R. Vilpišauskas. The problem of EU’s energy dependence on Russia

At the official opening of Nord Stream
At the official opening of Nord Stream AFP / Scanpix

The new security crisis in Europe caused by Russia has drawn attention to the possible consequences of its escalation for the energy security of EU countries. If Russia resumes military aggression and the West responds with broad economic sanctions against Russian companies and banks, the sanctions would also directly impact the payment of natural gas to EU countries, causing supply disruptions and potentially even higher prices. In addition, Russia itself could further restrict its natural gas supplies to Europe, even if this would negatively affect its reputation as a business partner. After all, even international institutions have admitted that Russia has manipulated the natural gas supply to Europe over the last six months, thereby increasing its price.

This situation has once again reminded EU countries of the strategic risks posed by their heavy dependence on Russian energy supplies and the importance of continuing to look for ways to reduce it. Especially as this dependence is hardly compatible with the EU’s Green Deal ambitions.

Unfortunately, the debate in the EU on what should be considered green energy for investment purposes, and Germany‘s move to add natural gas to the list, shows that its businesses and politicians are in no hurry to reduce their dependence on Russian supplies as quickly as they decided to move away from nuclear energy a decade ago. The importance of Germany’s energy ties with Russia, as a number of analysts have pointed out, is the reason for the cautious attitude of its coalition government, or somewhat of the dominant Social Democrats, towards the threat of aggression against Russia.

The current security crisis has also revealed a number of other important things. One of these is the importance of US leadership on key European security issues. This is seen in the West’s response to Russian blackmail and its initiative to provide alternative sources of additional LNG supplies to EU countries, for example, by initiating talks with Qatar. As a result, the US became concerned about the EU’s energy security, and only later did the European Commission become concerned, for example, by opening talks with Azerbaijan.

Another important point is that, in the face of this crisis, those who initiated and supported the installation of the LNG terminal in Klaipėda may triumph in Lithuania. As a result, Lithuanian citizens and businesses can now feel relatively calmer when considering the consequences of the interruption of natural gas supplies from Russia via Belarus.

Of course, Western sanctions against Belarusian and Russian companies are economically damaging for them and the West. This is illustrated by the protracted history of the suspension of Belarusian fertiliser transit through Lithuania. However, the main cause of these losses is not the behaviour of Western countries, but the aggression of authoritarian rulers against their own and other countries’ populations.

Unfortunately, Russia and China are increasingly aggressive in their attempts to rewrite the international norms that have been in force for more than half a century, which oblige all members of the United Nations to respect other countries’ territorial integrity and sovereignty. This aggressive behaviour sends a clear signal to the EU that it must seek to reduce its links with these countries, which can be exploited to exert pressure through business ties on EU countries. There will be economic losses on all sides, but economic losses may not be the greatest potential evil when thinking strategically.

Finally, it is worth noting the point made by Latvian Defence Minister A. Pabriks in an interview with the Financial Times. No, not the one about Germany’s ‘immoral and hypocritical’ relations with Russia. It is about the fact that the concept of sustainable business applied by Swedish banks and other investors limits the ability of companies involved in the defence industry to raise funds.

Indeed, in the West, corporate social responsibility is about ethical, social behaviour, environmental stewardship, and staying out of military-related activities. The norm is right in principle, but whether it is appropriate in a situation where only a credible deterrent can deter a potential aggressor from waging war in Europe is now becoming more than a rhetorical question.

Commentary by Ramūnas Vilpišauskas, Jean Monnet Professor, VU TSPMI

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