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Russia's Sergei Lavrov: EU Third Energy Package hinders closer ties
MOSCOW, Aug. 16 () -- Russia and the European Union can achieve closer energy ties but the EU's gas market reforms remain a roadblock, Russian Foreign Minister Sergei Lavrov says.Lavrov, in an article published Tuesday in the Journal of Common Market Studies annual review, said Moscow and Brussels are capable of developing "energy co-operation, leading in the future to a single European energy complex."But he warned the implementation of the EU's "Third Energy Package," which seeks to "unbundle" ownership of natural gas production and transmission lines such as those operated by Russia's Gazprom -- is hindering closer ties.The European Commission contends such "vertically integrated" systems squelch market diversification and violate antitrust principles, resulting in artificially high energy prices.Russia, Lavrov said, "is seriously concerned about the EU's steps to implement the Third Energy Package, which it portrays as a measure to improve anti-trust regulations."Of course, we do not question the EU's right to regulate its markets, but we expect it to abide by its international legal obligations," he said, contending the reforms violate the 1994 Russia-EU partnership and cooperation agreement as well as other bilateral investment deals."The Third Energy Package has already created problems for practical co-operation," Lavrov said. "Certain EU countries are now less appealing to Russian businesses, and systemic risks are higher. In some cases, we see de facto expropriation of Russian companies' assets. We never expected to face this kind of situation in the EU."The Russian foreign minister also criticized an ongoing EU antitrust investigation of Gazprom, which was launched last year.In that action, the European Commission opened formal proceedings to probe whether Gazprom might be hindering competition in Central and Eastern European gas markets, in breach of EU rules.Brussels says it is concerned the Russian energy company may be dividing gas markets by hindering the free flow of gas across EU member states and preventing the diversification of its gas supply.It also suspects Gazprom may have imposed unfair prices on its customers by linking the price of gas to oil prices.Gazprom, Lavrov said, makes a "significant contribution to energy security on the European continent" and contended such price-linking "has never been questioned before and is used by other companies supplying natural gas to Europe as well."If sanctions are introduced against Gazprom, it will be difficult for the company to work on the markets where it faces open discrimination."His criticisms come at time of increasing Russia-EU tensions over Ukraine, which is set to sign an "association agreement" and free trade deal with Brussels at the November Eastern Partnership Summit in Lithuania.Alexei Makarkin of the independent Russian think-tank the Center for Political Technologies told the Moscow online newspaper Gazeta.ru Lavrov's criticisms are likely linked to the upcoming Ukraine agreement."Russia is doing its utmost to prevent this, because they do not want Ukraine to leave its zone of influence," he said. "Russia instead wants Ukraine to join the Customs Union" of Russia, Belarus and Kazakhstan, an EU-style economic alliance of former Soviet states launched in 2010."That is why Russia is intensifying its criticism and is trying to prove that the laws of the EU (in particular, the Third Energy Package) are discriminatory."