Cheap energy gone for Europe

EU plans for life without Russian gas amid inflation spike

BRUSSELS:

EU leaders on Friday warned that “cheap energy is gone” and agreed to boost preparations for further cuts in Russian gas, accusing Moscow of “weaponising” energy via a supply squeeze which Germany warned could partly shut its industry.

A day after celebrations over setting Kyiv on the road to membership of the bloc, Friday’s summit in Brussels was a sober reflection on the economic impact of Russia’s invasion of Ukraine, with growing worries over soaring prices and warnings of a “tough winter”.

“Inflation is a major concern for all of us,” European Council chief Charles Michel told a news conference as the two-day summit ended.

“Russia’s war of aggression is pushing up the price of food, energy and commodities,” he said, adding that leaders had agreed to closely coordinate their economic policy responses.

The summit agreed few concrete steps but the leaders tasked the European Commission with finding more ways to secure “supply at affordable prices” because of “the weaponisation of gas by Russia.”

European Commission chief Ursula von der Leyen said the search for alternative supplies was already in progress, with US LNG deliveries up 75% this year from last year, and Norway pipeline gas deliveries up 15%.

Besides, the EU executive will present a plan on preparedness for more gas cuts from Russia to leaders in July she said, adding “Hope for the best, prepare for the worst. That’s what we are doing right now.”

The European Commission will come up with proposals and options to discuss at a next EU summit in October, including considering alternative market designs that would potentially include decoupling gas from the formation of the market price for electricity, von der Leyen said.

Published in The Express Tribune, June 25^th, 2022.

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