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1 Introduction

Even if the European Union (EU) has a full house of oil and gas suppliers, Russia’s often political approach to energy issues, has given the latter an aura of an energy superpower that dominates Europe’s energy supplies. Thus, while many have been occupied with Europe’s dependence on Russian gas, few have attempted to stress that “overdependence on Russia is not a pressing issue for Europe as a whole” (Noël 2008: p. 2). Nevertheless, the greater dependence of Eastern EU members on Russian gas, the 2006 and 2009 disruptions of supply, and Russia’s increasingly bullying politics have prompted the EU to enhance its energy security through diversification of its energy supplies. The 2011 disruptions in Libya’s oil production due to political unrest and subsequent rise in petrol and diesel prices in the EU have further underlined the urgency of diversification plans. Thus, since “some major producers and consumers have been using energy as a political lever” and others “have not been playing by the same market rules” (European Commission 2006a: p. 1), the EU has embarked on an active search for new suppliers since 2006. However, within several years since the development of diversification plans and policies, the EU has encountered a number of obstacles that have hindered the success of its energy policy. The EU’s approaches to the diversification of its energy sources are not only limited to its interactions with supplier and transit countries but also involve the interests of third-parties like Russia. Thus, observations on EU energy policy provide an opportunity to study the EU’s capacity of exercising its influence in a multi-actor environment and more specifically explain the outcomes of its energy policy.Footnote 1

Within the range of the obstacles for the EU’s capacity to exercise influence and its diversification plans, the most mentioned one is the lack of solidarity between member states and the incoherence of the EU’s policies (Noël 2008; Ericson 2009; Freifeld 2009; Umbach 2010) to some extent leading to lack of collective bargaining outcomes (Bozhilova and Hashimoto 2010). While not venturing to reveal all the factors affecting the EU’s capacity to exercise influence on the case of its energy policy, through foreign policy analysis this chapter adopts an outward approach of looking at external factors rather than often cited internal incoherence of EU decision-making ,divergent interests of non-solidary member states, and its political or economic leverages. Besides the policy-related initiatives of unbundling, the diversification of EU energy supplies has involved construction of new gas pipelines with the gas of new suppliers and the transit routes through new partner-countries. Being interested in the potential of the Caspian Basin for energy supply, the EU has focused its attention on the South Caucasus, where energy-rich Azerbaijan could be a new supplier and Armenia with Georgia new potential transit countries. However, the inclusion of the South Caucasus countries into the European Neighbourhood Policy (ENP) and the Eastern Partnership (EaP), along with the initiatives of Nabucco and White Stream pipelines have put the EU back into the murky zone of Russia’s assumed influence. In addition to different levels of democracy and economic development, divergent relations with Russia, and divergent ambitions for EU integration, the South Caucasus countries host frozen conflicts, further complicating the EU’s objectives.

By the analyses of developments within new agreements, commissioning of new pipeline projects, and competing Russian projects, this chapter shows the drivers for and obstacles to the EU’s energy diversification plans, arguing that solidarity principles are often overridden not only by rational interests of member states but also by external factors shaping those interests and affecting the EU’s capacity of exercising influence. This chapter juxtaposes the EU’s and Russia’s mechanisms of “striking deals” with their counterparts and latter’s competing pipeline projects of the South Stream and the Nord Stream, which smash potential solidarity of EU member states. For additional factors that drive the progress or cause the stalemate of the EU’s plans, this chapter looks at the political and economic features of the EU’s potential suppliers and transit countries putting the EU’s energy policy within the larger framework of its approach to the South Caucasus. The chapter argues that while the EU is plunged into the idea of diversification of energy sources resulting in a development of certain actions and policies, its geeky devotion omits the probability of Russia’s bullying politics. Arguing that besides its own internal discrepancies, the EU has to handle also the geopolitical situation of its potential suppliers and transiters, this chapter stresses the volatility of South Caucasus-based pipeline projects since the outstanding regional conflicts and the omnipresent Russian dominance may “freak out” the EU’s plans.

