Europe facing the energy crisis: could the light come from the South?

by Antonis D. Papagiannidis

The four EU countries of the South, meeting in Rome at a mini-Summit just days ahead of the March 24/25 European Council, raised eyebrows by being more to the point and technical than political on what an energy market left to its own devices and wide-open to the forces of speculation might mean for “Europe”.

Italian Prime Minister Mario Draghi hosted the meeting using all the conviction his opinions can carry as ECB’s own “super-Mario” credited with saving the day with his “Whatever it takes” dictum when the Euro-area was faced with collapse under the debt crisis. He summed up the deliberations by saying that the EU Summit of March 24/25 should agree on “concrete measures to protect all Member States”. Spanish PM Pedro Sanchez was even more articulate saying “Only with a European response can a European problem be solved urgently and decisively […] We have to do it now, we cannot wait one more day”.

When the Rome meeting was announced, nobody overlooked the fact that France – a major player usually joining in, if not taking the lead, in “South Europe” configurations – would not attend. The institutional set-up that gives to Paris the rolling Presidency of the European Council for the current semester, combined with the fact that French President Emmanuel Macron faces re-election in April offer sufficient explanations for the French absence. But in fact, French sensitivities were quite present in Rome.

Greek Prime Minister Kyriakos Mitsotakis, attending via videocall since he earlier tested positive for Covid, pointed to the tangible political risks of high energy bills, be it at the pump for gas or for electricity or for home central heating: “The energy crisis might reawaken the nightmare of populism in our continent”. By so doing, Mitsotakis evidently referred to the experience Greece lived throughout the European debt crisis that almost led to Grexit; but the French “Gilets Jaunes” experience, causing never-ending riots when prices at the pump were much lower than today’s, was in no way absent from the Rome meeting.

The political configuration of the EU South – Centre-left for Spain (Pedro  Sanchez) and Portugal (Antonio Costa),  Centre-Right for Italy (Mario Draghi) and Greece (Kyriakos Mitsotakis – is also interesting as a harbinger of the upcoming European Council: however liberal-minded, the EU “27” cannot side-step the necessity for some sort of market intervention so as to decouple natural gas market fluctuations from electricity bills. The fact that the Greek PM, who built a political career around market-led solutions, would now raise the standard of a EU fight against speculation and profiteering in the energy market (at a European level, that is: back at home the political discourse is less clear) is interesting enough.

Even more interesting will be the tone at the EU “27” March 24-25 Summit.