Juergen Roth: EU Is Exceedingly Cautious Regarding Gazprom

Juergen Roth, one of Germany's most renowned publicists and investigative journalists, shared with Novinite his observations on Europe's approach to South Stream.

Since 1971, Roth has made a number of TV documentaries and has published many acclaimed books. Among them is a recent one on Gazprom (Gazprom: Das unheimliche Imperium) in 2012, but also many including analyses on oligarchy and organized crime in Eastern Europe.

In 2008, he divided opinions in Bulgaria with his book Die neuen D?monen (which could be translated as The New Demons) dealing with crime, corruption and lacking rule of law in the country.

The EU Commission has insisted that the South Stream project be frozen until it complies with European norms. Why, in your opinion, did it launch an infringement procedure only against Bulgaria? Is the urgency to stop the project the only reason?

An infringement procedure is being launched against Bulgaria because - for whatever non-transparent reasons - a consortium around Stroytransgaz has received the order for the pipeline from the Bulgarian government. It seems there are issues of competitiveness here, especially in the assessment of the tender. It is though strange enough that Stroytransgaz, behind which the Rotenberg brothers stand, closest friends of [Russian President] Vladimir Putin, won the procurement. What is more, it is inadmissible, under EU rules, that the gas supplier controls the access to the pipelines as well. This could have been long known. A substantial reason is of course the conflict between Ukraine and Russia.

Do you expect that the Commission might also find problems with Gazprom contracts on South Stream in other countries?

This is not a matter of finding grounds. So far it is not known – if one puts aside the Nord Stream pipeline, where Stroytransgaz benefited as well – that there are similar problems, or they have been ignored. And the EU is naturally worried about the tight cooperation of the government in Sofia with Gapzrom, well knowing how deeply important corruption is. You know that in the past years Vladimir Putin threatened [Bulgarian] ex-Prime Minister Boyko Borisov that if the South Stream project was not realized, Bulgarians would go through a cold winter.

You know the way governments in Sofia and Moscow operate. Is Brussels capable of exerting influence on any of them?

Bulgaria is a member of the EU, dependent on Brussels and especially on financial aid, whereas the influence of the EU on Moscow might be rather scant.

If Europe wants to win the game it is playing against Russia over South Stream, why didn't it decide to blacklist Gennady Timchenko and Stroytransgaz? It has been known since the beginning of the year who is to build the Bulgarian stretch of the pipeline...

Yes, this is of course a scandal. Because it leaps to the eye that the EU is exceedingly cautious regarding Gazprom and its subsidiaries, and their officials respectively; bluntly speaking it is gutless. But this also has to do with the fact that we are dependent on gas supplies from Russia, especially the East European countries, and Bulgaria as well. One should not forget that, with both Nord Stream and South Stream, two one-time German politicians have the final say. Still, sanctions against Stroytransgaz were applied by the US.

Supporters of South Stream always say that Europe should also renounce Nord Stream if it decides to stop the former project. Are the two pipelines comparable?

In principle - no. Because Nord Stream is already completed and in service. And the anxiety was that, yes, alongside South Stream Gazprom would have a monopoly and the Western states would therefore be even more susceptible to blackmail than they are now.

In Bulgaria one often speculates with the legal amendments that could give an edge to Gazprom and exclude South Stream from the Third Energy Package: it is said that the Russian concern has directly sent them to Sofia. Along your investigations into Gazprom, have you ever come to instances from this or other Gazprom projects that confirm or refute such a thesis?

It corresponds to Gapzrom's policy to proceed this way, for example in Poland, Estonia or also Greece. I can nevertheless prove nothing in relation to Bulgaria. On the other hand it is actually the aim of the EU's Third Energy Package to curtail the dominant position of single actors through the unbundling of production, transport and distribution. This is something that, naturally, Gazprom cannot accept at all, as it is precisely the bundling that is the strategic goal of Gazprom.

The BSP, the main party in government, has shown remarkable decisiveness to build the South Stream despite warnings from the EU. How do you assess the idea that it is commitment to South Stream that keeps the cabinet in power?

The BSP was and is narrowly connected to the Russian nomenklatura also through business relations of companies close to the party. Whether the government is being kept in power due to its engagement with South Stream - I doubt it, because the social and economic crisis does not depend on whether the South Stream will or will not be carried out.

There has been a rift over South Stream between the ruling parties, the BSP and the DPS, in the past few days. Can this political situation put the project in jeopardy?

No. Solely the EU Commission poses a danger. In Bulgaria, what is tempting are the juicy profits for certain business ventures which are naturally interested in the construction of South Stream. Nothing else is of importance. The justification that Bulgaria would be more independent in terms of gas supplies is just an argument used as a pretext.

Could Russia agree that South Stream be included into the Third Energy Package? And could Moscow reduce the pressure on Europe after partially turning to China?

As politics in the Kremlin is completely opaque and a clear political and economic orientation is currently not visible, it might be difficult to issue a forecast here. Gas business with China needs time, and the Kremlin needs now a lot of money that could be generated only through the gas delieveries to the West.

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