SELLING “ENERGY SECURITY” IN BUDAPEST AND PRAGUE

For many years Russia’s European policy neglected the group of states from Slovenia to Poland that are now new EU members. These former “satellites” were perceived as intrinsically “Russia-phobic.” Russian President Vladimir Putin’s visits to Hungary and the Czech Republic last week were intended to disperse the emerging anti-Russia front in Brussels and secure a “safe passage” towards the countries that really matter in Moscow’s opinion, like Germany or Italy. Budapest and Prague had not seen Russian leaders since Boris Yeltsin’s respective visits in 1992 and 1993, when the first Russian president apologized for the Soviet tanks on their streets in 1956 and 1968. In both capitals, reflections on these historically recent tragedies are very strong, but Putin preferred to say as little as possible on this topic (Nezavisimaya gazeta, Globalrus, March 2).

Dismissing the remnants of “camp mentality,” he concentrated on the new foundation for bilateral relations that is also the key issue in his European affairs: energy (International Herald Tribune, March 1). Both countries are heavily dependent upon energy imports from Russia with Gazprom supplying up to 90% of their demand for natural gas. Doubts and worries about this dependency sharply increased during the “gas war” between Russia and Ukraine in the first days of this year, and the temporary “ceasefire” in this conflict cannot alleviate them. The group of nine Central European states led by Austria and Poland took the issue to Brussels, insisting that the EU had to revise its energy strategy and ensure diversification of sources and imports. Moscow is quite alarmed by this initiative as it watches with keen interest the ongoing battles on the European energy markets, like the merger between Suez and Gaz de France, driven in no small measure by the unresolved problems of the EU enlargement (Vedomosti, February 3). A small sign of Gazprom’s irritation appeared at Putin’s press conference in Prague when an innocent question from a Russian journalist triggered an angry response that if the EU was so keen about diversification, Russia would also think about diversifying its energy exports (Moskovskie novosti, February 3).

Moscow is step-by-step advancing a plan for consolidating its position on the European energy market. Hungary has a more prominent place than the Czech Republic in this plan; hence the visible difference in the content of the two visits. Russia intends to substantially reducing gas transit through Ukraine, and while the Baltic pipeline is one part of the plan, the second line of the “Blue Stream” pipeline to Turkey is another. The first two years of exploitation of this pipeline were quite disappointing, but now Gazprom wants to extend this “corridor” towards the market in Italy and to acquire all the distribution networks (Gazeta.ru, March 2). Hungary then becomes a hub where the flows of gas are channeled into several pipelines. The government of Prime Minister Peter Medgyessy is quite keen about the benefits of this plan, so Putin gave it every decently possible support before the parliamentary elections in April (Polit.ru, March 3). The importance of symbolic gestures was not forgotten, so a cemetery for the Hungarians killed in World War II was opened in Voronezh oblast and the medieval books from the Sarospakat College captured by the Soviet Army in 1945 were returned from Nizhny Novgorod (Vremya novostei, February 28).

There were none of these goodwill gestures in Prague, since the Czech Republic does not have a high value for Gazprom. The atmosphere, accordingly, was not that cloudless and there were more “unpleasant” questions for Putin at that press conference (Moskovskie novosti, February 3). The official negotiations were reasonably smooth, but the attention was stolen by the controversial letter condemning Russia’s war in Chechnya and urging the members of the G-8 to raise this issue at the upcoming St. Petersburg summit. Published in a local newspaper, it was written by Vaclav Havel and signed by several distinguished opinion-makers, such as Mary Robinson, Desmond Tutu, and Prince Hasan bin Talal (Grani.ru, February 1). For any Russian, a visit to Prague would be incomplete without a glass of beer, and back in 1993, Yeltsin shared this easy moment with Havel. This time, President Vaclav Klaus refrained from such bonding rituals, and Putin enjoyed his Prazdroj accompanied only by the members of the Russian delegation (Nezavisimaya gazeta, March 3).

He was probably not too upset about it, since his sights were set on higher targets. Sipping the beer he might have contemplated the effect of the subtle warning he had sent to his key counterparts a few days prior in the op-ed piece he submitted to the Wall Street Journal (February 28). The article was entitled, “Energy egotism is a road to nowhere,” and while many Europeans could say exactly that about Russia’s policy, Putin put the blame for the unevenness on the energy market squarely on the major consumers, who happen to be G-8 members (Kommersant, March 1). Moralizing aside, Putin asserted that price volatility was a threat that had to be addressed by common efforts aimed at securing a guaranteed long-term supply at fair prices. The catch in this apparently politically correct argument is that “volatility” in the period of record high prices, which Moscow obviously perceives as “fair,” means the possibility of their decline, and among G-8 members only Russia defines that as a “threat” (Ezhednevny zhurnal, March 1).

A larger conclusion stemming from Putin’s argument is that the liberalization of the European gas market strongly pushed by the EU Commission is obviously a bad idea. Gazprom is busy building ties with giants like E.ON or Gaz de France and does not want any competition that could break the clearly artificial link between the prices of oil and of natural gas. This vision of tightly controlled and essentially monopolized “energy security” has its supporters in Europe, and Putin is trying to recruit new “agents of influence.” Havel is certainly a hopeless idealist, but his words remind that the European values of human rights and economic freedoms are deeply interlinked – and significantly differ from the values of Mr. Putin.