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Putin’s new economic (pipeline) design for Europe

Russian Prime Minister Vladimir Putin is in Germany once again, for a meeting with Chancellor Angela Merkel. His working visit will last two days: November 25-26. The entire European Union (EU) and the rest of Europe are watching this visit particularly closely. This is always the case when Moscow and Berlin are planning to redesign the architecture of Europe.

Russian Oil and Gas Challenges

The agenda for their talks is interesting indeed. Putin and Frau Chancellor will discuss construction work on Nord Stream (half the gas pipeline – 699 km – has been laid to date), the volume of gas supplies to Germany and the EU (France, Denmark and the Netherlands are already discussing an increase), Russia’s accession to the World Trade Organization (WTO), a new EU-Russia partnership treaty and bringing the introduction of visa-free travel forward. Finally, the two leaders need to shed light on relations between the German energy giant, E.ON Ruhrgas and Russia’s Gazprom. E.ON Ruhrgas has a 15.5% stake in Nord Stream and owns 3.5% of the shares in Gazprom. There were reports that E.ON Ruhrgas was planning to sell its share for $4-4.4 billion. The European corridor into the WTO A couple of days before Putin’s visit, Moscow and the EU finally agreed the terms of Russia’s WTO entry. This is a goal Russia has spent 17 years pursuing: since 1993 when it officially applied for WTO accession. Merkel and Putin have yet to agree the details regarding the “the lines of conduct.” Officially, “the European corridor” will open at the EU-Russia summit in Brussels on December 7. Russia reached a similar agreement with the United States in September.

Any of the WTO’s 153 members have the right to veto the entry of a new applicant. Georgia has thus far withheld its signature. Berlin stands to gain by “persuading” Tbilisi to change its position because WTO membership simplifies trade and relations with the world’s energy and raw materials’ superpower. From Lisbon to Vladivostok: Europe’s Economy These blueprints contain five major points: 1. Forming a harmonious economic community stretching from Lisbon to Vladivostok; 2. A common industrial policy based on the integration of Russia’s and the EU’s technological and resource potentials; 3. Developing equitable and balanced relations between energy suppliers, consumers and transit countries. This is in fact the gist of the new energy treaty that Russia proposed; 4. Putting European science and education in a leading position through close partnership; 5. Eliminating visa requirements as the first step towards the real integration of Russia and the EU, rather than leaving it till last. This plan is so immense and innovative that it will be some time before Europe embraces it. At any rate, Russia’s vision for how its cooperation with the EU should develop is now clear.more


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