The contemporary complexities of the relationship between
Ukraine and Russia are as much influenced by personality as by
economics and politics. A key additional factor, however, is that
Russia’s leadership, as Quentin Peel of the Financial
Times puts it, “do not regard the Ukraine as a serious
independent country…”
Russia under Vladimir Putin has successfully sought to establish
a role relative to Europe that reproduces in a fashion the
political respect it once had as an adversary during the Cold War.
Economic leverage assisting in the maintenance of this recently
enhanced power position has evolved in part by becoming the
reliable supplier of 25% of all the gas needs of Western
Europe.
The key word here is “reliable,” and that’s where Ukraine comes
in. Most of the gas in the pipeline to Europe currently originates
from the former Soviet republics of Kazakhstan, Turkmenistan and
Uzbekistan. About a quarter is from Russian fields. All this gas
arrives in Western Europe via pipelines transiting Ukraine.
The Ukrainians reportedly consume a little over one third of the
gas that is piped through their country. If the Russians halt that
flow, the nations west of Ukraine and Ukraine, itself, are in a
severe energy predicament.
EARLIER THIS MONTH, Gazprom, the giant Russian gas cartel, still
headed by the soon-to-be new Russian president, Dmitry Medvedev,
insisted Ukraine had a gas debt of $600 million. The Russians
wanted that money as well as signed contracts to supply future
deliveries. The implication was that the gas spigot would be turned
off if Russian demands weren’t met.
The Ukrainians said threats to cut off any portion of the gas
shipment were a violation of the basic principles of international
commerce. The Ukrainian weapon was to withhold payment. Europe,
which was hit by an earlier pipeline crisis in 2006, could do
nothing but wait for the next shoe to drop.
This may all seem a typical commercial squabble until one
recalls Quentin Peel’s statement. Russia not only does not regard
Ukraine as serious independent country, the Kremlin truly believes
Ukraine has illegitimately been ripped from the body Russia.
It’s all right if the government in Kiev wants to pretend it is
truly independent, but as far as Moscow is concerned Ukraine owes
its existence to Russia in the past, present and future. The fact
that the Ukrainian government has made known its desire to join the
European Union and NATO more than a little exacerbates the
situation.
Enter the person that Toronto’s Globe & Mail
referred to as “the most beautiful political leader in the world,”
the 47-year-old stunning blond from Dniepropetrovsk, Ukraine’s
Prime Minister Yulia Tymoshenko. Holding an advanced university
degree in economics, this lady before entering politics headed the
major corporation, United Energy System of Ukraine. Forbes
magazine named her one of the world’s three most powerful
women.
PM Tymoshenko was adamantly against the structure of the
agreement as it has stood with Russia. Intermediary companies, in
which Gazprom also had a stake, were conveniently placed between
the two countries as buyer and seller of the pipeline product. The
informal agreement in February between Ukraine’s President Victor
Yushchenko and Russia’s Vladimir Putin was quite inadequate as far
as Tymoshenko was concerned.
President Yushchenko has his own problems with Ms. Tymoshenko,
who has no hesitancy in saying and doing things that annoy Moscow.
Ukraine’s president has gone so far as to charge his prime minister
with unnecessarily straining relations with Russia at a time when
he is trying to construct a working relationship.
IN EARLY MARCH, Gazprom cut in half the gas it was sending through
Ukrainian pipelines as a threat of what might happen. PM Tymoshenko
held her ground and on Thursday, March 13, an agreement was reached
removing the middlemen companies and maintaining the same price for
the gas for the rest of the year. In exchange it was agreed that
Gazprom would be entitled to a flat 25% of the Ukrainian industrial
gas market. The supposed $600 million debt wasn’t mentioned.
Perhaps more important than the financial settlement and
contracts for future delivery is the fact that Ukraine had to be
treated as “a serious independent country.” This is something that
Putin and his newly anointed president, the gas czar, Medvedev,
were forced to recognize.
There may be some non-publicized aspects to the new accord, but
for the moment it appears that the world’s most gorgeous politician
got exactly what she wanted. All this proves that among the big
boys in Ukraine and Russia natural gas is a girl’s best friend.
