GAS pipelines export influence as well as energy. Russia’s planned South Stream project was the $ 40 billion flagship of its attempt to regain sway in south-eastern Europe. After the failure of the Brussels-backed Nabucco pipeline from the Caucasus, the Russian plan gained a host of supporters, including traditionally Kremlin-friendly countries (Austria, Bulgaria, Italy and Serbia) as well as Croatia, Slovenia and Hungary, which is now treading its own path under the strong-willed Viktor Orban.Earlier this year South Stream was presenting a challenge to the authority of the European Union. The commission said the plan was illegal: under the rules of the EU’s liberalised gas market, a company cannot own both the pipeline and the gas that flows in it. The South Stream countries said they wanted exemptions from that rule.Then, on a visit to Turkey on December 1st, Mr Putin abruptly announced that the project had been cancelled. The turnaround infuriated his allies and mystified everyone else. What could have prompted Russia to destroy its credibility?The main reason for the U-turn is money. The plunging oil price has put a huge strain on both public…
