Sanchez wins Macron's support for energy price reforms

On Monday, Pedro Sánchez received the support of the French President, Emmanuel Macron, in his tour to defend the decoupling of electricity and gas prices, and put pressure on the European Commission, which must present proposals at the European summit next Thursday and Friday.

Before beginning a meeting in Paris with Macron, as part of the tour he began last week of several European capitals, Sánchez told the press of the two "fundamental" aspects that he believes will have to be resolved at the Brussels summit: "guaranteeing energy supply and the evolution of gas prices and their transfer to the price of electricity".

We hope," the Spanish Prime Minister stressed, "that the European Commission can find a balanced response that will allow all the countries to be able to respond to this challenge, to this formidable challenge that the war in Ukraine is presenting us with from the energy point of view, depending on how serious it is in one aspect or another".

Macron had thanked him moments earlier for "his personal commitment" and his work to "find European solutions that allow us to protect ourselves from the consequences of the war", and referred to the contacts Sánchez has had in recent days with the heads of Italy, Greece, Portugal and Germany, among others.

According to the French president, the aim is to limit the price of gas and "the impact on the price of electricity", but also to seek mechanisms for joint gas storage and to diversify sources of supply.

Pedro Sánchez's contacts continue this Monday in Brussels, where Sánchez had an appointment with the Belgian Prime Minister, Alexander de Croo, and with the President of the European Commission, Ursula von der Leyen, and the President of the European Council, Charles Michel.

France and Spain agree, along with other EU countries - essentially those in the south - in carrying out a "structural" reform of the European electricity market and above all of the marginalist pricing system, which in practice makes them dependent on the price of gas, which has soared in the last year and especially since the beginning of the war in Ukraine.

However, this has so far met with opposition from other northern states and reluctance from the European Commission, which considers that abandoning this marginalist system that guarantees the remuneration of the plants with the highest costs - now gas-fired plants - could jeopardise the single market and the continuous balance between supply and demand that prevents major blackouts.

Last week, Madrid and Lisbon, which share the Iberian electricity market - very little connected to the rest of Europe - had launched the idea of capping the price of electricity on the wholesale market at 180 euros per megawatt hour, but shortly before the meeting between Sánchez and Macron in Paris, the Spanish government announced that it was withdrawing it.

Macron explained that one of the points he was going to address with Sánchez was that of interconnections, which has been a priority of Spanish energy policy for many years, but which has not found the same harmony on the other side of the Pyrenees. 

The conflict in Ukraine has highlighted Europe's heavy dependence on Russian gas (40% of consumption) and the usefulness of the MidCat gas pipeline project between Spain and France, which was abandoned in 2019, mainly due to a lack of interest from Paris. 

Macron and Sánchez also referred, in the statement prior to their meeting, to the European response to Russia's invasion. The Spanish Prime Minister stressed that Macron's "efforts" even before the war began, together with the German Chancellor, Olaf Scholz, to discuss with Vladimir Putin, have shown that "there has not been a lack of diplomacy on the part of Europe, but rather that what has been left over has been aggression on the part of Russia".

In his opinion, Putin has made "three fundamental mistakes" with his attack: "underestimating the response" and the resistance of Ukrainian society and the Ukrainian government; considering that the EU would not respond in a united way with "forceful" and "unprecedented" sanctions, but also with humanitarian and military aid; and not taking into account "the response of the international community".