EU split over bloc's response to energy price surge

Member countries divided over long-term reform to the market

European Union countries have failed to agree on a unified response to the steep rise in energy prices, as entrenched divisions marked an emergency meeting between member states.

France and Spain want fundamental reform of the energy market but other countries say the price surge is temporary and does not require deep-rooted changes.

Gas prices in Europe have increased 170 per cent since the start of the year.

At the meeting in Luxembourg, ministers agreed "we should not rush into rash decisions", European Commissioner for Energy Kadri Simson said.

"There was no agreed position on whether or not intervention measures should be adopted at the EU level and applied in all member states," said Slovenian Infrastructure Minister Jernej Vrtovec, whose country holds the EU presidency.

Spain has argued for joint gas purchases by EU countries and a maximum gas price. Its Energy Minister, Sara Aagesen Munoz, said the price surge was "an extraordinary and urgent situation that requires urgent action".

However, 11 countries including Austria, Denmark, Finland, Germany, Ireland, the Netherlands and Sweden backed a statement that opposed fundamental changes to the market.

Ms Simson said there was "broad consensus" that the current price hike was temporary and "caused by the extraordinary global gas demand – not our market design".

The surge has been blamed on a rapid rise in demand for energy after the loosening of Covid-19 restrictions.

"There is no denying that the current market situation puts Europe under pressure," she said.

But the EU must focus on its ambitions to become carbon neutral by 2050, she said, requiring heavier investment in renewable sources.

"Changing the current model poses risks to market predictability, competitiveness and our clean energy transition," Ms Simson said.

Updated: October 26th 2021, 2:48 PM