Ukraine: End of Orange Revolution, start of Stabilisation

“We can say goodbye to our democracy, our independence and our sovereignty” (outgoing President Yushchenko predicts a future with either Ms Tymoshenko or Mr Yanukovych as President)

“I’m quite happy because whoever is chosen today will be hated tomorrow by the majority of the country.” (Andrey Kurkov)

Ukraine’s Russian-leaning opposition leader, Viktor Yanukovych is on course to become the country’s president, with early results indicating he had a lead of several points over his bitter rival, Yulia Tymoshenko, the prime minister. Describing yesterday’s vote as a “turning point in our country’s history”, he added that he would pursue policies that helped all Ukrainians – and would not favour one geographical area. “We don’t need to find enemies in our country. We need to unite together,” he declared. In contrast to 2004, international observers said there was no major evidence of fraud. Despite fair elections PM Tymoshenko insists that she will challenge the results of the presidential election.

With more than 97% of votes counted, Mr Yanukovych had a 2.6% lead over his rival, PM Yulia Tymoshenko. According to the results, “against all” received 4.4 percent. Preliminary estimates showed about a 69 percent turnout. Sunday’s elections had been given a “positive assessment” by the election observation mission led by the Office for Democratic Institutions and Human Rights ODIHR) of the Organisation for Security Co-operation in Europe (OSCE). The OSCE hailed the process as “professional, transparent and honest,” saying it should “serve as a solid foundation for a peaceful transition of power. There looks to have been less interference from the US this time than happened in 2004, when a number of Washington-backed NGOs took an active part in events in Kiev.

The outcome

Before 1st round I wrote and article “Ukraine – choosing a new Way”

I described Ukraine’s challenges – created mainly the disastrous regime of outgoing President Yushchenko – and prognosticated that Ukraine is now selecting more pragmatic and balanced approach with its foreign policy. I also predicted right the 1^st round outcome but bet wrong the final 2^nd round. One reason can be that after 1^st round President Yushchenko went really mad – changing voting regulations, naming Stepan Bandera (nazi-collaborator and chief of the Organization of Ukrainian Nationalists, OUN) as Hero of Ukraine and proposing to vote “against all”. These actions were maybe enough to increase the support for Mr. Yanukovich and decrease the popularity of Ms. Tymoshenko.

Tensions ran high ahead of the vote, with both candidates accusing each other of planning large-scale ballot fraud and vowing to send their supporters into the streets to sway the outcome of any legal disputes over the count. The positive assessment of international monitors however gives limited background to contest the result.

Stabilisation

Mr. Yanukovych and his team may be an old-style party team, however this past can be seen also as an experience needed to bring order and stability to country. In contrast to 2004, Yanukovych’s potential presidency is no longer viewed among Western Ukrainian voters as an existential threat to Ukraine. Earlier Party of Regions even managed to came third in the local election to the city council of Ternopil in March 2009 gaining about 10% and surpassing Tymoshenko’s bloc (which called for a boycott of the election) and Yushchenko’s “Our Ukraine.” Yanukovych’s personal support in the West of Ukraine rose to the same level. At the same time, the less intense animosity to Yanukovych now and disillusionment with his main alternatives means that the West of Ukraine will grudgingly accept him as a new president just the way it accepted Kuchma in 1994. One may claim that the ongoing political confrontation between the Orange leaders has become a far greater threat to Ukraine’s statehood than any of Yanukovych’s election promises could ever be.

According to the 2001 census, 67.5 percent of the population declared Ukrainian as their native language and 29.6 percent declared Russian. Ethnic Ukrainians make up 77.8% of the population while the share of ethnic Russians is 17.3%. So it is clear that the new President has considerable support also outside predominantly Russian regions. This situation may ease tensions between different ethnic and religious groups, not only between Ukrainians and Russians but e.g. between central government and the (Trans-Carpathian) Rusins as the Crimean Tatars.

One of his first tasks is to unblock frozen IMF aid for its ailing economy. Yanukovich supports the idea of starting talks with Russia and the EU on the possible creation of a gas transportation consortium in order to increase the reliability of Russian gas transit to Europe. Improving Ukraine’s investment climate could attract foreign companies who could help Ukraine to develop its vast oil and gas reserves and strengthen its energy security.

In foreign policy the outlines of the new Yanukovych era are clear. He will improve Ukraine’s strained relations with the Kremlin tilting country back towards Russia’s sphere of influence, after the relentlessly pro-European course set under President Yushchenko. He will rule out Nato membership and extend the lease on Russia’s Crimea-based Black Sea fleet. It expires in 2017. He also believes in European integration – economically if not politically.

Energy aspect

The election may also be the final nail in the coffin of GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova) Group which was founded 1999 with help of US to foster favourable conditions conducive to economic growth through development of an Europe-Caucasus-Asia transport corridor. GUUAM was dominated by Anglo-American oil interests, ultimately purports to exclude Russia from oil and gas deposits in the Caspian area, as well as isolating Moscow politically. First Uzbekistan withdraws from it leaving behind a stump GUAM. Then Georgia started its aggressions with false idea of western support leading today’s situation. Moldova was aiming towards Nato and EU but after conflict in Georgia it started to look other alternatives. Political attitudes of Azerbaijan and Russia have approached each other. Now Ukraine as last fortress of GUAM is taking distance from its earlier Nato ambitions. More e.g. in article “Is GUUAM dead?”

Constructing the White Stream pipeline underneath the Black Sea was supposed to be the main energy project of GUAM bloc; it was also designed as an alternative to EU’s Nabucco. The idea of White Stream is to pump natural gas from the Caspian region to Ukraine and further to Romania, from where it can be marketed to Europe. On May 28, 2008, the European Commission identified the project as a “Project of Common Interest” and furthermore accepted it as a “Priority Project.” However the last Georgian energy summit on January 14-15 2010 in Batumi to discuss the construction of pipelines bypassing Russia failed and got downgraded as no high-ranking officials who said they would attend the meeting ended up coming. White Stream has some similarities with Nabucco – both are more political project and both are missing the gas supply. With new President in Ukraine also political backing is dispelled.

Ukraine’s role of a major European gas hub is also at risk because South Stream could almost halve its transit earnings. Russian newspaper Kommersant reported on Tuesday that Viktor Yanukovich had invited Gazprom to participate in upgrading the Ukrainian gas pipeline system. Gazprom has made early comment that the pipelines needed upgrading and the company would be interested in participating, however any investment would not replace the need for Gazprom to develop the South Stream pipeline. I agree – politicians are coming and going and chancing their minds in between but pipe will stay a halve century if not more.

My Conclusions

• The most positive result were fair and free elections. I expect that in domestic politics attitudes between regions/groups identifying more with Ukrainian nationalism and the Greek Orthodox religion, and predominantly Russian and favourable to the Soviet era will ease.

• It appears obvious that in foreign policy one of the top priority in the political agenda of new President will become the restoring of cordial relations with Russia.

