Thursday

7th Dec 2023

EU digests Russia's South Stream announcement

  • Pipe-laying ship in Burgas, Bulgaria: Construction of the under-sea leg of South Stream had already begun (Photo: south-stream-offshore.com)

EU diplomats predict Turkey will use Russia’s South Stream decision as leverage in accession talks, as the European Commission handles the financial implications for member states.

The deliberations come after Russian leader Vladimir Putin on Monday (1 December) in Turkey said he will no longer build the pipeline - under the Black Sea to Austria and Italy - due to EU objections on non-compliance with anti-monopoly laws.

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

He added that he is in talks with Ankara to build an equally big pipe to Turkey instead and to create a new gas storage and trading hub on the Turkish-Greek border.

The new pipeline is to ship 63 billion cubic metres of gas a year, 14 of which will be sold to Turkey at discount prices and the rest sold on to countries in south-east Europe.

Putin’s announcement came as a shock to South Stream host states and participating companies.

Bulgaria, Italy, Hungary, and Serbia said they received no prior notification of the decision, which is set to cost them hundreds of millions of euros a year in lost transit fees.

Shares also plunged in Italian and German construction firms, Saipem and Salzgitter, on news of the massive loss to their order books.

“The coming days will tell us if the announcement made yesterday by Putin is final or not," Italian foreign minister Paolo Gentiloni noted on Tuesday.

Bulgarian president Rosen Plevneliev said in Sofia that South Stream can still be saved if Russia falls in line with EU rules: "If Russia agrees to comply with European law, I do not imagine anybody having objections to this project".

“The West and the East play 'cat and mouse' and Serbia suffers from this," Serbian president Tomislav Nicolic added.

EU officials and diplomats are also unsure whether Putin is bluffing in order to increase pressure on the European Commission to back down on its anti-monopoly regime.

One senior EU diplomat told EUobserver the Turkey-Russia pipeline deal is at an early stage and may come to nothing.

"Russia has signed similar 'memorandums of understanding' on energy projects all over the place. But it doesn't mean they will all bear fruit".

But the contact added that if the Russia-Turkey pipe is built it will harm European energy security by increasing dependence on Russia on the South Stream model.

"Both the EU and the US have to exert diplomatic pressure on Turkey. They [the Turks] must decide whose ally they really are".

The EU contact predicted the Turkish leader, Recep Tayyip Erdogan, will use the Russian offer as leverage to get the EU to open new chapters in stalled accession talks.

"He will say to us: 'Look, you haven't even opened the energy chapter [in the accession negotiations] so, until you do that, we have nothing to talk about."

For his part, the EU commission's new energy chief, Slovakia's Maros Sefcovic, said on Tuesday he will hold talks with ex-South Stream states on 9 December.

"This new development will be an additional element that will be discussed in that meeting. The ever changing energy landscape in the EU is yet another reason for the EU to build a resilient Energy Union with a forward looking climate policy", he noted, referring to a new commission proposal on EU energy security, due in spring.

His spokeswoman, Anna-Kaisa Itkonen, said the same day that "pipelines in Europe must be built and operated in line with EU legislation".

She added there is "no legal basis" for EU compensation for lost income if South Stream never comes to be.

Hungary moves ahead with South Stream pipeline

Hungarian PM Viktor Orban has reiterated his support for the Russian South Stream gas pipeline after parliament gave the green light to a law which paves the way for construction.

Bulgaria lobbies Brussels on gas hub project

Bulgaria wants the EU to fund construction of a gas hub on its Black Sea coast to collect possible supplies from the area and sell them to clients in member states.

Latest News

  1. EU suggests visa-bans on Israeli settlers, following US example
  2. EU ministers prepare for all-night fiscal debate
  3. Spain's Nadia Calviño backed to be EIB's first female chief
  4. Is there hope for the EU and eurozone?
  5. Crunch talks seek breakthrough on EU asylum overhaul
  6. Polish truck protest at Ukraine border disrupts war supplies
  7. 'Green' banks lend most to polluters, reveals ECB
  8. Tense EU-China summit showdown unlikely to bear fruit

Stakeholders' Highlights

  1. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  2. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  3. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  4. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?
  5. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  6. UNOPSFostering health system resilience in fragile and conflict-affected countries

Stakeholders' Highlights

  1. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  2. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  3. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  4. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Join EUobserver

Support quality EU news

Join us