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LOOKING AHEAD
18.05.2009

May 17, 2009 (the date of publication in Russian)

Konstantin Cheremnykh

THE SCATTERED PEANUTS

Jose Manuel Barroso has failed his anti-Gazprom mission

EITHER LIBERALIZATION, OR DIVERSIFICATION

A character of Leo Tolstoi's didactic Stories for Kids, a greedy monkey, was carrying a handful of peanuts and occasionally dropped one of them. As he bent down to pick it, two other peanuts fell and rolled away. Spending an hour crawling after the scattered peanuts, the greedy money eventually realized the initial mistake to bend down for the first one.

A similar story happened to EC Chairman Jose Manuel Barroso, who was responsible for promoting alternative energy projects for EU states. At the April 25 conference in Sofia, dedicated to diversification of gas pipelines, his task was to hail the notorious Nabucco project that (in its corrected version) was supposed to deliver gas from the ex-Soviet republics of Central Asia along the supposed Transcaspian route, via Azerbaijan and Turkey, and along the second undersea connection to Romania, Bulgaria, Hungary, Austria, and desirably Georgia. The key precondition was at hand: Turkmenistan had just signed a memo with RWE, a major German energy company that was in odds with Russia's Gazprom, on drilling gas on the Caspian shelf. Moreover, the Europarliament signed a temporary agreement on cooperation with Turkmenistan.

However, that seemed not enough for the hyperactive Gazprom- basher. At the same session of the Europarliament, the European Commission managed also to push the so-called Third Energy Package, a supplement to the Energy Chart that forbids a company to purchase distributing networks in any foreign states, demands proprietary division of sale and distribution from gas exporting companies, and declaring shift from long-term to short-term gas trade contracts.

Meanwhile, the agenda of the Sofia event involved a number of other points. In particular, the energy minister of Georgia advertised one more gas pipeline project, the White Stream, supposed also to cross the Black Sea, but reaching Ukraine with two branches, one of them supplying Crimea. The project was reported to have gained financial support from the EU, though no numbers were available. By the way, support for the long-discussed Nabucco had been slashed from 250mln to 200mln Euro in late March, and its implementation delayed to 2016 (some analysts even named 2022).

Both Nabucco and South Stream were supposed to challenge Gazprom's South Stream Project, co-financed by Italy's ENI and supposed to start from Russia's Krasnodar Region, cross the bottom of the Black Sea and reach the Bulgarian sea coast, to continue to Hungary, Greece, Austria, Slovenia, and Serbia.

At the same event, Bulgaria and Egypt agreed to sign a deal on delivery of condensed natural gas via a Greek terminal. The Egyptian side relied upon a long-term contract – similarly to Qatargas that had already struck a similar deal with Poland.

Officially admitting that Nabucco is a great and promising venture, and blaming Gazprom for interruption of gas delivery during the conflict with Ukraine in January, the Bulgarian side, however, continued to bargain with Gazprom on better conditions of the South Stream pipeline.

Thus, the Sofia conference resembled a handful of peanuts that was de facto impossible to embrace without dropping at least one of them Ц the fresh-approved Third Energy Package that made all kinds of long-term contracts senseless. Mr. Barroso's enthusiasm was cooled by US Special Representative Richard Morningstar who hinted that Nabucco is "no Holy Grail", and that the US side will be ready to invest into it only in case Europeans invest first.

In Russian liberal media, the event was described as a great strategic failure of Gazprom, this version being buttressed with the reluctance of Vladimir Putin to arrive at the event "from fear". The "fearful" Putin, however, used the occasion of Bulgarian PM Sergey Stanishev's visit to Moscow two days later to initial the "doomed" South Stream deal.

The major drawback of the Sofia event was the absence of the most desirable guest, Turkmen president Gurbanguly Berdymukhammedov, who launched his own conference in Ashgabat, involving China, Russia, India, Iran, a number of post-Soviet states, and the EU (mentioned in the very end of the list).

