Energy crisis: EU leaders seek to agree a price cap on gas in coming weeks amid continued divisions

EU leaders will seek to agree a price cap on gas in the coming weeks, but there are continuing divisions over the scope of the EU intervention and how it should be paid for, after today’s meeting of the heads of the bloc’s government in the Czech Republic.

Taoiseach Micheal Martin said he expected “very significant work” to be done in the coming weeks by the European Commission in a bid to have a firm proposal ready for a summit in Brussels in a fortnight’s time.

Mr Martin said EU leaders had discussed a “two stage process” involving “an immediate process to have an impact on the energy market” and then “the redesign of the gas market itself” which he said could take six months.

The European Commission is already in discussions with suppliers of gas, he said.

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Mr Martin said that EU leaders believed that “collective action is important and unity is important”.

Mr Martin added that a “critical issue” would be how an EU intervention in the energy markets would be financed, a response that hints at deeper divisions among EU leaders over joint borrowing and the EU’s own financial capacity.

“That’s probably where a lot of debate will take place between now and the council meeting towards the end of the month – as you know, that’s always a challenging issue in terms of collective action,” he said.

Mr Martin was speaking at the end of summit of EU leaders in Prague Castle, which also heard declarations of continuing support for Ukraine and condemnations of Russian President Vladimir Putin.

The summit was marked by wrangling over how to deal with the energy crisis in Europe, and how governments should support businesses and households. Though no conclusions were expected from the meeting – it was an “informal” summit – it was clear that there are deep divisions between member states that will make any common EU plan difficult to agree and implement.

Emerging from the meeting minutes before Mr Martin, the Polish prime minister Mateusz Morawiecki said: “Everyone agrees we need to lower power prices but there is no agreement what instruments to use to that end exactly.”

“More and more voices around the table in favour of a gas price cap,” he said. “Better late than never.”

EU leaders all agree that the European energy market should be reformed, but there is little consensus on how. And with winter approaching, governments are scrambling their resources to protect their citizens and economies first, without much thought about how their neighbours are affected.

There was much criticism about Germany’s plan to spend a further e200 billion in energy supports, with European Commission President Ursula von der Leyen telling reporters this morning that any plan for supports would have to take into account the functioning of the single market and the necessity for a “level playing field” for businesses in different countries.

Earlier this morning, the Taoiseach said The EU needs to come together to address the energy crisis just like it did during the pandemic, Taoiseach Micheál Martin said this morning.

Speaking to reporters as he arrived at the castle, Mr Martin said leaders would discuss a “Europe-wide response” to the energy crisis caused by the Russian invasion of Ukraine, though no decisions are likely today.

There have been well-publicised divisions between EU members — especially between Germany and others — in advance of the summit.

“Not simple,” said Mr Martin, “because different member states are coming to this with different positions. But we all want to arrive at the same destination, to try to limit the exponential growth in prices, but also making sure we have security of supply.”

But he warned there are no easy solutions to the problem.

[ What you should and shouldn’t do to cut your home energy bills ]

“Politicians may wish for a magical answer to this. There is none. It’s a wartime situation that has a negative impact on everything. But the capacity still exists for Europe to work in a co-ordinated united way to deal with the price issue and its impact on economies. And I believe something will be worked out, but it’s going to take a bit more time.”

He said that any price cap would “have to work at a European-wide level”.

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European Commission president Ursula von der Leyen said the leaders would discuss price caps — “where to put them, how to put them”.