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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

Eight EU states push to curb foreign policy vetoes

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Eight European Union member states, including Germany and France, want to reorganise the bloc’s foreign policy decision-making process.

The member states circulated the proposal, obtained by Bloomberg, ahead of informal meetings of EU defence and foreign ministers taking place in Ireland this week.

Many foreign policy decisions require unanimity, a requirement that has caused specific initiatives to remain blocked for years.

Former Hungarian Prime Minister Viktor Orban regularly used this veto power to block sanctions against Russia or halt support provided to Ukraine.

The document acknowledges a “radically altered environment shaped by strategic competition, growing instability, and attempts to undermine the rules-based international order”, and notes that the EU must “mobilise its collective political, economic, and diplomatic weight swiftly and effectively”.

Although the countries support “consensus as far as possible”, they are seeking solutions to accelerate the decision-making process and prevent bottlenecks without the need to rewrite the treaties, a step that would itself require unanimity.

The document proposes principles such as “sincere cooperation, avoiding linking unrelated policy debates, and constructive abstention” to ensure that member states can oppose a decision without vetoing it.

A group of countries made a similar attempt last year, but the effort is being brought back onto the agenda in the context of a broader debate on transforming the EU’s diplomatic service.

A proposal backed by Germany aims to integrate this service into the European Commission, the EU’s executive arm, in order to centralise foreign policy activities.

Under the Franco-German plan, Kaja Kallas would assume a more active role and hold broader responsibilities within the European Commission. However, Ursula von der Leyen would retain the final say on foreign policy.

Under the complex architecture of the Lisbon Treaty, the High Representative leads the European External Action Service (EEAS) and designs, coordinates, and implements foreign policy on behalf of the 27 member states.

The High Representative also serves as one of the vice-presidents of the European Commission.

However, heavy portfolios that shape the course of international policy, such as trade, energy, climate, and migration, fall largely under the Commission’s remit, leaving the EEAS without tangible leverage to bring to the table.

Enlargement, another area with a distinct geopolitical dimension, rests entirely within the hands of the Commission.

This division of competences has allowed Ursula von der Leyen to expand her foreign policy role significantly.

She has also pursued an intensive travel schedule to sign various high-profile agreements.

Von der Leyen’s expanding influence has caused surprise in capitals and generated occasional criticism alleging “overreach” and a “power grab”, despite her being frequently encouraged by EU leaders to take the lead in global crises.

The Franco-German plan envisages giving Kallas an active role in coordinating external relations areas run by Commission directorates-general (DGs), such as development aid (DG INTPA), humanitarian aid (DG ECHO), defence industry (DG DEFIS), and neighbourhood relations, which are divided between DG ENEST (Eastern Europe) and DG MENA (Middle East, North Africa, and the Gulf).

The high-stakes trade portfolio could also be considered.

To strengthen the new structure, a dedicated foreign policy department would be established. Until its integration into the EEAS in 2010, the Commission operated a directorate-general for external relations (DG RELEX).

In practice, Kallas would have broader and direct responsibilities within the Commission.

Yet this expansion of authority would ultimately benefit von der Leyen, as she would remain the supreme authority as Commission President, mirroring the hierarchical relationship between a prime minister and a foreign minister at national level.

The EEAS, which Kallas currently runs independently of von der Leyen, would be weakened to reduce the risk of institutional conflict.

This reform requires amending the 2010 decision establishing the European External Action Service (EEAS) rather than the Lisbon Treaty. Unanimous agreement will also be required on this matter.

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German historians condemn draft law on post-war expulsions

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Historians in Germany are criticising the federal government’s policy regarding Eastern Germans who were “resettled” after the Second World War.

According to a statement issued by the Association of German Historians (VHD), the new draft law concerning the Flight, Expulsion, and Reconciliation Foundation—tabled in the Bundestag in mid-August—reduces the complex events of the post-Second World War “resettlement” process to “German suffering”. It ignores the necessary historical context, namely the war of annihilation waged by Germany in Eastern and South-Eastern Europe, and thereby creates a “self-referential national narrative” hitherto developed primarily by expellee associations.

