EU nations seek joint approach to contain energy prices

EU nations seek joint approach to contain energy prices thumbnail

BRUSSELS The European Union has intensified its efforts to protect the population from rising energy prices. These prices could lead to poverty and cold over winter, as tensions rise with Russia over the war at the border with Ukraine.

The EU’s 27 countries’ energy ministers met in an emergency meeting to discuss their differing views regarding proposals to lower electricity and natural gas prices. These measures include windfall levies on oil companies whose profits have increased along with skyrocketing gas prices to setting a price limit on Russian gas.

While ministers acknowledged that it would be difficult to reach an agreement due to the differences in energy supplies and needs between countries, they also agreed that it was crucial that the most vulnerable citizens across Europe receive timely assistance. Russia has cut back on natural gas supplies that power factories, generate electricity, and heat homes. This has pushed up energy prices to record levels and fuelled inflation that could lead to Europe going into recession later in the year. The Russian government is the biggest interference in this situation. “They, through their actions, have used gas as weapons of war,” Eamon Ryan, Irish Transport, Environment and Climate Minister, told reporters in Brussels. “We have to intervene because the whole market has been played with.”

Ryan insisted that action must be taken “within weeks, not months.” He said that this coming fall, “when we’re really going to see the high prices having effect, that’s when we need the support, that’s when we need to get some of that money.”

The ministers might agree to provide support to struggling energy companies forced to buy supplies at inflated prices and back measures on ways to impose reductions in electricity use similar to those already agreed on gas.

“There is not time to wait and we must be swift and unison,” Jozef Sikela (Czech Republic’s industry minister) said Friday.

Despite the urgency of northern nations feeling the first chills in the morning air, announcing the arrival of autumn, ministers will only provide guidelines to the EU executive branch, the European Commission. Next week, they will present a proposal to the member states.

At that point, the EU nations can reassess and a decision will be made by the member states in the early part of next month. The commission has already called to a price cap for Russian natural gas. It is also seeking a “solidarity payment” from European oil- and gas companies that have made huge profits from the rising cost of energy.

German Economy and Energy Minister Robert Habeck also said it’s important to find a way to uncouple natural gas prices from the costs of all other forms of energy, particularly relatively cheap renewables, “without destroying the market mechanisms.”

While hoping for quick progress, Germany is keeping open the option of imposing a levy on high energy profits whose proceeds would be passed to consumers “if it takes too long,” he said.

” “We can’t take that card off the table, because the other, better option — namely bringing prices down — could certainly be complex,” Habeck stated. “We’re doing something that affects the heart of European energy supply — we’re intervening in the markets.”

The energy crisis is not only threatening households but also industry, with energy-intensive factories being forced to close. Ursula von der Leyen, President of the Commission, stated that Russia is “blackmailing the EU” with its threat to cut off gas supplies to the bloc. Moscow has already cut supplies to 13 EU nations, partially or completely, blaming technical problems and sanctions.

Russian pipe gas was 40% for all gas Europe imported prior to President Vladimir Putin’s invasion of Ukraine in February. However, it now only accounts for 9%.

The Commission believes that the EU is ready for winter with joint gas storage levels at 82% – well ahead of the 80% target set for October.

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Associated Press writer Lorne Cook in Brussels and Geir Moulson in Berlin contributed.

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