Russia and the EU – energy dialogue or energy conflict?

Russian and Western authorities handle energy trade and gas supply to EU in a “non-productive” fashion, comments Viktor Ivanter of the Institute of National Economic Forecasts. 

In a comment for RIA Novosti, Viktor Ivanter, director of the Institute of National Economic Forecasts at the Russian Academy of Sciences, regrets that Russia and the West have adopted a “conflict method” of negotiating energy problems. This negotiation mode is likely to induce Russia to grant domestic and non-European demand its trading preference, while leaving European consumers contend themselves with the leftovers. Therefore, the economist calls for the establishment of a “Russia- EU energy union,” with the following elements:

  • On the legal side: development of a stable legal framework on energy trade (on the WTO model). The Energy Charter, though unsatisfactory, can be a useful basis for further dialogue, and eventually, for a more acceptable document. That is why Russia must finally accept to ratify the Charter, according to the author.
  • On the economic side: to start with, more investment in oil and gas infrastructures is needed, especially in European consumer countries and with the participation of Russia.
  • On the political side: production by Russia of common rules for investors willing to put their money in economically strategic assets – to be differentiated from assets that are strategically important to the state. This echoes warnings by Garry Kasparov, chairman of the United Civil Front and former world chess champion, in the Financial Times: “Should things go sour for foreign investors, their only recourse will be the Russian courts, controlled by the same members of the Putinocracy who arranged the deals in the first place.”

Against this backdrop Ivanter thinks Russian-European cooperation should become “a strategic system of relations, not a one-time commercial profit.” To that purpose, the future energy union should focus on:

  • Providing Russia with the capital, technology and experience it is currently lacking in order to diversify its energy sources (to cope with rising demand);
  • Implementation of energy-saving technologies by foreign companies;
  • Shift of energy-consuming manufacturing closer to where energy is produced.

All in all, Ivanter considers a Russia-EU energy union as a win-win deal – for it should ensure “the stability of Europe’s economy and the development of Russia’s.” To put such words into deeds, Kasparov urges the EU to take a tough stance and stop compromising with the Putin government just because they are dependent on Russian energy imports: “It comes down to the leaders of the free world defining goals for their relationship with Russia. Do they want a reliable partner that will become a member of the democratic family or, are they just swapping favours with a repressive regime in order to get a good price on gas?”

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