ABSTRACT
Societies and eco nom ies that are open to the rest of the world have demolished the bar riers of the inward-looking soci eties of the past and allowed the world to con tinue along the path of pro gress. However, this increasingly interconnected world is also more vulner able. Security is identified more and more as a highly valu able – though vulner able – commodity. At the same time, gov ern ments and cit izens find it difficult to perceive that they enjoy a reason able level of secur ity in the pres ence of a signi fic ant degree of energy insecurity. Today, the pace of change in the inter na tional eco nomy is accelerating, and with it comes greater un cer tainty, and its pos it ive and negat ive effects are felt all around the world. The fin an cial crisis that began in 2007 – which turned into an eco nomic crisis one year later – and the sover eign debt crises in 2010 and 2011, have had a par ticu larly power ful impact on Europe, and have caused eco nomic risks to mater ialize in numerous coun tries. At the same time, there has been a decoupling of GDP growth in the emerging coun tries from that in the US and Europe. Political in stability in the Middle East and North Africa (MENA) has added to market ten sions. During this period, rising energy demand in emerging coun tries has more than offset the cutbacks and slowing of energy consumption in a number of Western coun tries that have been hit hard by the crisis. Burgeoning demand, espe cially in Asia, coupled with the polit ical in stability in MENA coun tries, has put pressure on the prices of energy products. Consequently, upward price movements have translated into inflationary pressures in Europe. Inflation spikes have prompted the aban don ment of loose monetary pol icy in the euro area, and inter est rates began to rise again. As a result, negat ive factors for energy secur ity have included lack of investments, increasing costs and prob lems re gard ing energy sources availabil ity. The inter action between macro economics, markets and geopol itics has once again affected energy secur ity. This raises new questions and challenges. The various crises – fin an cial, eco nomic and debt crisis – have also highlighted the need for strong and co ordinated institutions in Europe that are able to react swiftly and forcefully. However, certain member states have often sought to take the lead on energy mat ters, to the detriment of a unified response by the Euro pean Union (EU). This pattern has also been reflected in the past in the design and implementation of EU energy policy.
