France economy

France calls for review of European gas and electricity markets By Reuters

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© Reuters. FILE PHOTO: French Economy and Finance Minister Bruno Le Maire attends a press conference to present the French government’s 2022 budget to the Bercy Ministry of Finance in Paris, France, September 22, 2021. REUTERS / Gonzalo Fuentes

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By Leigh Thomas

PARIS (Reuters) – The French government on Thursday called for a review of the European gas and electricity markets to shed light on the current price spike and offer a coordinated European response.

Finance Minister Bruno Le Maire and Environment Minister Barbara Pompili launched this appeal in a letter addressed to Paschal Donohoe, the head of the Eurogroup of Euro Zone Finance Ministers.

So far, European governments that have responded to soaring energy prices have focused their efforts on relieving consumer pain.

The French government plans to increase subsidized bonds to help poor households cover their energy bills and Prime Minister Jean Castex was due to announce additional measures later on Thursday.

Calling for better coordination between EU countries, Le Maire and Pompili said broader measures should not be ruled out, without specifying which ones. In the short term, market supervisors should also conduct a “thorough review” of energy markets to improve their transparency, they added.

They also said in the letter, seen by Reuters, that the functioning of the EU gas market should be studied “to understand why current gas contracts have been insufficient to ensure comfortable gas availability in Europe”.

On the electricity market, they said: “We call on the European Commission to conduct an in-depth analysis of the functioning of European electricity markets and measures that could help stabilize market prices (and) limit volatility for consumers ”.

The Mayor said at a conference on the hydrogen industry on Thursday that he could not stand idly by as French electricity prices followed a surge in gas prices, even though France is generating 70 % of its electricity production from nuclear power plants.

The two ministers said that ultimately the EU should diversify its energy supply and reduce its dependence on gas-exporting countries as soon as possible.

“We have not built the energy dependence of our country for decades around nuclear energy and then be crushed by (Russian President) Vladimir Putin,” Le Maire said earlier at the conference.

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