Building a Europe Whole, Free, and Secure
Infrastructure integration at the heart of the European project
The progress made in unifying Europe has been one of the greatest successes of this century. The task at hand, however, is far from complete. Political and regulatory integration, fostered by EU membership, has yet to be fully complemented by infrastructural integration, both within Central Europe and of Central Europe into the broader European and transatlantic market space.
Despite significant progress in the last decade, Central European countries are still burdened by insufficient integration and unsatisfactory infrastructural connectivity with Western Europe, as well as weak North-South links. This is a legacy of the Cold War era, when intraregional infrastructural integration was actively prevented in order to maintain high levels of political and economic dependency on the Soviet Union. The detrimental consequences of this lack of integration are most evident in the energy sector. Central Europe remains a set of inadequately connected national energy markets, isolated from the Western community, and exposed to supply monopolies. Insufficiently diversified energy markets and monopoly pricing constitute a supply-security risk and lead to higher prices.
A meeting of Central European leaders on the sidelines of the UN General Assembly in New York City on Sept. 29 building on a joint report issued last November by the Atlantic Council and Central Europe Energy Partners entitled “Completing Europe – From the North-South Corridor to Energy, Transportation and Telecommunications Union”, provided fresh momentum to this agenda. The assembled heads of state and government representatives sent a clear message that investments in critical infrastructure along the corridor should be prioritized by the European Union and that regional coordination is essential to speed up the implementation of these projects.
Most urgent is the complete Europe’s energy integration to weaken Russia’s stranglehold on the most dependent member states. The Corridor would form the backbone of Central Europe’s energy infrastructure and enhance the region’s energy security. The North-South Corridor aims to integrate the whole of the EU and its neighbors into one coherent internal energy market in which industry can prosper and create new jobs on the continent and consumers can benefit from lower energy bills. In terms of gas, the Corridor would establish a transmission network of pipelines and interconnectors from the Baltic to the Adriatic Seas. It would also extend existing oil pipelines and establish a new link, enabling the transport of crude oil, via the Baltic and the Adriatic Seas to every country in Central Europe. As for the electricity sector, the Corridor would build and expand high-voltage transmission lines to connect the “energy islands” of the Baltic States with the rest of the EU. This would make the EU more competitive, strengthen its industrial base, and improve its ability to coordinate policies and politics. While there is no silver bullet to facilitate the Corridor’s implementation, tackling political, regulatory, and financial roadblocks through regional coordination can pave the way for such an outcome.
We believe that the North-South Corridor should be the top priority in the effort to build a single European energy market. Corridor projects should be granted preferred access to public funding in order to enable early-stage planning activities, as well as to tip the balance for sections of the Corridor that are not feasible through purely market-based mechanisms. A concentrated push, based on close regional cooperation, needs to be undertaken to obtain the necessary level of financing. This will only be possible when local transmission system operators conduct a dialogue with national regulators and lawmakers. Market-based development has to be at the heart of the Corridor, which is why the projects should be planned and implemented in line with economic developments in the underlying energy markets.
The New York meeting marked an important step toward binding the Baltic, Adriatic, and Black Seas together and creating a new bedrock of European prosperity and security. Completing the North-South Corridor offers a unique opportunity to further Europe’s integration, enhance its geopolitical influence, increase its competitiveness in the global marketplace, and strengthen its economic resilience; all this while furthering its climate change objectives. We hope that the New York meeting will provide an impetus to initiating the next phase of completing Europe, which is both a European and a transatlantic priority.
Marcin Bodio is CEO of Central Europe Energy Partners. David Koranyi is Director of the Eurasian Energy Futures Initiative at the Atlantic Council.
The Atlantic Council is a Natural Gas Europe Knowledge Partner.