EU Fails Again to Agree on Natural Gas Price Cap... Positions Remain Divided

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hwang Seoyul] The 27 member state leaders of the European Union (EU) failed once again to reach an agreement on the introduction of a natural gas price cap due to sharply divided opinions.

On the first day of the summit on the 21st (local time), the EU stated in a press release, "We urgently urge the Energy Council and the European Commission to submit a 'clear judgment' on additional measures." Specifically, they requested an analysis of the cost-benefit of the temporary price cap on natural gas futures proposed earlier by the European Commission, as well as the impact on the market, including the price cap for gas used in power generation.

This means that the EU summit, a political decision-making body, failed to reach a conclusion and passed the responsibility to the relevant council and commission to find a solution. The first day of the meeting, which started around 3 p.m. the previous day, extended past midnight and ended around 2 a.m. the following day without reaching a conclusion.

Germany, the largest gas consumer in the EU, reportedly maintained its opposition. German Chancellor Olaf Scholz told reporters the previous day that if a price cap is introduced, "there is a risk that gas suppliers will try to sell elsewhere, which could actually reduce gas supplies in Europe." He added, "This is why we need to closely coordinate to ensure that the EU does not compete with other gas-consuming countries such as Japan and Korea."

Hungarian Prime Minister Viktor Orb?n also expressed opposition on Twitter, saying, "A price cap is like telling a bartender 'I will only pay half the price of the beer,'" calling it "unthinkable."

On the other hand, 15 countries that have been demanding the introduction of a price cap repeatedly emphasized the need for a unified EU response. French President Emmanuel Macron requested Germany’s cooperation, saying, "Our role is European integration, and Germany must also be part of it."

Bloomberg News, citing multiple sources, reported that Italian Prime Minister Mario Draghi said in a closed meeting, "Creating divisions among EU member states is Vladimir Putin’s strategy, and if the EU does not show unity, it will be 'Putin’s victory'."