EU en acht landen aan Baltische zee tekenen overeenkomst over integratie energiemarkt (en)
EUOBSERVER / BRUSSELS – The eight countries bordering the Baltic Sea and the EU commission on Wednesday (17 June) signed an agreement to link up the energy networks of Estonia, Latvia and Lithuania with the wider European grids.
"Ending the effective isolation of the Baltic states, which still form an energy island, is an urgent task to deal with," EU energy commissioner Andris Piebalgs i, himself from one of three countries concerned – Latvia – said when the memorandum was signed.
The signatory countries – Denmark, Finland, Sweden, Germany, Poland, Estonia, Lithuania and Latvia – are also participating in the so-called Baltic Sea Strategy drafted by the EU commission, with one of its core priorities being energy interconnections.
The strategy and a set of concrete actions, which also include cleaning up the highly polluted sea – are expected to be endorsed by the heads of state and government at a two-day summit starting Thursday (18 June).
Projects envisaged as part of Wednesday's memorandum may get some €500 million in financing as part of the EU's €5 billion plan to boost energy investments and broadband internet to combat the current economic crisis.
Other EU financing is provided through the so-called structural funds aimed at boosting the infrastructure and competitiveness of poorer member states.
Three concrete sets of electricity grid projects are envisaged – the "Nordic Masterplan" - linking Finland and Sweden, Sweden and non-EU member Norway, which also participates as an observer, as well as Denmark and Norway.
The second set of projects links the Baltic states and Poland to the Nordic countries, while the third package connects Poland and Germany.
Similar connections are envisaged for gas pipelines, including to make existing pipes able to transport gas both ways, in case of a crisis similar to the one in January, when Russian supplies to eastern Europe were cut off for 10 days due to a price dispute with transit country Ukraine. New gas storage facilities and terminals for liquified natural gas (LNG) are also mentioned in the memorandum.
Yet all these projects could be considerably delayed due to the current financial crunch, which leaves very little money for co-financing such investments.
The European Bank for Reconstruction and Development on Wednesday warned that a series of energy projects in eastern Europe would be delayed "because of a lack of liquidity."
Ricardo Puliti, head of energy and natural resources at the EBRD told the Financial Times that multilateral lenders such as itself were unable to take up all the slack.
He was speaking after the EBRD announced it was to lend MOL, the Hungarian oil and gas company, €200 million to complete the construction of a new gas storage facility in southern Hungary.
Austerity measures
Similarly to Hungary, the three Baltic states are also approving austerity measures amid their worst recession since 1990.
Latvia's health minister Ivars Eglitis quit on Wednesday after the Parliament approved fresh spending cuts needed to secure a loan from the International Monetary Fund. Latvia is planning a 20 percent cut in public sector salaries on top of a 20 percent reduction already agreed.
Lithuania's finance ministry forecast the economy would slide 18.2 percent this year, more than the 10.5 percent drop previously forecast. The government in Vilnius also said it would cut public sector wages by 10 percent to help fill a widening budget gap. Pensions are also being cut by 10 percent.
Estonia, where the economy is expected to contract 12 percent this year, is expected to approve a new round of spending cuts on Thursday, although the central bank has warned the measures are not enough to keep the budget deficit in line with criteria needed for eventual euro entry.