energy crisis: Sánchez: “Spain has a lot at stake. This is serious. I can’t go on like this” | International
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They had already spent more than four hours of intense debate. And it didn’t look good. Pedro Sánchez and the Portuguese António Costa began to see that their idea of getting the European Council to authorize an “Iberian exception” to put a cap on the prices of gas used to manufacture electricity on the peninsula and thus achieve a lower price. drastic and fast the electricity bill had too many resistances. Especially in Germany and the Netherlands. The discussion was not going well.
Charles Michel, President of the Council, proposed to start voting on the points on which there was more consensus and leave the most complicated for last, including the Iberian exception and others such as the demand by the Italian Mario Draghi that the idea of the price limit to apply it in the future. But the tension at that time was already very strong. Coast insisted:
—It has to be made very clear that nothing is agreed upon until everything is agreed upon. We do not want these points to be taken for granted if the others are not closed later.
Sanchez seconded him.
—It is very important that we do not consider anything closed until we have managed to agree on points that are very relevant for Spain and Portugal.
The Spanish also distrusted. The tension was rising. Michel reassured the Iberian prime ministers, the ones who were most at stake in the event.
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“It’s the usual procedure, nothing will be closed until the end.
In the midst of this tension, Sánchez, who has been pressing for seven months to change the European energy market and has already failed in previous summits, is very clear that this time it must be different. He cannot return to Madrid empty-handed while entire sectors threaten to stop due to the exorbitant cost of energy.
Sánchez has been explaining the Spanish situation to his partners all morning, with transport stoppages, with the fishing fleet moored for several days, with stopped industries. He tells them that Spain and Portugal have suffered a lot from not having interconnections, which has forced them to invest much more. That both have made an enormous effort to develop renewable energies and are among the countries with the highest percentage of them. And that, however, all this comes to nothing because of a system that means that all electricity is paid for at the price of that generated with gas, only 15% of the total in the Spanish case.
It displays data, economic, political, and social arguments. He and his closest team have been working for weeks at all levels to soften the toughest: Germany and Holland. But the Social Democrat Olaf Scholz and the Liberal Mark Rutte are not giving in.
—The Iberian exception can break the European electricity market, it is very risky —they say.
At that moment, Sánchez reads on his mobile a tweet that someone sends him from France24 journalist Dave Keating, in English. “Sánchez is threatening to veto the conclusions if there are no clear changes in prices,” he says as he details the positions within various countries.
Sanchez explodes. He insists that at no time did he threaten a veto. But someone is releasing that version. The president needs a coup to change the atmosphere of the summit and allow him to strengthen his position to negotiate the Iberian exception. He can’t leave Brussels without her. So he does something very unexpected in a Europeanist leader, calm, cold, whom others have always seen temper in all debates. Sánchez informs others of the tweet. And he stands.
“You can’t have a quiet debate with these leaks. I do not feel comfortable. Spain is playing a lot, this is a very serious issue. In these conditions, I cannot continue.
Sánchez collects his papers and leaves the room, much to the surprise of all the other leaders. It’s the punch he needed.
The president takes an elevator and goes up to the Spanish delegation, where his team is, who is also surprised to see him. Shortly after, the Frenchman Emmanuel Macron, rotating president of the EU, arrives to look for him. Charles Michel also attends.
Sánchez needs others to know that he is serious. He has done it. The Spanish and the French go downstairs and enter the room together again. Very little time has passed, but enough for everyone to understand what Spain is playing for and the importance of the matter. There is a brief recess and, from that moment, according to various delegations, the meeting changes tone. Sánchez’s blow of effect has worked.
“In this matter there is no silver bullet [bala de plata] no magic recipes —several presidents repeat when they return.
“But the worst thing would be to do nothing.” Spain accepts measures that can harm it, such as increasing reserves, something that can raise the price and we don’t need it because we have many regasification plants. But we do it in solidarity with those who do need it. In exchange, we want them to allow us the Iberian exception— insists the Spaniard.
Behind this close-up of the leaders there is a lot of movement. Before reaching this peak with Sánchez’s coup, there have been dozens of conversations, trips, meetings, papers. The placenta of this agreement, in terms of Javier Cercas, has taken weeks. With many ups and downs.