2 European Solutions to Energy Problems and Russian Manoeuvres

The energy security of the EU is understood as functioning markets and diversification of supply sources. However, from the first glance the establishment of functioning markets is more time- and effort consuming, since they require “physical and legal infrastructure, as well as information and transparency, and the active participation of major players” (European Commission 2006a: p. 2). On the other hand, diversification entails different energy sources and transit routes, following “maintenance and upgrade of existing energy infrastructure in neighbouring countries of key importance to the EU” (European Commission 2006a: p. 2). Development of new major pipelines from the Caspian region and Central Asia is the most crucial aspect of the EU’s energy diversification plans. Thus the European Commission (2006b: p. 3) stressed the importance of having an EU external energy policy, placing it within its foreign policy objectives. However, since the objective of securing new energy sources through the Southern Gas Corridor has not yet been achieved, the EU’s decision-making or policy implementation are likely to be faulted. Applying foreign policy analysis, this article shows possible causes for the EU’s current failure and analyses its capacity to exercise influence depending not only upon its internal factors but also on the characteristics of its counterparts. The capacity to exercise influence is understood as the combination of internal and external factors characteristic to a certain policy and action-choices made by a policy promoting actor, which are likely to affect timely achievement of actor’s goals. Thus, the failure to achieve the goals within the set time limits would indicate reduced capacity to exercise influence. However, even in the case of unfavourable internal and external factors, the capacity to exercise influence may be increased by well-developed action-choices. This chapter analyses the external factors affecting the capacity to exercise influence viewing those within a larger framework of foreign policy decision-making.

In foreign policy decision-making, an actor identifies the decision problem or the goal, searches for alternatives, chooses an alternative (predicting the consequences of each alternative), evaluates each alternative in terms of the goals, and executes the alternative (Robinson and Snyder 1965). The “ideal type” (Mintz and DeRouen 2010: p. 7) of foreign policy decision making—rationality—assumes that actors are logical and, having perfect information about the consequences of a certain choice, maximise their benefits at the same time trying to minimise the costs. Rational choice received criticism from psychological approach (Tetlock and McGuire 1986), prospect theory (Quattrone and Tversky 1988; Levy 1992), social constructivism (Wendt 1999) and others. In addition, cognitive models of foreign policy decision making claim that rational model is often not realised in practice (Jervis 1976; Mintz and DeRouen 2010). Thus, mental shortcuts along with other processes are indicative of an actor’s “inability to carry out the complicated calculus of the rational model” (Mintz and DeRouen 2010: p. 8).

An attempt of rational decision-making may not result in desirable achievements due to a number of biases that decision-making actor is subject to. More than 15 biases including those of misperception, wishful thinking, relying on the past, and locking on one alternative (Mintz and DeRouen 2010), point to possible causes of choosing a specific action, thus affecting the capacity of exercising power. Nevertheless, they all separately account for different types of misinterpretations of the available information by a decision-making actor. In a multi-actor policy environment when success—i.e. timely achievement—of policy goals depends not only upon the decision-making actor, a multiplicity of biases may be applicable. Thus, for the reasons of parsimony, possible biases are grouped here into a planning fallacy,Footnote 2 which in the case of foreign policy analysis is understood as neglecting of internal or external dynamics of a multi-actor environment, and reducing the capacity to exercise influence. Thus, in a multi-actor environment, a decision-making actor promoting a specific policy needs to account not only for its own political and economic characteristics but also for possible actions of its “rivals” and internal dynamics of its counterparts (which would be external for a policy promoting actor).

The actors in such an environment (often of conflicting interests) can be categorised into three groups: geeks, bullies, and freaks. A geek is understood as an actor devoted to a particular policy objective and while endeavouring to account for details may commit planning fallacy, limiting it capacity to exercise influence. A bully is understood as an actor who may be negatively impacted by the geek’s policy and due to its own interests uses its economic, political or any other type of leverage to undercut geek’s plans. On the other hand, a freak is understood as the target of geek’s policy, which is seemingly an unproblematic and supportive actor, who actually poses (often unintentionally) obstacles to geek’s policy and the capacity to exercise influence due to its own internal dynamics. Depending on the analysed policy, the actors may change categories; however, in case the bully becomes the decision-making actor, its capacity of exercising influence is likely to be higher. In addition, should there be no bully-actor, the policy-implementing actor is likely to have higher capacity of exercising influence. Similarly, should the targets of a policy not turn out to be freaks but remain as expected, the capacity to exercise influence would further increase (Table 1). Should the possible policy rival not pose any obstacles to policy implementation or should the target of the policy correspond to its initial perception, they are classified as regular.

