The difficult quest for a common energy policy

The difficult quest for a common energy policy

Lucas Schramm is a political science researcher at Ludwig Maximilian University of Munich.

The European Council recently confirmed that little, if anything, in the European Union moves between France and Germany without consent.

The Franco-German controversies have been at the heart of the energy issue for weeks. But it is not uncommon for these two countries to take different positions at the start of a European crisis – or to criticize each other. One could even say that the initial Franco-German differences are a prerequisite for later European compromises, as the two nations often represent the overall range of member country preferences.

What’s troubling about the present case, however, is that policymakers in both countries are debating bilateral disagreements publicly — and aggressively.

In the face of a deepening energy crisis, national leaders expressed their solidarity and pledged joint action at last month’s European Council. Their conclusions, however, remain full of vague and ambiguous formulations, notably on the “dynamic” gas price corridor, essentially instructing the European Commission to make proposals for more ambitious and concrete measures.

Meanwhile, French President Emmanuel Macron went so far as to call Germany “isolated” and, in return, German Chancellor Olaf Scholz canceled a planned bilateral meeting of ministers.

How different from the COVID-19 crisis of just two years ago!

At the start of 2020, France and Germany were at odds again, this time over the bloc’s fiscal response to the pandemic. While France called for the joint issuance of government bonds, Germany initially insisted on using existing financial instruments instead. But above all, Chancellor Angela Merkel and Macron came to recognize that a common European response was imperative – not only financially, but also to send a signal of political unity – and they then presented the blueprint for what would become the EU’s NextGeneration recovery plan.

The current energy crisis, on the other hand, appears to be a more complicated task, as it involves several political dimensions, including geopolitical issues and issues of energy security, supply and prices. And historically speaking, Franco-German bilateralism – as well as its potential to forge broader European compromises – has always had its toughest times when multiple political dimensions are involved.

In this case, one cannot help recalling the oil crisis of 1973, where the Franco-German clashes also prevented a coordinated European response.

After the outbreak of the Arab-Israeli war on “Yom Kippur” in early October 1973, Western oil-consuming countries, including the European Economic Community (EEC), faced rising prices due to production cuts. Arab countries have sought to use oil as a weapon to divide the EEC and push its member countries to adopt a more critical stance towards Israel.

Strategically distinguishing between “friendly”, “neutral” and “unfriendly” countries, the Arab countries subjected the Netherlands to a complete oil embargo as the only member country of the EEC, which led the Dutch government – ​​with the European Commission – to advocate for European Solidarity and Oil Sharing.

However, members could not agree on an oil-sharing mechanism. More concerned about securing oil supplies, Germany echoes Dutch calls for greater solidarity, while France pleads for bilateral contracts with oil-producing countries. He argued that any intra-European sharing would only provoke Arab countries and lead to further price hikes. And at the Washington Energy Conference a few months later, German Finance Minister Helmut Schmidt told French Foreign Minister Michel Jobert bluntly that his country had the necessary financial means and was ready to pay higher prices.

There are remarkable parallels here with current discussions, just as today, different French and German economic approaches, priorities and philosophies have prevented a European deal. And besides energy itself, the 1973 oil crisis also had an important foreign policy dimension.

France proposes a common European front and a direct dialogue between the Arab producer countries and the European consumer countries. Initiating the Euro-Arab dialogue, he insisted on a common mandate for the Washington conference on energy. Germany, on the other hand, favored the idea of ​​a transatlantic consumer cartel, as suggested by US President Richard Nixon and his Secretary of State Henry Kissinger. And although speaking in his capacity as President-in-Office of the Council of the EEC, the German Foreign Minister at the time, Walter Scheel, publicly supported the American proposals, which led Jobert to point out his European colleagues as “traitors”.

Without France’s membership in the US-sponsored International Energy Agency – which was officially created in November 1974 – the continent was sharply divided on energy and foreign policy.

Of course, the lack of European coordination and action has been costly. Although hindsight suggests that the EEC did not face an existential shortage of supply, oil prices still quadrupled. Political unity also proved elusive. Angry at the lack of solidarity, the Netherlands has threatened to cut gas exports to European partners from the Groningen fields. And in a climate of mistrust, the integration projects envisaged – such as the transition to a European monetary union and the creation of a regional fund to support Europe’s poorest regions – have proven to be unrealistic.

The experience of the 1973 oil crisis shows that energy challenges can significantly undermine European unity, and the popular idea that Europe will emerge stronger from each crisis is far from certain. It is therefore important that the member countries – France and Germany in particular – develop a common vision and objective to face the current energy crisis.

Europe needs bilateral initiatives, followed by compromises. In concrete terms, this means determined and rapid attempts to limit gas prices – and on this point, Germany must above all act. At the same time, France should withdraw its resistance to a real European energy market – including gas pipelines crossing its territory – while the joint purchase of gas would also help.

But first and foremost, the public bashing must stop.

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