The Case of EU Russia Energy Dialogue. Ernest Wyciszkiewicz Polish Institute of International Affairs

Transcription

1 The Case of EU Russia Energy Dialogue Ernest Wyciszkiewicz Polish Institute of International Affairs

2 EU RUSSIA: Energy Interdependence? In theory geography (pipeline distance), infrastructure (locked up markets, no alternatives), and complementary needs (money and energy), should make interdpendence work and push both sides to enhanced co operation in the name of mutual benefits. Yet win win logic is absent here, why?

3 Mutual Dependency In Numbers EU s Dependence on Russian imports (% of consumption) Russia s Dependence on EU markets (% of non CIS exports) OIL 26 % 80% GAS 29% 96% Russia s dependence on Oil&Gas (2005): over 20% of GDP; over 50% of budget revenues; almost 60% of tax income; over 60% of exports revenues; over 30% of industrial output.

4 EU Russia trade EU imports from Russia (%) EU exports to Russia (%)

5 Interdependence Common sense definiton: Peaceisthenaturaleffectoftrade.Twonationswhotrafficwith each other become reciprocally dependent; for if one has an interest in buying, the other has an interest in selling: and thus their union is founded on their mutual necessities. (Montesquieu, The Spirit of the Laws) = Growing interdependence makes conflicts too expensive and thus irrational. Having in mind the numbers EU Russia energy dialogue should make both parties accept the reality and pursue mutually beneficial policies. Yet, interdependence is not about numbers, but about asymmetry and costs (financial as well as political and social), and perceptions.

6 Interdependence under Investigation sensitivity vulnerability asymmetry Asymmetrical interdependence as a source of power that can be used in very traditional ways. Conflicts are not less likely because of the costs, but they are different in form and intensity.

7 Asymmetries structure/policy making approaches & objectives costs These asymmetries make the EU more sensitive and vulnerable to Russian strategy of exploiting interdependence for the sake of its own interests.

8 Structure state vs. community Russia Unified and consolidated energy actor Single strategic decision making centre Clearly defined interests Authoritarian (immune to public pressure) EU Heterogeneous /Fragmented with complex power division Numerous centers of gravity (EC, MSs, interest groups) Unclear, often contradictory interests Pluralistic (vulnerable to public pressure) EU Russia energy relations are based not on EU Russia interdependence, but on set of asymmetrical interdependencies between Russia and individual Member States.

9 Approaches&Objectives Russia Energy assets as power politics resource Maximization of economic and political leverages Resource nationalism Security of demand meant as increasing market power inside and outside Oil&Gas as foreign policy tools Non acceptance to imported rules Hard times for foreign investors EU Institutions and rules as a cornerstone of security Liberalization (EC) vs. economic nationalism (some MS) Balancing between security of supply, climate change and competitiveness No external energy policy Export of EU rules Openness for third parties EU s calls for reciprocity remain unanswered, while any EU s efforts to restrict foreign activities meet with accusations of discrimination. EU a victim of its own philosophy?

10 Costs Russia Economic costs signficant but cushioned by Stabilization Fund High potential social or political costs, but no risk of de legitimization (the benefit of authoritarian system) EU Short term economic costs significant (high sensitivity) Long term costs limited by demand oriented policy Significant social and political costs at national level (the price of democracy) Member States individually are likely to bear larger costs in case of serious energy crisis with Russia. Hence, they are less willing to risk any damage to EU Russia relations.

11 Conclusion EU Lost in Translation EU Russia interdependence works in favor of Russia, which is interested in maintaining its asymmetrical character. Russia seeks to strengthen interdependence with some EU members, and simultaneously to deepen one way dependencies of the others (Central Europe). Interdependence can be used for mutual benefits as well as for egoistic interests what matters is the general framework of mutual relations, political culture, institutional links (formal and informal), commonality of objectives etc. Thinking about energy security as a natural outcome of interdependence misses the point, because it is deeper nature of the interdependence that matters. Until EU is fragmented and unable to act collectively, Russia will be successfully using this relationship to its economic and political advantage.