Historians point out that this situation jeopardises reconciliation efforts, particularly with Poland and the Czech Republic.

Because this change of focus directly affects the permanent exhibition maintained by the foundation at the Documentation Centre for Flight, Expulsion, and Reconciliation in a central district of Berlin, it will generate a broad public impact.

This development goes hand in hand with the revival of Berlin’s former “Germanness” policy towards minorities in Eastern Europe and Central Asia.

Post-war German migration exhibition: where is Nazi Germany?

According to German Foreign Policy, the starting point of the recent debates surrounding the Flight, Expulsion, and Reconciliation Foundation was the permanent exhibition at the Documentation Centre for Flight, Expulsion, and Reconciliation, which is operated by the foundation and opened at the Deutschlandhaus in Berlin in 2021.

Spanning two floors, the exhibition chronicles the resettlement of the German-speaking population from Eastern and South-Eastern Europe after the Second World War. The exhibition thus addresses historical events within a two-part context.

As the historian Felix Ackermann, who teaches at the Distance-Learning University of Hagen, described by way of example, the first floor presents “the pre-history of ethnic nationalism and state-enforced migration”, particularly in the context of various cases of flight, expulsion, and resettlement in 20th-century Europe.

Building on this content, the second floor focuses on the post-war resettlement of Germans.

However, this core element of the permanent exhibition is preceded by a very brief overview of the war in which Nazi Germany occupied significant parts of Eastern and South-Eastern Europe.

This aspect is of vital importance because without this knowledge, the complexity of the “resettlement” process cannot be evaluated in its proper context and adequately understood.

The Polish border issue

The overall structure of the permanent exhibition is widely described as a “compromise” reached between right-leaning expellee associations and the Scientific Advisory Board of the Flight, Expulsion, and Reconciliation Foundation.

This board also includes historians, particularly from Poland and the Czech Republic.

This compromise had hitherto been maintained by the director of the Documentation Centre, the historian Gundula Bavendamm.

However, in mid-2024, expellee associations effectively abandoned this compromise and launched a fierce attack.

For instance, in a letter sent to Bavendamm by Bernd Fabritius (CSU), then president of the Federation of Expellees (BdV), it was stated that the connection between the resettlement process and Germany’s war of annihilation had to be severed, as this “confused context with causality”.

Fabritius also argued that the Federal Republic of Germany’s 1990 recognition of Poland’s national borders should not legally be characterised as a “cession” of the former eastern territories of the German Empire.

This statement recalls that the border treaty between the Federal Republic of Germany and Poland merely “confirmed” the border between the two states, described it as “inviolable”, and renounced all “territorial claims”.

The treaty contains no unconditional recognition definitively describing the border as “inviolable”. As Fabritius’s statement implies, this situation could give rise to potential loopholes.

CDU/CSU influence in German expellee associations

The offensive launched by the expellee associations gained momentum following the change of government last year.

Initially, despite the unanimous objections of the Academic Advisory Board, this led to Documentation Centre director Bavendamm’s contract not being renewed in November 2025 and the post being advertised.

Close observers noted that not only the expellee associations played a role in this process, but also the Group of Expellees, Repatriates, and German Minorities within the CDU/CSU parliamentary group in the Bundestag, which is closely linked to them.

The leader of this group, Klaus-Peter Willsch (CDU), is a member of the board of trustees of the Flight, Expulsion, and Reconciliation Foundation.

Similarly, Stephan Mayer, deputy chairman of the Expellees Group who took over the BdV presidency from Fabritius, is also a member of this board.

The person they sought to appoint as director of the Documentation Centre to replace Bavendamm was Sven Oole.

Critics had noted that Oole had “no managerial experience in German museums” and had produced no “academic publications” on the subject, but that “as the long-time managing director of the ‘Group of Displaced Persons’, he knew the group’s historical-political goals like the back of his hand”.

Oole’s candidacy failed due to threats from the Scientific Advisory Board that it would resign en masse if he were elected.

In the end, Roland Borchers was selected, but it is said that no one knows “where he intends to lead the foundation”.

