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EU agrees to gas rationing amid fears of a Russian cut-off

The nations of the European Union decided on Tuesday to ration gas this winter in order to safeguard themselves from future supply cutbacks by Russia as Moscow continues its invasion of Ukraine.

A new European law intended to reduce the demand for gas by 15% from August through March was agreed by EU energy ministers. The new law calls for optional national actions to cut gas usage, and if such steps don't save enough money, it sets off mandatory steps for the 27-member bloc.

Ursula von der Leyen, President of the European Commission, praised the decision in a statement, saying that “the EU has taken a decisive step to face down the threat of a full gas disruption by (Russian President Vladimir) Putin.”

Concerns that Putin will use the gas trade to undermine the EU's opposition to the war in Ukraine have increased after the Russian energy company Gazprom announced on Monday that it will restrict supply to the EU through the Nord Stream 1 pipeline to 20 percent of capacity.

“The winter is coming and we don’t know how cold it will be,” said Czech Industry Minister Jozef Sikela, whose policy portfolio includes energy. “But what we know for sure is that Putin will continue to play his dirty games in misusing and blackmailing by gas supplies.”

In less than a week, the ministerial agreement was finalised. It is based on a recommendation made by the European Commission, the executive arm of the EU, on last Wednesday. The commission said that coordinated rationing would allow the bloc as a whole to survive the winter should Russia suspend all gas deliveries in an effort to maintain a unified EU face over a dispute that shows no signs of ending.

Since Russia's invasion of Ukraine in February, which the West condemned with economic penalties, Russian gas deliveries to 12 EU members have been stopped or reduced.

The EU has decided against imposing sanctions on Russian natural gas because Germany, Italy, and some other member states substantially rely on these imports, even though it has agreed to impose an embargo on Russian oil and coal beginning later this year.

“Germany made a strategic error in the past with its great dependency on Russian gas and faith that it would always flow constantly and cheaply,” said German Economy Minister Robert Habeck, who is also responsible for energy and serves as the country’s vice chancellor. “But it is not just a German problem.”

As Europe's inflation already stands at record highs, the disruptions in Russian energy trade with the EU are threatening to send the region into recession just as it was emerging from a pandemic-induced slump.

The energy crunch is also bringing back for Europe long-forgotten political tests of policy collaboration. While the EU now has centralised control over monetary, trade, antitrust, and agricultural policy, national sovereignty still generally governs in energy-related areas.

A clause in the proposed gas rationing law that would have given the European Commission the authority to decide on any transition from voluntary to mandatory activities was removed by the energy ministers as a symbol of this. The ministers made sure that member states would be in charge of any decision regarding mandatory actions.

They also eliminated some of the original proposal's provisions, such as the exemptions for island nations.

Nonetheless, Tuesday’s deal marks another milestone in EU policy integration and crisis management.

In sharp contrast to previous EU legislative initiatives in the area of energy, which frequently needed months or years of negotiations among member governments, the agreement was reached just six days after the commission hurriedly released the draught law.

In that regard, the new gas rationing strategy is similar to changes in EU health policy made two years ago when member states decided to act jointly in the face of the COVID-19 pandemic. This included giving the commission the authority to negotiate contracts with drug manufacturers for the distribution of vaccines to all 27 nations.

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