In Prague, European people must clarify what they mean by capping gas prices, says the Prime Minister’s adviser
Tomorrow and the day after tomorrow, the largest event of its kind ever held in the Czech Republic will take place in Prague. A total of about 48 delegations are to meet here tomorrow at an informal summit in the format of the European Political Community. What is the European Political Community?
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The European political community is the idea of Emmanuel Macron, so that the people of Europe can talk to each other about pressing problems, about what unites and divides us, about how to make the European continent more stable and prosperous, at this moment, for example, with enough energy, and that regardless of whether you are an EU state or not, whether you want to be or already are or whether you don’t care.
The French president proposed the creation of this platform in May. But why was the proposal created in the first place and what is its relation to our presidency?
To some extent, the relationship to our presidency is accidental, Emmanuel Macron came up with the idea during the French presidency, and we, based on the debate at the level of the European Council with others, that we will try to hold the first meeting in Prague during our presidency, i.e. this autumn, specifically tomorrow.
The idea is that people can come together without drawing conclusions, without talking about words, without building any new structures, without everyone having to speak in turn, because when 44 of them are supposed to speak, it takes endless hours. So the goal was that people could meet more informally, at a closed meeting, among themselves without delegations or with very small delegations.
The format of the meeting is that they are either in a room alone or with one, at most two people, to somehow stimulate a direct, open, confidential debate, because you don’t often have that opportunity at the UN, the Council of Europe, the OSCE and the North Atlantic Alliance. because they are all bound by protocol and quite often have to speak to the home audience more than to the leaders sitting at the other end of those huge tables.
If I understand it correctly, it is an effort to establish a kind of tradition, which coincidentally begins here in Prague. How often should this community meet?
That hasn’t been decided yet. There are opinions that it should be twice a year, i.e. once every six months. My personal private opinion is that once a year would be perfectly fine. Countries and people who think that meetings should take place once every six months are also appropriate. We’ll see what they agree on here. I won’t decide about it, I’ll let myself be surprised.
Charles Michel’s proposed communique for Friday talks about joint measures to combat high energy prices. According to the proposal, the leaders could call on the European Commission to prepare a workable solution to limit prices with the help of a gas price ceiling. Won’t capping gas prices be the proverbial stumbling block? As we know, Germany, for example, is against it.
No doubt people will be talking about it as they did at the extraordinary energy council last week, as they will be talking about it next week in Prague at the informal energy council, and as we will be talking about it in 14 days in Brussels at the regular European Council. Leaders and states need to clarify what they really mean by capping gas prices, because some think it is capping gas prices at inputs, i.e. when importing gas into Europe. This has certain difficulties, because if the ceiling were set too low, no one would sell us gas, or we would have even less of it.
Others envision the capping of gas prices on the internal market, i.e. the gas that is already in Europe. Of course, this also has many pitfalls, such as the question of who would pay the difference between the capped price and the market price at which we import gas from outside. Another analogy is capping the price of gas for the production of electricity in so-called closed power plants, which are expensive considering how expensive gas is. That’s the solution I think makes sense. It works in Spain and Portugal, the European solution would have to be modified in a certain way, the capping would also have to be at a different level, but it is something that would lower the price of electricity on the exchanges and would probably make it somehow clear where prices fluctuated from a medium-term perspective.
This solution provided some reassurance. Electricity would not be as cheap as in the past, but at the same time there would be no huge fluctuations and investments could be better planned. Leaders need to clarify which way they want to go and what they will agree on, what they envision under capping gas prices. At this point, I can guarantee that many imagine something completely different than the others.
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The President of the European Commission, Ursula von der Leyen, confirmed today that the Commission is ready to discuss capping gas prices. If a decision is made, will it be at the regular Brussels summit in three weeks?
I think there will be a debate on Friday, Ursula von der Leyen will also be here and the commission will be further, where the states are heading, where they want to measure and what the commission is supposed to work on directly. I am convinced that the commission will present proposals and more detailed ideas about the future direction at the same time.
I think it is a realistic way to move towards capping gas for electricity production, I consider it a rational and proven step, which is not so expensive compared to other steps, the price of this step is basically predictable and we should move in this direction. It’s not the only measure that should be taken, but it’s definitely one of the most important, and Prime Minister Fiala has been saying this for a long time.
On Thursday, Prime Minister Petr Fiala will hold talks with British Prime Minister Liz Trussová in Kramář’s villa before the super summit. What does he want to use the meeting for?
We have some joint projects related to Ukraine. There are also other joint projects under discussion, which concern, for example, modular nuclear reactors. Undoubtedly, we will also talk about energy security and the connection of Britain with continental Europe, because cooperation with Britain is important to ensure sufficient gas and electricity, we get gas to the continent through Britain.
At the same time, Britain has built many LNG terminals to receive liquefied gas and exports electricity to Europe. So we’re going to talk about the stability of these supplies as making sure that whatever measures we take don’t lead to, for example, the fact that the electricity is spinning. There is a shortage of electricity in Europe at the moment and we import from Britain, but if these parameters were to be adjusted incorrectly, it could happen that, on the contrary, there would be exports to Britain, if electricity were cheaper here thanks to the ceiling, which would lead to an even greater shortage electricity on the European market. We will also talk about these completely practical things.
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