Mercedes Herrero explains how Russia is taking advantage of the European Union‘s dependence on its natural gas in order to form privileged economic relationships, as well as quiet Europe‘s complaints about Russian internal affairs (such as the violation of human rights in Chechnya), and garner support for its own possible entry into the World Trade Organization. Herrero sheds light on the route of natural gas from Russia to the EU, on the reactions of Poland, Slovenia, and Ukraine to Russian pressure, and on why Brussels has decided to accept Russia‘s extortion in order to avoid instability in Europe‘s natural gas supply.
IN THE BEGINNING OF 2006 THE RISING PRICE of Russian natural gas exported to Ukraine caused a crisis between the two countries. The crisis, in turn, produced a wave of fear in Europe, whose supply of natural gas depends heavily on Russian pipelines that cross Ukrainian territory.
The conflict between Moscow and Kiev resolved itself in a short period of time, raising the price of natural gas from fifty dollars per thousand cubic meters to ninety-five. The new tariff is due to be renegotiated this summer, and while high, is still remarkably less than the two hundred and thirty dollars that many other European countries, including Austria, are forced to pay for their natural gas.
EUROPEAN DEPENDENCE ON RUSSIA
The European Union imports from Russia approximately 30 percent of its natural gas consumption, a rate that is sure to increase over the next few years. In order to avoid instability in its gas supply, Brussels has been nothing but compliant in its negotiations with Russia.
Russian President, Vladimir Putin, appears to be fully aware of his position of power in these negotiations. In his last meeting with top representatives of the Union (at the beginning of June of 2006), Putin showed interest in the offer to establish a free trade agreement, ceding economic privileges to both the EU and Russia. Natural gas, of course, was one of the key issues discussed in the treaty.
THE WTO AND CHECHNYA
In exchange for favoring the EU in Russia’s exportation of natural gas, the Russian President demanded two things: the support of the Union of Russia’s bid to enter the World Trade Organization, and silence in regards to the current conflict between Russia and the Republic of Chechnya.
Since the terrorist attacks of 9/11, the United States and the European Union have turned a blind eye to the violations of human rights that Russia has perpetrated in Chechnya. What Russia wants now from the European Union is complete silence; assurance that Europe will not raise its voice in even the faintest whisper of protest. Russia’s demands are non-negotiable, bordering on extortion; with its newfound economic power, Russia plans to act as it sees fit.
What is more, Russia is currently the presiding member over the Counsel of Europe, an organization specifically designated to uphold democracy and human rights on the European continent.
Germany, for instance, has begun planning to construct a pipeline across the Baltic Sea in order to transport the gas more efficiently from Russian to German soil. At the head of the project is none other than ex-prime minister Gerhard Schroeder, whose participation has received harsh criticism.
POLAND AND SLOVENIA TAKE ACTION
The initiative has completely marginalized Poland and awakened the anger of its citizens before such a delicate economic situation. Poland fears that Russian gas will come into the European Union without crossing through its territory, which would mean a great loss in economic and strategic power, and a possible crisis in Poland’s gas supply.
Slovenia too decided to act and sent a strong delegation to Moscow in the middle of June. Slovenia will assume the presidency of the European Union in January of 2007, and is especially interested in guaranteeing that Russian natural gas arrive safely on European soil to ensure Europe’s economic stability.
Slovenia also has a vested interest in the Russian market in order to oppose the Italian plans to construct two power stations (alternatives to Russian gas lines) at the mouth of the Gulf of Trieste, forty kilometers away from the Slovenian coast.
As Putin declared in a meeting with news agencies around the world (in early June), if Kiev wants to go ahead and make new allies, it should count on them, and not Russia, to provide natural gas at such low and generous subsidized prices.