when it comes to actions over Georgia 

(2) RUSSIA CHECKMATES DIVIDED AND DEPENDENT EUROPE

International Herald Tribune, 29 August 2008  http://www.iht.com/articles/ap/2008/08/29/europe/EU-ANL-Georgia-Europes-Options.php

BRUSSELS, Belgium: When it comes to action over Georgia, Russia has the European Union over a barrel. In fact, 1.2 million barrels.

That's how much Russian crude is pumped westward every day down the Druzhba pipeline to fuel Europe's economies.

This hard economic reality explains why Monday's emergency EU summit will struggle to produce much more than a slap on the wrist for Russia, despite Europe's exasperation over Moscow's invasion of Georgia and backing for its two separatist regions to break away.

The EU gets roughly a third of its oil and about 40 percent of its natural gas imports from Russia.

Germany, the EU's biggest economy, relies on Russia for 34 percent of its oil imports and 36 percent of its natural gas consumption. Slovakia, Finland and Bulgaria depend on Russia for over 90 percent of the gas that heats homes, cooks meals and powers factories.

Recent headlines in France and Germany asked if readers are prepared to see troops to "die for Tbilisi." But, with Europe already facing an economic downturn, the EU's politicians fear voters aren't even prepared to face higher fuel bills as the price of hardline support for Georgia.

French Foreign Minister Bernard Kouchner on Thursday reversed a previous assertion that the EU would avoid punitive action against Russia. He said some sort of sanctions were being considered following Moscow's recognition on Tuesday of the independence of Georgia's breakaway regions of Abkhazia and South Ossetia.

Russia's ambassador to the EU said sanctions would be a "grave mistake," but he shrugged off the threat.

"I have a doubt that might ever happen," Vladimir Chizhov told reporters. "This would be to the detriment of the European Union as much as the Russian Federation."

Even without the economic restraints, French and German officials say the EU has to moderate its response if it wants to act as a mediator who can persuade the Russians to pull back troops, accept international peacekeepers or negotiate a longer term solution.

Not all EU nations agree.

Poland and other eastern EU members are among the most dependent on Russian energy imports, but with fresh memories of Soviet domination, their leaders have urged a tough European stance. They are joined by Britain whose own oil and gas reserves make it less reliant on Russia.

"Over time it will feel the economic and political losses," British Foreign Secretary David Miliband said of Russia.

"If she truly wants respect and influence, and the benefits which flow from it, then Russia needs to change course," he said Wednesday.

Britain has suggested freezing Russia out of the G8 group of world powers and wants the EU to consider suspending talks scheduled to resume Sept. 15 on a major economic and political cooperation agreement with Moscow.

"We hope that it will go beyond statements and translate into action," Salome Samadashvili, Georgia's ambassador to the EU, said of the summit. "We should stop self-indulgent, wishful thinking that Russia is moving the right direction."

Georgia also wants the EU to block Russia's bid to join the World Trade Organization and threaten a boycott of the 2014 Winter Olympics in Sochi, the Russian Black Sea resort just a short drive from Georgia's disputed border.

Given the EU divisions, that's unlikely.

There will be a strong statement of support for Georgia's territorial integrity. The EU will probably add to the over 12 million it sent in humanitarian aid and offer more money to rebuild infrastructure damaged by the fighting.

The 27 member nations could offer to send more monitors, or even armed peacekeepers further down the line but only if Russia drops its long-standing objections to an international force.

As for longer term EU relations with Russia, expect much concern, regret and declarations that "business cannot go on as usual," but few concrete moves to suggest the Union will take action to force Russia's hand.

"Russia knows that when it comes to conducting a serious foreign and security policy, Europe is all mouth," says Lord Chris Patten, a veteran British politician who was the EU's external relations commissioner from 1999-2004.

"I doubt whether anything tougher than strongly worded communiqués will ever be employed," he wrote in a recent syndicated article.

Europe does have some economic leverage with Russia. With over 60 percent of its oil and gas exports going to the EU, Russia's economy needs petro-euros as much as Europe's depends on its energy. Russia also wants Western technology and investment to develop other sectors of its economy.

However, it could take years to wean Europe off Russian energy and the immediate impact of cutting oil and gas supplies would be catastrophic for European industry and households.

FULL STORY at http://www.iht.com/articles/ap/2008/08/29/europe/EU-ANL-Georgia-Europes-Options.php