UPDATE 2-Putin says EU energy laws are uncivilised 'robbery'

Fri Nov 26, 2010 8:16am EST

Related Topics

* Russian PM Putin takes aim at EU energy laws

* Putin says the laws prevent investment, amount to robbery

* Putin jokes about Europe's lack of energy resources

* Putin calls for EU-Russian alliance

(Adds comments)

By Gleb Bryanski

BERLIN, Nov 26 (Reuters) - Russian Prime Minister Vladimir Putin on Friday lashed out at European Union laws aimed at liberalising the continent's energy market, saying they hinder investment and amount to uncivilised "robbery".

Putin, speaking to an investor forum before talks with German Chancellor Angela Merkel, said the EU should consult Russia when drafting such important legislation.

"Our companies, together with German partners, legally acquired distribution assets in Lithuania. Now they are being thrown out there with reference to the Third Energy Package. What is this? What is this robbery?" Putin said.

"We often hear from our partners both in Europe and North America: 'If you want to be members of a global family of civilised nations, you should behave in a civilised way.' What is this then? Have our colleagues forgotten the basic principles?"

The European Union agreed in March 2009 to liberalise energy markets by splitting giant utilities, ensuring that small gas suppliers can get unhindered access to European infrastructure and compete on an equal footing with the dominant players. [ID:nLDE6AO0C3]

The plan included a so-called "Gazprom Clause" designed to prevent companies from outside the bloc -- such as Russia's state-controlled giant Gazprom (GAZP.MM) -- from buying up strategic distribution networks without approval by governments.

Criticism of the EU legislation has overshadowed Putin's visit to Germany, where he was set to discuss a deal under which German utility E.ON (EONGn.DE) would sell a $4.5 billion stake in Gazprom to state-owned Russian bank VEB, whose board is chaired by Putin. [ID:nLDE6AN01Q]

In response to Putin's criticism of the legislation ahead of the visit, Merkel on Thursday lambasted Russia's protectionist trade measures which she said were hurting German exports.

RUSSIAN FIREWOOD?

Putin mixed his criticism of the energy legislation with a proposal for what amounts to an alliance with the European Union, a step he said was essential for the survival of both Russian and European civilisation. [ID:nWLA9223]

Putin said that Russia and the EU could one day even have a joint currency zone and that Russia was looking at ideas for increasing the role of the euro in energy trading.

Gazprom, the world's biggest natural gas company, supplies about a quarter of Europe's gas needs, but Moscow has repeatedly complained that European countries have blocked investment for Russian energy companies.

European leaders have persistently called for ways to reduce reliance on energy supplies from Russia, the world's biggest energy producer, though Gazprom forecasts that Russia's share in supplying the European gas market will rise over coming decades.

Putin quipped that if Europeans did not want gas or nuclear energy, they would still have to rely on Russia for firewood to heat their houses.

"I don't understand; how will you heat your houses? You do not want gas, you do not want to develop nuclear energy. Where will you get your heat from then? From firewood?"

"But even for firewood you will need to go to Siberia, you do not even have wood," Putin said.

The European Commission declined to comment directly on Putin's speech, but energy spokeswoman Marlene Holzner said the disputed legislation -- known as the Third Energy Package -- would lead to open and integrated markets.

"The European Commission ... is convinced that the third energy package will lead to open and integrated markets, which is good for competition and good for security of supply," Holzner said.

"Ensuring a good investment climate is one key aspect of the internal market legislation and of the infrastructure package that we recently presented." (Reporting by Gleb Bryanski, writing by Guy Faulconbridge, editing by Conor Humphries and Jane Baird)

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