Russia has warned Europe
that gas supply cuts may be looming on the horizon because of Ukraine.
Vladimir Putin is bracing the West for another gas conflict with Ukraine. In a
meeting with Austrian Federal Chancellor Werner Faymann, the prime minister
issued a serious warning to Europe: Russia
will cut transit gas supplies going through Ukraine
to Europe if Kiev
siphons off any gas which has not been paid for. "As long as our partners pay
us for supplies for internal consumption, they'll get gas for internal
consumption. If they don't pay for supplies for internal consumption to Ukraine, they will not get the gas," Putin said,
and went on to suggest that if Ukraine
doesn't receive gas, "it will most likely take gas from the export pipeline."
"As soon as such siphoning off begins, we'll reduce the supplies," he warned.
The prime minister has repeatedly stressed that Ukraine would need assistance if
interruptions in the gas supply were to be avoided. But this is the first time
that he has blatantly warned of possible reductions to the gas supply.
Help them yourselves
In the last gas conflict, Ukraine
was accused of completely stopping all gas transit to Europe.
Supplies were suspended by Gazprom on January 7, 2009 after a general audit of
the situation involving the delivery of Russian gas to European consumers
revealed that in spite of the fact that Russian gas was running through the gas
measuring station at Suzhda in Ukraine,
Russian gas was not reaching consumers in Europe.
Yesterday, Putin stressed that if Europe wanted to avoid a repeat of
this messy situation, the question of a guaranteed gas supply to Europe in the winter
must be solved today - and not with Russia. As he
pointed out, "Ukraine
has the financial resources to pay, and the International Monetary Fund has
confirmed this." This time around, Putin said, the real culprit is Ukraine's political
battles. "The real problem is that they have an ongoing presidential election
campaign, and as you know, the prime minister and the president are in opposing
electoral camps, so they have their own internal political interests," Putin explained.
It's absolutely vital, "without interfering in the internal political
processes in Ukraine",
to get the country to comply with international obligations, including the transit
of gas to European countries.
If transit stops, however, a whole new problem will arise. Russia has already paid Ukraine for gas
transit until the first quarter of 2010, inclusively. But if there is no
transit, there is no guarantee that Ukraine will actually return that
money.
Putin warned of the possibility of new problems with gas supplies to Europe on October 30 at a meeting with the leaders of
United Russia. He announced that he had just spoken with Ukraine's Prime
Minister Yulia Timoshenko over the phone. "It looks like problems with the
payment for our energy are once again arising, which is just very sad," Putin said.
For one, the European Union failed to disburse the money it had promised
Ukraine for this purpose;
second, according to the International Monetary Fund (IMF), Ukraine does in
fact have the money. The country's gold and currency reserves stand at $27-28
billion, and Ukraine
can easily use a large part of its reserves without running any risks for the
national currency. As Putin noted, "The minimum amount that ensures a stable
national currency and supports foreign trade transactions is about $12 billion,
according to IMF assessments."
So, why is the money not being made available? The reason is simple: political
infighting. Allegedly, President Viktor Yushchenko is obstructing normal
cooperation between the National Bank of Ukraine,
which holds the gold and currency reserves, and the government of Ukraine by blocking
the transfer of money.
Putin also mentioned South Stream yesterday. According to him, one of
the gas pipelines tasks is to "discipline" Ukraine.
There's money? But no political will
Amidst such a backdrop, the IMF seems to have suspended cooperation with
Ukraine
over political problems for the first time. Ukrainian Deputy Prime Minister
Grigory Nemyrya said recently that Ukraine
could pay for December's gas, but if the programme of cooperation with the IMF
doesn't get underway by January, Ukraine will run into difficulties
with payments. He was referring to the $16.4 billion IMF loan to Ukraine authorised
by the IMF in 2008. Three tranches of the loan have already been disbursed, but
the IMF is delaying the issue of the fourth tranche ($3.8 billion) because of
the country's political situation.
"For next month (November), we have a reserve in the form of IMF's
special drawing rights," Nemyrya said. Meanwhile, IMF's managing director, Dominique
Strauss-Kahn, indicated that the Fund was only willing to resume work with Ukraine after
the presidential election in January 2010.
