EU countries must ‘work faster’ on energy intervention – Portugal’s FinMin

LISBON, Nov 15 (Reuters) – EU states must “work faster and with greater determination” to reach an agreement to intervene in energy markets and support consumers and businesses affected by the reduction in the supply of Russian gas, said the Portuguese Minister of Finance.

Fernando Medina told Reuters on Tuesday that the intervention could take the form of subsidies or price caps, but needed to be implemented quickly because national policies could go no further in mitigating the impact of the crisis. energy crisis.

He rejected suggestions that a scheme called the Iberian Mechanism, which imposed a cap on the price of gas used in electricity generation in Spain and Portugal and which the European Union was considering rolling out more widely, had increased the fuel consumption.

He called it a “good model” and said a short-term increase in gas consumption was only caused by a local shortage of hydroelectricity due to a drought.

“I can understand the different positions but without a compromise on the energy markets and a faster or deeper agreement at European level, it will be very difficult, if not impossible, to contain more strongly or even to reduce prices”, he said in an interview in Lisbon. .

The EU is grappling with high energy prices that are fueling inflation and increasing recession risks, made worse by Russia’s sharp cut in gas flows following its invasion of Ukraine.

European energy ministers will meet again on 24 November for a new round of deliberations on energy market interventions which will likely include an alternative benchmark price for liquefied natural gas (LNG) and the purchase Voluntary gas spouse.

EU countries including France, Spain and Italy want a gasoline cap similar to the Iberian Mechanism, which EU officials say could be funded by joint borrowing similar to the program SURE from the block that has protected jobs during the COVID-19 pandemic.

Germany, Denmark and the Netherlands, however, oppose a price cap, citing fears for security of supply, as well as joint borrowing.

Medina said progress was being made on funding. “On common borrowing the level of disagreement is not that high, on (a) gas cap it is,” he said.

He welcomed a proposal from Spain, France and Portugal to build a longer-term undersea pipeline between Barcelona and Marseille.

“Obviously it won’t be used for this crisis but…for the future,” he said. “We need to diversify the sources of supply in Europe. No one would forgive this generation if we don’t make the investments…to make the system integrated.”

Reporting by Sergio Goncalves and Aislinn Laing; edited by John Stonestreet

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