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Black Sea Energy and Economic Forum 2009


  • Frederick Kempe, President and CEO, Atlantic Council
  • Fabrizio Barbaso, Deputy Director General, DG TREN, European Commission

October 1, 2009

FREDERICK KEMPE:  As always at these conferences, I am so intrigued as I walk past corners and coffees and see people negotiating and talking about things and wondering whether they can do deals, which of course is part of the charm of such a gathering, that you build the community that finds common interests.

It’s my pleasure to introduce Fabrizio Barbaso, deputy director general of transfer and energy.  I am going to give you some details from his CV because I think they’re important, but I say the man behind the CV is very important for an audience to understand.  At a time of historic challenge to the European Union whether it’s Lisbon Treaty, what kind of common energy policy you come up with, how does one come out with a common foreign policy, where is going to be the future of all sorts of issues.  This is a man who knows the European Union.  He has been there in Brussels for 30 years, he has worked on everything from agriculture to external relations to enlargements of industry.  He knows the place inside and out, so in the Q&A, I’m sure we can ask him all sorts of questions.

Originally from Torino, Italy, like two-thirds of the people that were born in Torino, Italy, worked at Fiat.  But all joking aside, to Fiat to the European Union is an important thing.  It was – in Brussels, he’s known for having quite a wicked forehand and backhand on the tennis courts as well.  Aside from that, he’s been in charge of coordination of energy policy since January, 2006.  He joined the European Commission in 1976, where he was occupied, as I said, with many different jobs.

He worked for nine years with two Italian commissioners in various capacities in the cabinet before heading the unit in charge of textile, clothes, furniture, leather and footwear for the internal market director.  On November 1st, 1997, he was appointed director in the External Relations Directorate, of course – one of the most important and powerful directorates in Brussels.  Between October 2000 and August 2003, he was in charge of market policies as deputy director general in the Directorate General for Agriculture, again, one of the most interesting and powerful directorate generals in Brussels.

He was acting director general of DG Enlargement.  He graduated from the University of Torino with a law degree.  It’s great to have him here.  After his remarks, we’ll have some questions and answers, so as you think through this and listen, just think about what you most want to know that he wasn’t able to say in his remarks.  Mr. Barbaso, it’s an honor to have you with us.


FABRIZIO BARBASO:  Thank you very much, Mr. Chairman.  Ladies and gentlemen, distinguished delegates, excellencies, it’s a pleasure for me to be back to Romania, to Bucharest, a city and a country which are very close to my heart.  I would like to express first my gratitude to all those who have organized this conference, which is very timely, as the debates have shown this morning.  

It has been said many times last night and again this morning that the Black Sea region plays a critical role, and this applies also to the strengthening of the new energy security.  And this is the subject I would like to address with you today.  Why this region is so important for the energy security of the EU, and what steps are being taken to address energy security in this region to the benefit of the EU, of the neighbors and the partners?

Energy security has been a core policy area since the EU’s birth.  In 1953, Nobel lecturer George Marshall called on nations to learn from past events and find ways to avoid war and maintain peace.  In Europe, at this time, following the Schuman Declaration of 1950 and learned from the lessons of the Second World War, plans were already taking off for a new kind of peaceful cooperation in Europe.  This was the start of the European Coal and Steel Community, the forerunner of today’s European Union.

In those days, coal meant energy.  Coal was the primary fuel of the new economy, fueling homes, business, factories and transport, and I heard this morning that many of you meant that this will also be the fuel of the future.  Millions of jobs depended on extraction of coal, processing and transportation, not to mention its consumption.  For Europe, the link between security and energy had been clearly established.

Is energy security a factor for peace or does it aggravate conflict?  In some parts of the world, access to energy is clearly an issue which exacerbates disputes.  In some cases, it may be a direct cause, and you heard this morning Mr. Patriciu saying that pipelines can be an instrument of war.  For today’s EU, as in the ’50s, energy security is and must remain a model for peace.  The EU is the world’s second largest consumer and the first largest importer.  Fifty-four percent of all energy used in the EU is imported, so more than half, 60 percent for gas, 84 percent for oil.  Demand for imports is raising – you heard the figures this morning.  And also, demand outside Europe is rising faster than before for gas and for oil.  