Table 1 Capacity to exercise influence in a multi-actor environment
Full size table

In the case of the EU’s external energy policy, it is hypothesised that the EU would be a geek, Russia the bully, and the South Caucasus the freak. It is argued that the EU has failed to achieve its policy goals of energy supply diversification due to its negligence of such external factors as Russia’s possible retaliation to cutbacks in energy purchases and the internal political dynamics of the South Caucasus. It is argued that the capacity of the EU to exercise influence has been reduced by the dynamics of the multi-actor environment the EU acts within. It is subsequently argued that the EU has committed a planning fallacy by ignoring “bully” and “freaky” characteristics of its counterparts.

The endeavour to switch from Russian energy to alternative sources has been based on the “fear that Russia is too politically unstable to be a reliable partner” (Rutland 2008: p. 1), aggravated by the presence of high-rank politiciansFootnote 3 within Gazprom’s Board of Directors giving the Kremlin an opportunity to use energy as means of political leverage. Russia and its Gazprom basically annul EU efforts to bring coherence and solidarity to the practice of its energy policy. Since the Orange Revolution in Ukraine Russian power has started to be measured “in miles of pipeline constructed and barrels of oil per day exported” (Baran 2007: p. 131). Even if the potential of Russia to use energy as political leverage should not be exaggerated (Rutland 2008) and according to some “Russian energy diplomacy is demonstrably failing” (Monaghan 2007: p. 286), its influence to block alternative sources and routes should not be overlooked either, since Russia’s “near abroad” policy may directly impact the EU’s energy security.

In addition, while trying to become less dependent “on oil and gas imports from geopolitically uncertain regions” (Barroso 2007: p. 1), the EU has turned for new supplies and transit routes to another geopolitically uncertain region—the South Caucasus. Previously uninterested in the South Caucasus, the EU has increased its presence in the region by appointing a special representative and by including all three countries—Armenia, Azerbaijan, and Georgia—in the ENP and the EaP. Rightly considering democratization and economic development safer issues to promote within Russia’s sphere of influence (Lussac 2010), through its policies the EU has officially focused on political development, regional cooperation, and free trade. Nevertheless, by including Azerbaijan and Georgia within its Southern Gas Corridor initiative and assigning Nabucco and White Stream pipeline projects a status of “strategic importance” (van Aartsen 2009: p. 7), the EU has elevated the status of the South Caucasus and has triggered further competition with Russia. Russia-initiated competing pipeline-projects—Nord Stream and South Stream—have torn the solidarity of EU member states and have contributed to the stalemate of EU energy diversification plans. The following sections analyse the developments that have to led to these outcomes by tracing the actions of the EU, Russia, and the South Caucasus countries.

3 New Pipelines and Russia’s Smart Bullying Politics

While the EU has “four or five equal priorities” within its energy policy, its “political and legal support mechanisms are weak” (van Aartsen 2009: pp. 6, 5). Relying on gas from former Soviet republics, including from Azerbaijan’s Shah Deniz Phase II, EU priority pipelines seem to compete not only with Russia’s projects but also with each other. Russia has not openly opposed EU pipeline projects and the EU has stated that it is neither against not for the South Stream project (Shishlo 2009), which has not been labelled as a rival to the Nabucco project only by the involved parties (BBC 2011b; EurActiv 2010a, 2011; Kanter 2011). Nevertheless, understanding that not all pipelines can receive gas from potential suppliers even if they are of strategic importance to the EU (European Parliament 2006), member states “promote each pipeline by undercutting the others” even if they “ought formally be acting together” (van Aartsen 2009: p. 7). In addition, even if some member states insist that pipelines are not competing but complementing each other (Bogdanovsky 2009), the progress of respective implementations and gas availability point to contrary conclusions. Russia in its turn applies what this chapter calls smart bullying politics. It instigates anti-solidarity actions of member states, in addition to promising “retaliatory measures” (RIA 2011c) to the EU’s Third Energy Package, which contradicts Russia’s own energy projects.