At a meeting yesterday with ambassadors of the G8 countries, the
European Union countries and representatives of the European Commission, Yulia
Timoshenko stated that she saw continued cooperation with the IMF as Ukraine's
main anti-crisis programme.
Acting Finance Minister of Ukraine, Igor Umansky, was a bit more
straightforward. According to him, the IMF has not yet clarified for Ukraine its
official position on the fourth tranche of the loan and, perhaps more
importantly, there are no risks for the country's economy even if the tranche is
delayed. "So far, we haven't gotten any official statements from IMF on the delay
or suspension of the programme. We are in the normal, working process of
revising the programme," Umansky told RIA Novosti.
Russia and gas are no
longer Kiev's
main concerns
Even though all the political forces in Ukraine
are preoccupied with preparations for the presidential elections on January 17,
the Russia
factor and gas problems are not the topics dominating the presidential
candidates' rhetoric. In fact, of all the candidates, the only one focusing
attention on the Ukrainian gas transportation system's development is Sergey
Tigipko, a banker. One item included in his company's programme is the organisation
of the domestic production of fuel from Caspian oil.
In a way, Yushchenko is choosing to play the Russia card: in October, he
appointed as Foreign Minister Pyotr Poroshenko - a man widely known to be
pro-Russian. By the same token, the gas theme is sure to become more relevant
as the New Year approaches, when the cold really starts to set in and people
will be gearing up to celebrate the New Year. So far, the central heating in Kiev and other cities is
not too bad.
The flu is cutting gas supplies
The number one electoral issue in the country at the moment is the flu.
President Yushchenko has refused to sign an amendment to the country's budget
earmarking 1 billion hryvnas to combat the flu and severe respiratory infection.
In addition, Yushchenko has suspended all the cabinet's resolutions on the
purchase of medical equipment with state guarantees.
On the whole, the epidemic has quite literally stolen the media spotlight
in Ukraine.
"Gas, the economy and the budget have all been pushed to the sidelines. The flu,
whether it's swine flu or your ordinary garden variety, is a real disease," the
head of Kiev's
Global Strategies Institute, Vadim Karasyov, told Gazeta. He explained that the threat of an epidemic plays right into
the hands of certain politicians who are eager to divert attention from the
recent row over the Artek summer camp.
As Deputy of the Supreme Rada (representing Our Ukraine - People's Self-Defense)
Alexander Doniy sees it, the flu and gas topics tend to boost Prime Minister
Yulia Timoshenko's popularity. "She had more access to the media and she used
the flu as political PR. Yanukovich and Yushchenko didn't have that
opportunity," Doniy said in an interview with Gazeta. He also noted that Timoshenko's strong team of spin doctors
ensured that gas supplies were not a serious problem for her. Experts all deftly
play down Yushchenko's reproaches over the gas agreements that the Ukrainian prime
minister signed with her Russian counterpart. "Besides, it has already been decided
that the IMF loan will pay for the gas debts. So, there should be no
disruptions in payments," the deputy maintained.
Shift in the balance of forces
The last month has witnessed some changes in the approval ratings of the
main presidential hopefuls. Yanukovich still has 25-30%, and Timoshenko 20%,
and there is no doubt about the necessity of a second round. The question is,
who's the third most popular candidate in the country? All the observers have
highlighted Tigipko's efficient campaign, which has secured an approval rating
of 11% in some regions. By contrast, Arseny Yatsenyuk, who until recently was firmly
in third place, is now lagging behind. Recent opinion polls show that he's lost
2%. Now, it's not just Yatsenyuk and Tigipko, but also Yushchenko and
parliament speaker Vladimir Litvinov, who are fighting for the hearts and minds
of Ukrainians.
Vadim Karasyov called attention to yet another intriguing aspect of the
current situation: will Timoshenko or Yushchenko manage to win over "the orange
lot" that makes up a significant chunk of the electorate? Yushchenko has strengthened
his position a little bit. According to opinion polls, about 5% of Ukrainians
would vote for him.
Andrei Biryukov, Lilia Biryukova