The best moment was the start of the process, on March 5, when Ursula von der Leyen, president of the Commission, went to La Moncloa and recognized Sánchez’s leadership on the energy issue. The most difficult, on Friday the 18th, at a dinner in Berlin, when Sánchez, accompanied by the vice-president Teresa Ribera, the great specialist, and Manuel de la Rocha, a key man in all the negotiations and Sherpas of the president in the decisive final hours in Brussels, he clearly saw that Scholz was very hard and flatly rejected the idea of decoupling gas and electricity prices throughout the EU.
That was the plan A of Spain, which that same morning had obtained the support of Italy, Portugal and Greece in a meeting in Rome. But there they saw that it was impossible and they began to work on plan B: the Iberian exception. That wasn’t easy either.
On Thursday afternoon, the sherpas from Spain, Portugal, France, Belgium and Greece begin to prepare the ground to combine strategies that can soften Germany and Holland. At that time, Spain was still committed to resorting to article 122 of the EU functioning treaty, which allows decisions to be made in exceptional moments outside the treaties. The idea was that the Iberian exception was embedded in European legislation. But the European Commission organizes a meeting at dawn with the sherpas of Spain, France, Germany and Holland, and the no of these last two is resounding:
—That would break the European market. We will never vote for it.
The Dutch complain above all that each one wants their exceptions and limits to the market —the Italian Draghi insists, and finally succeeded under great pressure, in introducing the idea of price limits in the final conclusions— and they fear lack of control. They do not want to touch the market despite the exorbitant prices.
—Solve it via taxes, taking away the benefits that fell from the sky to compensate consumers —they suggest.
The Spanish tell them that this route has already been explored and that it is not enough, they need to decouple the price of gas from that of electricity. But it seems useless.
On Friday, while Sánchez fights in the room and breaks the deck, the negotiations of the delegations multiply. Gradually, thanks to pressure from Spain, Portugal and the Commission, the Germans are beginning to accept the idea of the Iberian exception. But it has to be Spain and Portugal who propose their plan and the Commission who accepts it or not.
The Spanish distrust. They want to include the specificities of Spain and Portugal in the conclusions: less than 3% connectivity and more than 40% renewables. It’s almost like putting their names. But Germany rejects it.
Spain needs guarantees that the European Commission will not knock down the proposal when it is sent to them. It would be a big fiasco. If it cannot be in writing, it will have to be orally.
At this point in the afternoon, from Madrid, the vice presidents Teresa Ribera and Nadia Calviño, with good contacts in Brussels, multiply calls and negotiations. Ribera’s team is dedicated and especially a key man: Manuel García, General Director of Energy. In the middle of the summit, he speaks directly with the team of the Competition Commissioner, Margrethe Vestager, to guarantee that they accept the system that Spain plans to make and that there will be no problems.
The text of the conclusions, which covers the Iberian exception, is closed. “The temporary nature of the measures and the level of electrical interconnectivity with the single electricity market will be taken into account,” he says. Technical guarantees as well. Policies are missing.
Von der Leyen, who has been deeply involved in helping Spain, promises the Spanish that he will speak emphatically in favor of the Iberian exception at the press conference. Clearer even than in the conclusions. And he does.
—The Iberian Peninsula has a very specific situation. They have a high percentage of renewables, and that is very good, but very few interconnections. That is why we agree that there should be special treatment, he will say.
Shortly after, Sánchez and Costa appear together, euphoric and exhausted. The Spaniard is asked what guarantees there are that the Commission will accept the Iberian proposal when they send it.
“For guarantees, you only have to listen to the statements of the president of the Commission right now,” Sánchez answers.
Everything is agreed. The plan was very risky, and could have been a huge fiasco in one of the worst weeks of the Government. But it worked. Many keys had to be touched, forcing with a dramatic staging that included an unprecedented abandonment of the meeting. But Sánchez, who has shown that he is not afraid of risk, returns home with a mechanism to lower the price of electricity in less than a month as long as the Commission does not knock him down. And that was the only relevant thing.
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