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For five days argument has raged, tensions have risen and millions in southeastern Europe have shivered. Russia’s abrupt shut-off of all gas supplies to Ukraine echoes the pipeline row of three years ago. As in 2006, winter is adding urgency to a commercial spat that has become a political confrontation. The argument should strengthen the resolve of all Europeans to lessen their dependence on Russia for vital energy supplies.
The shutdown is not unexpected. For months, Moscow and Kiev have indulged in brinkman-ship as they argued over a new gas contract. Gazprom, the giant state-owned supplier, demanded a new price of $450 per 1,000 cubic metres, a figure that Ukraine’s leadership dismissed as “utter nonsense”. Kiev had already rejected an earlier proposal of $418, and said that, with its economy due to contract by up to 5 per cent this year, it could pay only $250, and only if Gazprom more than doubled its payments for the transport of gas destined for Europe.
Both sides were counting on the likely outcry from consumers to bolster their case, and both have since been lobbying Western opinion furiously. Some 80 per cent of all Europe’s gas imports from Russia go through Ukraine. Gazprom insisted that these would not be affected. Inevitably, however, gas supplies have been hit: Greece and Romania yesterday reported a drop of around 30 per cent, with Poland and Hungary also noting smaller reductions.
Moscow has accused Ukraine of stealing gas destined for these countries. Russia is threatening legal action. It has appealed to the EU to monitor supplies and put pressure on Ukraine. Kiev has insisted that it needs to divert some gas to maintain pipeline pressure. Ukraine accuses Moscow of manipulating supplies and railed against what it calls Russian bullying prompted by Ukraine’s efforts to seek Nato membership.
Western Europe, caught in the crossfire, is anxious not to take sides. In truth, both sides are to blame. Ukraine’s argument that it cannot pay is undermined by the logic of market prices for energy. The bickering between President Yush-chenko and Yuliya Tymoshenko, his rival for the leadership of the faltering Orange Revolution, has thwarted any compromise. And Ukraine has almost certainly diverted some of the gas destined for others in the hope of stoking up anger against the monopoly supplier. Ludicrously, Naft-gas, its state-run energy firm, is attempting to blame tiny Moldova for siphoning off transit gas.
Whatever its legalistic arguments, however, Moscow’s actions are deeply damaging to its perceived reliability as Europe’s energy supplier. Time and again, Vladimir Putin has used his country’s resources to punish or blackmail those former Soviet republics, especially Georgia, daring to challenge Moscow’s hegemony. For all the emollient smiles of Aleksandr Medvedev, the head of Gazprom, as he tours Western capitals, the EU is not fooled by protestations of purely commercial relations.
Like the Arabs’ oil embargo of 1973, Russia’s periodic confrontations have forced the West to seek other sources and types of energy as swiftly as possible. Moscow is naturally not obliged to sell its gas below market price. But turning off the taps turns off not only supplies but trust, reliability and long-term credibility.
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absolutly missleading article. Gazprom offered 250$ to pay for gas in 2009 when Poland, Hungary etc pay 450$, Yuzhenko said that he thinks that 210$ or 201$ would be more fare. Then he was told that if he doesn't want discount he can joing the club of 450$
Marina, Moscow,
By the way, Ukraine still didn't pay all the money for 2008. U know what happens if I don't pay my electric and heatting, internet, TV, water bills in Minnesota? They cut it off NEXT day, not next year like Russia, Ukraine should be greatful that we were so nice to them all this time
Marina, Moscow/Minneapolis,