Transatlantic Politics

Liberal politicians are the worst kind everywhere in the world. With parliamentary elections coming up on November 30, Romanian Liberal Party - currently in government - is flirting with the idea to get a lucrative deal with Gazprom and a quick gain, even if it means to sacrifice the country’s energy independance on the long run.

Liberal minister of economy and finances, Varujan Vosganian said on Thursday that Romania is open to South Stream, a Gasprom pipeline project designed to discourage European attempts to build a pipeline known as Nabucco, that would bring Caspian gas directly to the EU market via Turkey, thus bypassing Russia.

Romania has been the last country involved in Nabucco so far resisting Russian pressure to sign up for South Stream. Yet a Gazprom delegation is expected in Bucharest next week, amidst various media reports that the Russian monopoly is about to offer Romania to join its project.

While the Romanian president Traian Basescu still declares his backing for Nabucco and calls upon European leaders to speed up the process, the liberal government it is at odds with signals "openness" towards Gazprom, with the Ministry of foreign affairs mediating a meeting last week in Moscow between Romanian gas officials and the Russian monopoly.

Now, the economy minister’s wording suggest that gas politics might shape up the electoral debate in the run up to the elections.

The social-democratic opposition already called upon the Government to hold "direct talks" with Moscow in order to get a better gas price and dismissed the president’s "deep freeze" policy towards the Kremlin which was "disastrous" and only drew prices up.

Yet it is at least naive to think that direct talks with the Russian giant will put Romania in a better position. The debate is false, because unlike Hungary and Bulgaria, both Nabucco countries which signed up for South Stream as well because they are  over 85% dependent on Russian gas, Romania imports only a third of its total gas consumption from Gazprom, the rest being produced internally.

As Vladimir Socor from the Jamestown Foundation puts it, Romania is "only the latest addition to Gazprom’s list of candidate countries for the proposed South Stream."

The offer to Romania appears designed to increase Russia’s leverage vis-à-vis countries that have already signed up for South Stream and are now negotiating the commercial and financial terms separately with Gazprom. The Russians propose to include more countries in South Stream than the pipeline could possibly reach. By the same token, Russia offers to include more countries than it could possibly supply from Russian gas reserves in the years ahead.

Gazprom is tempting the maximum possible number of countries, playing them off against each other with the prospect of individual package deals around South Stream. Package deals would include supply contracts, transit revenue, and storage sites that could confer on this or that recipient country the coveted status of a gas-trading “hub.” Mostly aware of Gazprom’s limited gas export potential in the years ahead, the countries are vying to wrap up supply contracts ahead of their neighbors and to make the most out of any possible transit and storage opportunities.

For The Economist, all this works only because the European Union "is asleep on the job".

Bizarrely, Europe’s leaders publicly maintain that the two pipelines are not competitors. They have given the task of promoting Nabucco to a retired Dutch politician who has not visited the most important countries in the project recently (or in some cases even at all).

The main reason for the lack of private-sector interest is lack of gas. The big reserves are in Turkmenistan, but Russia wants them too. Securing them for Nabucco would mean a huge, concerted diplomatic push from the EU and from America. It would also require the building of a Transcaspian gas pipeline.

Yet as long as EU countries still give in to the temptation of bilateral deals with Russia, Nabucco, though twice cheaper than South Stream, has increasingly less chances to be completed.

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