Opinion

EU must step up energy cooperation with southern Mediterranean countries

Furthering energy cooperation between the EU and countries in the Southern Mediterranean is a challenge, but also a great opportunity. Supporting sustainable energy projects in partner countries could make them more economically stable and help safeguard the EU’s security of gas supply.

By: Date: May 4, 2016 Topic: Energy & Climate

This op-ed also appeared in Diario Economico and will be published in Il Sole 24 Ore and El Economista.

Il Sole logo

diario economico logo

el economista logo

The EU could help counter economic discontent in southern Mediterranean countries by stepping up energy cooperation, which would increase economic stability and perhaps contribute to the political stability of the region.

Trade links between southern Mediterranean countries are currently limited, and trade remains centred on the EU; energy makes up 50% of exports to the EU from the southern Mediterranean.

The EU’s Mediterranean energy policy aims to harmonize energy policies and regulatory frameworks in the region, and create a common energy market between Europe and Mediterranean countries.

But this approach has failed to create a common market or help stabilise the region. A deteriorating geopolitical situation in countries like Libya and Syria, along with the failure of regional energy initiatives and a lack of political trust, has resulted in little progress.

The EU must pursue a new bilateral energy policy in the region, and focus on supporting the development of renewable energy and energy efficiency in selected southern Mediterranean countries.

Furthering energy cooperation in the region is a challenge, but also a great opportunity. Energy demand is growing strongly and there is also potential for energy production. This represents a business opportunity for European energy companies, and is particularly welcome given the sluggish energy outlook within Europe.

However, barriers to trade across the region vary greatly between countries. To boost trade, the EU must help create bilateral relationships between countries instead of attempting to negotiate between regions as a whole.

Rather than politicising the process by starting negotiations between policymakers from many countries, the EU should bring the European Bank for Reconstruction and Development (EBRD) on board.

The EBRD could establish new ‘Sustainable Energy Funds’ with selected countries, creating public-private partnerships involving the EBRD, the government of the selected country, international energy companies operating in the country and institutional investors willing to make a long-term investment. This would encourage investors to get into the sustainable energy sector in the southern Mediterranean, as a proper risk-adjusted return would be guaranteed.

Economic cooperation between Europe and Mediterranean countries must be reviewed, and energy is a key piece of this mosaic. The Arab Spring and its tragic aftermath revealed deep political instability in many southern Mediterranean countries, pointing to the unsustainability of their economic model. Widespread economic discontent, particularly among young people, was a key driver of the uprisings. As the refugee crisis illustrates, this is also Europe’s problem.

After almost two decades of unproductive regionalist cooperation attempts, a new bilateral approach would reshape the EU’s energy cooperation efforts in the Mediterranean. The establishment of ‘Sustainable Energy Funds’ would be a win-win strategy, supporting sustainable energy projects in partner countries, making them more economically stable and safeguarding the EU’s security of gas supply.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint.

Due to copyright agreements we ask that you kindly email request to republish opinions that have appeared in print to communication@bruegel.org.

View comments
Read article More on this topic More by this author

Blog Post

Beyond Nord Stream 2: a look at Russia’s Turk Stream project

Since 2015, Nord Stream 2 has been at the centre of all European discussions concerning the EU-Russia relations. But as endless political discussions in Europe are being held on this pipeline project, the pipes of another similar Russian pipeline project – Turk Stream – are already being laid by Gazprom at the bottom of the Black Sea. This piece looks at these developments, analysing their strategic impacts on Europe.

By: Simone Tagliapietra Topic: Energy & Climate Date: July 4, 2018
Read article More on this topic More by this author

Blog Post

Ukraine: The struggle for reforms continues

The modernisation of the Ukrainian economy and state continues to develop at an unsatisfactory pace due to a lack of pro-reform political consensus. The two upcoming election campaigns in 2019 (presidential and parliamentary) make the reform process even slower and additionally put its effectiveness and sustainability under risk. The international community has a limited toolkit to overcome this stalemate.

