Europe
3:45 am
Tue July 22, 2014

Energy Concerns Complicate Potential EU Action Against Russia

Originally published on Tue July 22, 2014 12:13 pm

Transcript

RENEE MONTAGNE, HOST:

As we just heard in Jackie's story, as European leaders meet in Brussels today pressure is building on them to ratchet up sanctions on Russia. But there are a number of complicating factors that are holding them back - not least, Europe's reliance on Russian energy supplies. To learn what may come from today's European summit meeting, we reached out to Anton La Guardia. He's the European Union correspondent for The Economist. Welcome.

ANTON LA GUARDIA: Hi. Good morning.

MONTAGNE: Good morning. Britain's Prime Minister Cameron, as we also just heard, has been leading the charge in Europe. But he's also been criticizing other European nations for not being tougher on Russia. In terms of sanctions, what exactly is he after?

GUARDIA: Well, he wanted toughening of the sanctions and is obviously pushing for a move into what is known in the jargon as Phase 3 sanctions, which is moving towards a generalized system of economic sanctions. That would hurt the Russian economy but it would also hurt European economies which is why countries have been reluctant to go that way. So we're now in various forms of enhanced Phase 2 sanctions, which is targeting individuals and companies. And so what is likely to happen is that you're going to see a broadening of a number of people in a number of companies that are targeted by sanctions. But I think we're still short of that Phase 3 until, I think, there is more conclusive evidence from the investigation.

MONTAGNE: Now Prime Minister Cameron would need the support of France and especially Germany to really get anything done in the way of sanctions. Is that a step those two countries seem prepared to take after the shooting down of this Malaysian airliner?

GUARDIA: The mood has changed in Germany. I'm currently in Berlin. The feeling that the Russians have gone beyond the pale and beyond the limits of acceptability, and that there needs to be a ratcheting up of the pressure on them all while maintaining diplomatic dialogue to try and talk the Russians down. But what it will translate into, in concrete terms, is still unclear. Let's be clear, there needs to be - there's a great worry that economic sanctions will hurt some European countries more than the others. So there needs to be some kind of balance. For example, there's a lot of pressure now on the French to halt the delivery of two warships to Russia. The French will say, well, that's all very well and good but what about oligarch money in London? And then people will say, well, what about Germany? They have to do something on the energy front. So you will have to have a negotiation among Europeans to spread the pain.

MONTAGNE: There's been a fair amount of talk about the Europeans being hurt, but what about the damage to Russia?

GUARDIA: Well, it's unclear what exactly hurts Putin. Nobody quite knows what his pain threshold is. And it's probably higher than that of most European politicians, particularly given the economic crisis that many countries are still living through. That said, there's a sense you have to go after his close circle. There's a sense you have to go after the economic interest and support him. But nobody has any certainty that economic sanctions, a political opprobrium, will work of itself. Then again, nobody - absolutely nobody - is talking about military options.

MONTAGNE: What other options are there that might be considered viable if it came to a situation where Russia were to turn off the energy taps, the gas taps to Europe?

GUARDIA: There are number of countries that are highly dependent on Russian gas. But then again, Russia is highly dependent on the European market for gas. So it's interesting that they haven't threatened to do so thus far despite several rounds of incremental sanctions. So it is a weapon, I think, that both sides are reluctant to see used. In the short term, the Europeans are fairly comfortable. They've got fairly high gas reserves that have done more in terms of interconnections between different countries of the EU. So if the flow is cut from one direction you can still get it from the other. In the longer term, though, there is still a very high dependence on Russian gas. And conversing and weaning an economy away from it is a process that will take years. So the question is not is there an immediate problem but whether there will be a problem next winter, for example.

MONTAGNE: Anton La Guardia is the European Union correspondent for The Economist and he joined us from Berlin. Thanks very much.

GUARDIA: Thank you. Transcript provided by NPR, Copyright NPR.