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Visegrad Group divisions in natural gas deals assessment. Russian factor

15.08.2017

Intergovernmental agreements on natural gas deliveries are important for European Comission and Poland. However some Visegrad Group countries see it differently. According to Intergovernmental Agreement (IGA) Decision from 2012 member states are obligated to allow European Commission to carry out compliance checks of intergovernmental agreements with third parties ex post, so after these were signed. It applies to natural gas deals but also infrastructural projects. In February’s 2015 Energy Union Strategy you can find an appeal to assure „full compliance of agreements related to the buiyng of Energy from third countries with EU law”. This issue is important especially to Poland. In 2010 natural gas deal negotations with Russia an intervention from European Comission helped Polish to achieve better terms in talks with Russian gas monopolist. This and other examples made Comisson look for solutions ensuring higher transparency of such deals. There was also a discussion is ex post check enough. Poland, and actually EC, were supporting ex ante checks. That means the idea of Comission checking every IGA before it is signed to prevent any contract to be in conflict with EU law. When it is signed there would be a problem with imposing changes, f.e. in gas deal with Russia. EC found that around one-third of IGA’s on supply or infrastructure were not compliant with European law. None of tchem were succesfully renegotiated to date. Further discussion led to IGA revision in 2015. After the changes member states have to inform EC on their intention to start negotiation with non-EU country, submit to Brussels a draft of a contract, all existing contract texts and legally non-binding commitments with third parties. EC has also a right to inform member states about it’s doubts about deals compatibility with EU law, inform about compatibility or suggest changes in 12 weeks after notification, assess the proposed changes in nine months from notification and make amendments on its own to help member states to adapt the contract to EU law requirements. It is idea of an obligatory ex-ante assessment of a deal by EC to avoid a situation where member states sign unlawful documents with third parties. Some countries like that idea. Poland supported IGA revision. It has an experience of fruitful EC intervention int gas deal negotiations from 2010. It is against controversial clauses in gas deals, against politicization of it, after EC catalogue of wanted and forbidden clauses and, in effect, standarization of gas deals. Other Visegrad Countries see it differently. We can see the Russian factor that makes countries other than Poland hesitate to support a revision. Slovakia is not agaist the revision. It would help to change a Velke Kapusany-Uzhorod big gas reverse deal which is preventing Bratislava from increasing natural gas transit to Ukraine because of Gazprom influence. However, it is sad that Rosnieft supply deal could be also questioned and Slovaks do not want that to happen because it is beneficial to them. Czech Republic was openly against the IGA Revision. Their gas market is fueled with Russian gas through Nord Stream-OPAL- Gazelle route. Market ownership is splitted between German and Russian companies. Czechs do not care about further transparency of gas deals. Hungary is in a new gas deal with Gazprom starting from 2015. There is roll-over of take or pay clause and guarantee of gas storage in Hungary, and attractive price included. Hungarians do not want EC to interfere in this deal which is perceived by them as beneficial plus they are interested in Turkish Stream project which could also be questioned by EC.

In march 2017 European Parliament supported IGA revision. According to Polish ministry of Energy the decision means that IGA’s would need to be notified to EC and its opinion will be taken into consideration – ex ante – before the deal is signed. There will also be an obligatory ex post assessment of electric energy deals. Memorandums of understanding will be under voluntary assessment. EC has a right to advice member states in the context of European law and to take part in negotiations as an observer. Visegrad Group countries participated in Union’s consensus on these conclusions.

Wojciech Jakóbik is an energy analyst, political science BA and international relations MA. He is editor-in-chief of the webside BiznesAlert.pl

International_Visegrad_Fund,_emblemo_bluaThis text was created thanks to support of International Visegrad Found.

Photo: public domain (KPRM Flickr)

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