Tony Barber

Yulia Tymoshenko’s refusal to acknowledge Viktor Yanukovich as the legitimate winner of Ukraine’s presidential election is starting to embarrass her friends in the European Union.  The White House, Nato and the EU have all congratulated Yanukovich on his victory.  The longer Tymoshenko maintains her defiant stance, the more it will cost her in terms of prestige and contacts in Europe.

Only last December I saw the red carpet rolled out for Tymoshenko at a congress in Bonn of the centre-right European People’s Party, the biggest party in the European Parliament.  Everyone was there – German chancellor Angela Merkel, EU president Herman Van Rompuy, French premier François Fillon, Italian premier Silvio Berlusconi, etc.  Tymoshenko was one of the star attractions from the “new” eastern Europe. Read more

Tony Barber

It’s striking that the Czech constitutional court announced its approval of the European Union’s Lisbon treaty on Tuesday morning just as the prospect of another Russian gas import crisis began to loom on the EU’s horizon.  For even though the news from Prague is welcome, a moment’s reflection is all you need to remind yourself that the Lisbon treaty will, in and of itself, do very little to help the EU address its most serious foreign and economic policy problems.

The sheer sense of relief at adopting a new EU treaty – it’s taken eight years, required two different texts, gone through three failed referendums and caused endless trouble in countries such as the Czech Republic, Ireland and the UK – risks fostering the delusion that everything will be better once Lisbon is in force.  But this is to fall into the trap of assuming that process can substitute for substance (see Monday’s blog on how the same fallacy affects the EU’s approach to relations with other big powers). Read more

Tony Barber

According to an opinion poll, more than half of Denmark’s population has little or no confidence that world leaders will strike an agreement on fighting climate change at December’s landmark United Nations summit in Copenhagen.  It is just a hunch, but I reckon one impulse behind this pessimism is the widespread European suspicion that China, which recently overtook the US as the world’s biggest greenhouse gas emitter, will play an unconstructive role at the talks.

What if this suspicion is unfounded? Read more

Tony Barber

What should be the top five priorities of the next European Commission?

1) Top of my list is the defence, and if possible the strengthening, of the single European market.  This is the European Union’s bedrock achievement.  It secures prosperity for its citizens, and it underpins the EU’s collective weight in the world.  Without the single market, the EU would lose not merely its cohesion but its very reason for existence.  The single market is under strain at present because of the emergency measures taken over the past year to prop up Europe’s banking system.  These have, in effect, suspended the EU’s state aid rules in this sector.  The Commission will need to be tough in making sure that EU governments do not manipulate the rules as the emergency measures are gradually withdrawn.  Meanwhile, it should continue to press the case for integrating and liberalising the EU’s service sector, which accounts for two-thirds of all EU economic activity. Read more

Tony Barber

For anyone interested in European energy security, and especially the long-suffering Nabucco gas pipeline project, there was a fascinating piece of news on Monday. The Obama administration appointed Richard Morningstar, a former US ambassador to the European Union, as its special envoy for Eurasian energy issues.

Morningstar has a career background not only in EU affairs but in the energy diplomacy of the Caspian Sea area. As such, there is no one better placed to give the Europeans the benefit of US advice on Nabucco, a project some energy analysts think may be doomed to failure unless resolute action is taken soon to finance it, secure the necessary gas supplies and get it up and running. Read more

Tony Barber

Negotiating with Vladimir Putin, Russia’s prime minister and former president, is hard enough even when Europe’s relations with the Kremlin are going well – which they haven’t been for some while. For an insight into Putin’s brutal, hard as nails character, have a look at the official Russian government transcript of a conversation he had with some Moscow-based western reporters last week.

The discussion, which centres on the shut-off of Russian gas deliveries to the European Union via Ukraine, turns at one point to the possible deployment of EU monitors along the pipeline route through Ukrainian territory. “We hope that the issue will be resolved expeditiously. We don’t want a group of men and women to come to Kiev and just sit in a hotel and sip horilka [Ukrainian vodka],” Putin says. Read more

Tony Barber

Buried in last Wednesday’s €200bn European Commission economic recovery plan for Europe was a proposal that sent waves of relief through Lithuanian policymaking circles. This was the idea of allocating €5bn for trans-European energy connections.

A large chunk of this money is destined for Lithuania, the aim being to reduce the dangers that face the country after the planned closure of its Ignalina nuclear power plant on December 31, 2009. Ignalina supplies 70 per cent of Lithuania’s electricity, and when the plant is shut down Lithuania will be almost entirely dependent on Russia for its energy. Read more

Tony Barber

It was seven months ago that Javier Solana, the European Union’s foreign policy chief, warned about the risks to international stability from the intensifying competition among countries in the Arctic region. Today the European Parliament drew attention to the issue again by passing a resolution that called on EU policymakers to push for an international treaty for the protection of the Arctic.

Legislators adopted the resolution by 597 votes to 23 with 41 abstentions, demonstrating that it had overwhelming cross-party support. Soon the European Commission will publish a long-awaited report that for the first time will put flesh on the bones of the EU’s Arctic policy. Read more

Tony Barber

How much will it cost the European Union to fight global climate change? Clearly, the answer depends on what your target is, how you propose to get there, and the size of the EU’s contribution compared with those of the US, China and so on. But a new report from the Centre for European Policy Studies thinktank offers some useful estimates.

