Russian-EU Energy Interdependence and Security in Europe

Abstract

Does the current level of economic interdependence between the Russian Federation and members of the European Union (EU) promote stability in Europe? As a key component of national security, energy security is a high priority for all states. While overall EU dependence on the Russian Federation for such critical needs as oil and gas does pose a potential threat to the national security of some EU members, the reality is that this dependence will continue through at least the next decade. If the EU is overall dependent on Russian energy imports then one could say that Russia is highly dependent on the income from exporting oil and natural gas to the EU. Despite the economic recovery that Russia has seen over the 13 years, since the Russian economic collapse in 1999, Russia has failed to diversify its economy. With the federal budget of the Russian Federation being at least 50 percent dependent on the income from energy exports, establishing demand security for those critical commodities should have been a very high priority over the past decade. Unfortunately, Russia's state owned national champion Gazprom has instead been used to finance the government and as a tool of international diplomacy to either reward or punish European states for their compliance with Russian positions. The failure of Russia to diversify its economy and the failure of the Russian energy sector to diversify its consumer base have resulted in the Russian federal government being highly dependent on energy exports. Additionally, with nearly 80 percent of Russian energy exports flowing to the EU this means that the Russian federal government is highly dependent on energy exports to members of the EU. If interdependence is defined as two states being dependent on one another for trade then Russia and the EU share interdependence in the energy market. Despite previous attempts to unite EU member states in critical policy areas such as energy policy over the past decade, the Russian Federation has been able to bypass EU structures and engage EU members individually to establish dominance in the energy market. However, the Ukrainian gas crisis of 2009 exposed the vulnerabilities of the EU to supply disruptions and gave individual EU member states the motivation to work more closely together to improve overall EU energy security. This basic change in the willingness of individual EU member states to prioritize overall EU goals in the energy market represents a fundamental paradigm shift. While not every EU member supports the concept of a common EU energy market to the same degree, this shift has been significant enough to challenge Russian influence in the EU marketplace.