Penny Wise, Gas Foolish

BRUSSELS – Europe is on the verge of making a historic mistake, one that would compound the growing sense of European decay and collapse. The issue involves Cyprus, but it has nothing to do with the divisive politics of the country’s bailout terms – though Europe’s approach to that problem will play a key role in determining the outcome.

What is at stake for Europe is the energy deal of the century. No one can yet say how much oil and gas lies within Cyprus’s territorial waters, but there are strong indications that it could make a huge contribution to the European Union’s energy needs. According to recent news reports, the Aphrodite field alone could eventually supply 40% of the EU’s current natural-gas consumption.

Clearly, the wrong bankers are addressing the Cypriot debt problem. A team of investment bankers who know how to structure long-term deals would be far better than the bean-counting officials of the European Central Bank and the International Monetary Fund, who know the price of everything but the value of nothing.

The island of Cyprus is the legendary birthplace of the ancient Greek goddess Aphrodite, and the offshore block named after her is just the first of 12 earmarked for exploration. It lies close to Israel’s Leviathan gas field, whose name gives an idea of how much energy lies beneath the eastern Mediterranean Sea, and it is also not very far from the Egyptian coastline, where Shell already has three major projects.