German energy crisis plan criticized during EU leaders meeting

Diplomats accuse Germany of taking a stand-alone approach and fear that debt-financed spending in Berlin could exacerbate inflation, exacerbate the divide between Europe’s rich and poor, and unfairly benefit German companies in a way that goes against the spirit of the common EU. Market.

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Germany has defended its measures as fair and proportionate – while also opposing proposals for EU-wide price caps or joint borrowing. German politicians suggested that if any country was to blame, it was France, whose failed nuclear power plants added pressure on the European power grid.

Tensions continued on Friday at an informal summit in Prague, as European Union leaders focused on the energy crisis, including measures to control prices and concerns over the recent sabotage of Nord Stream pipelines that carry gas from Russia to Europe.

More than a dozen of the 27 EU member states have called for a ceiling on the price of natural gas.

Ahead of the summit, European Commission President Ursula von der Leyen said she was in favor of considering temporary price limits “that would demonstrate that the EU is not willing to pay any price for gas”, but also warned that “without a common European solution, we are taking a big risk.” by fragmentation.”

The German announcement seemed to have taken the rest of Europe by surprise – and immediately raised eyebrows.

open minded Italian Prime Minister Mario Draghi – He is credited with keeping the eurozone together in his previous job as head of the European Central Bank – taking Germany to task, saying, “We cannot divide ourselves according to our financial maneuvering room.”

Similar criticism was leveled from France and Spain, while Hungarian Prime Minister Viktor Orban came at a press conference He called it “the beginning of cannibalism in the European Union.”

Two powerful EU Commissioners from France and Italy echoed these points in a joint opinion piece published in Frankfurter Allgemeine Zeitung and Other European newspapers on Monday. Thierry Breton, commissioner of the internal market, and Paolo Gentiloni, commissioner of the economy, write that Germany’s plan raises “a lot of questions”. They called for financial solidarity within the European Union, noting that the bloc could turn to the same tool – joint borrowing – that it used in the pandemic.

Chancellor Olaf Scholz defended Germany’s support, the moratorium on price caps at the bloc’s level and additional joint debt.

He told a news conference on Tuesday that Germany’s plan is “a very balanced, very smart, very decisive package that keeps prices low and sustainable for as long as these challenges exist.”

He further argued that Germany’s move is in line with what other countries are doing. “The measures we are taking are not unique, but they are also taken in other places and rightly so,” he said, referring to neighboring France.

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Paris has said that it will not allow the prices of natural gas and electricity for households to increase more than 15 percent in 2023. However, these price caps are expected to cost about $12 billion If special taxes on energy companies are taken into account, they are much lower than what Germany would spend, even when calculating per capita.

Meanwhile, less affluent EU countries lack the same means to protect consumers.

On the issue of joint borrowing, Schulz referred to the European Union’s Epidemic Recovery Fund. “We have a huge program totaling 750 billion euros, most of which is not yet used, but it could be particularly effective at the moment,” he said.

He also argued that capping prices at the EU level would make Europe more likely to lose out to China and others in the competition for LNG.

German newspapers firmly follow the Chancellor’s footsteps and read, there is a feeling that the energy predicament in Europe is France’s fault.

“Macron is taking our electricity — and we’re paying the bill,” said conservative weekly Fox, summarizing the prevailing sentiment.

Almost half of France’s nuclear power plants are under maintenance, which deprived France of its title as Europe’s largest energy exporter, and required it to import electricity from Germany.

“But it seems to be more about a technical administrative planning failure than a political one,” said Elisabetta Cornago, a researcher at the Center for European Reform in Brussels, as in Germany.

For many Germans, it’s an emotional issue. The country decided in 2011 to exit nuclear power production and was supposed to turn off its last reactor by the end of this year. But when German Economy Minister Robert Habeck – one of the main proponents of that nuclear exit – was forced to announce the delay recently, he blamed France. He said two German nuclear power plants would likely need to operate until next spring to make up for France’s production problems.

Another source of Germany’s frustration with its neighbor is French opposition to the natural gas pipeline project between Spain and France across the Pyrenees. The project has been dormant for years. But the Germans, Spaniards and Portuguese now view the pipeline as an important link between LNG terminals in southwest Europe and customers in central Europe such as Germany.

French officials argued that the existing pipelines between the two countries had sufficient capacity and that the construction of a new pipeline would take too long.

“I don’t understand why we jump like Pyrenees goats about it,” Macron said recently.

When he met European leaders on Thursday in Prague, he took another undisguised look at Germany’s insistence on getting out of nuclear power even as it struggles to find alternative energy sources.

Instead of another pipeline between Spain and France, he said, Europe needs a strategy for renewable energy – and for nuclear energy.

Nowak reported from Paris, Brady from Berlin, and Reuss from Prague.