BAKU, Azerbaijan, Dec.2. The European Union should leverage its purchasing power as the world’s second-biggest combined economy behind the United States, Jeromin Zettelmeyer, director of the European economic think tank Bruegel, said in his remarks in the Scramble for Energy report of the International Monetary Fund (IMF), Trend reports.
“The bloc could negotiate with gas suppliers as a single buyer. This could be a win-win: while the European Union needs to secure gas at a reasonable price, suppliers need long-term contracts to better manage investment plans. Living without Russian gas means replacing the 150 billion cubic meters Russia used to export annually to Europe. The European Union has a chance to pool this enormous demand and negotiate long-term deals that offer suppliers a predictable revenue stream while ensuring gas security and affordability to Europe,” he said.
Zettelmeyer believes that the European Union needs to maximize domestic energy supply in the short term.
“This requires additional efforts from countries such as The Netherlands in raising gas output and Germany in continuing to operate nuclear power plants that were scheduled to close. These measures are politically difficult but could become feasible based on reciprocity. In addition, a joint EU fund might be considered, for example, to compensate citizens of The Netherlands for the increased earthquake risk associated with greater gas production,” he added.
He points out that the energy crisis poses an immense challenge that no European state can navigate alone.
“Emergency interventions like gas price caps risk worsening the situation, especially if rolled out in a patchwork of uncoordinated national policies. The European Union needs to strike a grand bargain that relies on its strength as an economic bloc and sets the course for energy policy at the EU level. Today’s choices over how to manage limited supply will shape the future of Europe’s energy system. Deeper integration and accelerated investment can allow Europe to both overcome this crisis and advance the transition to cleaner, renewable, and more affordable energy.”
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