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Russia plays pipeline politics
By Francesco Sisci
In Europe, Russia is not just another country, even forgetting its history. Its
territorial dimensions (Russia is larger than the rest of Europe) and
demographics (there are twice as many Russian native speakers in Europe as
German native speakers - the second-most widely spoken European language) make
it a giant when compared with other European countries. However, its average
wealth is lower than in rich Europe, and Russians feel a sense of alienation
from fellow Europeans: Russia feels bigger and stronger than other European
countries, while it remains poorer. South Stream could help to change that
perception.
In this situation, ENI has seized a business opportunity - to be part of an
attempt to corner the European market for oil and to join
Gazprom in a potential world monopoly. There is nothing strange in the moves by
ENI and Gazprom, the Russian energy giant.
The history of oil is one of monopolies. There were the "seven sisters," the
Anglo-American oil companies that dominated the market from World War II to the
1970s; in the 1970s, OPEC came along. But both attempts were monopoly alliances
comprised of many actors - there were at least seven major oil companies in the
seven sisters and dozens of states are OPEC producers. Moreover, OPEC - which
was also born of the anti-colonial Third World movement of the 1960s but lacked
strong political and military support - de facto sank in a few years. The seven
sisters instead lasted for nearly three decades on the shoulders of
Anglo-American political and military power.
The ENI-Gazprom alliance would then need strong political support. But does
Russia have it? And if it doesn't, then what is it willing to do to get it?
What is Russia willing to do if someone stands in the way?
Furthermore, the seven sisters were seven - not just two - companies and were
based on the two victorious powers of World War II (the US and Britain.) - not
on the defeated power of the Cold War (Russia) and on a medium-sized power
(like Italy, France or Germany). What then is the interest of Italy - or of
Germany or France? In an alliance with Russia, each of them would be a junior
partner, largely unable to leverage the senior partner and subjected to any
changes in its political mood. The interest of each European country is
conversely to have energy at the lowest possible price, which is obtained by
putting several suppliers in competition with each other. This could drive
European oil-consuming industrial strengths rather than living off oil
annuities.
Finally, there is a basic market rule. Since the beginning of capitalism,
theorists noticed the perverting influence of monopolies, which influence
prices, create inefficiencies for consumers, and lead to an unhealthy business
atmosphere. In other words, monopolies try to restore the old feudal economy
and move away from modern capitalism.
Many reasons militate against South Stream. These were brilliantly presented
and discussed about a year ago by Zeyno Baran in a report on the security of
the South Stream prepared for the European parliament and commissioned by the
Hudson Institute in Washington [2]. But so far, the US and European countries
have not pushed strongly against it. Washington does not want a confrontation
with Russia, instead it wants to engage with Russia and build a positive
relationship, as among other things, the US needs Russian support to solve
problems in Afghanistan and Iran.
America is willing to help Russia find solutions for the problems of its
pipeline through Ukraine. The Barack Obama administration was also willing to
scrap its missile program for Europe, and it has toned down its support for
anti-Russian Georgia in the Caucasus. Many of these previous policies could be
viewed as unnecessary provocations when there was no reason to confront Russia.
Yet, this engagement can never result in the US giving away Europe and the
Mediterranean to Moscow. On the other hand, South Stream seems unrealistic,
riddled with political and technical difficulties. It may well never take off,
and if so, then it would simply not be necessary to confront it - the project
will drag on for years and eventually peter out and disappear. This might be a
possibility, but in the meantime, the simple idea of South Stream could kill
the even more difficult Nabucco project. And without Nabucco, South Stream
could emerge as the only practical solution to Europe's energy difficulties.
Here, the European strategy also meets the plans of the Holy See.
Moscow has revamped relations with the Russian Orthodox Church, and the Holy
See is working hard to improve relations with Russian Orthodox believers, who
have no huge theological difference with Rome. Rome would like to bring the
Russian Orthodox Church to the Catholic riverbed.
With a different stress, and even with different purposes, there is a parallel
between the US and the Holy See action vis-a-vis Russia - both are aimed at
avoiding confrontation with Moscow and in taking Russia back into the fold.
Washington is more cautious and Rome more enthusiastic, but certainly the Holy
See does not want to give the Catholic Church to the Moscow patriarch. Italy's
political "subjugation" to Russia with South Stream could, however, strengthen
the hand of the Moscow patriarch, who is linked to Moscow's political leaders.
Nor are relations between the Holy See and Washington free of difficulties. The
old accusations of gay priests and pedophilia are ruining the reputation of the
Catholic Church in America, and this threatens the Vatican. In the US, there is
a now dormant bill that proposes dropping time limits on pedophilia suits. That
is, one could sue a priest because of molestations 30 or 40 years ago. This
threatens the US church with bankruptcy as parishes and dioceses invariably
agree to settle out of court to avoid trials that could tarnish the whole
church.
President Obama had proposed passing the bill, but now it is in the icebox. But
if a new campaign of accusations of homosexuality in the church makes its way
to Italy, the cradle of Catholics, one puts salt in an open wound. It might
open a Pandora's box for the whole world - with effects in France, Spain,
Germany and Latin America - a danger to the universal church.
In the past few weeks, this took place in Italy as the Berlusconi family
newspaper, il Giornale, attacked on sexual charges Dino Boffo, the editor of
Avvenire, the daily belonging to the Italian Conference of Bishops. This was
done entirely for domestic reasons; however, its drawbacks may be
international, and if the situation continues, it could spin out of control, as
Berlusconi's Italian enemies could also bait him with new provocations hoping
for excessive reactions from him or his men.
The best course of action should be to take a step back, wait for a few months
until things are improving in Afghanistan, and cool down on the South Stream,
with Russia, the pipelines and gay issues. But rational responses are often
hard to come by and crises may occur when and where we least like them.
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