opposed by Paris. The project was designed to connect the French and Spanish gas networks via a 190 km pipeline from Hostalric, north of Barcelona, to Barbaira, east of Carcassonne, through the Pyrenees.

In the middle of the night, at the end of a dozen hours of negotiations between the 27, Emmanuel Macron and Olaf Scholz played the appeasement, the latter evoking in particular an “intense and fruitful” relationship. The two men are due to meet again on Wednesday in Paris.

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