INFORMAL DISCUSSION OF SERIOUS QUESTIONS IN LAHTI


19.10.06
MOSCOW. (RIA Novosti political commentator Boris Kaimakov)

The October 20 dinner of the European Union countries’ heads of state and government in Lahti, Finland, which Russian President Vladimir Putin will attend, will be an informal occasion. But Europe and the Kremlin regard it very seriously, because the European leaders will discuss energy policy.
The Kremlin has clearly indicated that it is prepared to respect international agreements on energy issues. And some observers say Moscow has lost the dispute with the international consortium of the Sakhalin II oil and gas project.
Less than a month ago, top Russian officials said the production sharing agreement, under which the project is being developed, did not correspond to new realities in Russia. The issue has now been removed from the agenda.
Viktor Khristenko, Russia’s minister of industry and energy, has actually disavowed criticism of project operator Sakhalin Energy, saying that there are no reasons for revising its license. At the same time, the parties have reached a compromise allowing Gazprom to increase its share in the project.
Assets are a crucial economic element, but political decisions also have their part to play. The Kremlin acted wisely by taking a step toward Western investors, although they were waging an information attack against Russia. This removed speculations about the risks of investing in the Russian energy sector.
Putin will now be able to address more important issues in Lahti, rather than try to ward off the attacks of his Western colleagues with regard to Sakhalin II.
According to the official European Union website, “After their informal meeting, the EU Heads of State or Government will be joined for dinner by the President of Russia, Vladimir Putin. Discussion during the dinner will focus on the development of the strategic partnership between the EU and Russia, including cooperation in energy issues.”
Europe clearly views Russia as the main energy partner, and wants to formulate new principles of energy cooperation with the Kremlin, which it describes as a strategic partnership. The wording shows that there is no energy alternative to Russia, as the Finnish spokesman in the European Parliament has said the other day. Indeed, 25% of oil and gas delivered to Europe comes from Russia.
The EU leadership has clearly indicated that any arguments against inviting Putin to the Lahti summit are not serious. Russia is Europe’s economic and political partner, and is indispensable for addressing crucial European issues.
But this does not mean that Putin will have a comfortable evening in Lahti. The EU claims the role of Russia’s main negotiating partner and wants the Kremlin to revise its energy policy. In other words, it wants to remind Moscow that it will not be dealing with individual countries, but with the European Union as a whole.
However, the EU is not prepared for this form of cooperation, since its individual members pursue different interests in energy relations with Russia. For example, the German chancellor has been accused of ignoring the energy interests of the other EU countries. It is logical therefore that the European leaders want the final protocol in Lahti to include a phrase about the coherent internal and external aspects of energy policy as a crucial goal of the European Union.
Fearing that Russia’s financial strength may allow it to act more forcefully on Europe’s domestic markets, the EU intends to overhaul its energy infrastructure, in particular create specialized banks and invest hugely in energy production and distribution.
There are serious arguments in favor of Russian involvement in such projects. If we agree that Russia is rapidly building a market economy, we must also agree that deliberate efforts to hinder its advance to European markets are out of time and place. Putin convincingly allayed Europe’s fears that such advance would make it more dependent on Moscow during a meeting with Bavarian businessmen in Munich.
He said clearly that there were no reasons to fear the advance of Russian capital, and that dependence was mutual, because Russia needs Western investments and its economic prosperity largely depends on Western energy consumers.
This is why serious analysts do not think the Kremlin will use the gas argument for attaining political objectives. -0-