EU shoots down France and Spain's bid to take on Russia over gas crisis

·2 min read
A number of European governments have accused Russia of deliberately squeezing the EU by limiting the supply of gas - Dmitry Feoktistov /TASS
A number of European governments have accused Russia of deliberately squeezing the EU by limiting the supply of gas - Dmitry Feoktistov /TASS

France and Spain's calls for a radical overhaul of the bloc's energy policy have been shot down as the European Union squabbles over how best to take on Russia over a growing gas crisis.

Nine EU nations torpedoed a Franco-Spanish push for a dramatic overhaul of the electricity market on Tuesday, even as gas prices across Europe have soared to new records, prompting mounting fears of a supply crisis this winter.

A number of European governments have accused Russia of deliberately squeezing the EU by limiting the supply of gas to the bloc but the EU is split over how to tackle the issue.

Spain has called for the EU to use its combined purchasing power to buy up gas reserves that would allow it to set a ceiling for prices, to protect governments and consumers.

France has also proposed a wider shake-up of the way the bloc’s energy market operates, including an opt-out allowing governments to quit the current system of setting electricity prices.

However, at an emergency meeting of EU energy ministers in Luxembourg on Tuesday, both suggestions were rejected by countries including Germany, Austria, the Netherlands, Luxembourg and Ireland.

They argued it was a short-term price crunch caused by the global economic recovery and that wholesale reform was not needed.

“I think that the Spanish government is over promising by saying joint gas procurement will solve this crisis,” said Claude Turmes, Luxembourg’s energy minister.

“What will solve the crisis is efficiency investments, continue with reliable investments into renewables and what Spain needs most is interconnections.”

Spain and France also led calls to decouple the price of power from the cost of gas. The EU’s wholesale electricity price, including from cheaper renewable sources, is mostly set by gas prices, which Madrid and Paris argue is unfair.

But that too was dismissed, leaving the EU struggling to find a solution everyone could get behind.

"There was no agreed position on whether or not intervention measures should be adopted at the EU level and applied in all member states," Jernej Vrtovec, Slovenia’s infrastructure minister, whose country holds the EU’s rotating presidency, told a news conference.

The European Commission is exploring the design of Europe's electricity market and gathering evidence on a number of suppliers, in response to accusations that Russia’s Gazprom was deliberately pushing up prices, including a joint procurement scheme.

"There are many issues to be considered - who will pay for the costs of procuring and storing the gas, how the gas will be transported from the different regions," Kadri Simson, the EU’s energy commissioner, said.

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