Why the EU plans to extend its emergency state aid rules

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Good morning. While we’re still waiting for the EU’s 12th package of sanctions, including measures to tighten the oil price cap on Russian crude, here’s our scoop on how the current mechanism is almost entirely useless. That’s right: “almost none” of October’s shipments were executed below the G7’s $60-a-barrel limit, officials admit.

Today, our competition sleuth reveals Brussels’ plans to extend emergency measures put in place to help energy markets during the worst of the war in Ukraine. And our Dublin correspondent has news of an Irish initiative to take Israel to the International Criminal Court.

Winter is coming

The energy crisis may be subsiding, but Brussels has decided to delay lifting the measures put in place to help the bloc cope through this winter, writes Javier Espinoza.

Context: the European Commission put in place emergency state aid rules in 2022 to help member states cope with the aggressive rise in gas and electricity prices last winter as a result of the Ukraine war.

According to a draft proposal seen by the FT, Brussels now plans to extend those measures as fears of an escalation of the conflict in the Middle East could have a detrimental effect on supplies this winter.

The extension until the end of March next year is aimed at smoothing potential price rises, the draft states. It comes despite a general improvement in energy markets with falling electricity prices and lower supply risks compared with last winter, when the bloc was weaning itself off Russian gas.

The decision to extend the measures, which include allowing states to invest in companies where they would otherwise be breaching the bloc’s stringent state aid rules, comes after securing backing from France and Germany, and despite opposition from some smaller member states.

The European Commission said it did not comment on leaks.

The confidential document points to a deterioration in the bloc’s economy and warns that “the current crisis continues to pose risks and remains a source of uncertainty”, with reference to the continuing wars in Ukraine and Gaza.

Under the extended rules, member states will be able to pay up to €2mn in grants or loans to companies facing extra costs directly as a result of pressure from high gas and electricity prices.

But, following a consultation with all member states, Brussels has decided not to extend additional measures related to helping with the transition to a net zero economy, according to the document.

Those measures to help green the economy will therefore run out at the end of the year as originally planned.

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Upping the pressure

Ireland, considered the most pro-Palestinian country in the EU, faces votes in the Dáil parliament this week on referring Israel to the International Criminal Court and expelling the Israeli ambassador in protest at its campaign against Hamas, writes Jude Webber.

Context: Ireland’s Taoiseach Leo Varadkar has blasted Israel’s reaction to the October 7 attack by Hamas as “something approaching revenge”. Micheál Martin, the foreign minister, yesterday called on the EU to “go further” in calling for a ceasefire.

The pro-Irish unity party Sinn Féin will bring a private members bill to the Dáil today, calling for Ireland to refer Israel to the ICC. Sinn Féin was once considered the political wing of the Irish Republican Army during its armed campaign to end British rule in Northern Ireland’s Troubles conflict.

The move follows strenuous calls by leader Mary Lou McDonald at the party’s conference this weekend for the Israeli ambassador to Ireland to be expelled. 

Many attendees to the conference wore black-and-white keffiyeh — a symbol of the Palestinian cause — and supported calls for pressure on Israel with standing ovations and by chanting: “In our thousands, in our millions, we are all Palestinians.” Sinn Féin is Ireland’s most popular party, and a general election is due by March 2025.

The Dáil will vote on the Sinn Féin motion tomorrow, as well as another by the small Social Democrat party, which calls not only for a referral to the ICC but also for EU sanctions against Israel and the expulsion of the country’s ambassador. Neither is likely to pass.

Martin has said the ICC is already investigating the situation in Palestine, including the current conflict.

Nevertheless, expect Irish politicians to remain vocal. “Ultimately, this is all about ceasefire,” said McDonald.

What to watch today

1. EU defence ministers meet in Brussels.

2. German Chancellor Olaf Scholz hosts Greek Prime Minister Kyriakos Mitsotakis in Berlin.

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