This obvious failure did not discourage Mr.Barroso from launching one more international conference with a more ambitious title, "Southern Corridor: A New Silk Route", in Prague. This time, the conference did not concur with any events in Central Asia. At the same time, it conveniently coincided with the European Partnership Summit, arranged as far back as in last November.

A NEW SILK DEAD ALLEY

Weeks before the May 7-8 events in Prague, they were ridiculed by skeptical authors as one more attempt to push the US-backed Nabucco. Richard Morningstar was involved as well, though the major role was played by EU Commissar Benita Ferrero-Waldner, once political partner of SS veteran Joerg Haider. The lady, nicknamed Ferrero-Kuesschen, was sweet indeed, positioning herself as the "mother" of ex-Comecon states, evidently recognized as orphans since the fall of the Berlin Wall.

The event incidentally coincided with the NATO maneuvers on the territory of Georgia, launched despite political instability in Tbilisi and relevant risks of a new ethnic conflict. Unfortunately for the summit's organizers, this coincided was interpreted by Georgia's unstable President Mikheil Saakashvili as a sign from the Heavens: he declared that the timing marks the eventual entry of post-Soviet nations both into EU and NATO.

Mr. Saakashvili's joy was not quite shared by the invited heads of states. The six post-Soviet states, involved in the Partnership Ц Ukraine, Belarus, Moldova, Georgia, Armenia, and Azerbaijan Ц were very distant from the generally accepted standards of EU political structure, institutional development (especially in judicial, military and law enforcement spheres), not speaking about the hypersensitive issue of human rights. Two days before the meeting, a heavily drunken Yury Lutsenko, Ukraine's Minister of Interior, was not allowed on board of a Frankfurt-Seoul flight along with his similarly drunken 19-year-old son, whom the local police hand to immobilize with handcuffs. Still, President Yushchenko was welcome to the event Ц unlike Belarus President Alexander Lukashenko, whom an irritated Klaus would not like to see.

At the Eastern Partnership constituent congress, advertised as a summit, the only head of state (expect the unstable Czech President Vaclav Klaus) was an unhappy Angela Merkel. In fact, the Eastern Partnership was initiated by Poland and Sweden as an alternative to Nicolas Sarkozy's Mediterranean Union, and supposed to play the role of a consolation prize (financially estimated in a modest figure of 350mln euro) for nations that are, unfortunately, unfit for entry. Meanwhile, Ms. Merkel was herself a subject of severe criticism from East European states over the "deal with Gazprom" on the North Stream project. Thus, her sole representation of European leaders did not much correspond with the diversification idea that Mr. Barroso was overwhelmed with.

One more Prague peanut was the arranged personal meeting of the leaders of Armenia and Azerbaijan Ц who, as Mr. Barroso carelessly hoped, would resolve their contradictions, dating back to a devastating war between the two republics after the USSR collapse, in a moment. Obviously, Mr. Barroso relied upon the magic of Barack Obama, who recently advertised the opening of the Turkey-Armenia border Ц in its turn, essential for opening a direct Transcaucasian railroad to service the US contingent in Afghanistan.

However, Mr. Obama's bold initiative had already added more dissent to the existing tensions in the region, involving Europe as well Ц as in exchange for the deal, the US President promised Turkey an accelerated entry in Europe. Nicolas Sarkozy had since already raised eyebrows over the odd exchange, interpreting it also as an intervention in his own Mediterranean policy that involved Turkey.

In addition, Armenia's President Serge Sargsyan was not much encouraged with the failure of Mr. Obama to pronounce the term "genocide" on the 1915 massacre's Commemoration Day. Meanwhile, Azerbaijan addressed own grudges to Armenia, while Georgia got anxious about devastation of its ports in case cargo follows the Turkey-Armenia trans-border route.

One can easily guess what came out of this: a ridiculous, humiliating, and miserable flop. Instead of an expected truce, the Sargsyan-Aliyev meeting resulted in a more serious alienation. Meanwhile, Turkey's Foreign Minister Ali Babacan whom Washington had been long relying upon (particularly in energy policy), was sacked, while Turkey's PM Recep Tayyip Erdogan insisted on more demands towards Armenia as a precondition of any deal. Armenia was soothed by Iran that launched energy purchases from Yerevan in exchange for gas. The jealous Tbilisi leadership hurried to promote a deal on an alternative (much longer) strategic railroad that would bypass Armenia but cross Georgia.

