EU Energy crisis

Italian prime minister Mario Draghi said opposition to the cap proposal would cause recession and market fragmentation while continuing to finance Russian president Vladimir Putin, according to two people briefed on the fractious summit in Brussels to address the mounting economic damage caused by soaring energy prices. Scholz told his fellow leaders that while Berlin was willing to discuss the commission’s proposed emergency price cap mechanism, he could not agree to it, according to the people briefed on his remarks. Arriving at the two-day summit, Macron called for unified action. Polish prime minister Mateusz Morawiecki said he believed more and more leaders were swinging behind the price cap and that the commission had to move quickly to overhaul the market.

Germany’s €200bn support package for businesses and households has been criticised for using fiscal firepower that many smaller member states lack and potentially skewing the single market. But Berlin has resisted proposals for more aggressive interventions to tame energy prices. Instead, Scholz said the EU needed to cooperate with allies on gas deals. He appealed to big gas producers, including the US, to help ensure affordable energy prices in Europe.

Berlin is also pushing for the EU to encourage countries to drill for gas in new fields, according to draft conclusions of the summit. However, Germany is not alone in being sceptical about price caps. Countries such as the Netherlands and Hungary and Scandinavian and Baltic nations are also wary of the move. However, other member states have been lobbying for interventions to curb energy prices for months.

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