Discussion points, EU-Russia institutional aspects

Andrei V BelyiCEURUS, University of Tartu, EstoniaCEPMLP, University of Dundee, UK

EU-Russia interdependence

• Increasing trade volumes• Mutual vulnerabilities to international

markets (i.e. Eurozone crisis, internationalization of gas markets)

• Best practice transfer (energy efficiency and renewable energy promotion)

Positive interdependence:

• Mostly covering gas markets, following gas transit conflict and third energy package adoption

• Competition for Ukraine especially since EnCT accession

• Controversies surrounding the Energy Charter

Negative interdependence:

Ground for cooperationAnd institutional development

Ground for ‘de-institutionalization’Increased political risks

Institutional responses: gas

Energy Charter

Still the most overarching legal

framework

But how to make it accepted by RF and

other producing states?

EU-Russia Energy

Dialogue

Political discourses are dominating over expert cooperation

Gas Advisory Council focuses on ‘technical’

discussion, but political trust needed

Facing gas markets

EU to force markets even where the

competition does not have a ground?

Russia to rely over inefficient Gazprom?

EU • Main concern:

Gazprom’s export monopoly and price indexation

• Integration of Ukraine into EnCT also to reinforce transit security

RF• ECT is not

acceptable if transit issues are not clarified (incl dispute settlement); REIO clause is the key barrier

• EU markets bring new uncertainties in capacity markets

Main political concerns:

Going beyond negative interdependence ?

EU • More flexible

position on REIO ?

• Less rigid attitude towards EnCT?

RF• Need to face

market realities (i.e. oil indexation is outdated)

• Export monopoly: barrier and not a solution for the energy sector modernization?

Concluding remarks

Institutional responses are insufficient because negative interdependence prevails in gas

EU’s market development brings new uncertainties for post-command economies, incling EnCT; REIO clause in ECT rather complicates the multilateralism

Russia’s reliance on outdated institutional structures increases a distrust

Is positive interdependence matter of long term political will?