EU-Russia Energy Policy – Why is it Incoherent and Ineffective?

Following the collapse of the Soviet Union, Russia was left politically and economically weak, and with very little bargaining power. The European Union (EU) initiated several policy instruments with Russia to bolster the latter’s economy. A few former Soviet Union republics became members of the EU, adding to its size and power. However, once V. Putin became the President of Russia, the dynamics of the EU-Russian relationship changed. Putin’s goal was to make Russia an ‘Energy Superpower’ by having state control over the strategic sectors within and outside Russia. Besides being a state monopoly in the gas sector, Gazprom also expanded by acquiring downstream assets in the EU. However, any foreign investment participation in Russia is considerably discouraged by the Foreign Strategic Investment Law. EU has also similarly put roadblocks in Gazprom’s expansion plans by introducing the Third Energy Package in 2009. The ghost of Cold War haunts the EU-Russian relationship, which has become fraught with myths, distrust and political face-offs. The EU wants Russia to invest in the energy sector and increase production and yet it continues to promote energy independence as a policy goal. It comes as no surprise that Russia wants to deal with individual states in the EU rather than deal with EU as a whole to protect its interests. This has fragmented the EU, with some states pursuing their separate agenda of energy security while some are openly antagonistic towards any form of partnership, often making the several EU-Russia energy policies meaningless. It appears that the neighbors have lost the ability to hear each other - there is a total absence of co-operative mindset. This research paper attempts to explore the policy instruments adopted and their varying degrees of success. The paper will then seek to locate the reasons for the ineffectiveness of these mechanisms.