EU External Policy as a Model for Cooperation

Climate change, geopolitical uncertainty, and changes in the global economic balance-each of these calls is one of the manifestations of very uncomfortable truth: the dependence of the world from the increasing consumption of energy. The geopolitical implications of the growth in global demand for oil and gas are difficult to predict. The fields of oil and gas in the world are located unevenly. Transportation of hydrocarbons is often exposed to risks, and projects for production have in mind their implementation in more unfriendly parts of the world. In these circumstances, its necessary to move away from the traditional understanding that energy is a matter of national security, because it is the question of European security.

The complex and hybrid nature of European integration, from which stems the complexity of EU external energy policy, is defined by three different dimensions, following which, we may say that its external policy is a combination of an international organization and international actor. Besides international actors exist important EU actors as the Commission, the Parliament, the Council and other important actors as the Member States which have a say in energy foreign policy. The aim of external dimension of the EU energy policy is to ensure its security by diversifying its natural gas supply. Therefore, the external policy of the EU may serve as a model for cooperation with other countries/ partners.


Historical Background

 Energy policy is most important political issue for today, as it is tied to climate change, making it the topic of high priority within the EU. Energy policies in the past mainly were made at the national level and the areas of disagreement up for today include the energy mix of countries and the problem how to find future energy investment. Therefore now energy challenges are better met at EU level, thus creating integration process, which is rooted in energy issues.

The beginning of the integration of Europe marked the ‘Treaty establishing the European Coal and Steel Community’ signed in 1951, at the same time was set up a common custom union. The aim of the treaty was collective control over commodities, which were essential for warfare and reconstruction. [1] Following this, the Euratom Treaty on civil nuclear energy was entered, creating of the European Economic Community. The idea of nuclear energy was born after crisis affecting the Suez Canal in 1956, which served as the main route for oil from the Middle East to Europe. [2]

But external energy policy of the Euratom remained restricted to technical assistance in nuclear safety to the former Soviet Union. Another oil shocks of 1973 and 1979 put a security based approach under doubt. As the oil sector became one of the most strategic political areas, a political effect of the crises brought nationalization of energy policies.[3] Thus sea-bordering states began to build their own oil terminals and both electricity and gas supply were considered even more important questions of a national sovereignty.

After such policy developments, appeared two consequences. Firstly, the new European States strategies of energy diversification by developing the nuclear energy lost its actuality because of public didn’t accept such energy option; and secondly, very high level of politicization of energy policies, which reduced a Europeanization in this field.[4]

The first oil crisis of 1973 made member states to take a Directive 73/238/EC of the Council on measures concerning oil supplies, which was a response to the energy crisis but didn’t result in a common foreign energy security policy of the member states.[5] In the later state of the development of EU’s Common Foreign and Security Policy, the issue of energy security remained always marginal but it never became a subject of the EU’s external policies.


EU actors – and their role

The complex and hybrid nature of European integration, from which stems the complexity of EU external energy policy, is defined by three different dimensions.

First dimension defines the EU in realist terms, in which states form a geopolitical union, but keeps political control over such security issues as nuclear weapons; second dimension is seen as a functionalist economic integration in which exists a single European market and economic block at the international level; and third dimension explains the EU as a post-modern empire which exerts influence over the external world by exporting its integration model.[6] Following this, we may say that its external policy is a combination of an international organization and international actor.

Besides international actors exist, important EU actors as the Commission, the Parliament, the Council and other important actors as the Member States  have a say in energy foreign policy. The EU Commission initiates legislation and thus has considerable influence, as it may withdraw a legislative draft, but it has no decisive say. Being the executive body it also monitors the implementation of energy legislation.[7] As a Commissioner, who is proposed by the government of his home country, heads each policy area, the character of its power affects the stance taken by the Commission.

