mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Russia Moves the Goalposts in Ukraine Gas Deal

Russia and Ukraine very nearly signed a deal that would supply the latter with just enough gas to get it through this winter, provided temperatures didn’t plunge too far, before Moscow made a last-minute demand that the West essentially act as Kiev’s guarantor. The FT reports:

[…] Russia made another demand, asking for evidence to be submitted within five days that international lenders or other organisations were able to guarantee Kiev as good for its money.

Alexander Novak, Russia’s energy minister, complained that Ukraine had not identified its sources of funding. “We believe that there could have been rather more thorough work,” he said after the talks. “The cash gap requires funding.”

He said that he was looking for assurances that the likes of the International Monetary Fund, the European Investment Bank or “first-class” banks would help Kiev pay its bills. He also suggested that the European Commission could use its own budget.

Did you catch that? Quite explicitly, Russia’s energy minister suggested what has likely been Putin’s goal in this gas crisis all along: getting the EU to pay for higher-priced gas for Ukraine.

Finding an end to this dispute won’t be easy. As the EU’s own energy commisioner Guenther Oettinger put it, “Ukraine has not paid its gas bills for 7 months. If you go along to the butcher and don’t pay your bill for half a year, obviously it is a problem.” Unpaid bills have a habit of catching up to you, even if you’re a nation-state.

But Putin has known all along how shaky the Ukrainian economy is, and this latest last-minute maneuver is carefully crafted to put the rest of Europe—which itself is by no means on solid economic footing—on the hook. It very well may do so. Remember, the EU sources roughly a third of its gas from Russia, and half of that transits Ukraine, so there is a very real concern in Europe about the outcome of this Kiev-Moscow deal. If the West goes so far as to make the assurances Russia now requires, it’ll be Putin who comes out on top, as he fills his pockets from the EU’s coffers.

Features Icon
show comments
  • Andrew Allison

    This seems a little harsh. Russia has agreed to supply gas to Ukraine at a price in line with that paid by the EU. Given Ukraine’s inability/unwillingness to pay for gas already consumed, it doesn’t seem particularly unreasonable for Russia to seek guarantees of payment.

    • Sibir_RUS

      Putin initially said – in debt gas supplies will be no more.
      I.e. first the money, then gas. We waiting for a new wave of refugees from all over Ukraine in connection with frost. About half of the Russian population have relatives in Ukraine.

  • Sibir_RUS

    Milan. Italy
    Сhief of Gazprom vs. chief of Ukraine.

    • lukelea

      A picture is worth a thousand wordsl

  • lukelea

    So Ukraine should be allowed to go with the West but be subsidized by Russia?

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service