Brussels Sabotages EU Energy with South Stream Politicking
Finian CUNNINGHAM | 04.12.2014 | OPINION

Brussels Sabotages EU Energy with South Stream Politicking

The European Union’s ruling elite just hammered another nail into its creaky coffin this week with the critical loss of the South Stream gas project. Russian President Vladimir Putin may have been the one to formally pull the plug on the project while on an official visit to Turkey, but most observers can see that it is EU politicking that lay behind the collapse.

Putin said that continual obstruction to the South Stream project from Brussels had made it unviable. Putin said that Russia would henceforth be applying its energy resources elsewhere and unveiled a new pipeline route to Turkey from the Black Sea. It was reminiscent of how Russia has directed new energy trade with China and Asia over the past year partly as a result of Western unilateral sanctions and obstinacy. And who could fault for Russia for that?

Brussels had repeatedly raised objections to the South Stream project, claiming that Russia’s state-owned Gazprom as the owner and operator of the pipeline did not comply with EU competition laws. This seeming European probity over market regulations is fooling no-one. For a start, the EU ignores the same conditions of Gazprom’s operation of the Nord Stream via the Baltic Sea into Germany and existing pipelines through Ukraine. So why flag up the South Stream apparently with fastidious rules? 

 

No, the contradictions betray an ulterior agenda. The EU’s «probity» over the South Stream is just a cover for its own petty political reasons and a direct corollary of the Washington-Brussels aggressive agenda toward Russia over Ukraine.

 

Reactions to the news of the project’s cancellation were also indicative of which party was to blame for the debacle. The governments of Bulgaria, Hungary, Slovenia and Serbia described the decision as a blow. The tone of chagrin was deafening. Tellingly they did not rebuke Russia over the decision. Indeed, the Hungarian government said it was Russia’s right to cancel the project given the backdrop of wearisome wrangling by Brussels. While Slovenia’s prime minister Miro Cerar said he was «not surprised» by Russia giving up on the $40 billion undertaking, which was to come into operation in 2018 following its commencement last year.

 

The above countries were to have acted as key transit partners and stood to gain billions of dollars worth of fees over the long-term supply of gas to Europe. The pipeline was being contracted to supply some 63 billion cubic metres of natural gas from Russia to Central and Southern Europe, including Austria and Italy. That represents about 40 per cent of Russia’s total supply of gas to Europe in 2013. The South Stream route would thus have been a critical component of European energy security and would have reduced gas costs for millions of households. 

 

The reaction of Bulgaria, Hungary, Slovenia and Serbia to the South Stream collapse of course expressed disappointment over the impact on their economies. But their muted regret was more a reflection of consternation with Brussels for its policy of antagonism with Russia. Brussels’ high-handed slapping on of sanctions against Moscow and its repeated baseless accusations of Russian expansionism in Ukraine have led to the present juncture of badly frayed relations. That has, in turn, put the kibosh on what would have been a critically important improvement in Europe’s energy security, with financial benefits to several countries and millions of EU citizens.

 

It’s one thing for Brussels to be cavalier towards Russia; it’s quite another for the same elitist power centre to be cavalier towards its own increasingly hard-pressed citizens and their best interests. 

 

Gerhard Roiss, the chief executive of Austria’s top oil and gas firm OMV, described the South Stream’s abandonment as a «regretful development for Europe». He added that it was «a step in the wrong direction».

 

Roiss told Austrian media: «It is a regretful development for Europe since it needs Russian gas, it cannot do without Russian gas. But pipeline facilities are needed to ensure secure energy supplies». The OMV boss added: «The problem today is that possibilities of supplying southeastern Europe with gas are reduced and dependence on one supplier and one route via Ukraine is high».

 

Hugo Kyselka, the marketing director of Czech Republic’s gas company Vemex, was even more categorical about the negative impact on Europe, and who was to blame. He said the loss of the South Stream would be a «disaster» for Bulgaria, Serbia, Austria and Hungary, and he accused the Brussels elite of «deliberating sinking» the project. 

 

In a succinct remark, Kyselka said: «Brussels is not interested in the needs of ordinary people, but only in its political aims».

 

The Brussels bureaucracy of commissioners, financiers and other unelected mandarins, as well as certain European political leaders like Britain’s Cameron, France’s Hollande and Germany’s Merkel, have joined with Washington in a reckless zero-sum geopolitical game to destabilise Russia. Instead of working in the interests of the 500 million ordinary EU citizens, Brussels has thrown its lot in with Washington’s oligarchy of Wall Street banks and military-industrial complex to confront Russia in a geopolitical showdown for global hegemony.

 

The outlines of the battle were manifested a year ago when the Washington-Brussels axis made Ukraine a ripping point. Rather than coming to some accommodation with Russia over Ukraine, the US and EU delivered an ultimatum of «either with us or not» to Kiev, which resulted in an illegal coup and ongoing civil war in that country and which has incited the biggest crisis between Europe and Russia since the end of the Cold War.

 

This same maximalist aggressive attitude has been played out once again over the South Stream gas project.

 

Both Brussels and Washington have piled intense pressure on the Eastern European countries that were key to the project. Bulgaria, one of the newest and poorest members of the EU, was singled out for acute pressure from Brussels and Washington.

 

‘Bulgaria halts work on the South Stream after US talks,’ reported the BBC back in June this year. Among the US Senators to have lobbied the government in Sofia was John McCain, the self-styled champion of the neo-Nazi and anti-Russian Kiev regime in Kiev that Washington and Brussels helped to install in February.

 

Bulgaria’s reported halt to the South Stream due to American «talks» finally became a matter of full suspension two months later, in August, after Brussels conducted more «talks». The exact nature of this coercion is not sure. But it is not hard to imagine how all sorts of financial leverage could have been exerted by Brussels and Washington on the vulnerable Bulgarian government. 

 

Laurent Ruseckas, global gas analyst at the economic research firm IHS told the BBC: «Bulgaria has been strongly supportive of South Stream, which will give it greater security of gas supply – but as the situation in Ukraine has deteriorated, it has come under increasing pressure from Brussels to stop co-operating with Gazprom on the project».

 

The debacle over the South Stream clearly shows that the European political elite have no interest in the welfare of its ordinary citizens or poorer member states. It is reported that cancellation of the project will cost manufacturing firms and other businesses at least $2 billion in the immediate term. These firms include German and Italian pipe manufacturers. Thousands of jobs across recession-hit Europe are thus being put at risk by political games that Brussels is playing against Russia for its own arcane geopolitical reasons in cahoots with Washington. 

 

The energy security of millions of Europeans, involving higher market prices, is also being jeopardised by the failure to complete a strategically important addition of gas infrastructure for the continent.

 

Is no wonder therefore that ordinary European citizens increasingly have nothing but contempt for Brussels and a Western European political elite that treat ordinary people with such recklessness. Election after election across Europe, as well as angry anti-austerity protests in every capital, show that the EU is doomed under its present plutocracy. And charlatans like the demagogic prime minister of Britain, David Cameron, will not fob off this popular disgust with his Eurosceptic rhetoric. He is very much part of the hated European plutocracy.

 

The wanton political sabotage of the South Stream project is just another nail in the coffin for the EU plutocracy. Asking impoverished people to eat proverbial cake while they freeze in their homes and while the ruling European elite stokes an economic war with Russia has got to be the final insult to citizens’ intelligence and forbearance.

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