Russia May Soon Shift From Dollar To Euro, In Billing Its Energy Exports To Europe

June July 21-22], 2003
Source: German, Russian media

As this week's issue of Germany's Der Spiegel reports in an article on European self-assertion against the Bush Administration-run United States, EU Commission President Romano Prodi told journalists in early July that he expects Russia to soon handle its crude oil and natural gas exports to the EU in euros, instead of dollars.

Russian President Vladimir Putin wants that to "drastically upgrade relations to Europe," Prodi said, referring to close contacts he has to Russian policy-making circles. Hints in this direction have repeatedly been made, earlier, in Russian media, but this is the first time a leading European Union politician confirmed it.

[Source: German, Russian media, news archives, July 21-22]

EU AND RUSSIA MAY FINALLY REALIZE THEIR "STRATEGIC ENERGY
PARTNERSHIP," AFTER THREE YEARS OF TALKS.

Discussion to go ahead with the project has been conducted since the Paris EU-Russia Summit in October 2000, but remained inconclusive for two main reasons:

1) the disinterest of the EU bureaucracy in breaking with free market rule and going for long-term state-to-state agreements between EU and Russia;

2) the disinterest of the Russian energy oligarchs, based on (partially, illusionary) expectations that free market dealings would yield more revenue. Recent legal moves by the Putin entourage against the oligarchs may help to contribute to a "rethinking" on the side of the energy firms.

At the recent St. Petersburg (EU-Russia) and Athens (EU) summits, decisions have been taken that indicate that the talks about that strategic partnership will be accelerated now:

* The EU is going to propose the establishment of four main corridors for oil imports from Russia, partially through an upgrading of existing pipelines, but also construction of some new ones:

1) Drushba North, via Poland; 2) Odessa-Brody-Plock, across Poland; 3) Constanta-Triest, via Romania/Serbia/Croatia; 4) Bourgas-Alexandropoulis, via Bulgaria/Greece;

* The establishing of a mixed expert team, to work out details of proposals for the EU-Russia deals;

* An energy conference in Moscow in October;

* Energy cooperation ranking on top of EU-Russia Summit in Rome, in November.

Related is also the bilateral energy cooperation summit Germany-Russia, in September.

Interesting in this context are remarks made by EU Commission President Romano Prodi, in a meeting with journalists in Brussels in early July, that he expects the Russians to soon shfit from dollar to euro, in billing their entire oil and gas exports to Europe.