View on The EU Commission's Energy Policy Through a Constructivist Lens

This chapter will look at the EU’s interests and overall approach towards the energy trade with Russia. It will outline the diverging approaches of the Commission, compared to individual member states, and the negative effect this has in terms of achieving a collective policy approach towards Russia. The internal and external dimensions of the Commission's energy policy will be viewed through a constructivist lens, to emphasize the limitations of the constructivist approach in accurately reflecting the relevant dynamics. Additionally, the individual approaches of certain member states will serve to highlight the heterogeneity of actors and their interests, despite the rhetoric of solidarity. Conclusively, this section will show that while the energy trade remains indispensable for both sides, the EU’s approach is oppositional to the interests of Russia and certain member states.

The 2006 European Strategy for Sustainable, Competitive, and Secure Energy has been symbolic in terms of the EU’s energy policy. While being focused on potential external issues like Russia, the general strategy of the European Commission prioritizes the internal creation of a unified energy market. A liberalized internal energy market is meant to provide the Commission with increased influence over external energy suppliers. This would create improved competition, as well as access to alternative suppliers through infrastructural investments. Moreover, it would ensure decreased consequences in the case of supply disruptions, as well as increased policy cooperation among member states. The Commission's promotion of internal cooperation is thereby meant to increase cohesiveness in terms of external policies towards actors like Russia (Youngs 2009).

The progressive liberalization of the EU’s internal energy market has undergone continuous change since the end of the Cold War. Contained within the framework of the European Energy Charter, several directives or “packages” were issued on behalf of the EU. They established a common legal framework, regulating the internal transport, supply, and production of energy. The 2009 Third Package was meant to provide greater competition, unify the energy market, as well as allow consumers to choose their suppliers (Memo: TEP, 2011). This choice involves the possibility of EU member states requesting suppliers to sell a share of their transportation and distribution infrastructure or to provide partial management roles to independent companies within a given member state. Thereby, member states receive increased control over the energy sector. Additionally, pipeline suppliers are obliged to reserve pipeline use for third-party suppliers. Overall, these restrictions constitute a decrease in the pressuring capabilities of suppliers, while increasing the leverage of consumer countries (Noel, 2009, p. 22). Moreover, future construction of additional pipelines is further limited and needs to abide by the aforementioned criteria. The certification process of third-party suppliers is arbitrarily determined, while pipelines that are reserved for non-existing third-party suppliers go unused (Cottier et al., 2010). Naturally from a Russian perspective, this market reform constitutes a loss of overall pipeline ownership and seems to target Gazprom specifically. Russian access to the European energy market would thereby be limited and existing projects like agreements with individual member states would require renegotiation (Mandil 2008: 20; McGowan 2008: 101).

However, not all of these member states support the Commission's efforts to project an internally liberalized market to external relations. While market liberalization was expected to permeate the EU-Russian energy dialogue, individualistic member state policies actively disregarded the notion of solidarity. Counteracting the Commission's goals reveals the heterogeneity of interests and approaches within the EU. For instance, member states with a privatized energy market (e.g. Spain), are less likely to conform to overall liberalization. On the other hand, sufficiently liberalized national energy markets (e.g. England) are incentivized to support it further. Member states that find themselves overly dependent, would likewise profit from increased liberalization in terms of leverage in the energy market (Belyi 2009: 123; Youngs 2009: 33). Therefore, there is a difference between member states that prefer the regulation by market forces, whereas others are more prone to pursue opportunistic bilateral deals with Russia for economic profit. This is partially attributed to the economic downturn in 2008 (Economist 201). Ultimately, the differing understanding of energy security among member states resulted in internally conflicting approaches to the liberalization of the energy market.

The EU’s approach of internally liberalizing the energy market for it to regulate external relations is in existing academic contributions explained through social constructivism. Constructivism perceives actors as part of the environment in which they act. The environment as a shared system of meanings determines the identity and preferences of actors (Christiansen et.al. 1999; Pollack 2010: 24). Interests thereby become social constructs, which are internally defined (Wendt, 1999). For the EU, the basis of the internal regulation approach to energy policies in cooperation along with predetermined rules. From this perspective, the Commission abides by the principle where the benefits of cooperation are perceived to outweigh the disadvantages. The EU has thereby maintained peace and cooperation through regulation of behavior Keukeleire & MacNaughtan 2008: 13. While these principles of cooperative mutual benefit are applied internally, a constructivist perspective sheds light on how they project on external energy policies Hughes 2007; Keukeleire & MacNaughtan 2008; Westphal 2006). However, despite the insight this perspective provides, it fails to account for certain dynamics of power (Hyde-Price 2006: 218).