• I hope that the EU and Ukraine will rapidly reach agreement on a new Association Agreement (including comprehensive free-trade agreement) that added to better investment climate will help modernise the Ukrainian economy and enable it to return to pre-recession growth rates.

Summa summarum

• Free and fair elections will revise the policy both with internal and foreign affairs of Ukraine. Nato membership will be ruled out, European integration will continue economically if not politically, relationship to Russia will improve. Ethnic tensions may be reduced and more united country with new President has better possibilities match economical challenges.

balkan

Ukraine: Choosing a New Way

“When we get Russian gas, the problem is not the supplier, but the fact that 80 percent of the pipeline is located in the Ukraine. We should look for independence not from Russia, but from such transit schemes,” (Gerhard Schroeder)

Just after 2004 Orange Revolution Ukraine took course towards Nato and EU, the new leadership had popular backing to fulfil fast forward hopes its policy. Instead of the fast forward progress scenarios the outcome has been a totally different crisis scenarios including possible confrontation between Ukraine and Russia in Crimea due the Black Sea Fleet, a new dispute over the supply of Russian natural gas to and via Ukraine, different ethnic tensions with minorities and of course declining economy with all social impact.

The dominant factor in Ukrainian political life has been the inability of political leaders – President Victor Yushchenko and his prime ministers – to work together to promote high-flown ideas. Now however the course is changing again in January elections. According different opinion polls President Yushchenko will lose the game already on first round and the winner of second round early February will probably have a pragmatic approach towards Russia and potential to implement more balanced policy. Ukraine is likely to pursue a more modest pace in developing its relations with NATO, a more measured tone on support for Georgia, and more moderate relations with Russia.

Ethnic tensions

Internally Ukraine has a big divide between the Russian friendly and ethnic Russian regions against the more westward looking regions. There is ethnic tensions also between central government and the (Trans-Carpathian) Rusins – an East Slavic people that is the indigenous population of the Carpathian Mountains; the Crimean Tatars and nowadays also with supporters of radical Islam. An of course there is some 9-17 million Russians in country total population of 46 million.

During Yushchenko’s presidency Ukraine has been eager towards Nato membership; same time there has been speculations what will the near future foresee after 2017 for the Russian fleet in Sevastopol? In the worst case the situation might even instigate or support an effort by Crimea to break away from Ukraine. The new president probably is ready to end these speculations.

It is also possible that despite results in election separatist movements are gaining more support and one compromise can be creation some kind of federation with strong minority rights which also can block Ukraine’s former western dreams.

From Subject to Object

From my viewpoint Ukraine has during last presidency lost its regional importance mostly due the geopolitical energy game. GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova) Group was founded 1999 with help of US to foster favourable conditions conducive to economic growth through development of an Europe-Caucasus-Asia transport corridor. GUUAM was dominated by Anglo-American oil interests, ultimately purports to exclude Russia from oil and gas deposits in the Caspian area, as well as isolating Moscow politically.

Now GUUAM is coming to end of its short road. Already earlier Uzbekistan withdraws from it leaving behind a stump GUAM. Then Georgia started its aggressions with false idea of western support leading today’s situation. Moldova was aiming towards Nato and EU but after conflict in Georgia it started to look other alternatives. Political attitudes of Azerbaijan and Russia have approached each other. Russia again took the initiative acting as a mediator between Armenia and Azerbaijan to solve long term conflict of Nagorno-Karabakh. The last piece of GUUAM is Ukraine and also this last fortress has degenerated to stagnation. More e.g. in article “Is GUUAM dead?”

The adventure after Orange revolution in foreign policy issues finally lead to situation where Ukraine turned from a subject of politics into an object of (geo)politics.

Energy game

One of the real parts of Euro-Asian Oil Transportation Corridor is the Odessa-Brody oil pipeline from Ukraine to Poland for transportation oil from Caspian Sea region to Baltic Sea. However completed in 2001 up to Brody near the Polish border, that pipeline remained empty for three years. In 2004, Russian oil companies began to transfer oil from Brody to Odessa instead of original from East to West plan. However, Ukraine still looks to extend this pipeline so that it can carry Azerbaijani oil arriving from the Georgian port of Supsa to Odessa and then take it to the Polish refinery at Plock and potentially to the port of Gdansk. Some 500 kilometres of pipeline have to be built for that to happen. Meantime other players have been taken more and more Azerbaijan’s energy resources for other markets.

The latest gas dispute made it clear that Ukraine is not reliable transmitter of Russian gas to Europe. This boosted EU’s Nabucco –plan to new level. The same is true also with Russia’s South Stream pipe line. The both pipelines are bypassing Ukraine. When implemented – probably until 2015 – the new line(s) are invalidating the significance of Ukraine as transit route of energy. Turkey is taking this role as most important energy hub for Europe. More e.g. in article “The Nabucco-South Stream race intensifies”.

Declining economy

For a short-sighted and selfish political motivation (the weakening of Russia and its sphere of influence) of West has helped divide and devastate Ukraine. However the EU can’t afford Ukraine economically, geographically and politically, nevertheless in an attempt to weaken Russia EU attempted to lure it away form the Kremlin’s sphere of influence. The result has been economic catastrophe for Ukraine which has seen significant rises in its gas and oil bills along with other economic misfortunes.

The unsolved economic and social difficulties accompany the young state since its declaration of independence. The outbreak of the world economic crisis in 2007/08 with its financial and industrial breakdown accelerated and deepened these problems such as a general credit crunch, an enormous devaluation of the currency, a decline of production following the decline of steel-prices on the world-market and a remarkable reduction of foreign-trade which effects are reflecting from one side the integration of the country into the market economy and Ukraine’s peripheral position from the other side.

Despite the greatest media freedom Ukraine has position 155 in press freedom and is described as partly free in Freedom House survey. Threats, harassment, and attacks against the media continued as the country’s weak and politicized criminal justice system failed to protect journalists from regional politicians, businessmen, and criminal groups. Ukraine would definitely be an interesting case study in criminal justice degree courses.

One of the main tasks of the new political leadership is to provide a balanced position between Brussels and Moscow. This may be realistic when the EU same time is searching a possible “third way” between EU member- and non-membership with some innovative model of “privileged partnership” discussed especially with case of Turkey. The model – when first created – could be copied also with some other countries which now are in enlargement process or included in Eastern Partnership program like Ukraine.

Conclusions

Ukraine tried play important role in U.S. backed GUUAM to create East-West transport corridor for energy blocking Russia from Caspian Sea energy resources and isolating Moscow politaically. However Russia implemented its own initiatives making North-South energy corridors stronger and helping to transfer East-West corridor some hundreds of kilometres southwards. As a result GUUAM is nearly dead, both EU’s and Russia’s new pipelines are bypassing Ukraine, Turkey is coming the main energy hub to Europe.

