JÁVORT Az EU-BA!

Támogasd Te is küzdelmünket a zöld és igazságos jövőért!

Reconsidering EU-Russia energy relations: a basis for a new balance

The aftermath of the Ukrainian crisis, the Russian military intervention and the undeclared war in eastern Ukraine brought about a crucial change in the EU’s foreign affairs. The new understanding of a conflict-oriented and imperial rationality-based attitude of the Russian leadership caused a substantial shift in the EU’s Russia-politics – and raises security questions not only at European level but also on the global scale.

The military conflict in Ukraine has brought to the forefront the issue of energy security and the need to reduce all forms of energy dependency from Russia. Underlining this is importance of the EU speaking with one voice in energy policy as well as in its foreign policy.

Russia is the EU’s biggest neighbour and its third biggest trading partner. In the last decade, EU-Russia relations have been characterised by mutual recognition and increasing cooperation, which was evident not only in the fields of trade and economic cooperation. The so-called common spaces cover aspects such as research, culture, education, environment, freedom and justice. Moreover, negotiations have been ongoing since 2008 to further strengthen the partnership and have legally binding commitments in all areas including political dialogue, freedom, security and justice, research, culture, investment and energy. After 2010, the partnership for modernisation has become the focal point for cooperation, reinforcing dialogue initiated in the context of the common spaces.

Not acceptable in any sense

The role of Russia in the Ukrainian crisis shed light on the fact that Russia is not on track in the process of democratisation and modernisation in the way the EU had believed. Russian politics did not become more moderate through the cooperation with the EU, but rather the opposite occurred. Even if we accept the experts’ argumentation for the need for a ‘buffer zone’ between the EU and Russia, the illegal annexation of Crimea and the continuous destabilisation of Eastern Ukraine including aggression by Russian armed forces on Ukrainian soil cannot be considered acceptable in any sense. These issues give a clear indication of the unchanged aggressive nature of Russian politics and leadership. It became clear that Putin is primarily led by imperial rationality and now it seems that Putin’s Russia is no longer interested in a trustworthy and functional relationship with the EU.

Since 2014, the EU has progressively imposed restrictive measures in response to the annexation of Crimea and the destabilisation of Ukraine. After a series of rocket attacks in Mariupol by pro-Russian separatists in January this year, the Latvian EU presidency has called on a council of EU foreign ministers to prepare the ground for a summit of EU leaders on the crisis with Russia and to determine the role the EU should take. The developments over the past two years call for a new interpretation of the Russian-EU relationship as they demonstrate that Putin’s Russia is impossible to handle with peaceful approaches and methods based on seeking consensus. It is all the more important that the EU speaks with one voice and acts in a united manner. And this is exactly what is missing.

A need for clear signals

Some EU member states including Poland and the Baltic states regularly use strong anti-Russian rhetoric, while others, such as Hungary, take political decisions showing an opening towards Russia. These seemingly contradictory attitudes, however, might stem from a common fear of growing Russian influence – partly due to historical reasons. The only difference lies in the role these national governments attribute to the EU (or the US) in handling the conflict, depending on the extent they believe that the EU is willing and able to send clear signals to Russia.

Germany itself, having a huge influence on EU politics, has recently re-evaluated the Russian relationship. Before, Germany had the standpoint that a close economic cooperation could have a stabilising effect on Russia and reduce the possibility of aggressive geopolitical measures. They hoped that this cooperation might also further the modernisation of the Russian economy and thus it might contribute to the creation of a Russian state that was linked to the world economy not only through its energy export, but with many other ties and which has its interests in sustaining the balance of international relationships. Germany, however, has realised that these presuppositions and hopes were wrong. Therefore, Chancellor Merkel placed harsh measures and defends consistently the sanctions that the EU adopted in response to Russia’s military intervention in the Ukraine.

The sanctions in place include the suspension of most cooperation programmes, suspended talks on visas and the new EU-Russia agreement, as well as restrictive measures targeting sectorial cooperation in the fields of defence and sensitive technologies, including those in the energy sector. Russian access to capital markets is also restricted. The European Investment Bank and the European Bank for Reconstruction and Development have suspended the signing of new financing operations in Russia and a trade and investment ban is in force for the Crimea region.

The sanctions would have expired in the course of this year, yet various EU leaders stressed that the EU should maintain the sanctions until Russia stopped the aggression in Ukraine. Thus, the Council meeting of June 2015 extended the restrictive measures and economic sanctions until June 2016. These sanctions, however, are somewhat questionable in their effect.

