Debate: Conclusions of the special European Council meeting of - May
Date: WEDNESDAY, 8 JUNE 2022
Speaker: Ursula von der Leyen
Language: EN

And what is the problem of the structure of the market? We still have an electricity market that is designed in a way like it was necessary 20 years ago when we started to bring in the renewables. So it is the renewables that go in first, at that time much more expensive, and later on comes the other energy topics, like for example oil, or gas, or nuclear, or coal. And the one that comes last in, the most expensive, is defining the price. Today, the market is completely different. It is the renewables that are the most cost—effective and the cheapest ones. And they come in and then at the very end comes in gas. Gas is the most expensive, but it defines the whole price. And this market system does not work anymore. We have to reform it. We have to adapt it to the new realities of dominant renewables. This is the task that the Commission has taken over now. This is not trivial. This is a huge reform. It will take time. It has to be well thought through. But we need to step forward to adapt our electricity market to the modern conditions. My second point is a reply to the question Malik Azmani put forward. We have done steps in the right direction. The first one is we have now the common storage of gas. And today we have 44% of our storage filled. This is better than last year, there we were at the same time at 40%. So the common storage does already work in the right direction. And we have formed just now a joint purchase platform so that the 27 Member States can together jointly purchase, for example, gas worldwide. And this is so important because we are a big market power if we work at 27. If we go everyone on its own, its fragmented to 27, and there is not at all a market power. But if we work together, we should keep in mind that of the pipeline gas, we have 75% of the world’s demand. We hold it. So together we are strong, we are powerful, and this we should use now, and therefore we have created this joint platform for gas purchases. Then there were several questions on relief and reconstruction. And yes, this is a big and mostly important topic. What is it? First of all, we need relief for Ukraine in the short term. As you might know at the moment Ukraine needs per month EUR 5 billion just to make it for the basics – pensions, salaries, basic services like healthcare. To uphold it they need 5 billion, and here we have to step up together with others. G7 already came forward with a proposal. Now we want to join the G7 and we are working on the 9 billion relief for the next months from the European side. But the bigger topic is indeed the topic of reconstruction – Marek Belka, you mentioned a lot on that. Reconstruction would mean that the investment is colossal, as President Zelenskyy said, it is indeed colossal. We cannot do it on our own. We will carry our fair share, but we need others like the financial institutions, the IMF, OECD, G20, World Bank, for example. We need other partners, other countries to join, and therefore we will form a platform co-led by Ukraine – they have to own it – and the European Union, to make sure that we have a common direction of travel. And then the second thing that is so important is that these investments go hand-in-hand with reforms – to improve the administrative capacity of the country, to fight corruption, to make sure that there’s an independent judiciary, to make sure that there is a conducive environment for the business sector. And we’ve done already a lot with Ukraine, and we know already a lot about each other. We have done reforms together, the land reform for example, to kick out oligarchs for example, so a lot has been done through our Association Agreement and the Deep and Comprehensive Free Trade Agreement. We have a common grid, for example, too. And therefore, in the very end, important is the signal: there is no wild card for Ukraine. There are no shortcuts. The conditions have to be met. But if we invest and if we are combining that with reforms, this will pave the way towards the European Union. And finally, my last sentence. Yes, the perpetrator – Russia – has to pay its fair share. So we are looking into the legal basis to achieve that.