INTERNATIONAL CONFERENCE

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1 INTERNATIONAL CONFERENCE on INTERNATIONAL BUSINESS ICIB 2014 proceedings edited by Aristidis Bitzenis & Vasileios A. Vlachos

2 International Conference on International Business ( Thessaloniki, May 2014 Proceedings edited by Aristidis Bitzenis and Vasileios A. Vlachos

3 2015 «Εργαστήριο Διεθνών Σχέσεων και Ευρωπαϊκής Ολοκλήρωσης του Πανεπιστημίου Μακεδονίας» Πανεπιστήμιο Μακεδονίας Οικονομικών και Κοινωνικών Επιστημών, Εγνατία 156, Τ.Κ , Θεσσαλονίκη. Τμήμα Διεθνών και Ευρωπαϊκών Σπουδών Τηλ Fax: Μπιτζένης Π. Αριστείδης, Ph.D. ISBN ISSN Απαγορεύεται η με οποιονδήποτε τρόπο αναπαραγωγή του συνόλου ή μέρους του παρόντος με οποιοδήποτε μέσο, μηχανικό, ηλεκτρονικό, φωτοτυπικό, ή άλλο, χωρίς την γραπτή άδεια του συγγραφέα, σύμφωνα με τον Νόμο 2121/1993 και τους κανόνες του Διεθνούς Δικαίου που ισχύουν στην Ελλάδα.

4 International Conference on International Business Chair Dr. Aristidis Bitzenis, University of Macedonia (Thessaloniki, Greece). Head of Organizing Committee Dr. Aristidis Bitzenis, University of Macedonia (Thessaloniki, Greece). Members of Organizing Committee Mr. Charisios Kafteranis, University of Macedonia (Thessaloniki, Greece). Dr. Apostolos Kiohos, University of Macedonia (Thessaloniki, Greece). Dr. Marko Kolakovic, University of Zagreb (Zagreb, Croatia). Dr. John Marangos, University of Macedonia (Thessaloniki, Greece). Mr. Vasileios A. Vlachos, University of Macedonia (Thessaloniki, Greece). Heads of Scientific Committee Dr. Aristidis Bitzenis, University of Macedonia (Thessaloniki, Greece). Dr. John Marangos, University of Macedonia (Thessaloniki, Greece). Scientific Committee Members Dr. Oksan Artar, Istanbul Commerce University (Istanbul, Turkey). Dr. Foteini Asderaki, University of Piraeus (Piraeus, Greece). Dr. Rana Atabay Baytar, Istanbul Commerce University (Istanbul,Turkey). Dr. Aristidis Bitzenis, University of Macedonia (Thessaloniki, Greece). Dr. Evaghoras L. Evaghorou, University of Piraeus (Piraeus, Greece). Dr. Konstantinos Hazakis, Democritus University of Thrace (Komotini, Greece). Dr. Apostolos Kiohos, Assistant Professor, University of Macedonia (Thessaloniki, Greece). Dr. Marko Kolakovic, University of Zagreb (Zagreb, Croatia). Dr. Petia Koleva, University Paris Diderot (Paris, France). Dr. Ilias Kouskouvelis, University of Macedonia, (Thessaloniki, Greece). Dr. Eric Magnin, University Paris Diderot (Paris, France). Dr. Dimitris Manolopoulos, Athens University of Economics and Business (Athens, Greece). Dr. Vladimir Marinkovic, Professor at Megatrend University (Beograd, Serbia) Dr. Pyrros Papadimitriou, University of Peloponnese (Korinthos, Greece). Dr. Ioannis Papadopoulos, University of Macedonia (Thessaloniki, Greece). Dr. Iordanis Petsas, University of Scranton (Scranton, USA). Dr. Georgios Rizopoulos, University Paris Diderot (Paris, France). Dr. Bruno Sergi, University of Messina (Messina, Italy). Mr. Stefanovic Nebojsa, President of the Parliament of the Republic of Serbia. Dr. Ioannis Tampakoudis, University of Macedonia (Thessaloniki, Greece). Dr. Virginia Zhelyazkova, VUZF University (Sofia, Bulgaria). Associated members Dr. Achilleas Anagnostopoulos, Technological Education Institute of Larissa (Larissa, Greece). Dr. Panagiotis Kontakos, University of Macedonia (Thessaloniki, Greece). Dr. Nikolaos Konstantopoulos, University of the Aegean (Chios, Greece). Ms. Christina Sakali, University of Macedonia (Thessaloniki, Greece). Mr. Vasileios A.Vlachos, University of Macedonia (Thessaloniki, Greece).

