Gas prices: Commission rejected by France and Spain

Spanish Prime Minister Pedro Sánchez and France consider the gas price capping mechanism proposed by the Commission as “inadequate”.

By Emmanuel Berretta

The Prime Minister of Spain, Pedro Sánchez, considered the proposal of the Commission insufficient.
The Prime Minister of Spain, Pedro Sánchez, considered the proposal of the Commission insufficient.

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LThe Brussels Commission is the subject of sharp denials from Spain and France ahead of the Energy Council, which is supposed to focus on capping gas prices. The Spanish Prime Minister did not hide his dismay on Tuesday afternoon, considering that the proposal presented by Commissioner Kadri Simson “is not going in the right direction” and may even be – a shame! – causes prices to rise. France follows the path of Spain and considers the text of the Commission “inadequate”. “The Commission does not respect the mandate entrusted to it at the last European Council”, we emphasize on the side of the Cabinet of the Minister of Ecological Transition, Agnes Pannier-Runacher.

Kadri Simson proposed an emergency intervention mechanism in the gas market if two conditions are met: first, if the price of each kilowatt hour exceeds 275 euros for two weeks and the difference between the TTF index (which determines the price of gas from the pipeline) and the average market price of LNG for ten days is 58 euros consecutively. The mechanism is supposed to come into force from 1er January 2023. “This double condition is absurd, the safety net is too low, protests in the cabinet of Agnès Pannier-Runacher. To work, one has to imagine a complete deregulation of the market that corresponds to the destruction of infrastructures. Very unlikely. France is once again mobilizing 15 countries demanding gas price caps to reject the proposal and force the Commission to review its copy.

ill will

The Commission is clearly reluctant to do so because it is wary of any interference in the gas market. So much so that the parameters stored by its services make this intervention very hypothetical. He also admitted that the proposed parameters would not have caused the intervention during the price peak recorded last August. The Commission, under the influence of DG Energy, finds it difficult to hide its reluctance, which coincidentally is the same as Germany. Gas prices are not a major concern in Berlin. Above all, the Germans are afraid of disruption of supply and are ready to pay the necessary price, even a very high one, to provide themselves with gas…

READ ALSOGas prices: Why the Commission is dragging its feet

Thursday’s Energy Council in Brussels will spark a new conflict between the 27 countries over energy prices. The topic has been debated since long before the Gulf War, and given its diversity, compromises are very difficult. Energy mixes between EU countries.

In December, the “Iberian mechanism” was investigated

There is a second text on the agenda of this Energy Council aimed at accelerating the deployment of renewable energies by reducing the administrative procedures for the installation of wind turbines. A more consensual topic among 27. The proposal was welcomed by France.

READ ALSOGas price ceiling: France tries to please Germany

France, like others, proposed capping the price of gas production by extending the Iberian mechanism to the whole of Europe. The conclusions of the Council asked the Commission to study in depth the feasibility of such a mechanism. This issue will be investigated at the meeting of the Energy Council on December 19. The Commission has yet to publish anything on this, but we also know that it is reluctant to accept the idea… just like in Germany.

Prime Minister Elisabeth Borne will travel to Berlin on Friday. The energy issue will be part of his discussions with Chancellor Scholz and Vice-Chancellor Robert Habeck to reach a common position. “Announcements may be made,” from a government source.

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