Thursday

26th May 2022

Nine countries oppose EU gas market reform

  • A wholesale reform of the electricity market will not solve high prices, the group of nine member states believe (Photo: European Parliament)
Listen to article

Germany, the Netherlands and Denmark and six other countries have signed a letter saying they cannot back any reform conflicting with the gas and energy markets - including a reform of the EU electricity markets.

Spain and France have called for a fundamental rewrite of gas-buying rules ahead of the Emergency Council of environmental ministers on Tuesday (26 October).

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

But hopes for a new agreement seem squashed even before the meeting could start.

Denmark, Germany, Austria, the Netherlands, Luxembourg, Ireland, Finland, Estonia and Latvia signed the letter stating that higher prices are caused by global economic recovery and are not caused by the EU gas market design.

A wholesale reform of the electricity market "will not be a remedy to mitigate the current rising energy prices linked to fossil-fuels markets," they wrote.

Instead, the EU should focus its energy on promoting energy efficiency, investment in green energy and a 15 percent interconnection of the EU electricity market by 2030, which could save up to €40bn in the long run. They referred to national measures to protect households against higher bills as a short-term solution.

Most countries are already using subsidies and tax cuts to lower bills, but some EU countries want more fundamental reform to protect citizens in the future as well.

The wholesale electricity price is currently often set by gas prices, but this is unfair according to France and Spain.

"We get our electricity from nuclear power plants and hydraulic energy. So this increase in gas prices even though we have our independence in terms of electricity production is totally absurd"", " said the French finance minister Bruno Le Maire said in advance of Tuesday's ministerial meeting.

Cheaper renewable energy is also set by gas prices, hampering the green transition.

Spain has led calls to decouple the price of power from the cost of gas, and joint gas-buying to increase EU countries' bargaining power in global markets.

"We want to impress on the council a sense of urgency," Spanish prime minister Pedro Sánchez told press last Friday, warning that "the issue of energy prices can undermine the competitiveness of the EU."

But the group of nine countries protected the current market design. "The internal market for gas and energy has been jointly build over the past decades. Competitive markets contribute to the security of supply and are thus a key element to facilitate the transition," they wrote.

European Central Bank president Christine Lagarde recently told MEPs that "fiscal authorities" (ie governments) have a responsibility to "harness market power" - implicitly referencing the Spanish plan for joint gas purchases, EUobserver recently reported.

Gas price spike exposes rift at EU summit

The first topic leaders discussed at the EU summit were the continent's soaring gas prices, which have lead to a spike in household energy bills - amid widespread disagreement on how to solve the issue.

EU calls for end to gas price speculation

The EU has called for an end to energy price speculation, but it is still unclear how far the commission is willing to go to stem market forces.

Lagarde urges EU to use market power to fix gas price

ECB president Christine Lagarde said that "fiscal authorities" (ie governments) have a responsibility to "harness market power" to arrange better prices and referred to a Spanish plan that might "rebalance other market forces."

What's in the EU's second 'Fit for 55' package?

The European Commission is expected to unveil the second part of the 'Fit for 55' package – including proposals for joint gas-purchases, improving buildings' energy performance, boosting green mobility, and mitigating the impact of the transition on poor households.

EU watchdog: no proof of carbon market manipulation

The EU watchdog has found no proof of manipulation of the carbon markets, allaying European Commission fears. However, the European Securities and Markets Authority did note that it had only limited access to essential data.

Commission grilled on RePowerEU €210bn pricetag

EU leaders unveiled a €210bn strategy aiming to cut Russian gas out of the European energy equation before 2027 and by two-thirds before the end of the year — but questions remain on how it is to be financed.

News in Brief

  1. Dutch journalists sue EU over banned Russia TV channels
  2. EU holding €23bn of Russian bank reserves
  3. Russia speeds up passport process in occupied Ukraine
  4. Palestinian civil society denounce Metsola's Israel visit
  5. Johnson refuses to resign after Downing Street parties report
  6. EU border police has over 2,000 agents deployed
  7. Dutch tax authorities to admit to institutional racism
  8. Rutte calls for EU pension and labour reforms

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic delegation visits Nordic Bridges in Canada
  2. Nordic Council of MinistersClear to proceed - green shipping corridors in the Nordic Region
  3. Nordic Council of MinistersNordic ministers agree on international climate commitments
  4. UNESDA - SOFT DRINKS EUROPEEfficient waste collection schemes, closed-loop recycling and access to recycled content are crucial to transition to a circular economy in Europe
  5. UiPathNo digital future for the EU without Intelligent Automation? Online briefing Link

Latest News

  1. EU summit will be 'unwavering' on arms for Ukraine
  2. Orbán's new state of emergency under fire
  3. EU parliament prevaricates on barring Russian lobbyists
  4. Ukraine lawyer enlists EU watchdog against Russian oil
  5. Right of Reply: Hungarian government
  6. When Reagan met Gorbachev — a history lesson for Putin
  7. Orbán oil veto to deface EU summit on Ukraine
  8. France aims for EU minimum-tax deal in June

Join EUobserver

Support quality EU news

Join us