Thus, the EU has to find a way to ensure aid and protection for the civilian population in eastern Ukraine as well as to find a new balance in the EU-Russian relations.  In this respect, again, speaking with one voice is essential. Finding a new balance is key in the broader context, for the sake of a global equilibrium as well, as Russia might opt for building stronger links to China.

Extreme dependency

These recent developments also affect the issue of energy security in the EU, which is very high on the political agenda now. However, the impacts of Russia’s nuclear investments in the EU are not seriously considered.

We are all aware that the EU is extremely dependent on external energy sources, mainly coming from Russia. (And vice versa, supplies of oil and gas make up a large proportion of Russia’s exports to Europe, which are crucial for the Russian economy. The recent collapse of the Russian economy due to the rapid fall of oil prices is a clear proof of this, as it has shown that the country’s self-confidence merely stemmed from high oil prices.)

The dependency on Russian fossil fuels and the lack of diversification of energy sources have been widely recognised in the EU’s energy policy. However, these are only a small part of the whole picture. The impacts of Russia’s fossil or nuclear investments in the EU are hardly considered in the energy-related acquis, even though it is obvious that through its energy corporations, the Russian government has means of influence far beyond the mere business transactions.

Energy dependency can appear in multiple forms including financial, technological or fuel dependence in the nuclear and fossil sectors, acquisition and ownership of strategic energy infrastructure as well as investments in energy projects by Russia in the EU, in particular, the Baltic and the Central-Eastern European member states. Here again, we see no unified behaviour from EU member states. Some EU member states have reconsidered their cooperation with Russia, or Rosatom in particular, as a consequence of the crisis in Ukraine. For example: Germany refusing to sell gas storage capacities to Russia; Bulgaria refusing a second Rosatom nuclear plant; Slovakia stopping negotiations with the Russian nuclear complex; and the UK suspending its negotiations with the company. At the same time, some EU countries such as Finland or Hungary still consider building new nuclear power plants partly using Russian financial sources, technology, fuel and waste management facilities. It is the responsibility of the EU bodies to ensure that decisions in any member state do not undermine the energy security of the EU as a whole.

Equally importantly, the EU should think out of the box and look beyond resource route diversification and new infrastructure projects, when it comes to improving energy security. A systemic, long term solution for the problem is increased energy efficiency with special attention to the transport sector, residential buildings and industrial sites and the wide-scale use of local, renewable energy sources building upon, inter alia, novel financial solutions and community-based models. Energy efficiency and renewables projects could be very useful components of this project, as they could contribute to reducing all forms of energy dependencies.

To conclude: even if the hopes of the EU for the stabilisation and democratization of Russia have failed to come true, geopolitical realities are given. The EU has to reassess its relationship with Russia, to act firmly in a united manner and to tackle security threats at all levels, including in the field of energy policy. The EU should work for a healthier relationship with Russia in this regard, as well, by systemically reducing its dependency, wherever possible – yet acknowledging long-term mutual dependencies which can be used as a basis for the new balance.

(An earlier version of this article was published on the website of the Green European Journal in February 2015.)

Changing EU-Russia relations and their consequences for energy security in Europe

The aftermath of the Ukrainian crisis, the Russian military intervention and undeclared war in eastern Ukraine brought about a crucial change in EU’s foreign affairs. Russia can no longer be regarded as a fully reliable partner to the EU. The issue is highly relevant today as the city of Mariupol in eastern Ukraine were recently assaulted by pro-Russian separatists, using weapons obviously supplied by Russia. The new understanding of a conflict-oriented and imperial rationality based attitude of the Russian leadership caused a substantial shift in the EU’s Russia-politics substantially – and raises security questions not only at European level but also at the global scale. The military conflict also brought to the forefront the issue of energy security, the need to reduce all forms of energy dependency from Russia and it underlines the importance of the EU speaking with one voice in energy policy as well as in its foreign policy. (Benedek Jávor’s article in Green European Journal)

The Russian-Ukrainian crisis, which unfolded after the Ukrainian revolution in 2014 and resulted in the Russian annexation of the Crimea and the destabilization of Eastern Ukraine largely affected the EU-Russia relations.

