Shut Down Speculation on Amsterdam’s Gas Exchange!

A growing portion of public opinion has been made aware of the fact that the root of the gas price inflation is the highly speculative TTF (Title Transfer Facility) market, which sets the prices of gas for the EU on the basis of a totally fictitious demand driven by financial traders. Calls for regulating or shutting down the TTF for good have come from several quarters. Among others, the Catalan Employers Association (Foment del Traball), has called for “eliminating the TTF as a reference system for setting the price of natural gas in European markets”, while the Czech government, the current EU rotating chairman, had included it in a set of proposals to be discussed at the Sept. 9 meeting. It was rejected, given the opposition by some EU member countries, led by the Netherlands and Germany.

As for Germany, Finance Minister Christian Lindner gave a roaring speech against energy speculation before the press, after the Sept. 6 cabinet meeting. “We have speculation on the electricity markets, and we have rules on the electricity markets that have established a kind of politically made yield autopilot,” he said. This yield autopilot must now be switched off, Lindner said.

With “politically made yield autopilot,” Lindner is referring to the mechanism by which the price of electricity is determined by the seller at the highest price. This mechanism was devised in order to subsidize so-called “renewables”, which originally supplied the most expensive electricity due to the high costs. As gas prices started to rise last year, gas-produced electricity suddenly became the most expensive and determined electricity prices, which have now climbed to astronomical levels as a result.

While many were positively surprised by his belated but important awakening, Lindner’s call for action is a diversion. In fact, it concerns only the European Energy Exchange, the Leipzig-based electricity market, but not the more important Amsterdam-based TTF.

While it is important for Germany to throw its weight behind the proposal to decouple electricity prices from gas prices, thus joining many other countries, EU member countries must have the courage to address the real taboo – elimination of the TTF. It would suffice to have one EU government raise its voice, accompanying the demand with the threat to leave the euro. The choice is between the well being of European citizens and the wealth of the Davos billionaires.

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