Javier Solana speaks out. Is the short speech made last week by Javier Solana (at the Energy Policy Forum organised by the European Commission) a positive symptom of the EU's political will finally to move towards common positions on energy? I think so, because the High Representative for Common Foreign and Security Policy (CFSP) was unusually firm in his tone. He said that in the absence of unity, "our partners will run rings round us, as has almost been the case on several occasions". He feels that not only does this disunity have serious consequences for the energy security of the Union, but it also has repercussions on EU external relations as a whole, by "limiting our ability to move forward broader objectives of foreign policy, conflict resolution, human rights and good governance". Bottom line: if the EU does not act as a whole in the field of energy, all of its external actions will end up compromised.
I feel that this affirmation is more than the opinion of a qualified person. Javier Solana is well aware of his responsibilities, but also of the limits of his functions. It seems to me unlikely that he would adopt such a forward view if he didn't know that it corresponded to those of the main authorities above him. His speech thus reflects growing awareness in most of the Member States of the need for Europe to act as a body. The High Representative pulled no punches in his enumeration of the risks: Europe's negotiation partners in the field of energy "do not necessarily share our interests and our values. Having vast reserves of oil and gas gives a trump card to regimes which may use their resources to dubious ends". If Europe is weak, it will be hard for it to obtain the support of its key partners on broader objectives (see our bulletin 9310).
The doctrine of Vladimir Putin. Those who control oil resources and who do not share European values are many, but Russia was no doubt at the centre of the concerns voiced by the High Representative, particularly as, at almost the same time, Vladimir Putin had published a "Tribune" in various European newspapers, voicing his assessment of relations between his country and the EU. The Russian President said that accession to the EU was not his objective, but that Russia is, by its nature and by its historical and cultural traditions, "a natural member of the European family", to which it can lend its "extraordinary experience in the coexistence of religions, ethnicity, and different cultures". However, Mr Putin added that when we speak of "common values", we must take account of the "multiformity which has historically been created in the unitary European civilisation", going on to state that it would be "unhelpful and, indeed, deeply wrong to attempt to impose artificial average standards". The subtext of Mr Putin's message is clear: the EU cannot impose its standards of civilisation on a country such as Russia.
Mr Putin then went on to outline his conception of the new EU/Russia agreement, negotiations for which were due to have opened late last week. He sees a concise text of great political weight, future-orientated, laying down the objectives and mechanisms for equal cooperation between the EU and Russia. Technical and sectorial issues are of secondary importance; we must certainly put our heads together to discuss and resolve any difficulties; but the agreement to be concluded is another thing altogether. And we need have no fear of the "growing interdependence" between the EU and Russia; this is but a "stereotype far from reality".
We can, therefore, see that where Mr Solana believes that it is vital for the EU to discuss energy issues with Russia as a single entity (vital in order to have some weight in other areas as well), Mr Putin considers that negotiations on a new planned agreement should be more general in nature. For energy, he believes that interdependence is quite normal; the current situation (in which every country of the EU, or very nearly, does its own thing) may suit him very well indeed. In this context, we can see, delaying the opening of negotiations is just a momentary thing.
"Substantial reciprocity". Going back to energy, the elegant phrases and odd concession (on overfly rights on Siberia) of Vladimir Putin do little to change the situation: Europe cannot face Russia down unless it manages to sing from the same hymn sheet and to defend uniform positions. Demands by Poland calling for Russia immediately to sign the Energy Charter had an unpleasant whiff of blackmail about them (towards the other Member States, that is): demanding this signature before 24 November as a condition for the opening of negotiations with Russia was unrealistic, and everybody in Warsaw knew this very well. Russia will never sign this Charter as it stands. It accepts the principles of it, but on the basis of "mutual reciprocity", and Mr Putin explained what he meant by this expression: in exchange for access to the energy resources of his country, Russian companies must be able to be active on the EU market. The European Commission had already substantially accepted this view. I have spoken of this many times in this column (see, amongst others, bulletin 9293), and a few agreements between companies of both sides have already been announced, because, pending these discussions of a more general nature, life goes on.
