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Economy

EU-Med Countries Seek More Flexible Gas Price Cap Mechanism

December 10, 2022

MADRID (AP) — Leaders and representatives of nine Mediterranean and Southern European countries on Friday called on the European Union to come up with a more flexible gas price cap mechanism than the recently proposed cap of 220 euros ($232) per megawatt hour.

The call made at a EU-Med9 summit in Spain further highlighted divisions within the EU over the proposed cap. The bloc initially proposed a cap of 275 euros last month but this met with considerable opposition. Several EU members want no price cap at all.

Spanish Socialist Prime Minister Pedro Sánchez said the EU-Med leaders agreed to work together so that the Dec. 13 meeting of EU energy ministers could reach “a gas price cap that is more dynamic and effective.”

When the first figure of 275 euros was proposed, Spain and others said it was so high it was very unlikely the price would reach that figure, and therefore the cap mechanism would never need to be activated.

Spain and other countries want a much lower cap and one that is fluid, linked to an market index and can be applied whenever necessary. This in turn, they argue, would help both countries and consumers in a more realistic manner.

The energy crisis triggered by Russia´s invasion of Ukraine this year dominated the summit. The leaders reiterated the need for the EU to build on European energy sovereignty and achieving independence from Russian fossil fuels.

French President Emmanuel Macron said Friday’s talks produced “real convergence toward both security of (energy) supplies and reduction of gas prices.” He said the leaders share “collective support for grouped purchases” of gas and notably are aiming for jointly making medium and long term contracts for the next three to five years to bring prices down.

Macron said France hopes an agreement can be reached at the EU energy ministers meeting on Tuesday for “a packet of technical measures to reduce prices … and limit speculation.”

The EU-Med meeting in the eastern city of Alicante brought together leaders or representatives of Spain, Portugal, France, Italy, Greece, Malta, Cyprus, Slovenia and Croatia. European Commission President Ursula von der Leyen and EU Council President Charles Michel also attended.

Meetings of the EU-Med group began in 2014 and are intended to develop a consensus among the participating nations on major issues concerning the 27-member EU.

Along with an EU-proposed price cap on natural gas, the group discussed strengthening relations with countries across the Mediterranean Sea, the fight against climate change in the region, and migration.

Malta’s Prime Minister Robert Abela said dealing with migration by working with countries of origin and transit, as well as dismantling human trafficking mafias, was a priority.

The Mediterranean island country is a usual port for rescue ships that have saved migrants trying to reach European countries like Italy, Spain and Malta, by sea from north Africa.

The day started off with a summit between Spain, France and Portugal at which they finalized an agreement to build a major undersea pipeline to transport hydrogen from the Iberian Peninsula to France and Europe by 2030. The pipeline is aimed at making the EU more energy independent.

Sánchez and Italy’s far-right premier Giorgia Meloni were to have had their first bilateral meeting at the summit but Meloni had to cancel because she came down with the flu, her office said Friday. Italian Foreign Minister Antonio Tajani attended in her place.

The EU-Med9 agreed to hold their next meeting in Malta in 2023.

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By IAIN SULLIVAN Associated Press

Associated Press writers Ciarán Giles and Raquel Redondo in Madrid and Angela Charlton in Paris contributed to this report.

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