Debate: Russia’s escalation of its war of aggression against Ukraine
Date: WEDNESDAY, 5 OCTOBER 2022
Speaker: Ursula von der Leyen
Language: EN

Putin has launched Russia’s first mobilisation since World War II, treating hundreds of thousands of young Russians as cannon fodder. He uses sham referenda in an illegal attempt to change international borders by force. And since many months, he is using energy as a weapon. Now, of course, we feel that the Russian war causes economic and social hardship and it places a heavy burden on our citizens and on the economy in our single market. We see in particular the rising energy prices and gas and electricity prices that are leading to reduced purchasing power, and they are leading to a loss of competitiveness for our business in the international market. But our resilience in all these difficult times is remarkable. And what we have to do is work steadily on our resilience, mainly on the field of energy. And that’s where I want to focus today. If you look at the course of the last seven months together with our Member States, we have already taken important steps. We have diminished our gas consumption by around 10%. That’s good. It’s not enough. We have to do more, but it’s a big step forward. I want to give you two figures where the Russian supplies of gas are concerned. At the beginning of the war, if you look at all the imports of gas, the Russian share was 41%. Within seven months we have gone down to 7.5%. That’s good. And we have compensated this decrease in Russian supplies by a massive increase by our trusted suppliers, for example, the United States, for example, Norway. Let’s look at gas storage. This is almost at 90% by now. This is 15% higher than on the same day last year. Three weeks ago in this Hemicycle, I announced that we will skim the exceptional profits that electricity producing companies have these days to make them available for Member States to support vulnerable citizens and businesses. Now, last week already we have enshrined that in law, EU law. We achieved that in lightning speed and I really want to thank the Czech Presidency for this outstanding deliverable in really a very, very short time. And yesterday the Council reached agreement on REPowerEU. So, we will have key instruments in place to make it through the winter – that’s storage and saving – to jointly purchase gas. This is our platform to get rid of the grip the Russians have on us through their fossil fuels, these are our agreements with other friends. To redistribute the windfall profits to support those in need and to invest in the future of a sustainable energy supply, and that is REPowerEU. The measures we have put in place provide us with a first buffer of protection. And, thanks to these, we can and we will now step up to the next level. I will lay out a road map in a letter to leaders in view of our meeting in Prague in two days this week. And I want to discuss with you first-hand the key components of this letter. Of course, it’s all about energy prices. So, we will step up our negotiations with trusted partners, for example, with Norway, to dampen the price we pay for gas imports. The talks have already started. I think as a European Union, we have a considerable market power and many of our suppliers want to conclude deals with us which are beneficial for both sides. So I really think it is necessary that we come to an agreed corridor of prices to stop this crazy peaks we have partially in the import of gas prices. We will strengthen our energy platform. And let me be very clear: it is in our collective interest. After the winter, we will have to refill the gas storages and if we then see that we have again a scenario where Member States are outbidding each other on the global market and thus raising the prices here in the European Union, this is not sustainable. So we have to have a joint procurement of all Member States. This is much better than the way we have it. My next point is on gas prices. As you know, we use gas in three different domains: for industry, for heating and for the production of electricity. Let me start with the electricity. Our market for electricity is built in a way that high gas prices are driving electricity prices. We have now to limit this inflationary impact of gas on electricity, and everywhere in Europe. This is why we are ready to discuss a cap on the price of gas that is used to generate electricity. This cap would also be a first step on the way to a structural reform and overall reform of our electricity market. But I think we also have to have a look at gas prices beyond the electricity market. So, where industry is concerned, where heating is also concerned, the general approach of gas, and here we will work together with Member States to reduce gas prices and to limit volatility, and thus to limit the impact of price manipulation by Russia. Because if you look at the fever curve of gas and gas prices, the whole gas price, you can see the manipulation that Russia has on the gas prices, and this has to stop. We have already offered this mechanism in March. At that time, we have said that it can give an important signal that the EU will not pay any price for gas any more. We have qualified such a price cap as having an immediate impact on price levels, but that it entails drawbacks in terms of security of supply. This is still true today. So it’s a fine line to walk. It’s not trivial to do that. But the situation since March has critically evolved since then. And today, compared to March, more Member States are open for it and we are better prepared. Such a cap on gas prices must be designed properly to ensure security of supply. And it is a temporary solution to