The road to get to have a ‘corridor’ in Europe that limits the increases in gas prices in the coming months, which Italy has long asked for, and also on the extension to the rest of the EU of the so-called ‘exception, is all uphill Iberian ‘, the ceiling on the price of methane used for the production of electricity, strongly desired by France and today allowed only in Spain and Portugal, countries that are not very interconnected with the others. Despite the conclusions of the European Council, which came at the end of a night-time negotiation started after a very hard intervention by Mario Draghi, now instruct the Commission to present “operational” measures quickly on this matter, the member states remain divided, with Germany continuing to slow down, both on the corridor roof and on the extension of the Iberian exception to the rest of the EU, for fear of running out of gas. Berlin thinks it can solve the price problem by exploiting the bargaining power of the EU as a whole: the “most efficient way” to contain methane prices in Europe is to exploit the “market power” of the EU as a whole, allowing “the major players to coordinate”, to jointly purchase the gas, stressed the German Minister of Economy and Climate Action Robert Habeck in Luxembourg. -Covid, but private companies, which will therefore have to sign up. For this reason, as the German Chancellor Olaf Scholz said at the end of the European Council, the EU rules on competition will have to be amended, which today punish cartels. The European Council, recalled Habeck, spoke of a “dynamic” corridor for prices, to “prevent” excessive swings, “and this makes sense”, so as to “not increase” the reactivity of the markets, but “this also means that at fixed prices is not the right tool “. In practice, Germany could support a mechanism that limits intraday volatility on the Ttf, Title Transfer Facility, the virtual Dutch market that acts as a benchmark for the price of gas in Europe, but not a price corridor anchored to other parameters, such as that requested by Italy and other countries to contain the increases in the price of methane. Prices which, left at the mercy of the mood of a thin market, exposed moreover to the manipulations of the Kremlin as recognized by the European Commission, have contributed to causing strong inflation and pushing Europe into recession, as Draghi predicted to his colleagues last week (“The Commission says electricity consumption will drop: it will undoubtedly drop as we go further into recession. Indeed you will see”, and how you will see it, he lashed). The Commission, which even yesterday limited itself to presenting yet another non-paper, that is a non-binding document, on the Iberian exception, the ceiling on the price of gas used to produce electricity, is now being criticized, more or less covertly, by the States. , the majority, who are pushing to approve emergency measures. The French Minister of Ecological Transition Agnès Pannier-Runacher stressed that “our expectation is that the mandate” of the leaders in the European Council “will produce concrete proposals, first of all on the decoupling between the price of gas and the price of electricity, on the corridor of price of gas and on the platform for joint purchases. “Measures that,” now that the price of gas is falling, allow us to better prepare for next winter “. Even more explicit, the Spanish Minister of Ecological Transition Teresa Ribera:” Many Member States – he said – have asked the Commission to be much more precise in the analysis on how to apply the Iberian exception to the rest of the EU and on the effectiveness of measures that can prevent leaks “of subsidized energy to non-EU countries, in in particular, the United Kingdom, Switzerland but also Turkey. In short, on this issue there has been “little concrete progress and we expect much more precision from the Commission”. From the European Council to the next Energy Council, the Commission “will have to present the proposals with much more precision, if there has not been an agreement in Coreper first”. Ribera confirmed that “some Member States are reticent and concerned about this type of decision”. The Minister of the Environment and Energy Security Gilberto Pichetto Fratin, who had just been catapulted into the heart of a very complex and highly technical negotiation, let himself be guided at his debut by his predecessor Roberto Cingolani, who was present in Luxembourg yesterday. After a couple of errors on the video (even if the difference between the European Council, the EU Council and the Council of Europe has escaped in the past even national politicians who held positions above his level and, often, even the Italian press not based on Brussels), Pichetto did not go out of balance, noting that “moods” such as optimism “do not count” and that what matters is that the Commission “undertakes to give a formal answer”, which is “a elaboration of the various requests and proposals ”. The Czech Minister of Energy Jozef Sikela confirmed that among the Member States there are“ different positions ”on the corridor price cap and on the Iberian exception. In the meantime, the extraordinary Energy Council that should have been held on November 18 has been postponed to the following week, November 24, to give more time to negotiations between the countries, another confirmation that the problems have not been resolved. The aim of the Czech presidency is to close by the end of November. It is not certain that he will succeed: Sikela recalled that another meeting of the Council, ordinary, is scheduled for December 19, and he wished not to be forced to ruin Christmas for colleagues (or heads of state and of government). The Commission, the