TCS Daily

The EU's Power Crisis

By Evgeny Morozov - May 19, 2006 12:00 AM

What would the drafters of the Maastricht treaty in 1992 make of the EU's three so-called pillars in 2006? If they were doing it all over again, they might choose to lump foreign policy with energy, not security.

To see how deeply energy concerns are engraved in EU foreign policy, think of the big issues haunting European diplomats at the moment. Russia, Belarus, Iran, Turkmenistan, Ukraine -- in all of them foreign policy is tightly intertwined with energy. Energy concerns explain why nobody in the EU has the guts to criticize the draconian dictatorship of Turkmenistan; too many sharp words from Brussels and the Turkmen pipelines would be rerouted to China (in fact, they wouldn't -- it is still not technically feasible -- but many in Brussels prefer to live with this bone-chilling awe than getting Turkmenbashi to behave himself).

When foreign policy and energy policy clash, Brussels and national capitals retreat to heart-rending self-denial and start searching for a scapegoat. Invariably, it is found in the greedy Anglo-Saxon locusts or in expansionist Russian companies, which are just a tool in the cunning hands of the Kremlin. Moscow is constantly reminded how much is expected of it as of a major EU partner.

Expecting the Kremlin to provide energy security to Brussels on a silver platter is the pinnacle of naïveté. Despite whatever claims Putin might be making on the eve of the G8 meeting, it is cash from oil and gas, not energy security, that interests him. It is time for EU to ensure its own energy security. Aligning energy and foreign policies, ironing out the misgivings that exist among member states, and developing a joint strategy on Russia would make for a good start.

The most eminent problem is that although EU has awoken to the alarming importance energy would play in its policies, it still tirelessly gropes for answers to the wrong questions. Take the recent disputes over Russian energy companies. Instead of retreating deeply into self-analysis and drafting a road map for building a constructive relationship with Putin, the EU lashed out at Moscow for having an expansionist mindset.

Expansionist Gazprom and Rosneft surely may be; but so are BP, Shell, and Total, which are also dying to expand their presence in Russia. There is nothing wrong with the aspirations of the Russian state-owned giants; they, like any other companies, will either grow or die. By thwarting the expansion efforts of the Russian energy companies, the EU will hurt nobody but itself and its own businesses, who will face a hard time operating in Russia as well.

There is hardly any threat to the EU in Gazprom's bid for Centrica. Gazprom does not make much money on its Russian operations, since it has to sell gas at highly subsidized prices to domestic consumers. Its expansion is the only way for it to make enough cash to pay for the momentous projects it has embarked on. On that count, Putin is right when he accuses the EU, which likes to give him lessons about globalization and free-markets, of double-standards. Tony Blair's support for Gazprom's bid reveals that he still has much more common sense than most of his fellow leaders in other European countries. In France, the matter would have probably been solved by now, with Gazprom being shown the door.

The pervasive protectionism that emanates from national capitals whenever it comes to the energy sector is surely destructive in the long-run, but it has more to do with backward economic thinking in general. One should not confuse this with energy policy; it has as much to do with energy as with banking or steel, the other two sectors of the European economies that remain extremely protectionist.

The real problem with the EU's callow energy policy lies in its apparent lack of strategic communication, consultation, and consensus-building among members states. It becomes especially apparent whenever it comes to bilateral deals that the national governments strike with Moscow.

Germans pave the way here: the bilateral deals with Putin that were so much adored by Gerhard Schröder have continued under Angela Merkel. Berlin does act on Germany's national interests all of the time; it wants to secure its energy supplies in the very likely case of Ukraine or Belarus, the two transit routes from Russia, being cut-off from the Russian pipelines. The same goes for putting Schröder on the board of Gazprom's daughter-company: Putin's best buddy with a vast experience in politics would represent Germany's interest better than anybody else.

However, such big, unilateral, and secretive moves by Germany do not square well with EU's raison d'être. When a senior member of the Polish government compares the recent deal between Germany and Russia to the Molotov-Ribbentrop pact of 1939, one can already smell something bad in the air. So far, it is just gas, but the smell is likely to worsen very soon.

Why would a German chancellor enter such an important deal with Russia outside the EU framework is hard to explain, especially to the countries in New Europe, who thought that from now on they are going to be consulted on big policy issues. It might be very soothing for Germans to know that they will not be freezing in winter -- but they should also know that this comfort comes at the expense of Poles left out in the cold. Poland has just pieced together a populist government, and if Germany continues in this unilateral framework, it is not going to breed just anti-German feelings (which are still quite strong in the country), it is also going to breed anti-EU feelings.

It is tempting to write off most these problems as by-products of the EU's previously careless approach to energy. The bloc had been neglecting the issue until January 1, when Russia cut off gas to Ukraine. Even when the current European Commission was being formed, the energy portfolio was hardly considered important (as long as the supposedly incompetent László Kovács was not running it). President José Manuel Barroso gave the portfolio to Latvian Andris Piebalgs. His professional qualifies aside, Piebalgs was a bad choice, simply because Russia, not known as a friend of the Latvian government, is now the EU's most sensitive partner.

It is time to appoint a high-level figure with rich experience in the field as the EU's senior representative for energy, and have him play a role similar to the one Javier Solana is playing in foreign policy. More than that, the two should work together. The new energy representative should be on good terms with Moscow, be a welcome guest there, and, spend as much time with Putin as with Barroso. It would also help if he or she does not come from an Eastern European country that has a long history of animosity with Russia.

With such a convenient scapegoat as the Kremlin close at hand, the EU will find it increasingly tempting to give up on self-correction and just blame it all on Putin. Putin is a strong a Russian man, and he will stand the accusations. However, the costs of such a fallacy for the EU itself would be quite dear.

The author is a columnist for the Russian newspaper Akzia. He lives in Berlin.


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