In that regard, the EU-Russian energy relation does not just reveal EU dependence but also constitutes an essential market for Russia. Based on the above, it can be argued that the Commission possesses a degree of political leverage over Russia. Therefore, the Commission's approach is not merely identity-driven but also exerts a realist power dynamic by attempting to dictate the rules of trade. The relationship thereby represents a power struggle, where the EU tries to impose regulations and diversify from Russian supply, while Russia attempts to apply bilateral agreements to overcome EU restrictive measures. For instance, the 2007 European Charter Treaty, which was meant to consolidate some of the aforementioned market regulations, can be seen as an EU attempt to strengthen control over the energy sector (Kirchner & Berk 2010: 872). Having applied it provisionally, Russia ultimately failed to ratify it because of the difference in interests.

The aforementioned reduction of Russian control over transit lines constituted an EU attempt to reduce Russia’s monopoly on energy transport of energy, which would assist further EU diversification of supply beyond Russia’s control. For Russia, this threatened its status in the European market, as it would diminish the overall shares and pricing leverage. In 2009 Russia finally rejected the European Charter Treaty. The EU on the other hand insisted on maintaining the internal conditions of a liberalized market. While the energy trade has remained ongoing, this symbolizes the difference in interests between the EU and Russia.

The constructivist perspective offers further insight into the power dynamics at play. The EU routinely utilizes soft incentives to coerce other international actors through the projection of norms and values, as well as through economic and political incentives. The international impact of the EU in terms of externally shaping norms and values gave rise to the idea of Europe as a normative power (Manners, 2002). While the absence of a regional army supports alternative methods of influence, it is often seen as avoiding power dynamics to maintain common rules of conduct. The goal is to influence the identities, norms, and values of other international actors, to converge these with those of the EU. However, since this can be seen as beneficial for the EU, distinguishing between a purely value-driven approach and one to acquire power becomes difficult. The EU normative approach is repeatedly applied to external actors, despite withholding political and economic incentives, such as EU membership. This is inherently indicative of a subjugating approach towards Russia, where it is urged to converge with EU norms, values, and above all, terms of regulation. From a Russian perspective, the EU normative approach disregards not just the interests of Russia, but also its values and norms. Similarly to the constructivist perspective on EU’s external energy policies, the perception of Europe as a normative power likewise proves inconsistent, due to its delineation as being value-driven, rather than a potential tool for political leverage. Conclusively, the constructivist perspective of the EU in terms of EU-Russian energy dealings ignores the inherent power dynamics of EU normative measures for political gain.

As was mentioned above, the member states actively undermine the Commission's approach towards Russian energy. This is partially due to the sensitive nature of energy security among member states, which tends to avoid collective action. Considering the energy import-dependent nature of most EU member states, the focus on the notion of energy security has understandably been a primary focus of EU energy studies, predominantly assessing the status of the EU about energy suppliers like Russia. Within that focus, there have been references to a general lack of solidarity on behalf of the EU and its member states, about energy dealings with Russia (Energy Security Strategy, 2019). This lack of collective efforts has impeded substantial progress towards a common policy approach, in terms of the broader EU-Russia energy discourse. Relevant literature often presents singular member states as having a unique relationship with Russia, most notably Germany (Rahr, 2007). Existing constructivist academic contributions, however, lack the explanatory insight to explain this breach of solidarity, while at the same time pursuing individual energy relations with Russia (Noel, 2008, p. 8). Therefore, this section will apply a more detailed perspective to the EU and thereby emphasize the presence of realist tendencies on behalf of EU member states and non-state actors when dealing with Russian energy. This tendency will be explained primarily using Germany as an example and thereafter related to the broader theoretical implications of the inquiry as a whole.

