As early as Thursday, at the start of the EU summit in Brussels, it became apparent that the German government's opposition to a European gas price cap was increasingly lost.

Only a handful of countries share the concern that it will inevitably lead to supply bottlenecks.

Two thirds of the EU stand are for it.

After hours of negotiations, EU leaders agreed on a compromise in the early hours of Friday that addresses at least some of Germany's concerns.

Bosses are calling for "urgent decisions" to think about gas prices.

This includes price caps for gas trading as well as a price cap on the use of gas in power generation, in order to at least lower electricity prices.

Henrik Kafsack

Business correspondent in Brussels.

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An energy crisis fund financed by EU debt is also mentioned as a possible part of the solution to high energy prices.

More specifically, the conclusions speak of the importance of "common solutions at European level, where appropriate".

This is less than French President Emmanuel Macron and the leaders of Italy and Portugal, who had called for a European solidarity mechanism, may have had in mind, but opens the door for it.

In this context, however, Chancellor Olaf Scholz again referred to the funds in the hundreds of billions from the Corona development fund that had not yet been spent.

"Unity and solidarity prevail," wrote EU Council President Charles Michel on Twitter.

The EU now has "a very good timetable," said EU Commission President Ursula von der Leyen.

Scholz said the summit had "laid the basis for joint action".

The energy ministers would now have to make a “consensual” decision, said Scholz, with a view to the upcoming negotiations on the energy crisis proposals presented by the Commission before the summit, which contain at least a rudimentary price cap.

The next meeting is scheduled for next Tuesday.

Otherwise "the Council has to do it again," emphasized Scholz.

Formally, that's not correct.

The EU ministers can decide with a qualified majority and thereby overrule Germany, which is also pointed out in the Commission.

Politically, however, it is difficult to imagine that Germany would be outvoted on such an important issue.

The Council, i.e. the EU summit, must decide unanimously.

Partial success in setting incentives

Scholz and the other opponents of a gas price cap, which include the Netherlands, Austria and Denmark, were at least able to get the Council to advocate greater efforts to save energy.

The hope is that gas prices will fall as demand falls, making a price cap unnecessary.

In addition, both the introduction of the price cap on gas and the price cap for the electricity market are linked to a number of conditions, above all that the gas supply remains secure.

The Commission must now draw up concrete proposals for capping the price of gas in electricity generation – the so-called Iberian model, because it already exists in Spain and Portugal.

It remains to be seen whether the rudimentary price cap that the Commission proposed before the summit is sufficient for the majority of EU countries.

It provides for a dynamic cap that starts with the Amsterdam leading index TTF.

However, it is unclear how high it should be.

In addition, it only applies to the spot market, i.e. not to direct transactions or transactions between gas buyers and sellers mediated by a broker.

So it could easily be bypassed.

In addition, it should only apply temporarily until the EU has developed a new gas price index that should lead to lower prices.

French President Macron said during the night that he expected an agreement to be reached quickly.

The EU could have "mechanisms that can be implemented at the end of October or beginning of November".