EU’s Emergency Gas Plan Is Pre-Programmed Disaster
On July 20, the EU Commission presented its strategy to reduce energy consumption in Europe, which was given the catchy name “Save Gas for a Safe Winter” strategy. But not catchy enough to gain the support of EU member countries. A few hours after it was presented, Greece, Portugal, Spain and Italy rejected it.
Eventually, EU Energy Ministers reached a compromise six days later. It involves accepting the target of reducing gas consumption by 15% by March 2023, but with a long list of agreed-upon exceptions. And the original proposal authorizing the Commission to declare an energy alert, which “would allow for a mandatory demand reduction target to be introduced”, was rejected, and the decision put in the hands of the European Council, which could decide with a qualified majority vote.
But even this compromise is going to fail. At a joint press conference with Austrian Chancellor Karl Nehammer, in Vienna on July 28, Hungarian Prime Minister Viktor Orban blasted EU policy toward Russia, warning: “If Brussels does not alter its strategy, we should expect a war economy across Europe in October…. Sanctions and weapons deliveries are ineffective. You do not usually put out fires with flamethrowers,” he told Kossuth radio. He also confirmed that Hungary is negotiating the purchase of additional natural gas from Russia.
The same day, Polish Prime Minister Mateusz Morawiecki threatened to veto the plan. He insisted the final agreement must be unanimous as opposed to a majority vote. “If the EU tries to coerce us into voting by qualified majority, we will protest strongly” and if necessary, “we will make a formal veto.” Warsaw’s Climate Minister Anna Moskwa said that Poland had already made cuts, and that compulsory cuts were “unnecessary”, telling public broadcaster TVP that “in the worst case, if we are outvoted, we simply won’t comply.”
The fact is that the 15% reduction target is not achievable with “homeopathic” measures, such as those officially recommended by the Commission, including reducing heating in homes and public buildings. It would only be reachable with a massive reduction of economic activity, something that producers in EU countries are already doing due to the high energy costs. Furthermore, the Commission assumes that current gas supply levels from Russia, albeit reduced to 20%, will continue through next winter.
Whereas some countries have realized that this is a suicidal strategy, the German government is sticking to the plan, in the hope of receiving help from EU partners once it is implemented. But the tide could turn, A recent poll by the German Chamber of Industry and Commerce (DIHK) found that 16% of German industrial firms have already scaled down production or are planning to do so. With energy-intensive industries, the percentage is up to 32%. These are alarming figures and under the EU plan, many of those industries could be forced to stop producing for good. Since Germany is the locomotive of Europe, when the German economy catches a cold, the others get pneumonia.
There is, however, one way to avoid the disaster: lift the sanctions on Russia and stop arming Ukraine…