10th May 2021

EU leaders to grapple with divergent energy proposals

  • Turkmenistan mosque: high-level meetings with gas-rich dictators paint EU energy politics in a bad light (Photo: d_proffer)

A stronger EU mandate for dealing with gas-rich autocracies in the Caspian region, more public funding for renewable energy sources and a north-south energy corridor will be on the agenda of an EU summit on Friday (4 February). But France, Germany and eastern EU members are at odds over what to prioritise.

Money and Russia are ultimately the two big issues looming in the discussions of EU leaders on energy security, pipelines and market liberalisation. The EU commission, for instance, would like to have public funding committed for cross-border and green energy projects in the next multi-annual EU budget from 2013 on.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Modernising the bloc's power grids, so that wind energy from the North Sea for instance is transported to Spain or Italy, is one of the crucial investments the EU commission is pushing for. The cost is estimated at around €200 billion and Brussels fears that the private sector will not be able to foot more than half of the bill.

Germany, the main contributor to the EU budget, sees things differently. According to German government sources, the issue is not so much about money, but about "intelligent regulation" which would allow the private sector to invest more in this field.

A proposal put forward by EU energy commissioner Guenther Oettinger, himself a German politician, will be discussed on Friday. But Berlin is keeping its cards close to its chest and prefers to defer the money issue to the broader talks about the next multi-annual EU budget.

Germany's confidence in the power of companies to make the necessary investments in the area does not stand the test of experience in Spain and Netherlands, where companies have struggled after the scaling down of subsidies for wind and solar parks in austerity budgets.

EU leaders from the eastern member states, many of whom where badly hit by the Russia-Ukraine gas crisis in 2009, are eager to get EU funding for cross-border connecting pipelines, which would allow their countries to help each other out in case of another supply crunch.

On Thursday night, the Prime Ministers of Bulgaria, Hungary, the Czech Republic, Poland and Slovakia and the President of Romania will meet with EU commission chief Jose Manuel Barosso to agree on a "North-South gas corridor." This project would link the eastern flank of the EU, which is still heavily dependnt on Russian gas, to the more mixed energy sources of northern and western Europe.

The money issue and EU caution over Russia relations could put the brakes on the scheme, however.

The EU's flagship project aimed at reducing reliance on Moscow's gas politics - Nabucco - is currently in its ninth year of existing mostly on paper. Not one km of pipeline has been laid down yet, out of the projected 1,200 km to cross the South Caucasus and Turkey, Bulgaria, Romania, Hungary and Austria.

Mr Oettinger, in an interview with the Austrian newspaper Die Presse, expressed annoyance that multi-national consortium behind the project has still not taken key business decisions.

"There's a chance now to get to the largest gas fields in the world. The same way our forefathers went to Baku 150 years ago to make oil, there is this window of opportunity now, to seal a gas partnership between the Caspian area and Europe," he said.

A stronger negotiation mandate with Caspian countries for the EU is one of the issues to be discussed on Friday.

None of the Caspian autocracies are easy business partners for Europe, however. High-level meetings result in fierce criticism by human-rights-oriented NGOs, while the unpredictability and non-transparency of the regimes make it difficult to secure commitments and contracts based on normal European models.

Luxembourg tax scandal may prompt EU action

An investigation into Luxembourg's tax regime has uncovered how the Italian mafia, the Russian underworld, and billionaires attempt to stash away their wealth. The European Commission has put itself on standby amid suggestions changes to EU law may be needed.


Portugal vs Germany clash on EU corporate tax avoidance

Portugal's taking over the EU presidency puts the tax transparency law for corporations - which has been fought over for years - to a vote in the Council of Ministers. The resistance of the German government has failed.

News in Brief

  1. Report: Czech minister plotted to bury evidence on Russian attack
  2. Putin promotes Russia's 'Kalashnikov-like' vaccine
  3. Coronavirus: Indian variant clusters found across England
  4. UN report encourages EU methane cuts
  5. EU court upholds ban on bee-harming pesticides
  6. Israeli tourists welcomed back by EU
  7. EU duped into funding terrorist group, Israel says
  8. Brussels prepares portfolio of potential Covid-19 treatments

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  2. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  3. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  4. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance
  5. Nordic Council of MinistersThe Nordic Region can and should play a leading role in Europe’s digital development
  6. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance

Latest News

  1. EU ambassadors flock to Red Square for Putin's parade
  2. MEPs win battle for bigger citizens' voice at Conference
  3. Hungary gags EU ministers on China
  4. Poland and Hungary push back on 'gender equality' pre-summit
  5. EU preparing to send soldiers to Mozambique
  6. EU now 'open' to vaccine waiver, after Biden U-turn
  7. EU mulls using new 'peace' fund to help Libyan coast guard
  8. Poland 'breaks EU law' over judges, EU court opinion says

Join EUobserver

Support quality EU news

Join us