Between the jaws of the pincers of the significant decline in Russian gas supplies, and the approaching steps of the ruthless “silent and murderous enemy”: the harsh winter, Europe is trying to accelerate its “groggy” steps in order to find solutions to the rise in gas prices and confront the energy crisis, in light of the record high rates of inflation and the significant deterioration for purchasing power.
As the battles intensify and the frequency of raids and bombings on the Ukrainian-Russian war front rise, the controversy escalates and the tone of discussions and internal divisions rises in the corridors of the European Union to determine the ceiling of Russian prices, threatening to crack the walls and corners of the European House and the intrusion of cold north winds and Siberian snow into it.
Russia, which provides 40% of European gas imports, was absent in the European summit that took place last week in Prague, whose discussions were overshadowed by the Russian-Ukrainian war and the energy price crisis.
road map
With severe Russian gas supplies in short supply and expectations of power cuts during the winter, European leaders rushed to put together a "road map" and plan to rein in soaring energy prices.
The plan includes setting a ceiling on energy prices, but disputes arose between European countries. While 15 countries demanded a maximum gas price, Germany, Denmark and the Netherlands opposed setting a price ceiling, fearing that it would curb the purchase of gas that their economies need.
"We are determined to mobilize our resources to reduce energy prices and we are working to boost stocks," said European Council President Charles Michel, at the conclusion of the Prague summit, adding that "Russia launched an energy missile on the European continent and the world."
For her part, European Commission President Ursula von der Leyen noted that EU executives will present more detailed proposals to tackle higher energy prices in the coming weeks.
"All views regarding gas supplies and electricity prices are very important in order to avoid divisions and keep our market united," Der Leine added.
In contrast, the Polish authorities accused Germany of "selfishness" in its attitude and handling of the expected energy crisis.
In light of the divergence of views and the intensification of differences between the members of the Union, most of the issues and points of contention were transferred to the meetings of the European Commission scheduled for 20/21 October.
The European Commission is expected to present a broader package that includes short-term price-cutting measures and longer steps to reshape the gas market.
Billions of losses
At a time when the European Union countries are seeking to get rid of dependence on Russian gas and energy, President Vladimir Putin stressed - in his speech at the Energy Week forum in the capital, Moscow - that his country is a reliable source of energy, blaming the West for the disruption in supplying the market. European Union Stadium" to resume supplies.
Putin also indicated that prosperity in Europe was associated with cooperation with his country, pointing out that setting a ceiling on gas prices would make Europe lose hundreds of billions.
Referring to the issue of setting a ceiling on gas prices, the Russian president said, "We will not supply energy to countries that set a ceiling on their prices."
External causes
The analyst and strategist at the European Institute for Prospect and Security, Francois Compagnola, attributed the causes of the European energy crisis to external causes, starting with the Corona pandemic, to the Ukrainian crisis, which caused a reduction and cut off gas supplies, which deepened European internal differences.
He added to Al Jazeera Net, "All these divisions and disagreements are due to the failure to establish a single European energy market," and asked: How can Europeans today get out of these differences with minimal damage in the absence of this market?
As for the analyst and economic expert, Daniel Melhem, he noted that the problem today is not in determining the prices of Russian gas, which can be applied considering that 70% of Russian gas passes through European infrastructure, but the real problem is in determining the price of other gas, whether it is imported from Norway or the United States. United.
He added in his speech to Al-Jazeera Net, "Germany objects to setting the ceiling of Russian gas because it considers that this could lead to the flight of suppliers from Europe to Asia, especially with strong competition from countries such as China, Japan and South Korea who buy gas at high prices."
Hard and harsh winter
The European Center for Medium-Range Weather Forecasts warned that the coming winter will be colder than the past, which threatens to increase electricity and gas consumption.
In the same context, French President Manuel Macron considered - in statements on the sidelines of the Prague summit - that the winter of 2023-2024 will be more difficult than the next winter for Europeans in terms of gas supplies.
While the strategic expert at the European Institute stressed that it is necessary to rationalize consumption to overcome this difficult winter, and considered that the negative effects of high energy prices on citizens and companies are inevitable.
Energy crisis turns into debt
European economies are experiencing a period of deflation, especially with the continued rise in inflation rates, which this year reached a record rate of 10%, according to the Eurostat observatory of economic data.
As the prices of energy and raw materials have risen by more than 40%, can the energy crisis turn into a debt crisis?
The strategic expert at the European Institute for Prospect and Security noted that the debt will necessarily rise, but it will differ from one country to another.
Countries such as Italy, Spain and Greece - in his opinion - may bear the most consequences of rising energy prices, and their debts will rise and their economies will be directly affected.
He added that France has allocated 45 billion euros to protect consumers for this rise in energy prices, while Germany has allocated 200 billion euros to provide support to its citizens and affected companies.
As for the economic expert (Melhem), he explained that mitigating the shock of rising energy prices and improving the purchasing power of the citizen inevitably passes through the provision of aid, and in order to provide support funds, European countries must resort to borrowing from international financial markets.
He continued, stressing that to compensate for this debt, European countries will be forced to raise taxes in 2025 and 2026, and therefore all aid and support packages will end after 5 years, because the public debt of countries will not be able to withstand under these circumstances.
Solutions and options
With gas prices rising by nearly 90% compared to last year, and with expectations and fears of power outages during the coming winter, and in an effort to anticipate matters, European governments have urged companies and families to reduce the heating temperature and save energy, as part of a plan aimed at reducing gas consumption this winter, including Not less than 15% of the average for the past five years.
Are these measures sufficient to control the gas and energy crisis?
Are there other solutions for European countries?
The strategic expert at the European Institute stressed that we cannot apply the same solutions to all European countries, because each country has its own economic characteristics and independent energy policy according to its resources and sources of energy.
According to the economist (Melhem), the solutions are summarized in:
Separating the gas market from the electricity market, which will provide additional funds, reduce electricity prices, and restructure the electricity market.
Setting a ceiling on the price of Russian gas and negotiating with Norway to reduce gas prices.
Collectively conclude gas purchase deals.