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EU leaders focus on war and energy markets at summit

October 20, 2022

European leaders are gathering in Brussels for a two-day EU summit that will aim to bring down energy prices across the bloc. Disagreement among member states, however, means a price cap on gas is still very unlikely.

German Chancellor Olaf Scholz among EU and European national flags
German Chancellor Scholz and EU leaders are looking for a way to find agreement on key issues facing the blocImage: PIROSCHKA VAN DE WOUW/REUTERS

European leaders began gathering in Brussels Thursday for a two-day summit that will aim to bring down energy prices across the 27-member bloc as Russia's war on Ukraine continues to upend global gas and oil markets.

The meeting is the second in two weeks, yet leaders seem to be no nearer to achieving consensus on the idea of instituting a bloc-wide cap on the price it will pay for gas.

"It is clear that the prices for gas, for oil and for coal must go down. Electricity prices must go down. And this is something that demands a common effort of us all in Europe," said German Chancellor Olaf Scholz speaking to reporters before talks got underway.

"I think we could be in for a long night," said Prime Minister Mark Rutte of the Netherlands, as he arrived in Brussels.

Will EU leaders agree on a gas price cap? 

France and Poland are among the 15 countries pushing for a price cap, but Germany and the Netherlands have both opposed such a move, saying it could threaten supply by scaring off producers who can sell for more elsewhere.

Though French President Emmanuel Macron said he will seek a solution to the impasse by working with Scholz, he also offered a warning to turn up pressure on Berlin, saying, "I think it's neither good for Germany nor for Europe if Germany is isolating itself."

Ultimately, observers expect agreement on some parts of a raft of EU energy proposals including joint gas buying and establishing a new price benchmark for liquified natural gas (LNG).

"A very large majority of the member states agree with the proposals and are asking the Commission to implement them," said Belgian Prime Minister Alexander De Croo.

Prior to today's meeting, the bloc had agreed to fill gas storage facilities as well as take back energy company profits to finance consumer financial assistance to help with skyrocketing energy prices.

Leaders are also expected to discuss increased spending in an attempt to mitigate the damage caused to the bloc's 450 million citizens by energy shortfalls.

A number of countries have called for taking on joint debt to finance such measures, but others, mainly those who would be asked to foot most of the bill, have been reluctant, saying there is already enough cash in EU coffers to do what is needed without taking on new debt.

Germany's €200 billion energy relief plan: How fair is it?

What will EU leaders discuss beyond energy?

Beyond the issue of energy stability, EU leaders will also weigh how to best increase support for beleaguered Ukraine.

Some avenues being discussed to that end include supplying energy equipment, helping restore Ukraines's power supply, and ensuring long-term financial assistance to help rebuild the devastated country when the conflict ultimately ends.

Earlier Thursday, the EU also announced new sanctions on three Iranian generals and a drone manufacturing company for their role in the conflict in which Russia has increasingly used Iranian-made suicide drones to attack civilians as well as Ukraine's energy infrastructure.

"The European [Union] Council condemns in the strongest possible terms the recent indiscriminate Russian missile and drone attacks targeting civilians and civilian objects and infrastructure in Kyiv and across Ukraine," reads a draft statement from the EU summit. 

Kyiv claims it has shot down 223 Iranian drones since mid-September.

Tehran and Moscow have both steadfastly denied knowing anything about the use of Iranian-made drones in the conflict.

The UK announced later on Thursday that it would be matching the EU's sanctions against Iran, adding Shahed Aviation Industries and three top Iranian military officials to its sanctions list.

Countering soaring energy prices in the EU

mm, js/es (AFP, dpa, Reuters)