5 Organizers Department of International and European Studies, University of Macedonia (Thessaloniki, Greece). International Relations and European Integration Laboratory, University of Macedonia (Thessaloniki, Greece). Department of International and European Studies, University of Piraeus (Piraeus, Greece). European Centre for the Development of Vocational Training (Thessaloniki, Greece). Faculty of Political Science, University of Messina (Messina, Italy). UMR LADYSS, University Paris Diderot (Paris, France). School of Business and Economics, Winston-Salem State University (Winston-Salem, North Carolina, USA).

6 Gold partners Silver partners Bronze partners

7 Preface by Aristidis Bitzenis and Vasileios A. Vlachos The International Conference on International Business (ICIB) aims to bring together academics and practitioners in order to share ideas and methods for the exploration of foreign direct investment (FDI), the role of multinational corporations (MNCs) and the complexity of the globalized business environment. ICIB 2014 took place on May 2014 and was organized in parallel sessions of English and Greek. The conference focused on but not limited to empirical research in the following fields: Entrepreneurship & international business environment European Union enlargement Financial management Global budgetary crisis management by the European Union institutions Globalization, MNCs, competitiveness and development International political economy and business e-business Sustainable business Social entrepreneurship Labour economics and industrial relations MNCs and political strategies Mergers & Acquisitions Impact and determinants of FDI FDI and European economic integration FDI, trade and regional integration FDI and transition Tourism enterprise and industry Shadow economy and corruption ICIB is supported by a number of participating journals and follows a specific publication procedure (for details the reader should refer to Except from the ICIB papers published in the regular issues of the collaborating journals, two special issues of the collaborating journals also hosted ICIB 2014 papers. One issue was published in 2014 at the East-West Journal of Economics and Business under the title Elements of sustainable growth: In search for an exit from the crisis. Another issue is forthcoming in the Global Business and Economics Review under the title Foreign Direct Investment in the Aftermath of the Current Global Economic Crisis. The papers included in the proceedings were presented at ICIB 2014 and have completed the final stage of the publication procedure. The papers are grouped according to the general themes of ICIB 2014 sessions. The pluralism of ICIB 2014 is reflected in the volume at hand, which covers major interlinked issues of international business through seventeen regular and teleconference sessions where over 60 papers were presented. The key issues considered were the consequences of the eurozone crisis, the energy market, marketing and human resources, FDI and economic development, tourism, entrepreneurship and international relations. Some papers do not appear in full text as their full versions (copyrights) are property of participating journals or edited volumes committed to ICIB. The organizing committee of ICIB 2014 would like to thank all participants organizers, members of the scientific committee, presenters, keynote speakers, sponsors, etc. and aims for an even more successful and stimulating ICIB 2015.

8 Contents (Sessions in bold) Energy market Shale gas perspectives and geopolitics in Central and Eastern Europe Panagiotis Kontakos Energy market in Europe - A sustainable development with an environmental approach Dimitrios Kalfakis Towards consolidating Greek dominance in future global seaborne energy trade: the LNG tanker shipping industry in 2014 Panagiotis Kontakos International business (papers presented in Greek) Πολυεθνικές Επιχειρήσεις και Οικονομική Διπλωματία στη Διεθνή Πολιτική: Μια σύγχρονη θεωρητική προσέγγιση Αθανάσιος Μποζίνης & Χαράλαμπος Τζιώγας Διερεύνηση των στρατηγικών διεθνοποίησης των ελληνικών επιχειρήσεων στις χώρες των Βαλκανίων: Συμπεράσματα και προτάσεις στρατηγικής Ιωάννης Ταμπακούδης, Άννα Θεολογούδη & Μανώλης Σκουλουδάκης Επιτυχημένες επιχειρηματικές πρακτικές σε περίοδο κρίσης Βασιλική Λάζου Η μείωση της ανεργίας των νέων με τη συμβολή των χρηματοδοτικών προγραμμάτων ΕΣΠΑ και Γ ΚΠΣ Χαρίσιος Καφτεράνης Multinational enterprises Leading export driven companies during a crisis situation: An internal case study approach Slobodan Velinov & Leslie Szamosi Firm survival in European post-transition countries Mladen Turuk & Boris Sisek Greek small and medium size enterprises (SMEs) and the importance of forming wide and competitive dynamic multinational business alliances Labros Sdrolias, Georgios Aspridis, Nikolaos Kakkos, Dagmar Škodová-Parmová & Vasiliki Kazantzi Cross country variability in salaries changes of teachers across Europe during the economic crisis Kostas Filippidis, Sophia Anastasiou & Stelios Mavridis The concept of technology in international business Dimitris Manolopoulos & Christodoulos Soulis Social indicators, technology, marketing and human development (papers presented in Greek) Διεθνής πολιτική οικονομία της γενετικής & βιοτεχνολογίας Αθανάσιος Μποζίνης Human Development at risk: Performance and convergence in EU sub-regions before and during the crisis Spyros Kouvoussis, Sofia Gkavardina & Dimitrios Moschos Loyalty marketing entrepreneurial opportunities in Greece: A grocery retailers perspective Naoum Tsolakis & Charalampos Tziogas Banking and finance Islamic Finance: A solution to the current challenges or a choice with limited scope? Besarta Tafa Page

