European leaders are wrangling about the level of two energy price caps: one on European wholesale natural gas prices and another on Russian oil exports. Despite the focus on the price level disagreement, the real fight is about policy: What the price caps are intended to do, and whether there are any acceptable tradeoffs for them.
So far, the only thing the European leaders have agreed upon is that they want something they can all call a “cap” to look tough on Russia. It doesn’t matter if the final product looks more like a unicorn — highly desirable, but very, very rare — or, increasingly, a bit of a chimera. Both caps are meant to resolve “all of the above” problems while triggering “none of the below” tradeoffs. If they can get through all the push-me-pull-yous, it will be nothing short of a miracle.