Identifier
Created
Classification
Origin
09BRUSSELS280
2009-02-27 12:28:00
CONFIDENTIAL
USEU Brussels
Cable title:  

UNITY QUEST: CENTRAL EUROPEAN EFFORTS TO FORGE EU

Tags:  PREL PGOV EUN ENRG EPET XH 
pdf how-to read a cable
VZCZCXRO4813
RR RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHBS #0280/01 0581228
ZNY CCCCC ZZH
R 271228Z FEB 09
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 000280 

SIPDIS

E.O. 12958: DECL: 02/26/2019
TAGS: PREL PGOV EUN ENRG EPET XH
SUBJECT: UNITY QUEST: CENTRAL EUROPEAN EFFORTS TO FORGE EU
ENERGY SECURITY POLICY

REF: A. BRUSSELS 134

B. BRUSSELS 219

Classified By: USEU POLMINCOUNS CHRIS DAVIS, FOR REASONS 1.4(b) and (d)
.

C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 000280

SIPDIS

E.O. 12958: DECL: 02/26/2019
TAGS: PREL PGOV EUN ENRG EPET XH
SUBJECT: UNITY QUEST: CENTRAL EUROPEAN EFFORTS TO FORGE EU
ENERGY SECURITY POLICY

REF: A. BRUSSELS 134

B. BRUSSELS 219

Classified By: USEU POLMINCOUNS CHRIS DAVIS, FOR REASONS 1.4(b) and (d)
.


1. (C) Summary and Introduction: Renewed efforts by the
Central Europeans to approach energy security from a common
EU position are being obstructed by a lack of member state
unity on the issue. Holding the rotating presidency of the
European Council, the Czech Republic has made energy security
one of its priorities. The disruption of Russian gas to
Europe in January sharpened the energy policy focus of the
European Commission and certain Central European member
states, notably the Czech Republic, Poland and the Baltic
states. Nonetheless, EU member states remain divided on
whether to create an interconnected gas distribution network
and whether to commit EU financial resources to energy
security in the midst of a global economic slowdown. Several
EU policy experts doubt whether sufficient political capital
can be mustered within the next three to four years to
address effectively energy security at an EU level, and look
instead to domestic and regional approaches. Meanwhile, the
debate on nuclear energy within the EU appears to be
shifting, with more countries willing to consider the nuclear
option as a component of energy security. Even so, an EU
approach to nuclear energy will prove challenging to muster,
as Austria has signaled its intention to block such moves.


2. (C) This cable is the second in a series (REF A) looking
at how the Central European states that joined the EU since
2004--Bulgaria, Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Poland, Romania, Slovakia, Slovenia--commonly
known as the CE-10, are faring within EU institutions,
especially when it comes to initiating policies in Brussels.
End summary and Introduction.

-------------- --------------
Varying Views of Russia's Reliability as an Energy Supplier
-------------- --------------


3. (SBU) Poloff on 10 February attended a conference
organized by the EU Russia Forum, a Brussels based think

tank, entitled "EU-Russia Relations: Is Russia a Reliable
Partner?" The conference panelists included an energy
security expert from the European Council on Foreign
Relations, a representative of the Czech EU Presidency, and
an official from the EU Commission, who presented differing
views of the problem and proposed solutions. According to
Pierre Noel, a Senior Policy Fellow with the European Council
on Foreign Relations, who is a widely respected expert on
European energy policies, Germany is the main obstacle within
the EU to European energy supply market integration. France,
more malleable on gas networks because of its own preference
for nuclear infrastructures, he said, is an important swing
state. Noel then pointed to Slovakia and Hungary, which in
the last couple of years have maintained a more sympathetic
view toward Russia, as likely obstacles to CE-10 unity on
energy security policy. Thus, Noel was pessimistic about the
EU's ability to create a functioning energy supply market.
According to Noel, CE-10 states need instead to focus on
building up national and regional storage sites, ideally with
expanded interconnections. He argued that some states, such
as Bulgaria, would be well served by also investing in their
electrical grids, specifically so that they could handle
demand load transfers in the event of a disruption. Noel
stated that during the January gas cutoffs, Bulgarians
resorted to Chinese-made electrical heaters, which placed
significant demand on the national electrical grid. When
pressed on how the CE-10 could, over time, rally broader EU
support for a collective focus on energy security, Noel said
the CE-10 had to avoid the "subsidy trap"-- requests for the
EU to pay for upgrades to domestic networks and storage
facilities -- as well as any attempt by the CE-10 states to
view energy supply disruptions as an opportunity to summon
NATO Article 5, neither of which he argued would fly.


