European Union Announces Gas Price Relief Plan and Additional Aid for Ukraine
EU Commissioner Ursula Von der Leyen, who announced the gas price roadmap and Ukrainian aid plan, speaks to the European Parliament (Wikimedia Commons).
On October 21, at the EU summit meeting in Brussels, The European Union agreed on a “roadmap” to protect consumers from high gas prices while providing additional financial support for Ukraine. Since its invasion of Ukraine, Russia has drastically reduced gas exports to Europe leading to a rise in energy costs across Europe that consumers have struggled to afford.
Fifteen European countries, with the notable exception of Germany, signed a letter in support of a price cap on September 27. The letter urged the European Commission to agree on a cap for all gas imports, not just Russian gas, to provide relief for struggling consumers across Europe.
Germany, Austria, Denmark, and the Netherlands opposed the price cap due to fears that it might constrict supply. German Economy Minister Robert Habeck explained that Germany believes a price cap would hinder Europe’s ability to compete for gas on the global market and reduce the amount of gas imported.
Germany agreed to compromise on the roadmap, conceding that a temporary price control would help alleviate the situation until a new pricing system can be implemented. The fifteen countries that supported the price cap were also not satisfied with the results, as the price cap is only a temporary measure.
In the roadmap, EU leaders only vaguely sketched out future measures, leaving room for the plan to fall through before it can be implemented. European energy ministers will meet to negotiate on the specifics of the price relief next month in Luxembourg.
In addition to the roadmap, EU Commissioner Ursula Von der Leyen reported that the EU is working on a new financial aid plan for Ukraine, which will provide 1.5 billion euros of aid per month. It was also announced that Von der Leyen and German Chancellor Olaf Scholz will be hosting a conference on Ukrainian recovery next week.
Von der Leyen estimated that European aid will make up about half of the support needed for Ukraine’s survival, and that the United States and other allies cover the rest of the needed aid. The Commission did not announce any new sanctions on Russia, but instead focused on providing financial and infrastructural aid to Ukraine.
Although the disagreement among European countries about the proposed gas price cap has contributed to tensions between the nations, the EU remains united in its strong support for Ukraine.