Katinka Barysch of the Centre for European Reform has always produced of the highest quality research on EU-Russia energy relations, and her latest article on the continuing need to push forward with the Nabucco pipeline project is no exception.

The pet project of EU energy security, as always, is in deep trouble, with financing unsecured (and probably disappearing into Greece), gas demand temporarily down, and Russia surging forward with South Stream pipeline proposal despite the electoral victory of Viktor Yanukovych in Ukraine, Barysch notes.  The project still offers numerous important advantages, and is central to the EU’s foreign policy to develop closer ties with critical countries to the East such as Turkey while fostering greater cohesion in energy negotiations with Russia.  But the problem, Barysch admits, is that the companies which Europe is relying on to build the pipeline are unlikely to see short-term profitability, so the project is in dire need state support and recognition of its political and strategic urgency.

In this excerpt below, Barysch explains why Europe should wait before falling for the South Stream bluff.