On Tuesday, the EU reached a draft agreement that member states will voluntarily reduce gas consumption by 15 percent from August to March. The load will fall unevenly given that some countries are more dependent than others on Russian gas. But beyond what the text says, analysts say countries that failed to heed warnings about dependence on Russia – especially Germany – will have to do a lot of hard work if they want to preserve European unity on the issue.
EU energy ministers approved this agreement on 26 July to save on gas – a necessary step to ensure that the heating stops this coming winter – the same day Russias state-supported gas company Gazprom announced that it is cutting feeds to Germany through the Nord Stream 1 pipeline to 20 percent of capacity.
The cuts in gas demand are voluntary but can be made mandatory in the event of an “emergency”. And the agreement contains many exemptions and special exemptions for countries, such as Spain and Ireland, which avoided dependence on Russian gas and have limited capacity to export it to other EU members.
In this way, the deal is a very watered-down version of the 15 percent cuts across the board requested by the European Commission in a plan outlined last week.
>> Can Europe keep heating up this winter amid Russian gas crisis?
To discuss the context and implications of the EU’s plans to reduce gas demand, FRANCE 24 spoke to Jacob Kirkegaard, a senior fellow in economics and trade at the German Marshall Fund in Brussels.
Before the agreement was reached, Spain, Poland, Greece and Ireland all lobbied for exemptions from the European Commission’s plan for a 15 percent cut that applies to all members of the bloc. What motivated these four countries to adopt this approach? Do you think it is representative of a wider concern within the EU that has not yet been expressed openly?
The important thing to understand is that this was a very far-reaching proposal, because if you end up in a situation where you’re rationing gas for retail consumers, that has potentially very damaging implications for governments. They would never cede the power to do so to the Commission. they would not allow the EU Commission to be president Ursula von der Leyens cabinet decides when rationing is imposed on their own constituents.
The Commission was politically ambitious when it proposed these across-the-board cuts, to put it kindly; naive, if you want to be rude. The Member States will bear the political consequences of these measures, not the Commission.
The agreement says the cuts will be voluntary and only mandatory in an emergency – but isn’t something like an emergency quite likely, given that many analysts expect Russia to completely cut off gas supplies to Europe before winter?
Gazprom said on Tuesday that gas flows will be reduced to a fifth of what they normally are through Nord Stream 1. And we could have a very cold winter. So it is quite likely that we will have some kind of emergency.
If [Russian President] Vladimir Putin He thinks he can create political chaos this winter, he definitely will. The probability that the Russian gas supply will be reduced to zero is quite high. He shows people who’s boss. Let’s not forget that he’s already got the German government to kiss his boots – in recent weeks he actually forced Germany to get Canada to break the sanctions by sending the repaired turbine to the pipeline. Then he gave Berlin the middle finger by cutting supplies to 20 percent. That reduction to 20 percent in Nord Stream 1 risks a crisis during a cold winter.
So โ in a sense โ we already have a political emergency. By being so dependent on Russian gas all these years, countries like Germany have already given Putin the initiative, allowing him to show who holds all the cards.
This is a terrible situation to be in, considering that we in Europe are trying to help Ukraine win. It’s not an acceptable situation to be in. But it’s the reality.
Do you think European unity will endure on this issue?
Yes, it is an emergency. And yes, you need a shared decision-making process. But it’s a different kind of emergency than the coronavirus. It is not the kind of crisis that affects each member state in the same way – not least because of different decisions made by these member states.
See it from Spain’s perspective. You have plenty of liquefied natural gas terminals; you have an abundant supply of gas from various sources. Say you end up cutting gas demand like Germany didโa country whose political and economic elites ignored all the warning signs about their dependence on Russian gas both before and after Russia’s annexation of Crimea in 2014. You’d think you were . in practice saving Germany. That’s what it would look like if you’re sitting in somewhere like Madrid.
So there is moral hazard here because this crisis is not dictated by unforeseen circumstances. The countries are largely responsible for where they are today.
There are lessons – to use the phrase German finance minister Wolfgang Schauble used about Greece during the eurozone crisis – that Germany needs to learn. Berlin must consider keeping nuclear plants open – among other measures – even if there is a painful political price to pay for doing so.
In the end, I think there will be solidarity, but Germany will have to make the biggest cuts in demand of any EU country. Other nations like Italy and Austria have been quite dependent on Russian gas and they will have a lot of work to do. But look at Scandinavian countries, look at the Baltic states – they managed to completely cut themselves off from Russian gas in a relatively short time.
Originally published on France24
Source: sn.dk