Russian Prime Minister Vladimir Putin warned yesterday (25 November) that European legislation aimed at liberalising energy markets could hinder investment and undermine future cooperation with the European Union.
Putin, whose comments were published in Germany's Sueddeutsche Zeitung newspaper a day before talks with Chancellor Angela Merkel in Berlin, said the legislation would undermine investment eventually lead to energy shortages.
"It creates serious risks in the European energy sector and undermines investors' plans to put their money into new projects," Putin said in the article, warning that the plan will result in energy shortages and high prices.
"Remember, the poorly-thought out liberalisation of the financial markets in many ways provoked the crisis," he said. "We do not want the failures from regulating the gas sector to take us to a new crisis, this time, an energy crisis."
Access to Russia
Moscow was irked by the European Union's blocking of a Russian gas deal with Poland until EU authorities in Brussels had inspected the document and were happy that it complied with liberalisation laws.
The liberalisation of EU energy markets has eroded some of the profits that were anticipated in European gas pipelines, but analysts say investors in new projects have so far found it easy to agree exemptions that make their investments worthwhile.
But Putin hinted that limiting Russian investment in the European Union could prevent asset swaps that could give European energy companies access to Russia's vast energy reserves.
"If we unite our efforts we could not only trade energy resources, but hold asset swaps [and] jointly work at all stages of the technological chain – from exploration and production to delivery to consumers," Putin said.
Russia has announced plans to privatise state-owned assets worth $32 billion over the next three years and has reserved some of the assets, including a 10% stake in oil major Rosneft, for potential asset swaps.
During his visit to Germany on Friday, Putin is likely to discuss a plan by Germany's E.ON to sell a $4.5 billion stake in Russian gas giant Gazprom to Russia's VEB state corporation.
E.ON's 3.5% stake in Gazprom may also be used for asset swaps, a strategy Russia is using to break into new foreign markets.
Putin said that Russia and the European Union, which accounts for half of Russia's foreign trade, should have a common industrial policy and called for technical regulations and customs rules to be unified.
"What are we proposing?[…] The creation of a harmonious community of economies from Lisbon to Vladivostok," Putin said, referring to Russia's far eastern city.
"And in the future, possibly, a free-trade zone and even more advanced forms of economic integration," Putin said, adding that Russia and the European Union should work to remove all remaining obstacles to Russia's 17-year-old bid to join the World Trade Organisation.
(EURACTIV with Reuters.)