At any price: Russia is embarking on the construction of South Stream. OSW Commentary No. 98, 2012-12-07

Gazprom is determined to continue its efforts to build the South Stream gas pipeline regardless of the slump on the European gas market and the fact that there is sufficient capacity already in the existing transport infrastructure. The official inauguration of the maritime section of South Stream was held on 7 December this year, but the construction itself will commence in 2014. The agreements concluded so far, both intergovernmental and between corporations, are necessary for the launch of the construction of the new pipeline, but still do not guarantee that the project will be completed on time. First of all, some legal problems have yet to be resolved, such as the evaluation of the compliance of the planned actions with the ‘third energy package’ or the fact that ecological surveys required under European law need to be carried out. Secondly, given the present situation on the European gas market and medium-term forecasts, the high cost of implementation of this project and the maintenance expenses of existing pipelines – which are not being used to full capacity – the new project seems to be unfeasible. However, Gazprom’s determination in its efforts to build the pipeline proves that Russia is ready to take a high economic risk to maintain its dominant position on the European gas supply market; it will restrict the possibilities of alternative infrastructural projects being implemented (above all, the EU’s Southern Corridor) and use the construction of new pipelines as an instrument of political pressure on the present transit countries (especially Ukraine).

Rebalancing the EU-Russia-Ukraine gas relationship. Bruegel Policy Contribution ISSUE 2014/15, DECEMBER 2014

The October 2014 agreement on gas supplies between Russia, Ukraine and the European Union did not resolve the Ukraine-Russia conflict over gas. The differences between parties in terms of objectives, growing mistrust and legacy issues make it unlikely that a long-term stable arrangement will be achieved without further escalation. Without EU pressure and support, Ukraine is likely to enter a new unfavourable gas arrangement with Russia, which could have repercussions beyond the energy sector. Key highlights: To reduce prices and increase the security of imports, the EU as a bloc should redefine its gas relationship with Russia and Ukraine and overcome the diverging interests of EU member states on second-order issues. Implementation of a joint strategy rests on enforcement of EU competition and gas market rules, a strengthened role for the Energy Community and the establishment of a market-based instrument for supply security. For Ukraine, the EU should serve as an anchor for comprehensive gas sector reform. Contingent on Ukraine’s reform efforts, EU financial and technical assistance, the enabling of reverse flows from the EU to Ukraine and pressure on Gazprom, should eventually enable Ukraine to obtain a sustainable gas-supply contract with Russia. This should make a sustainable and mutually beneficial Russia-Ukraine-EU gas relationship possible. However, during the transition, the EU should be prepared for possible frictions.

Russia's position on the events in Kyrgyzstan (April-June 2010). OSW Commentary No. 38, 2010-07-27

Russia was the first state in the world to de facto recognise the regime change in Kyrgyzstan that took place on 7 April 2010. This recognition, along with a previous campaign by the Russian media against the then President Kurmanbek Bakiyev, has given rise to suspicion that the events of April were provoked by Russia. However, it seems no more than reasonable to say that Russia provided some inspiration and lobbying in that direction. Russia offered support to the new Kyrgyz government almost immediately, albeit conditionally. Russia’s relations with Roza Otunbayeva’s government have been changing in nature; they are currently much cooler than they had been immediately after the coup. There are many indications that this change was a reaction to the extension of the lease agreement for the American military base in the Manas airport. At the same time, Moscow remains in contact with the political rivals to the current regime, which suggests that the Kremlin is preparing for different developments, and does not regard the current crisis as having been fully resolved. Despite the interim government’s plea for help, Russia refused to undertake military intervention in southern Kyrgyzstan, which plunged into ethnic unrest in June. This shows that Russia is wary of being dragged into a long-standing and bloody conflict in the region, which could entail considerable expenses and jeopardise Russia’s authority. It should be expected that after the October parliamentary elections in Kyrgyzstan, Russia will return to its plans to establish a second military base in this country (in addition to the Kant base) to reinforce its dominant position in the region. This is the first time that Russia has had a real chance to play a stabilising role in the CIS area. How Russia copes with this challenge may decide its position in post-Soviet Central Asia – and in a wider context, its relations with NATO, the USA and China.

Foreign policy at the service of modernisation: old wine in a new wineskin. OSW Commentary No. 39, 2010-08-31

Russia’s contacts with the external world over the past year have been characterised by a gradual improvement in its relations with the West, as well as the use of non-confrontational rhetoric, the most far-reaching example of which was the address President Dmitri Medvedev gave to Russian ambassadors this July. In an attempt to harmonise foreign policy with the widely propagated programme for the modernisation of Russia1 President Medvedev presented a vision of the Russian Federation as a responsible global power which is open to co-operation. According to this vision, Russian foreign policy would help to attract foreign investments and technologies. The West was presented as a partner, not a rival. Both this rhetoric and the atmosphere of co-operation in relations with the USA and the EU contrast with the assertive and aggressive Russian policy which was symbolised by and culminated in the Russian-Georgian conflict of 2008. The changes observed in Russian foreign policy are quite limited, and are not constructing a new external strategy. Those changes are rather an attempt to find more efficient ways to implement old strategic goals. The new image of a responsible global power is inconsistent, and Russian policy is still assertive and geopolitically motivated. Although a new rhetoric is really in place, the Russian political elite’s perception of their country’s place and role in the contemporary international order remains unchanged. Moscow’s readiness to become engaged in genuine co-operation with the West has not increased significantly; it is still to a great extent declarative in nature.

Russia's interest in the Mistral: the political and military aspects. OSW Commentary No. 41, 2010-10-11

The negotiations over Russia’s purchase of French Mistral-class multipurpose assault ships, which were intensified in 2010, have gained a significant political dimension. The prospects of such a spectacular acquisition of large and expensive assault ships from one of NATO’s member states are being used by Russia to demonstrate that it has opened a new stage of relations with Western Europe. Paris has welcomed Russia’s desire to embark on military cooperation; for France, the Mistral deal has become a convenient tool to prove that relations with Russia are becoming increasingly normal, and that Russia poses no threat to the European security.

Lukashenka has to choose: reforms or concessions to Russia. OSW Commentary No. 42, 2010-10-27

The most serious crisis in the history of Russian-Belarusian relations has been taking place over the past few months. In 2007 Russia started the process of depriving Belarus of subsidies in the form of supplies of fuels at low prices, which have for more than a decade guaranteed the stability of the Belarusian economic model, and is continuing this process now at an accelerated rate. At the same time, the Russian media started attacks on Alyaksandr Lukashenka from the middle of this year. This toughening up of Russia’s measures indicates that the Kremlin is determined to implement its goals regarding Belarus, including first of all taking over its strategic economic assets, which would result in a significant weakening of Lukashenka’s position. The Belarusian government has been consistently avoiding meeting Russian demands, while at the same time insisting on the reinstatement of preferential conditions of co-operation. If the Belarusian leader continues resisting Russian demands, the crisis in Russian- -Belarusian relations will be aggravated, and a conflict over energy issues around the turn of 2011 cannot be ruled out. The reduction in preferences offered by Russia in the energy sector has significantly impaired the condition of the Belarusian economy, and may lead to its breakdown in a year or two. As his country comes under increasing pressure from Russia, Alyaksandr Lukashenka will soon have to make a strategic choice between yielding to the Kremlin’s demands and embarking upon an at least partial restructuring of the economy.