I wait that during this election Ukraine will finally get rid off Mr. Yushchenko already in first round, which will be won by Mr. Yanukovich. However last round will bring victory to Mrs. Timoshenko and so the country will get both pragmatic and charismatic new leader.

The new president in Ukraine will probably have more pragmatic approach towards cooperation with Russia. Ukraine is likely to pursue a more modest pace in developing its relations with NATO, a more measured tone on support for Georgia, and more moderate relations with Russia. The outcome can very well be easing tensions not only in energy policy but with ethnic and military fields too.

Is Yemen the next target for the War on Terror?

“Somebody in our government said to me in Sana’a, the capital of Yemen, Iraq was yesterday’s war. Afghanistan is today’s war. If we don’t act pre-emptively, Yemen will be tomorrow’s war.” (Sen. Joseph Lieberman, I-Conn.)

On December 25 US authorities arrested a Nigerian named Abdulmutallab aboard a Northwest Airlines flight from to on charges of having tried to blow up the plane with smuggled explosives. He was “suspected” of having been trained in for his terror mission in Yemen. A new target for the “War on Terror” has been found. Is it really so that a guy who burnt his trousers with some powder hidden there has so big influence to geopolitics – I have some doubts. More than from trousers of this desperate Nigerian wannabe terrorist the hidden agenda may be found again from great energy game and from interests of military-industrial complex.

Yemen has a population 23.8 million is located at the tip of the Arabian Peninsula , bordered by Saudi Arabia to the north, Oman to the east, Red Sea to the west and Gulf of Aden to the south. It is one of the poorest countries in the Arab world. Per capita GDP estimated at $2,500; 45% live below the poverty line, and 35% are unemployed. The Republic of Yemen was created in 1990 when North and South Yemen united. President is Ali Abdallah Saleh became the first elected President in reunified Yemen in 1999 (though he had been President of unified Yemen since 1990 and President of North Yemen since 1978). 53% of the Muslim population is Sunni and 47% is Shi’a. Among Yemen’s natural and cultural attractions are four World Heritage sites.

The fight now

Yemen’s southern provinces have recently been the scene of US air strikes which Washington claims to be aimed at uprooting an al-Qaeda cell operative in the Persian Gulf state. But the residents of the area dismiss the claims that al-Qaeda members are being targeted in the US-sponsored air strikes, while Yemen’s government says the strike targeted militants and their relatives.

The Yemen-based group, which claims to be affiliated with Osama bin Laden’s organisation, had earlier claimed responsibility for the failed attack and called for strikes on embassies in Yemen.

The US operation in southern Yemen comes on top of a joint Saudi-Yemeni military campaign in the country’s war-weary north where Sana’a and Riyadh forces are engaged in a fierce fighting against the Houthi fighters. The Houthis, who accuse the Sunni-dominated Sana’a government of discrimination and repression against Yemen’s Shia minority, were the target of the army’s off and on attacks before the central government launched an all-out fighting against them in early August. Saudi Arabia joined the operation later following alleged clashes between its border guards and the Houthis, carrying out regular air strikes and ground incursions against the fighters.

One presumption is that US has gave the Saudis a green light to militarily intervene in Yemen to defend the Sunnis against Shias. It remains to see if this outsourcing of US foreign policy to the Saudis is enough or will escalation occur.

The Oil

The actual reason for planned U.S. involvement can be the fact that the U.S.-backed dictator, Yemen’s President Saleh, increasingly is losing control after two decades as despotic ruler of the unified Yemen. Economic conditions in the country took a drastic downward slide in 2008 when world oil prices collapsed. Some 70% of the state revenues derive from Yemen’s oil sales. The central government of Saleh sits in former North Yemen in Sana’a, while the oil is in former South Yemen. Yet Saleh controls the oil revenue flows. Lack of oil revenue has made Saleh’s usual option of buying off opposition groups all but impossible. The government has little control outside the capital, leaving a power vacuum in large swaths of the mountainous, impoverished nations.

For U.S. Yemen is important for two energy related issues: one is Yemen’s geopolitical location as one of the world’s most important oil transport routes and the other is undeveloped – some say one of the world’s largest – petroleum reserves in the territory.

The U.S. Government Energy Information Agency states that “closure of the Bab el-Mandab could keep tankers from the Persian Gulf from reaching the Suez Canal/Sumed pipeline complex, diverting them around the southern tip of Africa. The Strait of Bab el-Mandab is a chokepoint between the horn of Africa and the Middle East, and a strategic link between the Mediterranean Sea and Indian Ocean.”

In addition to its geopolitical position as a major global oil transit chokepoint, Yemen is reported to hold some of the world’s greatest untapped oil reserves. Yemen’s Masila Basin and Shabwa Basin are reported by international oil companies to contain “world class discoveries.”

The US military-industrial-complex

“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.” (Dwight Eisenhower)

The same forces that steered the Bush Administration still seem alive and well today. The Military-Industrial-Complex (MIC) has its decisive say in U.S. foreign policy. Why so? The explanation can be found from picture above describing spending in U.S. federal budget.

The military industry is a dominant player in the US economy. Military orders drive America’s manufacturing sector. More than one-third of all engineers and scientists in the US are engaged in military-related jobs. Several sections of the country and a number of industrial sectors, particularly shipbuilding and aerospace, are greatly dependent upon military spending or foreign arms sales. The Department of Defense (DoD), together with the top defense corporations – or what is known as the “military-industrial complex” – controls the largest coordinated bloc of industry in the US. Roughly 75% of federal research and development expenditure is devoted to military projects.

While military contractors are looking for new markets, the Pentagon is seeking a new mission. Pentagon and U.S. intelligence are moving to militarize a strategic chokepoint for the world’s oil flows, Bab el-Mandab. The Somalia piracy incident, together with claims of a new Al Qaeda threat arising from Yemen, are serving as good excuse to this campaign.

Citing an unnamed former top CIA official, the New York Times wrote that a year ago the Central Intelligence Agency sent many field operatives with counterterrorism experience to the country. At the same time, some of the most secretive special operations commandos have begun training Yemeni security forces in counter-terrorism tactics, the report said. The Pentagon will be spending more than 70 million dollars over the next 18 months, and using teams of special forces, to train and equip Yemeni military, Interior Ministry and coast guard forces, more than doubling previous military aid levels, the paper noted.

Without doubt, the military-industrial complex has a stake in expanding areas to be exploited for oil as well as protecting U.S. oil sources. This is good news to the weapons industry. While many sectors in the US are suffering from the economic crunch, top weapons manufacturers are awaiting new orders, hiring new people, looking for new investments and gaining attention on the stock market. Political connections are also helpful in ensuring business and creating new markets. This connection helped influence overthrows of several foreign governments perceived as unfriendly to American business. It also allowed the companies to be at the right place at the right time to take advantage of new business opportunities with puppet regimes.

