EU leaders have unveiled a plan to intervene in Europe’s gas market in an attempt to bring down soaring prices.
Presidents and prime ministers hashed out a deal late into the evening on Friday at a tumultuous summit in Brussels.
Leaders discussed the war in Ukraine on Thursday in the company of US president Joe Biden but on Friday turned their attention to addressing the continent’s unfolding cost-of-living crisis.
The top-level meeting dragged on hours longer than originally planned after leaders split into two camp advocating different ways forward.
Despite pledges by Mr Biden on Friday morning to send more liquid natural gas to Europe to replace Russian supplies, some leaders want the EU to take a more active role in controlling prices.
Energy costs have gone through the roof since the Russian invasion of Ukraine, further buoying a market already inflated by demand restarting after Covid lockdowns.
Spain, Italy and Belgium argued that the European Commission should look at possible market interventions like price caps.
But more free-market governments like the Netherlands and Germany opposed such a move.
In the end a compromise was reached which included a reference to price caps and called on the Commission to look at ways to reduce prices.
But the main part of the plans will see EU countries cooperate on the joint purchase of gas on a voluntary basis in a bid to bring down prices.
“The root cause of high electricity prices is, in large part, high and volatile gas prices,” European Commission von der Leyen said following the meeting.
“So we will join forces, pool our demand and use our collective bargaining power when purchasing gas. In addition, we must complete pipeline infrastructure and ramp up our storage.
”This will be our insurance policy against supply disruption. It’s also time to look at the design of our energy market.“
She said Spain and Portugal would also be given “special treatment” to introduce their own measures, which their governments would announce at home in the coming weeks.
Ms von der Leyen justified this different on the basis that the countries produced much electricity from renewable energy. The two countries were among the strongest advocates for fully fledge price caps.
Greek Prime Minister Kyriakos Mitsotakis, who also favored a more interventionist approach, told a press conference following the EU summit: “We managed to include in the conclusions an explicit reference to gas price caps, among other options, which we call on the Commission to consider in order to put downward pressure on prices.
He downplayed the length of the discussion, which he described as featuring ”minor tensions“, and added: “We will intervene together as European Union and break the game of the speculators, we will not pay for Russia’s war.”
Explaining the measures, French President Emmanuel Macron told reporters: “We’ve seen some countries going towards other countries to negotiate their own contracts, that, and I told colleagues, it’s not the best way as we are pushing prices up.
”As we need to go towards a European diversification, it’s much more pertinent that the discussions for new contracts like Norway, Qatar or the United States, can negotiate en masse and volume. It’s much better for us. “