EU leaders reach compromise on energy after lengthy debate

BRUSSELS (AP) — European Union leaders scrambled for hours Friday to reach a compromise on a deal aimed at curbing energy prices that have soared and hurt homes and businesses in the 27-nation bloc. .

There was a clear rift between the bloc’s northern and southern nations during the one-day talks in Brussels, with Mediterranean countries led by Spain pushing for market intervention with measures such as price caps, while Germany and the Low resisted drastic options.

Leaders did, however, agree to a proposal from the European Commission to move towards joint purchasing of natural gas and ensure the bloc’s storage facilities are nearly full to try to avoid another energy crisis linked to the EU’s dependence on the Russian energy.

The war in Ukraine has made EU nations realize that they have relied too heavily on Russia for natural gas and oil to heat their homes and run their industries.

Earlier in the day, the United States and the EU announced a new partnership to reduce the continent’s dependence on Russian energy. Under the plan, the US and other nations will increase liquefied natural gas exports to Europe by 15 billion cubic meters this year. Even larger shipments will be delivered in the future.

Faced with internal protests from farmers, truck drivers and the fishing industry, the President of the Spanish Government, Pedro Sánchez, had presented plans to the EU to decouple electricity prices from gas prices. However, the radical options did not achieve an immediate consensus. The EU will re-examine the matter in May, but in the meantime, Spain and Portugal could receive a special dispensation to deal with price increases.

“The Iberian Peninsula has a very special situation. There, their energy mix has a high load of renewable energies, this is very good,” EU Commission President Ursula von der Leyen said after the summit. “Therefore, we agreed to a special treatment… so that the Iberian Peninsula can face this very specific situation in which it finds itself and manage electricity prices in the way that we have been discussing.”

French President Emmanuel Macron said divergent views within the Council paved the way for the long debate, “because the interests and energy models of different states are not the same.”

With energy prices high and supplies low, the EU is looking to its latest crisis, the COVID-19 pandemic, as a model. Member states came together to purchase vaccines in bulk for equitable distribution.

“The root cause of high electricity prices is largely high and volatile gas prices,” von der Leyen said. “So we will join forces, pool our demand and use our collective bargaining power when buying gas. In addition, we must complete the pipeline infrastructure and increase our storage. This will be our insurance policy against supply interruption. It is also time to analyze the design of our energy market”.

Europe was already facing a difficult test before the Russian invasion due to a prospect of slowing economic growth accompanied by rising inflation, fueled by high energy prices. The European Commission forecast that the bloc’s economic growth would slow from 5.3% last year to 4% this year and 2.8% in 2023.

EU leaders agreed in principle at a summit on March 11 to phase out dependence on Russian imports of gas, oil and coal by 2027. The EU currently imports 90% of the natural gas used to generate electricity, heat homes and supply industry, with Russia supplying almost 40% of the EU’s gas and a quarter of its oil.


Sylvie Corbet in Paris contributed to this report.


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