Thursday, December 22, 2005

More Ukrainian-Russian Gas Head Bashing

Ukrainian Foreign Minister Borys Tarasyuk said Thursday that his country is ready to maintain its partnership with Russia, but will not put up with blackmail or pressure.

"Ukraine confirms its willingness to maintain a partnership with Russia. However, our country will never tolerate blackmail or pressure, which look like desperate attempts [from Russia] to assert itself rather than the well thought-out policy of an international player," the minister told a news conference marking Diplomat's Day.
From here.

A very acrid opinion piece from the Ukrainian PoV:

When president Yushchenko makes an appeal not to make gas supply a political issue, there is no doubt he has common sense. This is the only way to cool down and create optimal conditions for the negotiations to go ahead.

However this matter had become a political issue long ago. In August “RIA Novosti”, a Russian pro-government information agency, put a lot of effort into publicising a leak from the Foreign Office, in which the Russian minister claims that Russia is commencing to use the energy-related linchpin to regain domination in Eastern Europe.

This policy is being put into action as Russia asks a new price for gas from the 1st of January 2006 at $160 per thousand cubic metres in the form of an ultimatum, and then the sum of $230 is mentioned.

Ukraine has an agreement with Russia which sets the price for gas at $50 until 2009. Russia demanding Ukraine paying the new price immediately is an equivalent of Ukraine is demanding that the Black Sea Fleet leave Sevastopol before the 1st of January 2006 regardless of any technical obstacles related to such a move.

Certain rules apply when such an agreement becomes subject to review. For instance, Georgia demanded an immediate withdrawal of the Russian military bases from their territory, however after the protracted negotiations the parties had agreed on a 3 year term.

That is why when Russia demands Ukraine to pay twice the price it is charging the Baltic states, that is solely due to political considerations. The Baltic states are protected by NATO and EU and Russia had lost the main means of manipulating there.

Russia is provoked by the Ukrainian temporary vulnerability which enables it to subject Ukraine to various experiments as it is not a member of the clubs mentioned above.

Russian historical tendency to breach agreements represents an issue in any negotiations with this country. German Chancellor Bismarck once said that all agreements signed with Russia are not worth the paper on which they are written.

It gets even more acidic here.

The Financial Times view:

Ukraine and Russia have had many disputes over natural gas, but have never come as close as now to reducing supplies to Europe.

Even through the break-up of the Soviet Union and crises that followed, Russia's gas exports to Europe, 80 per cent of which transit Ukraine, have always been reliable.

But unless Ukraine agrees to pay much more for the gas it takes from the pipeline for its own use – Moscow first asked for roughly a four-fold increase, but now suggests it should be more than five-fold – Russia has said it will cut out Ukraine's portion from the gas going into the pipe.

If Ukraine keeps taking gas, which Moscow says would be stealing, supplies to Europe could be cut by about 20 per cent.

Both sides have huge incentives to make a deal. Russia has no other way to get its gas to Europe, while Ukraine, which currently receives 30 per cent of its gas from Russia in a barter deal in lieu of transit fees, has no alternative source.

Yet both sides claim the other is refusing to negotiate seriously. Viktor Yushchenko, Ukraine's president, this week called Russia's position “irresponsible, unprofessional and naive”.

Read it here.

The gas war here isn't just a Ukrainian-Russian issue as you might expect. Now its a European issue. Ukraine cuts the gas line, Russia can't deliver its gas to Europe. Perhaps the EU ought to get involved?

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