One of the EU’s greatest challenges is to ensure that growing energy dependence does not become a risk to wider economic or international security.  There is much talk about the EU’s dependence on energy imports, but in frank, all of us consume, producing and transiting countries alike are becoming more and more dependent on each other.  Security of supply is important for us, but other countries seek security of demand, and you listened to the debate this morning in the panel and also last night, Mr. Morningstar, Ambassador Morningstar speaking from this podium, he stressed what I am also going to tell you:  that this age, the new age, is the age of interdependence.

Our own energy security depends on building up corporation, dialogue and negotiation with all stakeholders based on mutual respect and trust.  Within the EU, 37 member states and almost 500 million citizens have come together on a voluntary basis into a single internal-engine market based on commonly-agreed goals, political objectives and legislation.  

Closely related to this is our approach to climate change, which we see as the other significant international threat to security, and you listened this morning that this is one of the nightmares of one of leading entrepreneur present today.  Finding solutions to climate change will also help improve security of energy supply, so the two have to be seen more and more together.  An historical milestone was reached as the first of January 2007, when EU’s shore reached the Black Sea.  As a result, the prospect of stability and security of our neighbors in the Black Sea region became a new immediate concern to the EU.

Moreover, as pointed out in the commission’s Communication on Black Sea Synergy immediately after the accession of Bulgaria and Romania, the Black Sea region is a production and transmission area of strategic importance for EU and to supply security.  So as you see, we have that time already identified these areas, an area not only of the mission of also of production.  

It offers significant potential for energy supply diversification.  And it is an important component of the use of external energy strategy.  There are, for example, say there are technical options for additional gas exports from the Caspian Sea through the Black Sea region to the EU.  Also, additional quantities of crude oil will likely be imported into the EU through existing or new pipelines, and/or via ship with the tankers.  

The congested Turkish Straits will not be able to transit additional oil production.  Some of you heard last night Paolo Scaroni, the Chief Executive Officer of Eni, mentioning and recalling the failures of how intense is the traffic.  Not any longer sustainable in the Turkish Straits.

So new infrastructure will need to be considered, particularly as increased Caspian oil production is expected in the years to come, notably from the Kashagan oil field in Kazakhstan.  This situation raises concerns, both in terms of security supply, but also with regards to the environmental threat of possible tanker accident in other seas.  Against this background, allow me to outline some of the concrete steps we are taking to address this energy security in the Black Sea region.

Let me start by something which was stressed last night by Ambassador Morningstar. And this is EU legislation:  A fully functioning, true, internal energy market is key to fostering more secure and sustainable energy for Europe.  Our so-called third package of internal energy legislation will make it easier for us to avoid an energy crisis and deal with disruptions more effectively.  It will help create the necessary economic signals to trigger investment by separating the interests of producers from the network operators.  And it will increase transparency and access to market-related information, demand, network capacity and supply.  

The gas crisis in January 2009 between Ukraine and Russia was a painful reminder of the strategic importance of energy security to Europe.  The crisis forced European citizens, in particular, in this region, and in a country next to this one, to suffer from the winter cold, and inevitably impacted all our invested output.  This came as a real shock for many Europeans.  

The 27 heads of state of the EU, meeting in the European Council in March, underscored the urgency of clear guarantees from suppliers in transit countries, that supplies will not be interrupted.  They also, vigorously stressed, once more, the importance of diversified sources, fuels and routes of energy supply.  In fact, this crisis concerned, beyond any doubt, the merits of the commission’s second strategic energy review which was adopted at the end of last year.  

It specifically focused on energy security and proposed a five-point energy security and solidarity action plan.  It calls for an improved crisis and prevention response mechanism, and  energy efficiency.  And you listened this morning how important, for Romania, it is to make progress in the field of energy efficiency.  The potential is huge.