Russia is the EU’s biggest neighbour and its third biggest trading partner. In the last decades, the EU’s Russia-politics have been characterized by mutual recognition and increasing cooperation, which was evident not only in the fields of trade and economic cooperation. The so-called common spaces cover aspects such as research, culture, education, environment, freedom and justice. Moreover, negotiations have been on-going since 2008 to further strengthen the partnership and have legally binding commitments in all areas including political dialogue, freedom, security and justice, research, culture, investment and energy. After 2010 the Partnership for modernization has become the focal point for cooperation, reinforcing dialogue initiated in the context of the common spaces.

The role of Russia in the Ukrainian crisis, however shed light on the fact that Russia is not on the perceived track in the process of democratization and modernization, that is to say, Russian politics did not become more moderate through the cooperation with the EU, on the contrary.

Even if we accept the experts’ argumentation for the need for a ‘buffer zone’ between the EU and Russia, illegal annexation of the Crimea by Russia and the continuous destabilization of Eastern Ukraine including aggression by Russian armed forces on Ukrainian soil cannot be considered acceptable in any sense and give a clear indication of the unchanged aggressive nature of Russian politics and leadership. It became clear that Putin is primarily led by imperial rationality and now it seems that Putin’s Russia is no longer interested in a trustworthy and functional relationship with the EU.

The question is highly relevant today after a series of rocket attacks in Mariupol by pro-Russian separatists. Against this background, the current EU presidency has called a council of EU foreign ministers to prepare the ground for a summit of EU leaders on the crisis with Russia and the role the EU should take.

Indeed, the developments over the past two years call for a new interpretation of Russian-EU relationship as they demonstrate that Putin’s Russia is impossible to handle with peaceful approaches and methods based on seeking consensus.

It is all the more important that the EU speaks one voice and acts in a united manner. And this is exactly what is missing.

Some EU member states including Poland and the Baltic states regularly use a strong anti-Russian rhetoric, while others, such as Hungary take political decisions showing an opening towards Russia. These seeming contradictory attitudes expressed in the rhetoric and concrete choices, however, might stem from a common fear from growing Russian influence- partly due to historical reasons. The only difference lies in the role these national governments attribute to the EU (or the US) in handling the conflict, depending on the extent they believe that the EU is willing and able to send clear signals to Russia.

Germany itself, having a huge influence on EU politics, has recently re-evaluated the Russian relationship. Before, Germany had the standpoint that a close economic cooperation can have a stabilizing effect on Russia and reduce the possibility of aggressive geopolitical measures. They hoped that this cooperation might also further the modernization of the Russian economy and thus it can contribute to the creation of a Russian state that is linked to the world economy not only through its energy export, but with many other ties and which has its interests in sustaining the balance of international relationships. Germany, however, has realised that these presuppositions and hopes were wrong. Chancellor Merkel placed harsh measures and persecutes consistently the sanctions that the EU adopted in response to Russia’s military intervention in the Ukraine.

The sanctions in place include the suspension of most cooperation programmes, suspended talks on visas and the new EU-Russia agreement as well as restrictive measures targeting sectorial cooperation in the fields of defence, sensitive technologies including those in the energy sector. Russian access to capital markets is also restricted. The European Investment Bank and the European Bank for Reconstruction and Development have suspended the signing of new financing operations in Russia and a trade and investment ban is in force for the Crimea region.

These sanctions, however, are somewhat questionable in their effect and will expire in the course of 2015 unless all 28 Member States of the EU agree to renew them. Chancellor Merkel called for joint European action and during their December Council meeting various EU leaders stressed that the EU should maintain the sanctions until Russia changes its behaviour and stops the aggression in Ukraine.

Thus, the EU must again discuss economic sanctions against Russian, as well as how to ensure aid and protection for the civilian population in eastern Ukraine. In this respect, again, speaking with one voice is essential.

Finding a new balance in the EU-Russian relations is key in the broader context, for the sake of a global equilibrium as well. Russia might opt for building stronger links to China.

These recent developments with Russia have also point the attention to issue of energy security in the EU, which is very high on the political agenda now.

However, the impacts of Russia’s nuclear investments in the EU are not seriously considered.

We are all aware that the EU is extremely dependent on external energy sources, mainly coming from Russia. (And vica versa, supplies of oil and gas make up a large proportion of the Russia’s exports to Europe which are crucial for the Russian economy. The recent collapse of the Russian economy due to the rapid fall of oil prices is a clear proof for this, which has also shown that the country’s self-confidence was merely stemming from high oil prices.)

