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Merkel plans to press Putin on energy reliability

German Chancellor Angela Merkel will seek to banish doubts about Russia's reliability as a supplier of gas and oil when she travels to the Black Sea to meet President Vladimir Putin on January 21.

Merkel meets the Russian leader in the resort of Sochi. The chancellor, who's put improved ties with Russia at the center of her six-month European Union presidency, needs to encourage Putin to keep the pipelines open to supply the fuel on which the EU depends. Earlier this month, OAO Transneft, Russia's oil pipeline monopoly, ordered a three-day shutdown of oil piped to western Europe via Belarus after a row over pricing.
That followed a decision by OAO Gazprom - the world's largest natural-gas producer - to cut gas to Ukraine in January last year, interrupting supplies to Europe. „We need a strategic partnership with Russia, but Russia also needs a strategic partnership with Europe,” Merkel told reporters in Strasbourg January 17.
She said an extended partnership and cooperation agreement between the EU and Russia would provide a good basis for reliable relations and „energy will be high on the list for this agreement.” Companies in Germany, Russia's biggest trading partner, were „shocked” at Transneft's action, which infringed bilateral treaties, said Klaus Mangold, the BDI industry group's chief lobbyist for Eastern Europe.

„This is repeated bad form,” Mangold, who represents businesses including Siemens AG, Europe's biggest engineering company, said in a January 16 interview. „Russia is legally liable for its negligence.” Putin's assertiveness is causing such concern in Germany because it and EU partners plan to import more oil and gas from Russia, said Joachim Wuermeling, a German deputy economy minister responsible for energy policy.
Germany, Europe's biggest economy, bought about 33% of its oil from Russia last year and 42% of its gas. „The plain fact is we're already competing with China and India for custom with Russia,” Wuermeling said in an interview in Berlin. Attempting to assuage those concerns, Igor Shuvalov, Putin's co-ordinator for meetings of the Group of Eight leading industrialized nations, told an audience in Berlin on January 17 that Russia „aims to stay a reliable partner of the EU.”

„Of course there will be a discussion on energy security issues,” Putin spokesman Dmitry Peskov said in a telephone interview today. They will also look for ways of „eliminating existing difficulties on ways of initiating dialogue” on the partnership and cooperation agreement between the EU and Russia. The agreement, which underpins all relations between the EU and Russia, expires this fall.
Merkel is seeking to extend the decade-old partnership and cooperation treaty to include clauses committing Russia to honor long-term energy contracts, German Foreign Minister Frank-Walter Steinmeier said in an interview on January 16. That includes pressing Russia to accept independent mediation in any future energy disputes with its neighbors, he said. „We want to weave a new chapter into the accord addressing long-term energy supplies,” Steinmeier said. „If we can achieve that, we may also seek a mediation mechanism for disputes.”

Relations are complicated by the fact that Poland is currently blocking negotiations on the energy accord to protest Russia's year-old ban on Polish meat imports. The EU will today sign an agreement promising that all food exports to Russia meet the highest EU standards, though Russia is still refusing to lift its embargo, the Polish newspaper Gazeta Wyborcza reported yesterday. On her trip to Sochi, Merkel is following in the footsteps of her predecessor Gerhard Schroeder, who won a promise from Putin there in August 2004 to increase oil exports to curb rising global prices.
Schroeder, now supervisory board chairman of a joint German-Russian project to build a Baltic Sea gas pipeline, this week advised Merkel not to seek apologies from Putin in Sochi. The Russian leader has „restored stability and reliability” in his country's foreign dealings, Schroeder told the Berlin event with Shuvalov. Putin, he said, is simply „misunderstood.” (Bloomberg)