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Crisis deepens as Russia-Ukraine gas deal unravels
2009-01-14
Moscow - After nearly a week of shutdowns that left 18 European countries facing severe energy shortages in a mid-winter cold snap, gas briefly began flowing again on Tuesday through the 4,000-kilometer pipeline (about 2,500 miles) that connects Russian gas fields with Europe via Ukraine. But the tentative deal began unraveling almost immediately amid an escalating war of words between Moscow and Kiev. By Tuesday evening the gas flow had been blocked somewhere in Ukraine, to the consternation of European observers sent to monitor deliveries, and both sides were back to blaming the other. The perennial dispute between the two former-Soviet states over prices and terms of transit is now boiling over into a crisis that threatens to paralyze economic relations and plunge Russia and the West deeper into diplomatic crisis. Moscow maintains it's simply a matter of weaning Ukraine from the Soviet-era subsidies that saw it paying less than half the global market price for its gas as recently as last year. Mired in economic troubles, Ukraine's ability to pay the $450 per thousand cubic meters that Russia is now demanding seems uncertain. Ukraine relies on Russia for 75 percent of its gas needs, and the fuel is essential to power the steel and chemical industries that are the economic backbone of the former Soviet country of 50 million. But as observers' heads spin over the on again off again flow of Russian gas, which accounts for a quarter of Europe's total supply, there are growing suspicions that hidden concerns over Ukraine's geopolitical choices and high-level corruption in both Russia and Ukraine may be the real factors driving this dispute. "There are so many things about this conflict that are neither logical nor transparent, and it is the subject of many intrigues," says Dmitry Vydrin, a deputy of Ukraine's parliament, the Rada. "Nobody can say when or how it's going to end. We all have many more questions than answers at this point." Russia has repeatedly accused Ukraine of sabotaging Europe-bound deliveries by illegally siphoning off gas that it's unwilling to pay market rates for. Alexander Medvedev, deputy CEO of the Russian state gas monopoly Gazprom, added a fresh stick of dynamite to that charge Tuesday, suggesting that "a completely different country" may be orchestrating Kiev's behavior. That's a likely reference to the US, which last month signed a "strategic partnership" with Kiev, which Moscow reads as support for Kiev's bid to join NATO. The rhetoric between Moscow and Kiev has flared to new heights in recent days, with Russian Prime Minister Vladimir Putin accusing Ukraine's warring politicians of stealing gas to fund their political campaigns, and Ukrainian President Viktor Yushchenko replying that Russian claims are untrue and designed to "humiliate" Ukraine. In an interview with German TV this week, Mr. Putin denied that geopolitical considerations mattered, but then slammed Ukraine's "Orange" revolutionaries, who had pledged closer ties with the West, for leading the country astray. "The former leaders of the Orange Revolution have failed to live up to their hopes," Putin said. "Political infighting [in Ukraine] is degenerating into a clash between clans . . . and [a] fight for access to financial flows, of which trade in Russian gas is one."
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 Russia, Ukraine to sign gas deal, end standoff (2009-01-19) | | New Russia, Ukraine gas accord leaves Europe dubious (2009-01-18) | | Russia, Ukraine clinch deal to resume Europe gas supplies (2009-01-17) | | Russia, EU, Ukraine set for gas talks (2009-01-16) | | Russian gas cutoff energizes nuclear comeback (2009-01-16) | | Last chance for Moscow, Kiev to show they are serious: EU (2009-01-16) | | Russia-Ukraine gas war deadlock (2009-01-15) |  Crisis deepens as Russia-Ukraine gas deal unravels (2009-01-14) | | Russia and Ukraine may meet over gas dispute (2009-01-14) | | Ukraine leader accuses Russia of 'blackmail' over crisis (2009-01-13) | | Russia, Ukraine trade blame as Europe sees no gas (2009-01-13) | | Russia to restart gas pumps to Europe on Tuesday (2009-01-12) | | Russia set to resume European gas supplies after deal (2009-01-11) | | EU monitors deploy to end Russian gas deadlock (2009-01-11) | | Russia and EU sign deal on gas transit via Ukraine (2009-01-10) | | Putin warns Europe gas crisis "worsening" (2009-01-10) | | Gazprom may resume gas shipments to Europe today (2009-01-09) | | EU leader to meet Putin amid efforts to resolve gas dispute (2009-01-09) | | Russia to pump gas to Europe if monitors are there (2009-01-08) | | Russia, Ukraine in EU talks as gas crisis engulfs Europe (2009-01-08) | | Thaw in the air as Russia-Ukraine gas crisis talks begin in Brussels (2009-01-08) | | Halt in Russian gas supplies to Europe deepens crisis (2009-01-07) | | EU: Russia, Ukraine accept monitors in gas dispute (2009-01-07) | | Gas shortages spread as Russian-Ukraine row flares (2009-01-06) | | Natural gas shortages slam many European nations (2009-01-06) |
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