EU Crackdown on Gazprom May Scare Investors Away

Economists claim that the EU interferes too much in the pricing in the European gas market. The legal action against Gazprom which the EU is striving for would mean a direct intervention in the mechanisms of a free market economy, Deutsche Wirtschafts Nachrichten reported.

Economists warn the EU from exerting too much influence on the pricing of natural gas in the European market, underlining a thin line between punitive measures against Gazprom and an illegitimate interference in the functional mechanisms of the free market, the media source reported.

In the anti-trust law, the increase and maintenance of competition are essential in order to achieve a fair price, Mario Mariniello, expert from the European think tank Bruegel told Financial Times.

Mariniello argues that the actions of the European Commission may change the mood for investments. In particular, investors who could be potentially active in the energy industry may feel threatened by such institutional intervention.

However, other analysts believe that in exceptional circumstances the Commission can intervene in order to prevent a monopoly of one company.

The European Commission’s investigation into activities of the Russia’s Gazprom was announced in September 2012, preceded by a major European antitrust raid on September 27, 2011, when the European Commission investigators conducted unannounced simultaneous inspections in Gazprom offices in 10 countries.

In September 2012, the European Commission accused Gazprom of violating European rules of competition in several areas. There have been suspicions that Gazprom prevented the diversification of gas supplies to Central and Eastern Europe and imposed unfair prices on its customers.