Europe held an emergency meeting on energy, many countries objected to only restricting the price of Russian gas, and the price of natural gas in Europe fell by 7%

time:2023-01-30 author:Stock market
Europe held an emergency meeting on energy, many countries objected to only restricting the price of Russian gas, and the price of natural gas in Europe fell by 7%

EU energy ministers gathered in Brussels on Friday to discuss energy market interventions to get through the winter amid gas shortages. The EU ministers involved in the negotiations are now urging the European Commission to take measures against energy profits, according to the latest media revelations. Ministers say more needs to be done on setting price caps for gas imports; oppose measures to cap prices for gas imported from Russia only; urge European Commission to come up with proposals to lower all gas prices without affecting supply; ask EU to propose temporary emergency intervention measures , including a cap on natural gas prices (in European countries). Ministers also want action on energy windfalls, asking the EU to come up with measures to limit revenue for non-gas generators. Ministers all supported measures to bring additional liquidity to energy markets, which are currently strained by massive margin calls. Regarding the progress of the talks, German Deputy Chancellor and Economy Minister Habeck said that the EU has reached an agreement on reducing energy prices and reducing the burden. The European Commission is on the right track to redefine the energy market (prices). EU Energy Commissioner Simson said the European Commission will propose energy-related measures next week. Affected by news of a potential natural gas price cap, European natural gas futures fell as much as 7% on Friday and are still down more than 3.5%. But even so, European gas prices are about eight times higher than the average over the past five years.

Specific implementation differences are serious

Discussions at the EU level have been ongoing for several days. According to information previously disclosed by the media, potential interventions include price caps on non-natural gas power generation, price caps on Russian natural gas imports, cuts in electricity consumption levels, administrative pricing in areas with the worst supply disruptions, and financial regulation to curb gas prices Hype etc. The challenge now is to find solutions that can be applied across the EU and fit into the power systems of the 27 EU member states. These economies and national power systems are powered by different energy sources. Ministers now agree on a number of general themes, but remain largely divided on what exactly should be done and how. On the gas price cap, energy ministers are currently opposed to a proposal by European Commission President von der Leyen to cap Russian gas prices. Countries including Italy, Poland and Greece believe that imposing a price cap on Russian gas will only anger Russia, prompting the latter to implement a total gas supply cutoff to Europe. Russia's gas supplies to the EU have fallen by about 80 percent since the outbreak of the Russia-Ukraine crisis. As an alternative, EU ministers are currently asking the European Commission to take steps to reduce all gas prices. Proponents of the proposal have proposed capping prices above previous prices in Asia and the United States to ensure international traders have an incentive to ship LNG to Europe. There are also different voices within the EU regarding the cap on non-gas power generation. The European Commission is currently proposing a price cap of €200/MWh, which is far lower than the current electricity price of €340/MWh in Western Europe. But France says different price caps should be set according to different power generation technologies: French nuclear power plants do not create the same value as German thermal power plants and Spanish wind power plants.

Not much time left

The EU is in the early stages of planning. The diplomats said Friday's discussions were unlikely to lead to immediate action. According to EU procedures, even fast-track measures require at least several rounds of negotiations between government representatives before they can be approved by ministers, translated into the EU's 24 languages ​​and published. But Europe may not be able to wait too long. Belgian Prime Minister Alexander De Croo has warned that Europe cannot afford two months of debate, when the EU faces the risk of complete economic shutdown and deindustrialisation: a few more weeks and the European economy will come to a complete stop. Recovering from it will be a lot more complicated than intervening in the natural gas market today. The EU will face the risk of deindustrialisation and fundamental social unrest. EU leaders are scheduled to meet informally in Prague on October 6-7 and another summit in Brussels on October 20-21. It is expected that relevant measures may be finally reached by leaders of various countries at that time. This article is from Wall Street News, welcome to download the APP to see more
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