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EU backs one emergency energy plan. Now for the next one

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The energy emergency gripping Europe will be a long haul — and next winter could be even worse.

Ministers meeting in Brussels on Friday secured a deal on the bloc’s latest package of relief measures. It’s one they hope will help to protect households and businesses from cripplingly high energy bills and the specter of power outages this winter caused by Vladimir Putin’s war on Ukraine and his squeeze on Europe’s gas supply.

By any previous standards, the plans are radical. But the European energy emergency has made what was once unthinkable, unavoidable.

Countries will ration electricity by 5 percent at peak hours this winter, on top of previous commitments to bring down gas usage. They also signed up to tax energy company windfall profits to the tune of €140 billion. This will be spent supporting households and businesses over the winter.

Before the ink was dry on the agreement, the discussion among ministers immediately shifted to how much further the bloc needs to go.

“We need to do more,” Energy Commissioner Kadri Simson said after the summit — already the third emergency meeting since July.

She pledged that a new “EU-level market intervention” to curb gas prices would be part of the next set of measures. Precisely what form that will take is now subject to an increasingly fraught debate within the bloc. It is an argument that looks set to drag, even as the nights lengthen and temperatures fall.

Before Friday’s meeting, a group of 15 countries had written to the Commission calling for “EU-level market intervention” in the form a bloc-wide cap on the price of all imported gas. They were left frustrated by the response: an informal policy note that left no room for a meaningful progress on the issue at Friday’s summit.

Simson said that the Commission would work with countries ahead of next week’s informal EU leaders’ summit in Prague to “develop” ideas of what the next intervention should look like. Possibilities including an EU-wide limit on the price of gas used for generating electricity; negotiations on lower prices with friendly country gas suppliers like Norway and Algeria; and capping the price of gas imports from Russia alone.   

Jozef Síkela, the Czech Republic’s industry and trade minister, who chaired the summit, said he was ready to call “as many extraordinary councils as are needed in order to implement the necessary legislative acts as soon as possible.”

The next interventions in the gas market must, he said, “decrease the price of gas without motivating too high consumption. There is still a threat that there won’t be enough gas this or next winter.”

After this week’s sometimes fractious discussions over the price cap, another key priority will be to maintain EU unity.

Some countries pushing for a bloc-wide cap on gas imports were taken aback when Germany, which is resisting the measure, announced on Thursday a huge €200 billion package to shield its own households and businesses from rising gas prices.

“Just Germany can afford such a thing,” said one EU diplomat. Italy went public with its concerns.

Síkela, seemingly reading the mood among countries, pointedly highlighted the importance of unity in comments ahead of Friday’s summit.

“I expect unity and solidarity,” he said, when asked about countries such as Germany. “We are in a war and the decisive battle will be this winter. We need to stay united and we need a high level of solidarity.”

Whatever drastic measures come next, everyone should buckle up for the long haul, said one Commission official.

“The gas price cap discussion is being presented by some member states as a silver bullet,” the official said.  “There is no single solution … this will not be over soon. Nor will it be easy.”

Karl Mathiesen contributed reporting.

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