The events of February 2008 begged the question whether the European Union (EU) is capable of agreeing on common policy which would be advantageous for new member states in particular. The answer is “not”.

The first proof was the negotiation for the cancellation of visa for the citizens of the Czech Republic when visiting the US. The Czech Republic asked the EU for help as early as three years ago. Since the help didn’t come, it seized the initiative itself and achieved the cancellation of visa duty (1). Of course, the situation is complicated by the fact that US immigration authorities require certain personal data when entering US territory. The EU has objections against this procedure. It dislikes seeing the accumulation of sensitive information in the hands of any authority. Nevertheless, the old EU members aren’t activated sufficiently by the fact that some countries need visa because they don’t encounter this inconvenience when entering the US themselves.

The Czech attitude is the undermining of joint EU stance in a sense. However, this happened in a situation when the Community exerted a very restrained, or rather, zero activity. Why should the community abide by two standards?

The second trial for the EU was the declaration of Kosovo’s independence dated 17th February, 2008. The independence of this former Serbian province was supported predominantly by the US as well as the largest EU countries. On 18th February, 2008, the Council of the European Union for External Relations wasn’t able to attain to a joint posture and member countries were to express themselves as regards Kosovo’s independence according to their own deliberation. The created precedent and the violation of international law and its negative impacts in terms of international dimension were pretty well envisaged especially by those countries which perceive latently the peripeties with regard to the maintenance of the integrity of their territories. The EU failure in the case of Kosovo hints that the Community isn’t capable of becoming a global player in the medium term (2).

The last evidence is the signature of the agreement between Hungary and the Russian Federation on 28th February, 2008. Hungary has thus joined the project South Stream which, as it is well known, poses a competition to the project Nabucco upheld by the EU and the US. The EU isn’t able to secure financial backing and sufficient input gas sources for Nabucco. The EU has been losing the battle for sources in Central Asia with the Russian Federation. The Azerbaijani sources themselves are sufficient solely for the first Nabucco stage which, however, won’t secure financial returnability. For the realisation of the second stage it needs either the gas from Iran, on which sanctions are imposed and an embargo is put, or the gas from Turkmenistan which committed itself to export this raw material to Russian territory (3).

These are the reasons why the project Nabucco remains just on paper. Even the participation of another partner, namely the German concern RWE which is just a transit and distribution company like other five partners and has no production capacities around the Caspian Sea, wasn’t a help to it.

Gazprom has taken advantage of these European demerits and it’s been planning the project assisted by the Italian company ENI. The Russian concern has the largest gas supplies in the world and tremendous annual profits. The dominance over the EU consists in this fact. It’s able to make a concrete bid to countries which have been waiting vainly for a similar proposal from the Nabucco consortium for many years. Bulgaria, the member of Nabucco, didn’t resist to the tempting offer and signed a contract with the Russian Federation in January 2008. In the same period, the agreement between Serbia and the Russian Federation was achieved, although the Balkan country isn’t a member of the European project. Hungary turned out to be another part of the mosaic agreeing with the offer and signing the contract with the Russian Federation on the top political level in the end of February. Romania has remained the only faithful Nabucco member so far. South stream, however, might encounter similar problems like Nord Stream. As both projects will build a part of their pipes under the sea, the consent of adjoining states is needed. Sweden and Finland reject to issue it in the case of the northern branch owing to ecological reasons. Similar ecological objections may have Ukraine and Romania in the case of the project South Stream.

Hungary has never had stable and constant opinions as far as power engineering is concerned. On year ago when South Stream wasn’t mentioned thus much frequently, the Hungarian PM Ferenc Gyurcsány (4) supported the project on Blue Stream extension which was in the centre of attention at the expense of Nabucco. The country was promised the position of the most important distribution centre for Russian gas in the EU. Nonetheless, when OMV and Gazprom signed an agreement on the utilisation of storage tanks in Baumgarten to this end in May 2007, offended Hungary took Nabucco’s side and in September it summoned a conference at which it showed clear support of the construction of this European project (5).

Today, nearly half a year later, Hungary has been undermining the European project again by signing the agreement on South Stream. And again it’s supposed to become the main distribution centre of Russian gas in the EU. This is connected with the construction of storage tanks the volume of whose will amount to 1 billion m³ minimum. The pursuit of joint energy policy suffered another blow below the belt. Anyway, its erosion was triggered by the agreement between Germany and the Russian Federation on the North Stream pipeline some time ago.

It’s not true that both pipes can coexist. In spite of the fact that gas consumption in the EU should grow perpetually according to some estimates (6), there has been stagnation during the last years (7). Both projects are due to be finished in 2013 and transport approximately the same amount, i.e. 30 billion m³.

It’s rather questionable whether the Union will need additional 60 billion m³ of gas from the south-east route in 2013. The consumption stagnation is caused by the stepping up of energy efficiency, the imposing of more effective technologies and the growth of oil prices and thus earth gas too. The route constructed as first will postpone automatically the building of the other one until a later period because it won’t be financially justifiable. That’s why the statements that both projects can coexist in the near future are not true.

