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. Last Updated: 07/27/2016

A Looming Unified Front on Energy

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One of the basic threats to the Kremlin's energy ambitions today is European economic consolidation: Russia could find itself alone face to face with a strong union of consumers. That threat is personified in German Chancellor Angela Merkel.

Germany presently holds the EU's rotating presidency, and Merkel is calling on her colleagues to make Europe the world's environmental leader and to reduce emissions of greenhouse gasses. She wants to increase significantly the share of biofuels and renewable sources in Europe's energy balance. And Merkel wants to make these targets mandatory and impose real punishments on those member states that don't meet their obligations.

This all fits with Merkel's larger priorities, including further EU consolidation and restarting the process to push through a constitution for Europe. These tendencies are fraught with complications for Russia, which prefers bilateral to multilateral scenarios in its foreign policy. The government runs into resistance from the EU when defending the interests of Russian oil and gas companies, but has a much easier time negotiating with individual European companies or governments. Lack of European unity and the presence of different national energy interests make this easy.

Germany used to be Russia's chief partner in Europe. Merkel's predecessor, Gerhard Schr?der, happily signed bilateral deals and lobbied for the Nord Stream gas pipeline along the bottom of the Baltic Sea connecting Russia to Germany. Merkel appears uninterested in being Russia's energy representative in Europe. In an interview with the Financial Times on the eve of last week's European energy summit, she made it clear that Europe would present a unified front on Nord Stream, with all countries receiving gas from the pipeline according to the same conditions. Merkel also took a strong stand against Gazprom expansion. Relations between the EU and Russia, she said, should be symmetrical: If Russia limits foreign investors' access to strategic assets, then Europe should introduce the same measures for Russian companies.

So far, Merkel's plans remain just that. European leaders failed to reach total agreement on energy policy at the summit. They all agree something has to be done about global warming and renewable energy, but not everyone likes the idea of mandatory targets and punishments. EU members also differ over how best to achieve the desired goals. But in the long term Europe has no choice -- a unified energy policy is just a matter of time.

The question is whether this will be bad for Russia as a whole or just for the Kremlin's plans. Will EU energy consolidation have a negative effect on the economy or just on Gazprom and its sometimes incomprehensible business projects?

This comment appeared as an editorial in Vedomosti.