9 An empirical examination of the purchasing power parity on the USD to JPY exchange rate Jona Puci Inflow of FDI in India and its significance to Maharashtra Pratibha Gaikwad The relevance of bilateral investment treaties / regional agreements in the regulation of foreign investment Maria Susanna Wandrag Is the European Union moving towards a banking union? Ioannis Papadopoulos Tourism Destination brand-building model of cultural tourism based on an empirical comparison Xing Huibin, Wang Lei & Stella Kostopoulou The strategy of increasing customers loyalty in non prominent Greek tourist destinations Labros Sdrolias, Dagmar Škodová-Parmová, Stefanos Karagiannis, Christos Ladias & George Korres Τι μπορεί να κάνει η Ελλάδα για να προωθηθεί σαν τουριστικός προορισμός ταινιών; Σοφία Γκαρανέ Shadow economy, innovation and economic crisis A comparative analysis in the EU shadow economy using a DEA model Claudio Quintano & Paolo Mazzocchi How much and how should the Greek shadow economy be reduced? Aristidis Bitzenis, Vasileios A. Vlachos & Friedrich Schneider Innovation and crisis: An OECD patent analysis Maria Markatou The impact of shadow economy on Greek entrepreneurship Ioannis Makedos Shadow economy, labour flexibility, internalization and corruption (papers presented in Greek) Tax evasion and shadow economy in Greece: An empirical analysis of causes Panagiotis Mitrakos Εννοιολογική προσέγγιση της διαφθοράς: Αίτια αυτής και συνέπειές της στην οικονομική ανάπτυξη Σπυρίδων Πασσάδης Διαφθορά στην Ελλάδα: Είναι η κρίση το αντίδοτο; Δήμητρα Δάλιου The development of the Greek labour market in the European framework during pre-crisis Achilleas Anagnostopoulos Foreign direct investment Traditional and nontraditional determinants of foreign direct investments in Mexico Ioannis A. Tampakoudis, Demetres N. Subeniotis & Manolis I. Skouloudakis The effects of foreign direct investments to the telecom sector in developing countries: The case of South Africa, Brazil and Turkey Yavuz Kalfa The European Union and its trade and investment policy - Which way forward? - Ana-Maria Petrescu FDI effects on sector employment shifts in advanced versus developing countries: The role of ICT, education, and stability Ziva Rozen-Bachar Οι εισροές ΞΑΕ στα Ηνωμένα Αραβικά Εμιράτα προς ανάκαμψη εν μέσω της παγκόσμιας κρίσης

