WORLD EU ministers tussle over how to tackle gas price surge


EU ministers tussle over how to tackle gas price surge


16:53, October 26, 2021

EU energy ministers held an emergency meeting on Tuesday on how to tackle surging gas prices, with 11 countries including Germany rejecting proposals from France and Spain for deep market reforms.

File photo: VCG

The gathering in Luxembourg was bookended between an EU summit last week called on the same issue and the COP26 climate summit next week in Britain.

It came against a backdrop of rocketing energy prices globally as many countries' economies jump into high gear after a long hiatus forced by Covid-19 restrictions.

Europe, highly dependent on imported gas and oil, is seeing wholesale energy prices jump dramatically, mainly on the back of soaring spot gas prices that are the benchmark.

The European Commission has come up with a "toolbox" of measures to mitigate the short-term surge, mainly encouraging member states to cut taxes and levies that typically account for around a third of energy bills.

But Spain went into the meeting gung-ho to persuade the others to back its plan for EU countries to jointly purchase gas, the same way they did for the bloc's successful Covid-19 vaccines procurement.

France, backing Spain, wants a redesign of Europe's energy market to make gas a less important component in setting prices -- something that suits its domestic energy mix, which is more than 70 percent supplied from nuclear power.

Nine countries including Austria, Denmark, Finland, Germany, Ireland and the Netherlands said in a joint statement issued just before Tuesday's meeting that they opposed fundamental changes to the EU's market.

"The internal market for gas and electricity has been jointly and gradually built over the past decades. Competitive markets contribute to innovation, security of supply and are thus a key element to facilitate the transition" towards the EU's ambition for a low-carbon future, they said.

One of the signatories, Luxembourg, said Sweden and Belgium had also signed onto the statement, bringing the total backing it to 11.

"The Spanish government is over-promising by saying joint energy procurement will solve the crisis. What will solve the crisis is efficiency investments," Luxembourg Energy Minister Claude Turmes told reporters as he arrived for the meeting.

Spain's energy minister, Sara Aagesen Munoz, countered that the energy price surge "is an extraordinary and urgent situation that requires urgent action".

"Our proposal is totally clear and forceful," she said, adding that she planned to win over her counterparts "with facts".

"The energy transition, the ecological transition and the decarbonisation that Europe is committed to is only possible if consumers and industries perceive the benefits of this transition," she said.

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