cater for the fact that the TTF, that is our main price benchmark, is no longer representative for our market. This TTF benchmark reflects or mirrors a lot pipeline gas. But in the last seven months, because we wanted to get rid of the dependency on Russian gas, we have increased a lot the LNG market and this LNG market is not properly reflected in the TTF. So, introducing a cap on gas overall is a temporary solution until we will have a new EU price index developed that ensures a better functioning of the market. And the Commission has already started to work on this. Honourable Members, these are far-reaching measures and I wholeheartedly agree with you when you say in the resolution you will vote on today that exceptional times require exceptional measures where the Union needs to act as jointly and as united as ever. In pursuing our action, two things remain paramount: that is action in unity and action in solidarity. If I look at our single market, we really need to protect the fundamentals of our economy and, in particular, our single market. The single market is the strength of our European Union, and this is where the wealth of the European Union comes from. Without a common European solution we risk fragmentation. If every Member State goes on its own, we have fragmentation we don’t want, and we have to do something against it. And, therefore, it is so paramount that we preserve a level playing field within the European Union and our single market. Every Member State is benefiting from it. As I said, the wealth comes from our single market. Now, what does that mean? With REPowerEU we have developed a crucial instrument to accelerate the transition in the energy independence. That’s what we’re working on since seven months and REPowerEU will allow, it’s the governance structure, it will allow the investment in infrastructure, for example, pipelines, for example, interconnectors, for example, renewables.  But it also allows – and that’s important – to support businesses or households to invest in energy efficiency, for example, insulating houses or installing heat pumps or installing new technology for the companies, the businesses that have to do the transition. Now, here’s my proposal: I think we should further boost REPowerEU with additional funding, common European funding. This way, all European states can accelerate the necessary investment, all European Member States. We modernise our infrastructure, the energy infrastructure. We preserve the level playing field and we secure our European competitiveness on the global market. So we have to do this investment. We have to do this funding together as Europeans, jointly, with a common solution. And, honourable Members, allow me to speak about another pressing issue which we have to address today. The acts of sabotage against Nord Stream pipelines have shown how vulnerable our energy infrastructure is. For the first time in recent history, it has become a target. Pipelines and underwater cables connect European citizens and companies to the world. They are the lifeline of data and energy. It is in the interests of all Europeans to better protect this critical infrastructure. And for this, I will present a five-point plan. First, we must be better prepared. We have very recently agreed new legislation – that’s good – which will strengthen the resilience of critical EU entities. The responsible Parliament committee will be voting on it next week. That’s good too. So we are absolutely on time and I think we can, and we should, already now be working on this basis. Second, we need to stress-test our infrastructure. We don’t have to wait till something happens, but we need to make sure that we are prepared and therefore we need those stress tests. We need to identify whether we have weak points and where these weak points are. And of course, we have to prepare our reaction to sudden disruption. What are we doing then? Are all the information chains in place? Is everybody informed? Does this emergency scenario really work then in our single market? We will work with Member States to ensure effective stress tests in the energy sector. And this then should be followed by other high-risk sectors, such as the offshore digital and the electricity infrastructure. My third point, we will increase our capacity to respond through our civil protection mechanism well known to you in the European Union. With this, we can support Member States in addressing the disruption of critical infrastructure, for example, with fuel, with generators, with necessary shelter capacity. My fourth point, we will make best use of our satellite surveillance capacity. We have these satellites in place. We have the capacity to do the surveillance to detect potential threats. So, this is also a matter of prevention and awareness. And finally, we will strengthen our cooperation with NATO and with key partners like the United States on this critical issue. Honourable Members, this war has entered in a new phase. The Ukrainian army keeps reporting impressive successes in its fight against the aggressor. We all saw the images of deeply relieved people welcoming Ukrainian soldiers. And I could see with my own eyes when I was three weeks ago in Kyiv that life has come back to Kyiv. Of course, it is the bravery of the Ukrainian people that made it possible. But I think Europe’s contribution also has made a huge difference. And now it’s the time to keep track to help the Ukrainians to face down the invader. A strong and steadfast Europe, that will be the only way to stop Putin. This is the moment to stay the course and to signal again to our Ukrainian friends, we stay by your side as long as it takes. Thank you and long live Europe.