Every cloud has a silver lining
In everyday life, a well known proverb suggests: Every cloud has a silver lining. The same proverb applies to international relations, where some nested interests profit from conflicts, whereas others lose. It might sound morbid to think in a similar fashion about the latest happenings in world politics regarding the Russian intervention in the Ukrainian peninsula of Crimea, after opponents of the ancient regime overturned Victor Yanukovich’s regime and a pro-Western government seized power in Ukraine, to the disgust of the Russian leader Vladimir Putin. Some saw Samuel Huntington’s Clash of Civilizations reemerge, while the West desperately tries to position itself in regard to the latest happenings. The European Union (EU) announced sanctions on Russia, but consideration of its energy dependence on Russian gas and oil shed some light on reality. In some EU member states, the imposition of economic sanctions on Moscow has been welcomed rather bashfully, primarily due to potentially detrimental effects of Russia's economic isolation on the energy sustainability of EU countries on one side, and economic trade on the other. In fact, the EU has no time to waste. It needs to rethink its energy policy and come up with alternative oil and gas routes, independent from Russian influence. Croatia, a small Mediterranean country and the latest EU member could just be the right solution to the energy crisis. Recent technological achievements in Croatia, access to the Mediterranean Sea and a pivotal geopolitical position between Western and Eastern Europe promise big things. The window of opportunity is open. However, political incentive still needs to appear in order to seize the opportunity.Energy dependence unfolded
After the Russian military intervention on the island of Crimea, there are troublesome times for the EU, as well as the whole world in sight. Moscow's aggression was received with bitterness in the EU, and sanctions ranging from visa restrictions and travel bans to investment withdrawals and G-8 meeting cancellation were proposed. Nevertheless, influential EU member states like Germany and the United Kingdom condemned Russia's actions, but slightly hesitantly, rendering concern about possible countermeasures that the Russian Federation might impose on the EU in regard to oil and gas supplies and other economic trade items. At the moment, every action has its obverse and reverse. Every move is planned carefully, and EU Member States are weighing their collective options, fearing Russian reprisal. Any sanction can be contrasted with a counter-sanction. Any external interference in the Ukrainian-Russian dispute that would shake up Russian interests in Crimea could destabilize the state of international relations. The EU desperately wants to send a strong message of disapproval regarding the allegedly unconstitutional and illegal intervention in Ukrainian internal affairs, but finds itself trapped in a fatal embrace with Russia, leaving Putin with ample room for maneuvers. Preventing backlashes, yet imposing sanctions on Russia at the same time, will be a difficult and risky task that calls for creativity in the EU leadership. No one wants to cut ties with their third biggest trade partner. Unfortunately, what we are witnessing is a realist, interest-driven response to a largely humanitarian problem in its nature. Politics cares about Ukrainian and Russian people only to the extent that it does not jeopardize EU member states’ economic considerations.
One of EU’s biggest concerns has been the energy dependence on Russian oil and gas. Just recently, Russia put its arms around Europe, first by finishing constructions on the Nord Stream, an offshore gas pipeline connecting Russian gas with Germany, and subsequently by sealing the deal about the upcoming South Stream pipeline, which will transport Russian gas through the Black Sea to Bulgaria, Greece, Serbia, Slovenia, Hungary, Austria and Italy. In the wake of the revival of the Cold War block politics that some scholars have been evoking, the Russian monopoly in supplying Europe with gas and oil would further deepen this dependence. The EU has to react quickly in diversifying its energy transit routes to avoid serious energy shortages in the future. If political and economic relations between the West and Russia freeze, the latter could easily cause an adverse supply shock, just like OPEC did in the 1970s. Prices of oil and gas would skyrocket, triggering high inflation and higher unemployment. This is something that the European Union certainly wants to avoid, especially now that it has laid down all its cards on economic recovery and unemployment termination after the severe economic crisis. At the onset of a new Cold War scenario, the EU needs alternative and safe energy routes, and Croatia might be an important asset to the EU in that regard.