The signing of the agreement between Gazprom and ENI (Italy) after a year of discussions was the most significant of these. The contents of this agreement are most noteworthy: a) the duration of the contracts for Gazprom to supply ENI (normally due to expire in 2017 and 2022) has been extended until 2035; b) Gazprom will start to sell increasing quantities of its gas, up to 3 billion cubic metres a year as of 2010, directly to end customers in Italy from next year (using ENI pipelines for the Italian section of the transportation); c) ENI will become the joint owner of Russian resources (in the former empire of Yukos); d) both sides will jointly carry out a series of expansion projects, in Russia and elsewhere, and will work together on gas liquefaction technology.
As is much to be expected, the European Commission took a close interest in this agreement, and the Commissioner for Energy, Andris Piebalgs- ruing the fact that he had learned of the signature of the agreement "through the press"- met the Italian minister in whose jurisdiction the case lay, Pierluigi Bersani, and also ENI CEO Paolo Scaroni. The Minister said that Italy was in favour of the "European dimension" to the energy policy, but that in the meantime, it must protect its own essential interests, and the security of supplies of Russian gas until 2035 is very much one of these. Mr Scaroni explained the agreement, stating that it fully respects any rules Europe has in this field. At the same time, Gazprom has opened a subsidiary in France for the direct sales of its gas to local industries (it is said to be targeting 10% of the French market) and is in the process of shoring up its position on the UK market and its agreements in Denmark.
It is the Putin doctrine on this "substantial reciprocity" in full force. I would, however, like to add one word of warning: in "Interface", the monthly bulletin of the "Confrontations Europe" Association, energy issues expert André Ferron expressed the view that this reciprocity would be apparent rather than actual. To quote him (our translation): "the basis for trade is completely biased; it consists of allowing Gazprom genuine and non-discriminatory access to the European networks, in exchange for precarious access to the Russian networks. If the separation between producers and networks can be total in the EU, it never will be in Russia. Even if Gazprom was no longer the official owner of the networks, the Russian State would still not give up its grip of the networks and of Gazprom itself".
Two lessons to be learned. In conclusion, then, there are, in my view, two main lessons to be learned from the above-mentioned developments. The first is the clear and unavoidable confirmation of the fact that the energy sector is not in the hands of businesses alone, because the role of the political authorities is an essential one. On the Russian side, this is quite obvious: everything that Gazprom does (or does not do) is decided on directly by Vladimir Putin. On the European side, a few days ago, Romano Prodi (who, once upon a time, personally signed the agreement in principle with Mr Putin on Gazprom's entry onto the Russian market) was in Algeria to negotiate the increase of the capacity of Transmed (the under-sea gas pipeline which transports Algerian gas to Italy) and the construction of Galsi (a similar gas pipeline which will link Algeria with Sardinia). Even the military authorities have a hand in the energy issue: NATO authorities have warned the Member States of the possibility that Russia may create a cartel of gas producers by adding Libya, Qatar, Iran and several other Asian countries to the agreement which has already been reached with Algeria.
The second lesson to be learnt is also confirmation: Europe's powerlessness if each Member State insists on playing its own national game. Those who have possibilities of taking action use them unilaterally with questionable results; those who believe themselves to be in a position of weakness are armed only with the veto, and Poland's case proves that in some situations, they will not hesitate to use it. Javier Solana's words quoted at the top must be taken seriously.
In parallel to all this, the EU must step up its efforts internally. The action plan adopted last week by the Council on energy inefficiency is absolutely vital (see the report by Emmanuel Hagry in our bulletin 9313), because it seems finally to indicate a certain amount of awareness of the significance of energy economies, both economically (volume of possible savings) and environmentally. The European Commission is announcing initiatives (although certain elements of them remain controversial) on the functioning of the internal market. Watch this space.
(F.R.)