The president of government from Spain, Pedro Sanchezhas claimed that the leaders of the European Union (EU) act to lower the prices of the Energy and prevent Europe from becoming “hostage” to its Russian counterpart, Vladimir Putinas well as limit the economic damage caused by the war in Ukraine. This is how Sánchez has expressed it in a interview with the British economic daily Financial Times (FT).
The Spanish president has pointed out that the next summit of the NATO – which takes place this Thursday – should help Spain and other countries that are having a hard time coping with big spikes in oil prices gasoline and the electricityas well as those who seek to reduce their dependence on gas in Russian. “If the EU does not give us the tools to respond to this energy emergency, it will be difficult, not only for Spain, but for all the Member States to assume the enormous economic cost,” warned the socialist politician.
The Sánchez government is currently considering capping the wholesale price of electricity as an emergency measure to decouple it from gas, triggered by the war from Ukraine. In this sense, according to the President of the Spanish Executive, Moscow sought to keep European energy prices high, keeping gas reserves low last year as part of a pre-war strategy.
“We have to defend our citizens; Europe cannot be an energy hostage of Putin”, Sánchez underlined, while at the same time urging “increasing our energy independence at the same time that we adapt our price system to a new reality”. Thus, he has argued that “if industries slow down their production, it is not because they have a problem with demand, it is because they have energy costs that are absolutely unbearable”.
‘We need action’
In this context, Sánchez stressed that “Europe cannot allow the summit to end without an agreement; we need measures and we need them now”. “The (economic) impact of the war will be greater or lesser depending on the response of Europe to the crisis”, warned the Spanish president.
Before this summit, Sánchez has traveled this week to Paris and Brussels, where he has met with the French president, Emmanuel Macronthe Belgian Prime Minister, Alexander DeCroothe president of the European Commission, Ursula von der Leyenand the President of the European Council, Charles Michael.
The Spanish Government proposes decoupling electricity prices from gas prices by pausing or abolishing the EU marginal price system, which sets the rates based on the last unit auctioned to allow full supply of the market. Last year, 45% of Spanish electricity came from renewable energycompared to only a third of gas, so for Sánchez “it is not at all logical that it is that 10-15% of gas that sets the price of electricity for the entire market.”
Spain and energy independence
However, these changes have not been well received in countries like Germany, Netherlands and Austria, who have downplayed expectations of an agreement at the summit. Critics contend that the variations sought by Spain could undermine incentives to invest in renewable energy and harm Russia’s long-term push for energy independence.
On the other hand, Sánchez has also pointed out that Spain could contribute to a greater extent to the energy independence of the EU, as the owner of almost a third of the energy storage plants liquefied natural gas, provided that interconnections with France are improved. Thus, he has argued that this was part of the “great opportunity for Spain after the departure of the United Kingdom from the EU to position itself as one of the main players” in the bloc.
“Putin has tried all these years to weaken the European project. Now, in Spain and in Europe, a new European identity is being built, a new European patriotism. That is what Putin wants to endanger,” Sánchez settled.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.