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EU Nations Look For A Way To Break The Gas Price Cap Deadlock

EU Nations Look For A Way To Break The Gas Price Cap Deadlock
As Europe prepares for a winter of limited Russian gas, a cost-of-living crisis, and the looming threat of recession, the 27-nation European Union is strategizing its next course of action to control rising energy prices and protect consumers from soaring bills.
"We need to find a quick solution that will be applicable to all the European Union," a senior EU official said. "National solutions are not a way forward."
The European Union's energy ministers will meet in Prague on Wednesday in an effort to give the European Commission more specific guidelines about the next emergency energy measure the union should adopt.
But nations continue to struggle with making decisions.
Most EU nations say they want a gas price cap but disagree on its formulation because gas prices are nearly 90% higher than they were a year ago. Germany, Europe's largest gas market, is one of the nations that continues to be opposed.
The last week's discussions among EU leaders did little to clarify the next steps. One EU diplomat referred to the many options being considered, such as a price cap on all gas, pipeline gas, or just gas used to generate electricity, and said that the discussions "went in all directions."
No "unified signal," according to a second EU diplomat, had emerged from the leaders' discussions. Regarding the meeting on Wednesday, the diplomat said, "I'd say expectations are low."
Some people had more faith that a consensus was developing. A senior EU official claimed that as a temporary solution, countries were moving toward the "Iberian model" of capping the price of gas used for power generation.
In June, Spain and Portugal put that plan into effect, which helped lower local power prices. Although some are concerned that the idea could increase EU gas demand because Spain's gas use increased as a result of the measure, the idea has gained support from other nations.
To combat the rise in energy prices brought on by Russia's slashing of gas supplies since it invaded Ukraine, EU countries have already hurriedly passed emergency energy windfall profit levies, gas storage filling obligations, and electricity demand curbs.
However, after Germany announced it would spend up to 200 billion euros to protect its consumers and businesses from high energy costs, there has been increased pressure to agree to more EU-wide measures. This has sparked criticism from some countries over the uneven distribution of national support.

Christopher J. Mitchell

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