Southeastern European states sign milestone energy treaty

The Energy Community Treaty between the European Union and nine partners of Southeast Europe – Croatia, Bosnia and Herzegovina, Serbia, Montenegro, the Former Yugoslav Republic of Macedonia, Albania, Romania, Bulgaria and the United Nations Mission in Kosovo (UNMIK) on behalf of Kosovo – signed in Athens yesterday sets the stage for an integrated energy market across the continent. The extension of this market to Europe was postponed since Turkey, though represented in Athens by Energy and Natural Resources Minister Mehmet Guler, did not sign the treaty, saying there were problems in the implementation of the «acquis communautaire» (EU laws and regulations) on environmental issues. Moldova is an observer state. Besides environmental rules and regulations, the parties in the treaty have also undertaken to implement EU legislation and regulations on energy and competition. «This is the first time in history that all of these states and territories have signed a legally binding treaty and is a milestone in reconciliation after the wars of the 1990s. The Energy Community Treaty is consciously modeled on the European Steel and Coal Community that was the genesis for the European Union,» the European Commission said in a statement yesterday. «The treaty will also create, firstly, an agreed policy framework for the World Bank and the EBRD support to infrastructure investments – which are estimated at $30 billion in the electricity sector to reach EU standards by 2015 – and, secondly, the expansion of the natural gas system to create an intermediate gas market between the Caspian Sea and the European Union. From the strategic point of view, the treaty creates a supply route for gas into the European Union from the Middle East and the Caspian region and this will eventually increase competition in the core EU markets and reduce dependency on single sources of gas [meaning Russia]. European Union companies that have invested at the far end of the supply chain will be able to better export to the EU,» it added. The treaty seeks to address local and specific energy and environment concerns of Southeast Europe, such as increased mortality rates from winter cold and environmental degradation from emissions at old power stations, the use of wood for domestic heating which results in deforestation and the unsustainable development of wetlands and watercourses for hydroelectric power. «Significant new investments in the mining and metallurgy sectors are expected as short-term results… In the longer term, the stabilization of the energy sector will considerably assist the macroeconomic regeneration of the region, contributing to lower emigration rates, economic growth and peace,» the Commission statement said. «This is the first treaty of its kind. It uses the common denominator of energy policy to bring the countries of the region together and will provide an important catalyst for further governmental cooperation in the future,» said UK Trade and Industry Secretary Alan Johnson, who signed the treaty on behalf of the EU presidency. Greek Prime Minister Costas Karamanlis also hailed the treaty as a milestone that will bring all Balkan countries closer to the EU.