The political-economic dimension of transformations in EU-Russia gas trade mechanisms

Franza, L., 2020, [Groningen]: University of Groningen. 363 p.

Research output: ThesisThesis fully internal (DIV)

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This thesis investigates the political-economic implications of changes in EU-Russia gas trade mechanisms resorting to qualitative and quantitative tools and combining TCE, NIE, and IPE.
TCE explains the original choice of long-term contracting, why contracts came under pressure, the nature and outcome of renegotiations, and the importance of relational contracting. The weakening of long-term contracts may lead to underinvestment in future. Long-term contracts are still needed because the trend towards lower asset specificity will not necessarily continue indefinitely.
IPE explains how liberalisation – a political process – influenced the economic rules of the game, and how in turn these altered the EU’s and Russia’s relative economic and political power. The EU exerted structural power and shaped the milieu to its own benefit. Liberalisation is not neutral: it has an inherent consumer/EU bias. While the introduction of hub indexation can be interpreted as a neoliberal policy transfer, IPE helps us rejecting the radical Realist argument that the EU promoted it to hurt Russia.
NIE notions of logic of appropriateness and institutional complementarity explain why EU-style gas market liberalisation in Russia is neither likely nor desirable. Two different institutional environments will coexist.
Transformations in EU-Russia gas trade mechanisms have benefitted the EU and Gazprom’s revenues have been dented. However, the negative impact on Russian economy and federal budget has been limited. The last word is not said: should certain circumstances arise in future, these transformations might turn out to be detrimental for the affordability and security of gas supplies to the EU.
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
Award date8-Oct-2020
Place of Publication[Groningen]
Publication statusPublished - 2020

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