IN THE PRESS: The Russian-Ukrainian gas crisis and Russia's tarnished reputation (01/22/06)

IN THE PRESS

The Russian-Ukrainian gas crisis and Russia's tarnished reputation

"Russia's Reputation Suffers in Gas Row," lead editorial, Financial Times (London), January 5:

In the event, Kiev [sic] has escaped humiliation and Moscow has been left in the awkward position of explaining its actions to the world. Its reputation as a reliable energy supplier has been called into question. Ukraine bears some of the blame for extracting gas for its own use from supplies destined for Gazprom's European Union customers. But, to Mr. [Vladimir] Putin's embarrassment, international concern has rightly focused not on Kiev, but Moscow.

Russia has also failed in its long-term aim of securing a stake in Ukraine's export pipeline. In Georgia and Belarus it has recently struck deals swapping cheap gas for a say in pipeline management. Not for the first time, Kiev has escaped Moscow's clutches.

However, Ukraine must now adapt to rising gas prices. Increased energy efficiency will bring political as well as economic benefits. The sooner Kiev acts, the quicker it will reduce the scope for Russian political leverage.

"Potemkin Compromise," in the "Review and Outlook" section, The Wall Street Journal (New York), January 5:

Gazprom's once impeccable reputation for reliability, arguably its most valuable asset, was destroyed in a few hours. By turning off the spigots to Ukraine on New Year's Day, President Vladimir Putin cut off clients down the pipeline in Europe, which gets a quarter of its gas from Russia and is suffering a particularly cold winter. Poland, Hungary, Austria, Germany and Italy reported reduced supplies, touching off a near panic.

Ukraine siphoned off some gas for its needs but the reduced pressure in the lines also played a role. Not even in the darkest days of the Cold War did the Soviet Union resort to energy blackmail. Mr. Putin, once again, broke the mold by unilaterally abrogating Gazprom's standing contract with Ukraine. If this can happen in Ukraine, who says Germany or France won't be treated the same one day.

Mr. Putin tried to bully Ukraine and comes away hurt himself, not for the first time. As in the winter of 2004, when the Kremlin wanted its own man installed in the presidency in Kiev [sic], the Russian leader figured that smaller, weaker Ukraine would bend to his will. The gambit was transparently intended to undermine President Viktor Yushchenko and Ukraine's young democracy that was born in the 2004 Orange Revolution.

Instead, Mr. Putin provoked a nationalist backlash in Ukraine that ended up strengthening Mr. Yushchenko and brought international rebuke. As Russia takes over the helm of the G-8, Mr. Putin reminded everyone that his country doesn't really deserve to belong in this Western club.

"Russian Gas: Putin's Momentous Move," editorial, The Guardian, (London), January 4:

This crisis has been about something larger and more complex than the price paid by Ukraine for Russian gas. Russia is the world's largest supplier of natural gas and its huge state-owned Gazprom energy company is fully entitled, in principle, to sell that gas at a market price. But Russia uses Gazprom to set its prices as a way of exerting political influence.

How else can one explain the fact that, until January 1, the same 1,000 cubic meters of gas was sold at such a variety of prices as $120-125 to EU customers, $110 to Georgia, $50 to Ukraine and $47 to Belarus. And the same is true, in spades, of the $230 per 1,000 cubic meters that Russia unilaterally demanded of Ukraine from Sunday.

This was not just a breach of a five-year contract that Gazprom made in 2004. It was also an attempt to destabilize the pro-Western government that came to power after Moscow's candidate was ousted in Ukraine's orange revolution nearly two years ago.

"Playing Politics with Pipelines," column by Anne Applebaum, The Washington Post , January 4:

By no ordinary measure does Russia deserve to belong to the G-8, a group meant to include only the leaders of the world's richest democracies. In sheer size, Russia's economy lags behind those of Holland, Mexico and Brazil, among others. In per capita income, Russians lag behind Malta, Brunei, Chile and Uruguay. Even in conventional military power, Russia, with its army still stuck deep in the Chechen mud, is hardly the behemoth it used to be.

But in its ability to manipulate European supplies of natural gas, Russia is once again emerging as a superpower. There are still limitations: It is true that Ukraine was paying less than the world price for its gas, and also true that Ukrainian and Russian oligarchs were both profiting from that post-Soviet arrangement (which helps explain why it existed so long).

Nevertheless, the theatricality of the shut-off - those television pictures of big men turning big wheels - suggests that this was a political decision. The facts suggest that, too. After all, the object of the blackmail was Ukraine, a country that is striving to achieve political independence from Russia - not neighboring Belarus, a country that remains subservient to Russia. It was also President Putin, not Gazprom, the Russian gas monopoly, who publicly announced the decisions this week. Theoretically, the Europeans could also fight back diplomatically, in concert with the United States. Take that presidency of the G-8, for example: Is everybody still absolutely sure that Russia should remain a G-8 member? Is everybody absolutely positive that they want Putin to act as the G-8 president?

But before Western leaders can even contemplate asking such impolitic questions, they'll have to recognize Putin's new year's celebration as the warning signal it was. Manipulation of television stations, harassment of human rights activists, imprisonment of the president's political rivals - none of that has so far excluded Russia from the club of civilized nations.

Like the war in Chechnya, Russia's bitter dispute with Ukraine over gas prices was, until now, largely dismissed as a regional spat. That has to change. Perhaps if the Russians want to talk about "energy security" in 2006, we should take them up on it.

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