The EU Council and the EU Parliament are central actors in the legislative process. The EU Council has representatives from Member States on Energy and keeps focus on States interests. The EU Parliament as the second legislative body, takes part in all important energy policy decisions. In the Parliament decision-making on energy policy is strongly influenced by political preferences.[8]

Outside the institutional level, the most important actors are the Member States. Their influence appears through their energy ministers in the EU Council. It’s noticeable, that the EU can only act in areas for which the Member States gave the EU the competence to act. For example, a Member State competence is the energy mix and such indicators as national preferences, available natural resources, industrial reasons and energy foreign policy have influence on what kind of mix a country has. [9]

Thus, a difference in the energy-mix leads to differing interests. In order to strengthen energy security in the EU, the demand on energy solidarity was included in the Lisbon Treaty, as if some EU members are dependent on one supplier, such as Russia, in the gas sector, it will make the affected countries more nervous about their energy security that those countries which have a diversification in suppliers. [10]

Another important role also play the international and national energy companies in the EU via associations in the Economic and Social Committee and direct contacts with EU MEPs or members of the Commission. Mostly the liberalization process in the energy sector is handled with big time lags within the EU, but some national champions such as France’s EDF and Germany’s RWE gained some influence, as well.

The key priority of the EU is completion of the internal energy market, as liberalization process.[11] However, this process remains incomplete. Being an international actor which is exporting its liberalization model beyond its borders, it becomes model for non-EU members to follow.


External energy policy as a model for cooperation

The EU has cooperation agreements with all neighbor countries, including the southern Mediterranean-rim countries, a framework developed within the UN Framework Convention on Climate Change. Among the general cooperation is agreement on European Economic Area. In terms of energy policy, Norway will remain one of the Union’s most important partners, being important supplier of oil and gas for the EU. Cooperation between Norway and the EU is governed in the Agreement on the European Economic Area (EEA). Under the EEA, customs duties were abolished and 80% of the EU’s single-market regulations apply. [12]

Another form of general cooperation is accession negotiations, an instrument with which the EU may apply its legal order to partner countries. A new member, Croatia, has a great potential for wind and solar energy, along with this, being important energy transit country for southeastern Europe and central Asia.[13]

Within the framework of the European Energy Community Treaty, Croatia became transit country for electricity and an important partner in realizing the Nabucco gas pipeline. Another potential candidate in ongoing negotiations is Turkey, which plays a central role as an energy hub.

The European Neighborhood policy (ENP) as a form of cooperation, holds agreements between the EU and the countries of eastern Europe and the Mediterranean, which includes mainly energy policy cooperation. Since its creation, the ENP has been developed into separate blocks- the Eastern Partnership and the Union for the Mediterranean. Partner countries in Eastern Partnership, in particular Azerbaijan, Georgia and Ukraine are important transit countries and however, the interest is remains in diversification of fossil-fuel supplies and the expansion of nuclear energy, in case of Ukraine. [14]

The Union for the Mediterranean is an evolution of previous Mediterranean policy. Such countries as, Albania, Algeria, Egypt, Israel, Jordan, Lebanon, Mauretania, Morocco, the Palestinian Territories, Syria, Turkey are now Monaco, Montenegro, Bosnia and Herzegovina also members of the Union for the Mediterranean. Declaration of the Union for the Mediterranean’s summit along with Solar Plan, include energy project, with German and French participation. [15] The Solar Plan focuses on expansion of renewable energy technologies.

Another aspect is cooperation with Russia and Central Asia. The European Union is the largest consumer of Russian energy products, as Russia is the largest single external supplier of oil to the EU. In 2013, Russia delivered approximately 161.1 billion cubic meters to European Countries, its about 30% of Europe’s gas supply.[16] 50% of the EU oil supply also was imported from Russia.

The aim of external dimension of the EU energy policy is to ensure its security by diversifying its natural gas supply.[17] The plan is to create new gas pipelines, which are supposed to supply the EU with gas from Middle East, the Caucasus and the Central Asian region. Such projects include: the Trans-Adriatic gas pipeline; a pipeline connecting Turkey, Greece and Italy; a pipeline connecting Azerbaijan, Georgia and Romania; the Trans-Caspian gas pipeline and South-Eastern European Pipeline.[18]

Currently, the most promising project is the Trans-Anatolia Gas Pipeline (TANAP) that would start at the border of Georgia and Turkey and deliver gas to the border of Turkey and Bulgaria and thus through the ‘short’ Nabucco transport the gas to Central Europe. Such projects have also geopolitical aspects as they can lead to reduction Russia’s impact in the areas of interest of its foreign policy.

