Spain and the countries most irritated with the Commission for the “bad joke” of its initial proposal force a new meeting in mid-December and link the approval of the entire package to each of the parties.
There will be no agreement on the full package of energy measures until an agreement is reached on the gas cap. There is a group of countries in the EU, with Spain as one of the most angry, who believe, denounce and regret that the European Commission “has not taken seriously” the task entrusted to it and that the proposals for a mechanism of price intervention presented a few days ago are “A bad taste joke”. These countries, a majority, have made it clear today in Brussels that they are going to jump through hoops this time, and that if there is no solution that satisfies all parties on the cap issue, there will be no green light for everything else. So everything is committed to a next meeting, in two or three weeks, to try to find a joint solution.
Moncloa, together with Italy, Poland, Greece or Belgium, are very upset. They understand that the task of the Commission is complicated, since it has to gather the sensitivities and demands of the whole world in a sensitive and technically complicated issue. But the cap mechanism suggested this week, which will only be activated when the price of gas derivatives in the Netherlands market exceeds 275 euros for two weeks, and there is also a price difference of 58 euros over the market for 10 days in a row, it’s a “tease”. The demand to promote this tool to reduce the impact of gas on electricity was driven by the soaring prices of the summer, but the Commission itself admits that with its idea now or then it would not have activated the intervention.
The positions are disparate, and even countries like the Netherlands or Germany, which are more than reluctant to put a cap on prices, believe that the Commission has not been fine and should not have launched as it has done. The community technicians, who have been putting sticks in the wheels for a year because are not in favor of interventionist measuresbelieve that a price below 275 euros in the operations carried out in the gas market would compromise the supply.
“Unenforceable and ineffective”
The position of Spain, defended in the community capital by the vice president Teresa Riberais that solidarity, joint purchases and a cap on the price of gas must go hand in hand, and it would be “enormously unbalanced to politically support and adopt today the Council’s proposals on how to accelerate the deployment of renewables and how to reinforce solidarity with those who need it.” and, nevertheless, to leave in a vacuum a proposal from the Commission that, by all accounts, seems to us absolutely unenforceable, ineffective and out of purpose and reiterated demands as a priority aspect to address this crisis”. Spain, in any case, has its own tools like Portugal, the Iberian mechanism, which reduces the impact of gas prices on electricity generation, but if the price falls In general, the benefits would also be immediate.There are days these weeks in which in fact the mechanism is not activated because the price in the market is below the thresholds.
At today’s Extraordinary Council, the people of the police station kadri simson He has had to listen to very harsh reproaches in an unusual tone, especially from countries like Spain that always presumes to be with the consensus. The Czech presidency, which this semester is holding the reins of the Council, has decided to call a new extraordinary meeting, probably on December 13, to try to resolve this issue, with much more work ahead. “The Presidency now has a margin of two or three weeks to make new acceptable proposals that we can address in a new meeting of the Energy Council. We cannot accept leaving open today the question of what the path of gas prices should be, that would be a mistake”, said Ribera.
In the EU the Commission proposes, but it is the states that dispose. The Commission does the technical work, because it has the muscle, but the decision rests with the capitals, the ministers. If an Energy Council were held in the middle of next month, there would be an additional trick at the highest level, since on the 16th and 16th the European Council, the Heads of State and Government, also meet, who can give the final touch. to any discussion. “We will continue working hard, negotiating, and we can reach an agreement,” the Czech minister said at a press conference at the end of the meeting. “We are prepared to go further. Although today’s result has not been enough, I am very sure that we will do what is necessary to pass the correction mechanism in a way that helps everyone. We will not hesitate to use if the market situation requires it.“, he has pointed out.
Now it will be the Czech presidency that takes the controls and tries to polish a text that is worth everyone. With the assistance of the Commission, but not on its initiative. The solution can go through a lower ceiling of those 275 euros, for less demanding demands (that 14 days in a row are not necessary) or as Madrid and other capitals want, that this idea of a fixed ceiling be changed for a dynamic fork that responds to market movements in each situation.
The 15 countries that have been asking for more ambition do not want caps above 200 euros. His problem is not just about quantity, but about philosophy. They believe that the Commission has not sought what it should. “In August, the most critical moment, there have not been 5 days in a row with prices above 275 euros. For there to be 15 days above 275 would be equivalent to having prices at 600 per Mwh,” said Ribera. “The design was intended not to be applied. And the concept that it reflects is of ultra-security for a possible ultra-escalation of prices, but what we asked the Commission for was an orientation to the markets on price references willing to pay, the purpose is different”, the Spanish insisted. it is just a bottom line for the worst, but a way for traders to understand where the bottom line is.
At the meeting there were no substantive problems on issues such as accelerating the approval of renewable energy projects and a solidarity package for the energy crisis that includes the idea of joint gas purchases, solidarity measures to guarantee the exchange of supplies within the EU in case of serious distress. And the establishment of a new reference price for LNG. This index is expected for spring, and precisely the corrective mechanism should be activated, starting in January, in the event that limits considered unacceptable are exceeded. But everything is conditioned to the top of the gas.
The 15 passes are saved that letter. It is not something strange in Brussels, it is part of the normal negotiating process. All the states have been optimistic and confident, believing that an agreement can be reached by mid-December despite the differences. Perhaps changing the fixed stop, perhaps leaving only a variable tool. EU deposits are at 94% of its capacity and since it was announced that there would be an intervention mechanism, prices have remained in a more manageable range. But nothing guarantees that the situation will get worse, whether from the climatic point of view, in the war or in the supply. “I am pragmatic”said Commissioner Simson.
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