The EU has put its hopes on Azerbaijan’s willingness to sell its gas to Europe and Georgia’s EU aspirations to transit Azerbaijani gas. With an intention to bypass Russia and deliver Caspian gas to Europe, Nabucco has been deemed by the International Energy Agency as a more effective measure for ensuring Europe’s energy security than the Russia-supported South Stream (RIA 2010c). However, despite a number of agreements, Azerbaijan has maintained a pragmatic position as President Aliyev mentioned that Azerbaijan’s participation in Nabucco project was not final and would depend on the price offered by either the EU or Gazprom (Dadashev 2009) even if it had before agreed to provide gas for Nabucco. Azerbaijan’s pragmatism and the EU’s indecisiveness have created a fertile ground for Russia’s further actions directed at undermining of Nabucco’s feasibility.

Even though Nabucco project has been designed to bypass Russia, Prime Minister Putin said Russia would not hinder the implementation of Nabucco, given there were resources for it (RIA 2009b). However, according to Nabucco consultant Joschka Fischer, the South Stream project is not in the EU’s political interests and Russia has been doing everything to hinder Nabucco’s construction (Flauger and Stratmann 2010). Apparently, without constructing direct obstacles to Nabucco’s implementation, Russia has opted to leave Nabucco without gas and win over other European partners. However, it seems spillover revolutions in Northern Africa and the Middle East have added to Russia’s luck (Grinkevich 2011), making the region even more uncertain than it had been deemed before.

The South Stream pipeline—a joint venture of Italian ENI and Gazprom established in 2008—plans on transporting Russian gas to Bulgaria, Greece, Italy with the initial endpoint in Austria.Footnote 4 The 3,700 km pipeline bypasses the traditional transit country Ukraine and instead of diversifying the energy supply of the EU, diversifies the export routes of Russia. From its initiation the South Stream project had been perceived as Nabucco’s rival (MacDonald 2008), and Gazprom’s unexpected offer to buy Azerbaijani gas for its new project left no doubts about the upcoming competition (Velizade 2008). Putin’s remark that Nabucco partners should simply “take a calculator and work out what is more profitable” (RIA 2008) have persuaded Hungary, which receives 70 % of its gas consumption from Russia, to join in shortly after the establishment of the South Stream project (Shchedrov 2008). Similar intergovernmental agreements were signed with EU members Bulgaria, Greece, which considers the South Stream an energy priority (RIA 2011b), and Slovenia, which aimed to diversify its sources by exclusion of Ukraine (Shiryaevskaya and Bierman 2009). Turkey’s long-awaited agreement to allow part of the pipeline pass through its territorial waters (Gazprom 2011) have put the South Stream closer to its implementation, as it has not encountered either gas shortage or lack of intergovernmental agreements and has implemented its actions according to the initial timetable (Nikolskyi 2012).

Arguing that both Nabucco and South Stream will guarantee the energy security of Europe, Russia’s representative in the EU Chizhov stressed that Russia is not against Nabucco, especially since the main difference between the South Stream and Nabucco is that the South Stream had gas and Nabucco did not (RIA 2009b). The 2009 agreement on exporting Azerbaijani gas to Russia was not conceived as a danger to Nabucco, given it would not be prolonged beyond its expiration date of 2014 (Socor 2009). However, in 2010 Gazprom signed a new agreement with Azerbaijan on purchasing 1 bcm gas per year—twice more than previously—doubling the purchase starting from 2011 (RIA 2010b), thus buying the gas supposed to flow through Nabucco (Zaynalov 2009). The agreement was later confirmed and updated with a commitment to buy more than 2 bcm of Azerbaijani gas from 2012 with no further ceiling on the volume of purchase (Regnum 2010). Committing to purchase the entire export volume of Azerbaijani gas even if having sufficient gas reserves of its own, Russia subsequently resells it for a lower price to Poland and Ukraine (Krechetnikov 2010), thus stressing the claim that its gas policy in the South Caucasus has been directed at voiding Nabucco from supplies.