Military Industrial Complex is much more than only developing, producing and marketing weapons. One part is hired guns – private armies – like DynCorp and Xe (formerly Blackwater USA) costing tens of billions of dollars in Iraq and Afghanistan. Lack of oversight so scandalous that rampant waste, fraud, and abuse plus war crimes go unmonitored. While U.S. troops are implementing COIN strategy in Afghanistan these companies like the infamous Blackwater, now called Xe, are at work for the CIA, which is spearheading the covert Pakistan war, and this all costs money, big money. Fortunately, the agency still has the opium crop to cover the shortfalls in budget or cash.

War vs. Solution

Yemeni Foreign Minister Abu Bakr al-Qirbi warned that the United States

should learn from its experiences in Pakistan and Afganistan and not repeat the mistakes in Yemen, both in dealing with the government of Yemen and confronting al-Qaeda. The United States and other Western powers need to provide long-term economic development to reduce poverty and raise educational standards, which can help combat terrorism in a more effective fashion than just using military force.

Recently in his interview to Al Jazeera al-Qirbi stated that

Yemen is going to deal with terrorism in its own way, out of its own interests and therefore I don’t think it will counterfire, … The negative impact on Yemen is if there is direct intervention of the US and this is not the case.

One task is to prevent exaggeration of problem. The “war on terror” can be used as Yemen’s internal policy instrument when the President tries to transfer his power to his son by stamping the opposition as supporters of al Qaeda. In overall Yemen’s fragile government is in a delicate balancing act between its allegiance to the United States and tribal, political and religious forces that resent U.S. interference in Yemen and sympathize with al-Qaeda’s ideology.

From my point of view this the core question which often seems to be forgotten while U.S.MIC tries to secure its quarterly bonuses. I hope that at least EU understands that for solution one needs to take account sociological, religious, tribal and political aspects.

U.S. Coin strategy in Afghanistan tries to be more comprehensive than pure military attack, but it also can fail if presumptions are false – or moderated to get political acceptance. More about this in my article “Will Coin work in Afghanistan?”

Sure also civil crisis management operation can fail like it has been case in Balkans Some examples in my articles “Bosnia collapsing?” and “Kosovo update” . However this failure probably does not cost so many lives than failed or even successful military operation.

With these kind of economical interests it is easy to understand that a guy with burning trousers serves only as part of marketing plan to gain public acceptance. The planning of war started much earlier and probably MIC has already started planning of next invasion options after Yemen.

Serbia on the road to EU

Serbia’s application to join the EU was finally made before X-mas. Early December EU foreign ministers agreed to unblock Serbia’s interim trade agreement, which is part of Stabilisation and Association Agreement (SAA). Serbia, Macedonia, and Montenegro have been approved by EU for visa-free travel within the EU Schengen area from January 2010. (More in my article “EU’s visa-freedom dividing Balkans”).

While Serbia’s pro-western government is committed to achieve EU membership same time in Serbia however anti-European feeling is growing and according some long time polls the number of those against cooperation with ICTY (Hague Tribunal) is on the rise again.

EU-Serbia trade has been growing rapidly since 2000 and now the EU is Serbia’s main trading partner. In 2007 exports and imports of goods and services to and from the EU increased to 56% of the country’s total exports and 54% of its total imports, compared with 53% and 49% in 2006. However during 2009 the economical activity between Serbia and Russia has developed significantly and the prospects are even better mainly due the starting implementation of South Stream and other projects related to it.

After visa-liberalization and the free-trade agreements one could ask what is the added value for Serbia (as well for Bosnia-Herzegovina and Montenegro too) to be a EU member state?

Next steps

Sending the application is the easy part of process, the real work for next 4-10 years is only beginning. The application will be placed on the agenda of the EU Council of Ministers. If it gets the approval of the ministers of all 27 EU member states, it will be forwarded to the European Commission, which will then send Serbia a questionnaire with 1000-4500 questions. dealing with all institutions and sectors. Based on the answers, the European Commission will report on the situation in the country which has applied. And then are starting negotiations where some 80.000 pages of EU regulations are applied to candidate country’s legislation.

During negotiations EU will open different chapters related e.g. trade, energy, internal affairs, food safety, citizen rights etc; EU also can stop opening chapters because of whatever political reasons. This kind of issues can be e.g. cooperation with Hague and Kosovo question.

And the neighbours

Croatia in 2009, with the country now entering its final phase of negotiations. In addition to agreeing on a financial package (see first story), the Council decided to set up a working group to draft an accession treaty. In relation to the former Yugoslav Republic of Macedonia, the Council noted the Commission’s recommendation to begin negotiations and agreed to return to the issue under the Spanish Presidency. Ministers were “encouraged” by recent positive developments between Skopje and Athens on the dispute over the use of the name “Macedonia”.

Montenegro presented the completed questionnaire to Commission on early December. Based on the Commission’s Opinion the Council will have to decide whether the country is ready to be granted candidate status or open membership negotiations. Montenegro applied to join the EU in December 2008 and the Council formally asked the Commission to prepare an opinion on the application four months later.

On 16 December it was Albania’s turn to receive a pre-accession questionnaire.

On Bosnia and Herzegovina, the Council reiterated its position that membership negotiations could not begin until the Office of the High Representative has been closed and replaced with a reinforced EU presence. It called on the country to “urgently speed up key reforms” and stressed the need for “a shared vision of the common future of the country by its leadership, and the political will to meet European integration requirements”.

EC can be also freeze the process if there is some unfinished border dispute with candidate country. Montenegro’s way with towards EU seems clear but it is hard to believe that Serbia and EC will soon agree which are the borders of Serbia – are they including Kosovo or not? After all the refined negotiation process however the climax will be political one – EU can take new members with any criteria and lower standards like it was case with Bulgaria and Romania.

I have no doubt that both Montenegro and Serbia can and will give satisfactory answers to EC questionnaire and have good ability to fulfill (pre) conditions. Both countries have so good administrative capacity that they can match all criteria needed for membership. Serbia has already prepared a document “National Programme for Integration of Serbia into EU” (NPI) which with its 900 pages describes the integration activities of different sectors..

Serbia has demonstrated its commitment to moving closer to the EU by building up a track record in implementing the provisions of the Interim Agreement with the EU and by undertaking key reforms. On 14 October 2009 the Commission adopted its annual strategy document explaining its policy on EU enlargement.

More about EU Commission’s country conclusions in my article “West Balkans soon ready for EU – at least part of it” .

My point of view

My estimation still is that there will be some grey area between non- and full EU membership. During next few years Turkey will come an energy hub through implementation of Blue Stream pipeline from Russia and South Stream, possible implementation of Nabucco and planned import of gas from Iraq and Iran. So in energy game Turkey will have some aces; if not membership EU must offer very attractive “third way” solution for Turkey, why not do the same with some states of the Western Balkans if needed.

