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24 Nov, 2022 14:21

French economy at risk due to rising gas prices – energy minister

The country is calling for a long-term solution and says fuel-price cap will have little effect
French economy at risk due to rising gas prices – energy minister

France risks losing some of its markets and may never get them back due to rocketing gas prices and the detrimental conditions for European production they create, the country’s Energy Minister Agnes Pannier-Runacher said on Thursday.

Speaking at an emergency meeting of EU energy ministers, summoned in an effort to decide on how to bring energy prices down, she criticized the European Commission’s proposal to cap the price of gas, saying that it would have little effect on skyrocketing prices.

“This [price cap] may be helpful, but it is not a structural reform and is not a response to rising gas prices which the EU production is facing, and which is putting our economy at risk,” she said.

The official stressed that current gas prices, which are five-to-ten times higher than two years ago, degrade France’s industrial output, and called for a “structural solution” to shield the economy.

The proposed price limit would only rein in the costs in emergency cases while, in the long run, it may disrupt the market, Pannier-Runacher said, urging that measures be implemented to prevent the situation where France risks “losing part of its markets, with all the consequences it will have for producers and jobs in the industry.”

The initiative from the European Commission has drawn widespread criticism, with some countries arguing it lacks sufficient safeguards, while others, like Spanish energy minister Teresa Ribera even calling it a “mockery.”

The commission has proposed introducing a cap when prices on the TTF exchange, Europe’s gas benchmark, reach €275 per megawatt hour (where electricity is produced using gas) and when prices are €58 ($59.53) higher than the LNG reference price for ten consecutive trading days within the two weeks. Both conditions need to be met for the cap to be triggered.

For more stories on economy & finance visit RT's business section

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