The pipeline competition between the EU and Russia has also been shrewdly used by some member states, while under considerable pressure from Russia. While showing rhetorical commitment and demanding the EU to exhilarate the construction of Nabucco (Bogdanovsky 2009), Bulgaria also signed an agreement with Russia for the construction of the South Stream (Babich 2009; RIA 2009a). Less than a year later Bulgaria modified its position, stating that Nabucco was more important than the South Stream (Bogdanovsky 2010), consequently managing to negotiate a lower price for Russian gas and yet again modifying its stance in favour of the South Stream (RIA 2010a). In 2006 Romania’s president Basescu called Gazprom “the biggest threat to the region [Europe] since the Soviet army”, advocating for energy independence from Russia. Nevertheless, in 2010 after being “under strong pressure from Gazprom to join the pipeline project” (EurActiv 2010b), Romania confirmed its interest in participating in the South Stream pipeline construction (Gazprom 2010).

New pipeline initiatives supported by Russia have also antagonized member states not included in a project. The Nord Stream AG established by Gazprom and German E.ON in 2005 directly connects Russia with Germany through a pipeline passing under the Baltic Sea with a capacity to pump 55 bcn of gas per year. Even though North European gas pipeline linking Russia and Germany through the Baltic Sea had been recognised as a project of “common interest” for the EU (European Commission 2006a: pp. 15, 22), the bypassed Poland called it an equivalent of the Molotov-Ribbentrop pact (Chumakova 2006) and “a waste of money” (EurActiv 2010c). Similarly bypassed Lithuania would have been happy if the Nord Stream would have been “off the table” (EurActiv 2009), while Czech prime minister expressed his disappointment with Germany’s active involvement with the project (Fedyashin 2009). Nevertheless, the Nord Stream pipeline, dubbed by Chancellor Merkel “the milestone of a reliable relationship” between Europe and Russia (BBC 2011b) started pumping gas in November 2011, pushing the plans of diversifying Europe’s energy sources further away.

The commencement of Nabucco’s construction has been delayed to 2013 with subsequent 2-year postponement of the first gas flow to 2017 “as a direct result of the changes in the timing for gas supplies in the Caspian and Middle East regions, as announced by potential suppliers” (EUbusiness 2011)Footnote 5. Nabucco’s future became even more uncertain after the 2011 EU sanctions and earlier decision to halt the construction of a pipeline through Iran (RIA 2010f), which had previously pledged its readiness to provide gas for Nabucco (Kommersant 2008). Russia’s agreements of 2008 with Bulgaria and Serbia were dubbed as “the death of Nabucco” by Russian Duma Deputy Speaker since “there will be no gas left for another pipeline” (Nicola 2008). Such grave predictions for Nabucco’s fate were labelled as “far from the truth”, calling the South Stream “a rhetorical pipeline designed to frustrate Southern Corridor gas” (Ramsay 2009). However, the last nail in Nabucco’s coffin might have been struck when its major partner Austrian OMV signed a cooperation agreement on South Stream with Gazprom, further strengthened by an intergovernmental agreement between Austria and Russia in April 2010 (RIA 2010d, e). Assuring that Europe will have a secure gas flow for the next 100 years, Russia rendered Nabucco as a competition but no match for its South Stream (RIA 2010f). While Nabucco’s construction has been delayed, Russia-supported South Stream’s construction has been brought forward from 2013 to the late 2012 with first gas to be pumped in 2015 (BBC 2011a).

The advancement of the South Stream project and the delay of Nabucco with its shortage of suppliers seem to have prompted the EU to revive its plans on building a submarine Trans-Caspian gas pipeline. A similar initiative was previously effectively put under doubt by the 2007 agreement between Russia, Kazakhstan and Turkmenistan to build a pipeline along the coast of the Caspian (Konyrova 2007) and by earlier voiced environmental concerns (RIA 2007). Speaking on the possibility of the Trans-Caspian pipeline, which would connect Turkmenistan with Azerbaijan, the Energy Commissioner Oettinger mentioned that “Europe is now speaking with one voice” and intended to diversify its resources as soon as possible (European Commission 2011). The revival of the pipeline project bypassing Russia has been met with fury by Russian authorities, which oppose the project on the grounds of environmental concerns, warning to veto the project from the standpoint of a Caspian basin littoral state (Reuters 2011b). While Russia voices its concern on preservation of environmental integrity of the Caspian Sea, it seems to have no objections to its own pipelines to be built beneath the Baltic and Black Seas. Azerbaijan and Turkmenistan, nevertheless, agreed to the project, with Turkmenistan, interestingly, planning to buy equipment for building its part of the pipeline from Russia (RIA 2011d). However, it has to be seen whether the claims of US officials that “nothing will obstruct the construction of the Trans-Caspian pipeline” (Nurmuradov 2011) or Russia will manage to impede another European gas project, with Duma vice-speaker threatening Turkmenistan with a “Libyan scenario” if it continues “flirting with the EU and the USA” (Yazev 2011). The developments have indicated the EU’s continuing commitment to its pipeline projects. However, the developments have also shown that the EU often cannot control the actions of its members and how it has failed to contain Russia’s bullying actions.

