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Putin says EU energy laws are uncivilised 'robbery'

27 November 2010 15:24 (UTC+04:00)
Putin says EU energy laws are uncivilised 'robbery'

MOSCOW – Russian Prime Minister Vladimir Putin on Friday criticised European Union laws aimed at liberalising the continent's energy market, saying they hinder investment and amount to uncivilised 'robbery', Reuters reported.

Putin, in Germany for talks with Chancellor Angela Merkel, demanded the EU consult Moscow when drafting such important legislation, which he said threatened key gas pipelines backed by Russian state-controlled gas giant, Gazprom.

'What is this? What is this robbery?' Putin said in a speech to German investors in Berlin, referring to the legislation which he said was damaging investments in major pipelines by forcing a separation of gas supply and transport assets.

'The investors of course counted on getting the right to use this infrastructure to pump their own gas. It is their gas, their investment, but then this Third Energy Package is accepted ... and they deny them the right to use their own property.'

The EU agreed in March 2009 to liberalise energy markets by splitting giant utilities, ensuring that small gas suppliers can get unhindered access to European infrastructure and compete on an equal footing with the dominant players.

The plan included a so-called 'Gazprom Clause' designed to prevent companies from outside the bloc from buying up strategic distribution networks without approval by governments.

Echoing criticism from Gazprom, which supplies a quarter of European gas, Putin said the EU legislation undermines vast Russian and German investments in pipelines to Europe.

'We often hear from our partners both in Europe and North America: 'If you want to be members of a global family of civilised nations, you should behave in a civilised way.' What is this then? Have our colleagues forgotten the basic principles?' Putin said.

He said the EU laws were already creating problems with pipelines that are to link into a trunk pipe being built across the Baltic Sea to Germany and with the gas distribution network in Lithuania, where Gazprom and E.ON Ruhrgas have warned of supply disruptions in a row over the EU regulations.

Criticism of the EU legislation has overshadowed Putin's visit to Germany, where he was set to discuss a deal under which E.ON would sell a $4.5 billion Gazprom stake to state-owned bank VEB, whose board is chaired by Putin.

In response to former president Putin's criticism ahead of the visit, Merkel on Thursday lambasted Russia's protectionist trade measures which she said were hurting German exports.

During the Putin presidency, Russia imposed limits on foreign investment in sectors it deemed 'strategic' and gave state-controlled companies such as Gazprom and Rosneft priority in Russia's vast oil and gas sector.

European leaders have persistently called for ways to reduce reliance on energy supplies from Russia, the world's biggest energy producer, though Gazprom forecasts that Russia's share in supplying the European gas market will rise over coming decades.

Putin quipped that if Europeans did not want gas or nuclear energy, they would still have to rely on Russia for firewood to heat their houses.

'I don't understand; how will you heat your houses? You do not want gas, you do not want to develop nuclear energy. Where will you get your heat from then? From firewood?'

'But even for firewood you will need to go to Siberia, you do not even have wood,' said Putin.

Putin mixed his criticism of the energy legislation with a proposal for what amounts to an alliance with the European Union, a step he said was essential for the survival of both Russian and European civilisation.

Putin said that Russia and the EU could one day even have a joint currency zone and that Russia was looking at ideas for increasing the role of the euro in energy trading.

The European Commission declined to comment directly on Putin's speech, but energy spokeswoman Marlene Holzner said the disputed legislation would lead to open and integrated markets.

'The European Commission...is convinced that the third energy package will lead to open and integrated markets, which is good for competition and good for security of supply,' she said.

'Ensuring a good investment climate is one key aspect of the internal market legislation and of the infrastructure package that we recently presented.'

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