Brussels (awp/afp) – The mechanism proposed by Brussels to cap gas prices in the EU, the subject of sharp differences between the Twenty-Seven, could intensify market volatility and even “compromise the financial stability of the euro zone “, alerted the European Central Bank (ECB).
On November 22, the European Commission proposed a mechanism aimed at capping for one year the prices of certain futures contracts on the TTF reference gas market to counter any new surge in energy prices, but the Member States have since been torn on the conditions allowing to trigger this cap.
In a note published Thursday, the ECB recognizes that this mechanism aimed at moderating extreme prices on the wholesale market “can in principle mitigate a number of risks to financial stability”, but strongly warns against undesirable effects.
“The current design of the proposed mechanism may, in certain circumstances, compromise financial stability in the euro area”, warns this note signed by the president of the Frankfurt institution, Christine Lagarde.
It can also “increase volatility”, cause “margin calls” to soar – amounts that market operators must block to guarantee their transactions, at the risk that they no longer have sufficient liquidity -, and “questioning the ability of central counterparties (on regulated markets) to manage financial risks”.
Above all, imposing a cap on the Dutch TTF market alone could encourage players in the energy sector to migrate to over-the-counter transactions, outside regulated markets and without a clearing house to guarantee the materialization of exchanges, is alarmed. she.
Finally, while the Commission planned in its proposal to give it an active role in triggering the price cap, the ECB is calling for its role to be more limited and only advisory, so as not to encroach on its independence.
These criticisms of the ECB come as the Twenty-Seven are struggling to agree on the Commission’s proposal, which will be on the menu Tuesday at a new meeting of energy ministers.
Brussels had proposed that the cap kick in as soon as monthly contract prices exceed 275 euros/MWh for two consecutive weeks, among other conditions – which never happened, even at the height of the price surge in last August.
Some of the member states had denounced an “ineffective” mechanism and have since been calling for a drastic relaxation of the conditions for triggering the cap.
Other countries, such as Germany and the Netherlands, reluctant to intervene in the markets, continue to worry about possible disruptions in gas supplies to Europe, in the face of competition from Asian buyers likely to higher prices in the event of a ceiling in the EU.
afp/lk