Greek PM on EU natgas cap: A milestone in efforts to shield our citizens, businesses from excessive prices caused by Russia’s invasion

Greek Prime Minister Kyriakos Mitsotakis on Monday hailed a same-day decision by EU energy ministers to institute a “dynamic” cap on natural gas prices, concluding two months of often acrimonious talks between the partners.

Mitsotakis, among the first EU leaders to propose such a cap, had lobbied heavily for the measure, repeating it at virtually every pan-European venue.

“Today is another milestone in our long effort to shield our citizens and businesses from excessive gas prices caused by Russia’s invasion in Ukraine. The market correction mechanism -a GR proposal submitted 9 months ago- has finally been adopted by Europe’s energy ministers,” Mitsotakis tweeted on Monday afternoon, while adding:

“The market correction mechanism sends a clear message than when markets fail, governments will step in. We will not allow our institutions to be weaponized against us. This is an additional tool to help protect our economies from the extraordinary increase in gas prices.”

The measure had been elusive for the EU’s members, with some countries, including Germany, pointing to potentially adverse market implications. However, another bloc, which included Greece, argued that such a measure is essential to bring down skyrocketing energy costs for European consumers.

The compromise measure will be automatically activated under two conditions: If front-month gas contracts exceed 180 euros per megawatt hour on the Dutch Title Transfer Facility — the continent’s main benchmark for natural gas prices – for three working days in a row; and, if the price is 35 euros higher than a reference price for liquefied natural gas on the international market for the same period.

The measure is set to apply as of Feb. 15, 2023.