Saturday, October 21, 2006

[europe] eu leaders wine and dine putin

Continued … Europe has long been scared of Russia. Just 20 years ago, it the fear of a strong Soviet Russia threatening invasion. 10 years ago it was fear of a weak Russia flooding Europe with starving refugees. Now Europe is worried about energy.

Russia is the world's biggest gas exporter and the second biggest oil exporter after Saudi Arabia. Already 40 per cent of Germany's gas comes from Russia, within ten years most of Britain’s gas will have to be imported.

So what happens when the EU's leaders all get behind closed doors with Vladimir Putin? According to one EU insider quoted by the BBC, the leaders all say 'I love you, Vladimir'. A little cynical perhaps but that’s the sort of unilateral approach that will give Russia the upper hand, according to the Director of the EU Russia Research Centre, Fraser Cameron.

The problem is that too many member States are not really taking the common policy we have towards Russia seriously. They’re cutting bilateral deals. You will only deal with Russia seriously, and I think gain influence, if you operate collectively as an EU and that’s the challenge ahead to try and get all the member states to sign up for an agreed EU policy.

When Russia cut off the gas to Ukraine and Georgia this year, it conjured up nightmares of a freezing Europe, a dystopic vision of what an energy giant could do to those who pushed too hard for cheap energy. Unlikely perhaps, but Russia's massive energy conglomerates, unrestrained by EU competition law and with helpful friends in the Kremlin, are exactly the sort of corporate behemoths cause geopolitical nightmares in European capitals.

But it’s that sort of talk that appals Vladmir Chisov, Russian Ambassador to the EU, who was told about similar concerns on BBC Radio. I was appalled by those comments. I think they are based on wrong information. Dependence on Russia’s energy supplies is an objective fact.

This meeting that should around now be up to the whisky and cigars stage, is being held in Helsinki because Finland currently holds the EU's rotating Presidency. Foreign Minister Erkki Tuomioja says Russia can make threats but Moscow needs the EU just as much as Europe needs Russian gas.

So as you contemplate your breakfast and Europe’s leaders eyeball Vladimir Putin, why would any common European front be replaced by unilaterally cut deals? Lithuania may provide a reason.

The government there sold an oil refinery to a Polish rather than a Russian company. In July, Russia cut off oil supplies to the plant after the pipeline was damaged by quote, "unknown factors." This week a fire at the plant caused the equivalent of $100 million damage. Authorities in Lithuania are now investigating.