European states have reportedly drawn up a new text for the Iran Nuclear resolution. The previous draft had been rejected by China and Russia.

Unidentified officials have told The New York Times that the new text allows for Iran’s civilian nuclear program to go on, as the prohibitions have to do with activities linked with making a nuclear weapon. It also removes restrictions on the nuclear reactor being built by Russia in Bushehr. The revision is undeniably meant to get China and Russia on board and it’s likely that the Europeans will get the support of the two veto-yielding powers.

The key issue for Russia is the idea of nuclear energy and what Russia stands to gain economically if Iran is to develop its nuclear program. With Bushehr off the new proposal, the Russians will be able to complete the power plant without obstruction. If the project is successful, they stand to gain more similar contracts, as Iran is looking to expand in the nuclear field. The new text also urges Iran to go ahead with the proposals put forth to it in June, which include stopping uranium enrichment. Because it will need to enriched uranium for its nuclear energy, Iran may chose to have it enriched in Russia, as was proposed a few weeks ago. This would benefit Russia economically as well.

China has economic ties with Iran as well and may want to participate in helping Iran shape its nuclear energy program as well, reaping the economic benefits received by Russia thusfar (the Bushehr plant is worth 800 M$).

The revised resolution which is to be formally presented on Monday is more reflective of the changing reality of countries like Iran, which are undergoing new stages of development that include nuclear energy production. In the same trend is India, which is currently in the process of finalizing a deal on cooperating with the US on its own nuclear energy program.

For more, see Nuclear Energy on Rise, Iran on Board.

Italy’s PM Prodi has suggested that Europe needs a central power authority for the continent.

The suggestion comes after the recent blackouts across Europe.

While Prodi may find it absurd that Europe has no central power authority, it also makes sense in a free market world. No one would want one country or one entity to control an asset as essential as energy.

This is precisely the problem that Europe currently has with Russia, which controls a major part of gas exports into Russia.

Gazprom, Russia’s state-controlled energy giant has announced plans to double the price of gas for neighboring Georgia.

Russia has been having a tough time with its neighbor of late, following the Georgian arrest of four alleged Russian spies. Without a doubt, the price hike is meant to chastise the former Soviet republic for its anti-Russian attitudes. This tactic is not new — the same strategy was used in the Ukraine last winter. Since, the Ukraine, has been more aligned with Russia; this summer, the Ukranian government settled on pro-Russian Yanukovich, as its Prime Minister.

In turn, Yanukovich has negotiated a friendly gas price with Russia.

Energy as Foreign Policy

Because Russia has used its energy resources as a foreign policy tool in the past — and no one has been able to stop it, due to its great market share — European countries tried to reverse this imbalance earlier this fall. European ministers wanted European companies to have access to the Russian market and have these companies export energy back into Europe. For obvious reasons, Russia didn’t commit.

The Guardian published a poll suggesting that the majority of British voters want their troops out of Iraq. This poll is published just a day after Deputy PM Saleh pleaded with the international community (and Tony Blair specifically) to not bail on Iraq.

In terms of electoral politics, the kind of numbers that the Guardian has printed (61% of voters want the troops out within the year, regardless of mission completion) would make withdrawal inevitable. If Labour is to be re-elected, they must respond to electoral demands. However, things are not as clear-cut. Blair is serving his last term as PM and in that sense may bail on his party, which forced him to announce his resignation recently. In his last year as PM, Blair will want to leave a mark and staying in Iraq could be his way of doing it (though this does not appear to be the case).

The two main questions are how loyal is Blair to his party and how loyal is he to the mission that he started with George W. Bush in 2003?

Putin doesn’t commit

October 20, 2006

As expected, Russian President Vladimir Putin has not committed his country legally binding agreement.

While Russia has been a fairly open market, its energy sector has been centralized with Putin’s presidency. The country has reaped enormous economic rewards, has had its economy grow and has been able to pay off its debts at faster paces than anyone could have predicted. President Putin wants to stick to the winning formula. With a quarter of energy exports in Europe being Russian, it will be hard to persuade the president to change course. It simply is in the country’s interests to maintain the current order.

Or perhaps Putin is preparing for his post-Presidential career; there has been speculation that Putin may head Gazprom upon the completion of his term.

Russian President Putin is meeting with EU leaders today to discuss energy provision to Europe.

Russia’s economic growth in recent years has been accomplished largely through its exports of gas and oil. With a direct pipeline to Germany on its way, it doesn’t seem likely to slow down; this is why European leaders are worried, because while Russia doesn’t hold the monopoly, it can certainly influence things quite a lot. The perfect example is what occurred when Russia cut the gas supply to the Ukraine this winter: repercussion were felt throughout Europe.

The EU leaders want access to the Russian energy market (for European companies), but they are unlikely to get much from Putin. His presidency has been focused on centralizing energy resources to ensure the state income that the country has brought in under his presidency. One of the accomplishments of his presidency was returning Gazprom to state control, with the government owning more than half of the prosperous company.