Statement paper MEC-2023

For almost a year now, the member states of the European Union lived with the fear that at any
moment, Russia could cut off their access to the natural gas and petrol they were so dependent on,
with disastrous consequences for their economies and their citizens. This is because 40 percent of
the EU’s gas consumption came from Russia by pipeline (Nord Stream 1 and 2, Yamal, TurkStream
etc… ). Three quarters of the natural gas supply coming from Russia has already been cut off ahead
of what is forecasted as being a cold winter. The continent and its citizens are seeing record high
energy prices and inflation. Spain is no exception to the rule, inflation peaking in July at 10.8%,
fortunately declining to 7.3% in October, down from 9.0% in September. Furthermore, electricity
prices in Spain rose by 32.2% during the first half of 2022, more than double the average of other EU
countries (13%), compared to the same period last year. The average price per megawatt hour is
around 125 euros, a far cry from the 544.98 at the short-lasting peak in March of this year.
Fortunately, Spain's economy is set grow by 4.5% in 2022, according to the Bank of Spain. The
rebound of tourism, coupled with government measures to limit the impact of high energy prices are
factors that will boost growth.

The Spanish government has of course taken measures to mitigate the consequences of the energy
crisis for its citizens, especially since the Spanish Socialist Workers' Party, headed by Pedro Sanchez,
is in government. In terms of natural gas, Spain has the capacity to import LPG thanks to the
construction of several LPG terminals along the Spanish coast. Recently, The European Commission
has approved a €8.4 billion Spanish and Portuguese measure aimed at reducing the wholesale
electricity prices in the Iberian market (MIBEL) by lowering the input costs of fossil fuel-fired power
stations, known as the Iberian exception. Energy saving measures have also been implemented for
the general population. This means that heating during the winter should be set at a maximum of
19°C and summer air-conditioning at 27°C minimum and working from home has been encouraged
in order to save the energy that would be used commuting and, in the office, in addition to air
conditioned or heated buildings being required to install automatic door-closing mechanisms to
prevent any further heat loss. Also, On the 25th of June, the government adopted a fresh anti-crisis
package totalling €9.1 billion targeted at minimizing the impact of inflation and targeting energy
corporations' windfall profits. On the 11th of October, the government approved its ‘Plan for More
Energy Security’, a sweeping set of 73 measures that should reduce Spain’s energy consumption by
between 5.1 percent and 13.5 percent this winter. It includes €500 million set aside in aid to
promote energy self-consumption, tax breaks for investment in energy transition, discounts for 1.6
million houses with community boilers, and the continuation of the thermal and electricity bonuses.
Furthermore, on the 13th of October, more measures were announced including € 3bn of extra
spending that is due to benefit 40% of the country’s population.
In spite of the challenging situation the EU is facing, it has so far pulled through and will continue
doing so. Together, the member states of Europe must support each other and must successfully
collaborate on swiftly implementing measures to combat the energy crisis, like we have done so far.
Spain supports the decisive action taken by the European commission and the price caps
implemented, taking example from the Iberian exception. When the commission initially proposed
the 15% cap on energy consumption, the Spanish government was rather reluctant because the
measure was seen as biased towards the countries that were the most dependent on Russian gas
and petrol. Nevertheless, Spain aligned itself with the common policy quickly afterwards, because it
was obvious for the government that the importance of a common stance against Russian
aggression was far more important than a petty squabble over the cap on energy consumption.
Thanks to its early and massive investments in LPG terminals, and renewables, Spain is now a leading
example of what Europe can do to be self sufficient and independent from Russian energy and all
the political baggage attached to it.
A totally different stance on the issue can be found in Hungary. As most of their energy mix is made
up of Russian gas and petrol (and due to the political stance of the current Fidesz government), they
have proven themselves as being significantly less aligned with the common goals of the European
Union. For example, the Hungarian government is in general strongly opposed to the packages of
sanctions against Russia, especially when they are related to energy.