And back to use of EU indigenous resources, as well as a greater focus on energy in the EU is better relations, and these are of course, in addition to the infrastructures and the diversification.  In this context, allow me to highlight, in particular, the commission’s adoption, just before the summer, of a proposed new regulation to improve the security of gas supplies in the framework of a dependent gas market.

It calls for member states to be fully prepared in case of supply disruption, through clear and effective preventative and emergency plans involving all stakeholders and incorporating thoroughly the EU dimension of any significant disruption.  We noted during the crisis that the countries which had in place emergency plans were much more able to react effectively to the crisis than the others.  

Regional cooperation and solidarity are at the heart of our proposal.  The plans will be based on appropriate risk assessments.  I fully expect that this regulation will be given high priority by the council and the European parliament in the months to come in order to ensure that the EU will be better prepared to prevent another gas crisis, or to manage it, if ever it happens.

Of course, promoting infrastructure is essential to the EU’s energy needs.  Indeed, the EU energy security and solidarity action plan considers that a number of infrastructure developments should be considered as energy security priorities, amongst which is the development of a southern gas corridor to bring energy resources from the Caspian to the Middle East and Turkey via the Black Sea region to the EU.  

As you know, several projects make up the southern corridor, including Nabucco, the interconnector between Turkey, Greece, Italy and White Stream.  White Stream I and White Stream II – that’s what we used to speak about these days.  The priority of the southern corridor has been recognized by the European Economic Recovery Plan, and which 4 billion euros has been reserved for energy projects.  And another fair share has been allocated to projects supporting the southern corridor’s future development.

The success of the EU’s approach has recently been demonstrated by the conclusion of an intergovernmental agreement between Turkey, Bulgaria, Romania, Hungary and Austria to facilitate the building of the Nabucco pipeline.  We were delighted to have witnessed this historic event just two months following the Prague Summit, which has developed the concept of southern corridor.

It is the first concrete project in the EU’s vision of a new southern energy corridor, and that approach in the southern corridor will benefit from this vision and from the recent agreement.  Moreover, all countries involved in the southern corridor, whether producer, transit or consumer, will benefit from greater diversification and security in their energy markets and economies.  For the countries of the Caspian Basin and Central Asia, as well as those of Mashriq and Middle East, the realization of this corridor would enable secure and long-term access to one of the world’s largest, most integrated and financially attractive energy markets – this is the EU market.

For the countries of the southern Caucasus and the Black Sea region, the realization of this corridor would offer them the possibility of additional energy supplies to new markets, as well as a long-term source of gas transmission renewal.  And for the EU, the southern Corridor offers geographically, new sources of energy and the potential to enhance commercial and economic relations with the countries of the Black Sea and Caspian regions, as well as Central Asia.

The European Commission will continue to strongly support the development of the southern corridor.  To this end, we are actively developing a mechanism to provide producers in the Caspian region a secure and stable environment for export of energy sources to the EU.  

In the Second Strategic Energy Review, the feasibility of mechanisms for the purchase of Caspian gas – we call it Caspian Development Corporation, but it’s more an abrogated demand addressed to those countries.  It has been explored in collaboration with the European Investment Bank, the European Bank for Reconstruction and Development, as well as the World Bank.

We also benefit from the variety of existing and new instruments to enhance energy relations with Black Sea countries on the regional and bilateral level.  Black Sea countries such as Ukraine and Georgia are proud beneficiaries of the Eastern partnership, as are the Caspian neighbors, Azerbaijan and Armenia.  This will seek to accelerate political association and economic cooperation between the EU and the partner countries.  It also establishes an energy-security platform – which has already met once, and next meeting will take place beginning of November – which among other things will focus on energy support and security.

The Energy Community is a valuable tool which foresees the implementation of the contracted parties of most of the EU legislation in the energy field.  This helps to create a stable regulatory and market framework and provides a strategic legal framework for our energy supply lines.  Black Sea countries play a key role.  Turkey and Ukraine are currently up-sellers, and if negotiations are successful, then they will become full members.  I am pleased to let you know that with Ukraine, the negotiations have reached a very final stage and we have started also to negotiate last October with – last – the beginning of September with Turkey.