4. (C) Poloff met separately on 11 February with Polish MEP
Janusz Lewandowski, Vice Chair of the Committee on Budgets,
who opined that it might have been a mistake that the new
member states did not propose any initiatives in the context
of EU cohesion funds to bolster energy security, whether
through improved electrical grids, interconnections, storage
centers, enhanced efficiency, or new power plants. Still, he
speculated that Central European member states could attempt
to revise their list of approved structural funds projects as
events warrant.


5. (SBU) Speaking about the view from the Czech Republic at
the EU Russia Forum event, Daniel Kostoval, the Director of
the North and East Europe Department in the Czech Foreign
Ministry, estimated that it will take five to ten years to

BRUSSELS 00000280 002 OF 003


forge a common EU approach to energy security, and that right
now the EU is not doing much at all. He posited that the EU's
main task should be to coordinate diversification of energy
sources and routes to satisfy growing European demands.
Kostoval asserted that Russia's behavior as a supplier can be
summed up as "reliably unpredictability." He talked about
widespread perceptions among European energy analysts that
Russian gas production is decreasing, that Russia is not
investing in its infrastructure, that it lacks experience
needed for offshore drilling, and that it ultimately does not
have enough fuel to satisfy its current signed contracts.
These are reasons why Moscow is moving to reassert itself in
the Caspian region, Kostoval said. He opined that now is the
ideal time for member states to reconsider their large
dependence on gas in light of other options, such as nuclear
energy. He also pointed to a fundamental difference in
Western and Russian worldviews; Kostoval informed the
audience that while recently discussing the EU's Partnership
and Cooperation Agreement with Russia, his Russian
counterparts told him, "Russia does not share European
values, and we don't want to. Let's stop pretending we have
common values and let's refrain from writing such things into
our agreements." (REF B)


6. (SBU) Marjeta Jager, the Director of General Policy in
the European Commission for Energy and Transport and a former
Slovene diplomat, said that the January gas supply
disruptions highlight the tremendous work that the EU needs
to do to integrate EU markets and assure the security of gas
supplies. Sounding a different note from that expressed
earlier by Noel and Kostoval, Jager told the audience that
although she believed both Russia and Ukraine need to repair
their damaged image, Russia is ultimately a reliable energy
supplier and she believed that there would be no future
supply disruptions. Jager reiterated the Commission's strong
support for Nabucco as well as South Stream and Nord Stream,
and noted that new initiatives were presently being prepared
by Caspian states and the Commission welcomes considering
those as well. She also praised the work of her office in
solving the crisis and the speed with which the Commission
was able to assemble and deploy pipeline monitors. Noel and
Kostoval tempered such praise and instead pointed to the
sizable challenges EU member states and the Commission face
in their efforts to bolster European energy security.

