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European Union Geopolitical Watch – From July 23 to July 29, 2022

European Union Geopolitical Watch Team: Audrey Moisan, Sara Brouwers, Yanis Kourrad, Antoine Bézier, Etienne Mathieu

07/26/2022: Greece pleads for a new European electricity market model. -Yanis Kourrad-

Due to the correlation between gas and electricity prices and the European context of soaring electricity prices, Greece presented on Tuesday 26 July its proposal to divide the electricity market into two: renewable energies, hydroelectricity and nuclear power on the one hand and fossil fuels on the other. This proposal follows the wish of the European leaders who, last May, announced that they wanted to work quickly on optimising the electricity markets. 

However, the announcement from Athens has fuelled tension, dividing Europeans into supporters and sceptics. Italy, for example, supports the initiative, which it considers essential, especially as regards “this type of decoupling”. Similarly, Cyprus sees the Greek solution as a measure that “deserves to be taken into consideration”. In the same vein, France did not oppose the project and the Minister for Energy Transition, Agnès Pannier-Runacher, even said she was “very interested in this proposal”. 

On the other hand, other European states fear a weakening of the internal electricity market, which Luxembourg’s Energy Minister, Claude Turmes, sees as a “considerable asset” and which should not be “thrown out with the bathwater”. Similarly, Copenhagen has been reluctant to support the initiative and Energy Minister Dan Jorgensen has argued that “we really need to make sure that we don’t take decisions that will have negative long-term consequences and ruin a system that is crucial for the ecological transition”

Open to discussion, the European Commission plans to launch an impact assessment, the results of which will be presented in October, before leading to a possible legislative proposal, which could emerge in early 2023. 

07/26/2022: Saudi Arabia’s Crown Prince Mohammed bin Salman begins his first tour of Europe since the murder of journalist Jamal Khashoggi. -Antoine Bézier-

On Tuesday 26th July, Mohammed bin Salman, Crown Prince of Saudi Arabia, visited Greece and began his first European tour since the murder of journalist Jamal Khashoggi by a Saudi commando in October 2018. He was then received in Paris by French President Emmanuel Macron on Thursday 28th July. Since the murder of the dissident Saudi journalist, which took place in atrocious conditions in the Saudi consulate in Istanbul, Turkey, the de facto ruler of the kingdom enjoyed a relative status of pariah on the international scene, and the American intelligence services had highlighted his responsibility in the operation. 

The context of the Russian-Ukrainian war and the global energy crisis has accelerated the gradual “rehabilitation” of Mohammed bin Salmane, which had begun earlier, when Greek Prime Minister Kyriakos Mitsotakis and French President Emmanuel Macron notably visited Saudi Arabia, in October and December 2021 respectively. With the Russian invasion of Ukraine having led to a considerable rise in oil prices fuelling inflation, Riyadh is indeed one of the few international players likely to be able to increase its production and thus stabilise world prices. The West would like the kingdom to increase its daily production of black gold by about three million barrels. Before Emmanuel Macron, President Joe Biden had already pleaded this cause with the Crown Prince, obviously without success, during his visit to Saudi Arabia a fortnight ago.  Riyadh wants to spare its relations with Moscow and invokes its commitments to the other countries of the Opec+, to which Russia belongs. For the time being, the Saudi authorities had only announced last May a plan to increase oil production by 7% by 2026, and the project requires structural investments.

Mohammed bin Salman’s visit to Greece resulted in the conclusion of a series of contracts, notably in the fields of energy and defence. This relationship is part of the ongoing tensions between Greece and Turkey and the rivalry between Riyadh and Ankara for the leadership of the Sunni Muslim world, and Athens had notably supplied Patriot missiles to the kingdom in 2021. 

In France, Emmanuel Macron’s reception of the Crown Prince of Saudi Arabia, which was characterised by a “working dinner“, divided the political class. Beyond the Khashoggi affair, the left wing political forces spoke about the general human rights situation in the kingdom. In a message written in French and sent to AFP, the fiancée of the killed journalist, Hatice Cengiz, said she was “outraged” by the French president’s decision to welcome the Saudi leader. Two foreign NGOs, including DAWN, which was founded by the dissident Saudi journalist, have taken the case to France and would like the country’s leader to appear before a French judge for the murder of Jamal Khashoggi. The French presidency invoked the “criminal immunity” allegedly enjoyed by foreign personalities on official visits, as well as a pragmatic and realistic approach to international relations, justified by an exceptional world situation, and claimed not to make any concessions in the field of human rights. 

07/26/2022: Europe finds a compromise on Russian gas. -Audrey Moisan-

On July 26, 2022, while the sanctions against Russia continue, the European Union has managed to find an agreement between its members regarding the import of gas on its territory, while Gazprom has announced that it will not resume its deliveries to the European territory.

After lengthy talks, the 27 countries have agreed on a coordinated reduction of 15% of their gas consumption in the next eight months. However, the agreement must be qualified, since it includes many exemptions, particularly for Malta, Cyprus and Ireland, three states not connected to the Russian gas network and benefiting from an automatic and total exemption, but also for Spain, Portugal, Italy, Greece, Belgium and France, which may benefit from an exemption under conditions.

The purpose of this reduction is to save 45 billion cubic meters of gas for the winter and thus avoid a shortage in Europe, while Russia has announced to further reduce its exports. 45 billion cubic meters would be equivalent to the quantity missing in case of a total closure of the gas pipeline by Russia if Europe faces a particularly cold winter.

07/27/2022: Populism on the brink again in Italy, presidential candidates agree on a deal. -Sara Brouwers-

On 27 July, the right wing represented by Silvio Berlusconi’s Forza Italia and the far right, represented by the League of anti-migrant populist Matteo Salvini and Fratelli d’Italia, agreed on a deal ahead of parliamentary elections in September.

On 14 July 2022, Mario Draghi tendered his resignation after the 5-Star Movement refused a vote of confidence in Parliament, arguing that “the pact of confidence that underpins the action of this government [had] disappeared“. The resignation was refused and then accepted the day after, on 20 July, when he lost the support of the League, the M5S and Forza Italia, the latter having abstained in a vote of confidence in the Senate. The government was broken up. Indeed, following the implosion of the national unity coalition in Parliament, the Italian President announced the dissolution of the Senate and the Chamber of Deputies.

Thus the agreement between the three parties was based on the fact that The party in Italy’s centre-right coalition that gets the most votes in the parliamentary elections scheduled for the autumn will decide who will head the government if the alliance wins,” said Giorgia Meloni, whose post-fascist Fratelli d’Italia party, the most extremist of all, leads the polls with 22%. According to political scientist Paolo Natale, Giorgia Meloni could be rewarded by the electorate for remaining in opposition (especially in relation to her refusal to join the national unity government created in February 2021 by Mario Draghi, and that of Giuseppe Conte, previously).

07/29/2022: Gas, French MPs ask Brussels to abandon the agreement with Azerbaijan. -Sara Brouwers-

On 29 July, some sixty French elected representatives signed an article in the newspaper Le Monde denouncing an agreement signed between the EU and Azerbaijan on 18 July. In order to offset dependence on gas from Moscow, 20 billion cubic meters per year would be transported from the Caucasian country to supply Europe. But some voices are being raised against Ursula Von der Leyen, the president of the European Commission, accusing Ilham Aliyev’s regime of not being democratic. Some elected representatives also fear a new dependence on Azeri gas this time, rather than Russian.

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