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Knife to a Baguette Fight
Ukraine Gets Its Gas Deal, Strings Attached

Ukraine will enjoy cheap Russian natural gas for at least the first quarter of 2014. Kiev relies heavily on Moscow to keep the lights on, but until now was saddled with some of the highest prices in Europe for the privilege. Ukraine, teetering on the edge of a financial crisis, has been chafing at those prices, and the long-term, take-or-pay contracts they’re tied to, for some time. That dissatisfaction was one of the main drivers of its courtship of the European Union—a saga that came to an abrupt end back in November—and the cheap gas is Ukrainian President Yanukovych’s reward for choosing Russia over its Western suitors.

The European Union tried to offer Ukraine cheaper Russian gas through Slovakia, but that jury-rigged workaround obviously couldn’t compete with an actual deal with the progenitor of the supply itself. The European Union couldn’t offer the same practical incentives that Russia could; its pitch to Ukraine was, at its core, a load of sweet nothings. Brussels brought a baguette to a knife fight, and received a very public lesson on the limits of soft power for its troubles.

In the meantime, the protest movement is showing signs of petering out:

At times over New Year and Orthodox Christmas the protest has taken on a party atmosphere, swelling again to hundreds of thousands. Barricades still block traffic across Independence Square, known as the “Maidan”, and protesters occupy several public buildings, including part of Kiev’s city government.

But with only a few thousand people on or around the square on Thursday, the realisation has set in that Mr Yanukovich has ridden out the immediate storm without conceding to the opposition’s main demands: to rekindle the EU agreement, or sack his government and stand down.

Yanukovych will certainly be celebrating the finalization of this new gas deal, which, paired with a $15 billion lifeline thrown to him by Putin last month, will greatly stabilize his country’s economy. But Putin emerges the long-term winner here—the price for gas is to be renegotiated every three months, effectively turning the discount into a yoke to keep Kiev in line with Moscow’s wishes for the foreseeable future.

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  • Andrew Allison

    “Brussels brought a baguette to a knife fight, and received a very public lesson on the limits of soft power for its troubles.”

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