OPINION: Many European countries were enjoying unseasonably warm weather this week, with visitors drawn to beaches and lakesides, but the continent is gearing up for a tough winter ahead.
The outlook did not get any better after European Union energy ministers failed once again to settle their differences on whether and how to place a cap on wholesale gas prices.
At first, the stated objective was not only to shield local businesses and consumers from soaring energy bills but also to dent Russia’s gas revenues however now the bloc is marching into the cold season with an exposed flank and division in the ranks.
On many levels, the firmness and apparent unity of the Western response to Russia's invasion of Ukraine, allied to the latter’s effectiveness in the battlefield, have been crucial to stymie Russia’s military adventurism.
Leading European figures including Italy’s former head of government Mario Draghi, German Chancellor Olaf Scholz and the UK’s former prime minister Boris Johnson played important roles in building crucial early support for Ukraine.
This support was also instrumental in containing Russia’s efforts to use its energy commodities as economic weapons, which EU officials openly described as “blackmail”.
Gas inventories in Europe are now more than 90% full, despite diminished Russian supplies. Gas prices have declined to levels last seen in March.
But the volatility of energy prices will continue to pose a threat to European stability and economic well-being in the months to come.
Disagreement
Tellingly, the primary reason EU ministers pulled back once again from gas price caps is the growing disunity between countries.
The disagreement is deepest between those in favour of a cap and those who are not, but also about how such a cap would be structured and imposed.
And if there is one thing that Russian President Vladimir Putin’s politics has been effective at is exploiting division to sow discontent: the textbook divide and conquer approach.
Putin knows how to exert leverage wherever solidarity is lacking. And there is more than one place in Europe where he could go looking.
Hungarian Prime Minister Victor Orban has manoeuvred this former victim of Soviet aggression back into Moscow’s sphere of influence, despite membership of the EU, and, in doing is proving a real thorn in Brussels’ side.
He has spoken against sanctions and stressed that Europe’s approach is hurting its own citizens.
There are those in Brussels who think Orban's oppressive record on matters such as press freedom and gender rights mean Hungary has become nothing less than Moscow’s Trojan Horse inside Europe’s city walls.
But a cold winter spell and increasingly volatile gas prices would amplify Orban's message and find him more willing ears.
Russian gas giant Gazprom will play on the fears felt by increasingly nervous European politicians and has threatened to end remaining gas exports if caps are imposed.
After new elections last month, Brussels is also cautiously looking at Italy’s far-right government and its geopolitical positioning.
While likely new Italian Prime Minister Giorgia Meloni has insisted on her support for EU membership, NATO and sanctions, coalition partners Matteo Salvini and Silvio Berlusconi have history of co-operation and, in the latter’s case, personal friendship with the Russian president.
Meloni’s government last week elected a Putin-aligned Eurosceptic, Lorenzo Fontana, as speaker of the lower house.
Add to this the spectre of recession that is looming over the European economy and growing resentment of German largesse in supporting its domestic consumers, and there is plenty that could sap the bloc's power to uphold sanctions and support to Ukraine.
Europe’s failure to agree on a gas price cap remains an open flank as winter approaches. Putin will be pleased.
(This is an Upstream opinion article.)
