November 29, 2022

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EU leaders reaffirm support for Ukraine, squabble over gas price cap

EU leaders reaffirm support for Ukraine, squabble over gas price cap

  • EU leaders remain divided over gas price ceiling
  • The European Commission to submit proposals to the EU Summit
  • Poland criticizes Germany for spending too much on reparations
  • The leaders pledged to continue financial and military aid to Ukraine
  • Schulz says it will take a generation to rebuild Ukraine

PRAGUE (Reuters) – European Union leaders agreed on Friday to provide more financial and military aid to Ukraine, but a full day of talks in the ornate royal castle in Prague appears to have brought them no closer to deciding whether or how to curb gas. the prices.

Most of the EU’s 27 countries want a cap on gas prices, but differ on the details, with options including a cap on all types of gas, a “dynamic corridor” and a cap on the price of gas used for power generation specifically or for Russian gas only.

The European Union has been debating the issue for weeks, so far without result, although the 27 countries have agreed on other joint steps to help them weather a severe energy crisis as runaway prices threaten to cause a recession in the bloc.

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“Everyone agrees that we need to lower electricity prices, but there is no agreement on exactly what tools should be used to achieve this end,” Polish Prime Minister Mateusz Morawiecki said.

Italy’s Mario Draghi said the bloc’s European Commission will present to the next meeting of EU leaders on October 20-21 a broader package of short-term price-cutting measures and long-term steps to redesign the electricity market.

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The cap is one of a set of proposals and initiatives put forward by European countries to deal with declining gas supplies from Russia, which was providing 40% of Europe’s needs, and skyrocketing prices. It has fallen from its peak this year but is still more than 200% higher than it was at the beginning of September 2021.

Germany and Denmark oppose imposing a cap, fearing it would make it difficult to buy the gas their economies need and reduce any incentive to cut consumption.

‘it’s not fair’

Warsaw also criticized Berlin over its plan to spend up to 200 billion euros ($196 billion) in subsidies to protect German consumers and businesses from rising energy costs.

“The richest and most powerful country in the European Union is trying to exploit this crisis to gain a competitive advantage for its single market business. This is not fair, this is not how the single market should work,” Morawiecki said.

German Chancellor Olaf Schulz said the meeting cleared up a “misunderstanding” over the Berlin deal, which he defended as the right thing to do, adding that France, the Netherlands and other countries have their own support measures as well.

However, French President Emmanuel Macron said the package created “tensions” between countries that could not finance such a large national package, and added that the solution was to allow member states to benefit from a European fund that provided vacation loans during the Covid-19 pandemic.

The President of the European Commission, Ursula von der Leyen, stressed the need to buy common gas.

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“At the end of winter, when our stores are depleted, it is critical that we have joint purchases of gas so that we avoid outbidding each other…so that we have collective bargaining power,” she said. He said.

A generation to rebuild Ukraine

While wrangling over ways to get out of the energy crisis, the bloc showed unity in pledging continued support for Ukraine.

“We are determined to mobilize all possible tools and means to support Ukraine with financial means, military support, humanitarian support and of course political support,” said summit chair Charles Michel.

After Ukrainian President Volodymyr Zelensky addressed EU leaders via a video link, von der Leyen said the bloc would support Ukraine “as long as it takes”.

“Russia brought war to our land … And only thanks to the fact that the Ukrainian people stopped this invasion by Russia, Russia can no longer bring the same war to other parts of Europe, in particular the Baltic states, Poland and Moldova,” Zelensky said, according to a text on his site. on the Internet.

He called for more air defense systems to protect Ukraine’s energy infrastructure from Russian strikes, international pressure to withdraw Russian forces from the Zaporizhzhya nuclear power plant in occupied Ukraine, and to fund Ukraine’s reconstruction.

The bloc’s top diplomat, Josep Borrell, said he wanted the bloc to allocate more money for military support to Ukraine, including for training, and that specific proposals on that would be discussed later this month.

Schultz pledged a significant German contribution to the European training mission, but before the reconstruction conference in Berlin on October 25, he also warned that rebuilding Ukraine would take a generation.

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Additional reporting by Jan Strubchowski, Kate Abnett, Jason Houpt, Alan Charlech, Sabine Siebold, Michelle Rose, Michael Kahn, Paul Florkevich, Marin Strauss, Sudeep Kar-Gupta, Charlotte van Campenhout, Bart Meijer, Jan Lopatka, Robert Mueller and Sabine S. ; Written by Gabriela Bachinska and Anthony Deutsch; Editing by Hugh Lawson, Jonathan Otis and Paul Simao

Our criteria: Thomson Reuters Trust Principles.