Apart from the issue of human rights and rule of law, energy relations with Russia give EU’s leaders the biggest headaches. This state of fact is rooted in the importance of the ”mighty energy sector” for Russian internal and external policy.
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Apart from the
issue of human rights and rule of law, energy relations with Russia give EU’s
leaders the biggest headaches. This state of fact is rooted in the importance
of the ”mighty energy sector” for Russian internal and external policy. For
Moscow the revenues from oil and gas industry ensures the stability of
political regime and represents the main instrument of its geopolitical
influence. The "energy diplomacy" emerged since the first Putin’s presidential
term and dominates the EU-Russia relations.
As a basic
feature, the EU-Russian energy relations are characterized by a strong mutual
dependence. Russia is the EU’s biggest energy supplier and the EU is Russia’s
biggest trading partner. However, even the Kremlin has been trying to increase
Europe’s dependence on its energy, Russia needs the EU more than Brussels needs
Moscow. While some member states are unduly dependent on Russian energy, and a
few alarmingly so (ex. Finland, the Baltic states, Bulgaria), the EU as a whole
does not suffer from excessive dependency upon Russia. The Russian fuels
exported to the EU represent over three quarters of all its exports, for the
EU, though, these constitute a bit less than one third of its total energy
imports needs. In these conditions, the EU would be able to withstand any
interruption in imports of crude oil or natural gas from Russia because the
EU’s energy consumption can be replaced by other energy sources (nuclear,
renewable, liquefied gas) and suppliers (increased imports of Norwegian, Middle
East, Nigerian gas or increased imports of Saudi oil). Russia’s position would
be more vulnerable if the EU reduced its purchases of Russian oil and gas. In
this scenario, Russia would be threatened with financial collapse due to its
inability to replace lost revenue . This mutual dependence between Russia and
Europe has meant that Russia’s energy weapon has, in actuality, turned out to
be less potent that some in the Kremlin may have hoped and that many Europeans
feared.
There is no
doubt that the January 2009 Ukrainian gas crisis, Russia’s withdrawal from the
Energy Treaty, the Arab revolts in North Africa, and the Japanese earthquake,
tsunami and nuclear accident, which called into question the reliability of
nuclear energy, put pressure on the security of European energy, however, the
EU is trying to overcome these challenges. Thus, in order to reduce its import
vulnerability, in November 2010, the European Commission adopted the ten-year
Energy plan entitled, Energy 2020: A strategy for competitive, sustainable and
secure energy. The Commission’s objectives for 2020 are to increase the share
of renewable energy to 20% and to make a 20% improvement in energy efficiency.
As the large EU members of Western Europe are less dependent on Russian
imports, while the countries of Eastern and Central Europe have fewer
alternatives and are from 70 to 99% dependent on gas and oil imports from
Russia, the strategy involves the obligation of solidarity among member states,
internal infrastructure and interconnections across external borders and maritime
areas. This way, the gas could circulate in case of crisis, in order to be able
to be transferred from one country to another. The EU will put an important
accent on the modernization of the existing infrastructure, with specific
emphasis on the Southern corridor, in particular Nabucco and ITGI. Europe has
also found different sources of energy in Qatar and even in the USA, countries
which could export liquefied gas. In January 2011, the EU and Azerbaijan signed
an agreement on natural gas supplies, which commits Azerbaijan to selling
”substantial volumes of gas over the long term” to the EU. The agreement
represents the first firm commitment from a Caspian Basin country to provide
gas for the EU’s Southern Corridor.
Moscow
perceives this EU policy as a threat to its energy security and has reacted
defensively. The termination of Russia’s provisional application of the Energy
Charter Treaty came two weeks after the signing of the Nabucco
Intergovernmental Agreement. (Moscow is afraid of losing its gas transportation
monopoly and the ratification would have undercut Gazprom’s position on the
European market by forcing Russia to open up its network to cheaper gas from
Central Asia.) A week after the signing of the EU-Azerbaijan agreement on the
Southern Corridor, Gazprom announced that it would increase the amount of gas
it purchases from Azerbaijan, in order to make the European project nonviable
because of lack of sufficient hydrocarbons reserves. Russia has been also trying
to diversify its energy exports and reduce its dependence on the European Union
by opening an Asian route to Chinese, Korean and Japanese markets. Gazprom is
trying to sell gas to China, but the negotiations on exports have been taking
place for several years without success so far. Thus, Russia remains dependent
on the EU. On one hand, the gas is usually transported through pipelines and
Russian transport infrastructure is oriented towards Europe, exporting to new
markets requiring expensive new pipelines and advance planning, and on the
other hand, the EU is the most lucrative market for Russia (Gazprom gets nearly
70% of its profits from sales to the EU)3 . Moreover, Russia encounters further
problems with regard to the Chinese market. The communist neighbors are not
willing to pay as much as are paying the Europeans for Russian gas and oil, and
the demographic discrepancies between ratified Siberia and crowded China are
not at all comfortable for Russian leaders. ”Vladivostok is already a Chinese
city, both economically and culturally. The Chinese make up more than half the
population of Khabarovsk”4 . Russia now seems understandably to be more
preoccupied with the exposure of the thinly populated Far East to the rising
power of China. Beijing’s growing involvement in Central Asia (including the
launch of a gas pipeline from Turkmenistan to China via Uzbekistan and
Kazakhstan) and Turkmenistan’s thriving cooperation with Iran, have seriously
limited Gazprom’s ability to have Central Asian gas at its disposal.
Furthermore, Moscow fears being marginalized in a world where power and wealth oscillate
between Asia and the Pacific and needs powerful allies as a counter-balance to
Chinese power. Thus, at least in the medium term, Russia is ”condemned” to be
EU’s partner in the energy field.
The asymmetric
inter-dependency is more obvious in trade area. The EU is the most important
Russian commercial partner, while Russia is ranked third among the EU’s trading
partners, after the USA and China. More than half of Russia’s trade is
conducted with EU states, and 75% of foreign direct investments in Russia come
from the EU. On the other side, the EU’s exports to Russia represent up to 6%
of its total value exports, while its imports from Russia are around 10%. It
is obvious that Russia is dependent on the EU and not vice versa. And this
dependency on trade, especially energy trade with the EU will increase, given
the new and future projects (Nord Stream – to Germany and South Stream to the
Balkans). Russia has sought to enhance its leverage over Europe through the
construction of new pipelines and to direct the asymmetric interdependence to
its advantage, that is to make Europe more dependent on Russia than Russia is
on the EU, however, these pipelines not only increase the sheer quantity of oil
and gas Russia can export to Europe, but also increase Russia’s dependency on
European market.
The Russian
economy is considerably dependent on the EU economy for its export, of which
60% goes to the EU. In the hypothetical case where trade between the EU and
Russia would come to a complete standstill, Russian economy would simply
collapse. On the other side, the European Union is the largest single market
in the world, which gives the EU and especially to the European Commission some
leverage on Russia. Brussels should not be intimidated by Russia’s ”energy diplomacy”
when negotiating, in fact the Kremlin recognized its need to be part of the
market economies club by becoming member of the World Trade Organization, and
now has to comply with the international rules.
Cite this Article:
Empfohlene
Zitierung / Suggested Citation: Rotaru, Vasile: Between interdependence and
strategic interests: EU-Russia relations after the Georgian war. In: Studia
Politica : Romanian Political Science Review 12 (2012), 3, pp. 472-474. URN:
http://nbn-resolving.de/ urn:nbn:de:0168-ssoar-445994
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