Eu Leaders Struggle To Find Short Term Fix For Energy Crunch

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The “tough” debate on energy price caps ends with renewal Biden promises LNG for Europe as he moves away from Russia Leaders are worried about the impact of high energy prices on consumers No agreement to ban imports of Russian oil and gas

BRUSSELS, March 25 (Reuters) – EU leaders on Friday failed to agree on a short-term solution to the energy market crisis exacerbated by Russia’s invasion of Ukraine, but offered a compromise on Spain, where spiraling fuel prices led to a 12-day blockade of truckers. A heated debate over whether to cut energy prices, which some southern countries are facing Germany and the Netherlands, prompted the second day of the EU summit in the evening, with Spanish Prime Minister Pedro Sanchez stepping down at some point. the meeting room. In the end, they compromised and left some issues unresolved. Sign up now for FREE unlimited access to Reuters.com Register The war in Ukraine has pushed energy prices to record lows and prompted the European Union to seek to reduce Russian gas use by two-thirds this year, finding gas elsewhere and boosting energy from renewable sources. As Mediterranean states pushed for a wholesale gas price cap to protect the poorest households, opponents said it would entail a public subsidy for fossil fuel production. The leaders instructed the European Commission to urgently assess what short-term options, from price caps to tax cuts, could help reduce gas and electricity prices. Italian Prime Minister Mario Draghi told a news conference after the summit that the EU executive would discuss options with major oil and electricity companies. “We expect to have some proposals by May,” he said. Spain and Portugal have secured authorization to implement interim measures to reduce electricity prices. European Commission President Ursula von der Leyen said this “special treatment” was possible because the Iberian Peninsula was largely cut off from the rest of the EU electricity grid, although the EU executive would also evaluate short-term plans. proposed by other EU members. Earlier on Friday, US President Joe Biden – who attended the first day of the summit – pledged to help Europe with more LNG deliveries as it addresses the need to reduce its dependence on Russia for its energy needs. Russia supplies 40% of the EU’s gas needs for heating and electricity generation and more than a quarter of its oil imports. Belgian Prime Minister Alexandre de Croix, who has backed pressure from southern European countries to intervene in the market, said governments across the EU were facing growing public pressure. “Today it concerns the daily issues of the people and that is the electricity and gas tariff of the people,” he said. “We are at war and in a war you have to take emergency measures.” DEPENDENT FROM RUSSIA An agreement has been reached between the 27 Member States on a plan for common gas markets to tame prices. The European Commission has said it is ready to lead negotiations on concentrating demand and gas demand before next winter, following a similar model in which the bloc bought vaccines for COVID-19 on behalf of the Member States. read more “We have seen some countries go to other countries to negotiate their own contracts. That, and I told my colleagues, is not the best way as we push prices up,” said French President Emanuel Macron. However, the EU remained divided over whether to ban imports of Russian oil and gas, in addition to the series of sanctions imposed on Moscow since the invasion a month ago. Moscow calls its actions in Ukraine a “special military operation” to demilitarize and “demilitarize” Ukraine. Kyiv and the West say Putin has launched an unprovoked war. Europe’s energy dependence on Russia means that the issue of the embargo, as imposed by the United States, is economically dangerous and no decision was made on Friday. Germany, Hungary and Austria were among the most cautious about imposing a ban on Russian oil and gas. There was no common ground on Russia’s request this week that “unfriendly” countries should use rubles to pay for its oil and gas. read more Draghi said the leaders agreed that any such Russian demand for gas exports would be a breach of contract. The Kremlin’s demand poses a dilemma for countries dependent on Russian energy, because by agreeing to it, they would support the ruble and inject hard currency into Moscow – but their refusal could mean depletion of their energy reserves. Sign up now for FREE unlimited access to Reuters.com Register Additional citations by Philip Blenkinsop, John Irish, Jan Strupczewski, Sabine Siebold in Brussels, Belen Carreno in Madrid, Bart Meijer in Amsterdam and Benoit Van Overstraeten in Paris Written by Ingrid Melander and John Chalmers Lewis Edited by Our role models: The Thomson Reuters Trust Principles.