Russia: Moscow Turns Its Attention To The Balkans

Two summits in two Southeast European cities. One loud and clear message from Russian President Vladimir Putin: We're back. Addressing a Balkan energy summit in Zagreb, Croatia on June 24, Putin was as poker-faced as ever as he trumpeted a landmark deal that could secure Moscow's continued dominance of Europe's energy market. "As you know, yesterday [June 23] Gazprom and the Italian [energy] company Eni signed a memorandum on the possible construction of a gas pipeline under the Black Sea," Putin told 10 heads of state from the Balkan region. Putin also said Russia wants to build "underground storage facilities in several Balkan states, which will not only improve energy supplies to the region, but will make it more attractive and more important from the perspective of solving energy problems in Europe as a whole." A day later at a meeting of the Organization of the Black Sea Economic Cooperation (BSEC) in Istanbul, Turkey, Putin urged member states to foster stability in the region's energy markets by signing long-term contracts -- presumably with Russia. Putin later told reporters that "the Balkans and the Black Sea [region] has always been a sphere of our special interests," adding that it is "natural that a resurgent Russia is returning there." Analysts say Putin's energy diplomacy in the Balkans and Turkey was partially aimed at frustrating the European Union's efforts to diversify the continents energy supply to lessen dependence on Moscow. But Putin also had a larger agenda: reestablishing a Russian sphere of influence in Southeastern Europe.

South Stream

The highlight of Putin's energy diplomacy this week was Gazprom's deal with Eni to build the South Stream pipeline, which would pump 30 billion cubic meters of Russian gas a year under the Black Sea to Bulgaria. The pipeline, which is slated to be finished by 2011, would then branch off in two directions: north to Austria and south to Italy. Energy analysts say South Stream severely hampers the European Union's efforts to diversify the continent's energy supplies to reduce dependency on Russia. Federico Bordonaro, a Rome-based energy analyst for the "Power and Interest News Report," says it's another big move in the chess game. "We cannot talk about a bloc. What we can talk about is Russia's attempt to undermine the Washington-backed vision of a very homogenous wider Black Sea area" "I don't think this kills other possible projects, but what it kills is the possibility that these other projects will be as decisive as they were actually thought to be," Bordonaro says. A key component of the EU strategy is the proposed Nabucco pipeline, which would transport gas from Central Asia and the Caspian Sea region to Western Europe via Turkey and the Balkans -- without going through Russia. To block this strategy and maintain its dominance, Moscow is seeking to gain control over energy routes in Southern Europe so Caspian and Central Asian gas is exported to international markets via Russia. In May, Russia moved closer toward that goal when Putin, Turkmen President Gurbanguly Berdymukhammedov, and Kazakh President Nursultan Nazarbaev agreed to build a pipeline along the Caspian Sea coast to transport natural gas from Turkmenistan to Europe via Kazakhstan and Russia. And the South Stream project is another giant step in that direction. "I think it makes it much more complicated to find the backing for projects like the Nabucco pipeline. Particularly if South Stream seems to be looking at two onshore routes once it gets to Bulgaria -- one, perhaps, going across to Italy and one going to Austria. And that second one would be in competition with Nabucco," says Julian Lee, a senior analyst with the London-based Center for Global Energy Studies

More Roads Lead To Europe

The EU strategy has also been frustrated by nuclear-free countries like Germany and Italy who are among the most heavily dependent on Russian energy to generate electricity. Moscow has also courted countries like Hungary, which decided in March to back another Gazprom plan to extend Russia's Blue Stream pipeline under the Black Sea. According to the plan, Hungary would then serve as a hub to transport Russian gas to Europe. Russia's Druzhba pipeline "Actually, if we see the whole thing in a broader perspective, this kind of strategy that wants to decisively reduce Russian influence is not working so well. I think that Russia reacted with an intelligent strategy," Bordonaro says. Like many analysts, Marshall Goldman, a professor emeritus of Russian economics at Wellesley College and the author of a forthcoming book on Putin's energy policy, compares Putin's energy policy to a game of chess. "The end game is to make sure that Russia maintains its monopoly control and to prevent anything from undercutting that kind of activity," Goldman says. "Gazprom's next step now is to pressure to gain control of the distribution lines within Europe, both Central and Western Europe."