Similar to the long-term energy relationship between the EU and Russia, bilateral agreements with Russia likewise has a long history. Considering the ongoing bilateral dealings between EU member states and Russia, diversification to alternative suppliers beyond Russia is difficult. Based on the existing energy infrastructure between member states and Russia, certain member states are more heavily dependent on Russian transit lines than others (Green Paper, 2006). Nevertheless, despite the low dependence on Russian pipelines, countries like Germany still chose to pursue bilateral energy dealings with Russia, regardless of the EU call for solidarity. Among other things, this is explained by the increased bargaining power, which large importers of Russian energy have about Gazprom, and the eventual revenue they thereby provide for the Russian state. Therefore, the incentives for bilateral cooperation with Russia are determined by factors, such as the relative size of the domestic energy market, total import volumes, and the overall share of Russian energy imports (Schmidt-Felzmann, 2011, p. 581). Based on these criteria, member states are prone to act by their overall status about the Russian energy discourse. Those with a relatively weaker stance aim to decrease Russian influence, whereas those with a less compromised bargaining position pursue bilateral deals with Russia, to benefit from the high volume of Russian supplies and geographic proximity, decreasing the overall price and transit costs.

The combined German and Italian imports, constitute approximately 50% of Russian gas exports (Girardi, 2018). Based on the previously outlined criteria that provoke bilateral behavior, countries like Germany tend to have a more engaged stance towards energy deals with Russia. These deals are most notably exemplified through bilateral contracts with not just the relevant member states, but more specifically the domestic gas companies, such as ‘Ruhrgas’ (Germany), ‘ENI’ (Italy), and ‘Gaz de France Suez’ (France) Kirchner & Berk 2010: 868. A more recent example of this is the 2018 beginning of the construction of the Nord Stream 2 pipeline, marking a rift between Eastern European countries concerned about Russian influence and those collaborating with Russia, such as Germany. To put this into perspective, in 2017 the latest EU gas supply regulation was issued, referring to the notion of “solidarity” over one hundred times (Regulation, 2017). Based on the past and continuous bilateral deals between EU member states and Russia, this regulation is perceived merely as a rhetorical continuation, which in reality is actively opposed by singular states. In terms of cooperation between countries like Germany and Russia, this even constitutes a deepening of existing cooperative initiatives, such as the original Nord Stream project.

The original Nord Stream pipeline was meant for direct energy delivery from Russia to Germany through the Baltic Sea. It was launched in 2005 under the name Northern European Gas Pipeline (NEGP) (Schmidt-Felzmann, 2011, p. 585). Initially, including only Germany, the project continued to incorporate Dutch and French stakeholders. Other EU states have urged Germany to reconsider partaking in bilateral projects, due to the potentially negative effects on other member states. The Nord Stream was mainly constructed for the benefit of Western member states like Germany and France, while avoiding transit through Eastern states, such as Ukraine. Therefore, Germany has been blamed for prioritizing domestic interests over collective EU ones (Gusev, 2008, p. 17). This in turn is indicative of a realist approach, which shows how energy security policies are far from harmonized across the EU and how member states seem to base their choices on potential gains, rather than potential negative impacts on fellow EU members. While these concerns are mostly framed from an opportunistic perspective on behalf of Russia, it is important to acknowledge the role that EU member states play in doing so. Accusations of a lack of solidarity cannot be solely attributed to Germany, considering the involvement of multiple other states and non-state actors (e.g. Ruhrgas, ENI, Gaz de France Suez), as well as repeated occasions of others seeking to maximize bilateral and opportunistic behavior regarding Russian energy. Even the Benelux countries, which should above all act in a spirit of solidarity, find themselves in-between collective practice and bilateral energy relations with Russia (Casier, 2011). Belgium, the Netherlands, and Luxemburg are among the EU’s top investors in Russia, with economic interests that reflect the favoring of constructive engagements with Russia. Similar to the case of German, Italian and French governments and gas companies, the extensive business ties act as the primary incentives to avoid collective EU action. This case is notable, due to the conventional pro-European stance of the Benelux countries. Conclusively, we can observe a distinction between the official national rhetoric of these countries and their actions. Consequently, the credibility of these allegedly pro-European countries is thereby damaged.

This section has shown how bilateral agreements ultimately contribute to the continued reliance on Russian energy imports, while at the same time undermining collective efforts to effectively liberalize the internal energy market. As a result, it further impedes the coordination of a cohesive external EU policy towards energy dealings with Russia, as well as fragments the EU notion of solidarity. Disadvantaged member states are disregarded for national economic profit and energy security, ultimately damaging the multilateral EU attempt through unilateral deals with Russia. In terms of the theoretical perspective, the constructivist perspective yields useful insight into the interests and approaches of the EU towards Russia and the energy market. Nevertheless, it fails to account for the underlying power dynamics of Europe as a normative power, as well as the fragmented internal structure of the EU by both state and non-state actors, perpetuating confrontational and incompatible EU approaches.