Euro­pean Union charges Rus­sia gas gi­ant Gazprom; claims abuses its po­si­tion

The China Post - - INTERNATIONAL - BY RAF CASERT

The Euro­pean Union on Wed­nes­day charged Rus­sia’s state-con­trolled Gazprom en­ergy gi­ant of abus­ing its dom­i­nant po­si­tion in cen­tral and eastern EU na­tions in an an­titrust case that will fur­ther test tense re­la­tions be­tween Brussels and Moscow.

EU Com­pe­ti­tion Com­mis­sioner Mar­grethe Vestager said Gazprom is strong-arm­ing cus­tomer na­tions rang­ing from Es­to­nia to Bul­garia, where it some­times al­most fully con­trols the gas mar­ket, by set­ting un­fair pric­ing and con­tract re­stric­tions.

Vestager said she was in­ves­ti­gat­ing Gazprom’s sales poli­cies through­out most of the EU’s eastern rim and was fo­cused on three key is­sues: whether the com­pany is pre­vent­ing cross­bor­der flows of gas to other EU na­tions, charg­ing un­fairly high prices and de­mand­ing to keep con­trol of the pipe­lines in re­turn for gas.

“It all ends up in one — abuse of dom­i­nant po­si­tion,” she said.

Gazprom im­me­di­ately dis­missed the ac­cu­sa­tions as “un­founded.” The com­pany said in a state­ment it “strictly ad­heres to all the norms of the in­ter­na­tional law and leg­is­la­tion in the coun­tries where Gazprom op­er­ates.”

The move comes at a time when the EU has al­ready im­posed eco­nomic and po­lit­i­cal sanc­tions on Rus­sia for its in­volve­ment in the vi­o­lence in eastern Ukraine.

Vestager in­sisted pol­i­tics played no role in her de­ci­sion to go af­ter the com­pany with strong links to Pres­i­dent Vladimir Putin’s Krem­lin. Oth­ers dis­agreed.

Al­most im­me­di­ately, Lithua­nian Pres­i­dent Dalia Gry­bauskaite, a staunch op­po­nent of its neigh­bor Rus­sia, tweeted that “Fi­nally @EU_Com­mis­sion took on #Gazprom,” adding there was “no fu­ture for #Krem­lin po­lit­i­cal& en­ergy black­mail.”

The de­ci­sion to send an of­fi­cial state­ment of ob­jec­tions comes af­ter some EU lead­ers and Moscow reached a peace deal that calmed the con­flict in eastern Ukraine, where rebels have fought the Kiev gov­ern­ment. The EU has long claimed Putin has been stok­ing the con­flict for Rus­sia’s gain.

Rus­sian For­eign Min­is­ter Sergei Lavrov stuck to legal, eco­nomic ar­gu­ments Wed­nes­day, say­ing that all of Gazprom’s cur­rent EU con­tracts “were signed in strict com­pli­ance with the legal regime that was in force in the EU at the time.”

I f some might con­sider Wed­nes­day’s de­ci­sion po­lit­i­cally mo­ti­vated, Vestager can note the EU took sim­i­lar ac­tion just last week against Google, al­leg­ing the Amer­i­can In­ter­net gi­ant is also abus­ing its dom­i­nant po­si­tion.

The stand­off over Ukraine has forced the 28- na­tion EU into a sud­den re­think of its en­ergy poli­cies to make it less re­liant on Rus­sia and Gazprom.

The Krem­lin has of­ten been seen as us­ing its dom­i­nance in gas sup­plies to Europe for po­lit­i­cal gains, never more so than when it stopped de­liv­er­ing gas into and through Ukraine twice over the past decade. Europe im­ports some 40 per­cent of its gas from Rus­sia, half of that via pipe­lines that run through Ukraine.

By hin­der­ing gas trade among eight na­tions in the EU’s eastern rim, it could en­force a “di­vide­and-rule” pol­icy that gives it ex­ces­sive power, the EU said.

Gazprom has a lot at stake, too — the 28-na­tion EU is its most lu­cra­tive mar­ket.

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