European Union: EU summit: Scholz expects gas price cap agreement

In the month-long dispute over a European gas price cap, Chancellor Olaf Scholz (SPD) expects the 27 EU member states to reach agreement soon.

European Union: EU summit: Scholz expects gas price cap agreement

In the month-long dispute over a European gas price cap, Chancellor Olaf Scholz (SPD) expects the 27 EU member states to reach agreement soon. "It was always clear that we were striving for an amicable solution and I'm hearing good reports that we're on the verge of that," said Scholz on Thursday at the start of the EU summit.

For months, the EU countries have been arguing about measures to control gas prices, which have fluctuated sharply in the wake of the Ukraine war. Under pressure from a large number of countries, the EU Commission proposed capping the price for gas sold at the TTF wholesale site at EUR 275 per megawatt hour under certain circumstances.

Scholz spoke of good progress. "I'm sure that we can set a few more small remaining conditions today, especially on the sidelines," he said.

French President Macron also said: "I think we are about to reach an agreement". In any case, it is his wish to find means to limit gas price volatility. The EU Commission will also be given a mandate to finalize the reform of the electricity market at the beginning of next year.

Transatlantic Relations

Macron also advocated a firm European response to the US's multi-billion dollar program to boost climate-friendly technologies in America. It is about maintaining fair competition and defending the major projects for green technologies and future technologies in Europe, he said on Thursday at the consultations with the other heads of state and government on the subject. This requires, among other things, a simplification of the European state aid rules and a level of support that corresponds to what the Americans are doing.

"I think we have to react decisively now," said Macron. It is important that Europe does not now quarrel over money issues. Community financing instruments could be guarantees, loans or subsidies. We'll talk about that now.

The US program, officially called the Inflation Reduction Act (IRA), is a roughly $369 billion investment plan designed to boost climate-friendly technologies. However, subsidies and tax credits are linked to companies using US products or producing in the US. In the EU, it is therefore considered discriminatory and incompatible with World Trade Organization (WTO) rules.

Migration and border fences

Austrian Chancellor Karl Nehammer is calling on the European Union to fund border fences in Romania, Bulgaria and Hungary to stop illegal immigration. "We finally have to break the taboo fences," he said. According to him, 75,000 people entered the EU and crossed it to Austria without being registered. He did not name a period. "It's a security problem and it has to be solved," Nehammer said.

Bulgaria, Romania and Hungary should be supported in border security. "These are countries that should also protect the external border for all of us who are landlocked countries. We see that there are problems here, that there is a shortage."

Controversy over minimum tax

After Poland's temporary blocking of an EU decision on the international minimum tax, Polish Prime Minister Mateusz Morawiecki is now accusing other countries of putting pressure on Poland. "It's a kind of blackmail from some countries," he said. These tried to combine completely different topics such as financial support for Ukraine in the war against Russia and the international minimum tax. "They are completely separate, like apples and bananas," said Morawiecki.

Actually, the EU states had already agreed on Monday to pass the minimum tax as part of a package with other laws. Other components included billions in aid for Ukraine and the freezing of EU funds for Hungary due to corruption risks. At the last minute, however, Poland reported the need for a review of the minimum tax. This held up the entire package and pushed the deadline for adoption to Thursday.

The aim of the minimum tax is to prevent corporate profits from being shifted to tax havens. International companies with at least 750 million euros in sales per year should therefore pay at least 15 percent tax, regardless of where they are based. The directive is to be transposed into national law by the end of 2023. An agreement was meanwhile prevented by Poland and then by Hungary. In the negotiations, other issues such as the Hungarian funds were then linked to the project.