Thus, the whole set of deals, supposed to be buttressed with a twofold Nabucco-White Stream deal, slipped out from Mr. Barroso's hands, rolling away in various directions. The May 8 New Silk Way conference resulted in nothing but a joint declaration of intentions, signed by the EU (i.e. Mr. Barroso), Turkey, Georgia, and Egypt Ц but without a single Central Asia state, though most of them were represented on the level of Vice Ministers. "A gas-free gas pipeline", jeered Kommersant Daily next day.

The indifference of the Central Asia states is hardly explained with their fear before Gazprom. Turkmenistan, Uzbekistan, and Kazakhstan, whose signatures were desperately expected, have long developed their self-sustaining government systems and foreign policy principles, becoming far more independent than the arch-liberal Ukraine. One of the key factors that could distract them from a deal with Barroso was the EC conditions on human rights included, in particular, in the EU-Turkmenistan temporary agreement. The three Islamic countries have already witnessed the pressure on Turkey on relevant matters, driven as preconditions for entry in the EU. None of the three Central Asia leaders would choose the Ukrainian model of government with its clan wars that in their societies would turn a scores direr disaster. Besides, two of these countries have already disgorged the poisonous peanut of a "tulip revolution".

DON'T SHOOT THE PIANIST

While Mr. Morningstar, his true disciple Matthew Bryza and Britain's Foreign Secretary David Miliband were desperately trying to display the Azeri-Armenian meeting as a breakthrough, the foreign minister of Mr. Bryza's mother country, Poland, was visiting Moscow. This foreign minister, Radek Sikorski, had earlier contended for the post of NATO General Secretary. But Obama's White House snubbed him twice, first rejecting his candidature, and then deciding to deploy a strategic anti-Iranian ABM facility not in Poland but in Azerbaijan.

Definitely, Mr. Barroso could not also foresee that after the Trancaucasian uproar provoked with the border deal, Washington would dispatch Gen. Duncan McNubb, commander of US Army's Transport Troops, to Baku for "evaluation of Azerbaijan's transport infrastructure". In this process, the idea of planting the ABM facility in Gabala, earlier accepted by Vladimir Putin, was revived.

Definitely, Mr. Barroso could not expect back in May 2008, when the Eastern Partnership was designed, that the Czech government that presently chairs the EU would perform so miserably, eventually getting into a brawl first with Paris, later with Washington, and failing to keep political balance Ц that, in particular, resulted in a parliamentary ban for ABM deployment in Czechia as well.

Definitely, Mr.Barroso could not imagine that the first words Ukraine's Viktor Yushchenko would pronounce at the constituent event of the Eastern partnership would be "Save me please from the evil Romania". The energy fever, infecting Bucarest especially due to the Nabucco project, had since unfolded in a debate for the border Zmeyiny Isle, or rather for the adjacent oil and gas deposits on the Black Sea shelf.

In fact, the whole described snafu reveals a complete disaster of Barack Obama's policy in Europe. Still, the EC Chairman appears to be a perfect scapegoat for the failure of the diversification policy Ц which became quite obvious on May 15, when the heads of governments of Russia, Italy, Bulgaria, Greece, and Serbia met at Vladimir Putin's residence in Sochi, Russia, to sign the additional documents on the South Stream, and to agree to double the projected amount of transit; and when, in a matter of hours, a recent Nabucco fan Recep Tayyip Erdogan, snubbed over his ambitions of EU membership by both France and Germany (and thus realizing that Mr. Obama’s word means nothing), arrived at the same place.

The fact that European energy policy is not any longer steered from Brussels, and that Russia has acquired powerful arguments in favor of its concept of energy security, alternative to the Energy Charter, has become clinical Ц right on the eve of the new EU-Russia summit. Luckily, the tradition of hara-kiri is not rooted in Portugal.


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