On Turkey, I would like to comment on what has been said yesterday by chief executive Paolo Scaroni and taken up also this morning by the president of senate, Geona.  There is no doubt in my mind that Turkey is a European state.  Twenty-five European countries meeting within the European Council – this was just before the accession of Bulgaria and Romania, so in Europe 25 – in December 2005 has decided to open accessioning negotiations with Turkey.  This means that the target of those negotiations is the accession of Turkey to the EU.  So indirectly, it’s a clear recognition that Turkey belongs to Europe and will be part of Europe when it will be able to meet the definitions for joining the EU.

Georgia, to come back to the Energy Community, was accepted as an observer to the Energy Community in December 2007, and where appropriate, we will also proceed at the extension of the Energy Community to other countries.

Seven Black Sea region countries also participate in the regional energy dialogue established under the commission’s so-called Baku Initiative.  This brings together the EU and 12 partner countries in the Black and Caspian Sea region with a view to facilitate the transportation of energy resources to the EU and support the creation of regional energy markets, as well as to enhance cooperation in the area of energy efficiency and security.  This is the main – the business structure of what will become one day a pan-European, integrated energy market, because there is a process of converging legislation and the regulatory framework between the EU countries and our eastern and southeastern partners.

Helping Black Sea countries to develop an EU focus on these areas has an important overall benefit not just in terms of releasing energy resources but also as regards our climate-change objectives.  Let me say a few words about European Union cooperation with the United States on energy.  Cooperation is good; cooperation is coherent and is ongoing.  However, the formal structures we have in place can be sometimes slow to react to rapidly changing circumstances.  We have decided recently to address this problem, and we are at this moment working with our U.S. friends on the creation of an EU-U.S. energy council which will be the focal point for all other energy contracts.

And this council will operate at the highest level.  It is our hope that the creation of such a council will be announced by the leaders during the EU-U.S. summit to be had in Washington in the beginning of November, on the 3rd and 4th of November.  In conclusion, ladies and gentlemen, the EU is advancing with an ambitious energy attack plan.  Some of you have said this morning that it’s all ambitious, but we believe that it is ambitious and realistic.  Beyond any doubt, the Black Sea region plays a critical role in its success.  However, it is equally clear that energy security cannot be assured by national actions alone.  No single state is able to ensure energy security these days.  

Neither can the EU, despite its size and advanced state of energy integration.  The EU has shown that energy collaboration, dialogue and understanding are a means to bringing later energy security not only to our citizens but to the wider world.  As President Barroso at the signing of the Nabucco agreement, gas pipes may be made of steel, but Nabucco can cement links between our people.  We have a mutual interest in ensuring a stable and predictable framework for the flow of energy, including through the modernization of existing and the establishment of new energy infrastructures.  We will continue our work towards increased energy security and diversification.  This should, in turn, bring wider political and economic benefits in terms of stability, in terms of progress to the Black Sea region as a whole.  

So before closing, let me mention again that – what was said by Mr. Geona this morning, president of Senate.  He wants to reestablish a link between European Union, United States and this region, and I think that we have posed the basis for such a link, and energy will be again a cement for reconciling and putting together people, and not to divide them.  Thank you very much.  (Applause.)

MR. KEMPE:  Is this working now?  Is it on?  Testing.  Okay, that’s great.  Thank, you Mr. Barbaso, for that important statement and comprehensive statement, which we’ll also put on our website if – for those who would like to look at it more deeply.  I am going to turn to the audience after one question from myself.  We focused a lot on process and what the EU is doing to help, but let me – let’s get to the bottom line.  The bottom line is, how much can the commission actually do in the energy field, no matter how many meetings you have, how nice the process is, when certain EU capitols don’t necessarily support your goals?  What is your role when you can’t even get the capitols to decide themselves to work together on these energy policies, and how do you deal with that?

