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Collective Bargaining
European Energy Union's Momentum Gets Czeched

When Polish Prime Minister Donald Tusk first proposed a European energy union in the pages of the FT last month, we thought it made a certain amount of sense. Gazprom has successfully exploited the “divide and conquer” tactic in Europe, arranging long-term, take-or-pay contracts for its gas with individual entities and nations. If Europe were to present a unified front and attempt to negotiate a single price for all its gas customers, it would have significantly more leverage. Tusk’s idea seemed to be gathering momentum, too, when the EU’s energy commissioner joined his voice in support of the idea earlier this month.

But fissures are already showing in the fledgling plan, after the Czech government released a position paper that came out against a unified European negotiating body. Reuters reports:

The Czech Republic opposes a Polish proposal to create a single body to buy gas for the European Union but could support private groups voluntarily joining up for purchases, according to a position document approved by the government on Wednesday. […]

The approved position paper said the Czech Republic did generally “not support the creation of one body in the EU responsible for buying oil and gas”.

The paper went on to support more so-called inter-connectors between European countries, which would allow reverse flows of gas within the continent and create a more robust pipeline infrastructure capable of shuffling natural gas supplies around. That would come in handy in case of a disruption in, say, Ukraine.

Still, it’s somewhat surprising that the Czech Republic isn’t keen on the collective bargaining approach, given that it pays some of the highest prices for Gazprom gas in Europe. Perhaps Prague’s dependence on Russian gas—which accounts for roughly three-quarters of its total supply—makes it hesitant to roil the waters with Moscow. If so, credit Putin for a brilliant geopolitical play, pitting Europe’s countries against one another to maintain Gazprom’s significant advantage at the bargaining table.

What this means for Tusk’s dream remains unclear, but the Czech position has to have Vlad smiling.

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  • Andrew Allison

    European Energy Union’s Momentum Czech-mated? Given the problems created by EU expansionism, the craven response to the resulting destabilization of Central Europe and the ongoing eurozone disaster, why would any EU member want to consign control of its energy policy to Brussels? Given an effective interchange system, the EU (which purchases five times as much Russian gas as the Chinese deal which is creating so much chatter envisages), could negotiate as a bloc without the need forthe sprouting of yet another Brussels (sorry) bureaucracy.

    • Corlyss

      “why would any EU member want to consign control of its energy policy to Brussels?”
      To feed on the remains of the carcass until the meat runs out?

  • Pete

    The EU — a confederacy of dunces.

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