EU leaders reaffirm support for Ukraine, squabble over gas price cap

PRAGUE, Oct 7 (Reuters) – European Union leaders agreed on Friday to give more financial and military aid to Ukraine, but a full day of talks in the ornate royal castle in Prague does not seem like the related to the decision whether or not to limit gas. prices.

Most of the 27 EU countries want a cap on gas prices but disagree on the details, with options including a cap on all gas, a ‘dynamic corridor’, a price cap on gas used specifically for electricity generation or on Russian gas only.

The EU has been discussing the issue for weeks, so far without result, although the 27 have agreed on other common measures to help them deal with an acute energy crisis as runaway prices threaten to cause a recession in the bloc.

“Everyone agrees that we need to lower electricity prices, but there is no agreement on exactly what instruments to use for this purpose,” said Polish Prime Minister Mateusz Morawiecki.

Italian Mario Draghi said the bloc’s executive European Commission would present for the next meeting of European leaders on October 20-21 a broader set of short-term measures to bring prices down and longer-term measures to rethink the electricity market.

The cap is part of a series of proposals and initiatives by European states to deal with falling gas supplies from Russia, which once provided 40% of Europe’s needs, and soaring prices. They have mitigated this year’s highs but remain more than 200% above those of early September 2021.

Germany and Denmark oppose a cap, fearing it will make it difficult to buy the gas their economies need and dampen any incentive to cut consumption.

‘IT IS NOT FAIR’

Warsaw also criticized Berlin for its plan to spend up to 200 billion euros ($196 billion) in subsidies to protect German consumers and businesses from soaring energy costs.

“The richest country, the most powerful country in the EU is trying to use this crisis to gain a competitive advantage for its companies in the single market. It’s not fair, it’s not how the single market should work,” said Morawiecki.

German Chancellor Olaf Scholz said the rally cleared up “misunderstandings” about the Berlin package, which he championed as the right thing to do, adding that France, the Netherlands and others had also put put in place their own support measures.

French President Emmanuel Macron, however, said the package had created “tensions” between countries that cannot fund such a large national package, and added that one solution would be to let member states dip into a fund. European Union which provided leave loans during the COVID-19 pandemic.

European Commission President Ursula von der Leyen stressed the need for joint gas supply.

“At the end of the winter, when our storages will be exhausted, it is essential that we have a common gas supply to avoid outbidding each other…, that we have collective bargaining power”, a she added. said.

A GENERATION TO REBUILD UKRAINE

While bickering over ways out of the energy crisis, the bloc showed unity in pledging continued support for Ukraine.

“We are determined to mobilize all possible tools and means to support Ukraine with financial means, with military support, with humanitarian support and of course with political support,” said summit chairman Charles Michel.

The bloc would support Ukraine “as long as it takes”, von der Leyen said after Ukrainian President Volodymyr Zelenskiy addressed EU leaders via video link.

“Russia brought war to our land… And only thanks to the fact that the Ukrainian people stopped this invasion by Russia, Russia cannot yet bring the same war to other parts of Europe, especially the Baltics, Poland and Moldova,” Zelenskiy said, according to a transcript on his website.

He called for more air defense systems to protect Ukraine’s energy infrastructure from Russian strikes, international pressure to withdraw Russian troops from the Zaporizhzhia nuclear power plant in occupied Ukraine, and funds to rebuild Ukraine.

The bloc’s top diplomat, Josep Borrell, said he wanted the bloc to spend more money on military support for Ukraine, including training, and that specific proposals on this would be discussed later. this month.

Scholz promised a large German contribution to the European training mission but, ahead of a reconstruction conference in Berlin on October 25, also warned that rebuilding Ukraine would take a generation.

Reporting by Jan Strupczewski, Kate Abnett, Jason Hovet, Alan Charlish, Sabine Siebold, Michel Rose, Michael Kahn, Pawel Florkiewicz, Marine Strauss, Sudip Kar-Gupta, Charlotte van Campenhout, Bart Meijer, Jan Lopatka, Robert Muller, Sabine Siebold; Written by Gabriela Baczynska and Anthony Deutsch; Editing by Hugh Lawson, Jonathan Oatis and Paul Simao

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