MR. BARBASO:  Well, if you look back to what we have been doing over the last years, it’s established the progress that has just been achieved in the absence of a specific movement basis, because so far there is no specific provision of the energy policy.  Nevertheless, we have developed the common market, the climate-change policy, for energy plays a great role.  We have developed our work on standard relations in this region, we have developed infrastructures and researched development policy.  Things will change with the new treaty.  When Lisbon enters into force, we have a specific chapter which will support initiative in this area.  

The cooperation of the capitals is, of course, a key instrument in our extended relations.  And it’s not an easy task, because the condition of this capital is to go individually to look at them and to speak into interlocutors.  But we believe that by involving them closely through the interlocutors, and by providing group examples, it would be possible to make also progress in this field.  Look at what happened with Nabucco.  

If this intergovernmental agreement has been signed, it’s mainly because the European Commission was instrumental in putting together member states and Turkey, drafting the text of the agreement, animating the debates, and after the debates, trying to amend the final part of the provision.  So I think that I’ve given good examples of real value of the joint European work in this area, if it will be possible to rally all member states into an integrated, coherent party, to be just one single voice vis-à-vis our third countries interlopers.

MR. KEMPE:  Thank you for that, that’s an excellent answer.  I also have observed, and I think you have as well, that there’s nothing more unifying than a good crisis.  (Laughter.)

MR. BARBASO:  Yeah, let me tell you what happened during the crisis between Ukraine and Russia.  When we were really confronted with the need to take rapid decision and to put strong pressure on the other partners, it was agreed that EU would be represented by the European Commission and by the presidency, and that can tell you that also one of the negotiating country, in view of the accession, as a gate to be represented by the European president serving with that commission, because they understood that a joint representation would make much more powerful an opposition than a single-member presentation of the European interest.

MR. KEMPE:  And while I jump to wish no crises upon you, it’s actually not such a bad thing for the European Union.  Paula Stern if you could ask the first question, and I’ll watch other heads.

MR.    :  The gentleman here is first.

MR. KEMPE:  Okay, sure, then here, sorry.

Q:  Thank you very much.  First of all, I’d like to thank Mr. Barbaso for the very interesting and comprehensive presentation given.  I have three quick questions.  So the first one: you mentioned something new in your presentation about the Energy Community Treaty, and you said about Turkey and about the Ukraine, but I expected to hear also something from you about the Republic of Moldova and how the negotiations between the commission and the Republic of Moldova goes and if you see the Republic of Moldova could become member of the Energy Community soon, and if this could be also seen as a political signal for a new European perspective for this country.  

The second question, the Russian president, Mr. Medvedev, has recently launched an initiative, a proposal for the revision of the Energy Charter Treaty.  Does the European Commission have any views on this initiative?  And the last question, which is very easy for you, I am dead sure that you know the name of the next commissioner for energy, and if you can share it with us, we will appreciate it very much.  (Applause, laughter.)

MR. KEMPE:  Let me just say one thing to the audience.  If you are going to ask – I was about to say no one gets three questions, and I’m very sorry, but if you can ask your three questions that shortly and make them all as provocative, you’re welcome.  So Moldova, Medvedev, Energy Charter, and of course the name of your new boss.

MR. BARBASO:  Let’s start with the simplest one, and this is about Moldova.  Yes, Moldova is also negotiating the accession to the Energy Community, and so far, we have reached an agreement at a technical level between the two negotiators with a clear calendar for Moldova to incorporate the commitments.

This proves that very soon, and I would be ready to go back to that, but it could happen also in December, Moldova will join – the Republic of Moldova will join the Energy Community, and this is approaching it to the European family.  

About the Medvedev proposal, as you know, we were struck by this decision taken by the Russian authorities to withdraw from the Charter of Energy, and we can’t examine in true detail the counterproposal, which is to set up a number of agreed principles.  All the principles, as such, proposed by Medvedev, we don’t think that there could be serious difficulty.  Some of them are the same as the ones that you can find in the charter today.  There are some missing principles and rules which could be usefully introduced.  But what was asked is that if you both want the negotiation, it will take a lot of time, and what in the meantime?

