Market intervention "should have been done earlier, and it's a shame that it took so long," said Belgian Prime Minister Alexander De Croo.
ADVERTISEMENTThe European Union's response to the worsening energy crisis has come too late, said European Council President Charles Michel and Belgian Prime Minister Alexander De Croo.
In separate statements, the two leaders criticised what they see as a slow reaction to soaring electricity bills, which are bringing consumers and businesses under financial strain, raising fears of widespread industrial paralysis and insolvency.
"There is not a day to lose," said Michel in an interview with several international media. "We have to address the question of the price caps."
Michel's comments were seen as direct criticism against the European Commission presided by Ursula von der Leyen, who has promised to unveil a proposal to tackle the crisis.
"[This] is not new, we do not start this debate today," Michel said. "That is why we invited the Commission several times in the past to put concrete proposals on the table to help the member states decide."
A series of documents signed by the Commission's energy department, but not officially endorsed by its legal team, have in recent days offered some "preliminary" answers, including a price cap on the excess revenues obtained by non-gas producers (renewables, nuclear, coal) and a plan to gradually cut down electricity demand.
Von der Leyen has also raised the possibility of introducing an EU-wide cap on imports of Russian gas, although EU officials have warned this measure could push Russia to retaliate and totally suspend flows.
The ideas are set to be discussed by member states on Friday during an extraordinary meeting of energy ministers. The representatives are expected to bring their own proposals to the table.
"An ideological debate on instruments is not enough. We need concrete and operable proposals on the table in order to deliver," Michel said.
'It took so long'
Michel's comments were echoed by fellow liberal Alexander De Croo, who has for months pushed for market intervention to "decouple" the price of gas from the final electricity bill.
"Decisive action [at the European level] in spring could have limited the contamination of the electricity market," De Croo said in a meeting with Belgian diplomats.
"It should have been done earlier, and it's a shame that it took so long."
De Croo referred to the rules of marginal pricing that today govern the EU's liberalised electricity market.
Under this system, all electricity producers – from wind and solar to fossil fuels – bid into the market and offer power according to their production costs. The bidding starts from the cheapest sources – the renewables – and finishes with the most expensive ones – in this case, gas.
Since most EU countries still rely on gas to meet all their power demands, the final price of electricity is inevitably set by gas, even if clean, cheaper sources also contribute to the total mix.
Scorching summer temperatures, persisting drought and a shortfall in nuclear production have only augmented the role gas plays to keep the lights on across the bloc.
"We need a new market model for electricity that really functions and brings us back into balance," said von der Leyen, who has become increasingly vocal about market reform.
Energy experts say marginal pricing worked well until the war broke out and that any intervention should be targeted and time-limited. Energy savings, they say, remain the best tool to address the present crisis.
ADVERTISEMENT'Extreme complexity'
Asked about Michel's criticism, a spokesperson for the European Commission refused to comment and said work was ongoing ahead of Friday's extraordinary meeting.
"Taking into account the extreme complexity of the energy topic as such, and the sensitivities when it comes to ensuring that our interventions lead to the right results [...] it is clear that work was required before we could finalise our proposal," said Eric Mamer, the executive's chief spokesperson.
"What we will put on the table for discussion will be all the more helpful because we have taken the time to analyse all the different dimensions of this issue."
Hours after Mamer's response, President von der Leyen shared on Twitter a preview of the upcoming energy proposals, including financial help for electricity producers facing liquidity challenges.
Von der Leyen is set to give her annual State of the Union speech on 14 September, when she is expected to unveil further details of the exceptional measures.
ADVERTISEMENTBut it is unclear how much relief these solutions could offer once implemented.
In its leaked draft, the Commission warns energy prices will remain high for the remainder of the year and "until 2024-2025, albeit to a lesser extent."
"[The measures] will not bring energy prices back to pre-crisis levels or remove the significant effects of the crisis on both inflation and the European economy as a whole," says the document.