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LONDON/PARIS: Europe felt the chill of soaring energy prices on Monday, with France saying it could not foot all of the extra costs for consumers, while Britain faces a rising risk of recession.

The European Union and Britain are battling to mitigate the shock of what some politicians have dubbed an “energy war” with Russia, which has slashed gas exports to Europe after the West imposed sanctions over its invasion of Ukraine.

The European Commission is set to unveil a package of proposed emergency measures on Wednesday for the 27-nation EU, including a windfall profit levy on energy firms and a life-raft for power firms facing a liquidity crunch.

But countries are split over the details and whether to impose a cap on gas prices, diplomats said.

Meanwhile, Russia said it was hard to predict the consequences for gas transit to Europe of a new arbitration process initiated by Ukraine energy firm Naftogaz.

In France, Finance Minister Bruno Le Maire said consumers would be protected by new caps on energy prices when the current ones run out this winter, but stressed that households would need to absorb a “small part” of the increased costs themselves.

“It would be completely irresponsible to put the burden of these increases solely on the state budget”, said Le Maire, adding there will be a “contained rise in gas and power prices.”

In Britain, where inflation has hit a 40-year high of more than 10%, the economy expanded by 0.2% in July compared to June, less than the 0.4% expected. The sharp climb in energy costs hurt demand for electricity and a leap in the cost of materials hit the construction sector. A “disappointingly small rebound in real GDP in July suggests that the economy has little momentum and is probably already in recession,” said Paul Dales at Capital Economics.

Meanwhile, as the European Commission drafts the next series of EU measures, Norway warned it against gas caps. “We’re going into the talks with an open mind but are sceptical towards a maximum price on natural gas,” Norwegian Prime Minister Jonas Gahr Stoere said on Monday after a call with European Commission President Ursula von der Leyen.

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