Serbia’s position is a bit similar due the South Stream project which is going ahead in comparison with Nabucco, even faster than in my earlier estimation few months ago. Nabucco has got more problems with energy supply sources when Azerbaijan on December decided to sell bigger share of its gas to Russia and new gas pipe from Turkmenistan to China is progressing fast.

All Balkan countries have their own development paths – some countries are going to join fast to EU (Croatia), some are going to do it later (Macedonia, Albania), some are maybe looking alliances from other directions (Serbia), Kosovo will be international protectorate also next decade; Bosnia will totter between breakup, federation/confederation, state, protectorate depending inner politics and exterior influences.

From my point of view Serbia should think if joining to EU is worth of time, money and bureaucracy it demands. Visa arrangements, free trade and some EU programs are possible also for non-members. However I think that at this moment it would be good idea to continue EU process but not because of fulfilling EU needs. The motivation should be the needs of the beneficiaries aka Serbs not EU elite in Brussels. Also from my point of view Serbia should not put all eggs in the same basket; economical cooperation with Russia and other BRIC countries can create real development on the ground instead slow development on the EU’s negotiation tables.

The Nabucco-South Stream race intensifies

The race between the two EU’s eastern gas pipelines is going on while next winter can again show some supply problems via Ukraine. South Stream got latest boost on 11^th November 2009 as Russia’s Energy Minister Sergei Shmatko and Slovenian Economy Minister Matej Lahovnik signed an agreement on the passage of the South Stream gas pipeline across Slovenian territory. Same time shareholders in the Nabucco have started talks with two European top lenders over borrowing almost €1.5 billion for the pipeline’s construction; a €5.6 billion loan is needed for the construction first stage of the project and the shareholders have also started talks with two credit insurers. Besides loan Nabucco still desperately is searching gas for its planned pipe.

With South Stream Russia is looking a more reliable route for its gas exports to Europe as it bypasses Ukraine and Belarus, where price disputes have in the past led to gas shortages. EU Commission tries with Nabucco provide a supply of gas not subject to Russian control.

The competition

The competition over gas is coming harder. In my article “New Player in Caspian Sea Power Corridor” I described how China has came to game to take big share of Turkmenistan gas.

For contest between EU’s Nabucco and Russia’s South Stream China’s actions favor later. Today’s arrangements are securing gas for South Stream while Nabucco still is searching supply. It is more clear that Nabucco should be filled with Iraqi and/or Iranian gas and political aspects related to this may delay finding(private) investors and the implementation of project as whole. In bottom line while Russia is taking its part from old gas fields and China from old and new gas fields the Nabucco pipe still is more than half empty.

More about this comparison one may find from my post “EU’s big choice – Nabucco or South Stream?“.

Bulgaria?

From 2015 South Stream is scheduled to take gas into the EU via Bulgaria. A northern branch ends up in Italy via Serbia, Hungary, Slovenia and eventually Austria. A southern route takes the gas through Greece and under the Adriatic Sea to Italy. With Slovenia Russia has all the necessary European partners for us to be able to complete its project. During Summer 2009 there was discussions if South Stream could pass Bulgaria. Russia however agreed on 6^th August 2009 with Turkey about energy cooperation with South Stream and also development of Blue Stream pipeline between Russia and Turkey under Black Sea so South Stream has secured also an alternative route. After that the discussions between Bulgaria and Russia got a new boost.

Austria?

 

Austria has officially backed Nabucco even some of Austrian companies are also partners in South Stream. On 11^th Nov. 2009 Russia and Austria had meeting. PM Putin said after talks with Austrian Chancellor Werner Faymann that they agreed to draft an agreement on cooperation in South Stream. Faymann said South Stream is in Austria’s interests and that Austria’s government had given a mandate to start negotiations two weeks ago. He said Nabucco and South Stream shouldn’t be viewed seen as competitors: “We believe that this is diversification as well as a chance to make the energy supply more secure,” Faymann said. More in CNBC news.

Bottom line

Russia made already on May 2009 a proposal including the South Stream gas pipeline to pump natural gas from Russia to the Balkans and onto Europe in a list of EU priority projects. The U.S./EU backed Nabucco project had been included in the list, but South Stream not yet. From my point of view I would like to see EU to change priority status from Nabucco to South Stream. Nabucco could still be kept alive in case to wait stabilisation in the Middle-East.

 

Russia’s new Security and Energy Initiatives

Two new proposals related to European security and energy cooperation was made last week by Russia. During official state visit in Finland Russia’s President Dimitry Medvedev gave a key note speech in Helsinki on April 20^th outlining a “new European security structure”. Same day Russia made public goals and principles of new framework for energy cooperation.

In a speech he delivered in Berlin last June, Medvedev suggested that an “all-European summit” be convened to draft a new security arrangement to govern relations between Russia and the Euro-Atlantic community. He indicated that the new pact should attempt to build on the 1975 Helsinki Final Act. If final product, under Medvedev’s scenario, would be a “Helsinki Plus” agreement that created new guidelines for inter-state relations. 

At the time of Medvedev’s Berlin speech, ties between Russia and the West had already been damaged by NATO’s continued eastward expansion, Washington’s missile defence plans, Moscow’s decision to suspend its participation to the 1990 Conventional Armed Forces in Europe (CFE) Treaty, and Kosovo’s unilateral declaration of independence. The August 2008 Russian-Georgian war and the subsequent Russian-Ukrainian natural gas dispute further strained those relations.

New Security Treaty

In a keynote speech at the University of Helsinki on April 20^th 2009, Medvedev also offered another glimpse of his designs for”new European security architecture,” first floated in June 2008. Citing well known recent conflicts the Russian president said existing security organizations are no longer capable of guaranteeing Europe’s security.

Recalling that 2010 will mark the 35th anniversary of the signing of the Helsinki Final Act, the President said the future treaty on European Security should be seen a ‘Helsinki plus’ treaty. It should be viewed as the confirmation, continuation and effective implementation of the principles and instruments born out of the Helsinki process, but adapted to the end of ideological confrontation and the emergence of new subjects of international law.

Medvedev also repeated Russia’s call for a new security pact to replace NATO, an idea that initially got a cool response when first broached at the Organization for Security and Cooperation in Europe’s (OSCE) meeting in Helsinki in December. Russia has said NATO is a Cold War relic. It wants a legally binding pact enshrining arms control, a commitment not to use force, and guarantees that no single state or group of states can take a dominant role in the continent’s security.

Russia is inviting all states and organizations operating on the European continent to work together to come up with coherent, up-to-date and, most importantly, effective rules of the game. For this work neither NATO nor the EU seems fully appropriate, because there are countries that do not belong to either. The same applies to organizations such as the CIS or CSTO. It could take place at a summit of the OSCE but of course in Russia’s view there is a problem with the OSCE as well. According Russia the OSCE has focussed on solving partial, sometimes even peripheral security issues, and this is not enough. Therefore, Russia proposes another forum which could lead to a productive dialogue among all parties without exception.