--------------
EU Experts Blame Disunity and Economic Woes
for Lack of Energy Security Progress
--------------


7. (C) Poloff met on 12 February with Nicu Popescu, a Policy
Fellow with the European Council on Foreign Relations, who in
2007 drafted a report entitled "A Power Audit of EU-Russia
Relations." Popescu asserted that divergent national
interests among the EU member states -- which he claims tend
more often to fall on north-south rather than east-west lines
-- are precisely what prevents the conceptualization of an EU
approach to energy security, and what enables Russia
effectively to drive wedges between member states. Piotr
Kaczynski, a Research Fellow with the Centre for European
Policy Studies, told Poloff on 24 February that on the
positive side, Russian actions have compelled the Commission
to deal more seriously with energy security. To support this
claim, Kaczynski outlined a plan to create a new office for
energy issues within the Commission; this autumn, when the
new Commission is seated, the current Directorate General for
Energy and Transport is slated to split, and a new
Directorate General for Energy, possibly also responsible for
Climate Change issues, will be created. Still, Kaczynski
lamented that the current global economic situation is making
it more difficult to commit EU resources to energy security;
a plan by the Commission to allocate some $4.82 billion (3.75
billion euros) of unused funds from the 2008 budget to energy
infrastructure projects was rejected on 23 February by a
grouping of the EU's biggest budget contributors, and legal
arguments have also been made against the proposal. Germany,
France, the United Kingdom, and the Netherlands have argued
that those funds should be proportionally returned to the
member states for their own use. Kaczynski averred that an
EU energy policy will eventually be agreed to, but noted that
it is highly unlikely to come together in less than four
years. In the meantime, he asserted that member states are
likely to take security-promoting initiatives on a
state-by-state basis, or in regional groupings, such as in
ongoing Polish and Baltic state cooperation on electrical
grid interconnections. Still, he held that existing EU
agreements, such as those on climate change and pledges to
reduce carbon emissions, provide a common framework for
member states to consider energy policies.

-------------- --------------
Debate on Nuclear Energy in the EU Rapidly Shifting

BRUSSELS 00000280 003 OF 003


-------------- --------------


8. (C) On 11 February, Poloff met with Czech MEP Libor
Roucek, Vice Chair of the Committee on Foreign Relations in
the European Parliament. Roucek believes that the debate on
nuclear energy in the EU is quickly shifting and represents a
needed component to European energy security. He noted that
the perceptions of nuclear energy in Central Europe are
improving, and cited plans -- at varying degrees of progress
-- to build new reactors in the Baltic States, Bulgaria,
Czech Republic, Hungary, Poland, Romania and Slovakia. He
said that nuclear energy is an area of expertise for the
Czechs, and speculated that this could be an eventual niche
industry for the French and possibly the Czechs within the
European market. The Czech Republic and Slovakia are
cooperating on the European Nuclear Energy Forum, a regularly
occurring meeting designed to encourage a dialogue between
industry experts and EU leaders on the pros and cons of
nuclear energy. Still, as Roucek pointed out, proponents of
nuclear energy will have a difficult time convincing Austria,
and he described Austria's opposition to nuclear energy as
"militant." Roucek speculated that Vienna would make any
organized approach to nuclear energy in the EU extremely
difficult. He predicted that German opposition would
eventually wane, as happened with Italy and Sweden; both
states in Februarydecided to reexamine their previous bans
on nclear energy. Roucek noted that even the ardent
opposition to nuclear energy by the Czech Greens Party, a
member of the Czech governing coalition, could be neutralized
over time. Roucek speculated that internal divisions in the
Greens party or the probable creation of a new government
within the next few years that does not rely on their support
would make it easier for the Czech Republic to pursue the
nuclear renaissance Prime Minister Mirek Topolanek called for
in 2008.


9. (C) Comment: While the EU may make incremental progress
in liberalizing the internal market for gas and electricity
and in promoting projects to diversify European energy
supplies, the adoption of an overarching common energy
security policy appears highly unlikely in the next few
years. The recent gas disruptions to Central Europe have
certainly emphasized the need for the EU to address energy
security; however, obstacles loom large, specifically key
differences between member states on whether to create an
integrated European gas supply network, where the funding for
security bolstering initiatives should come from, and how
nuclear energy might factor into the equation. The CE-10
states, given their comparatively large dependence on Russian
fossil fuels, are likely to remain the chief advocates for a
common EU energy security policy, despite the odds. End
comment.

MURRAY
.