Energy crisis debate

The 27 heads of government and state will debate a new package of emergency measures unveiled earlier this week by the European Commission, the second of its kind in two months. For the first time, the package includes the layout of an EU-wide cap to bring high gas prices under control. However, the measure, which is still under development, would only be triggered in cases of extreme volatility and speculation in the market. «The time has come,» said European Commission President Ursula von der Leyen when she presented the proposal. «It is important to move with a clear signal that we are willing to be reliable partners on the market but not at any price anymore».

The measure, while innovative, falls short of the broader price cap demanded last month by a group of 15 member states, including France, Italy and Spain. Their proposal would artificially limit the price of all gas imports entering the bloc and all gas transactions taking place.

Key questions remain

«We have no idea if the Iberian model will work elsewhere,» said a senior EU diplomat, speaking anonymously. The debate on energy is expected to be heated, as member states hold diverging opinions on how to curb gas prices while preserving the security of supplies. Due to the issue's complexity, EU leaders will be compelled to engage in technical details, something unusual for high-level summits. «An intelligent price cap does not hamper supplies if you apply it well,» said a diplomat from a Western country.

Another friction point will be the idea of issuing common EU debt to cushion the painful impact of the energy crisis. This kind of collective response was agreed upon during the coronavirus crisis and resulted in a historic €750-billion recovery fund comprising grants and low-interest loans. However, some countries are wary of potential fragmentation across the single market if capitals continue to pursue uncoordinated, go-it-alone solutions. Germany's surprising €200-billion aid programme fuelled these concerns and highlighted the gap between wealthy and debt-ridden states.

In addition to energy, EU leaders will discuss the worrying evolution of the bloc's economy, recent developments in Russia's war in Ukraine and EU-China relations. At one point during the summit, EU leaders bid farewell to Italy's Prime Minister Mario Draghi, a highly respected technocrat expected to be soon replaced by far-right leader Giorgia Meloni.

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