Transatlantic Politics

Yesterday’s  record fine against US giant Intel - $ 1.45 billion - is yet another example of EU’s double standards when it comes to American companies and Russian monopolies.

Not that TransatlanticPolitics is contesting the accuracy of the EU commission’s findings  - the bloc’s guardian of fair competition rules - but it is at least dubious that no probe has been launched into any Russian company/monopoly on the EU market.

"Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years," competition commissioner Neelie Kroes said.

"If we smell that there is something rotten in the state, we act."

It seems however that Gazprom’s actions on the EU market have no smell, despite its ownership of half of the trading floor in one of Europe’s major gas hubs in Austria - Baumgarten.

No formal inquiry has been launched by the EU into this matter, although Gazprom basically has free access to priviliged information about all the gas being traded there.

"Knowing, for example, that one company’s future contracts become mature on this particular date, another county needs gas on that date, if you know all the pricing information, you can undercut these limited opportunities that began to emerge at Baumgarten for more market-based pricing of gas giving this arbitrage a possibility. So, it’s crucial that the EU is examining the operation of that gas hub and information systems and make sure the information is not being used by one company or another company to undercut competition," US deputy assistant secretary of state Matt Bryza told EUobserver in April. Similar statements here.

 Asked about this issue, a spokesman for the EU commission said the matter was not relevant, since Gazprom could only follow the amounts of gas currently traded and not influence any future transactions.

So much for Europe’s level playing field..

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Hillary’s charm tour in Europe ended in a big mockery, as she found herself lost in translation. When in Geneva, Hillary gave Russian foreign minister Sergei Lavrov a plastic button, after Joe Biden’s announcement last month that the Obama administration has to hit the ‘reset button’ in US-Russian relations.

"You got it wrong" - Lavrov said. Instead of "reset", the button read "overload" or "overcharge" in Russian. Whooops… Sorry, wrong button.

No problem, DeeDee, thank God you’re not the POTUS and don’t have a real button to play with.

And hopefully this embarrassment will put an end to such gimmick-diplomacy. What exactly was that button supposed to mean? A fresh start with Russia, based on what? Down at the NATO headquarters in Brussels, Hillary did not sound so much different than Condi. Hell, she even called Poland and the Czech Republic "visionary" for signing up for missile defense, a plan that really pisses off Russia.

Of course, her hawkish talk may have been just a way to soothe fears in Europe after that Obama letter offering to scrap missile defence in return for real Russian help against Iran. But one can hardly say what’s more naive: to think that such trade-off would really work or to believe that the Kremlin would buy this "fresh start" thing based on a gimmick which wasn’t even spelled correctly.

But the reset-button episode was not the only gaffe. While in Brussels, Hillary also managed to misspell two of her counterparts names during a press conference - she called the EU top diplomat Javier Solana a cream candy - ‘Solano’ - and the EU commissioner for external relations ‘Benina’ - when her real name is Benita. Both were standing right next to her and rolled their eyes thinking "oh boy, why can’t the Americans learn the names of the people they talk to?"

Maybe all of this is just a warm-up for gaffe-master Biden, who is in Brussels this week to convince Europeans to commit more troops to Pakistan. Sorry, Afghanistan. Or just call it AfPak, like most of the Obamites now do. Is much easier. Also solves the eternal question of how it’s spelled correctly - Iran or Iraq?

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So Biden has made quite an impact with his "hit the reset button" with Russia remark at the Munich security conference over the week-end. But this comes as bad news for Eastern European countries such as Poland, the Czech Republic or Romania - hailed as "special partners" by the previous Bush administration. Not to mention Georgia and Ukraine.

On the planned missile defense shield in Poland and the Czech Republic, Biden said the US would "continue to develop missile defenses to counter a growing Iranian capability, provided the technology is proven to work and cost effective."

"We will do so in consultation with our NATO allies and Russia."

Well, since Russia has consistantly opposed this project and with Germany and France not very keen on the project either, chances are pretty slim that the shield is ever going to be installed, despite serious political damages to the Eastern European governments involved, after they put their credibility at stake with the Bush-backed plan.

Here’s some background from the Wall Street Journal:

In advance of Mr. Biden’s speech, White House aides had said the vice president would announce that the U.S. was prepared to reconsider plans for a missile-defense system in Eastern Europe. Moscow has long opposed such plans. Mr. Biden’s actual remarks appeared vaguer. A senior administration official traveling with Mr. Biden said the administration toned down the language because of unease in Washington that Moscow was behind last week’s proposed eviction of the U.S. from an air base in Kyrgyzstan used to support the military in Afghanistan.

