European leaders agree on joint energy purchases and energy saving measures

At the European Council: Ursula von der Leyen and Charles Michel.
At the European Council: Ursula von der Leyen and Charles Michel. Source: SCANPIX/AP

On October 20, the heads of state and government of the European Union met in Brussels to discuss energy supply, high energy prices and the resulting high inflation. The European Council agreed to set a winter gas price cap and to delegate to the member countries' energy ministers the task of finalizing the details of this agreement on Tuesday next week.

"The discussions picked up where we left off in Prague two weeks ago, we continued to look for ways to reduce energy prices and lessen the negative impact of high prices on people," Prime Minister Kaja Kallas said.

The heads of state and government decided to move forward with the European Commission's plan to jointly find suppliers to fill gas storage facilities.

"Joint procurement will ensure reasonable prices for consumers while limiting gas prices. In the current situation, it is imperative to consider all solutions, and a gas price cap is one option, but it is not a long-term magic wand as it could increase consumption and, with limited suppliers, could jeopardize security of supply. Means must also be found to bridge the gap between the price cap and reality," Kallas said.

"What was agreed upon in Brussels will allow us to face the winter with a little less anxiety, but these solutions will only be effective if everyone here and in Europe reviews their consumption habits and starts saving," the prime minister emphasized.

The main advantage of the agreement is that it limits Russia's ability to manipulate gas prices, Kallas told ERR.

"The primary goal of the gas price cap is to prevent excessive pricing and market manipulation. We are signaling to the market that price hikes will be suppressed, which will reduce the possibility of fraud or speculation. This is what we decided," she said.

Energy ministers have been tasked with finalizing the details on Tuesday in order to expedite talks.

"We have been talking about it for months, and the general consensus is that we do not want to meet on the same topic again. Let the energy ministers decide, and we will proceed from there," Kallas said.

"The Council agreed that qualified majority voting would not be used this time and that all parties would work together to find a solution. This was also a critical message," Kallas added.

The European Council continued to discuss the fight against high inflation as well as the overall economic situation in the European Union. The heads of state and government agreed to jointly coordinate energy measures between countries in the coming winter season to maintain the unity of the internal market and to ensure security of supply. They also highlighted the importance of ensuring corporate liquidity.

The European Commission and ministers of energy and finance will now determine the next steps. European heads of state and government will continue discussions at the next meeting.


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Editor: Kristina Kersa

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