Tuesday, 27 Feb 2024

US accused of ‘profiting from the war’ as EU flounders over gas prices

Joe Biden stumbles on his words during COP27 speech

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Vladimir Putin’s strategy of using Russia’s gas supplies against the West is starting to sow dissent among NATO as top European officials take aim at Joe Biden, accusing him of “profiting from this war”. Multiple high-ranking officials from the bloc have accused the US president of capitalising on the opportunity represented by the invasion and jacking up the price of weapons and gas. The controversy follows Brussels’ growing frustration with the White House’s green taxes and subsidies, which the bloc claims moves trade away from EU-based industries.

Speaking to Politico, a senior EU official said: “The fact is, if you look at it soberly, the country that is most profiting from this war is the US because they are selling more gas and at higher prices, and because they are selling more weapons.”

Another said: “We are really at a historic juncture.”

The official added that the combination of trade disruption and high energy prices jeopardises the US’s reputation with countries on the other side of the Atlantic.

They said: “America needs to realise that public opinion is shifting in many EU countries.”

Emmanuel Macron has also accused the US of not being “friendly” in its approach to the EU. The EU’s chief diplomat, Josep Borrell, meanwhile, called on the US to acknowledge the impact they were having on the European economy.

He said in an interview with the same news outlet: “Americans – our friends – take decisions which have an economic impact on us.”

However, the US has refused to concede that they are impacting the price of gas in the EU.

A spokesperson for Mr Biden’s National Security Council (NSC) said: “The rise in gas prices in Europe is caused by Putin’s invasion of Ukraine and Putin’s energy war against Europe, period.”

They added that exports of liquefied natural gas from the US to Europe “increased dramatically and enabled Europe to diversify away from Russia.”

An American official stressed the price setting for European buyers of gas reflects private market decisions and is not the result of any US government policy or action, SAYING: “Us companies have been transparent and reliable suppliers of natural gas to Europe.”

The EU has turned to the US as an alternative to Russian gas, in order to avoid indirectly funding Putin’s war and giving him leverage over them for the crucial resource. However, Europeans say the price they are facing in the US is nearly four times as high as the same fuel costs in America.

This row is compounded by a surge in orders for US-made military gear, as the EU’s supply of weapons to Ukraine leaves them running low themselves. Mr Macron even argued the high US gas prices were not “friendly”.

Meanwhile, Germany’s economy minister called on Washington to show more “solidarity” by reducing their energy costs.

According to the senior official speaking to Politico, Mr Biden was entirely unaware of the impact of high US gas prices on the EU, when bloc leaders cornered the president on the issue at the G20 meeting in Bali last week.

Other EU officials and diplomats agreed that American ignorance about the consequences for Europe was a major problem.

David Kleimann of the Bruegel think tank added: “The Europeans are discernibly frustrated about the lack of prior information and consultation.”

An EU diplomat added: “It’s not good, in terms of optics, to give the impression that your best ally is actually making huge profits out of your troubles.”

The high gas prices add to existing tensions over Mr Biden’s Inflation Reduction Act (IRA), a huge tax, climate, and healthcare package for the US – but which caused one EU official to question whether Washington was “still our ally”.

Fears are rising of a transatlantic trade war as a result of the package, which EU officials say put European industries at risk of collapse.

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Dutch Trade Minister Liesje Schreinemacher said the IRA is “very worrying”, adding: “The potential impact on the European economy is very big.”

An official from France’s foreign affairs ministry described the IRA as “discriminatory subsidies that will distort competition.”

Tonino Picula, the European Parliament’s lead person on the transatlantic relationship added: “The US is following a domestic agenda, which is regrettably protectionist and discriminates against US allies.”

The EU is preparing to have to react to the growing trade crisis, including reportedly considering subsidising industries that need support.

The NSC spokesperson said: “The increase in global LNG supplies, led by the United States, helped European allies and partners get storage levels to an encouraging place ahead of this winter, and we will continue to work with the EU, its members, and other European countries to ensure sufficient supplies will be available for winter and beyond.”

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