10 Παναγιώτης Κοντάκος & Αριστείδης Μπιτζένης Education issues and the role of the European parliament (papers presented in Greek) Η διασφάλιση της ποιότητας στην Ελληνική ανώτατη εκπαίδευση: Η επίδραση των αρχών και των προτύπων του Ευρωπαϊκού χώρου ανώτατης εκπαίδευσης και του ΟΟΣΑ Φωτεινή Ασδεράκη & Παναγιώτης Ντούλιας Ο νόμος 4009 /2011* και η συμβατότητα του με το σύνταγμα Δήμητρα Κούντη Entrepreneurship The Greek entrepreneurship in the years of austerity and crisis Maria Markatou & Yannis Stournaras Modelling sustainable entrepreneurship in time of crisis: Evidence from a conjoint choice survey of Greek food companies Theodore Tarnanidis, Jason Papathanassiou & Demetres Subeniotis Measuring sustainable entrepreneurship in a time of crisis: Evidence from a structural equation model Theodore Tarnanidis, Demetres Subeniotis & Jason Papathanassiou Personality factors influencing entrepreneurial intention: Evidence from Saudi Arabia Abdulmonem Hamdan Alzalabani Education during the Greek economic crisis (papers presented in Greek) Ο ρόλος των αναλυτικών προγραμμάτων εκπαίδευσης στην πρόληψη και στην αντιμετώπιση της κρίσης Παναγιώτα Χρυσοχόου Ο ρόλος των ανθρωπιστικών και κοινωνικών επιστημών στην πρόοδο της κοινωνίας, μέσα από την αγωγή των νέων Ελένη Χανόγλου & Δημήτρης Ζαχαρίου Διγλωσσία: Εκπαιδευτική πραγματικότητα στην Ελλάδα, προτάσεις βελτίωσης Ελένη Σιριβιανού Η εκπαίδευση στην Ελλάδα της κρίσης: Η επιχειρηματικότητα στη μέση εκπαίδευση Δημήτρης Ζαχαρίου & Ελένη Χανόγλου International relations and institutional reforms Whose planet? Remarks on why should international relations care about animal-human relations Kyriakos Mikelis Multiple dimensions of John Mearsheimer s conceptualization of revivalism: Towards a post-offensive realist analysis? Kyriakos Mikelis & Markos Troulis Reintegrating ethics and European economic governance: An institutionalist approach Konstantinos Hazakis & Pantelis Kallias Agonistic Pluralism vs Cosmopolitanism Chantal Mouffe as an IR thinker or towards a multipolar world order Spiros Makris Tourism, real estate and entrepreneurship (papers presented in Greek) O ρόλος του τουρισμού στην οικονομική ανάπτυξη της Κύπρου Ιωάννα Μπότσαρη & Άννα Χρυσοστόμου Οικονομική κρίση και τουρισμός: Πως μπορεί ο τουρισμός να συμβάλει στην έξοδο της Ελλάδας από την οικονομική κρίση Ραφαέλα-Σοφία Μαυριδάκη & Ελένη Μπόθου H συμβολή του Joseph Schumpeter στην θεωρία της οικονομικής ανάπτυξης Άννα-Μαρία Κουμπαρούλη

11 Οικονομική ανάλυση των εταιρειών Real Estate στην Ευρώπη Μαρία Μαρκάκη Θεωρία ηλεκτρονικής διακυβέρνησης συγκριτική ανάλυση ηλεκτρονικών καταστημάτων Public με Plaisio & e-shop Άννα Βεργίδου & Αφροδίτη Ουσουλτζόγλου European Union Female entrepreneurship in a two-speed European Union: Please, mind the Gap! Sofia Boutsiouki The single euro payments area and e-commerce: The way forward Despina Anagnostopoulou Age effects in Okun s law within the Eurozone Oliver Hutengs & Georg Stadtmann The added value of European territorial cooperation policies: The case of GR-CY Cross Border Co operational Programme Dimitrios Maniopoulos The EU influence on corporate governance in Romanian legal framework Mihaela Tofan Labour market, leadership, and economic crisis (papers presented in Greek) Η αγορά εργασίας στην περιφέρεια Δυτικής Μακεδονίας Μαρία Μπούρα Το Κραχ του 1929 Βάια Αποστολάρα Η πορεία προς την Οικονομική κρίση του 1893: Η ιστορία επαναλαμβάνεται ένα αιώνα μετά; Μάριος Σταυρακάκης Μοντέλα ηγεσίας στο χώρο της εκπαίδευσης Σοφία Ξυγκώρου Εφαρμογή της θεραπείας σοκ στην Βουλγαρία και στην Ελλάδα Ζωή Γεωργιάδου, Αλιέ Τζαφέρ-ζαδέ & Χατζηιερεμία Ελένη Technology, entrepreneurship, free market and governance (papers presented in Greek) Η συμβολή των αρχών της «χρηστής διακυβέρνησης» και της «πολυεπίπεδης διακυβέρνησης» στην αναμόρφωση των Ευρωπαϊκών συστημάτων υγείας Κατερίνα Τσαλαμπούνη «Πολιτειακή Οικονομία»: Παρεμβάσεις στη λειτουργία της ελεύθερης αγοράς Επιπτώσεις και αντιμετώπιση κοινωνικοοικονομικών ανισοτήτων Ηλίας Κωνσταντινίδης Η επίδραση της εισοδηματικής ανισότητας και της ανισότητας του επιπέδου εκπαίδευσης, στη διαμόρφωση του ψηφιακού χάσματος στην Ελλάδα Ηλίας Γουνόπουλος & Βαρβάρα Κίσσα Turkey s transition to market economy prospects of its development and accession to the European Union Nikolaos Kotsiopoulos & Dimitrios Papagiannakis

