EU funding disputes over energy spell trouble ahead

Good morning and welcome to Europe Express.

Here’s a question: if it took EU governments five months to agree on where to find €20bn for a plan aimed at speeding up the transition away from Russian hydrocarbons, how long will it take them to approve larger sums dealing with the multiple crises this winter? We’ll explore what finance ministers from opposing camps had to say about it in Luxembourg.

Over in Brussels, EU ambassadors last night made a final heave towards a deal on the bloc’s eighth sanctions package against Moscow, and managed to reach a preliminary political agreement on the G7-led price cap on Russian crude (though its implementation is being held off until the G7 gives its green light).

There were still some final alterations to be made while you were sleeping and officials will reconvene with the hopes of formally signing off on the package this morning. But it looks like the ambassadors have effectively done their job: reach a deal before the informal Prague summit and spare their bosses the need to spend time sparring over sanctions.

In Strasbourg, former European parliament president Antonio Tajani, a close ally of Silvio Berlusconi, quit yesterday to rejoin his former boss in the government led by far-right leader Giorgia Meloni. One post he is being considered for is that of foreign minister, insiders say.

Last but not least, we’ll fill you in on the EU parliament’s final act in its decade-long quest of looking to free up drawer space and make it easier for forgetful persons to charge their devices: a single charger.

Scraping the barrel

While in Luxembourg, French finance minister Bruno Le Maire’s unveiled a five-point plan for tackling soaring costs. It sounded suitably far-reaching, encompassing measures to reduce energy consumption, smooth state aid rules and generate fresh sources of EU funding to tackle the crisis. 

But the reality, as leaders prepare for an informal summit in Prague on Friday, is that the EU is a long way off from striking any grand bargains to quell the looming energy crisis, write Sam Fleming in Luxembourg and Alice Hancock in Brussels. 

Take Le Maire’s idea to marshal fresh EU funding to help alleviate the crisis in hard-hit member states. The model touted by the French finance minister was, perhaps not coincidentally, also cited by two commissioners, Thierry Breton and Paolo Gentiloni, in an opinion piece on Monday calling for a “European budgetary response” to the crisis. 

The idea would be to seek inspiration from a common borrowing scheme dubbed Sure, which was used to provide loans to member states hit by spiralling unemployment claims during the Covid-19 crisis. 

A number of member states question any immediate need for such an initiative, however, pointing instead to €225bn of untapped NextGenerationEU loans that are available for countries seeking ways of boosting energy infrastructure. Sigrid Kaag, the Dutch finance minister, was among those questioning whether this was the right approach. 

“We would be concerned that the immediate default position is yet another instrument,” she told the FT. “Is this the right answer to the problem we are trying to fix?”

Instead, member states are currently haggling over far more modest sums. Finance ministers meeting in Luxembourg yesterday managed to agree how to raise an extra €20bn of EU cash aimed at weaning the bloc off Russian fossil fuels by 2027.

To raise the funding, first requested by the commission in its REpowerEU scheme this spring, ministers agreed that €15bn should taken from the union’s Innovation Fund, which targets development of clean energy technologies, and the remainder could come from selling future permits from the emissions trading scheme earlier than planned.

The political deal was widely welcomed, but it came after months of discussions, underscoring how difficult it will be for capitals to agree on any big new EU-wide packages designed to alleviate the costs of the crisis. 

Le Maire’s plan aimed at making Europe “stronger and more independent” also hinges on finding effective mechanisms to both save energy and drive down prices. A large cohort of member states (including France) want to achieve the latter goal by imposing a cap on the price of imported gas, but once again there is no sign of any consensus on the measure. 

Even within the group of capitals advocating the idea there is no common view on the best mechanism for conjuring up a price cap, while senior officials in the commission remain highly sceptical. An “action plan” on gas prices that was planned for this week has been canned.

Mairead McGuinness, financial services commissioner, observed succinctly at an event yesterday that “there are different views around the table”.

McGuinness has instead been focusing on ways of improving the functioning of energy markets as a way of alleviating the crisis. She said technical details for easing collateral requirements and designing a circuit breaker mechanism to pause trading when price volatility was especially high were being worked on. 

She said she told finance ministers in Luxembourg that as soon as a proposal was made, member states should “get it through the process as quickly as possible”.

She added: “We are going to move rapidly but not recklessly so that is why we listen to the regulators. We are not going to move out of step with those who are charged with watching these things very carefully.”

A reminder, perhaps, that while it is relatively easy to issue sweeping calls to action on the energy crisis, finding workable solutions is proving a painfully complex and drawn-out process. 

Chart du jour: Nukes, explained

Read this explainer by John Paul Rathbone and colleagues on what tactical nuclear weapons are, how many of them Moscow still holds and what the chances are for Vladimir Putin to use them in Ukraine.

One charger to rule them all

The European parliament voted to force makers of smartphones and tablets, including Apple, to use a single charger, writes Javier Espinoza in Brussels. The move is aimed at saving consumers hundreds of euros and reducing electronics waste.

A majority of members of the European parliament voted to pass a law yesterday that will allow consumers to choose if they want to buy a new device with or without a charger and will make the USB Type-C the new charging standard.

The legislation is scheduled to come into effect in 2024, after a political agreement before summer break. Industry players, including Apple, had pushed back on the idea arguing that it would undermine innovation.

Alex Saliba, the lead MEP on the topic, said the new law will remove piles of redundant chargers. “The common charger will finally become a reality in Europe. We have waited more than ten years for these rules, but we can finally leave the current plethora of chargers in the past.”

He pushed back against Apple’s argument, saying the law still allows for other innovative charging solutions to be developed the future.

Saliba said he hoped there would be a “ripple effect” and that even those countries outside of the bloc, say, the UK, would benefit from the new law with some manufacturers already committing to make changes to their chargers worldwide.

Wireless chargers are also captured in the new law to avoid “leaving a backdoor open so that companies continue to sell proprietary chargers to consumers,” he said. These new obligations will help consumers save up to €250mn per year. This law is estimated to save 11,000 tonnes of e-waste every year in the EU, he added.

What to watch today

1. EU ambassadors reconvene to sign off on the eighth sanctions package against Russia

2. German chancellor Olaf Scholz meets Spanish prime minister Pedro Sánchez in A Coruña

3. Opec+ meets in Vienna, with Saudi Arabia and Russia expected to announce cuts in oil production

Notable, Quotable

To conquer another territory and make it part of the empire, you use national minorities . . . because they are expendable

• Discriminatory mobilisation: Russia’s ethnic minorities in republics from Dagestan in the Caucasus to Yakutia in northeastern Siberia have seen a larger proportion of the male population rounded up and in a much more aggressive and arbitrary way.

• New EDF boss: Luc Rémont, currently a senior executive at industrial conglomerate Schneider Electric, will take over the reins of state-owned energy giant EDF at a time when the company struggles with short-term problems as well as planning for some of France’s biggest nuclear construction projects in two decades.