EU leaders spent hours on Thursday discussing their so-called toolbox for confronting a spike in energy prices, but ultimately there seemed little Brussels could immediately do to spare citizens from getting hammered by high electricity and gas bills this winter.
While they asked the European Commission to “swiftly consider medium and long-term measures” like the development of a strategic natural gas reserve, the heads of state and government grudgingly acknowledged that in the short term, at least, the price spike was mostly a matter for national governments to manage on their own — mainly by cutting taxes and fees, and by offering subsidies to citizens in need of assistance.
But as they pondered a future without German Chancellor Angela Merkel, who was attending her 107th and likely last European Council summit, the bigger challenge for leaders seemed to be the absence of a magic toolkit or any other real or imagined instrument to deal with other problems, including dismally low COVID-19 vaccination rates in Bulgaria and Romania and a bitter dispute with Poland over rule-of-law principles.
The energy conversation dominated the opening session of the summit — and then spilled over into their dinner of sea bass fillet — as EU leaders grappled with the inevitable political peril of soaring utility costs.
The scramble for remedies highlighted a predicament for the European Commission, which aspires to provide common solutions but is at constant risk of being blamed for anything and everything that might go wrong.
Belgian Prime Minister Alexander De Croo seemed to express some sympathy, telling leaders it was “interesting how more and more when we have problems in national domains, everyone asks Europe to intervene,” according to a diplomat.
There were also signs some leaders were prepared to use the energy price crisis for political advantage. Hungarian Prime Minister Viktor Orbán, for instance, speaking to journalists ahead of the summit, called for the Commission’s “Fit for 55” initiative — the legislative package aimed at reducing EU carbon emissions 55 percent from 1990 levels by 2030 — to be “withdrawn and completely rethought.” Yet in the room later with his fellow EU leaders, Orbán was softer, simply calling for an “impact assessment,” according to a diplomat.
The leaders ultimately reached a consensus on written conclusions that reflected both their genuine sense of urgency but also the severe limits of Brussels’ ability to deliver short-term relief, given how national energy markets and conditions are highly individualized.
In addition to promising “swift consideration” of medium- and long-term measures — a classic example of strategic contradiction — they called for a study of the EU’s gas and electricity markets, as well as its Emissions Trading System (ETS), where companies buy and sell permits to offset greenhouse gas expulsions. They also asked for the Commission to explore a number of other measures “taking into account the diversity and specificity of situations of Member States.”
Countries like Spain, Greece, Poland and Hungary, whose consumers are struggling with record-high electricity bills, had pressured to have specific actions outlined in the document, but the majority of EU members rejected that option, and expressed reluctance to adopt radical measures to tackle a crisis some predict will conclude in the spring.
Still, the wording permits Spain’s PM Pedro Sánchez, who sought a revision of the bloc’s electricity market, and Poland’s PM Mateusz Morawiecki, who wanted to place limits on the ETS, to tell home audiences they got the Council to bend to their demands.
In the summit room, the debate among leaders captured many of the political and technical complexities behind the soaring energy prices.
Czech Prime Minister Andrej Babiš implored his colleagues to disabuse themselves of the notion they could ever end their reliance on Russia as a major natural gas supplier. “Forget about ever becoming independent from Russia, this will never happen,” Babiš said, according to a diplomat in the room.
Babiš said some EU countries had erred in criticizing Germany’s Nord Stream 2 gas pipeline with Russia, and he asserted that Hungary was in a relatively better position than many other countries thanks to a 15-year contract with Russia.
Babiš urged leaders to similarly pursue long-term contracts with Russia, a step Commission President Ursula von der Leyen has warned strongly against, saying such contracts would potentially inhibit the EU’s efforts to fight climate change and transition to renewable energy sources. Other leaders, including Morawiecki, also complained about alleged Russian manipulation of gas markets.
Leaders also clashed over whether nuclear energy should get the Commission’s “green” energy source label. Opposition to such a move, particularly from Luxembourg Prime Minister Xavier Bettel and Austrian Chancellor Alexander Schallenberg, prevented any language supporting nuclear energy from reaching the Council’s conclusions.
Merkel, in comments clearly directed at leaders of Poland, Hungary and other countries to Germany’s east, urged her colleagues to separate the discussion of high energy prices from a debate over the Fit for 55 package, which she argued is largely unrelated to the immediate crises. According to the diplomat in the room, Merkel also referenced a conversation she had with China’s leader, who urged the EU not to pressure Beijing to close coal-fired electricity plants too soon, arguing it would lead to further sharp increases in gas prices.
Rule of law
On the rule-of-law fight, Council President Charles Michel maneuvered carefully to prevent the highly divisive topic from dominating the summit. He put the issue on the agenda just before the leaders’ dinner, at a point when many were already hungry and some were eager to come back to the far more politically urgent energy debate. Official notetakers were ordered to keep the description of the conversation general, without the customary references to individual leaders.
Michel invited Morawiecki to discuss a controversial ruling by his country’s Constitutional Tribunal that declared primacy for the national constitution over the EU treaties — a move widely seen in Brussels as undermining the EU’s legal foundation. Other leaders then joined the debate and voiced exasperation at the broader erosion of judiciary independence in Poland. Dutch Prime Minister Mark Rutte, in particular, pointedly called on the Commission to trigger a new mechanism that would restrict EU budget funds to Poland as punishment over its contested judicial reforms.
The rule-of-law discussion was excluded from the formal Council conclusions, but Michel did issue his own informal presidential summary through an EU official, saying: “This debate has revealed that European Council members are convinced that the rule of law and the independence of the judiciary are absolutely fundamental. Legal and institutional instruments have already been activated or could still be activated.”
“Rhetoric and mutual respect can facilitate or complicate solutions,” Michel’s summary added. “Political dialogue needs to continue to find solutions.”
A senior official from a northern EU country praised how the matter was approached, saying it would preclude Poland’s governing Law and Justice Party (PiS) from claiming any discrimination against the country.
“According to my assessment, the debate on Poland has been utmost important and of the right kind,” the senior official said. “We should avoid giving any impetus for the PiS government to blame us for breaking the ‘good governance’ in the EU. We must adhere to our own principles, very carefully.”
“It is the task of the Commission to act, after thorough analysis,” the senior official added. “Today would have been too early to jump into any conclusions.”
Indeed, there were no formal conclusions on rule of law, nor was there any jumping, or even a news conference. Instead, leaders will reconvene Friday morning for discussions on migration policy and on digital policy initiatives.
Lili Bayer, Maïa de La Baume, Aitor Hernandez-Morales, Barbara Moens, Rym Momtaz contributed reporting.