Of joint energy procurement and geopolitical issues

by Antonis D. Papagiannidis

Greek Prime Minister Kyriakos Mitsotakis found support in his Italian counterpart, Mario Draghi (a figure of higher traction in European circles), when he presented to last week’s EU Summit an array of proposals over a joint European response to the evolving energy crisis. His major proposal was that the EU should build a joint-buying scheme so as to ensure a steady flow of energy – mainly: natural gas – at moderate prices to the continent. (The argument that such a scheme could be modeled on the earlier, vaccine-buying one was rather disingenious, if for no other reason at least because of the quite underwhelming performance of the Commission in the AstraZeneca affair).

Such an approach on part of the Greek PM corresponds to the overall Greek trend of shifting sensitive issues towards the EU – the potentially explosive Greek-Turkish situation constituting the premier example. To be fair with the Greek bundle of energy-related proposals, it includes a number of interesting lateral bits: building increased natural gas storage capacity (one such project is underway in Kavala, the new FSRU unit is close to completion near Alexandroupolis), or even supporting the “greening” of nuclear power  in European taxonomy (as vigorously proposed by France – of course earthquake-prone Greece could in no way accommodate such infrastructure).

Still, the main element of Greek proposals is of geopolitical nature. K. Mitsotakis briefed the Summit over the outcome of a recent Greek-Egyptian-Cypriot trilateral concerning the electricity grid interconnection of Northern Africa (i.e. Egyptian production capacity) with the European continent (through Greece); he also seemed to revive the EastMed natural gas pipeline project that seemed defunct, by pointing out that the prospect of mid-term energy shortages in Europe could/should rekindle the flame. Here, too, the taxonomy would have to get shifted, so as to include a new natural gas to eligible energy projects.

To be true, the proposal for European buying of natural gas as a bloc met with cold shoulder on part of North European countries for German/NordStream-2 reasons at the very least.  But reaching-out to geopolitical considerations in the present energy configuration in Europe – skyrocketing prices along with looming shortages if the winter 2021-22 is not mellow, plus middle-term shortages due to lagging investment in the recent low-price past plus the fast pace of (promised) decarbonization and green transition – is gaining ground, fast.

In the recent seminar of the Centre of Research for Progressive Policy of former Finance Minister Yannos Papantoniou, analysts such as Centre for European Reform/London director Charles Grant and Institute for International Relations/Greece director Konstantinos Filis focused on this very dimension, of integrating the active foreign-relations approach and the longer-term geopolitical one to the current energy impasse.