With a little help from the European Commission: TAP and the Southern Gas Corridor

Last week Baku hosted the 4th Southern Gas Corridor Advisory Council Meeting. The event saw the participation of representatives from the governments involved in the project, but also the European Commission Vice President Maroš Šefčovič, who in the last few months hasn’t missed a single chance to stress its support to the gas mega-pipeline, an “EU priority”. Such vocal statements by Commissioner Šefčovič came with no coincidence just at a time when the European Investment Bank (EIB) faced a fierce internal discussion about the EUR 1.5 bn loan to the TAP Ag company for the funding of the final part of the corridor, the Trans Adriatic Pipeline (TAP). Indeed, it was Šefčovič himself, together with the Energy Commissioner Miguel Arias Cañete, who wrote to the EIB President last July in order to “remind” him about the urgent need of capitals to fund the pipeline construction consortium, and called for the EIB’s hand.

No wonder the bank went for the loan in the end, but not without some crucial “help” from the European Commission. Indeed, in order to make the loan happen, last December a panel of experts (the so-called Investment Committee) decided to cover the risk of the EIB loan through a guarantee from the European Fund for Strategic Investment (EFSI).

Who knows if Šefčovič and Cañete have really pushed hard for this. As a matter of fact, although the loan has been granted by the EIB, it will be up to the European Union to take on the risk – with public resources, of course, via the guarantee fund of EFSI.

Energy security rhetoric and Baku official declarations aside – merely formulated to reassure potential investors (private finance giants, i.e. the big commercial banks, but also investment and pension funds that could make a difference and inject the money needed to go ahead with the construction) – the truth is another story. That is, without a public guarantee the economic sustainability of the gas pipeline is nothing but a bitter hallucination. And obviously in Baku the real, juicy discussions didn’t happen on the main stage, but rather in side meetings.

Baronness Emma Nicholson, Theresa May’s trade envoy to Iraq, Azerbaijan and Turkmenistan, did not hide having participated in a fruitful business dinner with the British Business Group of Azerbaijan.

The American presidency envoy, Sue Saarnio, also expressed the States’ support to the Corridor, running parallel to more insidious issues related to the Syria conflict and Turkey’s support to NATO. A delicate balance, where Azerbaijan managed to juggle its position with a foot in both camps, just as Turkey did, between the US and Russia, and now Iran.

Interestingly enough, the Italian government representative Ivan Scalfarotto also felt the need to officially confirm the Italian support to the project, regardless of the upcoming legislative elections’ result. Was that maybe a way to say that the pipeline is not Renzi’s toy and that it doesn’t have any political colour? Or rather to confirm the firm approach against the protests on the ground in Puglia, that certainly worried Baku and the European Commission?

Quite a key message in any case. Indeed, while considering the reasons for opposing the pipeline is not even an option, making sure the project benefits society as a whole does not seem to be a central concern either. What if the main issue at stake was the delivery of the project for its own sake and that of the network of relations connected to it?

The sensitivity of the issue, together with the increasing toxicity of the relations surrounding the Corridor, aren’t but confirmed by the recent attack of the Azerbaijani government on the OCCRP investigative journalism network, the engine of the mega investigation known as the Azeri Laundromat (see the letter published on The Guardian about it).

The scandal – which led to the resignation of different European parliamentarians, as well as to an internal investigation at the Council of Europe and general disarray among political parties, governments and institutions – features the Italian former deputy Luca Volontè, now on trial for corruption and money laundering. As leaked by the press in June 2016, the European politician is investigated for allegedly accepting bribes from Azerbaijan.

Volontè has recently been absolved from the money laundering accusation, as reported by the Italian daily Il Corriere della Sera on February 14. While the news made it hardly through the Italian and international press, busy with the current electoral campaign, it didn’t escape the Azeri’s government attention. Different articles signed by high representatives of the government were promptly released, with the aim of more or less openly threatening a libel action against the OCCRP investigative journalism network, accused of spreading a defamatory campaign against the Caspian country.
But what the Azeri government has left out, and that can be read in the Corriere article instead, is that Luca Volontè’s trial for international corruption will go ahead. Maybe that’s the real “problem”.