Along with Russia, Kazakhstan, Turkmenistan and Uzbekistan have the world’s second largest reserves of oil and gas. Kazakhstan has three times higher the oil reserves of the North Sea whilst in Turkmenistan and Uzbekistan the gas reserves are the 5th and 8th highest in the world. [19] Kazakhstan and Uzbekistan are major suppliers of uranium to the EU. Cooperation between EU and Central Asia takes place under the Baku initiative that enhances energy and transport cooperation between the EU and the states of the Black and Caspian Seas.

In November 2006 in Astana four priorities for cooperation in energy field were adopted: energy market convergence; energy security; sustainable energy development and investment. [20] INOGATE programme provides funding for energy cooperation for each of the four priorities.

Also an important cooperation is Gulf Cooperation Council. It is the Cooperation Council for the Arab States of the Gulf that consists of six members: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The states of the Gulf region don’t belong to the EU’s neighbours, however, they are among Europe’s most important suppliers of energy with the exports of oil and gas.


Current developments and future challenges

Currently, several strategy papers are defining energy developments on EU level, the most important of which are: ‘Energy 2020. A strategy for competitive sustainable and secure energy’ published in 2010 and ‘Energy Roadmap 2050’ published in 2011. ‘Energy 2020’ aims to achieve an energy-efficient Europe; to complete the internal energy market; to empower consumers and achieve the highest level of safety and security; and to strengthen the external dimension of the EU energy market. [21] The ‘Energy Roadmap 2050’ is also a strategy paper, but with a longer time-frame, which aims to provide planning certainty for investment. Commission predicts in general, are the increasing household expenditures for energy and energy related products.

Energy has now become a prominent issue in all EU’s external political dialogues. Energy cooperation with major suppliers such as Russia, the Middle East and countries of the European Neighborhood Policy are in high priority whilst energy cooperation with rising powers from the Global South seems to be missed. This is more case for external energy relations with BRICs as it not only serves as new consumers of scares resources but also most visible China’s rise as the worlds biggest investor in wind technologies. Thus one of the major challenges that the EU is facing is the establishment of a multipolar world order with emerging powers.

The strong control of Russian state over production and supply to Europe became clear in the Sakhalin –II dispute in 2006. Apart from control over domestic energy resources, Russia imposes strong control over its energy transit network, what weakens internal European efforts to establish common energy policy.[22] Oil and gas exports from Africa are expected to triple by 2030.

However, because of the rising demand, the USA and China have also their plans on Africa’s energy resources, what significantly poses an external problem to the EU’s energy policy. Gas imports from the Middle Eastern region are only 1.5% of Europe’s total gas imports. Dependence on oil and gas from the region brings several problems for the EU’s energy policy, such as unclear situation concerning Iran’s nuclear weapons programme and background of the Israeli-Palestinian conflict, as transportation of products to Europe faces more risks than their production.[23] Therefore the safest way is to become less dependent on external developments is to explore opportunities at home. However, the question of international industrial competitiveness rises, what implicates energy-taxes.

The existence of agreements that currently is available to the EU helps to expand its cooperation with partner countries in the alternative energy sector. The Lisbon Treaty strengthened the political value of the topic of energy, however without transferring additional decision-making power to community institutions. Nevertheless, energy documents are issued by both the European Commission and the European Parliament which implement principles, goals and laws and regulation that affect Member States and actors within the EU, and also determine the content of external energy policy.

The problem of the common voice is on the agenda in connection with different energy characteristics and interest of member states. Thus, the EU faces a range of complex external problems in developing an energy policy. Cooperation with Russia and China remains the most difficult, as these both countries disproved the EU’s model of market liberalization. Thus, adherence to the EU internal energy policy agenda, which aims to transform market at international level, doesn’t in fact always benefit EU external energy policy objectives.