The report assesses six recent studies, ranging from the Stern Review and a World Bank analysis to research prepared by Vattenfall, the Swedish energy company. In these reports, the average annual global costs for mitigating and adapting to climate change are put at anything from €230bn to €614bn, based on 2006 data. Read more

Thursday’s thundering Financial Times editorial on the food crisis unfortunately arrived too late to change opinions on the 13th floor of the Berlaymont, the European Commission nerve centre. The day before the call for a pause in the push for biofuels was made Jose Manuel Barroso, Commission president, defended the policy.

He said the use of crops for fuel had so far had little effect on higher food prices. It can’t be often that the Commission disagrees with its multilateral brethren, the IMF, World Bank and United Nations. Read more

The thaw between Poland and Brussels has sent a chill down spines in Lithuania.

Donald Tusk, the new Polish premier, arrived at the European Commission and parliament on Tuesday to show that his country was back in the centre of Europe. The era of the Kaczynskis, “the terrible twins”, picking fights with Brussels, was over.

The fear in Vilnius is that he may stop picking fights with Russia, too, leaving the Baltic republics, which only recently threw off the Soviet yoke, alone in the ring with the bear. Talks on resolving the Russian blockade of Polish meat, which in turn have held up a new EU-Russia partnership agreement to Brussels’ ill-concealed annoyance, start next week.

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It doesn’t usually take long before the glitz of a European Union summit rubs off. Commitments signed up to amid a fanfare of rhetoric quickly become tarnished. There was a fascinating glimpse behind the shiny green paintwork of the target of sourcing 20 per cent of energy from renewable targets this week – and it wasn’t pleasant. The Guardian newspaper got hold of a government memo showing British bureaucrats are already looking for ways to erase what their leaders signed up to in March. They are lobbying governments and senior Commission officials for a “flexible” interpretation of whatever individual target the UK is assigned, so they can build solar farms in Africa or count nuclear generation. Investing in renewable sources at home is just too expensive.

It would be understandable if the Brits, like the poorer eastern Europeans, had tried to sabotage the idea from the outset. But instead Tony Blair, burnishing his green credentials, welcomed it.

Another "groundbreaking, bold" commitment (Mr Blair’s words), to source 10 per cent of transport fuels from plants by 2020, looks every bit as ugly.

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Weird to see Gerhard Schroeder in Brussels in his job as a businessman/lobbyist for the Russian/German gas industry, especially when you’re more accustomed to watching him throwing his weight around here as Germany’s chancellor.

On Wednesday he was in town representing Nord Stream, the Baltic Sea pipeline project which will run between Russia and Germany, cunningly bypassing Poland. The infrastructure is a joint venture led by Gazprom, the Russian state-controlled gas giant, with two German companies.

As one scornful EU official said: "How nice of him to come to Brussels. Isn’t he an employee of Mr Putin these days?"

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On the face of it, the European Commission had some shocking news for shareholders of Eon and RWE in Germany, OMV in Austria and similar listed energy groups across the region. The Brussels regulator on Wednesday vowed to break up all energy suppliers that are also active in managing networks such as grids and pipelines. It argued that the combination of the two businesses stifled competition.

Given the Commission’s sweeping powers to initiate legislation, scrutinise mergers and pursue antitrust infringements, such a step is certainly not beyond Brussels’ reach. That would mean forcing some of Europe’s biggest groups not only to sell off priceless assets but also to face much sharper competition from smaller rivals.

And yet, this shocking news somehow failed to strike fear in the hearts of investors. RWE’s shares actually gained slightly, while Eon and OMV posted only minuscule falls that mirrored the broader market. What’s up? Don’t traders read the newspaper?

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It’s almost mid-January in Brussels and there has not been a single frost in the city. People are shedding their winter coats, trees are sprouting leaves; a rose made an appearance in my garden last week. It doesn’t take a climatalogical genius to realise something is going on, and at long last Europe’s policymakers seem to be taking it seriously.

As recently as last May, José Manuel Barroso did not even mention climate change as one of his top priorities; now it is the cornerstone of almost everything the European Commission does, and is at the heart of Wednesday’s announcement of a new EU energy policy.

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In its drive to get us all to do our bit to combat climate change, the European Commission has adopted a pithy slogan: "Turn down. Switch off. Recycle. Walk." It seems, however, that Europe’s functionaries are reluctant to comply with the second of these four edicts.

Brusselspic1_1 Photographs passed to the Financial Times show several of the EU’s most illustrious buildings – including the European Parliament and the Council of Ministers’ Justus Lipsius building – lit up like Christmas trees in the middle of the night. The Committee of the Regions is incandescent. Read more

Jos Manuel Barroso is facing one of the biggest decisions of his time as European Commission president: whether to take on entrenched industrial and political interests in order to break open the continent’s energy market.
After interviewing him – on-the-record and privately – for over 90 minutes I have the impression he is gearing up for a fight.
Mr Barroso says in his FT interview he wants to break the grip of Europe’s monopolistic energy suppliers, which control both the supply and distribution of electricity and gas in their home markets. Legislation is expected early in 2007.
But how tough will he be? Will he go for a full-frontal attack and demand the complete unbundling of the supply and distribution operations of companies such as Eon and EDF – or settle for some half measures?

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