The Russian President said the new Euro-Atlantic treaty should replace the imperfect arrangements that are and create an undivided security area encompassing the hemispheric band from Vancouver to Vladivostok. The basic principles in the treaty are compliance with international law, respect of sovereignty, control of arsenals, renunciation of force and resolution of conflicts through peaceful talks.

New Energy Charter

Same day when Medvedev made his key note speech, Russia made public their “Conceptual Approach to the New Legal Framework for Energy Cooperation (Goals and Principles). Russia gave the documents to G8, G20, CIS countries, international organisations, and our neighbouring countries. The conceptual approaches to a new legal base in international energy cooperation consists of three sections, which are

• The first one contains the international energy cooperation principles, which must be included in the new international legal act.

• The second section contains elements of an agreement governing [energy] transit, an integral part of which will be an agreement on resolving transit conflicts.

• The third section contains a list of energy materials and products that Russia suggest applying these legal acts to. So, besides gas or oil, also all other energy products, including nuclear fuel, electricity, coal, and all the other goods traded by in the energy sector.

According Russia it would be advisable to elaborate a new universal international legally binding instrument, which, unlike the existing Energy Charter-based system, would include all major energy-producing (exporting) countries, countries of transit, and energy consumers (importers) as its Parties and cover all aspects of global energy cooperation. The new framework would according Russia create transparency of all international energy market segments production/export, transit, consumption/import.

Updating old or building new? 

The core question for further development of Russia’s security initiative is from which platform start the process. There has been and is different scenarios about this.

USA‘s long-standing preference for NATO as the transatlantic institution of choice has several explanations. The Alliance has been successful — at least until Afghanistan — and it helped the West win the Cold War without firing a shot. NATO’s job, as British Secretary-General Lord Ismay famously put it in 1967, was “to keep the Russians out, the Americans in, and the Germans down.” But rather than close up shop with mission accomplished in the early 1990s, the 1949-founded pact sought to find a new purpose.

Then there is the proposal to open NATO to Russia. The Russians favored this option throughout the 1990s and even during Putin’s first term in office; today this option seems quite unrealistic.

Yet another option is to resuscitate the Organization of Security and Cooperation in Europe (OSCE) and turn it into a real pan-European security organization. This was one of the ideas back in 1990, when the OSCE (then the CSCE) was still connected with the spirit of the Helsinki process. This is no longer the case. Through neglect and infighting, the OSCE has fallen into tragic disrepair.

EU is a bit question mark as leader of this project. Even if the Lisbon Treaty is ratified this year — a prerequisite for serious EU security policies — the European Union will still need to prove that it can act effectively in the face of crisis.

Realization

Did Russia’s so-called Helsinki-plus initiative take a step forward in Helsinki, or not? Finland’s chairmanship of the OSCE and the OSCE meeting that was held in Helsinki in December last year stuck closely to the line that the current structures are a good basis for agreement on European security issues.

Despite recent improvements in Russia-EU and Russia-NATO relations, Georgia, Ukraine, the three Baltic States and most Central and Eastern European countries — all states that view NATO as the main pillar of Europe’s security — remain either openly hostile to, or extremely wary of the Russian security proposal.

By contrast, Azerbaijan and members of the Collective Security Treaty Organization — a Russian-led regional body that brings together Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan — support Medvedev’s plan.

Bottom line

According Russia the proposals would be discussed at a prospective summit forum in Helsinki, to be called “Helsinki-plus”. One summit is however only a tiny part of realization. When the Heads of State and Government of the CSCE met in Helsinki in 1975, the participating States had held more than 2400 meetings in Geneva, and deliberated on 4,660 proposals. So a new pact will require careful work and time.

Since 1975 the map of Europe has changed a lot, the same occurred to problems which today are more complicated and having various global aspects and local variants. From my point of view the international organizations managing security, economical and energy issues have not necessary developed with same scale – some updated structure could be suitable.

Two last decades have been giving many bad practices which – if copied – can make Europe with surrounding regions more unsecure. I think that now it is time at least discuss about lessons learned, develop and copy better practices. Will the outcome be a new structure or updated old one shall be seen but even more important is to start process itself.

Sources and more information:

Medvedev’s key note speech in Helsinki 20^th April 2009

Conceptual Approach to the New Legal Framework for Energy Cooperation (Goals and Principles)

Official views from Kremlin

My articles about security policy

“Is GUUAM dead?”

“Could EU lead the 3^rd Way out from Confrontation?”

“Powerplay behind the New Cold War”

“EU as a Mediator”

“Stop to Ukraine’s and Georgia’s Nato dreams can start the policy of Détente again”

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Battlefield of Power Politics – Northern Black Sea

While my special interests are laying in Balkans I keep an eye on Northern Black Sea – Caucasus, Ukraine and Bessarabia.Events there sure have their impact also in Balkans – if not direct so at least through their geopolitical, security or economical consequences.Today’s Caucasus with its surrounding regions is a frontline of power politics where U.S. and Russia are searching the limits of their sphere of influence.EU – without vision, strategy nor independent will and muscle – is trying preserve some foothold there as well its member states more or less depending their history, interests and priorities.

Last year was highlighted by conflict in Georgia.Separatist regions around the globe had waited Kosovo’s unilateral declaration of independence (UDI). Throwing international law to garbage western powers showed that independence gained by violence could be possible and even acceptable; South Ossetia and Abkhazia implemented their project first with help of Russia who following U.S. example could get rid rebuff of UNSC.

An other battlefield was and still is energy.Last year’s highlight was Gas crisis which had its effect also in most parts in Europe.Few months ago an agreement was made between Russia and Ukraine;my estimation is that if not even this weekend then later this year conflict is back.

What’s up 2009

Since Georgia is now parcelled up as frozen conflict I expect this year some interesting developments especially in Moldova and Ukraine if we speak about states.Speaking about issues related to the whole Caucasus – energy is the top one and it includes much more than only gas transit via Ukraina.Besides energy giants also U.S. military-industrial complex has some interests in region and with Nato’s helping hand some tensions could be provided to secure company profits also during recession period.

Moldova

In 1992 Moldova and Transdnistria aka Pridnestrovie fought a brief, bitter war which the separatists won, with the assistance of a contingent of locally-based Russian troops left over from the Soviet Red Army. Cease fire left Russian troops in place as peacekeepers and Transdnistria has since then acted de facto as independent – although not recognized – state.Conflict was frozen nearly ten years, then started first serious try to find sustainable solution. In the Spring 2003 Dimitry Kozakin – a special envoy of Russian President Putin – started to broke deal between local stakeholders. His plan known as “Kozak plan” was ready and preliminary agreed to sign on November 2003 but western powers put some pressure towards Moldova and everything was cancelled by President Voronin’s rejection.

