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EU, German leaders pledge reform to cut electricity prices
BERLIN (AP) — The head of the European Union's executive branch and Germany's chancellor on Monday pledged a reform of the continent's electricity market to help bring down power prices that have been pushed higher by skyrocketing gas prices.
European Commission President Ursula von der Leyen said in a speech in Bled, Slovenia, that soaring electricity prices “are now exposing the limitations of our current electricity market design.”
“It was developed for different circumstances,” von der Leyen said. “That is why we are now working on an emergency intervention and a structural reform of the electricity market.”
The continent's electricity market is underpinned by a “merit order” system in which the power stations offering the cheapest electricity are tapped first, but prices are determined by the last and most expensive power stations to be tapped — at present, those using gas, whose price has risen sharply following cuts in supplies by Russia to several European countries amid the war in Ukraine .
German Chancellor Olaf Scholz, visiting Prague on Monday , said that the question of how the European electricity market can be redesigned “so that we no longer have to bear these high prices we are currently seeing” took up much of his meeting with Czech Prime Minister Petr Fiala, whose country currently holds the EU's rotating presidency. He said that “we will act together quickly.”
“It is necessary for us to make structural changes that contribute to prices sinking again quickly and there being a sufficient offer” of electricity, Scholz said at a news conference. He added that “there is great readiness to change something, and that seems to me to be very much mutual among the heads of state and government in Europe.”
“Clearly what is currently being asked as a market price does not reflect supply and demand in the proper sense,” he said.
Speaking earlier in Berlin, a German economy ministry spokeswoman said that the idea is to keep the principle of the “merit order” system, “but do away with the negative effects the merit order has, so that the high gas prices can no longer impact immediately and automatically on electricity prices.”
The aim is for customers to benefit from cheaper production prices for renewable energy, for example, spokeswoman Beate Baron said.
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Germany's Scholz says EU must reform before it can admit Ukraine
German chancellor demands shift to unanimity voting on foreign policy, but it’s unlikely that countries such as France will follow him.
The EU must reform before it can admit new member countries like Ukraine says German Chancellor Olaf Scholz
German Chancellor Olaf Scholz said Wednesday that the EU must reform its voting rules in key areas such as foreign policy before it can admit new member countries like Ukraine.
Speaking to the Bundestag in Berlin ahead of a European Council summit this Thursday and Friday in Brussels, Scholz said he would resolutely push for approving both Ukraine and Moldova as candidates for EU membership, but stressed that such a commitment comes with strings attached.
“I will make every effort at the European Council to ensure that the entire EU gives an unanimous ‘yes'” to Ukraine and Moldova’s membership candidacy bids, the chancellor said, while demanding that the EU must also be made “capable of taking on new members.”
He argued that the bloc should change its voting rules to qualified majority to stop individual countries from blocking decisions. He specifically mentioned foreign policy as one area where such a change was needed.
Scholz has previously said that a change in voting rules could be swiftly decided if all EU countries gave their approval. However, several EU countries, including France, have already raised objections to ceding their veto power in key areas like foreign policy.
The German chancellor also advocated in favor of broader “institutional reforms” of the EU, which would likely require complex treaty change, and said that such reforms “should be used to strengthen democracy and the rule of law in the EU.”
He further called for a “Marshall Plan” to rebuild Ukraine after the war, and said that Germany would push for creating a “high-level international expert conference” to coordinate reconstruction efforts.
Scholz also said that Ukraine and Russia were still “far, far away” from peace negotiations “because [Russian President Vladimir] Putin still believes in the possibility of a dictatorial peace” being imposed upon his neighbor.
Therefore, Scholz said, Germany and its allies must “steadfastly” maintain sanctions against Russia as well as keep up weapons deliveries to Ukraine “until Putin finally recognizes his colossal miscalculation.”
