The European Union (EU) is struggling to develop a coherent and strategically independent energy policy, the likes of which could spur EU integration and expand its reach to the southeast. The enactment of such a policy would conform with the original objectives of the European Union: to strengthen energy relations, avert war, restore peace, and foster regional cooperation. However, such precepts have recently been challenged by the prevailing risk of instability in eastern Ukraine. In this piece, we will provide the larger context for a “Cool War” between Russia and the West and the energy plan that could better integrate the Balkan states into the EU.
A number of European countries, including the Balkan states, are “in the line of fire” when it comes to relations between Washington D.C. and Moscow over the Ukraine crisis. U.S. Secretary of State John Kerry describes this situation well. Appearing before the Senate Subcommittee on Foreign Relations, Kerry was asked about “the growing influence of Russia in Europe.” Among the countries mentioned were “Kosovo, Montenegro, Macedonia, and Serbia,” all of which are prospective EU members. Presently, Albania, Macedonia, Montenegro, and Serbia are all EU candidate countries, with Bosnia & Herzegovina and Kosovo holding the status of “potential candidate.” However, what has been labeled the “Cool War” between Russia and the West holds the potential to deter the Balkan states’ path toward full integration with the EU.
The “EU factor” is perhaps best defined as an instrument that conditions economic and political reform and alignment with the EU’s acquis communautaire, creating in aspiring EU member countries stable political arenas and attractive markets that are ultimately conducive to EU membership. The EU factor manifests through broader and more diverse economic instruments, greater political influence, and overall stabilizing effects exerted in regions that fall under the European umbrella. The EU factor has had a significant influence on the Balkan states, as shown by the notable improvements achieved in regional relations between the southeast European nations. For example, improved bilateral relations among the countries of the region can be observed through the EU-facilitated dialogue between Kosovo and Serbia. Following the “First Agreement of Principles,” governing the normalization of relations between Kosovo and Serbia on April 19, 2013, the Prime Ministers of Kosovo and Serbia signed a range of other agreements. These agreements were reached within the framework of the EU-facilitated dialogue and dealt with such topics as the Association of Serb Majority Municipalities, telecommunications, energy, and freedom of movement across the Mitrovica bridge, which links the north and south of the city of Mitrovica in the north of Kosovo. Another example of the enhanced intra-regional relations is the recently-signed border demarcation agreements between Bosnia & Herzegovina and Montenegro and between Kosovo and Montenegro, which took place during the EU-Western-Balkans Summit, held in Vienna on August 27, 2015. In the broader region, the EU’s role has been decisive in solving border disputes between Slovenia and Croatia, the latter of which became the EU’s twenty-eighth member state on July 1, 2013.
Despite these improvements, however, the Balkan region faces significant challenges, ranging from the poor shape of the economy to persisting diplomatic issues, such as Macedonia’s dispute with Greece over its country name. Further, cultural challenges stem from a regional inability to transform the ethnically-designed and divided state structures of Bosnia & Herzegovina into functional and sustainable institutions. Not to mention actually following through on agreements between Kosovo and Serbia has posed a problem as well.
And yet, obstacles to EU integration come not just from within Europe but from outside. Instability in Ukraine and the Middle East – particularly the rise of ISIS – has diverted attention away from progress and reform in the Balkans, a movement that is essential to the establishment of a whole, free, and prosperous Europe. EU cohesiveness is a priority both with respect to the issue of union enlargement and to the ensuing problems posed by the crises in Ukraine and the Middle East. One recent example is the massive influx of migrants from Syria, Iraq, Afghanistan, Somalia, and Eritrea, who are crossing the Balkans from Greece, aiming to reach the wealthy western European countries and apply for asylum.
One potential tactic to keep the Balkans out of the “line of fire” would be to advance the EU membership of the regional countries. Extending social and economic stability to the southeast would create resilience to external issues in Ukraine and the Middle East.
An energy-independent EU is of equal importance to EU citizens and to citizens of the EU-aspiring Balkans. One reason for this is shared resources. The South Stream offshore and onshore gas pipeline sections, which would have run from Russia through the Black Sea to Bulgaria and through Serbia, Hungary, and Slovenia to Austria, are now in danger of becoming the subject of global political conflicts. The majority of Balkan states are importers of Russian natural gas, the most notable exception being Romania, which relies on Russia’s gas only marginally and even exports gas to Moldova. The original Nabucco Gas Transport Project aimed to transport gas from Erzurum, Turkey to Baumgarten an der March in Austria; however, some countries included in the plan were unable to commit to that proposed line. The climax of this conflict came when a BP-led consortium in Azerbaijan announced that it would build the Trans-Adriatic Pipeline, or TAP, which would promise to be cheaper than even the shortest proposed Nabucco plan, a compact version that was called “Nabucco West.” The TAP pipeline will start in Baku, travel through Tbilisi, and end in Erzurum. Both TAP and TANAP (the Trans-Anatolian Pipeline) are scheduled to be complete by 2018. However, it has recently become clear that TAP is, in truth, a less potent threat to Russia’s dominance of the European gas market than originally anticipated, supplying just 10 billion cubic meters (about 330 billion cubic feet) a year of gas compared to the 30 billion cubic meters (1 trillion cubic feet) a year of gas that Nabucco originally proposed to ship into Western Europe. In short, today’s Russia faces many competing needs for funding as well as stiff competition in the gas market from Norway, Qatar, and other potential suppliers, such as the United States, which will emerge as a major player by the end of the decade. Europe just needs to create a coherent plan to capitalize on Russia’s weakening grip on the gas market and achieve energy independence.
The first challenge for EU leadership is to maintain cohesion in dealing with Russia, and the second is to develop a feasible strategy to promote energy independence in the EU. The arrangement between Russian President Vladimir Putin and the Hungarian Prime Minister Viktor Orban to strengthen economic ties (including an agreement on Hungary’s part to not export Russian gas to Ukraine) demonstrates that the EU has been largely unsuccessful in developing cohesion on matters of foreign and energy policy. In the past year and a half, the EU has simply been too negligent of Putin’s willingness to play the energy card. It would seem, however, that deals like the Putin-Orban gas agreement have serve as a wake-up call to the EU to develop a coherent and cohesive energy policy. Although the EU has done little so far to deter Russia from maximizing its exports revenues and enjoying a pivotal role in the European market, a policy paper from the European Commission, presented on February 25, 2015 that outlines ambitions for a European Energy Union, is a clear demonstration of this awakening.
In view of the crisis in Ukraine, it is high time for the European Union to reflect and build on its origins. The EU was founded on the principles of strengthening European integration through innovative thinking and cooperation around key resources. The modern energy market in Europe, which entails a complex interplay of supply and demand, is a pivotal example of such cooperation. Fostering EU energy independence, in particular for its eastern members whose gas needs could expose them to potential external blackmailing or other threats, will be a defining moment for European unity. Reducing gas and other resource dependence entails increased political cohesion among EU members, and a significantly greater ability to expand the market and export stably to southeastern European countries. These steps should serve the fundamental purposes of peace and prosperity.