May 26, 2022

Taylor Daily Press

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These are the decisions and their impact on you

These are the decisions and their impact on you

What was the summit?

In Brussels, European leaders finally agreed on a strategy to lower energy prices for citizens and businesses. At times, very technical negotiations on the energy market lasted for nine hours on Friday – quite extraordinary for the second day of the European summit. In the end, all 27 leaders agreed to the proposal that the committee, along with the energy sector, would consider a series of possible short-term actions.

What do you decide?

The European Commission is going to gas price ceiling And he’s still working on a system to make that possible. In the run-up to the European summit, Belgium was one of the countries that lobbied hard for such a cap to be introduced, and, along with Italy, carried out the sway on Friday afternoon. According to Prime Minister De Croo, the fact that the option is retained is due to the fact that the introduction will never be just a political decision, but will be made in consultation with the industry. “This was necessary to convince Germany and the Netherlands,” he said at his closing press conference.

The price ceiling cannot be separated from the second important decision: joint purchase of gasAlbeit on a voluntary basis. “You have to see the pricing mechanism along with the group purchases. The Commission will only be able to have good negotiations because that price cap is a big stick,” de Croo explained.

Specifically, it will be examined whether these measures can help reduce the price of gas and combat the “pollution” of the electricity market. There, the wholesale price is determined by the most expensive fuel needed to meet demand – currently gas. During May, the Commission will present proposals to separate the gas and electricity markets.

A solidarity mechanism has also been introduced to allow all member states to build up their gas reserves to an adequate level. Belgium is well connected and therefore has few problems to replenish its reserves, but this is less true for other countries.

Is the agreement widely supported?

Despite the deal, German Chancellor Olaf Schulz said Friday night after the summit that Germany remains “extremely skeptical” about setting a price cap. “There are some countries that have very strong ideas about market intervention and price caps. Others, including Germany, are very skeptical,” said Schultz.

Dutch Prime Minister Mark Rutte also noted that member states are “very divided” on the various options to keep prices low. The Netherlands itself is not in favor of capping the price of gas, as it could delay investments in renewable energy and jeopardize the security of supply.

US President Biden and Commission Chairman von der Leyen also reported earlier this week that the US will supply an additional 15 billion cubic meters of liquefied gas to the European Union this year, rising to 50 billion cubic meters annually until 2030. European now from Russia every year.

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