New Kid On The Bloc

But Goldman and other analysts say Russia's grand strategy goes further than dominating Europe's energy market. After being largely sidelined from European affairs since the 1991 Soviet breakup, Moscow is trying to use its energy might to reestablish a foothold -- some even say a "sphere of influence" -- on the continent. And Russia sees a major window of opportunity in the western Balkans, where Moscow has longstanding cultural and historical ties and where countries like Serbia and Montenegro are becoming increasingly frustrated with the EU's reluctance to admit them. "This energy game in the western Balkans is actually linked to geopolitical moves and to Russia's desire to become once again an influential player in the region, so that it will balance the EU and United States combined and the European Union's enlargement," Bordonaro says. Bordonaro says that while Russia is a long way from establishing anything close to the old Soviet bloc, they are successfully "infiltrating a would-be Western bloc" on the continent: "We cannot talk about a bloc," Bordonaro says. "What we can talk about is Russia's attempt to undermine the Washington-backed vision of a very homogenous wider Black Sea area, which is secured for NATO and Western security," he added. And this assures Moscow a measure of political support -- or at least acquiescence -- in Europe.

"You certainly do have a sphere of influence because once those countries become addicted to using Russian natural gas they begin to hesitate to strike out in a different direction for fear that the Russians will cut them off," Goldman says. But despite Russia's gas-powered geopolitical resurgence, most analysts point out that one of Europe's greatest fears, that Moscow will use energy as a political weapon against the West, is unfounded. "Europe is dependent on Russia for a very large proportion of its natural-gas imports. Europe is not nearly as dependent on Russia as Russia is on Europe as a market for its gas exports," Lee says. "Russia doesn't export significant quantities of gas anywhere other than to Europe. It exports some to the former Soviet republics, and it is beginning to bring prices there into line with its European prices. But it has no gas-export pipelines that go anywhere other than Europe." Despite Gazprom's current might, it could have other problems in the future supplying its customers with gas. Many analysts say that some of its fields are underdeveloped and need more investment to meet growing demand.

Source: http://www.rferl.org/featuresarticle...7911031DC.html

Russia confirms veto on Kosovo independence

Moscow has explicitly threatened to use its UN security council veto on an EU and US-backed plan to give independence to the Serb province of Kosovo, dinting hopes that Russia might abstain from the UN vote. "A decision based on Martti Ahtisaari's draft will not get through the UN security council," Russia's deputy prime minister Vladimir Titov confirmed on Tuesday (24 April), Russian newswires Interfax and Ria Novosti report. "The threat of a veto should stimulate the search for mutually acceptable options," he added, following months of hint-dropping by Russian diplomats that they would use the ultimate UN sanction. UN envoy Ahtisaari's proposal would give Kosovo "supervised independence," with Pristina shortly afterward declaring that it is an independent state and with the US and EU recognising its new status. Washington has been pressing for a UN decision in late May, but the UN is unlikely to table a resolution unless it has been pre-arranged that the five UN veto powers will either support the move or abstain from the vote.

The G8 summit in Germany on 6 to 8 June could be used for last-ditch talks, with the UN five - the UK, France, the US, Russia and China - all round the table and with Bush and Putin likely to hold their own bilateral. But some political sources in Serbia suggest Moscow and Belgrade are looking to delay any UN decision until autumn this year or early 2008, with Russia suggesting that Kosovo semi-autonomy would be acceptable to Serbia. In the meantime, a Russian-orchestrated UN fact-finding mission will between 25 and 28 April tour the region to see what lies behind Serbia's claim that tens of thousands of Serb refugees are still too afraid to go back to Kosovo. Kosovo prime minister and former ethnic Albanian guerilla Agim Ceku showed impatience with the Serb-Russian opposition this week, amid fears that radical Kosovo Albanians could turn to violence if made to wait too long. "Russia may demand new negotiations as much as it likes...but in the last few days of May, Kosovo will acquire independence," he said, Ria Novosti reports. Kosovo is home to 1.8 million ethnic Albanians and over 100,000 ethnic Serbs as well as Serb holy sites. But it has been under UN supervision since 1999, when NATO intervened to stop Serb attacks against the ethnic Albanian population.

The Titov veto statement comes after a prickly meeting between German foreign minister Frank-Walter Steinmeier and Russian foreign minister Sergei Lavrov in Luxembourg on Monday (23 April). Mr Steinmeier said the EU's "aim is to secure peace and stability" and acknowledged that "there are some differences on the assessment of the situation" between Moscow and Brussels. But with an EU splinter group including Slovakia, Romania, Greece, Spain, Italy and Cyprus recently voicing reservations on the Ahtisaari plan, Mr Steinmeier was unable to say the EU is united on the topic. "There should be no unilateral efforts to impose solutions because these Balkan nations need to live together," Russia's Mr Lavrov retorted, calling the Ahtisaari plan a "delayed-action land mine." The Russian also brushed off EU questions about police brutality and arrests of peaceful pro-democracy protesters in Moscow and St Petersburg one week ago. "I think it was Voltaire who said that freedom is following laws," he said.

Source: http://euobserver.com/9/23933