The energy war declared by Russia against the European Union will enter a new phase today with the publication of the guidelines for emergency intervention with what, in an unprecedented decision, the Twenty-seven propose to do in the markets to respond to the crisis .
Today, the College of European Commissioners will agree on several short-term action tracks, initiatives that President Ursula von der Leyen will discuss today with the ambassadors of the member states to prepare tomorrow's extraordinary Energy Council, from which concrete decisions are expected to come out . “Vladimir Putin is using energy as a weapon, cutting off supply and manipulating markets. He will fail. Europe will win”, Von der Leyen assured this week.
The pillars of the European shock plan, according to the president herself, are the reduction of electricity consumption, especially during peak hours, through the approval of a European demand reduction plan; a cap on the price of gas that member states buy from Russia, although at the moment there is a total cut in supply and, finally, aid to consumers and energy operators suffocated by rising prices and volatility.
In addition, they add community sources, the Commission will once again put on the table its proposal to impose new taxes on the extraordinary profits that electricity companies are currently obtaining as a result of market imbalances, since with the current system the price of electricity comes determined by the cost of gas, even though the bulk of production comes from cheaper sources, such as renewables or nuclear.
The main instrument of intervention for which the technicians of the Commission are betting is the adoption of a price ceiling for the gas that the Union buys from Russia. The measure would reduce Moscow's income and its ability to finance its war machine, as the EU has proposed to do, a goal so far failed. Between June and July they increased by 4% despite the fact that flows fell by 40%, while reducing volatility in the markets, warns one of the preparatory documents for the debate.
The main challenge right now is that Moscow has completely turned off the gas tap. But if the EU bets on this response to contain prices, "it must be prepared to totally renounce" Russian gas flows, since Putin could choose not to sell to their countries, community technicians warn. The idea would be to set a lower price than the current one but to give Moscow incentives to continue operating, although as the document points out, "the EU should not assume that Russia is a rational actor." Another variant of this intervention would be to set a specific price cap for Germany and the rest of the Central European countries that are most dependent on Russian gas.
In addition to price caps, the Czech presidency of the Council of the EU yesterday advocated also examining the option of putting a limit on the price that companies can charge consumers for electricity produced from renewable sources, which would allow the rest of the money to social assistance. On the other hand, Brussels plans to use the Asian JKM index as a market reference, with a price premium, instead of the Dutch TTF, at least for certain parts of the EU.
In parallel, the Commission is now also open to the idea of making joint gas purchases through the creation of a specific entity for this purpose, a proposal that the Spanish Government already launched about a year ago and Brussels then rejected. "The creation of a single entity for the purchase of gas in the EU would be very interesting in the long term," the community technicians now state in the aforementioned document.