Therefore, on a bilateral basis, European Union started in negotiation with Russia in view of replacing the existing agreement, we would write a detailed chapter on the energy policy, and we’ll be fine with this chapter. The principles which were inspired also the energy chapter.  So we – on one side we are proceeding bilaterally with Russia to – in view of making progress towards a bilateral agreement, and the other side, multilaterally, there has been already some discussion, G-8 and G-20, of this process which has to be examined further.

Next commissioner?  I don’t – it’s over, anyone can express his views of this.  We know that it has been in the – it has become very palatable, this portfolio for energy.  So there are a lot of applicants among the various commissioners, so a lot of the best, but just one which will be selected.  So it’s too early to tell you who will be the next energy commissioner.

MR. KEMPE:  You missed your chance to make news.  Paula Stern.

Q:  Thank you.  I guess as a child of the Cold War, I’ve learned to respect who controls the microphones in these settings.  But you, Fred – (chuckles) – but I’m happy to have an opportunity to ask you a question that I asked, actually, Ambassador Morningstar last night, and it relates to climate change.  At least last night, we had never heard the word climate change or the environment.  It was thanks to Sen. Hagel this morning when he first inserted the word environment in our energy discussion.

My question to you, as it was to Ambassador Morningstar, is how you relate your energy policymaking – and you’ve described it in great detail here – with your climate-change policymaking.  My question to Ambassador Morningstar last night was, do you – to what degree do you overlap and work with climate-change apparatus, if you will, in briefing, for example, those, like President Obama, who have to go to the G-20 and really discuss what our future will look like as – from a national-security point of view.  

In Washington, national security, or security, always trumps everything else, and now we have energy as a security issue, and now we have climate change as a security issue.  How are you relating those two together?  How shall our leadership at the G-20 do so going forward?

MR. BARBASO:  Yes, the EU has clearly established this link between the two issues, and we have developed an integrated climate change-energy policy.  What does it mean?  It means that our energy policy is based on three pillars: one, the first pillar is climate change, second pillar is energy security and the third is competitiveness, which means more affordable prices for the users of energy.  So preserving the potential of the EU industry, but at the same time, insuring consumers that they would pay an affordable price for energy, and looking at the link between climate change and security of supply.  It’s very difficult to say – I mean, I was asked many times the question, which one of the two is more important?  But if I address you the same question, you will react depending of the season, because if you come closer to the winter, you would say, security of supply is more important.  In summertime, maybe climate change is more important.  

But what is important for us is that by developing and taking a leadership in the climate-change policy – and this is the clearly stated European Union way – we are contributing to improving the security of supply, because if you look at the basic policies for the climate-change fight, what are they?  Promotion of the movements, which means more indigenous sources of energy, less equal.  And the second pillar is energy efficiency.  Energy efficiency will contribute by 50 percent to targets, which means that throughout the energy efficiency we can make extraordinary progress and therefore reduce imports and advantaging the EU – for example, in the case of the EU, budgets, and also to the benefit of the – of our own domestic consumers.

So this link has been clearly established; we want to continue to be part of this process in Europe and Copenhagen because we believe very much that the two of them are world challenges, but we cannot bring in one without bringing in the other.  So really, it’s a common challenge, both.

MR. KEMPE:  Thank you.  We’ve got five minutes left.  Let me take the two questions I saw here next.  If you could ask them one after another, and then we’ll come back for a final round of answers.  Please.

Q:  Thank you, John Moff.

MR. KEMPE:  Good to see you, John.

Q:  And you, Fred, thank you.  I want to ask a question specifically about Ukraine.  It seems to me it’s fair to say that the lack of reform of Ukraine’s energy sector has become, of itself, an energy-security problem for Europe.  I mean, put simply, if Ukraine had developed its own indigenous gas resources, caught gas demand, its gas problem with Russia would be less severe and so would Europe’s.  So I want to ask, how committed is the EU to finding a way of cleaning up Ukraine’s energy sector?

