Europe to Bust Gazprom?

Tensions are set to escalate once again between Brussels and Moscow as the EU’s new antitrust chief, Margrethe Vestager, is set to bring charges against Russia’s Gazprom for abusing its preeminent position in the natural gas markets. The NYT reports:

The formal charges against Gazprom could result in a fine. Theoretically, it could run higher than 10 billion euros, or $10.7 billion, although European Union antitrust penalties have never gone that high.

The larger worry for Gazprom would be the prospect of being forced to allow more competition in markets it has long controlled. The company, for example, could eventually have to drop conditions in its contracts that restrict those utilities’ power to share the gas with other countries. That would give individual countries more control over whether they consume all the gas themselves or sell some of it on to other countries, including Ukraine, something Gazprom has opposed.

The charges would just be a first step. Gazprom would then have the chance to lay out its defense, and it could even still settle the case.

The suit, if successful, could hit Vladimir Putin where it hurts most. Remediation may impose hefty fines on the gas giant, but may also demand a new level of price transparency from the state-owned company. Using Gazprom’s pricing power as a tool of foreign policy—rewarding allies and prying apart hostile coalitions—has been a favorite trick of Putin’s Kremlin.

Speaking of rewarding allies in Europe, Gazprom’s CEO, Alexei Miller, was in Athens meeting with Greek Prime Minister Alexis Tsipras on Tuesday. Asked by journalists whether the meeting would include a discussion of handing over €3 billion-€5 billion as a pre-payment for Greece’s participation in the “Turkish Stream” pipeline project (as reported in German media), a Gazprom spokesman was uncommunicative: “For what? I don’t understand what you’re referring to.”

This could very well be nothing: closed-door negotiations between Moscow and Ankara over the deal are still ongoing, and the German tabloid press in particular has never let a lack of firm evidence stop it from writing the juicy headline when it comes to the Greek crisis. However, Tsipras sure was saying some sweet things while he was in Moscow last time…

Where there’s smoke…?

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