The dependency on Russian fossil fuels, the lack of diversification of energy sources have been widely recognised in the EU’s energy policy. However, these are only part of the whole picture. The impacts of Russia’s fossil or nuclear investments in the EU are hardly considered in the energy-related acquis, even though it is obvious that through its energy corporations, the Russian government has means of influence far beyond the mere business transactions.

Energy dependency can appear in multiple forms including financial, technology or fuel dependence in the nuclear and fossil sectors, acquisition and ownership of strategic energy infrastructure as well as investments in energy projects by Russia in EU, in particular the Baltic and the Central-Eastern member states.

Here again, we see no unified behaviour from EU member states. Some EU member states have reconsidered their cooperation with Russia, or Rosatom in particular as a consequence of the crisis in Ukraine, e.g. Germany refused to sell the gas storage capacities to Russia, Bulgaria refused a second Rosatom nuclear plant, Slovakia stopped negotiations with Rosatom, and UK suspended its negotiations with Rosatom. At the same time, some EU countries such as Finland or Hungary still consider building new nuclear power plants partly using Russian financial sources, technology, fuel and waste management facilities. It is the responsibility of EU bodies is to ensure that decisions in any Member State do not undermine the energy security of the EU as a whole.

Equally importantly, the EU should think out of the box and look beyond route diversification and new infrastructure projects, when it comes to improving energy security.

A systemic, long term solution for the problem is increased energy efficiency with special attention to the transport sector, residential buildings and industrial sites and the wide-scale use of local, renewable energy sources building upon, inter alia, novel financial solutions and community-based models.

Energy efficiency and renewables projects could contribute to reducing all forms of energy dependencies.

To conclude: even if the hopes of the EU for the stabilization and democratization of Russia have failed to come true, geopolitical realities are given. The EU has to reassess its relationship with Russia, to act firmly in a united manner and to tackle security threats at all levels, including in the field of energy policy. The EU should work for a healthier relationship with Russia in this regard as well, by systemically reducing its dependency, wherever possible – yet acknowledging determinations, long-term mutual dependencies which can be used as a basis for the new balance.

Hungary eyes Russia’s ‘illiberal’ model

Hungary has increasingly courted and won favour with Russia, while rejecting the core values of the European Union.

Prime Minister Viktor Orban says he wants to turn Hungary into an 'illiberal' state, using Russia as a model. Source: aljazeera.com
Prime Minister Viktor Orban says he wants to turn Hungary into an ‘illiberal’ state, using Russia as a model. Source: aljazeera.com

Budapest, Hungary – As the West holds its breath waiting to see if Russia will intervene in Ukraine, there is one country looking to Moscow for inspiration: Hungary.

In a speech in late July, Prime Minister Viktor Orban said he wanted to turn Hungary into an “illiberal state” and used Russia as a model example.

“We want to build a workfare society … which is willing to bear the odium to declare that it is not liberal in character,” said Orban, adding the 2008 financial crisis proved liberal democracies cannot be competitive.

The speech proved highly controversial, grabbing international headlines and calls by Hungary’s opposition groups for the European Union, of which Hungary is a member, to monitor the country’s reforms.

“Hungary has gone so far as to actually reject explicitly by the prime minister the very values that guide the European Union and NATO. This has never happened before, this is a unique event,” said Charles Gati, a professor of European and Eurasian studies at John Hopkins University.

Government spokesman Zoltan Kovacs said the prime minister was only talking about the limits of liberal democracy and how to deal with those restraints. Kovacs said the reference to looking towards Russia, as well as other countries Orban mentioned including China, Turkey and India, were regarding economic models.

“He was not referring to democratic institutions and the decision-making process,” Kovacs told Al Jazeera.

However, director of the Hungarian-based Political Capital Institute Peter Kreko said Russia’s influence over Hungary goes far beyond economics.

“Putin serves as a role model for him in the sense that Putin is … the frontman of the ideological fights against Western Europe and Western interests.”

Warm relations

Hungary’s move towards Russia has been in the works for years – and it seems Russia has taken note. Last year, Vladimir Putin sent a letter congratulating Orban on his birthday and thanking the prime minister for greatly strengthening relations with Russia, according to Hungary’s state news agency MTI.

In January, Russia agreed on a controversial deal to loan Hungary up to $13.5bn to build two reactors at a nuclear power plant in the country’s south. It will be the largest construction project in Hungary since the end of communism more than 20 years ago.

