The European Council gathered in Brussels this week to discuss a range of issues, from relations with China to the energy crisis and war in Ukraine; now that Germany has made concessions, an energy price cap is possible
October 22, 2022
EU leaders met in Brussels over Thursday and Friday to cover a range of issues facing member countries, but Russia’s escalated aggression towards Ukraine and the ongoing energy crisis was the central topic of discussion. The outcome has paved the way for the European Commission, the EU’s politically independent executive arm, to begin drafting proposals for a temporary energy price cap.
This meeting of the European Council was the official follow-up to the emergency meeting of EU leaders that took place in Prague on October 7 in the wake of the first meeting of the European Political Community on October 6.
On Friday, European Commission President Ursula von der Leyen discussed the outcome of the meeting of the European Council in a press conference.
Here are their key conclusions:
The potential for an energy price cap
The focus for the conversation on Thursday centred around the ongoing energy crisis and the Council agreed upon a series of possible measures, which have been detailed in the meeting’s conclusions. EU leaders have urged the members of the Council and the Commission to decide on concrete measures with urgency in order for each country to assess the impact that any agreed measures will have on the specific circumstances of the individual nations.
The proposed measures include a voluntary joint purchase of gas in order to make use of the Union’s collective market weight. This was made voluntary in response to Hungary’s opposition to a mandated approach.
The Council is also edging towards a cap on the price of gas. This proposal is alongside a pledge to include a “cost and benefit analysis” of the measure itself.
Nothing has been finalised yet and much more “talking” – a favourite EU pastime – will be needed before a decision is made. The breakthrough was a result of Germany stepping back from its previous position. Until now, Berlin had been one of the strongest opponents of a price cap, but on Thursday Germany bowed to pressure from other leaders. It will support a temporary control of gas costs whilst a new pricing system can be devised.
There is fear that the EU, by refusing to trade gas above a specified benchmark price, will trigger shortages by causing Russia to simply sell to Asian markets instead.
Multiple points in the meeting’s conclusions address these fears by setting out ways to alleviate the threat of shortage.
One measure would fast track and simplify permitting procedures in order to accelerate the rollout of renewables and related grids.
There is also a proposal for energy solidarity measures in case of gas supply disruptions at national, regional or the EU level.
The simple decision to increase efforts to save energy was also listed as a possible measure.
EU leaders delegated further conversations to the EU’s Transport, Telecommunications and Energy Council who will meet next week.
German Chancellor Olaf Scholz also suggested that an emergency EU leaders’ summit will be required in the coming month. This meeting would allow Germany and others the ability to veto the European Commission’s final proposal.
The Council reiterated their commitment to continue improving European energy systems by focusing on renewable methods of energy production. This is meant to help the EU to transition away from fossil-fuel dependency on Russia.
The proposed tools for these improvements include increased energy efficiency, future-proof energy infrastructure, and innovative renewable technologies.
President von der Leyen said of the proposal:
“There is a lot of work now ahead of us where energy is concerned, but the roadmap is very clear, and it was good to have this unanimated, broad support for the road map that we have put forward.”
The mood is generally hopeful, but compromise always means that no EU member state will be entirely happy with the outcome. EU leaders insist that, nonetheless, the best approach is a united one.
Continued funding for the war in Ukraine and future reconstruction
President von der Leyen discussed the EU’s plans to continue funding Ukraine’s war efforts in the face of increased Russian aggression and outlined an aid package to help Ukraine cover its budget in 2023. In May of this year, the EU committed 9 billion euros of aid to be disbursed to Ukraine over the course of 2022; so far, the EU’s contribution totals 19 billion euros.
Ukraine has requested 3 to 4 billion euros per month to source resources for basic operations. Citing the importance for Ukraine to have a predictable and stable flow of income, President von der Leyen committed to 1.5 billion euros per month, a total of 18 billion over the course of 2023, financed by the European Union.
The other 1.5-2.5 billion is expected to be contributed by the United States and other financial institutions.
