On August 26th, gas prices peaked on EEX spot markets at 312,84€ per Megawatt-hour (Source: https://www.powernext.com/spot-market-data). All other energy sources follow. These prices are far from a plausible coverage of production costs and reasonable profits to make a business attractive. They are a result of trading on a free market the natural gas shortages caused by Russia’s war politics as an answer to Europe’s support for Ukraine and the EU’s sanctions.
These politics lead to a quadruplication of energy costs and more, even if gas caters to less than 20% of the electricity produced in the EU. This pushes inflation, reluctance to consume, reduction of purchase power and thus economic contraction. Our German member ‘Der Mittelstand.BVMW‘ did a survey this week among 850 of its member SMEs, where 72.5% say they suffer from high energy prices, 42.4% feel their business is in danger of shutting down due to these costs, and nearly 89% say the state should intervene to reduce energy prices (see: https://bit.ly/3dZgckQ).
While we do fully support Ukraine in its fight and recognize the dramatic sacrifice the Ukrainian people are giving to defend their country, their lives and, at the same time, Europe’s freedom and security, we wonder how well the EU member states had prepared for the current situation when they took their decisions in February/March 2022? How is it possible that we have now a situation where EU member states compete fiercely with each other for the last cubic meters of gas on the market, all against each other to make sure their people and industries will get through the winter? How can it be that there has not been any decision to prevent speculation and fierce competition around scarce resources among fellow members of the Union, defending our independency, economic and hence political stability together?
Unfortunately, there is no “European Central Bank for gas” (except maybe Gazprom), and no Mario Draghi is leading it like 10 years ago when he stated that the ECB would do “whatever it takes” to defend the Euro. But we definitely would need now a common European answer to this absurd situation. In such a politically created situation where artificial shortages are used to destabilize the EU, pushing markets to all-time high prices, the Commission and the Member States must take a common decision. Either to cap the market prices on the EU level, allow heavy subventions to producers that produce electricity from gas, or to decouple market prices for sustainable and other energy sources from those for gas.
In one way or another, we need an urgent answer. Europe’s people can’t wait, and Europe’s SMEs even less.
Welcome back from the holidays!
Stefan Moritz
Secretary General
European Entrepreneurs CEA-PME
