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The Warsaw Voice » Business » December 30, 2014
Central Europe Energy Partners
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Completing Europe: The North-South Corridor
December 30, 2014   
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by Gen. James Jones and Paweł Olechnowicz

Twenty-five years after Poland’s Solidarity and other dissident movements brought about the collapse of the Berlin Wall and promised a reunified Europe, the continent’s political map suggests that this vision has been largely fulfilled. Nations that once lived behind the Wall’s ideological divide have joined the European Union to help build a secure, prosperous region from the Atlantic Ocean to the Baltic and Black Seas.

But economic and infrastructure maps portray a different picture. European integration remains dangerously incomplete. A glaring problem is in Central Europe, where national networks of railroads, power lines, communications links, and notably oil and gas pipelines remain largely disconnected from each other and from Western Europe. Nations from Estonia and Poland to the Balkans lack the connections running north-south and east-west essential to making them fully part of a single European market. This is the unhealed legacy of a half-century of Soviet-led development, during which disinterest in such intra-regional connections kept these lands dependent on Moscow.

The Russia-Ukraine crisis of 2014 has dramatized the cost of Central Europe’s stunted network. Many of these countries, dependent on Russia as the only natural gas supplier their pipelines can access, find themselves vulnerable to Moscow’s political pricing of gas and other manipulations. This vulnerability has spotlighted a strategic imperative for Europe: to build, without delay, a north-south corridor of energy, transportation and telecommunication links from the Baltic to the Adriatic and Black Seas.

Such a corridor would diversify Central Europe’s energy supplies by connecting the entire region to the liquefied natural gas terminals being completed on Poland’s northwest coast, and proposed for Croatia. Improved oil and electricity routes as well as road and rail links would better connect the Baltic region with those along the Adriatic and Black Seas. Spurs from this backbone would link to Ukraine, Moldova and Turkey, helping to integrate and stabilize Europe’s fragile periphery with the European Union’s core.

This idea is not new, yet it is more urgent than ever. In 2011, the European Commission declared that a “north-south energy corridor” was a priority in the effort to create a single European energy market. But Europe’s weak economy and tight budgets impeded investment and the EU’s commitment to the project faded.

As we note in a new joint report by the Atlantic Council and Central Europe Energy Partners, Europe’s new leadership must reprioritize the corridor. Economic and political conditions have improved for infrastructure investment. There is a growing consensus in Europe that coordinated infrastructure projects can provide a needed stimulus to the continent’s faltering economy and a foundation for long-term growth. The north-south corridor should become the cornerstone of European Commission President Jean-Claude Juncker’s broad new investment campaign into Europe’s growth.

The north-south corridor fits easily within the European Commission’s plan to generate 300 billion euros of public and private investment to strengthen infrastructure and jump-start a new brand of European competitiveness. The corridor would foster smart, sustainable and inclusive economic growth, and help drive a reindustrialization of Europe through lower energy prices, faster transportation links, and modern digital infrastructure. The new efficiency in Central European transport and its greater use of natural gas would also help Europe toward its goals of cutting pollution and building a low-carbon economy.

The changes in the U.S. Congress after the midterm elections could lead to a more active engagement mood on foreign policy in Washington on European issues. That could be directed into U.S. support for this project. Promoting the corridor would show continued U.S. commitment to Europe’s peace and prosperity. The U.S. government should use its influence to help manage and advance the debates over how to implement a complex project, as it did in the development of the southern gas corridor to supply Europe with gas from Middle Eastern and Caspian suppliers. Washington should also liberalize its energy trade and provide extra liquidity to the global markets.

Finally, Russia’s aggression against Ukraine has laid bare Europe’s energy insecurity, and now this issue cannot be ignored. While the Ukraine-Russia gas deal in late October may temporarily ease the risk of a cutoff in the Russian gas supplies on which much of Europe depends, the future is far from certain. It is imperative to diversify Europe’s supplies and link it to new upstream resources in Eurasia via the emerging southern gas corridor as well as the emerging global LNG market.

The north-south corridor would strengthen Europe strategically and economically as a partner for the United States and realize the transatlantic vision of a Europe which is united, free, and at peace.

Gen. James Jones (ret.) is chairman of the Atlantic Council’s Brent Scowcroft Center on International Security and a former U.S. national security adviser and commandant of the Marine Corps. In 2003-2006, he served as NATO’s Supreme Allied Commander Europe.

Paweł Olechnowicz is president and CEO of Polish energy company Grupa Lotos S.A., and chairman of the board of directors of Central Europe Energy Partners (CEEP), a Brussels-based non-profit association.

The full report is available at www.ceep.be

Central Europe Energy Partners (CEEP) is an association formed by energy and energy-intensive industries that aims to unite the energy sector in Central Europe and strengthen the position of this sector in the European Union. This is the first industry-specific organization from Central Europe of a regional character. The association represents the Central European energy sector (for example coal, oil, renewables, grids) as well as energy-intensive industries (steel, chemicals and others). Its main aim is to support the integration of this energy sector within the framework of a common EU energy and security policy. At present, CEEP has 25 members—companies and research institutions from countries including the Czech Republic, Lithuania, Poland, Romania and Slovakia. In June 2014 CEEP celebrated its fourth birthday.
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