“It’s true, we destroyed the gas market in August, but our mission was to replenish supplies.” An admission that is as open as it is disturbing by the German Vice Chancellor and Economics Minister Robert Habeck. The co-chair of the Greens, a leading member of the Greens in the government of Olaf Scholz together with the foreign minister Annalena BaerbockHe spoke to Bloomberg TV in Davos, where he was working with the Chancellor for the World Economic Forum. And he made heavy statements when you read it in hindsight.
Europe’s hot summer on gas
Habeck refers to the German brake in order not to associate a solution with a Upper limit for the price of natural gas in the European Union at a time when fears of an ultimately milder-than-expected winter were devalued by the markets with a price surge. On InsideOver in August, we named Germany as Europe’s weakest link in gas, as the Scholz government had literally panicked over the triple situation that had emerged: doubts about winter storage, the risk of a deep recession from high energy prices, and a slowdown in German manufacturing Industry driven exports.
From this point of view, until the collapse of the Nord Stream 2 gas pipeline, Berlin was deeply undecided about what to do in Europe, so much so that it torpedoed the Italian Prime Minister’s plan Mario Draghi on the roof for gas prices for fear of Russian reprisals aimed at preventing the camps from being replenished.
The price cap was then identified as one of the two main strategies to be implemented along with the decoupling between gas prices and electricity prices Products from renewable sources. But nothing came of it. Habeck’s words are characterized by their realism.
The way uphill to the gas roof
In essence, Berlin, a country more dependent on both external supplies and troubled Russian gas, put the ‘all free’ of the gas supply race, which risked creating competition between importing countries, at the forefront of the set priorities. By forgetting anything that could jeopardize that goal at this stage. Including the upper gas price limit, which was only reached with difficulty in December. Starting with a completely dysfunctional price cap of 275 euros per MWh, which thanks to the pragmatism of countries like Italy, France and the Mediterranean bloc was lowered to 180 euros on December 19 last year.
Earnings claimed, lawfully, from the Meloni government as victory for Italy but their mediation came after months of deadlocks by Berlin on proposals that would allow a lower ceiling to be pushed through. Maybe at 80 euros as originally suggested by Draghi before receiving the Berlin “no”.
Sardana prices in August, which saw blue gold often hovering between €300 and €350 per MWh, passed like a tsunami, overwhelming the economic prospects of millions of citizens and hundreds of thousands of businesses across Europe and making its systemic impact felt bills and tariffs paid by users.
The weaknesses of the German government
Habeck is speaking after an overall favorable winter in which the climate helped Europe conserve gas supplies. But the policy of the Environment Minister, who found himself, in retaliation for retaliation, having to be the custodian of the country’s gas supply, has long proved inadequate. Just as we have felt the fragility of Chancellor Scholz’s leadership, which lacks the pragmatism of Chancellor Angela Merkel. To put it pro-European, the Scholz government and Minister Habeck in particular have actually unleashed oneunhealthy gas competition which accelerated the price race and which, only for emergencies, produced no winners and losers.
Worse was only prevented by the long times made possible by the mild climate for the storage facilities to be completely filled, in which Germany bought large quantities of Russian gas, also thanks to the anti-price cap shifts in the summer. But the brash individualism of Scholz and Habeck’s Germany bodes badly for Europe. And it needs to be watched closely now that Berlin intends to block various policy proposals related to the continuation of the suspension of emergency debt and budget rules and to go “wrong” on public finances and interest rates. Always, as with gas, with the worst possible timing.