Regarding the recent actions of Russia itself, the conclusions from the meeting state:
“The European Council condemns in the strongest possible terms the recent indiscriminate Russian missile and drone attacks targeting civilians and civilian objects and infrastructure in Kyiv and across Ukraine. It likewise condemns Russia’s actions at Ukraine’s Zaporizhzhia nuclear power plant.”
President von der Leyen echoed this sentiment at the press conference on Friday by describing the attacks of Russia on civilian infrastructure as “atrocious and deliberate”.
The discussion then shifted to focus on the reality of the ongoing humanitarian crisis in Ukraine. The EU has confirmed another 175 million euros will be allocated to aid the humanitarian needs of over 11 million internally displaced people who lack access to water, electricity, heating, and shelter.
Finally on the topic of Ukraine, President von der Leyen discussed the mid and long-term goals of reconstruction in Ukraine within the context of its candidate status for possible membership in the EU:
“The massive investments that are necessary should be aligned with the needs for reform in order to really pave already their path to EU membership. Ukraine, as you know, is a candidate country so everything should be focused on this common journey that we will undertake together.”
The International Expert Conference on the Recovery, Reconstruction and Modernisation of Ukraine is set to take place in Berlin next week. The goal for this conference is to discuss the technical and financial challenges involved in the reconstruction of Ukraine. The keynote speech at the conference will be delivered by Ukrainian President Volodymyr Zelensky.
Strategic external relationships with the looming threats of China and Iran
At the meeting on Thursday, the European Council strongly condemned the human rights violations taking place in Iran by the Iranian authorities’ unacceptable use of force against peaceful protestors.
The Council welcomed the measures set out on October 17 in response to this aggression, which include a travel ban and asset freeze on 11 people and four entities for their role in the death of Mahsa Amini and a prohibition on EU citizens and companies making funds available to these people and entities. The EU is calling for the Iranian government to release all peaceful protestors who have been detained.
Tensions with Iran have also arisen this week due to Iran’s supply of drones to Russia, which were used in the recent bombardment of Kyiv.
Discussion of China occurred on Friday morning, and President von der Leyen outlined the conclusions in her press conference. The central area of concern was the EU’s continued reliance on China for technology and raw goods, especially in the face of President Xi’s clear mission to establish dominance in East Asia.
President von der Leyen said of this reliance on China:
“We have to be very vigilant when it comes to dependencies, and we’ve learned our lesson with how the over-dependency on fossil fuels from Russia is concerned and how tough but necessary it is to get rid of this dependency.”
The EU’s priorities moving forward will be to reinforce their own capacities and to diversify the supply of raw materials from other reliable and trustworthy suppliers. In this pursuit, the EU is working on free trade agreements and raw material partnerships with other countries.
EU-ASEAN Commemorative Summit will take place on 14 December 2022. The European Council has now stated that the goals for this summit are to further deepen the European Union’s Strategic Partnership with Asia, to stress a shared attachment to international law and internationally agreed norms and standards, and to focus on common intereststhat bind the regions in a longstanding partnership.
Next Steps
Of the two-day meeting, European Council President Charles Michel said:
“This has been a crucial European Council. It is crucial in that it has produced a framework which has now been set out with precision and no taboos, together with a list of measures which must now be fine-tuned ready, we hope, for gradual implementation so that it can have the desired impact on the three priorities: to lower prices, guarantee access to supply, and continue to work to reduce demand. We are determined to achieve all three.”
Many of these proposals will continue to be fleshed out through the series of events planned in the upcoming weeks.
The meeting of the EU’s energy ministers and the International Expert Conference in Berlin will both take place on October 25. There are just over seven weeks until the EU-ASEAN Summit, but an emergency EU leader’s summit is on the horizon in the meantime.
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Typically for the EU, the approval and implementation of the proposed measures will continue to take place slowly, but for now, at least it seems to be heading in the right direction – provided Germany plays along.
This article was originally published on IMPAKTER. Read the original article.