In early July, Orban said Hungary would go ahead with the South Stream pipeline project that would import natural gas from Russia through a route that would bypass Ukraine.

26

To link Hungary’s economy stronger and stronger to Russia which is in a trade war with… the European Union and in a diplomatic conflict with the European Union, I think it’s highly dangerous and highly risky.

– Benedek Javor, European Parliament member

Andre Goodfriend, who is currently in charge of the US embassy in Hungary while it awaits a new ambassador, told Al Jazeera that Hungary needs to diversify its energy imports from other countries.

“We’ve been encouraging Hungary and many other countries to diversify their sources of gas [and] find other ways … to share gas between different countries … without having it necessarily come from Russia,” he said.

Kovacs, the government spokesman, argued that there was a long, thorough process before the deal was made.

“It’s been competitive in the form that the previous government as well as this one has looked around and tried to measure all possible alternatives and possibilities,” he said.

Concerns exist, however, that the nuclear deal will increase dependency on Russia, which is already Hungary’s main supplier of natural gas and oil.

European Parliament member Benedek Javor, who is part of a small leftist opposition group in Hungary, asked the EU to investigate the deal over whether it broke the law.

He said the Ukrainian crisis, sparked by then-president Viktor Yanukovich sacrificing an EU trade deal for closer ties to Russia, showed the risk of allowing Moscow greater influence over Hungary.

“To link Hungary’s economy stronger and stronger to Russia which is in a trade war with … the European Union and in a diplomatic conflict with the European Union, I think it’s highly dangerous and highly risky,”Javor told Al Jazeera.

What’s in it for Russia?

But what does Russia get out of a relationship with a relatively small country such as Hungary?

“The main reason for Russia’s interest … is to weaken the European Union,” John Hopkins University professor Gati said. “It is doing so … primarily by several countries dependence on Russian energy and, therefore, these countries’ willingness to close their eyes to some aspects of Russian behaviour.”

Putin feels that the European Union is in a very weak position.

– Peter Kreko, Political Capital Instiute

Peter Kreko, director for the political consultancy firm Political Capital Institute, said focusing on Hungary is one of the best ways to undermine the EU because Orban has taken an antagonistic approach to the supranational government.

He added, however, that previous leaders have also tried to get closer to Russia. “Putin feels that the European Union is in a very weak position,” Kreko told Al Jazeera.

Hungary is not the only EU member-state to have maintained ties to Russia during the Ukrainian crisis. Austria also said it will go along with the South Stream gas pipeline project, while Germany, where exports to Russia in 2013 equated to almost $50bn, avoided placing tough sanctions on Moscow before the Malaysian Airlines M-17 downing in eastern Ukraine.

Meanwhile, France said it plans to go through with the delivery of a mistral warship to Russia in a deal worth $1.6bn.

But so far, only Hungary has been accused of a democratic backslide. Last year, the European Parliamentadopted a non-binding resolution stating that Hungary was undermining the independence of its own judiciary and was rushing through legislation.

Goodfriend echoed similar concerns about the check on power in Hungary.

“A number of those checks and balances don’t exist here and with a government that has a two-thirds majority [in parliament], it’s especially important that they use that majority to ensure that they carry out legislation responsibly.”

Uptick in nationalism

Kreko said there are also signs that Orban is mimicking Putin’s strategies, such as removing his limits on power and increasing nationalist rhetoric.

In Orban’s July speech, he discussed how “paid political activists” working for NGOs with foreign funding were preventing reforms in the country; a month earlier, Hungarian authorities raided the offices of NGOs receiving grants from Norway over accusations thay they are politically biased.

Kreko said this is similar to when Putin took aim at NGOs by introducing a law that requires organisations using funding from abroad to register as “foreign agents”.

In May, Orban called for autonomy of ethnic Hungarians in western Ukraine, while in the east rebels allegedly backed by Russia were also demanding autonomy from Kiev.

It led to the Hungarian ambassador being summoned by the Ukrainian government, but government spokesman Kovacs said Hungary was simply asking for autonomy for minorities set out in international agreements.

According to MP Javor, other EU member states with fragile democracies could follow Hungary’s footsteps if the EU does not act.

“This combination limiting democracy and stronger dependency on Russia makes the Hungarian situation extremely [worrying] for Europe as a whole.”

Follow Kristina Jovanovski on Twitter: @kjovano 

aljazeera.com