By: Marek Dabrowski Topic: Global Economics & Governance Date: July 4, 2018
Read about event

Upcoming Event

Oct
11-12
20:00

Policy responses for an EU-MENA shared future

In the third edition of the "Platform for Advanced & Emerging Economies Policy Dialogue" we will discuss trade flows and trade policy between Europe and MENA, integration of developing economies into global value chains, and regional energy relations.

Speakers: Karim El Aynaoui and Guntram B. Wolff Location: Rome
Read article

Parliamentary Testimony

European Parliament

Brexit and Energy Policy

Testimony before the European Parliament's Committee on Industry, Research and Energy

By: Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate, European Parliament, Testimonies Date: May 28, 2018
Read article

Blog Post

The Iran nuclear deal crisis: Lessons from the 1982 transatlantic dispute over the Siberian gas pipeline

A US president taking a unilateral decision that affects European interests; European policymakers outraged at US interference in their affairs; European businesses fearing losing access to some international markets – sound familiar? This is the story of a crisis that took place in 1982 regarding the Siberian gas pipeline project; its outcome should inspire optimism in the Europeans’ capacity to counteract Donald Trump’s decision to withdraw the US from the Iranian nuclear deal.

By: Emmanuel Mourlon-Druol and Angela Romano Topic: Energy & Climate, European Macroeconomics & Governance Date: May 23, 2018
Read about event More on this topic

Past Event

Past Event

Cleaning up Europe's transport sector: which strategies?

Over the last decade, EU’s greenhouse gas emissions have decreased significantly in all sectors with the only exception of transport. This sector is thus becoming a key obstacle to EU decarbonisation and more aggressive policies are needed to decarbonise it. This event discussed the potential strategies to structurally address this issue, also on the basis of Bruegel’s new policy proposal in the field.

Speakers: Maria Demertzis, Francesco Starace and Simone Tagliapietra Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 3, 2018
Read article More on this topic More by this author

Podcast

Podcast

Brexit consequences for EU climate and energy policy

Bruegel fellow Georg Zachmann joins Richard Tol, professor in the Department of Economics at the University of Sussex, and Pieter-Willem Lemmens, head of analysis at the climate policy think-tank Sandbag, for this episode of 'The Sound of Economics', to discuss the impact of Brexit on climate and energy policy in the European Union.

By: The Sound of Economics Topic: Energy & Climate Date: February 15, 2018
Read about event More on this topic

Past Event

Past Event

Impact of Brexit on the EU energy system

This meeting will build on Bruegel’s recent report for the European Parliament (link) and will consist of two sessions. The first session will discuss the impact of Brexit on the EU energy sector, with a special focus on the consequences of Brexit for the Irish energy system. The second session will look at the impact of Brexit in terms of […]

Speakers: Georg Zachmann, Richard Tol and Pieter-Willem Lemmens Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: February 8, 2018
Read article More on this topic More by this author

Blog Post

EU budget: Expectations vs reality

The public's impressions of where money is spent in the European Union can often be wide of the mark. But whether this is a result of wishful thinking or just a lack of information remains unclear.

By: Yana Myachenkova Topic: European Macroeconomics & Governance Date: January 29, 2018
Read about event More on this topic

Past Event

Past Event

EU long term climate change strategy

This meeting, which will take place in Czestochowa, is part of the project “Developing the EU long-term climate strategy”.

Topic: Energy & Climate Location: Czestochowa, Poland Date: January 29, 2018
Read about event More on this topic

Past Event

Past Event

EU Long Term Climate Change Strategy

This meeting, which will take place in Copenhagen, is part of the project “Developing the EU long-term climate strategy".

Topic: Energy & Climate Location: Copenhagen, Denmark Date: January 26, 2018
Read article More on this topic More by this author

Opinion

The clock is ticking: Ukraine’s last chance to prevent Nord Stream 2

Ukraine is running out of time to provide western gas consumers with the necessary trust to abandon the Nord Stream 2 gas pipeline project.

By: Georg Zachmann Topic: Energy & Climate Date: January 24, 2018
Load more posts