12 Shale gas perspectives and geopolitics in Central and Eastern Europe Panagiotis Kontakos* 1 ABSTRACT Shale gas has been reckoned as the upcoming energy revolt, but is controversial for its doubtful economics and alarmed environmental impacts; at the same time, its geopolitical impact in the case of Central and Eastern Europe countries has been associated with their capability to reduce their energy reliance on Russia. This is facilitated by evaluations that the largest European shale gas resources are located in Russia s peripheral states, and mainly in Poland, but also to a lesser extent in Ukraine, and Romania. Eastern Europe's shale gas and supply diversification potential has been viewed by Russia as a strategic threat, with discounts provided on its natural gas exports partially deliberated to discourage investments that would compete with Russian supplies. The aim of the paper is, firstly, to provide a regional overview of shale gas potential and current R&D activities in Central and Eastern Europe; secondly, to provide a discussion framework to assess the relative geopolitical effectiveness of Western and Russian geo-strategies in the region. As the paper asserts, the West remains constrained in its ability to reduce Eastern Europe's reliance on Russian natural gas; Russia maintains more tools to support its dominant position as a provider of natural gas to the region, at least in the short to medium term. KEYWORDS: shale gas; geopolitics; CEE; Russia; US; European energy security 1. INTRODUCTION According to the elite newspapers and journals of opinion, the future of foreign affairs mainly rests on ideas; in other words, the world of the future can be engineered and defined based on doctoral theses. And to a certain extent this may be true. As the 20th century showed us, ideologies matter and matter greatly. But there is also another truth: The reality of large, impersonal forces like geography and the environment that also help to determine the future of human events (Stratfor, 2014). This is the case with shale, a sedimentary rock within which natural gas can be trapped. Shale gas constitutes a new source of extractable energy for the post-industrial world. Countries that have considerable shale deposits are expected to be better placed in the 21st century. Shale gas has been reckoned as the upcoming energy revolt, but is controversial for its doubtful economics & alarmed environmental impacts (refer e.g. to Zobacka et al., 2010 and Jacobya, H. et al., 2011). Its geopolitical impact in the case of CEE countries has been associated with their capability to reduce energy reliance on Russia. This is facilitated by evaluations that the largest European shale gas resources are located in Russia s peripheral states. The aims of the current paper are to present a regional overview of shale gas potential and current R&D activities in CEE; also, to provide a discussion framework to assess the relative geopolitical effectiveness of Western & Russian geo-strategies in the region. 2. UNCONVENTIONAL RESOURCES A DEFINITION Shales are the most abundant form of sedimentary rock on Earth. Until recently, were generally regarded as nuisances to be tolerated while drilling (Boyer et al., 2011). But geologists and engineers have begun to view a specific type of shale organic-rich shale with a newfound appreciation: they have the potential to serve not only as sources for hydrocarbons but also as reservoirs to be produced. Unconventional gas reservoirs refer mainly to low-to ultra low-permeability sediments that produce mainly dry gas. These resources are called unconventional, to distinguish them from those that can be extracted using traditional oil/gas field methods. Every shale formation is different, but main techniques used to extract natural gas are the - hydraulic fracturing (fracing) & horizontal drilling, to reach additional deposits. 3. STATUS OF GLOBAL GAS SHALE E&D Finding and producing commercial quantities of gas from shale formations has been initially a North American phenomenon, which has become a global pursuit for many exploration companies. Gas shale exploration is ongoing in South America, Africa, Australia, Europe and Asia (Graphs 1,2 and 3). As assessments of global shale resources have continued (Table 1), estimates for resources potential have gone up dramatically. A recent study estimated that the global natural gas resource potential from shales was 25,300 Tcf [716 * Senior Research and Teaching Fellow, Thales Research Programme, Department of International and European Studies, University of Macedonia, Thessaloniki, Greece. pkontakos@uom.gr 1