MR. KEMPE:  I think that’s a great question.  And we’ll take the last question here because this non-EU state has huge influence on the European Union and its relationships.  Please, one more question.  Thank you.  And please identify yourself.

Q:  Very quickly, right now this is more Caspian-related.  There is an impasse over the transit-tariff issue between Turkey and Azerbaijan related directly to any Southern Corridor pipeline except potentially White Stream I and II, which I found intriguing that you mentioned.  So what role can the EU play in attempting to overcome this impasse?  And, second, if it is impossible to overcome this impasse, how will White Stream I or II be prioritized or viewed in relation to the other Southern Corridor pipelines that you mentioned?  Thank you.

MR. BARBASO:  Thank you.  Starting with John, your question, we take it very, very seriously, the situation in Ukraine.  As you know there is a bilateral conference in March in Brussels and we declared and that we have set up together a roadmap towards implementation of a number of commitments by Ukraine in lieu of substantially adapting the regulatory framework and the market functioning to the EU model and modernizing also their infrastructures.

More recently, when Ukraine was faced with the financial difficulties linked to the payment of the import of gas in view of a replenishing of the storages, the leader of Ukraine, Prime Minister Tymoshenko, has accepted nine clear commitments in view of getting a green light from the financial – international financial institutions as well as the EU in view of being able to pay for these reforms.

Now, it is true that some of the commitments have not yet been implemented.  This is due, as you know, also, to the delicate political situation in the country, which is going to have presidential elections very soon and where unpopular decisions are difficult to be taken.

However, we have reached a substantial breakthrough in our negotiations for the accession of Ukraine to the energy community implying that Ukraine has accepted to substantially change a draft law for gas which they were preparing and to put it in line with the EU requirements.  And we think that this is a major achievement and we are looking forward to the presentation of this draft law by their government to the parliament and to be adopted as soon as possible.  But European Commission will continue to follow very closely the situation and the development of the situation in Ukraine.

On this dispute for the tariffs to be paid for the gas import in Turkey by – from Azerbaijan, I am optimistic because I think that there is no way, that the solution must be found because, otherwise, the image of Turkey as an important energy hub or transit country will be undermined.  And I don’t think that this is the moment to do so in the country; they are expecting huge investments – not only Nabucco, but, as you know, other pipelines are in the pipe.

So I think that, at the end of the day, it would be possible to find a solution even if we know that it’s not an easy dispute because the two parties – as always in a dispute – believe them to be right.  But, I mean, you have to go for a compromise, which means that they both have to make some concessions.

MR. KEMPE:  Thank you, Mr. Barbaso.  In closing, before we give you a round of applause and thank you, because this is the first initiative, first, the inaugural conference, I think it’s always important to explain where the different pieces fit.

For us in organizing it, it was absolutely crucial that we have the European Union.  From the very beginning we knew that this conference couldn’t take place, this forum couldn’t continue without the participation of the European Union.  Christopher, where are you?  Thank you very much.  This has been very important for us, this cooperation, and we hope to continue it.

Also between forums and also between meetings – because we need to understand how you live with these issues to be useful ourselves.  We don’t represent any government; we’re a nongovernmental organization.  We try to bring parties together.  The European Union – we can’t do it without them.

We certainly can’t do it without the member states.  And you’ll see a lot of ministers represented tomorrow, and of course, crucial for this meeting is Romania; crucial for next year’s meeting is the Turkish government.  And so we bring in member states and the different governments.  And, of course, Ambassador Morningstar last night – keeping the U.S. government contribution strong and bringing the best people we can from the United States, both in the private sector and also in the public sector here.  And you can expect that again next year.  But that’s what we bring together.

But most important is this kind of a moment, where we can get away from protocol, we can have a nice and open discussion on an informal basis where we can push conversations further ahead.  So this was very useful for us.  Thank you for taking the time.  And thank you for helping us out with this new initiative.  (Applause.)

Transcript by Federal News Service, Washington, D.C.

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