Trial shows why Croatian Presidency of the EU endangers Europe

The prosecution of MOL energy head Hernádi Zsolt under controversial circumstances, reveals both corruption within the Croatian government, and the influence of Vladimir Putin over the country; writes Saeed Khan
credit: Press Association

By Saeed Khan

28 Jan 2020

A court case with a dubious verdict is hardly a unique event. Strange outcomes that don’t align with the evidence or burden of proof, may provide some limited sensationalism in the media, then die down until the next scandal.

But it would be wrong, even deeply dangerous, to treat the case of Hernádi Zsolt with the same complacency. Hernádi’s conviction on bribery charges, confirms for many the accusations of corruption within Croatia’s judicial system.

 


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Worse is raises serious charges of Croatia’s susceptibility to external influences and pressures. There are allegations that the decision to convict Hernádi, were influenced by Moscow.

If true, then Croatia’s current status of holding the Presidency of the Council of the EU, places in jeopardy the entire Union. As a country holding the Presidency, can be susceptible to the whims and objectives of others.

A court in Zagreb convicted Hernádi, current CEO and Chairman of the Hungarian energy group MOL, of bribing the former Croatian Prime Minister Ivo Sanander. In a scheme that would have allowed MOL to take control of Croatia’s state energy firm, INA.

Interestingly, the Hungarian courts had acquitted Hernádi, but Croatia’s response was to seek a new forum for a different outcome. A UN tribunal in Geneva also determined that is saw no evidence to prove the Croatian allegations.

Similarly, Zagrab’s efforts to have the case heard by the Swiss Supreme Court were rejected, when it ruled the charges and evidence put forward were bogus. Zagreb’s verdict certainly sets a shocking precedence in defining other judicial decisions if examined with similar facts, circumstances and evidence.

Therefore, something else must have been behind such a different outcome in the Croatia courts. Increasingly, people are looking to Russia to find the cause and explanation. One of the key factors is energy.

If true, then Croatia’s current status of holding the Presidency of the Council of the EU, places in jeopardy the entire Union. As a country holding the Presidency, can be susceptible to the whims and objectives of others.

Croatia imports two thirds of its Liquid Natural Gas (LNG) requirements from Russia, approximately two billion cubic meters.

At the same time, the country is also seeking to reduce its energy costs and energy dependence on Russia, by developing a liquid natural gas terminal on Krka, its largest island in the Adriatic Sea.  Simultaneously, Russian natural gas would be pumped through the new terminal to supply Europe to meet its substantial energy needs.

But Russia will make sure that Croatia’s efforts to gain energy independence will be short lived. Also, it wants to exert its influence over Zagreb, to keep Europe in check should it assert itself against Moscow’s policies.

Russia’s largest oil company, Gazprom, signed a ten-year deal to supply one billion cubic meters of LNG to Croatia, via its Prvo Plinarsko Društvo (PPD) subsidiary.

Gazprom is 50 per cent state owned; and President Vladimir Putin is reported to hold a personal stake of 4.5 per cent of the company. The EU has a political structure that is only as strong as its weakest link.

Thought Member States may enter into bilateral relations and agreements with state actors outside the EU as well as with commercial entities from those states.

Putin’s influence within Gazprom, and the contract it has with Croatia, is critical to the country’s energy needs, so making it a bargaining chip of tremendous proportions.

Understandably, such engagements can create different levels of reliance and dependency between an EU member state and another country. Given the asymmetric distribution of power among the various EU member states, some countries are better equipped at repelling the advances and agendas of non-EU actors, then others

While exerting influence over commercial matters and other tangible factors may certainly be burdensome, it is the intangible exertion of influence that can be unpredictable as to the manner, place and time where it is leveraged.

Vladimir Putin has made no secret, both explicitly and implicitly, of his desire to destabilise and weaken the EU. He has deftly used Europe’s sizable energy dependency on Russia, as a chief pressure point over the EU and its member states, to blunt any stronger and more strident positions against Moscow.

Croatia’s ascension to the EU Presidency is both a blessing and a curse for the country.

While the promotion certainly adds cache and credibility to its standing within the EU, there is considerable concern that Croatia will be particularly susceptible to Moscow’s plans for Europe.

Putin’s influence within Gazprom, and the contract it has with Croatia, is critical to the country’s energy needs, so making it a bargaining chip of tremendous proportions.

But the potential ripple effect the Zagreb-Moscow relationship may not stop at the water’s, or the pipeline’s edge.

It may be felt in Brussels and by extension, within several European capitals.

EU countries need to become far more vigilant and concerned, about the seemingly and relatively inconsequential impact of a bribery case in Zagreb.

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