Portuguese minister Duarte Cordeiro reported, “asked us for the mechanism” of a ceiling on the price of gas used to produce electricity. “The benefits are obvious and easy to demonstrate”, but “there are doubts in countries with a different energy mix”, given that “in Spain and Portugal the weight of renewables is very high and it is easier to apply it”. The EU executive in the non-paper highlights all its perplexities about the extension of the Iberian exception, underlining that, even if it would produce overall benefits of 13 billion euros per year, it would involve the risk of encouraging the consumption of gas and exporting in Non-EU countries low-cost energy subsidized by EU countries. Then there is the issue, far from simple, of how to compensate for the different costs that the measure would entail for different countries. Given that some states produce electricity using gas more than others, and that the difference between the cap for the gas used to produce electricity and the market price of methane is borne by the state, without compensation some countries would end up subsidizing the electricity consumed in other countries, in an interconnected market. The Commission underlines that the most penalized countries would be those most dependent on gas to produce electricity, namely Germany, the Netherlands and Italy, and that the main beneficiary would be France. Berlin also slows down on this, obviously backed by Holland (not even Rome, in truth, dotes on the Iberian exception, because it would cost a lot and would weigh on public accounts that must be handled with caution). Commissioner Simson seemed more likely that the Commission could present a more precise legislative proposal on the gas price corridor in a short time, even if she did not give an unequivocal answer: “We remain ready to put on the table proposals that follow up on the conclusions of the European Council ”, he said to a specific question. On the extent of the Iberian exception, Simson was much clearer, explaining that the presentation of a proposal will take place under two “preconditions”: the first is that a thorough “analysis” of the pros and cons be made; the second is that there is “sufficient support” from the Member States. The opposite of what the Council is asking, which through Sikela pointed out that the States have been asking for a legislative proposal since September, in order to be able to negotiate on something concrete and not on simple non-papers. Moreover, even if on many matters it could be decided by qualified majority, the agreement in the European Council is that the EU Council will proceed unanimously.Many suspect that the Commission intends to delay, to avoid being rejected the proposal and also, it is the growing feeling in Brussels, not to upset Berlin, hostile to any intervention on the market, for fear of running out of liquefied natural gas: if the price paid by the Europeans is lower than that paid by the Asian buyers, then the LNG carriers will set sail towards the East. It is a risk faced in the corridor outlined in the Italian non-paper, which anchored the movable roof even at the price of gas on Asian markets, but obviously Berlin remains skeptical. In all this, no minister yesterday spoke of the EU-level financing of anti-crisis measures, necessary to avoid the fragmentation of the single market, evident if you look at the 200 billion euro plan of aid to its companies announced by Germany. Only Sikela recalled that the temporary state aid framework must be accompanied by measures to avoid the disintegration of the single market and a level playing field to compete. Meanwhile, the Commission is working on the reform of the electricity market, which should decouple the price of electricity from that of gas, but this is a medium-term measure, which should not be operational before the second half of next year, as explained Emmanuel Macron. And by March 31, 2023, that is, in time for the next gas tank filling season, Acer, the agency of EU regulators, should develop a benchmark for gas “complementary” to the TTF, a parameter that gives a price very dependent on pipeline supplies and the specific conditions of the Netherlands. This is also a medium-term measure. If neither of the two gas price caps passes, the EU will remain exposed to wild fluctuations in gas prices on the TTF between now and next spring, perhaps mitigated by limits on intraday changes. The current drop in prices, essentially caused by the fact that demand is low at the moment also because October is extraordinarily mild, risks discouraging market intervention measures, and EU officials have already heard that the ceiling is not needed. : just talk about it and prices go down. But the markets soon eat the leaf and prices could very well rise, going towards the winter: “Gas prices have fallen because stocks are full – said Pannier-Runacher – when we reactivate flows in gas purchases, the upward pressures will return. . We must not think that this situation will last forever ”. Even Sikela would be “happy if prices remained low, but I believe the game is not over: we are talking about spot prices, not end customer prices and futures prices: the game Is not over and emergency measures are needed, to be activated when volatility returns ”. If it returns, in the absence of remedies, the problem will be all of the countries with less room for maneuver in the budget and that cannot afford to pay any amount for gas: it is up to them to push, weaving alliances, to keep together and broaden the front of the favorable ones. . But Berlin and The Hague remain hard bones. Convincing them between now and November 24 to introduce limits on the price of gas at EU level will not be easy.