Home Business Faced with Russia’s “gas blackmail”, the Europeans are speeding up discussions

Faced with Russia’s “gas blackmail”, the Europeans are speeding up discussions

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Europeans are preparing for all scenarios. An extraordinary council of European energy ministers is being organized on May 2 and 3 in Brussels, following Russia’s decision to completely suspend gas supplies to Poland and Bulgaria on April 27. Moscow justified this decision by the refusal of the two countries to pay for their gas in rubles. Most European countries oppose this new Kremlin requirement because signed contracts usually provide for payment in dollars or euros.

→ ANALYSIS. War in Ukraine: Poland and Bulgaria deprived of Russian gas, what consequences for the two countries?

For the time being, Bulgaria and Poland are supplied with gas “by their EU neighbours”says European Commission President Ursula von der Leyen, who calls the Russian measure a “gas blackmail”. Sofia and Warsaw should also be able to count on new supplies of liquefied natural gas from Norway and Greece by the end of the year.

“Additional actions” expected

But this abrupt cut has accelerated discussions on the EU’s level of preparedness in the event of a supply crisis on the continent. The meeting of European energy ministers – organized on the initiative of France – should make it possible to address “possible additional actions in terms of security of supply, gas transit and management of gas stocks”.

→ READ. War in Ukraine: dependent on Russian gas, the European Union is looking for new suppliers

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At the beginning of March, the Europeans had already set the objective of doing without two thirds of their Russian gas supply by the end of the year, but indicated that it would be necessary to wait until 2027 to do so. completely deprive. Germany – whose dependence has fallen from 55% to 35% since the start of the war – could not come out of it before mid-2024, according to Chancellor Olaf Scholz. A study published at the end of April by the German central bank estimated that in the event of a cut in supplies, the national economy could enter a recession and see the country’s GDP fall by 2% this year. The final European Union plan will be presented on 18 May.

A “ready” plan

“From day one, we started building a plan just in case”assured the European Commissioner for the Internal Market, Thierry Breton, at the microphone of France Inter on Saturday April 30, about this dependence on Russian gas. “This plan is ready, even if for the moment gas is not part of the materials put on the sanctions list”he continued, justifying the need for Europeans to supply their gas stocks for as long as possible, in preparation for winter.

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If the question is not directly on the agenda, the question of soaring prices arises in the background. Chance of the calendar: three days before the meeting, the European Agency for the Cooperation of Energy Regulators (Acer) published a long-awaited report, giving its conclusions on the functioning of the European electricity market.

Price spike

Commissioned by the European Commission, this report concludes that “the current functioning of the market deserves to be preserved”. Several European countries, including France, reproach him for his “obsolete”. Wholesale electricity prices are in fact aligned with those of gas. This prevents France from selling its electricity from nuclear and renewables – which is less expensive – at competitive prices.

Acer, for its part, considered that the rules of this market made it possible to “ensure an efficient and secure supply of electricity under relatively ‘normal’ market conditions”. This would have allowed, for example, Belgium or France to import more electricity to avoid shortages during shutdowns of nuclear power plants. Despite exceptional circumstances since the post-Covid price spike, then following the war in Ukraine, Acer estimated that the current design of the electricity market “not to blame”.

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