Putin puts foot down in Brussels over EU gas

(BRUSSELS) - Russian premier Vladimir Putin tore into the EU in its Brussels home Thursday over new laws banning state-owned Gazprom from controlling pipelines pumping gas into the world's biggest individual market.

Putin and European Commission chief Jose Manuel Barroso clashed heatedly after talks between almost half of the Russian government and the European Union executive, which also touched on the threat to global economic recovery caused by rocketing oil prices amid the unrest in north Africa.

At the heart of their squabble lies a change in EU law, due to enter force on March 3, to unbundle gas supplies from transportation networks.

While the new law is designed to ensure that "those who own gas should not possess transportation" networks, Putin railed: "We have to make a profit, to earn something."

Putin's ambassador in Brussels, Vladimir Chizhov, had warned beforehand that the meeting with Barroso was "certainly not an event of the mutual appreciation society," adding that Russia was tired of "the EU playing God, descending on Earth to teach the savages."

Touching on events in Libya, Russia and the EU issued a joint statement condemning the use of military force on civilian protesters.

However, Putin himself said peoples should be allowed to determine their future "without any interference from outside."

He said the international community has left Belgium in peace despite its world record-beating eight-month wait for a government.

The Russian leader was more concerned about Libyan instability's effect on oil prices, which he said posed a "serious threat" after crude oil jumped more than $5 a barrel to within a whisker of $120 in London trade.

The gas changes have been a bug-bear of the Russians since their adoption by EU states and the European Parliament in 2009.

Former Soviet satellite and emerging EU powerhouse Poland was forced by Brussels last year to revisit a long-term gas supply contract struck with Moscow that did not adhere to the incoming legislation.

Another fierce row is under way with Lithuania, which last month asked Brussels regulators to probe Gazprom for abusing its market clout.

"I understand the concerns expressed so clearly, so energetically," Barroso said of Putin's argument.

But he insisted Moscow was not being singled out, stressing that the legislation applies equally to other big non-EU gas exporters including Norway.

"We're asking foreign companies to accept the same rules we're implementing," Barroso underlined.

The single European market is home to half a billion consumers and 20 million companies.

If the likes of Gazprom can't own its own pipeline, though, it will only pass on extra costs, Putin said.

"After these pipes have been separated... they would need to increase the transportation price which will... lead to a greater price for gas."

The commission said this week that Russia accounts for nearly 30 percent of EU gas imports, but Barroso insisted the new demands are "fully compatible with WTO rules."

The former Portuguese premier, a veteran of Putin summits, stressed: "Thanks to Russian gas many of our industries work and houses are warm -- but we pay for it and we pay well."

The law gives EU states three options: strict separation, as chosen by Lithuania; breaking up corporate structures, as applied by Poland and most EU states; and guaranteeing pipeline access to competitors at same rates.

None suits Moscow. "We want to impose competition and the Russians don't like it," said a specialist on the European side.

Putin, who also met EU president Herman Van Rompuy, brought Foreign Minister Sergei Lavrov and a dozen or so cabinet members responsible for finance, trade, agriculture and other policy areas where Brussels holds power.

Chizhov said Russia was also pushing for changes to EU chemical regulations, taxes on CO2 emissions for civil aircraft, veterinary rules and the bloc's farm-produce export licensing regime.

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