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Europe Daily Bulletin No. 9894
A LOOK BEHIND THE NEWS / A look behind the news, by ferdinando riccardi

EU/Russia: A few things to consider about mutual interest in cooperating

Indispensable energy cooperation. In relations between the EU and Russia, the energy dossier in itself takes pride of place (see this column in previous edition) and also because it largely impacts on all the other areas. The Russian authorities are aware that only energy products can guarantee their country the necessary financial resources for its development and helping it overcome the decline in the value of its currency and other negative effects of the crisis. It is Russia's stocks of energy products that give the country the power to discuss and negotiate with Europe on an equal footing. The EU is not unaware that for a considerable number of years it will have to count on Russian gas and oil (or Russian control over these resources) to meet the energy needs of most member states. The need to cooperate or at least establish a modus vivendi, is therefore reciprocal.

Some sparks will inevitably fly in an effort to make one of the two partners aware that there are indeed some areas where the Rubicon cannot be crossed. We do, however, manage to stop in time and the Georgia affair proves it. Europe managed to get the Russian army to call a halt, the US didn't intervene, a few pseudo-philosophers screamed out for war to be declared on Russia (a heroic stance from those who risk nothing) and neither side gave up its position of principle but dialogue did resume. European human-rights activists continue to do their duty with regard to the tragedy in Chechnya and the most explosive question of all, Croatia, has not been resolved and will explode one day. In the meantime, however, negotiations for a new EU-Russia cooperation agreement have been relaunched. I am not unaware of the crisis that broke out between NATO and Russia last week. One newspaper spoke of a return to the “cold war” but there is nothing of the sort and the results of the mutual slanging match will be overcome. Diplomatic irritation can, above all, be explained by the official launch of the EU's Eastern Partnership, which takes place this week in Prague.

In concrete, energy is at the centre of all the different concerns. On 6 April, Alexander Medvedev, the deputy chairman of Gazprom and the director general of Gazprom Export, published in the European press' “right to reply” that he recognised the EU's demand to diversify its supply routes and affirmed that Russia was prepared to cooperate in this task. He explained that this would be done through necessary projects such as Nord Stream and South Stream (in which Russia is a participant) and also Nabucco, which in fact avoids Russian territory (but by at the same time negotiating the preliminary purchase of the gas Nabucco will transit…). Mr Medvedev also demanded participation in studies into modernisation of the Ukrainian transit system, which in his opinion is inconceivable if Russia is excluded, as the exclusive supplier of the transported gas. He asserted that “production and transport are a single and technologically complex system”: Russian and Ukrainian sections are integrated and transit by Ukraine could not be managed through an independent system. Without Gazprom's participation, operational changes could have unpredictable effects on the whole network - “only coordination with Russia will ensure efficiency of gas production, transport and consumption”. Hence - cooperation, but in all the different aspects.

Two observations. The US also considers these dossiers as being strategically important and aims to open up a hydrocarbons route from Central Asia to Europe by bypassing both Russia and (at least for the time being) Iran. The EU considers that following last winter's vicissitudes, the priority remains security and continuity of supply. But neither should it be forgotten that:

a) security is also through completion of the common European energy market, which has recently made considerable progress (even if its flexible and chosen formula of unbundling is quite controversial) and which will be speeded up through the Lisbon Treaty;

b) Europe's general interest does not necessarily coincide with the interests of member states' oil companies. Paolo Scaroni, the chief executive of the Italian giant, ENI, illustrated factors of concern as being the “dramatic fall in oil and gas consumption” and oil price prospects, which he believes will remain at their current low level all year. Several political forces consider, on the contrary, that these two factors are broadly positive. Mr Scaroni also said that alternative energies “do not represent the future; they are temporary solutions which only hold water because they are subsidised to the hilt”. This opinion is contested.

It is up to the political community to define the general interest. In the context of Russia, however, it appears obvious that the EU's interest is to have as peaceful and cooperative relations as possible.

(F.R./transl.rh)

 

Contents

A LOOK BEHIND THE NEWS
THE DAY IN POLITICS
GENERAL NEWS
WEEKLY SUPPLEMENT