Strategy, Innovation & Leadership LAB

“Energy Union Should Do More for Ukraine”

March 4, 2015

In finding an appropriate follow-up to Minsk II, there are opportunities for the rapidly developing European Energy Union, Ruud Lubbers and Paul van Seters write in this column. 

Image: © Nationale Beeldbank 

In the early hours of February 12, the leaders of Ukraine, Russia, France, and Germany reached an agreement in the Belarusian capital Minsk to put an end to the devastating war in eastern Ukraine. Whether Minsk II, as the agreement is commonly referred to, will achieve this goal is still uncertain three weeks later. Against the background of ongoing battles, President Poroshenko discussed with the UN and the EU the possibility of deploying an international peacekeeping force in eastern Ukraine. Meanwhile, America and Britain have decided to deploy military training missions. 

Different reactions to what has been agreed in Minsk underlined the uncertainty from the very start. There were commentators who felt that Merkel and Hollande gave Putin everything he wanted. But the European Council was generally very positive about the result achieved. As developments have since confirmed, all these responses fell short in calling for the necessary next steps. 

Opportunities for the European Energy Union

We think the responsibility for an appropriate follow-up to Minsk II rests mainly with the European Union. The EU should do much more than passively wait and see if all parties will observe the cease-fire. There are real opportunities for the EU, in particular for the now rapidly developing European Energy Union. 

On February 25, Commissioner Sefcovic published an ambitious “framework strategy”for the Energy Union. According to Sefcovic, the Energy Union should concentrate on five areas: energy security, the internal energy market, energy efficiency, low-CO2 economy, and research and innovation. On March 18-19, the European Council must first approve it. We support this strategy as an important agenda for the new Energy Union. But at the same time, we believe that the Energy Union should take more concrete measures, particularly regarding the situation in Ukraine.

The Energy Union could, for example, already in the course of 2015, examine all the Member States’ energy contracts, including those with Moscow, to see whether they are in the interest of the EU. The same would then apply to all energy contracts with Central and Eastern European countries that participate with the Energy Union through association agreements.

Attractive Opportunity To Bring Parties Together

Let us go back in time to four months ago. On October 30, 2014, on his last day as President of the European Commission, a happy and proud José Manuel Barroso gave a press conference in Brussels, where he made public the last minute gas deal between the EU, Ukraine, and Russia. The war in eastern Ukraine continued unabated for the remainder of the fall, but the gas deal offered an attractive opportunity to bring the parties together. However, the gas deal was only valid for a limited period of six months.

If the new EU Energy Union is ever to play an important role, this is it. But to have the Energy Union form the basis for a healthy relationship between Brussels, Kiev, and Moscow, we think that three conditions must be met. First, a diplomatic solution must be found for Crimea. One option could be that Crimea remains Ukrainian territory, but that Russian control, in particular of Sebastopol as a Russian naval base, takes the form of a very long lease or other legal arrangement. Any solution will need to take into account Russia’s strategic interests and the views and rights of the population in Crimea. 

Second, Ukraine will have to be transformed into a federal republic, with far-reaching autonomy for regions such as Donetsk and Lugansk in the easternmost part of the country. If no agreement can be reached on this, the alternative of separation for these regions must be tested. 

Third, the Energy Union will have to act rapidly in 2015 with both a view to peace in Ukraine supported by a generous but strict EU, and with a view to the UN climate summit in December in Paris, so that the world will see that Europe is working toward a low-carbon economy. There does not necessarily need to be any tension between these two objectives. On the contrary, it can form the basis for a political deal between Brussels and Moscow.

Commit to Firm Guarantees

A sovereign but federal Ukraine should be able to associate itself with the Energy Union in the area of energy. Alongside the generosity and flexibility of the Energy Union, a new Ukraine must commit itself to firm guarantees to eradicate corruption, at least with respect to energy. An association agreement between the EU and Ukraine in regards to energy should be crystal clear about the importance of energy without corruption. 

It was Angela Merkel, who, nine months ago, exerted pressure on Donald Tusk to become President of the European Council. She knew then how much importance Tusk attached to the creation of a European Energy Union. A few months later it became apparent that Jean-Claude Juncker, Barroso’s successor, felt the same way. 

Merkel, in turn, has repeatedly stressed the importance of a firm EU - strong and undivided, especially in regards to Putin. The crisis in Ukraine could possibly have been prevented with less naivety, more direction, and a greater analytical capacity of Western diplomatic and intelligence services. But countless deaths and displacements later, this crisis also offers opportunities to demonstrate the fundamental importance of extensive European cooperation for our peace and security. Now the time has really come to adopt a dual strategy: (1) go directly for an effective EU, and (2) a powerful, but win-win approach to energy toward Russia. It will, at the same time, give Russia, along with the G2 - US and China, the opportunity to come to a climate alliance with Brussels.

Putin will have issues with a European Union that is truly united and that, with regards to Ukraine, also signs treaties in which all energy contracts must require the approval of the Energy Union to be legally valid. But he will eventually have to conclude that there is no better alternative for him than a federal Ukraine that is viable thanks to such an association agreement with the European Union.

A Dutch version of this column by former Prime Minister Ruud Lubbers and Professor Paul van Seters was first published on Energiepodium.nl.

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