13 trillion m 3 ]. By some estimates, the technically recoverable shale gas in US alone, is enough to cover the nation s natural gas needs for the next 45 years (Medlock et. al., 2011). Table 1. Global shale gas estimates Source: Oilfield Review, Autumn 2011:23, no 3, Copyright 2011 Schlumberger; Kuuskraa et al, 2011 Graph 1. Global shale gas resources Source: Oilfield Review, Autumn 2011:23, no 3, Copyright 2011 Schlumberger; EIA,

14 Graph 2. Europe shale basins Source: Oilfield Review, Autumn 2011:23, no 3, Copyright 2011 Schlumberger; Kuuskraa et al, 2011 Graph 3. European shale gas basins Source: Rogers, 2011; Gas Strategies, LESSONS FROM THE US SHALE EXPERIENCE Per Rogers (2011), shale development in US is subject to three main categories of risk: Geological risk: in-place resources are but estimates associated with a degree of uncertainly. For the highest well productivity areas to be located, significant investment may be required, whereas even the best areas may not possess the required level of potential productivity. Technology and viability risk: even the most favorable areas in terms of well productivity, have to be transformed by operators into a viable production investment by a selection of proper and economically viable extraction techniques. 3

15 Regulatory and public acceptance risk: issues of surface and ground water contamination; potential of mineral rights disputes. Other concerns: operator and service capacity, natural gas pricing environment. 5. ASSESSING SHALE GAS POTENTIAL IN CEE Using the risk framework as aforementioned by Rogers (2011), main risk factors in EU s shale gas development can be classified as follows: Europe is currently addressing the first of the risks aforementioned - i.e. geological risk or confirming the presence, extent, and favorable characteristics of shale gas in a specific location. CEE s shale gas prospects are hypothetical at this point, and must await the results of exploratory drilling and analysis; they are based mainly on geological similarities with U.S. formations. Poland, the Europe s leading resource holder, is the most advanced in this respect, with more than 100 wells, while Ukraine (the third resource holder), Lithuania and Hungary are far behind. Shale well drilling in other Eastern European countries has yet to commence, although preparatory work is evidently ongoing, as in the case of Romania in the Black Sea (see also Weijermars, R., 2011). Operationally, there is a lack of infrastructure (e.g. land gas rigs), which needs to be imported from US suppliers. Shale drilling expertise from US is not necessarily portable to CEE geological formations. Instead, techniques must be carefully adapted to individual fields and circumstances. The political framework in CEE vis-à-vis shale well drilling may be thought of as a two-layered structure formed by EC s energy policy goals and national governments and their in-country priorities. These two sets of goals do not necessarily converge, which alone may pose exploration and development (E&D) uncertainties. Natural gas demand and contracting uncertainties pose yet another challenge to CEE shale gas development. A greater level of public understanding and openness by the shale gas industry is necessary to overcome present public perception, e.g. local opposition against shale gas development in France, Europe s second largest shale gas resource base, is so significant that has decided to maintain its nuclear options. Significant opposition has also been raised in UK. The uncertainty surrounding prospects for shale gas in CEE and complex political environment suggest that, for the time being, shale gas development must proceed largely on a basis of private investment, e.g., venture capital funds. As such, it remains critical for unconventional gas companies to restore profitability and provide shareholder returns - an issue also phased in US. 6. THE SHALE GEOPOLITICS IN CEE States in Russia's periphery favor shale gas extraction more than countries in Western Europe. The US could play a more subtle but still important role in helping Europe diversify away from Russian energy. Washington will likely provide technical support to CEE for projects such as import terminals and for hydraulic fracturing for shale gas extraction. The United States could also help finance diversification projects, which Eastern European states often cannot afford. This would not necessarily entail companies investing directly, but it could mean helping these countries work on regulations and tax schemes that attract investment. Moscow views Eastern Europe's shale gas and supply diversification potential as much more of a strategic threat than natural gas exports from the United States. Russian discounts on natural gas exports to the region are designed in part to dissuade energy companies and investors from funding projects that would compete with Russian supplies. The mere existence of these projects is a political tool in CEE. Compared to the West, Russia has overall more effective tools with which to give peripheral states financial incentives to divert away from developing strong alternatives. 7. CONCLUSIONS The future of shale gas development in CEE remains promising but uncertain. Shale gas production may remain on the bounds of the region s energy sector, perhaps complementing regional fuel balances. US is limited in its ability to strategically deploy its own energy exports for geopolitical purposes. Instead, US can support projects that diversify energy supplies to countries in Russia's periphery. Compared to the West, Russia has more effective tools, at least in the short-to-medium term, to divert away peripheral states from developing strong alternatives. Even assuming the three key risks outlined above are overcome, that there are no skills and resource constraints, and that the price environment is favorable, the growth of commercially viable shale gas in Europe is viewed as unlikely before

