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Price cap on Russian gas creates trouble in Europe

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Spanish Energy Minister Teresa Ribera lashed at Brussels last week. Describing the European Union’s (EU) price cap plan for natural gas as “ridiculous” and “damaging”, Ribera also urged Brussels bureaucrats to take the issue seriously.

Polish Climate Minister Anna Moskwa has also joined the long list of people who are unsatisfied with the matter. “[The gas cap proposal] is a joke,” he said, saying the EU’s offer for a price cap does not satisfy a single country.

EU officials, reluctant to give their names to CNBC, said the price cap negotiations had been challenging. Another official told that the negotiations were heated and at some point things even got “really ugly”.

No one is satisfied

The European Commission’s proposed natural gas price cap is 275 euros per hour and the price of natural gas will have to remain above 275 euros for two weeks for the law to be implemented. According to European Energy Commissioner Kadri Simson, the price cap is not a silver bullet that will lower energy prices, but a powerful tool that can be used when needed.

While EU energy ministers had not yet met and the Commission’s proposal had just emerged, a division had begun, involving France and Italy on one side, and Germany and the Netherlands on the other. The group, led by France and Italy, argued that it was necessary to set a price cap on wholesale gas prices in order to protect consumers and industry. The group led by Germany and the Netherlands thought that this would jeopardize supplies. This group includes Austria, Denmark and Hungary.

Similar objections came from members of the European Commission. Setting a price cap for natural gas would cause supplies to shift outside of Europe, causing fuel shortages and making it difficult to supply gas to countries in need within the union.

The electricity commodity exchange Europex also issued a statement, saying they were deeply concerned about the “market adjustment mechanism”, with the risk that the price cap would drive buyers to buy and sell directly. What is meant by direct trading is the purchases made through brokers and companies that are not listed on the stock exchange.

Objection by Poland, Spain and Greece

Countries that support the price cap think the bill is unrealistic. For example, the Spanish’s own Iberian price cap mechanism, which will expire in 2023, has set 40 euros as the limit. Therefore, it makes little sense for Spain to adjust to the price cap of 275 euros.

Poland’s problem seems to be different. Together with the Baltic countries, Warsaw argues that the price cap for natural gas and oil is too high, that it will never be put into practice and therefore will not harm Russia. For example, a price cap in 65-70 dollars range is being considered for Russian oil, but Poland’s proposal is 30 dollars.

Greek Environment and Energy Minister Costas Skrekas says a price cap of 275 euros is not actually a price cap though. The energy crisis for businesses and households is “shocking”, Skrekas said, claiming that Athens’ price cap proposal is 150-200 euros.

The meeting failed to reach any consensus

The emergency meeting of EU energy ministers last week also resulted with uncertainty and disagreement. “The debate was very heated and you all know that there are very different views,” Czech Industry Minister Jozef Síkela, who chaired the meeting, told the press.

Dutch Energy Minister Rob Jetten, who was skeptical about the price cap, said there were still huge. On Friday, while the price of gas in Europe was 123 euros per megawatt hour, Jetten said they want to prepare for the following year.

The Associated Press estimates that there are 15 countries that want a lower price cap. Germany and the Netherlands worry that gas suppliers who find better prices elsewhere in the world will bypass Europe.

With no results from last week’s meeting, a new meeting was scheduled for December 13th. On 5 December, new EU oil sanctions against Russia will begin.

Russia’s reaction

The first statement from the opposite front came from Mikhail Ulyanov, Russia’s permanent representative in Vienna-based international organisations. “Totalitarianism is being expanded into economics by the West,” Ulyanov said, arguing that the West is the biggest enemy of the market economy. Ulyanov also reminded that Moscow will not sell oil and natural gas under the price cap conditions.

In a phone conversation with the Iraqi Prime Minister, Russian President Vladimir Putin warned that the price cap that is to be implemented on Russian oil and natural gas would create “serious consequences” in the global energy market.

Estimates show that oil production in Russia ranges from 20 to 50 dollars per barrel. According to Bloomberg, that’s an average of 52 dollars. If the EU implements the price cap, Russia has the opportunity to cut production and turn the world’s energy markets upside down.

Attitude of US is different from EU

Other EU member states, including those with large maritime industries such as Greece, Malta and Cyprus, want to keep the price high in order to maintain the flow of Russian oil trade, the Financial Times wrote. The interesting thing is that the US probably supports this position. Washington is concerned that EU sanctions and the price cap will drive oil prices up.

The Biden government hopes that if a price cap is set, countries such as China, India and Turkey will be able to negotiate lower-priced deals, taking advantage of the price cap.

EUROPE

AfD aims to expand influence in European Parliament

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Months after the European Parliament (EP) elections, the right-wing Alternative for Germany (AfD) is gradually establishing itself in Brussels and even seeking to expand the parliamentary group it leads.

A series of scandals during the European Parliament elections in June had caused the AfD to distance itself from other right-wing European parties, leading to more isolation in Brussels than ever before.