4 The South Caucasus: Generating Energy or Problems?

Though to varying degrees all South Caucasus countries have shown open support to the EU’s policies in the region and along with their EU-ambitions announced their, at least rhetorical, adherence to the promoted European values. However, apart from Russia’s own energy policy, which methodically upsets the EU’s energy diversification plans in its objective of importing Caspian gas, the EU faces the long-standing lack of regional cooperation in the South Caucasus. Regional cooperation in the South Caucasus is an important factor for the EU’s energy policy since a cooperative framework needs to be established between supply and transit countries. However, there has been no trilateral cooperation in the region since Armenia has been under economic embargo from Azerbaijan, and maintained economic cooperation only with Georgia. The unresolved dispute between Armenia and Azerbaijan over the Nagorno Karabakh region has been the main cause behind the lack of regional cooperation in the region and one of security concerns in the European neighbourhood. Despite the involvement of international actors in the mediation of conflict resolution, the Nagorno Karabakh issue has not resulted in any tangible progress. Demonstrating strong rhetorical commitment to the resolution of the Nagorno Karabakh conflict by including it within individual ENP Action Plans, the EU, nevertheless, has provided only a loose framework of cooperation, often relying on the actions of other less influential organisations (Babayan 2012). The 2011 review of the ENP carried out jointly by the European Commission and High Representative has not introduced any novelty in the EU’s engagement in conflict resolution.

The importance of the South Caucasus for EU plans on energy supply diversification is highlighted by its geographic position, which would allow the EU to gain access to Caspian gas bypassing Russia and excluding Iran. In this case the importance of regional cooperation comes into play, since Azerbaijan would need to transport its gas either through Armenia or Georgia. However, given the closed borders of Armenia with Azerbaijan and Turkey, its leverage within regional energy structure is limited and it is not included in the Southern energy corridor. In addition, the EU insists on the closure of the Metsamor nuclear power plant, without offering Armenia alternative sources of energy diversification. On the other hand, closed borders with its neighbours stem from the protracted Nagorno-Karabakh conflict, which in its turn makes Armenia turn to Russia both for security and its energy supplies, thus sustaining the latter’s influence on the region. The ongoing Nagorno Karabakh conflict influenced the construction of the Baku-Tbilisi-Ceyhan (BTC) crude oil pipeline, which instead of directly crossing Armenia to enter Turkey, routes through Georgia, having made its construction both more time-consuming and more expensive. Bypassed by the BTC, Russia insisted that the pipeline was a politically rather than economically motivated initiative (RIA 2005). It retaliated by raising gas prices for the South Caucasus and allegedly deliberately fired 50 missiles on the pipeline during the 2008 conflict with Georgia (McElroy 2008; Morningstar 2008). If not for security and stability of the region, the EU has to involve more actively in conflict resolution for feasibility and security of its own planned pipelines in the case of conflict escalation.

The Nagorno Karabakh conflict also contributes to Russia’s presence in the region’s security matters since it maintains a large military base in Armenia on the grounds of the latter’s security. Due to the unresolved conflict, the presence of Russian military is considered desirable by the Armenian authorities and meddling into region’s internal affairs by the Azerbaijani authorities (Smbatian 2010). Russia not only simply moved its troops to Armenia after withdrawal from Georgia in 2005, but also prolonged the agreement on stationing of its troops in Armenia for additional 25 years until 2044. The 2008 Russia-Georgia conflict “generated new sources of instability for the entire post–Soviet space, not only because it highlighted a new form of Russian revisionism but also because it brought to the fore the limits of Western policies in what Kremlin views as its sphere of influence” (Mikhelidze 2009: p. 3). In addition, Azerbaijan chose to subdue its support to Georgia and adopt a soft approach in its builateral relations with Russia (Valiyev 2009) to avoid open confrontation with Russia and agreed to new increased sales of its gas to Gazprom.

