European Commission calls for 'energy union' as its seeks to break Russia's market dominance

Last week’s interconnection between Spain and France could be the start of an ambitious new plan to fortify and further integrate the European Union’s internal energy market in the face of deteriorating relations with Russia, until now Europe’s main gas supplier.

Leading German daily Sueddeutsche Zeitung reported on Tuesday that plans are afoot in Brussels to break Russia’s dominance by coordinating the energy policies of member states in a new “energy union” that would strengthen the EU’s negotiating position with its powerful eastern neighbor.

To that end, the European Commission is looking to abolish the borders between the 28 national energy markets. It also wants the right to review all supply contracts – a point of contention with the German government, which has rejected the idea, according to the paper.

The Sueddeutsche Zeitung cites a draft plan that is set to be presented on Wednesday by European Commission Vice President Maros Sefcovic, who oversees energy policy in the EU.

The proposed policy calls for a more united energy market in order to guard the EU against supply shortages. The crux of the controversial new policy is greater centralization of power in Brussels – the European Commission is seeking greater power to coordinate energy policy for all member states. Energy policy is currently determined a the national level, per the EU Treaty. Germany, the EU’s largest member state, opposes the Commission’s power grab, according to the Sueddeutsche Zeitung.

In an interview with the newspaper, Sefcovic described the plan as “the most ambitious projects since the founding of the coal and steel union.”

In addition to abolishing the borders between the 28 national energy markets, Sefcovic said the EU had to become more independent of Russian energy supplies and at the same time attract investors.

EU efforts to wean itself off Russian gas are seen as a direct result of Russia’s aggression towards Ukraine and the country’s tendency to exploit its energy supplies for geopolitical ends.

As part of the plan to form a united front against Russia, the 28 member states would have to submit future supply agreements for review to the European Commission before they are signed. The new requirements would also apply to commercial contracts, such as ones made between European companies and Russian state-controlled gas monopoly Gazprom.

The German government has so far opposed such interventions in the business affairs of private German companies.