Irresponsible states undermining partnership with Russia
Peter Lavelle has been writing lucidly on the gas row between Russia and Ukraine for some weeks now. His latest piece sets out hard commercial facts which underpin the dispute. Lavelle’s employment for Russian owned English language television station, Russia Today, has made him a target for especially vitriolic Russophobe attacks, however he is a seasoned observer of this annual wrangle and his article sets out sequentially the compelling case which Gazprom can make for its actions. Ukraine is guilty, at least in part, of attempting to exploit suspicion of Russia for its own commercial gain.
Many eastern European countries inflated their economies with cheap credit when world markets were buoyant and consequently they are feeling the pain particularly acutely at the present time. Ukraine is no exception, and to add to its malaise the bottom has fallen out of the commodities market, a vicious double whammy for a country dependent on steel exports. Having previously required bailouts from the IMF, Russia’s neighbour is now banking on anti-Kremlin sentiment, and Europe’s dependence on gas transited through Ukraine, proving adequate levers to allow it to default on its debts and have its energy bills subsidised for yet another winter.
The truth is that were Gazprom not a company inseparably entwined with the apparatus of the Russian state, the taps would have been turned off long ago. It is true that Russia has occasionally treated its neighbours as clients in return for preferential energy prices. That does not bind it to provide cut price gas in perpetuity where its influence is spurned, simply to avoid reproach from anti-Russian opinion in the west. Ukraine was offered gas at effectively half the market rate, despite purported tension between the two governments. On previous occasions, even when it has reached an accommodation with Gazprom, it has then failed to deliver on the terms for payment.
Ukraine, with annual attempts to avoid its responsibilities, should shoulder the lion’s share of the blame for diminishing energy security in Europe. It is simply not a reliable transit country, given that it might fail to pay for its own gas and begin to steal that which is intended for others at any given moment.
Much has been written about Russia attempting to assert itself belligerently on the world stage. A little more attention should be devoted to the irresponsible actions of former Soviet states, who take American and European patronage as an invitation to act provocatively toward their larger neighbour. Ukraine’s actions do not compare to the military adventurism of Mikheil Saaskashvili, but the same principle applies. Currently countries such as Ukraine and Georgia are wilfully undermining partnership between Russia and the west.
Many eastern European countries inflated their economies with cheap credit when world markets were buoyant and consequently they are feeling the pain particularly acutely at the present time. Ukraine is no exception, and to add to its malaise the bottom has fallen out of the commodities market, a vicious double whammy for a country dependent on steel exports. Having previously required bailouts from the IMF, Russia’s neighbour is now banking on anti-Kremlin sentiment, and Europe’s dependence on gas transited through Ukraine, proving adequate levers to allow it to default on its debts and have its energy bills subsidised for yet another winter.
The truth is that were Gazprom not a company inseparably entwined with the apparatus of the Russian state, the taps would have been turned off long ago. It is true that Russia has occasionally treated its neighbours as clients in return for preferential energy prices. That does not bind it to provide cut price gas in perpetuity where its influence is spurned, simply to avoid reproach from anti-Russian opinion in the west. Ukraine was offered gas at effectively half the market rate, despite purported tension between the two governments. On previous occasions, even when it has reached an accommodation with Gazprom, it has then failed to deliver on the terms for payment.
Ukraine, with annual attempts to avoid its responsibilities, should shoulder the lion’s share of the blame for diminishing energy security in Europe. It is simply not a reliable transit country, given that it might fail to pay for its own gas and begin to steal that which is intended for others at any given moment.
Much has been written about Russia attempting to assert itself belligerently on the world stage. A little more attention should be devoted to the irresponsible actions of former Soviet states, who take American and European patronage as an invitation to act provocatively toward their larger neighbour. Ukraine’s actions do not compare to the military adventurism of Mikheil Saaskashvili, but the same principle applies. Currently countries such as Ukraine and Georgia are wilfully undermining partnership between Russia and the west.
Comments
You state that if geo-politics were not involved that it would all the simpler, but at the same time admit that Russia plays the game too. And being that Germany (who gets 40% of her gas from Russia)has refuted Georgia's entry into NATO it has not hurt Russia too much.
Russia's adherence to the market value has been remarkably flexible depending on the political regime with which it's dealing and while it does indeed have the right to adjust to market value you'll excuse me if I raise an eye brow when Russia speaks of free markets the way Medvedev speaks of free elections.
But quite honestly we all would do well to read (or re-read) "The Long Emergency" and realize that countries fighting over oil and natural gas resources are more and more resembling two balding men fighting over a comb.