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Energy, an apple of discord Energy, an apple of discord
by Amin George Forji
2006-10-25 09:57:54
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Russian President Vladimir Putin met with the leaders of the 25 EU permanent members and representatives of Romania and Bulgaria, the two other potential members in the making, plus delegates of the European Parliament and European Commission on October 20th in the Finnish town of Lahti for an informal summit aimed at strengthening relations.

The summit which ended on Saturday October 21st was aimed at softening talks ahead of a formal EU/ Russia summit in Helsinki, Finland, on November 24th. Energy security has dominated talks at the summit, which has been tough and complicated. Europe depends on Russia for over 25% of energy supply and this was reminded after the Ukraine, Italy and Hungary were made to feel the importance of Russia earlier this year when Russia shut down one of the gas pipelines to Western Europe that runs through the Ukraine.

At the summit, Europe sought to reach a deal with Russia that could give firms the opportunity to exploit Russia's huge oil deposits and natural gas reserves in exchange for better access to Europe's markets. "We need to see more progress in terms of being certain that our companies will be able to operate in Russia, just as Russia wants its companies to be able to operate in Europe," Tony Blair's spokesperson said in a statement.

On Friday, the leaders tried in vain to convince Russia to sign a new legally binding energy pact that would administer the supply of oil and gas for the whole of Europe. EU leaders warned Putin that his country risks seeing foreign investors take flight, if she stay put on her stance. In his opening address, President of the European Parliament José Barroso reminded delegates that both Russia and Europe need each other, "Russia needs the European market...there is gas flow and there is cash-flow. Russia needs cash-flow, you can't eat gas."

President Vladimir Putin himself stressed that both Russia and the EU are natural partners in the natural sector, and that mutual dependence can only do good to energy security. He nevertheless added that energy cooperation must be based on "principle of reciprocity, predictability of the energy markets, responsibility and security." He added, "The leaders of Russia and the EU have once again confirmed that energy cooperation should be based on the principles of the stability of the energy market."

He rejected calls for Russia to sign the Energy Charter Treaty, but said every door remains open for agreement on specific aspects in the charter's basic principles. He explained that Russia was not per se against the charter in question, but that certain provisions therein are problematic and require amendment and clarifications. "We are not against the principles that are included in the charter, but we believe that those certain provisions of the charter should be defined better," said Putin.

With Russia rejecting calls to open up her markets and to sign the energy pact, European Commission President José Barroso, who spoke after Putin, feared that Europe could be at the brink of a new division, "I think we should not allow energy to divide the EU and Russia as communism once did."

The EU leaders further pressed Russia to bring the economic blockade on her Southern neighbour, Georgia, to an end, following escalating tensions. But Putin replied with even harsher words, warning that if Georgia wants military action, Russia will not hesitate to do just that. He blamed the tensions on the leadership in Georgia. "To our great sorrow and concern, the situation is developing in the direction of possible bloodshed...this is what you and I should be afraid of…bloodshed in that region," Putin lamented.

Also high on the agenda at the summit was Moscow's human rights records and military operation in Chechnya. Since it was going to be impossible for each of the EU leaders to ask direct questions to Putin, it was agreed that the job be done by two representatives, notably Finland’s Prime Minister Matti Vanhanen and Barroso. The latter was charged with asking the questions on energy issues and Vanhanen asked the most unpleasant questions on the situation of Georgians in Russia, human rights and the Politkovskaya case.

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