Energy: EU seeks to overcome Franco-German winter – 2022-10-20 at 16:56

French President Emmanuel Macron and German Chancellor Olaf Scholz meet on the sidelines of an EU summit in Brussels on October 20, 2022 (POOL/Olivier HOSLET)

EU leaders met in Brussels on Thursday to try to hammer out a common response to the energy crisis, complicated by growing rifts between Paris and Berlin.

The war in Ukraine and sanctions against Russia have sent oil, gas and electricity prices reeling. But since February, Europe has reacted slowly, weakened by the diverging interests of member states.

The Franco-German couple, the engine of European cooperation, seems to have broken down. The ministerial meeting of the two countries scheduled for October 26 in Fontainebleau (France) has been postponed to January.

French President Emmanuel Macron on Thursday played a lonely score in Berlin, appearing to blame the Germans for Europe’s woes.

“I think it is not good (…) for Germany or for Europe that it isolates itself (…) European unity and our role is to do everything for Germany to be part of it,” he said.

“It is very clear that Germany has always acted very cohesively,” replied Olaf Scholes.

After announcing a 200 billion euro support package for the German economy at the end of September, the chancellor was accused of self-interest.

The two leaders saw each other shortly before the twenty-seven meeting.

Progress has been announced on infrastructure projects that have been stalled for years. France, Spain and Portugal have announced a deal to replace the Midgate project with an undersea pipeline between Barcelona and Marseille to transport gas and then green hydrogen.

Initially launched in 2003, the Midgate project (short for Midi-Catalonia), was championed by Lisbon, Madrid and Berlin, but came up against opposition from Paris. It is intended to connect the French and Spanish gas networks via a 190 kilometer pipeline from Hostalric north of Barcelona through the Pyrenees to Barbeira east of Carcassonne.

– Institutions under threat

Brussels has launched a series of efforts to ensure energy consumption, low prices and security of supply, but difficulties persist.

However, thousands of European companies fear their survival is threatened by price-smart competition in the US or Asia.

Many diplomats expect long discussions between the 27 heads of state and the government into the night.

President Olaf Scholes before the Bundestag in Berlin on October 20, 2022 (AFP / Tobias SCHWARZ)

In an interview with AFP, Teresa Ribera, the Spanish minister for environmental change, openly criticized the work of the European Commission.

“The proposals are still a little scary: there are still no concrete measures in the majority of subjects. Of course there is a real effort (…) for a year, but how disappointing is the reaction of Europe. The face of the challenge we face is slow and laborious,” he said.

But Commission President Ursula von der Leyen faces disagreements between the twenty-seven members, each of whom has their own energy mix, with some relying on nuclear power and others using gas or coal to generate their electricity.

They are particularly divided on the question of a cap on the price of gas used to generate electricity. This type of device has already been used in Spain and Portugal, where it has helped reduce prices.

Several countries, including France, are calling for the so-called “Iberian” mechanism to be extended to EU level.

But Germany opposes it, as do many other Nordic countries, including Denmark and the Netherlands, which are reluctant to state intervention in markets.

The RWE coal-fired power plant in Lutserath, western Germany on October 16, 2022 (AFP / INA FASSBENDER)

Berlin believes that artificially lowering the price of gas will undermine the objective of energy moderation.

However, the draft conclusions of the Summit invited the Commission to prepare a proposal for this instrument. “The Iberian model is worthy of study. The questions are not answered, but I don’t want to overlook it either way,” Ms van der Leyen said on Wednesday.

Mrs van der Leyen described other proposals this week: gas joint procurement, new rules to impose gas sharing in Europe to help countries in the most difficulty or the reform of the TTF gas market index (European “gas” exchange), used as a benchmark in operator transactions.