 

[1]From the ECSC to the Energy Roadmap 2050. EU energy policy. Susanne Langsdorf. December 2011. Green European Foundation. Page 2 http://gef.eu/uploads/media/History_of_EU_energy_policy.pdf

[2]EU external energy policies. Andrei Belyi, University of Dundee. POLINARES working paper n. 69. December 2012. Page 3 http://www.polinares.eu/docs/d5-1/polinares_wp5_chapter3.pdf

[3] Ibid

[4] Ibid page 4

[5] Ibid page 4

[6] Europe’s Global Role: External Policies of the European Union. Jan Orbie. Ashgate Pub. , 2009. Page 203 http://books.google.lv/books?id=R8cd6JCEqAMC&pg=PA203&dq=external+energy+policy+european+union&hl=ru&sa=X&ei=avdkVKG7EMj4ywP6t4CQBw&ved=0CCAQ6AEwAA#v=onepage&q=external%20energy%20policy%20european%20union&f=false

[7]From the ECSC to the Energy Roadmap 2050. EU energy policy. Susanne Langsdorf. December 2011. Green European Foundation. Page 3 http://gef.eu/uploads/media/History_of_EU_energy_policy.pdf

[8]From the ECSC to the Energy Roadmap 2050. EU energy policy. Susanne Langsdorf. December 2011. Green European Foundation. Page 4 http://gef.eu/uploads/media/History_of_EU_energy_policy.pdf

[9] Ibid

[10] Ibid

[11] Ibid

[12]The External Relations of the EU in energy policy. Issue paper ERENE. Berlin, December 2010. Heinrich Boll Foundation ed. Page 20 http://www.erene.org/downloads/2011-02_The_external_relations_of_the_EU_in_energy_policy.pdf

[13] Ibid

[14] Ibid page 3

[15] Ibid page 3

[16]Russia Ready to Boost Energy Cooperation with EU. 14.10.2014. http://sputniknews.com/world/20141014/194055525/Lavrov-Russia-Ready-to-Boost-Energy-Cooperation-With-EU.html

[17]Controversial Issues in the EU-Russia Energy Relations. Tichy Lukas. CENAA Analysis. http://cenaa.org/analysis/controversial-issues-in-the-eu-russia-energy-relations/

[18] Ibid

[19]Central Asia-Energy. Development and Cooperation-EUROPEAID. https://ec.europa.eu/europeaid/regions/central-asia/eu-central-asia-energy-cooperation_en

[20] Ibid

[21]From the ECSC to the Energy Roadmap 2050. EU energy policy. Susanne Langsdorf. December 2011. Green European Foundation. Page7 http://gef.eu/uploads/media/History_of_EU_energy_policy.pdf

[22] External Problems for Europe’s energy policy- a brief geopolitical analysis. Elmar Hellendoorn, College of Europe, March 2009. http://www.exploringgeopolitics.org/Publication_Hellendoorn_Elmar_External_Problems_Europe_Energy_Policy_Geopolitical_Analysis.html

[23] Ibid

Power Elites in Georgia: Old and New

Power is never completely impersonal while it is in the hands of certain people or groups of holders of power who are elites and leaders. Choices which are made by elites at a certain stages of state development, the level of power and authority that they exercise in society, determine the success of the process of forming and consolidating a new regime. According to the studies of G. Field, M. Burton and D. Higley, the stability of a regime is directly linked to the degree of consensus among its factions regarding existing institutions and rules of game.[1]

Georgia’s case can serve as an example of it. During the period of independence, three political regimes have changed in Georgia: the regime of President Zviad Gamsakhurdia, who came to power in 1990 and was overthrown by a military coup in 1992; then the regime that was led by old Communist party functionary and former USSR Minister of Foreign Affairs Eduard Shevardnadze who also was overthrown as a result of a “Rose Revolution” in 2003 led by Mikhail Saakashvili. Both regime changes in 1992 and 2003 were cause by rifts in the elite.

Speaking about Georgia, the country is divided into 67 districts and five independent cities. In most cases, the local power was concentrated in the hands of the President’s governors and groups linked to him. Thus the powerful regional elites became those who had personal ties with the country’s president and they formed a separate group in the structure of the national elite during Shevardnadze’s rule.

In reality there were unlimited control over the activities of the district administration from the leadership of the provinces and also its worth to note that the spread of corruption and clientalistic relationships at all levels of government was a feature of Shevardnadze’s reign.

Speaking about the administrative elites of the districts, the head of district administration created a team of colleagues that would fall apart with the departure of the leader from the position of the head of the district. A new administration head had to balance between three different interests: his personal, the interests of the provincial and the central government and the interest of local groups. [2]

Regarding the economic elite, its formation was related to the shadow of the Soviet period. Influential economic groups attempted to establish control over the district administration and in most cases it had illegal nature of the business.

