Author`s name Dmitry Sudakov

South Stream to split Europe


Russia's decision to cancel the South Stream project triggered strong reactions in Serbia and Bulgaria. The Serbian President accused Russia of betraying common interests. And the Bulgarian Prime Minister got offended that Russian Federation set him up. Grievance is a primitive way of education. And a completely different subject needs to be chosen. Let's see what is happening behind the curtain of big time politics.

Current situation is more than just unpleasant for Europe. It has yet again been taken hostage of the Ukrainian pipeline, and if Ukraine suddenly decides to blackmail Europeans with it (for example, blowing up the pipeline and repairing it for a long time) then they will be expecting a cold winter. And Ukraine has things to bargain for, for example, credits being just promised but not granted, or weapons.

Europe's reaction to South Stream closure

Europe's reaction to the cancellation of the South Stream project can be figuratively divided into three blocs. The first are sure that it is Putin's tactical move in the war of sanctions, and the day will come when it is possible to return to the South Stream project. For example, Austrian Minister for Economic Affairs Raynhold Mitterlener stated that Austria didn't doubt that the South Stream would be constructed. The Minister pointed out that he learnt Gazprom plans from the media and asked Russia for explanations. The Hungarian Minister of Foreign Affairs and Trade Péter Szijjártó said that "Russia had the right to make such decision on the South Stream project. Hungary acknowledges this step". Sure thing it acknowledged it, Gazprom has the controlling block of stock and legally everything is legitimate.

The second say that it is good that President Putin refused - this points to the fact that there is rule of law and competition in Europe, and it is excellent that it didn't yield to Moscow's pressure. That said they are trying to assure that losses are not that high. Especially Bulgarian experts and politicians are making the maximum effort. They are talking of the fact that if Moscow were constructing the South Stream pipeline in accordance with European legislation, namely the Third Energy Package (under which it has to give 50% of the pipeline's capacity) then Bulgaria would have removed all barriers long ago.

Bulgarians not only defend but also attack. "Bulgaria's revenue from the South Stream is not guaranteed since there was no agreement for revenues signed only expenses on the project, - the Bulgarian President Rosen Plevneliev said. - We want an agreement that will clearly fix percentage of profits. We do not know what Bulgaria will benefit from the South Stream project. If someone knows then let's specify the numbers."

"Someone" knows, Mr. President, for example, former Minister of Energy Rumen Ovcharov who was closely engaged in the project as part of the former Oresharski's government. According to him, losses may reach 750 mln. USD per year as a result of refusing to implement the South Stream project.

The Bulgarian government is lying

"Let's put it bluntly, the Bulgarian government is just lying, - research scientist at the Centre for the study of the Balkan crisis of the Slavic Institute of the Russian Academy of Sciences Anna Filimonova told Pravda.Ru. - Agreements on the South Stream were signed long before the Third Energy Package was adopted. The law has no retroactive effect. It is possible that Russia would not be planning the South Stream project if it had known of the Third Energy Package. There is a confusion of notions and chaos in heads. And now Russia has cornered them so much that they do not even have reasonable arguments to explain their actions which to be frank look more like an insane asylum."

Serbia that accused Russia of betrayal stands apart among the countries that responded to the cancellation of the South Stream project. "Serbia has been investing in this project for seven years, we have done a big job and did not abandon the South Stream project even in the most difficult times," Prime Minister Aleksandar Vučić said.

"We cannot be left without energy carriers. Russia owes us this much, because we are suffering a lot for Russia," Serbian President Tomislav Nikolic said and demanded explanations from Russia.

"Tomislav Nikolic's statement is very surprising since it was Vučić's government (both represent the governing Serbian Progressive Party) to refuse to sign the final agreement on the South Stream in October 2014 when Vladimir Putin visited Belgrade, Anna Filimonova said. - Therefore, Nikolic's statement is provocative and does not reflect the truth." Serbians probably thought that having invited Putin to a special event and refused to impose sanctions (for their own good), they can enjoy an unlimited credit of trust on the Russia's part and ask for any support under this pretext. But let's see what is happening behind the curtain.

"Multiple claims, reproaches, threats on the issue of Serbian oil industry privatization are currently addressed to Gazprom, Anna Filimonova said. Vučić initiated reconsideration of Serbian oil industry privatization, the same claims are raised against Srbijagas that was supposed to have a big part in the South Stream project. In particular, today the newspaper "Courier" in Serbia was published with the heading that it was a thievish privatization and Russia owes Serbia some unbelievable money for this privatization, and in fact Serbia must take everything back."

Brussels to suffer huge losses because of South Stream project

Yes, Brussels has not made Belgrade to cave in in terms of sanctions, but it was not because it could not, but because it did not try to. Bulgaria was the key entry point of the South Stream pipeline, so they confined themselves to putting pressure on Sofia. The result is sad. "With the South Stream project cancelled Serbia suffers huge losses from geopolitical ones to purely economic. It is thrown back to the far fringes of European development, it will not be able to become an energy hub and will never speak with Europe as equals," Anna Filimonova said.

According to the expert, economic losses are more than impressive. "It is 500 million dollars for gas transit, and several thousand jobs, and 5 billion direct and indirect investments, in other words the South Stream project was essentially Serbia's most successful project for the past 14 years.

There is no cheering people in the streets of Sofia today, but let's remember how President Plevneliev cared about "liberation from dependence on Russia". What Bulgarians achieved?

"There will be no Russia in Bulgaria. But now Turkey will be in Bulgaria - Bulgaria's main adversary, Anna Filimonova noted. - Turkey has a rather aggressive foreign policy, aimed directly at expanding its influence in the Balkans. And the weak small Bulgaria that reduced itself to a position of a mere nobody in the European political arena, will have no leverage against Turkey. The Bulgarian elite does not know what national interests are and how to stand up for their sovereignty. For example, yesterday one Bulgarian high official clearly stated that they had no illusions - EU assigns Bulgaria to be a peripheral resort. In other words, it makes it clear that EU is depriving the country of any potential development. These are deadly words. In other words, he makes it clear that EU is depriving the country of any potential development".

According to Anna Filimonova, it is possible to return to the South Stream project but on one condition: when there are clear agreements with the parties and guarantees that these agreements will be fulfilled. "Earlier we could afford the risk of construction prior to obtaining approvals from EU regarding the Third Energy Package," the political analyst clarifies. It is quite another story now: sirs, if you want to get back to this issue, then go to Brussels and reach agreements yourselves. In terms of Brussels, Russia washes its hands and walks away.

Probably Serbians and Bulgarians need to understand that Russia needs allies but not temporary ones, not weathercocks that think of justice only when it is beneficial for them. Russia has its own interests and they may not coincide with interests of Serbia and Bulgaria. Aside from economic interest, there is a political one - to split Europe so that it rises against Brussels and Washington, why not - one good turn deserves another.

Lyuba Lulko


Read the original in Russian

Translation provided by TNC Freelancer Group