By Dimitris Gatsios
At the next Brussels Summit, scheduled for March 24 and 25, the decisions of the “27” leaders to deal with the… Unions of the energy crisis and the “tectonic changes” taking place in Europe, with the Russian invasion, are postponed. in Ukraine. The second day of the informal Versailles Summit raises the curtain, with the “27” discussing the Brussels reaction mix until the early hours of the morning, without their mobile phones or other electrical appliances. The convergence equation, aimed at the immediate European response to the surge in prices caused by the energy price rally and has a direct impact on consumer and business budgets, is expected to be resolved within the next two weeks. And the forthcoming Summit may… be reminiscent of the mammoth work of July 2020. When the “27” also discussed for more than five days the… embankments in the face of the παν pandemic virus earthquake, before… white smoke came out… the birth of the recovery fund, which was a turning point in the historical course of the European family.
From the data so far, two are the conclusions that emerge from the first marathon meeting, in a momentum of critical geopolitical and economic circumstances.
More specifically:
– President Macron’s proposal for the issuance of a common Eurobond did not find the required pace, as it stumbled on the wall of Germany, the Netherlands and other “sparing”, as they are commonly called countries.
-On the other hand, the need to take measures to address the energy crisis is becoming increasingly clear. Measures to be taken to support, at another extremely difficult crossroads, the economies of the Member States of the European Union, which, in turn, will look for tools to “shield” households and businesses. The… ball now goes to… the…’s stadium, which is called upon to submit proposals in the coming days, with time being an enemy and demanding immediate action, in the face of the… vise of precision that plagues European economies. According to government officials, at the “27” Summit in Versailles, it was decided that the proposal of the Greek Prime Minister, as reflected in his letter to Ursula von der Leyen, be included in the package of proposals that the European Commission will study and submit. That is, the six-point plan, to impose a temporary ceiling on gas prices, as well as their transfer to electricity prices. Kyriakos Mitsotakis has suggested:
-Price Ceiling: Ceiling in the prices of the Securities Transfer Fund, which will have as a reference point the historically highest gas price before the crisis.
-Daily Price Limit as a Protective Measure: A range of fluctuations in the prices of the Securities Transfer Fund, for example of the order of +/- 10%.
Emergency Price Setting: Price setting in the Securities Transfer Fund, as an emergency measure in the event of announcements concerning gas flows through pipelines from Russia.
Profit ceiling: Ceiling in the gross profit margin in the wholesale electricity market, for example of the order of 5%, based on the monitoring of production costs by market regulators and the Weighted Cost of Production (LCOE) in production units.
Trade with Natural Delivery: Consideration should be given to allowing the option for a specific period of time, which will allow transactions with only natural delivery.
Liquidity Enhancement: Increasing liquidity in the gas market by connecting the US / EU / Asian markets. For example, by strengthening cooperation with China on liquefied natural gas (LNG) cargo, with possible transport cost ceilings to curb speculative incentives.
Source: Capital
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