France has come out in favor of imposing an EU-wide price cap on gas supply from Russia and a windfall tax on excess energy profits as Europe looks to rein in sky-high energy costs and respond to provocations from Moscow, Report informs referring to Politico.
European leaders are fighting to contain an energy crisis that is driving economic turmoil across the bloc, and piling huge cost pressures onto millions of consumers and businesses.
Brussels is gaming out radical measures to lower energy prices which will be discussed by EU country representatives on September 7 ahead of an emergency meeting of energy ministers on September 9.
The proposals include a price cap on Russian gas, new benchmarks for EU-wide gas price setting and a command-and-control allocation of gas to needy countries in an emergency, according to documents obtained by POLITICO.
The proposed policy responses - many of which the European Commission had previously dismissed as risky, ineffective, or having too many negative unintended consequences - follow fresh provocations from Moscow that once again sent European energy markets soaring.
Laurence Boone, France's junior Europe minister, told POLITICO the measures were needed to respond to Russian aggression.
"As a counter-offensive, we Europeans need to halt Russia's market manipulation. It's the same when you see the price of a share collapsing following bad news, you have to suspend trading," Boone said.
Spain has not fully come out in favor of a price cap on Russian gas deliveries. Speaking to POLITICO, Ribera said: "I think that is something we certainly need to take into consideration ... The question is, to what extent we consider this something that we can afford to do."
Germany has also struck a more cautious note, publicly agreeing only to a windfall tax on nuclear, renewable power and coal producers, which are currently earning record profits.
France’s Boone warned that emergency measures would only be effective if all countries are on board, rather than “everyone doing something in their corner.”
The Commission document warns that measures aimed at hitting Russia's gas revenues aren't without risk.
The proposed price ceiling on gas - €50 per megawatt-hour is floated, which is less than a fifth of the current spot price - would take the form of emergency legislation used earlier this year to pass gas rationing measures by qualified majority vote, or by creating a single European gas buyer to negotiate a specific volume of gas to purchase from Russia.
Such a move would be a gamble, the document warns: “The EU would have to be ready to give up immediately Russian gas” if Moscow retaliated by cutting all supply, although ongoing cuts make that risk lower by the day, it adds.