The EU and Russia

The relationship between the EU and Russia is argueably the most important of any for these two nations and yes I know the EU isn't a nation state...yet Even more important than their respective dealings with the US. The EU is one of the great economic centers on earth. However the EU as relatively lacking in resources such as oil, natural gas, and other commodities. Resources that every modern industrial society needs. Russia however has the largest deposits of resources on earth. And needs buyers.

A match made in heaven you'd think. Well no, recently Russia has been flexing its muscle regarding these resources. While claiming that it wants to beknown as a reliable dealer but at the same time demanding political concessions from neighboring nations and the EU itself.

So I'd like to ask the Russian and European members of this forum what they think of the current state of the relationship and what do they think the future holds.

Well my whole theory is based on the past relations and present plus some vieuws on how the boath countries act.

EU is a peaceloving "comunity" they wont to be a nutral non "world police" state (if you can call it a astate).

Russia is a counter part of US without it there is no balance in worldpowers. Russian politicks have made a clear statement that they are willing to do everything to secure there world leading position(like the Space race).

if you look at export and import of boath nations you will notice that EU is relying on both Russia (so Eastern countries) and US. But how important is the relationship with boath?

Well: Russia is gaining a big hold on EU market due to improved relations and cheap products, on the other hand US is loosing there position due to unstability and high economical costs.

I expect in the near futur that EU will be close friends with Russia and US will be put asside more and more.

Only reason US is in a good position is due to there high technological advanced production and development of all kinds of items. Japan is way firther but the costs are way higher aswell.

Lets take this to a personal level, who would you prefer?

Russia: stabel (lets not take the past with us to the futur) cheap and with allot of Political influence (one of few with veto rights).

US: a crumbling state (being destroyed from the inside) with lacking resources and ongoing expenses...just waiting for a major fall.

i would go for the first.

Originally posted by danwild6
recently Russia has been flexing its muscle regarding these resources. While claiming that it wants to beknown as a reliable dealer but at the same time demanding political concessions from neighboring nations and the EU itself.

- I disagree.

Russia has been alarmed at the backing, involvement and encroachment of the US in some of those ex-soviet territories surrounding her and has told them that if they want to leave the Russian 'club' then the price of that is to forfeit the massively subsidised price they were paying for energy (re oil & especially gas).

.....and just why should Russia continue to subsidise them and not expect a market price?

It's true it was a shock to some but it wasn't as if it was suddenly sprung on them (the dispute has been rumbling on for some time) and neither is it true to say that they were gouging those countries either, they were simply being told to pay the same market price as the EU customers (and after the short hullabaloo even that was negotiated into a phased implementation).

Russia did not do anything in relation to her EU customers, she certainly didn't flex any muscles in our direction.
It''s also worth bearing in mind that the particularly cold winter last tme didn't help either (Russia - as has happened before - not unnaturally put herself first and this resulted in some short gas pipeline pressure drops).

There were also concerns about gas pressure in the pipeline running through the Ukraine to the EU but that was solely a matter of the dispute they had and not something 'aimed' the EU itself.
(naturally this was all hugely exaggerated and exacerbated by the traders in the international energy markets who are currently involved in driving up prices and behaving like hysterical school children over every rumour and small incident).

So I'd like to ask the Russian and European members of this forum what they think of the current state of the relationship and what do they think the future holds.

- Business is business.
We need their goods and they want our custom/cash.

You can choose to see the negotiations that follow from this situation as 'them' making 'demands' etc but I don't.
We want, they want; we demand, they demand; we stand up for our interests and they, not unnaturally, theirs and round and round it goes.
Happily in this our interests converge.

Russia and the EU are fairly evenly matched in terms of being able to threaten each other (each could completely destroy the other in all meaningful regards) but I don't believe that is seriously on anyone's mind or likely to be.

(if anyone really is frightened about this 'defence' angle then the UK's announcement that they are to either extend the life of the Trident system or replace it - irrespective of the ridiculous British tory game-playing on the matter - that should allay those concerns.....and you can bet the house on France doing similar when the time comes)
I'm sure you know that in trade terms the EU economy is massively greater than Russia's.

(Mind you the Russian situation regarding debt is a big plus for them as is the ability to back their currency with raw materials in such huge demand).

Commerce will find a peaceful way because that is the only way in which we can all prosper from this situation......and the alternative is either such a waste and lost opportunity or at worst so ruinous for us all.

'We' appear, IMO quite rightly, to be going down the road of a reasonable mix in energy supply.
Germany especially has built a very impressive and very large renewable and clean energy sector, France continues to export significant amounts of energy from her nuclear power plants and as far as the UK is concerned we are set to hugely expand clean and renewable energy production as well as building a handful of brand new nuclear reactors.
Northern Europe in the form of the Scandinavian countries are making huge strides with very demanding energy efficiency, recycling and conservation measures made mandatory, geo-thermal energy seems to be a major one for them

We do still have, and will have for quite some time yet, major energy production within the EU from oil and gas fields too, Norway is still a major oil and gas producer and even though Britain is a net importer now our dependance on imports is still very much reduced too.
Ditto the Dutch with their gas.

