Brussels, 24/02/2011 (Agence Europe) - The Russian ambassador to the EU, Vladimir Chizhov, warned the press on Tuesday: there is every chance that discussions between the European Commission and the Russian government in Brussels on 24 February will be “unpleasant” over the energy chapter. He was not exaggerating. The head of the Russian government, Vladimir Putin, who came to voice the concerns and dissatisfaction of Moscow over the implications for the sector and the major Russian energy groups of the implementation, by the member states, of the third legislative package for the liberalisation of the single energy market of the EU, did not mince his words, clashing with the President of the European executive, José Manuel Barroso, in front of the press after the meeting. There were major differences of opinion, which could not be hidden by the signature, by Energy Commissioner Günther Oettinger and the Russian Energy Minister Sergei Chmatko, of a roadmap for energy cooperation between now and 2050.
As anticipated, the Russian prime minister set the cat among the pigeons on Thursday, by criticising the energy policy of the EU and its chapter on the liberalisation of the single market, which prevents Russia from owning gas pipelines in Europe and will, he argued, lead to increases in gas prices for consumers. “Today, we once again raised the issue of the third package and clearly voiced our concerns regarding several parameters of this initiative”, said Putin. Barroso had hitherto limited his discourse to trivial issues about the energy relationship between the EU and Russia, praising the reliability of the Union's principal gas supplier. “Energy is another key element of our relationship and a good example of the importance of a constructive management of our shared economic interests. Yes, we have had differences of opinion in the past, but we have proved that we were able to resolve our problems together. A substantial part of our discussions today were on energy. We looked at how we could make progress on the provisions on energy (…). I understand that there are a few concerns on the Russian side and in fact, Commissioner Oettinger and Minister Chmatko have today signed several important documents, demonstrating that our energy dialogue is making progress (…). There is a firm joint willingness to make progress on our strategic interests”, said the President of the Commission.
Yes, but the application, on 3 March, of the third package for the liberalisation of the single energy market, which is based on the unbundling of the vertically integrated energy operators by means of the principle of ownership separation of production/supply activities and transport activities of the energy operators, in order to guarantee non-discriminatory access to the networks, has raised concerns on the part of Russia, which is refusing to see European legislation placing obstacles to the investments of its major groups. In particular, Moscow targeted a clause of the third package, the reciprocity clause, which, on the basis of the principle of ownership separation, does not allow an EU gas supplier at the same time to own gas pipelines on European soil. It believes that this specifically targets its gas giant, Gazprom. “The third package contradicts our basic agreement which is in force, guaranteeing that the situation of our companies on the European markets does not deteriorate. In fact, the third package does make it deteriorate, because it confiscates ownership (…). I do not wish to say that we have too many concerns, because everybody has his own vision, our partner has their vision, and we have our own. But I clearly told our European colleagues that we believe that the implementation of this package could lead to an increase in energy prices on the European market. And the European side is not interested in price increases”, Putin explained, clarifying his commitment to a “mutually advantageous solution in the near future”.
Shaken, but not stirred, Barroso responded, reiterating that the rules of the third package are “not discriminatory”. “All we ask of foreign companies is to accept the same rules that we impose on European businesses (…). These rules do not just target Russian companies, they also apply to Norwegian companies. I believe that the third package has instruments to mollify the concerns voiced by Russia. One thing is certain, we want Russia to remain our main partner for gas: thanks to Russian gas, our businesses work and we have heat in our homes. But we pay, and we pay well, we are excellent customers. It is in the interests of both Russia and the EU to have a predictable procedure (…). We believe that the third package is fully compatible with WTO rules, and with our bilateral agreements”, he continued.
But Putin was determined to have the last word: “The (European) rules say: those who provide the gas cannot own the transport. The energy transport business is not particularly profitable. If gas pipelines are shared between small European companies, this will increase prices”, he insisted. The EU/Russia energy dialogue left behind an image of a dialogue of the deaf at the highest level. The matter is far from concluded. It is now up to European and Russian experts to find common ground. (E.H./transl.fl)