The EU is chockfull of statements about diversification. This means the diversification of raw material sources as well as the diversification of transport routes. The top stage of the country’s energy security is the existence of more sources of energy bearers. If this cannot be achieved, convenient is the existence of more transport routes through which raw material from the same source flows. Hungary has given precedence to the second option.

South Stream endangers the position of Slovakia as the second most important transit country for Russian gas after Ukraine. Its construction will cause the decrease of transported volumes through its territory. According to some sources the Czech Republic has been mentioned as the project’s potential partner (8). In the aftermath of its participation South Stream will pose a direct threat to the energy security of the Slovak Republic because it will deliberately bypass its territory.

The Slovak Republic, however, has taken a wait-and-see attitude. In the case of Nabucco the Energy Security Strategy of the Slovak Republic refers to the fact that it is a project in which private companies are represented and therefore there are no ways how to negotiate with them about the project (9). Anyway, similar situation doesn’t prevent the Hungarian PM from supporting Nabucco publicly at suitable point and negotiating about this project at the same time. However, MOL, the key member of the consortium, is in private hands.

In the end of February 2008, the Hungarian PM signed a political agreement on the participation in the South Stream project. Nevertheless, the realisation of the Nabucco gas pipeline would be much more advantageous for the Slovak Republic despite the fact that it bypasses our territory as well. The country cannot remain beyond the main stream of European negotiations, it has to participate actively in them. It has to assess whether it is to join the negotiations on new routes. And if so, it has to choose between Nabucco and South Stream. Or it can choose both possibilities like Hungary which divides the risk of failure between two projects in this way. It’s necessary to make a decision because nowadays, negotiations on long-term contract concerning gas supplies between SPP and Gazprom are under way. There is every indication that the transit volume will sink along with transit fees. The period of validity of the current contract will expire in the end of 2008. If Gazprom didn’t count on new routes like Nord Stream and South Stream, the contract would be already signed. However, Gazprom may propose flexibly the cutting down on volume if negotiations on new routes develop positively. The decrease in volume stands for the decrease in the income from transit. The Slovak Republic would thus have a theoretical possibility to offer vacant capacities in the transit system for Nabucco as well as South Stream. The reason is that the realisation of routes bypassing the territory of the Slovak Republic has a negative impact on the energy security of Slovakia from a long-term point of view.

Old EU countries have a better portfolio of earth gas supplies because they utilise also their own extraction, then the supplies from Norway and Algeria and the continually growing supplies of LNG. Therefore they aren’t particularly interested in new routes like the countries of Central and South-East Europe. These countries are forced to seize the initiative and can’t just wait for common EU-27 stance.

Notes:

1. Vondra: ČR neporušuje jednáním s USA o zrušení víz pravidla EU, Respekt, 17^th February, 2008,

http://zpravy.respekt.cz/Vondra-CR-neporusuje-jednanim-s-USA-o-zruseni-
viz-pravidla-EU.html?f_search_text=topol

2. Marušiak J., Braxatoris M.,: Independent Kosovo has split Europe, Despite Borders, 26^th February, 2008,

http://www.despiteborders.com/clanok.php?subaction=showfull&id=
1204015882&archive=&start_from=&ucat=2,3,4,8&

3. Ševce P.,: New vision for Nabucco, Despite Borders, 24^th October, 2007, http://www.despiteborders.com/clanok.php?subaction=showfull&id=
1193219101&archive=&start_from=&ucat=2,3,4,9&

4. Dempsey J.,: Hungary chooses Gazprom over EU, International Herald Tribune, 12^th March, 2007,

 http://www.iht.com/articles/2007/03/12/news/hungary.php

5. Hungary now firmly backs Nabucco pipeline project, The Turkish Daily News, 12^th September, 2007,

http://www.turkishdailynews.com.tr/article.php?enewsid=83231

6. Natural Gas Demand and Supply, Long Term Outlook to 2030, EUROGAS, 16th November,2007, http://www.eurogas.org/uploaded/Eurogas%20long%20term%20outlook%
20to%202030%20-%20final.pdf

7. Gas consumption in Europe – 2006, GASSCO,  http://www.gassco.no/sw4772.asp

8. Bulgaria joins South Stream gas project, http://www.top.rbc.ru, – http://top.rbc.ru/english/clanok.shtml?/news/english/2008/01/18/
18172305_bod.shtml,

Hungary joins Russia’s South Stream gas pipeline, http://www.bbj.hu, 29^th February, 2008,

http://www.bbj.hu/news/news_36769.html,

Putin launches South Stream bid, http://www.upstreamonline.com, 17^th January, 2008,

http://www.upstreamonline.com/live/article147204.ece

9. The Energy Security Strategy of the Slovak Republic, The Economy Ministry of the SR, September 2007,  page 49 – http://www.economy.gov.sk/clanok/go.php?id=3167