The next type of elite existing during the Shverdnadze’s regime were criminal authorities, who operated in the districts. With their own influence they interfered in conflicts between different groups of regional elites and worked mainly with the old nomenklatura-type elite and business.[3] In the post Soviet Georgian society, so called “thieves in law” acted as a regulator of the power relationships between the various subjects of power.

Another type was Mkhedrioni (“army”) , who represented armed groups active in the years 1992-1995 and played a dual role. In the civil war they were one of the pillars of Shevardnadze’s regime and to some extent gained the official status of militia, however they often displayed criminal behavior and their leaders tried to establish control over the economy. Mkhedrioni in Georgia were something more than just government in government but it was the governmental power by itself.

And the last type of old elite was a party activists. Party activists who came to power after the 2003 revolution were unable to establish themselves in the leadership of the districts as it was in 1991-1992. The lack of resources, such as money or management experience, made the party elite dependent on the support of central authorities.

Considering Georgia in studies of post-Soviet states the terms “clans” and “families” are used. One of examples was Shevardnadze and his family. The dominant position of the family member and close relatives came to the light after the “Rose Revolution”. A Chief Auditor in the Shevardnadze government profited from corruption and assisted corrupt practices for the Shevardnadze family. Another example, the father-in-law of Shevardnadze’s son, Guram Akhvlediani, was the Chairman of the Chamber of Commerce and the leader of the most influential of the subgroups – the “clan Akhvlediani”, which developed business interests in mineral oil and aircraft and controlled the Poti port. [4]

Shevardnadze had many relatives so everyone had its own place under the “sun”. The Banking Sector also was and is occupied by the Georgian economic elite. TBC Bank of Georgia and its group received from the state the exclusive right of bottling Borjomi mineral water, one of Georgia’s largest exports. There also are foreign investors since 2000-2001, which reflected in the disposition of forces among the economic elite of Georgia.

They are individuals who gathered wealth in Russia in the 1990s. The best example is Bidzina Ivanishvili, ex-prime minister of Georgia, who operates primarily in the area of the business of television, began broadcasting his TV Company “Imedi”. But since he decided to leave its position as prime minister, he closed the channel, which served as a tool in his political career. His “Channel 9” had been on air since 1999. By 2003, Shevardnadze’s Union had crumbled and replaced by New Georgia, which promoted a programme of independence, integration into Europe, closer relations with US and NATO, the liberation of the economy and increases in salaries.[5]

This event marked the era of new emerging elites. Five major groups or parties opposed New Georgia: the National Movement, led by Saakashvili, the United Democrats by Nino Burdjanadze with Zhvania in the background, a left Labour party, conservative New Rights party and the Industrialists.

Catholicos-Patriarch Ilia II is the only constant in Georgian political Olympus of the post-Soviet era. A few years ago, right after the victory of the «Rose Revolution», Ilia II expressed its concern with the fact that there is no one, nationally-elected President of Georgia was not able to delegate his powers to a successor in lawful way. When there raised a real danger that Mikhail Saakashvili will share the destiny of the exiles of Gamsakhurdia and Shevardnadze, Catholicos announced as the only way of overcoming this «curse of Georgian policy»[6] is the idea of monarchy.

The opposition seized on the initiative of the head of the Church, because it is consistent with its commitment to eliminate the Institute of a strong President. Till today, Ilia II, remains a national arbiter, spreading the values and ideas, religion and attitudes within the Georgian society, which was clearly seen during the events of the parade of LGBT party in Tbilisi.

After the reign of Shevardnadze, many may say that Saakashvili eliminated corruption but still he had hidden business with Azerbaijan Company “Socar” and many others. The share of the President on each litre was about 22 tetri (= 4 cents), i.e. only from this business Saakashvili clan received approximately 24 million per month.[7] During the Saakashvili’s anti-corruption campaign was designed, first, on the destruction of some of the businesses that they did not belong, and secondly, the creation of «elite corruption».

