Gas, Russia and the European Union

In this month’s edition of The World Today, James Sherr, the leading Russia expert in Chatham House, has an excellent article on the perilous state of European energy policy (or lack thereof). The title of his piece, ‘Final Warning’, could not be any clearer: not only has the latest Russia-Ukraine gas row revealed—at least to those with their eyes open—that European energy supplies from Russia are under constant threat from the machinations of Mr. Medvedev and Mr. Putin’s authoritarian regime, but also that many Europeans—especially those from Germany and some of the Central European Member States—have deluded themselves into thinking that they can trust Moscow, or even that the Kremlin has their best interests at heart.

Of course, to those of us who understand the cold, prickly and callous nature of the contemporary Russian establishment, the Kremlin’s latest round of deceitful intrigue does not come as a surprise. Under its current leadership, Russia is no friend of the European Union’s; indeed, far from it, Russia has become a dangerous competitor, and is rising rapidly on our eastern flank. Moscow has continued to entrench its power over the European Union: first, by dividing and ruling the Member States, by playing one off against the other; and second, by encircling and pushing back European advances in the former Soviet space—if necessary, through the use of overwhelming military force (e.g. in the Caucasus). And Europeans have fallen for it. Germany and Italy have gone along with Russia’s designs, mistaken in the belief that the integration of Russian companies into the European energy grid might give Europeans a grain of influence over decisions taken in Moscow.

Unfortunately, as the Americans warned back in the early 1980s, this approach is flawed. It won’t work. The autocratic character of Russia means that the country will never see the world through the lens of the European capitalist or the European democrat. As Edward Lucas, the Eastern European correspondent for The Economist, points out: ‘Rather than exporting German virtues to Russia, the danger now is that Germans are importing Russian sleaze, corporatism and anti-Americanism.’ And this damages the rest of Europe as much as it damages Germany.

So where to from here? Dr. Sherr offers several pointers, of which two stand out:

(1) Europeans must express outrage at Russia’s actions. As he argues: ‘The E.U. will have no influence in Russia or Ukraine until it gains respect.’ Instead of snivelling in Moscow, Europeans need to be bolder and tell it like it is. José Manuel Barroso, President of the European Commission, went some way towards this objective yesterday when he publicly declared that Russia cannot be trusted. The Russians must be put in their place. Power politics is back (if indeed, it ever went away), and Europeans must be prepared to engage in it.

(2) Europeans must put their own house in order. As Dr. Sherr asserts: ‘If not, we will soon find that energy policy is made for the E.U. rather than by it.’ But putting our own house in order will require a plethora of new European approaches to cut and degrade the dependency currently afforded to Russian gas suppliers. It will mean a comprehensive approach to finding new forms of energy, and bringing back online older ones. It means Europeans must ditch the Nord Stream and especially the South Stream pipelines, and boost their determination to build the Nabucco pipeline instead. The former two will only divide Europeans even further (not least Sweden and Poland, who have feared Nord Stream’s geostrategic and environmental impact), while the South Stream pipeline would increase Russia’s reach into the Balkans and across the Black Sea. Nabucco, on the other hand, would diversify European gas supply infrastructure, and make possible direct shipments of gas from Central Asia and the Caspian Sea, without it having to enter the Russian supply system.

What is clear, though, is that Europeans will only succeed through the European Union. Only it has the aggregated power with which to deal with Russia. This is of particular relevance to France and the United Kingdom. Until recently, both, in their differing ways, may have felt that Russian energy dependency was a distant problem. Both of these traditional great powers are far less dependent on Russia—if at all—than Germany, Italy and the Member States to the east: Britain has its own supplies of gas in the North Sea, as well as long-term contracts with Norway. And France has a large nuclear power industry, making foreign dependency unnecessary. But as this latest Russia-Ukraine dispute has proven, problems in one Member State can rapidly proliferate and spread to harm the economies of all the others, particularly in times of financial difficulty. This is especially relevant for the British, whose gas reserves in the North Sea will decline over the new decade or two.

So, in an increasingly volatile world, full energy independence must be the European Union’s goal. Only more integration and a far harder policy towards Moscow will deliver the goods. And with a new American presidential administration coming to power in Washington, which is being advised by some very clever Russia experts who are known for their advocacy of a tougher line towards the Kremlin, it is time for Europeans to stand up and rise to the challenge.