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EU to Ukraine: We'll Sell You Russian Gas Cheaper than Russia Will

When last we left it, Ukraine was snubbing Russian gas in the run-up to its landmark vote later this month on joining a free trade and association agreement with the European Union. Since then, Ukraine has restarted imports, though is still paying some of the highest prices in Europe for the privilege.

Kiev has long played Moscow against Brussels, but has an opportunity on November 28 to move decisively away from its former Soviet master. Losing Ukraine would permanently scar Putin’s legacy. He hopes to create a Eurasian trade union to recover Russia’s sphere of influence, and Ukraine would be the pearl in that union. But the vote isn’t a foregone conclusion, as the Ukrainian Parliament has so far failed to release the jailed opposition leader Yulia Tymoshenko, one of the requirements Brussels has set forth for Kiev.

In this tug of war, you can be sure both sides are trying to sweeten the deal for Ukraine. Russia is likely sending “gifts” to Ukrainian pols, though it has not gone so far as to lower the price Ukraine pays for Gazprom gas. Curiously, that’s where the EU is hoping to outshine Russia, by selling Ukraine Russian gas at lower costs. It will do that by reversing the gas flows from Slovakia, as the FT reports:

The deal would allow Ukraine to receive gas shipments from neighbouring Slovakia, potentially easing its reliance on Russia, the country’s dominant supplier. It was poised for completion after the European Commission, the EU’s executive arm, intervened to persuade Slovakia to drop longstanding objections, according to EU officials.

“In terms of content we have found a compromise, we struck a deal . . . which should be officially signed between Ukraine and Slovakia in the next few days,” said a commission spokesperson in Brussels.

There’s still a week to go before the vote in Vilnius, and we can expect more developments like this one as that date gets closer. This is one of the most important geopolitical stories going at the moment, and it isn’t getting the attention it deserves. Stay tuned to Via Meadia for more.

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