Page 24 EU Reporter

D
espite the potentially far-reaching consequences
of the Energy Community (EnC) Treaty , whether
for regional cooperation or its impact on future EU
accessions, its legal, political and economic implications
are still barely known - even to some of the most eminent
researchers on the region.
What is known, is that the Treatys main aim is to provide
a legal framework for an enlarged Internal Energy Mar-
ket (IEM) in South Eastern Europe by paralleling the EUs
acquis communautaire the 80,000 pages that constitute
EU law in the areas of energy, environment, competition
and renewables . This international agreement carries
consequences however for the European Community on
the one hand, as well as the seven contracting parties on
the other, some of which, its signatories might not have
even been aware of.
Besides the goals of providing a stable environment
for investment, promoting security of supply, enhancing
competition, improving the environment and fostering
market integration, there are inherent challenges which
these objectives provoke. These go beyond technical
rules and specifc sector reform. The following conclu-
sions, shared by most observers and insiders, support and
explain this statement.
Essentially, the creation of the Energy Community is noth-
ing less than a testing ground to probe the viability of a
further round of enlargement into the southeast, in the same
manner as integration in the energy sector will be a litmus
test for the European integration process as a whole .
First, the Energy Community Treatys provisions
tackle an i mportant, but largely underdeveloped
sector of the Balkans, where progress can be achieved with
regulation that has now became standard in Western
Europe. The disintegration of the regions infrastructure due to
civil war and hampered market development did not, for
instance, allow for the emergence of comprehensive natural
gas provision or a signifcant level of competition.
This situation leaves room for comprehensive improvements
with relatively minor actions. Moreover, the legislative changes
required by the Treaty, for example those concerning gas
and electricity directives or regulations aiming to establish
the IEM, often represent legislation in areas where there
was little or none beforehand. The success or otherwise of
the EU applicant countries in transposing EU energy laws
into domestic ones can then be interpreted as a signal of
their willingness or ability to comply with other harmo-
nisation requirements. The progress made so far in the
energy sector, surprisingly or not, does not allow for
considerable optimism regarding the preparedness of
most non-EU countries in the Balkans for future accession
negotiations.
Closely linked to this conclusion is another. For the
ex-Yugoslav countries, these negotiations present an
opportunity to regain their international voice. By
fulflling their treaty obligations, these countries have
the chance to regain their international personality, promote
their own sovereignty and prove their capacity to act
independently.
This is particularly relevant, for instance, to Bos-
nia and Herzegovina a state which has yet to resolve
questions of territorial integrity and political independ-
ence; as confrmed by the recent diffculties surrounding
constitutional reform and the failure to achieve consensus
in early April this year. Examples like this prove that the
involvement of the High Representative remains necessary,
even though it undermines the states sovereignty. The
ENERGY: THE ENERGY COMMUNITY TREATY
By AIvin PuuI
THE SILENT ENLARGEMENT

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EU Reporter Page 25
ubiquitous diffculties involved in the defnition of
Kosovos status and international character add to the
problems in the area.
The political reintegration and long-term stability of
the whole region is hardly imaginable without its actors
having the capacity to operate on their own. It is worth
mentioning, that the EnC Treaty is the frst multilat-
eral treaty ever signed in this region and can thus
function as a test balloon. A further implication of this
Treaty relates to its role as regards integration and
cooperation in a core economic area beyond the borders of
todays Union.
In the context of discussions
about the viability of variable
speed integration or Europe
la carte even within the EU
member states, one can regard
the establishment of the EnC
as the start of a variable speed
integration process without
provoking the substantial
criticism that would follow if
such processes were attempted
within the Unions borders.
Starting off with targeted
legislation on energy can
simplify matters in other areas,
but this can also loosen the
EUs stick from its carrot. Due to increased voluntary
accordance with other EU regulation, the Union may lose
its infuence to design and defne the transposition. When
the latter does not meet EU standards entirely, as this is
the case in many of the EnC implementations, the conduct
of accession negotiations can become more diffcult, i.e.
less fundamental and more substantive exactly what can
be observed regarding compliance with the EnC Treaty.
The Balkan countries will have more of the acquis
implemented than all other candidates before. Where
the distance to the existing members is less, the lever for
obligations is shorter. Additionally, it is hard to explain
why a door to membership remains closed, when legal
systems between EU law and domestic legislation in
candidate countries is more similar than may be the case
between already existing member states.
Keeping this in mind, the beginning of EnC accession
negotiations with countries like Ukraine, Moldova,
Turkey and Georgia might signify today a desire to keep
any future fxed borders of the Union open, while excluding
formal membership. However, this may have exactly the
opposite impact in the medium and long-term and undermine
the Commissions capacity to control enlargement.
Finally, recent events also demonstrate the importance
of the EnC in a further area - hard politics. The Russian
leadership has contested a joint declaration between
Ukraine and EnC stakeholders in an unexpectedly harsh
manner. This joint declaration aims to commit Ukrainian
gas legislation to following the EUs gas acquis as well as
the Energy Community Treaty.
The newly created overlap of areas of infuence between
Russia and the EU herald diplomatic confict on the horizon.
These have the potential to shift the EnCs underlying
purpose from one of cooperative legal development aid
into an instrument of crude vital interest.
Concerning this last act, as well as for all matters relating
to the creation of the Energy Community, sensitivity for the
implications of this nearly invisible integration through the
backdoor is crucial for all
the parties involved. On the
one hand, recent events and
rising awareness about the
importance of this
international agreement
will undoubtedly promote
its profle. On the other
hand, increased brand
awareness of the latest EU
product will foster sensitivity
about it.
These developments
have the capacity to both
ease and complicate this
international agreements
m u l t i d i m e n s i o n a l
penetrating power.
A lack of political publicity may sometimes facilitate the
success of such a process. For the EnC as a former stepchild
of European Integration, there is no longer however a total
lack of publicity. Sensitivity and awareness of the broad
range of its implications on Europe therefore become vital
for every party involved.
Footnotes:
[1] Accessible under http://www.energy-community.org/portal/
page/portal/ENC_HOME/ENERGY_COMMUNITY/Legal/Treaty
[2] The parts of the acquis relevant for the EnC can be found here:
http://www.energy-community.org/portal/page/portal/ENC_
HOME/ENERGY_COMMUNITY/Legal/EU_Legislation
[3] Namely, Albania, Bosnia & Herzegovina, Croatia, Former Yu-
goslav Republic of Macedonia, Montenegro, Serbia and the United
Nations Interim Administration Mission in Kosovo.
[4] Iain Begg & Andreas Pointvogl, Energy: A cross-cutting in-
fuence on EU widening and deepening, 2008, report on EU-CON-
SENT workshop held in Brussels on 12 November 2008, available
at http://www.eu-consent.net/library/deliverables/D33.pdf.
[5] See the implementation reports of the Energy Community Sec-
retariat: http://www.energy-community.org/portal/page/portal/
ENC_HOME/DOCUMENTS?library.category=157
[6] Reinhard Priebe, Beitrittsperspektive und Verfassungsrefor-
men in den Lndern des Westlichen Balkans, 2008, Europarecht,
N 3, pp. 301-319.
[7] See Europolitics Energy, from 7 April 2009, N 754, p. 7.
DID SIGNATORIES KNOW WHAT THEY WERE SIGNING?
ENERGY: THE ENERGY COMMUNITY TREATY
Copyright: Piotr Lewandowski
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