2004-2008 “outsiders” like U.S., EU, OSCE as well Ukraine and Russia made some attempts to launch new negotiation process but without success. (More in my article “Transdnistrian numbergame”)

It will be seen this year if the “Kozak plan” still is valid for further examination, if yes, it will consolidate Moldova’s neutral position as the plan included the change of the Moldovan state’s structure – creation of the federation where Transdnistria and Gagauzia would be granted extensive rights including the right to block the undesirable bills.Moldova will have general elections on Spring 2009 so of course it is possible that the state can take new course e.g. towards Western Powers. In that case Russia might be more inclined to formally recognize Pridnestrovie’s separation from Moldova.

Ukraine

On October 25th 2008, in Mukachevo, the 2nd European Congress of Transcarpathian Rusyns took place; decision on declaration of “Rusyn statehood” and “reconstruction of republic of Subcarpathian Rus”, proclaimed in 1938, was accepted there. A meeting demanding to recognize this republic was held at the building of Mukachevo City Council. (AXIS 30.10.2008) The Office of Public Prosecutor of the Transcarpathian area has brought a case against leaders of Rusyns organizations on suspicion in attempt against territorial integrity and inviolability of Ukraine.

Besides such a criminal case has been brought in the Crimea regarding ” The Popular front Sevastopol-Crimea-Russia” which was created in August, 2005, and unites 12 public associations of the peninsula. Investigation is going on of its activity in connection with the “appeals to revision of territorial integrity of Ukraine” and similar case will be also in Donetsk republic.

SBU also considers necessary to expand powers of law enforcement bodies to more efficiently counteract to distribution of radical Muslim religious currents in the Crimea, Ukraine’s security services have also detained some mujahedeen who were going to Russia with an aim of recruitment of group of radical Islam fighters.

According the Security Service of Ukraine (SBU), separatist organizations in Ukraine do not possess serious threat for security of the country.As concerns the scale of the threat – these organizations are small and moreover, as a matter of fact, they are established from abroad and with external financing.

SBU’s estimation about importance of separatist movements is probably right, but I see the big divide between NW Ukraine – dominated by sc. Orange revolution parties and SE Ukraine – dominated by pro-Russian Viktor Yanukovich’s the Party of Regions.While ruling “Orange” coalition is seriously divided the pro-Russian opposition can win or lead ruling alliance in future, reconstruct better relations with Russia and minimize the impact of old parties of Orange revolution. So coming elections in Ukraine will decide if this huge country is seeking alliance more from Nato/EU or Russia and will the divine be so big that the whole country will split.

According economic terms Ukraine is already practically bankrupt. Grimly forecast is that Kiev will not be able to pay its next instalment for Russian gas deliveries in coming days so triggering a new cut-off. Even if this particular payment is averted, there is still next one coming on April.

Energy game

After “Cold War” US has all the while expanded its influence post-Soviet territory with aim to guide those region’s natural resources under US companies.  As stakes have been control over the oil and gas of the Caspian Sea/Black Sea/Caucasus basin, and the control of multiple key energy pipelines criss-crossing the region.  Economical interests have been linked to political game e.g. Nato enlargement.  While EU has been more bystander Russia has during last couple of years weight down the scale in favour of its own interests by series of successful operations.

GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova) Group was founded 1999 with help of US to foster favourable conditions conducive to economic growth through development of an Europe-Caucasus-Asia transport corridor.  GUUAM was dominated by Anglo-American oil interests, ultimately purports to exclude Russia from oil and gas deposits in the Caspian area, as well as isolating Moscow politically.From its part GUUAM was designed to support sc. Silk Road Strategy Act – adopted by US Congress March 1999 – which outlines a framework for the development of America’s business empire through development of an Europe-Caucasus-Asia transport corridor.

Now GUUAM is coming to end of its short road.  Already earlier Uzbekistan withdraws from it leaving behind a stump GUAM.  Then Georgia started its aggressions with false idea of western support leading today’s situation. Moldova was aiming towards Nato and EU but after conflict in Georgia it started to look other alternatives.  Political attitudes of Azerbaijan and Russia have approached each other.  Russia again took the initiative acting as a mediator between Armenia and Azerbaijan to solve long term conflict of Nagorno-Karabakh. The last piece of GUUAM is Ukraine and also this last fortress has degenerated to stagnation.

The latest gas dispute made it clear that Ukraine is not reliable transmitter of Russian gas to Europe. This boosts EU’s Nabucco –plan to new level. The same is true also with Russia’s South Stream, Nord Pipe and plans to increase more Liquefied natural gas (LNG) production and transport facilities. When impleneted – probably until 2015 – the new line(s) are invalidating the significance of Ukraine as transit route of energy.

Individual countries in Balkans and central Europe are considering their positions between those two projects; some have already made their selection like Serbia who allied with South Stream. Romania is open to investing in the Gazprom pipeline South Stream, not just the EU Nabucco project, designed to reduce energy dependency on Russia, Romanian minister of economy Varujan Vosganian said on October 2008, contrary to the president’s statements. “Romania is ready to support any EU project, both Nabucco and South Stream,” the liberal minister, whose party is at odds with the country’s conservative President Traian Basescu, said, newswires report.

EU

The EU Commission has called on EU nations to provide more aid for Ukraine and four other ex-Soviet states as part of a proposed “Eastern Partnership” program aimed at making the bloc’s Eastern doorstep more stable. The new policy, to be launched at an EU summit in Prague in May, is designed to help Ukraine, Moldova, Georgia, Armenia and Azerbaijan come closer to the EU. Belarus may also be involved, if it resists Russian pressure to recognise Georgian rebels in Abkhazia and South Ossetia as independent states.

EU has said to have a “crucial strategic interest” in Northern Black Sea region. Unveiled by the European Commission last December, the “Eastern Partnership” foresees granting some 350 million euros ($448 million) in extra help between now and 2013 to the EU’s ex-Soviet neighbors.Negotiations about implementation of plan are still ongoing. Some EU member states have expressed reservations about the proposal.France, which pushed the EU’s Mediterranean Union project last year, is reported to fear that increasing funding to the bloc’s eastern neighbors would shift the EU’s strategic focus away from North Africa and the Middle East.

The plan aims to promote economic and political stability in the countries and reduce Russia’s influence in the region. It includes free trade agreements, visa waivers, financial aid and economic integration with the EU.In return, the eastern neighbors are expected to step up progress toward economic modernization, democracy, the rule of law and human rights. The “Eastern partnership” scheme is planned to be approved this Spring and launched in May if everything goes without further delay.

Eastern Partnership is interesting also from an othet reason.With EPp its possible to test sc „Third Way“ for EU allies those are not coming EU member-states in near future.If the outcome is promising so it could be applied with Turkey to avoid its membership.

Other topics

With new leadership in U.S. it is of course possible that the new “Détente” starts between Russia and U.S.This probably would increase the possibilities to find some kind of peaceful cooperation between Iran and western block to avoid bombing this old civilization back to stone age.Elections in Iran can support this outcome.

