EU leaders fight for common ground on energy prices

EU leaders are set for tough talks on how to handle Europe’s energy shock Thursday, with capitals at loggerheads over imposing a cap on gas prices pushed skywards by the war in Ukraine.

The bloc’s 27 member states have been squabbling for months over measures to lower energy bills, and will arrive at their Brussels summit in a chilly mood.

Countries such as Italy are pushing hard for a swift and ambitious cap on prices, in the teeth of opposition from Germany, the EU’s biggest economy.

The political pressure to act is huge with strikes and protests over the cost of living spreading across Europe - notably in France and Belgium - and businesses fearing bankruptcy because of the high bills.

If this summit does not result in a “clear political signal that we...no longer tolerate high gas prices”, it will be “Europe’s failure”, Belgian Prime Minister Alexander De Croo said on Monday.

The European Commission, the EU’s executive arm, has tried to satisfy the diverging views with a series of proposals that it hopes will help Europeans pay for their heating as winter approaches.

But these have been dismissed as timid by those wanting a clear ceiling on gas prices despite the opposing view - championed by Germany, but also Denmark and the Netherlands - that this would choke off supply or encourage consumption.

The push for a common approach has been further hampered by discord between France and Germany, which burst into the open Wednesday when they delayed a regular meeting between cabinet ministers.

Breakthroughs in the EU are difficult to achieve when the bloc’s biggest powers do not see eye to eye and French President Emmanuel Macron and Chancellor Olaf Scholz were set to meet ahead of the summit to mend ties.

“There has been a lot of progress, but no fundamental breakthrough,” a senior EU diplomat involved in the negotiations said ahead of the two-day summit.

“Priorities differ: Germany has chosen security of supply because it can afford the high prices, but many countries cannot keep up with the cost,” the diplomat added.

Slow and painstaking

The Commission’s proposals include an idea to allow joint purchases by the EU energy giants in order to command cheaper prices to replenish reserves.

Another proposal is to give the Commission the power to establish a pricing “corridor” on Europe’s main gas index to intervene when prices get out of control.

Meeting in Brussels, the EU leaders will haggle over the Commission’s proposals, with some countries seeking something much more far-reaching than what is on offer.