Attempts to define Germans as a community based on descent

However, the substance of Borchers’s work is likely to be severely curtailed by the new law on the Flight, Expulsion, and Reconciliation Foundation, which was adopted by the federal government in July and submitted to the Bundestag in mid-August.

The Association of German Historians (VHD) directed sharp criticism at this legislation in late May. This criticism stems partly from the fact that Bernd Fabritius, in his role as Federal Government Commissioner for Matters Related to Ethnic German Resettlers and National Minorities, will in future hold an additional seat on the foundation’s board of directors.

According to the VHD’s statement, this will effectively give the BdV “a government-backed majority position on the foundation’s supervisory board”.

In its statement, the VHD explicitly warns against “bad examples of a state-directed remembrance policy”.

Furthermore, the statement contends that the new law focuses the foundation’s work to a certain degree on “German suffering” and replaces “the historical context of flight and expulsion with a self-referential national narrative”.

This situation further exacerbates “existing threats to reconciliation efforts, particularly with the Federal Republic’s Eastern European neighbours, especially Poland and the Czech Republic”.

Finally, the statement notes that, diverging from the openness of recent years, the law “once again defines Germans as a community based on descent”.

No immigration to Germany—except for “ethnic Germans”!

The historian Felix Ackermann also recently addressed the broader political context.

According to Ackermann, the new law aims not only to strip the resettlement process of its historical context and confine commemorative activities to a narrow national framework.

In addition, the federal government is moving the Flight, Expulsion, and Reconciliation Foundation from the purview of the Federal Government Commissioner for Culture and the Media to the remit of the Federal Ministry of the Interior.

Christoph de Vries, Parliamentary State Secretary at this ministry and deputy chairman of the Expellees Group within the CDU/CSU parliamentary group in the Bundestag, is also pushing for “the opening of new immigration channels for ethnic kin”.

Indeed, while politicians such as de Vries advocate strict restrictions on immigration, the Federal Ministry of the Interior seeks to revise immigration regulations for members of German-speaking minorities in Eastern Europe and Central Asia.

This revision would allow even German speakers born after 31 December 1992 to obtain German citizenship.

As Ackermann noted, this dual focus on the concept of “Germanness” makes it possible to describe the expulsion regions, just as during the Konrad Adenauer era, as the whole of the “German East”.

The fact that the “responsibility to preserve the history of the German East” now falls once again to the Federal Ministry of the Interior—which, as is well known, is responsible for domestic and not foreign affairs—seems to Ackermann “like a bad joke”; yet, Ackermann says, in reality this situation “brings terrible consequences.”

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German ruling parties urge EU to act against Chinese overcapacity

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Parliamentary groups of Germany’s ruling CDU-SPD coalition have called for stronger European protection against “unfair competition” and concrete measures to support car manufacturers.

According to Reuters, parliamentary sources indicated that these proposals primarily target China’s “overcapacity”, although China was not explicitly mentioned in the document obtained by Reuters.

The document called for a “decisive” response against “market-distorting practices and unfair competition”, including a faster and broader deployment of anti-dumping and anti-subsidy measures at the EU level.

This development comes as German industry steps up pressure on Chancellor Friedrich Merz to take a harder line against Beijing.

This also marks a shift in a country that has long resisted trade barriers for fear of Chinese retaliation.

According to one demand, once the German government develops local content criteria that comply with EU law and can be harmonised across the bloc, these criteria should be incorporated into Germany’s existing electric vehicle subsidy scheme, addressing concerns that taxpayer-funded German incentives are also supporting imported Chinese electric cars.

To support the country’s automotive industry, the parliamentary groups asked the European Commission to allow plug-in hybrids, range-extender electric vehicles, and highly efficient internal combustion engine vehicles alongside battery-electric vehicles beyond 2035.

The parties also called on Brussels to suspend plans to tighten the so-called “utility factor” metric used in calculating plug-in hybrid emissions from early 2027.

Under current plans, carmakers will need to sell significantly more electric vehicles starting in 2027 to meet mandatory fleet CO2 targets.

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