Carnegie Europe: Europe’s Energy Strategy and South Stream’s Demise

President Vladimir Putin’s announcement on December 1 that Russia was abandoning plans to build a $50 billion gas pipeline throws down the gauntlet to the European Union and all its 28 member states.

If Putin sticks to his policy to scrap the South Stream project, which would have brought gas from Russia to Southeastern Europe, the move could turn out to be decisive for the EU’s energy strategy—if the EU uses that opportunity.

For one thing, the demise of South Stream could speed up the diversification of Europe’s energy sources. It could also encourage transparency in the energy sector. And it could bring into line those EU countries that have yet to ratify the EU’s third energy package, which is designed to introduce competition into Europe’s energy market. Those were the issues that South Stream had intended to impede.  MORE