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The EU’s impotent rage at Putin’s gas games – POLITICO

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Russian President Vladimir Putin is fortunately needling the EU over sky-high power costs, however the bloc doesn’t actually have any devices to power a change of conduct in Moscow.

Putin’s newest jab got here earlier this week in the course of the Valdai convention in Sochi, the place he ridiculed the EU for dropping long-term fuel contracts with Russia, trotted out an previous Russian folks story the place he in contrast the bloc to a hapless wolf with its tail frozen in an ice gap due to a canny fox — and added he might assist by sending the EU the additional fuel it wants, if regulators would solely approve his pet venture, the Russia-to-Germany Nord Stream 2 pipeline.

Poland, for one, has had sufficient.

In a letter that reads like a laundry checklist of complaints over failure to produce sufficient fuel forward of winter, seen by POLITICO, Warsaw demanded that EU Competitors Commissioner Margrethe Vestager provoke an investigation into Russia’s state-backed Gazprom for market manipulation and abuse of dominance on power markets underneath Article 102 of the Treaty on the Functioning of the EU.

Two contributors in Thursday’s Council assembly on power mentioned that Polish Prime Minister Mateusz Morawiecki advocated launching an investigation to “sober up Gazprom” and train it a lesson.

The concept received backing from Italy and the Netherlands in lower-level conferences earlier this week, although Germany is strongly opposed, one EU diplomat mentioned.

Nevertheless, whereas the Fee does have to reply to a Polish request, it isn’t obliged to launch a contest probe. The final time competitors authorities had Gazprom of their sights was 2015, once they alleged the Russian fuel big was charging “unfair” costs, however the case fizzled and in 2018 Gazprom was let off with no advantageous.

This time it could be even harder to deliver a case in opposition to Gazprom, because it says it’s fulfilling all of its provide contracts, with further fuel getting used to replenish Russia’s personal storage reserves. Russia provides about 40 % of the EU’s pure fuel.

“The Fee is at the moment trying into all allegations of doable anti-competitive conduct by corporations producing and supplying pure fuel to Europe with a view to verifying whether or not the present scenario on the wholesale fuel markets in Europe might be attributed to business conduct by market contributors,” a Fee spokesperson mentioned Friday.

Pointing fingers

The European Fee has maintained that the fuel worth hike is a brief and manageable world phenomenon unrelated to its local weather agenda and power market liberalization insurance policies, which have discouraged long-term fuel provide contracts in favor of a buy-when-you need open market buying and selling system.

However behind closed doorways throughout Thursday’s European Council, Fee international coverage chief Josep Borrell admitted that the oil and fuel disaster had “deep geopolitical roots” and was worsening, as further fuel being pumped by the U.S. and Qatar was crusing previous Europe and as a substitute being snapped up by Asian consumers keen to pay high greenback. “From a geopolitical and safety perspective, we must always not provide fuel suppliers the leverage that they’ve in the present day,” he mentioned.

Fee President Ursula von der Leyen told the European Parliament: “Whereas Gazprom has honored its long-term contracts with us, it didn’t reply to increased demand because it did in earlier years.” She lamented that “this makes us weak,” and referred to as for efforts to diversify suppliers.

However nations that are not attempting to diversify have truly performed higher. Hungary, a Kremlin ally that final month signed two 15-year offers for Russian fuel, is not having provide issues.

That prompted Czech Prime Minister Andrej Babiš to label his personal nation’s failure to safe comparable long-term offers for political causes “a mistake.” He urged the Fee to rethink its technique to cut back fuel reliance on Russia. “Neglect about ever turning into impartial from Russia, it will by no means occur,” Babiš informed fellow leaders.

Putin is raring to signal these offers, saying Thursday that “European corporations that obtain fuel from Gazprom underneath long-term contracts obtain it 4 instances cheaper” than spot market costs.

However many are cautious of renewing such long-term ties with Russia — particularly after listening to information of close by Moldova being squeezed in fuel negotiations.

Von der Leyen relayed to EU leaders a dialog she had with Moldovan Prime Minister Natalia Gavrilița relating to the renewal of the nation’s expiring Gazprom contract. Gazprom supplied to resume the deal however needed to hike the costs from $550 per thousand cubic meters final month to $790 this month — a stage Moldova mentioned it couldn’t pay. Some see Russia as exerting stress on Moldova after it elected a pro-EU authorities and vowed to retake management of the separatist Russian-backed enclave of Transnistria.

Moldova on Friday declared a 30-day state of emergency, with Gavrilița saying Gazprom was solely supplying a 3rd of its standard fuel flows.

In Romania, power suppliers in search of to e-book further Russian fuel on a month-to-month foundation have additionally sounded the alarm over Gazprom refusing to reply to their requests for extra provide this winter.

Latvian Prime Minister Krišjānis Kariņš mentioned that given the EU’s vulnerability to Russia, Putin’s assertion that good political relations result in good fuel relations was tantamount to blackmail.

EU power ministers will focus on the difficulty at Tuesday’s extraordinary Vitality Council.

Jacopo Barigazzi and Lili Bayer contributed reporting.

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