Croatia‘s golden opportunity
After struggling to overpass the critical point of becoming a respected member of the international community after the War of Independence (1991-1995), Croatia signed the North Atlantic Treaty (2009) and joined the European Union just recently (2013), but still experiences difficulty in corroborating itself as an important figure on the international chessboard. Up to this time, Croatia has exercised bandwagoning as its primary modus vivendi in today's world order, going with the flow of the rest of its Western allies in most cases, without any true leverage in international disputes. However, things could change rapidly if the Croatian political establishment realizes the opportunity lying before them amid a possible energy crisis. Croatia missed its opportunity to be part of the deal a couple of times. The South Stream has bypassed the country, causing discontent in scholarly circles because of perceived governmental sloppiness. From today’s standpoint, this might be seen as an unintentionally positive thing. Croatia’s geopolitical seating in Southeast Europe guarantees access to Western, Central and Eastern Europe. Furthermore, access to the Mediterranean Sea via the Adriatic Sea opens the possibility to transport oil from the Maghreb region and the Middle East to Europe. Reasons why such an outcome could be desirable for Croatia’s endeavor to place some leverage on EU energy policy is as follows. First of all, Croatia’s position in Southeast Europe offers comparative advantages vis-à-vis other potential transit routes and projects that are in sight. Both the Nabucco Pipeline and the Trans Adriatic Pipeline, which are expected to transport natural gas from the Caspian Sea, have to pass areas of instability in the Caucasus area. The European Union cannot afford another uncertainty of energy supply. In addition, since the EU is the second biggest consumer of oil in the World, the capacity to substitute oil with gas from the Caucasus region would not suffice. The EU needs to transport oil through secure routes, which Croatia as a strong ally, is. Croatia’s location to distribute oil from the Maghreb region and the Middle East to Europe might diversify the supply chain. The ports of Pula and Rijeka, encompassed the function of trade hubs in the past, and continuity in that regard is not hard to imagine. Second, Croatia could finally prosper economically and employ its well known, but underused capacities.
The country has missed the chance to participate in energy policy a number of times, so this opportunity should not be missed. It would certainly help with the unemployment rate, which is currently one of the worst in the EU. This leads to the third point, which is the more political and electoral opportunist notion about the benefit such a project could bring to Croatian people. If the government realizes this opportunity, it could demonstrate the willingness to set the Croatian economy in motion and enhance the importance of Croatia internationally. To gain social acceptance, the whole project has to be framed properly. The biggest concerns are ecological considerations and oil spill scenarios a la Exxon Valdez. Croatia is mainly a tourist destination, and any uncertainty in that regard would mean immediate abolishment of any plan. This brings us to the fourth and last point, which is the Croatian research and development (R&D) potential. Just recently, a team of scientists from the Rudjer Boskovic Institute in Zagreb synthesized a revolutionary gelator that prevents oil from penetrating into water or ground, and does not change the chemical features of oil at the same time. Diverse industries have shown interest for this technology that could end ecological catastrophes for good. No more fear and uncertainty, at last. Further cooperation between the Croatian state and the R&D industry could benefit both sides and the welfare of the Croatian society.
What next?
The next logical step is to construct a cost-efficient and environmentally friendly framework for oil distribution. In addition, cooperation mechanisms with the R&D industry have to be established. Finally, political vision and political will are crucial if any of this is to happen. Nothing else can open the political window. Alternatively, Croatia could also benefit from trans-national and inter-regional cooperation in the Adriatic Ionian Euroregion, where common stances and strategies could be envisaged.
Hopefully, the conflict situation in Ukraine will be resolved peacefully without further casualties. It is the people of Ukraine our hearts should go out to right now. Unfortunately, EU-Russian interdependence prohibits harsher condemnation, with energy dependence as one of the main drivers. Even a positive outcome in the EU-Russian dispute cannot be a guarantee of future stability. This is why the EU needs several back-up plans to both diversify its energy suppliers and rely on safer oil transportation routes. Croatia should definitely take part in this game.
Mario Munta, Public Policy, Croatia
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