16 REFERENCES Boyer, C., Clark, B., Jochen, V., Lewis, R., Miller, C. (2011), Shale Gas: A Global Resource, Oilfield Review, Autumn 2011: 23, no.3 Gas Strategies (2010), Shale Gas in Europe, a Revolution in the Making?, Gas Strategies, March, available at Jacobya, H., O Sullivanb, F. and Paltseva, S. (2011), The Influence of Shale Gas on U.S. Energy and Environmental Policy, MIT Joint Program on the Science and Policy of Global Change, Report No. 207, November Kuuskraa, V., Stevens, S., Van Leeuwen, T., Moodhe, K. (2011), World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States, U.S. Department of Energy, Washington, Αpril Medlock, K., Jaffe, A., Hartley, P. (2011), Shale Gas and U.S. National Security, James A. Baker III Institute for Public Policy, Rice University. Rogers, H. (2011), Shale gas-the unfolding story, Oxford Review of Economic Policy, Volume 27, Number 1, 2011, pp Weijermars, R. and McCredie, C. (2011), Assessing shale gas potential, Petroleum Review, October Stratfor (2012), The Geopolitics of Shale, December 19, 2012 Zobacka M., Kitaseib, S. and Copithornec, B. (2010), Addressing the Environmental Risks from Shale Gas Development, Worldwatch Institute. 5

17 Energy market in Europe - A sustainable development with an environmental approach Kalfakis Dimitrios MBA, Financial Analyst, Researcher Abstract: The Climate is having major impact upon communities, vital ecosystems and international stability. Climate change is a major international challenge of the 21st century and has been place in the top priority of the developed countries especially Europe. Actions have been adopted and playing a significant role to a sustainable economic development. Global greenhouse gas emissions would have to be lowered between 40% and 70% by midcentury from 2010 levels, and to near-zero by the end of the century, efforts that would be likely to limit warming to 2 degrees Celsius. The European Union (EU) is a leader on climate action. The goals for 2030 policy framework are to reduce greenhouse gas emissions by 40%, to increase the share of renewable energy to at least 27% of the total, to continue improvements in energy efficiency towards to the 2020 target of by 20% and to reform the EU emissions trading system. Keywords: Renewable energy, energy efficiency, sustainable development, 1. Introduction. Climate change is one of the most important parameters to achieve environmental sustainability and to achieve the goals of a sustainable economic development. The consequences of climate change will have serious social and economic impacts globally in the coming decades. (World Bank, 2012a.) Growth and development gains both in developed and developing countries may be put at risk by climate change. The increasing ocean temperature is the pattern for the intensity of tropical cyclones. Millions of people might be vulnerable to health effects (IPCC 2007b), crop production might fall (IPCC 2007b), water supplies might be reduced (IPCC 2007b), rain might stop falling in arid regions (IPCC 2007b), extreme physical events will grow exponentially (Stern 2006), and 20-30% of the species will have risk extinction (IPCC 2007b). Even worse, there may be catastrophic events such as the melting of Greenland or Antarctic ice sheets causing severe sea level rise, which would cause hundreds of millions of people deaths or emigration (Dasgupta et al. 2009).There are a number of studies that suggest mitigation of the emissions may be inexpensive. Some studies argue that one could even stabilize greenhouse gas concentrations at negative costs (IPCC 2007c). Other studies suggest one could reduce emissions by % by 2030 for as little as $50 per ton of CO2 (IPCC 2007c). The optimistic scenario argues that emissions could be cut by 70 % by 2050 for as little as $50 per ton of CO2 (Stern 2006). The European Union (EU) is a leader on climate action for all of its activities within European Union but also outside Europe. EU applies an ambitious and comprehensive approach to climate change, as part of its overall sustainability framework. This Statement on Climate Action (EIB 11/2013) presents guides for EU activities and will continue doing so in the future. The 2030 policy framework for climate and energy proposed by the European Commission (European Council Brussels, 21 March 2014) aims to make the European Union's economy and energy system more competitive, secure and sustainable. While the EU is making good progress towards meeting its climate and energy targets for 2020, an integrated policy framework for the period up to 2030 is needed to ensure regulatory certainty for investors and a coordinated approach among Member States. 2. Market analysis Europe's energy sector is in the middle of a major transformation. The electricity production is moving out from carbon to strong growth of wind and solar power. Gas and nuclear plants are being developed helping this transformation to reduce carbon emissions. New technologies in gas and electricity are also being applied to the transport sector to become more fuel efficient using cleaner and alternative fuels. There are different expectations of how all these changes could affect each other. Environmental and climate policies are meant to ensure a sustainable energy sector for the long run acknowledging short term costs. Governments expect to deliver short term benefits to consumers as well as longer term sustainability objectives. The energy industry itself has to adapt to very different environmental, commercial, regulatory and technological regimes. The liberalization of the market is expected to deliver more competitive, efficient and cheaper energy. 6