So the Obama administration would have no problem in scrapping the missile defense shield and it is probably a matter of months until they will do so, the moment Moscow signals some opening.

Already the Russian envoys reacted warmly to Biden’s statements.

"The U.S. sent a very strong signal, and the signal was heard," Russian foreign minister Sergei Ivanov told reporters. "It’s obvious the new U.S. administration has a very strong desire to change, and we’re ready to cooperate with this administration on all levels."

Sad day for Eastern Europe. A new entente between big European countries - France, Germany, UK - Russia and the US could only come at the expense of Eastern Europe, still seen by Moscow as its own backyard.

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If elected president of the US, senator Barack Obama would not trade eastern European security for Russian help on Iran, his senior foreign policy advisor, Gregory B. Craig, told EUObserver in an interview.

"[But] that doesn’t mean that you trade away our security commitments to the new members of NATO, that’s not even thinkable. I always remember the notion that the expansion of NATO was not a threat to Russia, that this was a decision not by NATO to move east, but a decision by the new democracies from the former Soviet space to integrate with the West."

"The notion that you choose to co-operate with Russia vis-a-vis Iran at the expense of central and eastern Europe, I just don’t accept that. That’s not viable and it won’t happen that way," Mr Craig said.

Russia’s aggressive stance toward neighbours who want to be part of NATO and the EU is a historical throwback, he added. "I think the notion that Russia has a veto over what they decide inside of Ukraine or Georgia is very 19th to 20th century. In a 21st century world, with global impacts, global trends, Russia suffered enormously economically as a result of its intervention in Georgia."

Hmm..let’s see..

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Following the Russian military invasion, Georgia might soon be left out from the vital energy corridor now trasiting its territory, if Azerbaidjan comes to terms with Armenia over the frozen conflict in the Azeri region of Nagorno-Karabakh.

According to  Iranian Ambassador to Baku, Naser Hamidi-Zare, Iran is willing to mediate between Armenia and Azerbaijan over Nagorno-Karabakh.

“Iran proposed to mediate between Azerbaijan and Armenia in the resolution of the conflict” Hamidi-Zare said, adding that Tehran has held discussion on this issue with both parties of the conflict.

Why the sudden interest in Tehran for this very old conflict? Apart from an obvious image gain if it were to succeed in the mediator role, Iran wants to counter the US influence in the region. Early plans of the now functional Baku-Tbilisi-Ceyhan oil pipeline took into consideration another route, through Azerbaijan and Armenia, right on the border with Iran (see map). But with the US sanctions over Iran and the frozen conflict right in the middle of the shortest route from Baku to Turkey,, Georgia was then seen as a safer alternative.

But following the brutal "unfreeze" of the 2 Georgian frozen conflicts in South Ossetia and Abkhazia, now recognized as independent republics by the Kremlin, Azerbaijan is already hesitant in committing fully its exports through Georgia, rerouting some of these through Russia. And if its conflict with Armenia was to be solved, guess where the shortest route for its large oil and gas supplies would be? Exactly. Through Armenia.

Another key player in this whole energy game is Turkey, so far at odds with Armenia over a historical event it won’t recognize - the genocide against Armenians during World War 1 and over the Nagorno-Karabakh conflict, Ankara being a strong supporter of Azerbaijan.

Diplomatic ties were broken off between Armenia and Turkey in 1993, as a sign of support for Azerbaijan. But in the aftermath of the Georgian conflict, Turkish President Abdullah Gul made a historic visit to Erevan, the pretext being a football game between the two countries. And during the UN plenary in New York on September 26, Turkish Foreign Minister Ali Babacan sat down with his Armenian and Azeri counterparts in an attempt to move forward the discussions, so far championed by US envoy to the region Matthew Bryza.

Armenian media hope that Turkey’s increasing distance from the US and closer ties to Russia could work in its favour over the frozen conflict, and could end-up rerouting future Caspian-EU energy links through its territory instead of Georgia. Turkey is favoring both Russian and Iranian gas to be transported by the planned Nabucco pipeline, which is to reduce Europe’s dependancy on Russian gas. The US has so far insisted that Azeri gas and possibly gas from Turkmenistan would suffice for the pipeline.

Yet the Georgian conflict sees regional powers such as Turkey and Iran regrouping and arguably reinforcing their positions on the energy front. Russia can only encourage this.

P.S. According to EUObserver, an alleged Armenian-Russian connection during the Georgian conflict was highlighted in the European Parliament by the chairman of the Foreign Affairs committe Jacek Saryusz-Wolski, who asked EU’s foreign policy chief Javier Solana in a public hearing on 10 September if Russian bases in Armenia were used to launch missiles at Georgia during the conflict. Mr Solana said he could not confirm the information.

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