Russia's effort to break European energy unity seems to be failing — at least for now | WFSU News

2022-09-02 22:16:42 By : Ms. Tracy Zhang

PARIS — The annual gathering of France's largest business association, Le Mouvement des Entreprises de France, had a different tone this year. As CEOs and executives hobnobbed at the grassy Longchamp Racecourse in Paris, their main concerns were no longer stubborn French unions or a left wing that rejects capitalism. The pressing matter on everyone's minds was rising energy prices, and whether Europe will have enough gas to make it through the winter.

"If Russia completely turns off the spigot this winter, there won't be enough gas in Europe," French Prime Minister Élisabeth Borne told the influential group this week. "There is no immediate alternative source to plug that hole today."

The French government says the only way to avoid a crisis is to substantially reduce energy consumption for the next six months. Every business will be required to have an "energy sobriety" plan in place to cut consumption by this fall. More details will likely be announced following President Emmanuel Macron's emergency defense council meeting today to address the energy crisis.

France is actually in better shape energy-wise than many other countries, says Pierre-Louis Brenac, an energy consultant with SIA Partners who advises utilities across the European Union, United Kingdom and Middle East.

"Some of our neighbors are way more exposed, like Germany and Italy," he says. "For two reasons: Not only are they more exposed to Russian gas" — he says, referring to how much of the fuel they import from the country — "but they use much more gas in their energy mix than we do in France."

France is protected in other ways. About 70% of its electricity needs are met through nuclear power. And the French consumer has been relatively well shielded from price hikes by the government. Energy prices for consumers were frozen last November. The government is now paying the difference. Brenac says the cost of this will eventually be borne by the taxpayer.

Across the English Channel, the British government has taken a much more laissez-faire attitude. The U.K. energy regulator announced an 80% price hike coming in October. Dan Paskins, director of Save the Children UK, tells journalist Willem Marx in London that what's happening is hurting poor people.

"The overall hit on family incomes is bigger than any in the U.K. since records began," he says.

Part of the problem is the government is unwilling to make major spending decisions until a new Conservative leader, due to be announced next week, is put in place to replace outgoing Prime Minister Boris Johnson.

While Germany has recently been able to reduce its dependency on Russian natural gas from 55% to 26% in the past year, according to Reuters, the price of gas has been rising fast. And German consumers are up in arms over a new gas levy they will have to pay starting in October.

The energy crisis presents another challenge for European solidarity. But after remaining united through seven sets of sanctions against Russia over its military aggression against Ukraine, there is a will to stick together through the energy crisis. The Czech Republic's trade minister has said on Twitter that the EU is now in an "energy war with Russia" and it needs to take coordinated action to prevent further damage.

Analyst Brenac says dividing Europe is one of Russian President Vladimir Putin's goals in this war. "Clearly we can see that Putin has been playing that card, trying to have European countries bickering between each other, to break their solidarity," he says.

So far, unity seems to be holding. EU energy ministers and heads of state are set to meet in Brussels on Sept. 9 to further reinforce the bloc's solidarity through coordinated energy policies and action plans. After all, today's EU got its start in energy in the 1950s as the European Coal and Steel Community.

European solidarity was on the lips of executives at the Paris business forum, which kicked off Monday with a keynote speaker from Ukraine. President Volodymyr Zelenskyy addressed the crowd by video link-up from Kyiv.

Zelenskyy said he understands this winter will not be comfortable, but he implored Europeans to stay together with Ukraine to win.

"Putin threatens us all with his war and his blackmail over food and energy," Zelenskyy said.

He then invited French companies to come help rebuild Ukraine when the time comes.

Luis Antunes, CEO of energy consulting firm Eco Pro, was listening raptly. "Magnifique," he says of Zelenskyy's speech, which he says touched on every key issue.

Antunes says of course French businesses are worried about their bottom line with skyrocketing energy costs, but there are even higher stakes.

"Ukraine is committed to democracy, human rights and freedom," he says, and Europe must stand by it.

Antunes says the Russian government's brutal aggression in Ukraine and its authoritarian actions pose bigger threats to European companies than rising energy prices.

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