18 International Energy Agency Oil market report 18/01/2013 Price differentials can raise costs to consumers and generate competitive advantages or disadvantages. As we can observe we see that there is decrease is the use of oil to the power production for industry and residential/commercial use. From the other part we can see that the use of oil for transportation has increased the last years. These two movements of the market could be explained through the implementation of the new technologies to the industry and the residential market. The use of power of producing electricity in European Union and United States of America has turned in a high degree to renewable and gas production. Market growth in electricity and natural gas sector has brought significant downward price effects. But renewable sector had contributed with his fast growth to the increase of electricity prices. Renewable energy production is among other factors that have negatively affected carbon prices. International Energy Agency Oil market report 18/01/2013 The last decade we have observed high energy prices. This should remain a concern for the next years. Energy commodity prices have increased in recent years, including oil and coal due to increasing demand in emerging markets like China and India. 7

19 International Energy Agency Oil market report 18/01/2013 Electricity and natural gas prices for the median household consumer bands are illustrate the variation of price conditions across Member States and gives an analysis of the various components of retail prices. European Commission 2014, Energy prices and costs report Similar ratios are observed for all energy products (electricity or gas); consumer types (domestic or industrial), consumer bands (modest, median or big consumers), monetary units (Euro, national currency or purchasing power standards) and periods ( ). European Commission 2014, Energy prices and costs report 8

20 Looking at the period between 2008 and 2012, nearly every EU Member State has seen an increase in household electricity prices. On average, the EU household electricity prices increased by more than 4% a year between 2008 and In the same period industrial electricity prices (excluding VAT and recoverable taxes) have gone up by about 3.5% per year. In some countries retail industrial prices have actually decreased over the period in question (Czech republic, Denmark, Croatia, Hungary, Ireland, Netherland, Romania, Slovenia and Slovakia), while industrial users in countries such as Estonia, Lithuania and Latvia have experienced annual growth of more than 8%. (European Commission 2014) Taking into account purchasing power effects does not change the picture above in terms of price trends but it does change substantially the relative position of the Member State. As a group these countries register price increases in terms of PPS, indicating that the median household and industrial consumers from new Member States spend a relatively larger portion of their budgets to the purchase of the same amount of electrical energy. (European Commission 2014) Taking into account the relatively higher levels of energy intensity of new Member States suggests that those economies might be more vulnerable to price risks related to the different components of the electricity and natural gas bill. European Commission 2014, Energy prices and costs report Price increase in electricity was higher than the increase in the general price level as measured by the harmonized index of consumer prices (HICP). Belgium, Denmark, Italy, Luxembourg, Hungary, the Netherlands, Romania, Sweden and the UK were the exceptions to that rule. The combination of actual changes in electricity and general price levels between 2008 and 2012 was unique for each Member State. In Estonia, Spain, Cyprus, Latvia, Lithuania and Portugal electricity prices, inclusive of all taxes, increased by more than 30% between 2008 and For the same period, inflation increased by 10% or more in Bulgaria, Estonia, Greece, Cyprus, Lithuania, Luxembourg, Hungary, Malta, Poland, Romania, Slovakia, Finland and the UK. (European Commission 2014)Turning to industrial consumers and comparing the price rise in electricity (excluding VAT and other recoverable taxes and levies) and the general industrial price level, as measured by the Producer Price Index Member States were split by half. As a rule, electricity price changes were smaller than those for domestic consumers and in several countries (the Czech Republic, Denmark, Ireland, Hungary, the Netherlands, Romania, Slovenia, Slovakia and Sweden) electricity prices actually decreased. 9