EU leaders reckon with Russian gas cuts and inflation woes

EU leaders wrapped up a two-day summit on Friday focused on the dangers posed by Moscow's gas supply cuts and the skyrocketing inflation fuelled in part by Russia's war in Ukraine.

Twelve EU countries are grappling with diminished gas flows from Russia, European Commission President Ursula von der Leyen said in Brussels.

Germany is currently advancing through a gas emergency plan after an alarming drop in deliveries. German authorities have described the declining supplies as Russian retaliation for Western sanctions.

"If Germany gets into trouble, it will also have an enormous impact on all other European countries, including our own," Belgian Prime Minister Alexander De Croo said on Friday.

De Croo said that Russia is in an economic war with Europe, meaning that the EU must stand together.

Chancellor Olaf Scholz, whose government is trying to quickly end Germany's heavy dependence on Russian gas, said after the summit that Berlin was prepared for the current predicament and will continue to intensify efforts to diversify its energy supplies.

Scholz listed plans to construct port facilities to receive liquefied natural gas (LNG) by sea and the possibility of joint energy purchases with other EU countries. He said Germany's gas storage facilities were relatively well stocked at the moment.

German Economy Minister Robert Habeck has recently urged companies and consumers to save gas.

Von der Leyen announced on Friday that the commission is to present a plan on how to reduce energy demand in the bloc in the coming weeks.

"There will not be a return to cheap fossil fuels," von der Leyen said at a press conference.

"Alongside temporary and targeted support to vulnerable families and businesses, it is essential to help our economies and societies to adapt to the new conditions," von der Leyen said.

"Inflation is a major concern for all of us," European Council President Charles Michel said, echoing concerns over the economic consequences of the invasion.

"Russia's war of aggression is pushing up the price of energy, food and commodities. And all of this has a direct impact on our citizens and businesses," he said.

EU leaders tasked the commission to look into if and how energy price caps could eliviate the situation and to identify suppliers other than Russia "as a matter of urgency," a joint statement said.

Von der Leyen said US supplies of LNG are up 75% compared to 2021 as part of this strategy.

Turning to issues not related to Russia, EU leaders backed Croatia's use of the common euro currency from 2023.

Greece was also deemed financially stable enough to exit a strict fiscal surveillance programme linked to its last bailout in 2018.

EU leaders also kept a close eye on the Bulgarian parliament which voted in favour on a compromise proposal to potentially overcome the country's veto of North Macedonia's EU accession talks.

The proposed deal includes new conditions for North Macedonia, including changing its constitution to give the Bulgarian minority living in the membership candidate country equal rights.

Bulgaria has also refused to recognize Macedonian as an independent language.

Whether Friday's vote will help unlock the stalemate is unclear for now, as North Macedonian Prime Minsiter Dimitar Kovačevski called the proposal "unacceptable" a day earlier.

Michel said that the EU "will continue to watch that closely."

On the first leg of the two-day event, EU leaders granted Ukraine and Moldova official status as candidates for European Union membership, a seminal move hailed as a "historic decision" by von der Leyen.