[VIDEO] Oettinger: ‘The king of litigation’

The European Commission has launched a series of legal proceedings against member states in a effort to complete the internal European energy market.

The decision to launch infringement procedures against the majority of member states came as a rather ambiguous step on behalf of the EU Energy Commissioner Gunther Oettinger, explaining it as a necessity to “step up efforts” to complete the internal energy market reform by 2014.

He expressed confidence about the possibility of achieving the goal as planned. But

doubt was cast on the Third Energy Package feasibility for national industries, because of massive non-compliance with its ‘prescriptions’.

NE asks: How many infringement proceedings there are all-together?

VIDEO from the European Commission press centre with Marlene Holzner

The Commission has initiated 35 litigations against member states; 17 in the field of electricity, and 18 in gas. Those member states that did manage to comply were, Czech Republic, Denmark, Germany, Greece, Hungary, Italy, Latvia, Malta, Poland and Portugal.

Moreover the current 35 proceedings add to those still pending from non-compliance cases from the Second Energy Package, where 11 cases are still ongoing in gas, and 19 cases in electricity.

The logical question is whether or not the legislation is good, or time-table realistic?

“It is not about Energy, it is about power”, a European diplomat told New Europe. “Commissioner Oettinger wants to show that EU institutions have powers superior to member states. It is an old game here in Brussels. But it as a risky game, because it might hit back his image in case the processes stuck”.

The risk of failure to reform the interior energy market is pretty high for number of reasons, first of all because of different and constantly shifting public opinion towards perception of ‘good’ and ‘bad’ energies. The late German decision to abandon nuclear will make energy not only more expensive, but the country more dependent on imports, while Polish desires to construct nuclear will not change the European landscape as a whole.

Within the EU, there are national divergences, such as France, which derives about 80% of its electricity from nuclear, and in Austria, where even the word nuclear is a taboo, the creation of European internal energy rules is a more than a daunting task.

Besides the failure of the member states to comply with the Third Energy package is another argument, coming from outside: the disagreement of the major EU gas supplier and strategic partner, Russia, to accept the reform.

“Russian’s attitude towards the Third Energy Package is a rather complex issue,” Danila Bochkarev from the East-West Institute in Brussels, told New Europe. “Interested in maximizing profit in production, transportation and distribution, through the unbundling request Gazprom is forced to abandon operational control of its infrastructure in Europe. Like it was in the case of the Polish section of the Yamal–Europe pipeline. However, if the company managed to keep ownership of the Yamal pipeline, full ownership unbundling,for example in Lithuania, will have a negative impact on Gazprom’s business.”

“The Third Package gives an opportunity to get exempted from a number of rules, for example, prevent third party access to the pipeline, for the new infrastructure projects,” continues Bochkarev. “But these exceptions should be approved by relevant EU and national regulatory authorities, which are often reluctant to accept Gazprom’s expansion to the European markets. They see it as a threat for the competition environment.”

“Therefore, we can conclude that even if the Third Package will create certain difficulties for Gazprom, it doesn’t present the major challenge. But the spirit of its implementation and lack of readiness of the relevant regulatory authorities to offer Gazprom exceptions from Third Package rules,” concluded Bochkarev.

The Russian media baptised the project ‘Problem package’, considering it designed to exclude the country from entering the European energy market. Russian experts insist that the liberalisation of the market is good in case of ‘proficit’ but in case of a deficit the consequences for the consumer are a “sheer catastrophe”, because prices will “fly up like a rocket”. Above all it is not completely clear how the member states are going to rebuilt their energy systems within the realities of the current crisis.

Are the 65 infringement procedures currently ongoing truly a remedy for a problem?