The internal dynamics of South Caucasus politics has shown to be more problematic than initially anticipated by the EU. However, instead of addressing one of the core problems of the South Caucasus—conflicts—the EU has opted for democratization activities in its efforts to pull the region away from Russia. The EaP, which seemed to be a timely initiative due to the conflict between Georgia and Russia (Shapovalova 2009), offers political association and economic integration through association agreements (AA), deep and comprehensive free trade areas and visa liberalisation. Nevertheless, the attractive terms of free trade and visa liberalization have lacked substance (Boonstra and Shapovalova 2010) and specific terms and conditions that provide an effective framework for implementation. Even if the inclusion in the EaP had been initially conditioned by progress in democracy, in order to have access to Azerbaijani gas and possibly give more “European” feeling to Armenia and Georgia, they were included in the policy, despite their poor democratic performance. Some local observers have noted that the EaP will have a positive effect “on democratic changes in Armenia only in one case: if the European structures put forward very serious demands before our authorities” (Danielyan 2010). Despite poor democratic record, especially in Azerbaijan, the EU has never initiated sanctions against the South Caucasus countries and strongly relied on intergovernmental cooperation and assistance programmes, using political dialogue mostly as a policy dialogue on energy or trade (Börzel et al. 2009). Thus, the added value of the EU’s approach to the South Caucasus that can address the needs of partner countries and assist the EU in exercising its influence is ambiguous.

5 Conclusion

Even if EU member states may be “condemned to be divided” (Carta and Braghiroli 2011: p. 281), especially concerning Russia, the 2006 gas crisis caused concerns among all EU members prompting the emerged initiative to decrease Europe’s dependence on Russian gas. Through the development of an analytical framework applicable to multi-actor policy actions, this chapter has shown that the opposite has happened. While the EU has so far failed to diversify its energy sources through the Southern Gas corridor, Russia has managed to strengthen its position of the EU’s main energy source by diversifying its own export routes. This chapter has argued that the EU is a geek actor, which commits a planning fallacy in its policy by neglecting the dynamics of the multi-actor environment its policy is placed within, thus failing to fully use its capacity to exercise influence. As suggested before, the EU’s capacity to exercise influence for achieving the goals of its energy policy within the South Caucasus is low, since besides unfavourable internal factors, there is a number of unfavourable external factors.

The neglecting of the possibility of retaliation by bullying Russia and the inadequate assessment of the internal dynamics of the freaky South Caucasus have lowered the capacity of the EU to exercise influence and subsequently diversify its energy resources through the Southern Gas corridor. The results of this analysis, however, do not suggest that if a policy is to be implemented in a multi-actor environment with hostile or unexpectedly behaving counterparts, it should not be taken further. This analysis suggests, that in any multi-actor environment, a policy promoter should take into account the external dynamics of its policy implementation. This claim is especially applicable to the EU, which is already burdened by often anti-solidary and contradictory actions of its member states. More specifically, for the EU to succeed in its energy diversification initiatives, it needs to pay closer attention to the internal political and security dynamics of the South Caucasus, since the latter, even if unwittingly, currently fosters Russia’s bullying politics.

The internal dynamics of EU politics is only half of the problem when analysing its energy diversification plans, especially in such volatile regions as the South Caucasus. Thus, this chapter argues that the implementation of the EU’s energy policy has to address a complex interaction of often interconnected obstacles ranging from its own internal political dynamics to local realities of energy suppliers. At a different level, the lack of solidarity among EU members fuels Russia’s competitive pipeline projects and the success of its bullying politics. It damages the EU’s plans within its neighbourhood, making its other related policies ineffective and inefficient. An assertive and proactive approach may not be the EU’s conventional strategy, however, to achieve its objectives it has to match the strategy of its counterparts. Russia’s influence in the South Caucasus feeds on regional conflicts and its dominance will wane only if the conflicts are resolved and trilateral regional cooperation is possible. Thus, if the EU wants to transfer its energy diversification plans from theory into practice and increase its capacity to exercise influence, it needs to address the issue of protracted conflicts in the South Caucasus and stabilise the region by more active involvement in domestic issues.