However, becoming the second strongest party in the recent general elections in Germany at the end of February, along with support from Elon Musk and a bilateral meeting with US Vice President JD Vance, has given the AfD international attention and, at least in some eyes, renewed legitimacy.

The AfD’s newfound prestige is particularly noticeable in the EP, where international cooperation is a daily routine. Once a solitary faction forced to form its own group after the EP elections, the party now wants to expand the European of Sovereign Nations (ESN).

Party sources speaking to Euractiv confirmed that the AfD is in talks with at least two potential new members. Greece’s far-right Niki (Victory) party and Spain’s “anti-establishment” SALF party have recently held discussions with the ESN.

A source close to the negotiations said, “We expect SALF leader Alvise Pérez to join as early as April or May.”

Just a few months ago, the AfD had been sidelined by like-minded colleagues in Brussels, citing espionage investigations and “inflammatory statements.”

Ultimately, the AfD was expelled from the Identity and Democracy (ID) group, the former right-wing group led by Marine Le Pen’s National Rally, who feared that their German friends could cost them votes ahead of the European and French elections.

Without its former allies, the Germans struggled to form their own faction in Brussels because most candidates had found places in more established structures.

Together with another group of right-wing groups, the AfD formed the ESN in the EP.

Subsequently, attitudes toward the AfD and ESN softened, particularly with the support of the Trump administration. Even the French felt compelled to approach the AfD again in Brussels, inviting them, along with the European Conservatives and Reformists (ECR) group led by Meloni’s party, to cooperate on issues of common interest.

Leaders of the AfD’s sister party in Austria, the Freedom Party (FPÖ), are also pleased with the end of tensions between the Germans and other right-wing groups.

“I think cooperation is extremely important, and I also think it is extremely important that at some point, perhaps one day, there will be a significant right-wing group in the European Parliament,” said FPÖ MEP Petra Steger to Euractiv on election night in Germany.

The two parties have always been close but recently split into two main groups in the EP: the Patriots for Europe (PfE) and the ESN.

The AfD now wants to stabilize and secure the ESN. “We do not provide information about confidential discussions. But you can be sure that at the end of the legislative period, the parliamentary group will be larger than it is today,” ESN Co-Chair René Aust told Euractiv.

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Calls for German nuclear armament grow louder

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Following some German politicians raising the idea of acquiring nuclear weapons, Frankfurter Allgemeine Zeitung (FAZ), one of the country’s most important newspapers, has launched a campaign advocating for Berlin to possess atomic weapons.

Although Germany renounced nuclear weapons, experts agree that Berlin has the technological capacity to produce its own nuclear weapons in the near future, stating that the necessary technology for uranium enrichment is available at research centers in Jülich and Gronau.

Rainer Moormann, a former employee of the Jülich Research Center, notes that experts believe the construction of a much larger uranium enrichment facility is inevitable, and this would make it possible to produce “the necessary quantity for a few nuclear warheads within three to five years.”

However, delivering nuclear weapons to their targets requires missiles, and Germany is relatively weak in the construction of long-range ballistic missiles.

Nevertheless, it seems possible to produce cruise missiles that could be equipped with nuclear weapons. For example, it is said that Taurus could be used in this way. For this purpose, a maximum period of five years is considered realistic.

The legal and political situation is more challenging. On the one hand, the Federal Republic of Germany ratified the Treaty on the Non-Proliferation of Nuclear Weapons on May 2, 1975, albeit with a significant delay. Therefore, if the German government wants to start building its own nuclear weapons, it will first have to terminate the treaty.

From a purely legal point of view, this is possible without further ado, but it is likely to have serious political consequences, as other states may follow Germany’s example and try to obtain nuclear bombs for themselves.

The biggest examples in this regard seem to be Iran, Saudi Arabia, South Korea, and Poland.

On the other hand, the Two Plus Four Agreement, in which the Federal Republic of Germany confirmed its renunciation of nuclear, biological, and chemical weapons and also accepted the upper limit of 370,000 Bundeswehr military personnel, also constitutes an obstacle to Germany’s nuclear armament.

This treaty cannot be terminated; any changes require the approval of the four allies in World War II and the countries that occupied post-war Germany (US, Britain, France, USSR-Russia).

Ernst-Jörg von Studnitz, one of the former German ambassadors to Russia, recently ruled that the clausula rebus sic stantibus principle of international law could be invoked, according to which treaty provisions can be terminated if the basic conditions under which a treaty was concluded change.

This is the case for Germany because the US nuclear umbrella is no longer considered reliable and there is a possibility of escalating conflict with Russia.

The Frankfurter Allgemeine Zeitung (FAZ) also embraced the essence of this argument in a widely read editorial on Monday. The newspaper argued that there were “good reasons” to speak of the elimination of the basis of the Two Plus Four Agreement and wrote, “A ‘commitment’ that harms the country cannot continue.”

