Austria has backed calls for an EU-wide solution to the growing cross-border crisis of rising electricity prices, in part sparked by the war in Ukraine.
Chancellor Karl Nehammer said the “madness” of rising prices meant the “market will not regulate itself”.
Mr Nehammer was initially sceptical of the idea of capping power prices but, as they also show no sign of slowing, he has reconsidered.
His conservative-led coalition will try to get others in the EU on board, he said.
“We must finally stop the madness that is taking place in energy markets. And that can only happen through a European solution,” Mr Nehammer said.
“Something has to happen at last. This market will not regulate itself in its current form. I call on all the EU 27 [member states] to stand together to stop this price explosion immediately.”
Austria is heavily dependent on Russian gas particularly in industry and heating, obtaining about 80 per cent of its supply from Russia before the war.
But much of its electricity also comes from renewables, raising questions from the Austrian public about the market system where gas and power prices are closely linked.
“We cannot let [Russian President Vladimir] Putin determine the European electricity price every day,” Mr Nehammer said.
European electricity prices soared to records last week, presaging a bitter winter as Russia's invasion of Ukraine and Moscow's cuts to gas deliveries for Europe inflict economic pain across the continent.
In Britain, energy regulator Ofgem has said it would increase the electricity and gas price cap from October 1 to an average of £3,549 a year — an 80 per cent increase from the previous cap at £1,971, which was already a record. Last winter, the cap was at £1,138.
On Friday, the year-ahead contract for German electricity reached €995 ($995) a megawatt hour while the French equivalent surged past €1,100 — a more than tenfold increase in both countries from last year.
Germany's ruling Social Democrats (SPD) are proposing further measures to help citizens cope, including another discounted national transport ticket.
They are also looking at direct payments to middle and low-income households, and measures to protect tenants from eviction.
French Finance Minister Bruno Le Maire pledged to keep electricity costs in check with initiatives worth billions of euros.
“The 4 per cent cap will be maintained to the end of the year. There will be no catch-up of costs on the ceiling in 2023,” Mr Le Maire said.