Large parts of southern Europe already use micro solar energy production, which is another element of this on the verge of much more widespread growth.

As with any speculation about what might happen all possibilities are at least in theory out there but I see no reason to frighten ourselves unnecessarily just because (as per) this is difficult and far from straight-forward (in places).
We have every reason to believe we will get a lot more right than wrong IMO.

That's not to be complacent but to be realistic and sober about where we are and not get carried away with paranoia and the doom-sayers who'd have us believe every generation is the last
(but I'll admit that they only have to right the once ).

[edit on 22-7-2006 by sminkeypinkey]

Originally posted by sminkeypinkey
Russia has been alarmed at the involvement and encroachment of the US in some of those ex-soviet territories surrounding her and has told them that if they want to leave the Russian 'club' then the price of that is to forfeit the massively subsidised price they were paying for energy (re oil & especially gas).

So what Russia is saying is you can get cheap gas from us as long as you tow the line and keep your mouth shut. Sminkey those are not the actions of a reliable economic partner are they. And as far as subsidizing the Ukraine was granted its price in compensation for Russia being able to transport its gas from Russia to Europe across Ukraine without facing charges for using pipelines on Ukrainian soil.

Originally posted by sminkeypinkey
It's true it was a shock to some but it wasn't as if it was suddenly sprung on them (the dispute has been rumbling on for some time) and neither is it true to say that they were gouging those countries either, they were simply being told to pay the same market price as the EU customers (and after the short hullabaloo even that was negotiated into a phased implementation).

Russia did not do anything in relation to her EU customers, she certainly didn't flex any muscles in our direction.

Russia has repeatedly warned Europe against attempting to protect their energy sector from Russian expansion or face the possibilty of losing out to China and Japan for priority in regards to new supplies. As well as not to pressurer Russia to hard on issues such as human rights.

Originally posted by sminkeypinkey
There were concerns about gas pressure in the pipeline running through the Ukraine to the EU but that was solely a matter of the dispute they had and not something 'aimed' the EU itself. (naturally this was hugely exaggerated and exacerbated by the traders in the international energy markets who are currently involved in driving up prices and behaving like hysterical school children over every rumour and small incident).

Sure I know that Russia didn't cut anyone but Ukraine off intentionally. But it was an eye opener to alot of people(including many europeans)as to how reliable Russia is as a supplier of energy. Be careful who you elect or no gas for you.

Originally posted by sminkeypinkey
- Business is business.
We need their goods and they want our custom/cash.

But is it an equal relationship. Russia has alternatives for customers(China comes to mind). I think Europe would be wise to also look for alternative suppliers. The US has it better with Saudi Arabia and Kuwait(at least they are dependent on the US for protection.)

Originally posted by sminkeypinkey
You can choose to see the negotiations that follow from this situation as 'them' making 'demands' etc but I don't.
We want, they want; we demand, they demand; we stand up for our interests and they theirs and round and round it goes.
Happily in this our interests converge.

They're the ones in the driver seat as I said before its not an equal relationship. In reality you need them more than they need you. Your interests coonverge so much in that they have a large quantity of something you desperately need. And they're relatively close to you. And politically stable for the foreseeable future. But the political stability is off set by the conditions Russia has attached to Europe being allowed access to the "holy of holy's" regarding russia's energy reserves.

Originally posted by sminkeypinkey
Russia and the EU are fairly evenly matched in terms of being able to threaten each other (each could destroy the other in all meaningful regards) but I don't believe that is seriously on anyone's mind or likely to be. (if anyone really is frightened about this 'defence' stuff then the UK's announcement that they are to either extend the life of the Trident system or replace it - and irrespective of the ridiculous British tory game-playing on the matter - should allay those concerns.....and you can bet the house on France doing similar when the time comes) I'm sure you know that in trade terms the EU economy is massively greater than Russia's.

I'm not talking about military capability. And I'm not trying to make this a EU vs russia thread. So Trident and what ever the rest of the EU is doing militarily is a none issue.

If you haven't seen it Dan I'd say have a look at the stuff I put up on the 'Russia back to the USSR' thread.

Russia is in a calamitous position socially. I really don't see them as holding much of a 'whip hand' over anyone (excepting perhaps those they are so close to and have recently been so linked to, ie those ex-member states of the old SU).

I really don't get the argument that says those leaving the old 'club' are entitled to the benefits of that club.
Russia is merely asking for the market price if those states are so determined to go their own way, but still not stopping them doing it.

As for Russian warning about the EU states protecting their energy sector?!
Wow, is that how that one reported in the US?
Here it's a matter and a question of Russian companies being blocked from buying private energy companies.
They don't like that and I can't say I blame them.
'We' wanted them to engage with free markets etc and yet attempt to bar them from operating legally in that market?
One can see why they complain (and in their complaint say 'ok, if that's how you wish to treat us then we can always sell elsewhere', I wouldn't call that a warning.

We have a mix of supply and will continue to do so.
Claims of 'our' dependence are IMO grossly exaggerated.

Originally posted by sminkeypinkey
If you haven't seen it Dan I'd say have a look at the stuff I put up on the 'Russia back to the USSR' thread.