In the headline of the commentary, FAZ argued that Germany “must loosen its old shackles.”

The political turmoil that would result from the termination of the Two Plus Four Agreement could be enormous. The Federal Republic’s possession of nuclear weapons would not only lead to strong reactions from the four former allies, albeit for different reasons.

For example, a large majority of the public still opposes such a plan. However, the results of various polls fluctuate significantly; moreover, the reluctance to a ‘German bomb’ is decreasing.

A Forsa poll conducted about two weeks ago showed that 64% of the population rejected the Federal Republic’s nuclear armament; the proportion of supporters remained at 31%.

But this rate is four points higher than in 2024.

A survey conducted by the public opinion research institute Civey in the same period also concluded that only 48% of the population explicitly rejected a German nuclear bomb. A year ago, this figure was still 57%.

Also, the proportion of those who support Germany’s acquisition of nuclear weapons rose to 38%.

Both polls show that the proportion of those who support Germany’s acquisition of nuclear weapons is much higher among those living in the former Federal Republic of Germany than among those living in the regions of the former German Democratic Republic (GDR).

Two employees of the Helmut Schmidt Federal Armed Forces University in Hamburg, in their article published in FAZ yesterday, argued that the nuclear weapons debate in Germany is “still characterized by moral reflexes and historically transmitted narratives,” probably also taking into account the insufficient public support for increased nuclear armament.

The authors instead call for a “measured reassessment” of the issue. For example, while pointing to the importance of “maintaining state functions even after a nuclear attack,” they write that the current debate should be expanded “to include important aspects of civil defense and social resilience.”

The authors argue that the German people will have to “learn to live with the bomb,” and for this, they point out that “a comprehensive, socio-politically based strategy that integrates the relevant military, political and social dimensions” is needed.

In short, while it is necessary to “persuade its own people” about the necessity of nuclear armament and to bear its consequences, it is emphasized that “traditionally” this task falls to the leading media.

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US officials’ visit to Greenland sparks controversy amid political tensions

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As negotiations to form a new government continue in Greenland, a Danish territory, following recent elections, senior officials from the Trump administration are scheduled to visit the island next week.

According to individuals familiar with the trip who spoke to the Financial Times (FT), US National Security Advisor Mike Waltz, Usha Vance (wife of Vice Presidential candidate J.D. Vance), and the Secretaries of Defense and Energy will be in Greenland from Thursday to Saturday for a “private visit.”

A source familiar with the visit confirmed that Waltz and Energy Secretary Chris Wright will tour the US military installation, Pituffik Space Base, in Greenland.

Danish and Greenlandic officials have indicated they are open to an increased US presence on the island but are not receptive to a takeover of the base.

The FT reported that the visit has caused consternation among Greenlandic and Danish officials. Jens-Frederik Nielsen, the leader of Demokraatit, which won this month’s elections, stated that the timing of the visit, amidst ongoing coalition negotiations and local elections, “once again shows a lack of respect for the people of Greenland.”

Greenland’s outgoing Prime Minister, Múte Egede, added that the visit “cannot in any way be described as a harmless visit by the wife of a politician” and that its “sole purpose is a show of force against us.”

US President Donald Trump has repeatedly expressed his desire to acquire the Arctic island and has even considered the possibility of using military force to take it over from the NATO ally. Trump’s eldest son, Donald Jr., also visited the island in January for a “private visit.”

Danish Prime Minister Mette Frederiksen responded to the new US visit, stating that it “cannot be seen independently of the public statements” made by Trump and other officials.

“As the Kingdom of Denmark, we want to cooperate with the Americans. But this must be a cooperation based on fundamental values such as sovereignty and respect between countries and peoples. We are serious about this issue,” Frederiksen said.

Trump and other US officials have hailed the results of the Greenlandic parliamentary elections, seemingly equating the voters’ preference for pro-independence parties with a desire for ‘Americanization.’ However, a recent poll showed that only 6% of Greenlanders want to join the US, while 85% are opposed.

All leaders of the current parties represented in the island’s parliament also condemned Trump’s behavior as “unacceptable.” Aaja Chemnitz, a Greenlandic member of the Danish parliament, told Danish television that the visit was an “untimely interference” in the island’s politics so soon after the elections.

“Anyone who tries to interfere but is not part of Greenlandic society should stay away. We are going through a particularly challenging period in Greenland’s history because we are very much affected by what is happening abroad,” Chemnitz said.

Martin Lidegaard, a former Danish minister and current opposition MP, said the visit crossed the acceptable line for both Denmark and Greenland.

“It will now be crucial for Denmark and Greenland to act together,” Lidegaard added.

Usha Vance’s office confirmed that she would be traveling with her son and a US delegation “to visit historical sites, learn about Greenlandic heritage, and attend Avannaata Qimussersu, Greenland’s national dog sled race.”

The organization behind the dog sled race told Greenlandic media that it had received a large but undisclosed sum of money from the US consulate in Nuuk, Greenland’s capital.

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