EU leaders wrestle to seek out short-term repair for power crunch

U.S. President Joe Biden and European Council President Charles Michel shake fingers, throughout a European Union leaders summit, amid Russia’s invasion of Ukraine, in Brussels, Belgium, March 24, 2022. REUTERS/Evelyn Hockstein

BRUSSELS, March 25 (Reuters) – EU leaders failed on Friday to agree a short-term resolution to the power market crunch made worse by Russia’s invasion of Ukraine, however did supply a compromise for Spain the place spiralling gas costs have led to 12 days of trucker blockades.

An intense debate on whether or not to cap power costs, pitting some southern international locations towards Germany and the Netherlands, pushed the second day of an EU summit into the night, with Spanish Prime Minister Pedro Sanchez at one level strolling out of the assembly room.

Ultimately, they settled on trade-off and left various points unresolved.

The struggle in Ukraine has pushed power costs to report highs and prompted the European Union to hunt to chop Russian gasoline use by two-thirds this 12 months, by discovering gasoline elsewhere and boosting renewable power.

Whereas the Mediterranean rim states pressed for a cap on wholesale gasoline costs to protect poorer households, opponents mentioned this could entail public money subsidising fossil gas technology.

The leaders charged the European Fee with urgently assessing what short-term choices, from value caps to tax rebates, may assist scale back gasoline and electrical energy costs.

Italian Prime Minister Mario Draghi instructed a information convention after the summit that the EU government would focus on choices with giant oil and electrical energy corporations.

“We count on to have some proposals by Might,” he mentioned.

Spain and Portugal did safe permission to implement non permanent measures to curb their electrical energy costs.

European Fee President Ursula von der Leyen mentioned this “particular remedy” was attainable as a result of the Iberian peninsula was largely indifferent from the remainder of the EU energy grid, though the EU government can even assess short-term plans proposed by different EU members.

Earlier on Friday, U.S. President Joe Biden – who joined the primary day of the summit – dedicated to serving to Europe with extra LNG deliveries because it grapples with the necessity to scale back dependency on Russia for its power wants.

Russia provides 40% of the gasoline the EU wants for heating and energy technology and greater than 1 / 4 of its oil imports.

Belgian Prime Minister Alexander De Croo, who backed southern European international locations’ push for market intervention, mentioned governments throughout the EU confronted mounting public strain.

“At present is concerning the on a regular basis problems with the folks and that’s the electrical energy and gasoline bill of the folks,” he mentioned. “We’re at struggle and in a struggle it’s worthwhile to take extraordinary measures.”

DEPENDENT ON RUSSIA

There was settlement among the many 27 member states on a plan for joint purchases of gasoline to tame costs.

The European Fee has mentioned it is able to lead negotiations on pooling demand and looking for gasoline earlier than subsequent winter, following an identical mannequin by way of which the bloc purchased COVID-19 vaccines on behalf of member states. learn extra

“We have seen some international locations going in direction of different international locations to barter their very own contracts. That, and I instructed colleagues this, just isn’t one of the best ways as we’re pushing costs up,” French President Emmanuel Macron mentioned.

Nonetheless, the EU remained divided over whether or not to ban Russian oil and gasoline imports along with the slew of sanctions it has imposed on Moscow because the invasion a month in the past.

Moscow calls its actions in Ukraine a “particular navy operation” to demilitarise and “denazify” Ukraine. Kyiv and the West say Putin launched an unprovoked struggle.

Europe’s dependency on power from Russia means the query of an embargo, as the USA has imposed, is economically dangerous, and no choice was taken on Friday.

Germany, Hungary and Austria had been among the many most reticent about imposing a ban on Russian oil and gasoline.

No frequent place emerged both on Russia’s demand this week that “unfriendly” international locations should use roubles to pay for its oil and gasoline. learn extra

Draghi mentioned leaders agreed that any such Russian demand for gasoline exports would signify a breach of contract.

The Kremlin’s demand poses a dilemma for international locations reliant on Russian power as a result of, by agreeing to it, they might be shoring up the rouble and channelling onerous foreign money into Moscow – however refusal may imply their power provides dry up.

Further reporting by Philip Blenkinsop, John Irish, Jan Strupczewski, Sabine Siebold in Brussels, Belen Carreno in Madrid, Bart Meijer in Amsterdam and Benoit Van Overstraeten in Paris
Writing by Ingrid Melander and John Chalmers
Modifying by Matthew Lewis

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