Bronwen Maddox: World Briefing
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It is hard to see Vladimir Putin’s gas war paying off. Yesterday, in ordering Gazprom to turn off the tap to the European pipelines running through Ukraine, he made it into a challenge to the EU, not just to the perpetually collapsing Government in Kiev. The Russian Prime Minister makes no secret of his determination to use the state gas monopoly as a weapon. Any pretence that this is a commercial row between a gas supplier and a customer is ridiculous.
Putin’s aim, presumably, as well as punishing Ukraine’s Government for its hopes of joining Nato, is to warn those on Europe’s eastern border of the advantages of staying close to Russia, and the dangers of turning westwards. That is, in case they’ve forgotten the message delivered by Russia’s invasion of Georgia. It’s hard to predict how Ukraine will react. In presenting it with a hugely expensive deal for buying its own gas, Putin was punishing the Government of President Yushchenko for its ambitions of joining Nato and the EU. The increase that Russia demanded – double last year’s rate – would have exactly wiped out the $16 billion (£10.5 billion) which the Government secured two months ago from the International Monetary Fund. No Ukrainian politician could defend that.
But this was only a spur to the Government’s complete disintegration, into factions led by Yushchenko and Yuliya Tymoshenko, the Prime Minister. The country is buffeted by oligarchs and their nets of businesses. Infighting has destroyed the capacity to make plans, or the reforms needed to put reality behind dreams of joining the EU or Nato. With such political fractures, you can see why Putin’s threats might only deepen the old rift between those who loathe Russia and long for the EU, and those who consider Russia almost their own country, or at least a protector not to be provoked.
Putin’s challenge may clarify the politics in other countries, and turn them more against him. Bulgaria, for instance, which squeaked into the EU but is regularly chastised by Brussels for failing to do anything about corruption, has its own controversial gas deals with Russia, and a solid chunk of old-guard politicians who regularly question whether it would be better to stay close to the East, not West. This might remind them of the costs of such ambivalence.
The real cost to Russia will come from loss of its support within the EU. Putin had managed to split the EU between those wanting to take a tough line against him, and those keen not to annoy him. His prize was to have secured Angela Merkel, Germany’s Chancellor, in the second camp. Single-handedly (but just as Putin wanted), she brought the Nato summit in April to a halt by blocking the US’s move to let Ukraine and Georgia move towards membership. But nearly a year later, it’s harder to take her line that he is a leader the EU can do business with if he goes on state television to boast of turning off gas in the coldest winter for years.
The EU cannot manage, surely, to stay silent any longer on a deliberate threat to its own energy supplies. Putin may have persuaded some on Europe’s eastern fringe of the need to mollify him. But in the EU, he is more likely to have united those he once divided, and to have persuaded them urgently to cut their dependence on Russian gas.
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To Rick
Your Garibaldi was unlucky because he struggled with Austria and not with Russia. In case of Russia you in Italy today would have good chances to receive gas for 120 $ as Belorussia receives or even almost free of charge like Abhasia, S.Osetia or Pridnestrovje . How good to be a colony !
Valeriy, Rivne ,
"Russia has to learn to respect their neighbors
Sergiy, Yevpatoria, Ukraine"
Unfortunately, at the moment Ukraine deserves no respect. How can we respect a failed state which is trying to steal our gas and to lie? Who respect can be achieved by illegal supplies of weapons to Georgia?
Egor, Moscow,
Mr. Maddox is most likely right about the political evaluation of the situation. However what else, besides political affiliation, could make ANY country interested in selling its gas at prices more than TWICE lower than the average natural gas price in the European market, which Ukraine wants?
Sergei, St. Petersburg, Russia
Sergiy, you are glad for what ? for become you country clown of EU? this is not first time that an UA government do this "war with russia" or because you have now for president Yushenko ? Kuchma do
the same when he was president !finally EU will have its gas and UA will still do its contract !
Rick, Milan, Italy
Russia has to learn to respect their neighbors, especially the country that also happen to be one of their major customers. The truth is that Russia depends on Ukraine no less than Ukraine depends on Russia, and I am glad that the Ukrainian government finally demonstrated this explictly.
Sergiy, Yevpatoria, Ukraine
EU cannot do the ostrich putting the head under the sand ! In this moment EU has a lot of contractual power with UA , more than Russia has. The UA politicians are playing an hazard but has to hold alive their bets with :WTO, NATO and EU agrement. if the EU do-hard face- with UA ,it obtains what want.
Rick, Milan, Italy
D Murphy, Skipton & Gino, Hastings, England
For now we don`t have any claims to a western Europe. Of cause it`s a shame that EU is to suffer a collateral damage produced by UA`s dishonestness, but we can do nothing here - Ukraina just refuses to transit european butane through it`s pipelines.
Peter, Vladivostok, Russia
Peter in Vladivostok. Europeans have signed contracts to pay Russians for gas. But they're not getting any gas because Russians have turned it off. No matter what games Putin wants to play, that is called breach of contract. It is called the rule of law. Russia wants respect ? Get used to that rule.
D Murphy, Skipton,
The court recognized the agreements invalid, because the former deputy chairman of the Naftogaz Ukrainy board, Igor Voronin, concluded them. The Ukrainian government did not empower the foresaid official to sign these agreements.