The Gas Exporting Countries Forum (GECF), organization of world`s leading gas producers, was established in Tehran in 2001 to foster the concept of a gas cartel. Yet it does not have same organizational level as OPEC but some developments can take place. Last Autumn Russia, Iran and Qatar have taken the decision to form a “big gas troika”. …The idea is that the three countries will work on joint projects across the entire gas chain from geological exploration and production to distribution and marketing of gas.  This cooperation combination could come remarkable player in Middle East politics too.

Powergame in EU-Russia summit today

EU summit meeting with Russia in France is designed to reopen talks on a pact of cooperation after the crisis in relations caused by the Georgia conflict on August 2008. Before meeting hard words have been changed over Kaliningrad missiles, Nato radars and EU/OSCE monitors in Georgia. However the core question can be the energy game. A day before summit EU came out with its supergrid plan and Russia questioning Baltic Pipe. Southern energy corridor is an other battleground.

Power supergrid plan

EU’s Power supergrid plan is partly designed to decrease EU’s dependence about Russian gas. The Timesonline got look about plan and describes it as follows (Source: Timesonline):

The building blocks of the proposed supergrid would be new cables linking North Sea wind farms, and a network patching together the disparate electricity grids of the Baltic region and the countries bordering the Mediterranean, according to a blueprint drawn up by the European Commission. EU states will also be asked to pay for at least two ambitious gas pipelines to bring in supplies from Central Asia and Africa. The plans also call for a Community Gas Ring, or a network allowing EU countries to share supplies if Russia turns off the taps.

The EU Energy Security Plan notes that Europe imports 61 per cent of its gas, a figure projected to rise to 73 per cent by 2020. Russia sells about two-fifths of the total, including the entire supply of several countries.

How the supergrid will work is described in graphic here Source Timesonline  europesupergrid2

Same time in South…

One part of energy game is the southern energy corridor. During 2008 Russia has put also the southern corridor pipeline in doubts. Gazprom has override “Nabucco” with its rival “SouthStream” project. Same time GUUAM Group in Caucasus – cooperation body supported by US energy giants and military-industrial-complex – is breaking up as well rest of US “Silk Road Strategy”. (More about this in my previous artcles ”War on pipes” 9/9/2008 and “Is GUUAM dead” 4/11/2008 from my Archives:Blog)

…and in North

Also a day before Russian Prime Minister Vladimir Putin has questioned the construction of the Nord Stream pipeline for the first time since the signing of the agreement with Germany to establish the gas delivery network, as gas is set to become cheaper along with the drop in oil prices.

“Europe must decide whether it needs this pipeline or not,” Mr Putin told Finnish Prime Minister Matti Vanhanen on Wednesday (12 November) at a meeting in Moscow. “If you don’t, we will build liquefaction plants and send gas to world markets, including to European markets. But it will be simply more expensive for you,” he added.

The Baltic states and Poland strongly oppose the project, concerned they would be cut off from existing gas infrastructure with Russia, as Moscow would probably channel most of the gas deliveries through the direct pipeline to Germany. Sweden also opposes the project due to environmental concerns, echoed by MEPs, who have called for a new investigation into the pipeline’s impact on the environment. Finland, one of several EU states that has a say in approving the project, will conduct an environmental review of the plan next year, Mr Vanhanen said after the meeting with his Russian counterpart on Wednesday. (Source EUobserver.com)

So for Baltic states and Poland Nord Stream is more political and partly economical question, for Germany mainly economical topic and for Sweden and Finland mostly environmental question.

The bottom line

It is interesting to see how the power game will be developing. How big share gas, oil and wind will claim from energy markets? Where the pipes will be? How environmental and economical aspects will match with political aims? The game is still open.

War on Pipes: Transport corridors as core of US-Russia confrontation

GUUAM

When speaking about interests of West I would like to make a difference between US – or Anglo-American -interests and EU interests. After “Cold War” US has all the while expanded its influence post-Soviet territory with aim to guide those region’s natural resources under US companies. GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan and Moldova) Group was founded 1999 with help of US to foster favorable conditions conducive to economic growth through development of an Europe-Caucasus-Asia transport corridor.

As pointed out by Michel Chossudovsky in his book America’s ‘War on Terrorism,’ (presentation of Anglo-American war policy from the 1990s Balkans to the present), GUUAM has been “dominated by Anglo-American oil interests, ultimately purports to exclude Russia from oil and gas deposits in the Caspian area, as well as isolating Moscow politically.”

More specifically, the US-led military invasion – in close liaison with Britain-responds to the interests of the Anglo – American oil giants, in alliance with weapons producers, private security organizations and service providers (like Halliburton). One could say that the “Anglo-American axis” in defense, foreign policy and especially corporate capital is the driving force behind the military operations in Balkans, Central Asia and Middle East.

SRS

Just five days before the bombing of Yugoslavia (19 March 1999), the US Congress adopted the Silk Road Strategy Act, which defined America’s broad economic and strategic interests in a region extending from the Mediterranean to Central Asia. The Silk Road Strategy (SRS) outlines a framework for the development of America’s business empire through development of an Europe-Caucasus-Asia transport corridor.

The stakes involved with the current conflict are identical to those of the previous war: control over the oil of the Caspian Sea/Black Sea/Caucasus basin, and the control of multiple key oil pipelines criss-crossing the region. The most critical pipeline, the infamous Baku-Ceyhan pipeline supported by the US government and a consortium of US-allied transnational oil interests (including Royal Dutch Shell, Unocal, and BP) takes oil from the Caspian Sea across Azerbaijan (another US-supported regime), whereby it crosses Georgia (bypassing Iran and Russia), then on to the Black Sea, where the oil is carried to Western Europe, and the rest of the world.

The Baku-Ceyhan pipeline has been viewed by the Bush/Cheney administration as one of its brightest geostrategic successes. All of the Anglo-American empire’s pipelines and oil facilities, including Baku-Ceyhan, are threatened, if the conflict escalates. Same time the successful implementation of the SRS requires the concurrent “militarization” of the Eurasian corridor as a means to securing control over extensive oil and gas reserves, as well as “protecting” the pipeline routes on behalf of the Anglo-American oil companies.

Power play and EU

The effect of Nato enlargement is to swing the Iron Curtain to the east. Russia”s opposition to NATO expansion has only increased in recent years. On economical field Russia’s “South Stream” looks more successful so far than Nabucco while the leverage of the United States government over Russian foreign policy has decreased dramatically during last years. US policy is turning into a zero-sum competition with Russia for influence in the post-Soviet regions.

For EU the situation brings few questions such as

• Is there a difference between EU and Anglo-American interests related to SRS?
• How to balance aims of energy and security (military) strategies?
• Is there a difference between EU’s energy policy and interests of corporate capital?

I am not sure if EU would like to answer to these questions, however my point is that this background may have some influence – more than official concern about human rights, rule & law etc. – to EU policy in Balkans and Caucasus.

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