I'll be sure to take a look.

Originally posted by sminkeypinkey
I really don't get the argument that says those leaving the old 'club' are entitled to the benefits of that club. Russia is merely asking for the market price if those states are so determined to go their own way, but still not stopping them doing it.

Well again if Russia wants to be seen as a responsible and reliable energy supplier I don't think that political concerns should affect you status in regards

Originally posted by sminkeypinkey
As for Russian warning about the EU states protecting their energy sector?!
Wow, is that how that one reported in the US? Here it's a matter and a question of Russian companies being blocked from buying private energy companies.

Actually sminkey thats how it was reported on the BBC. The Russians didn't like the possibilty that state controled companies would be limited in their market access.

Originally posted by sminkeypinkey
They don't like that and I can't say I blame them. 'We' wanted them to engage with free markets etc and yet attempt to bar them from operating legally in that market? One can see why they complain (and in their complaint say 'ok, if that's how you wish to treat us then we can always sell elsewhere', I wouldn't call that a warning.

I think the degree of state control that the Kremlin possess over its energy companies was a big concern for european governments on this issue. Kinda of hypocritical if you ask me. France and Italy have a large degree of public control in their energy sectors.

Originally posted by danwild6
I'll be sure to take a look.

- I've found the Marcel Thweroux program on bittorrent here
www.mininova.org...
it's not pleasant watching.
They are in an incredibly appalling condition, both socially and in terms of their infrastructure, all of which needs large amounts of cash sustained for many years to come to correct.

I just don't see them taking stupid short-term 'grabs' and risking their established stable 'hard-currency' markets in these circumstances.
Russia has at least a 2 decades old infrastructure in supplying Europe, you can't just conjure that out of thin air and say we're going to change to China at any great pace.

That's not to say there won't be hard-bargaining, we can all do that and are all, at times, renouned for it.

Well again if Russia wants to be seen as a responsible and reliable energy supplier I don't think that political concerns should affect you status in regards

- Oh come on Dan, when did those political concerns ever not, anywhere (on such 'big stuff')?

Besides this isn't just a matter of not liking the style of politics of a particular leadership (and some of those ex-SU state guys are incredibly vile, murderous and brutal dictatorships no less); it's about the US giving them international support and setting up military bases there.
This is a development Russia finds totally unacceptable and probably about as shocking as the rest of us (that know about it) considering how things once were and considering the US is/was supposed to be a supporter of law-abiding democrats and friendly in respect of Russia these days.

Actually sminkey thats how it was reported on the BBC. The Russians didn't like the possibilty that state controled companies would be limited in their market access.....

.....I think the degree of state control that the Kremlin possess over its energy companies was a big concern for european governments on this issue.

Kinda of hypocritical if you ask me. France and Italy have a large degree of public control in their energy sectors.

Well ok I can see what you meant now.......and exactly.

As I said, my take on it was much more in line with the latter comment you made and not one of Russia just issuing barely veiled threats.

But I really do recommend a watch of the Marcel Theoux program, it might not be the complete and whole truth about everywhere over there and nor does it 'prove' where the Russian state may be coming from in it's energy policy but nevertheless it's a real eye-opener and places all of this in a context we rarely get to see.

Russia is going to be very preoccupied with Russia for a very long time to come.

[edit on 23-7-2006 by sminkeypinkey]

Here you go Dan, the UK is usually last to get going on this kind of stuff in comparison with our continental cousins but here it is, the beginning of the new way forward.

This can only grow and grow.

Between the 'carrot' of grants and the 'stick' of legal requirement this new approach will render a new context to the energy debate - and leave those trying to hold it under the old paradigm more and more out of date.

About £8m worth of funding for homeowners who want to switch to green energy is to be made available, the government has announced.
Secretary of State Peter Hain said Northern Ireland was "leading the rest of the UK" in green energy provision.

Under proposed building regulation changes, the use of renewable energy in new builds will be mandatory from 2008.

news.bbc.co.uk...

BTW did you know that thanks to the hard-fought battles and decisions taken in the 1990's and early 2000's Germany will produce more that 20% (the same % that the UK wishes to secure by new nuclear energy capacity) by various renewable sources before the British nuclear powerplants could be finished & commissioned?



[edit on 24-7-2006 by sminkeypinkey]

Lets see if I'm able to suppmorise the statements here of people:

It will take some time to make the infrastrukture for the resouces good enough for Europe?

Its not like people have options, you get the resources but the loss and kwality may be a bit of a set back true...and it will take some time (not a few decades) to fix that issue.
But wats most important to me is the fact that people still think Russia is some sort of a Middle aged country, with hey wagons and some 30 year old cars...well thats soooo wrong. if you go to US or any other countries you can find same decading vilages with crappy infrastruktion and even in Holland we got people who never heard about moon landing or who never saw a colored TV!!!

My plee:

With developing Middle east situation and rising resource prises its understandeble that EU is looking for some other options. And in politics the one who has the "joker' card gets his but kissed...like US with ther military.

And its logical that allies and good friends of Russia get lower pricess then treturous EU countries and for US i would even ask for a Double ammount.

I do not dislike US its just i dislike ther politics.