Rick, Milan, Italy
Yes ! ! ! a court of Ucraina has forbidden the transit of Russian gas and ordered to confiscate russian gas if transit for Ukraine !All this because Ucraine side tell that contract for transit was signed by an ucraine official that dont has power for do this! And In ucraina the know this now !!!!!!
Rick, Milan, Italy
2 Viktor, Merepha, Ukraine:
No problems! If you like US gas prices - buy it from US. If you want to rise transit prices - rise them when new transit contract is negotiated.
Alex, Moscow, Russia
Russia depends financially on selling gas to the EU and more than wishes to do so, but the lines run through Ukraine who cannot pay the EU prices. No contract with Ukraine for 2009 was signed, THEN Ukraine stole gas going to the EU THEN Russia stopped supplies that cannot reach destination.
Sergey, Moscow, Russia
Gino,
Have you spent at least 5 minutes for analysing of this gas problem?Why do you talk only about Russia and dont say anything about Ukraine activity?Ukraine has closed all transit gas pipe lines (not Russia) and Ukraine steals gas of EU customers on its own territory.And you blame Russia only
Peter G, Saint-Petersburg, Russia
Hi, it seems like all russia-based readers here support putin? Russia should gain respect in the region not by gazprom weapon but by making bodering states willing to work and live with us. I'm tired of ideology here in russia that we're surrounded by enemies.
Max, Moscow, Russia
I think the best solution is the new terms on delivery - EU can buy Russian gaz on the UA-RF border. For Russia it's the best solution to explain who is the supplyer you can trust and who is the "bad guy". All of the possible problems not ours in that case.
evgeny, Moscow, Russia
Dear Westerners,
if you don't want to face Russian trheats in frosty winters, depending on how would you follow Putin's imperatives, diversify your gas supplies ASAP! thourgh Nabucco, from Algiers, from wherever. Build underground gas reservoirs... Or adjust lifestyle to Russian bear's non-democracy
George, Tbilisi, Georgia
Viktor, buy gas in us, what's problem here? with transportation you will pay not less than $400-500.
Alexander, Ekaterinburg, RF
Why Ukrainians have to pay $250 per 1000 square meters while natural gas price in the USA constitutes $224? Why gas transportation price in Ukraine have to remain 58% lower than in Slovak Republic ($1.7 vs. $4)? Putin is threaten with internal rebellions and he seeks for a country-enemy.
Viktor, Merepha, Ukraine
David, HK
It is called "Default", David. Ukraina has this option to. Not the best one, because it will show that the late UA`s policy (stick together with EU against us) made a complete mess of this country`s economy.
Peter, Vladivostok, Russia
With all due respect, David, you kind of expect default when you buy a bond promising a 150% return....
Tatiana, London,
Russia does not like the fact that Ukraine has supported Georgia, not like the fact that Ukraine wants to integrate into NATO and the West. Russia can use the same excuse that it used in Georgia, the same excuse that was used by Hitler in Sudety - protection of their fellow tribesmen -I mean Crimea
Kate, Kiev, Ukraine
EU and Ukraine are undergoing the same thing on a larger scale that happened to Georgia in Jan 06 when the Russian gas pipe "exploded" on the Russian territory and was shut down for "maintenance" for many weeks, leaving entire Georgia without gas amidst the coldest winter.
Sergei, Kharkov, Ukraine
The annual mayhem of Russian/Ukraine negotiations will continue until pricing mechanism is the same as for European customers, i.e. linked to the price of oil.
I don't see why Gazprom has to continue selling gas to Ukraine at 60% discount to market price.
Tatiana, London,
So Peter, why didn't Russia pay debt due in 1998? Instead of honouring 'the conditions of written contracts' Russia defaulted. Very nice.
David, HK,
All are able to speack about Russia only speaking about Mr Putin . Putin has offered to close the contract with ucraina to 250$, and this is not FUTURE, is today! And today we, Italian I , pay gas 400/450$, Ucraina less than 50%, 178$ ! But this for you is not a great gift that Russia makes to UA?
Rick, Milan, Italy
I would like to see if your nation had a credit of 2 billions 600milions of $ , what would you say :-)))
especially in these black times !
Rick, Milan, Italy
1. Dear Times - Part tranche of IMF has already sent Ukraine - went not to pay its debts, or support for their industries - they were simply stolen of National Bank of Ukraine. Already the IMF would be better covered the debts of Ukraine and control costs.
Henry H. Pashkov, Taganrog, Russia
Peter;
The EU are customers of Gazprom and do not have any outstanding debt with them. Please don't talk nonsence.
This situation has already backfired on Russia as you regard money more higly than human life, and this episode, will not be forgotten.
Gino, Hastings, England
The author forgot to add that latest 'democratic' Government of Ukraine is the most guilty part of all country problems. They're destorying production, science and education by their own hands and will continue to destroy without any external help
Yuri, Simferopol, Ukraine
Just learn to respect the conditions of written contracts (even if you have to pay and even if you have to pay to Russians) and there won`t be any problems. It is the only message that we`r sending to the world.
Peter, Vladivostok, Russia