EUROPEAN FOREIGN POLICY SCORECARD 2013

Eastern Neighbourhood

49 - Relations with the Eastern Neighbourhood on energy

Grade: C
Unity 3/5
Resources 2/5
Outcome 3/10
Total 8/20
Scorecard 2010/11: B+ (14/20)

Moldova and Ukraine began to implement the provisions of the EU’s Third Energy Package but progress was slow.

There were mixed results on cooperation in the sphere of energy between the EU and Eastern Europe in 2012. Moldova and Ukraine, the only members of the Energy Community from the Eastern Partnership region, made little progress towards meeting their commitments and implementing the provisions of the EU’s Third Energy Package, which provides for liberalisation of their energy markets.

Following the expiry of Chisinau’s supply contract with Gazprom at the end of 2011, Russia started to mount pressure on Moldova to refrain from liberalising its energy market, offering lower gas prices in return. Following a series of exchanges between Chisinau and Moscow as well as the EEAS and the European Commission, the Energy Community (most of whose members are EU member states) gave Moldova almost four more years to unbundle its gas pipeline network in an attempt to grant more breathing space to Chisinau. Ukraine, which remains even more vulnerable to Russia’s pressure following the start of the operation of the Nord Stream pipeline in late 2011 and the beginning of the construction works on the South Stream pipeline in late 2012 (both bypass Ukraine), made some progress on meeting its commitments as a member of the Energy Community, but key deep regulatory reforms remain to be implemented. Although the European Commission now has a mandate to negotiate with Azerbaijan and Turkmenistan on the construction of a Trans-Caspian pipeline, a key component for the EU’s planned Nabucco pipeline (which helps diversify the EU’s imports away from Russia), there was no major progress in the talks in 2012.

Europeans were relatively united on the need to promote greater energy cooperation with its eastern neighbours, with the European Commission taking a clear lead. However, in practice, steps by states such as Hungary, Slovenia, or Bulgaria, which joined the Russian-sponsored South Stream project, undermine the viability of the EU’s own diversification project, the Nabucco pipeline, whose own future remains uncertain (see component 21).