Germany’s energy crisis plan criticized at EU leaders’ meeting
Diplomats accuse Germany of taking a stand-alone approach and fear that Berlin’s debt-funded spending spree could deepen inflation, exacerbate the rich-poor divide in Europe and unfairly benefit German businesses d in a way that goes against the spirit of the EU’s common policy. market.
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Germany has defended its measures as fair and proportionate – while opposing proposals for EU-wide price caps or joint borrowing. If any country is to blame, German politicians have suggested, it is France, whose failing nuclear power plants have increased the strain on Europe’s energy grid.
The acrimony is expected to continue at an informal summit in Prague on Friday, where European leaders will focus on the energy crisis, including price controls and concerns over the recent sabotage of Nord Stream pipelines carrying gas from Russia to Europe.
More than a dozen countries among the 27 members of the EU have called for a broad cap on the price of natural gas.
Ahead of the summit, European Commission President Ursula von der Leyen said she supported consideration of temporary price limits “which would demonstrate that the EU is not prepared to pay any price for gas”, but she also warned that “without a common European solution, we seriously risk fragmentation.
The German announcement seemed to surprise the rest of Europe – and immediately raised eyebrows.
Outgoing Italian Prime Minister Mario Draghi – credited with keeping the eurozone together in his previous post as head of the European Central Bank – took Germany to task, saying: “we cannot divide ourselves according to of our fiscal room for manoeuvre.
Similar criticism came from France and Spain, while Hungarian leader Viktor Orban called it “the start of cannibalism in the EU” at a press conference.
Two powerful EU commissioners from France and Italy echoed those points in a joint opinion piece published Monday in the Frankfurter Allgemeine Zeitung and other European newspapers. Thierry Breton, Commissioner for the Internal Market, and Paolo Gentiloni, Commissioner for the Economy, wrote that the German plan posed “a lot of questions”. They called for financial solidarity within the EU, suggesting the bloc could turn to the same tool – common borrowing – that it has used during the pandemic.
Chancellor Olaf Scholz defended German subsidies and opposed both a bloc-wide price cap and additional common debt.
Germany’s plan is a “very balanced, very smart, very decisive package that serves to keep prices low and tolerable for as long as those challenges exist,” he told a news conference on Tuesday.
He further argued that Germany’s move was in line with what other countries were doing. “The measures we are taking are not unique but are also being taken elsewhere and rightly so,” he said, pointing to neighboring France.
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Paris said it would not allow household natural gas and electricity prices to rise more than 15% in 2023. These price caps, however, are expected to cost around $12 billion if the special levies on energy companies are taken into account, much less than what Germany can spend, even calculated per capita.
Meanwhile, less wealthy EU countries do not have the same means to protect consumers.
On the issue of joint borrowing, Scholz brought up the EU’s pandemic recovery fund. “We have a huge program totaling 750 billion euros, most of which has not yet been used, but which can be particularly effective at this time,” he said.
He also argued that an EU-wide price cap would make it more likely that Europe would lose to China and others in the competition for liquefied natural gas.
German newspapers firmly follow the chancellor’s example and read them, one has the feeling that the energy situation in Europe is France’s fault.
“Macron takes our electricity – and we pay the bill,” said the conservative weekly Focus, summing up a widespread sentiment.
About half of France’s nuclear power plants are currently under maintenance, stripping France of its title as Europe’s top energy exporter and forcing it to import electricity from Germany.
“But it seems to be more of a technical and managerial planning failure, as opposed to a political failure,” like in Germany, said Elisabetta Cornago, a Brussels-based researcher at the Center for European Reform.
For many Germans, this is an emotional issue. The country decided in 2011 to phase out nuclear power generation and had to disconnect its last reactor by the end of this year. But when German Economy Minister Robert Habeck – a key proponent of the nuclear phase-out – recently had to announce a delay, he blamed France. Two German nuclear power plants will likely have to operate until next spring to compensate for French production problems, he said.
Another source of German frustration with their neighbor has been its opposition to a gas pipeline project between Spain and France via the Pyrenees. The project had been dormant for years. But the Germans, Spaniards and Portuguese now see the pipeline as a vital link between LNG terminals in southwestern Europe and customers in central Europe such as Germany.
French officials have argued that existing pipelines between the two countries have sufficient capacity and that a new pipeline would take too long to build.
“I don’t understand why we would jump like Pyrenean goats on this subject,” Macron said recently.
While meeting EU leaders in Prague on Thursday, he took another thinly veiled dig at Germany’s insistence on phasing out nuclear power even as it struggles to find alternative energy sources .
Rather than another pipeline between Spain and France, he said, Europe needs a strategy for renewables – and for nuclear power.
Noack reported from Paris, Brady from Berlin and Ríos from Prague.
War in Ukraine: what you need to know
The last: Russian President Vladimir Putin on Friday signed decrees to annex four occupied regions of Ukraine, following referendums held that have been widely denounced as illegal. Follow our live updates here.
The answer: The Biden administration on Friday announced a new round of sanctions against Russia, in response to the annexations, targeting government officials and their family members, Russian and Belarusian military officials and defense procurement networks. President Volodymyr Zelensky also said on Friday that Ukraine was seeking an “accelerated ascent” into NATO, in apparent response to annexations.
In Russia: Putin declared a military mobilization on September 21 to call up up to 300,000 reservists in a dramatic attempt to reverse the setbacks of his war on Ukraine. The announcement led to an exodus of over 180,000 people, mostly men who were subject to service, and further protests and other acts of defiance against the war.
The fight: Ukraine launched a successful counter-offensive that forced a large Russian retreat into the northeast Kharkiv region in early September as troops fled towns and villages they had occupied since the early days of the war and abandoned large quantities of military equipment.
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