Yes, at the bottom they destroyed corruption, and participation in corruption was only the right of the political elite of the President and his entourage. The earlier mentioned group created by two members the «Mkhedrioni», which were members of the elite groups inside «Mkhedrioni» under the name of «Baratebi», has grown into a company with a significant regional importance. Business group has extensive contacts with the political elite of Georgia. Its main companion and defender until 2008 was an influential member of the Parliament of Georgia, after which he became a member of the government who has close ties with Saakashvili.[8]

In Georgia, the «elite corruption» or in this world called intellectual corruption when all money belongs to the ruling elite, which, under the flag of democracy actually owns all business, was just such a situation which continues to exist so far: the ruling elite controls all spheres of the economy, including strategic and small businesses. On the background of absence in the country new ideas, new motivations and the existence of income only in upper layers drives us to a situation when the market is frozen, we do not develop innovative businesses and do not receive new. Such situation has developed over the years in the economy of Georgia.

After the next presidential elections, Georgia transformed from a super-presidential to super-premier Republic with a touch of design of parliamentary governance. But the twist is that in contrast to the majority of parliamentary republics of European type, the head of state is not elected in the Parliament, but by a universal suffrage. And if the President is a person, disloyal to Prime Minister, he will soon become a headache for the government. That’s how the current president Margvelashvili was elected, being under the protectorate of ex-prime minister Ivanishvili.

Georgian elite mainly studied abroad and those who made the rose revolution were trained abroad and they had work experience in organization of such activities; and we can say that to the leader positions came more broad developed generation. During the Communists’ the knowledge of Russian language was obligatory because it gave access to all the resources planned by the Moscow Imperial center, it follows that Russian was the oldest language of the elite.

Today the English language has become the second language of the elite which lobbies its interests both within the country and abroad.
Attempts of first president of Georgia, Zviad Gamsakhurdia to declare that the country needs to move in the direction of EU, failed. Eduard Shevardnadze also made some successful steps in that direction but the civil war in Georgia and absence of support from the West forced him to take pro-Russian side. Already Mikhail Saakashvili made significant efforts towards more close relations with EU.

The question of integration is one of those which coincided with the interests of ruling coalition of “Georgian dream” party and the party of ex-president Saakashvili. David Darchiashvili, a deputy of Georgian parliament and chairman of the issues on European integration Committee supported the political and economical integration, however many businessman and entrepreneurs assured that the economical advantageous for Tbilisi are very far perspective.

Also the fact that the relations with Russia improved after the defeat of Saakashvili, Georgian political and economical elite don’t want to disturb the development of trade relations. A perspective to sit on two chairs, EU and Russian, for our elite is seen as easily achievable goal.


[1] Different Governments in Tbilisi, same people in regions: local elites in the years of independence. Research paper. Giorgi Gotua. http://www.ge.boell.org/downloads/Giorgi.pdf

[2]Different Governments in Tbilisi, same people in regions: local elites in the years of independence. Research paper. Giorgi Gotua. Page 207 http://www.ge.boell.org/downloads/Giorgi.pdf

[3] Ibid page 208

[4] Power Elites in Georgia: Old and New. Research paper. Chapter 9. Zurab Chiaberashvili and Gigi Tevradze. file:///C:/Users/user Downloads/10_ChapterIX.pdf

[5] Power Elites in Georgia: Old and New. Research paper. Chapter 9. Zurab Chiaberashvili and Gigi Tevradze file:///C:/Users/user Downloads/10_ChapterIX.pdf

[6] Через революции-К царству. http://www.ogoniok.com/5023/16/

[7]Режим М. Саакашвили: что это было. М.С.Григорьев. Москва 2013. Стр 19 http://democracyfund.ru/userfiles/%D0%9C_%D0%A1_%D0%93%D1%80%D0%B8%D0%B3%D0%BE%D1%80%D1%8C%D0%B5%D0%B2%20%D0%A0%D0%B5%D0%B6%D0%B8%D0%BC%20%D0%A1%D0%B0%D0%B0%D0%BA%D0%B0%D1%88%D0%B2%D0%B8%D0%BB%D0%B8%20-%20%D1%87%D1%82%D0%BE%20%D1%8D%D1%82%D0%BE%20%D0%B1%D1%8B%D0%BB%D0%BE.pdf

[8] Купатадзе А. Изменения после изменений: цветные революции и организованная

преступность в Грузии, Украине и Киргизии (август 2010 г.) // http://research-repository.st-andrews.ac.uk/bitstream/10023/1320/6/Alexander%20Kupatadze%20PhD%20thesis.PDF