Ultima Thule

In ancient times the northernmost region of the habitable world - hence, any distant, unknown or mysterious land.

Saturday, December 31, 2005

Former Kremlin advisor says Russian demands for gas price hike is sign of resurgent Russian imperialism

By Aussiegirl

As the rest of the world gets ready to celebrate the New Year, Moscow is preparing to shut of the gas supply to Ukraine and Western Europe. Interesting news here is that the Russians had signed a 5-year contract in August of 2004 to supply gas at the price of $50 when they thought that Yanukovych would win the Ukrainian election. When Yushchenko won in a revote, they suddenly remembered about market prices. Ukraine has said that they have adequate reserves to avoid a shock to the economy and appear ready to call Moscow's bluff. Last minute demands by Putin were met with the simple reply, "We cannot sign."

Note especially Illarionov's warnings that this is reminiscent of ultimatums presented to the Baltic countries prior to their annexation shortly before WWII. Ominous words indeed. Only Ukraine is not about to let itself be annexed. But the bully Putin thinks he can use economic blackmail and the equivalent of a protection racket to intimidate his neighbors. Let's see how this all plays out when Russia takes the presidency of the G-8 It's not going to look too good for them to be cutting off gas supplies to most of Europe in a blatant show of intimidation while claiming to be a modern and free economic world power. It simply shows that Moscow's idea of international relations is a both primitive and antiquated.

The following from an AP story:

A former Kremlin adviser denounced Russia's New Year deadline for Ukraine to accept a massive gas price increase, saying Saturday the demand was a sign of resurgent Russian imperialism. Europe, meanwhile, warily watched the standoff amid warnings that its supplies could be affected.

Russia's state-owned gas monopoly, OAO Gazprom, has threatened to cut supplies to Ukraine Sunday morning if Kiev does not agree to pay $230 per 1,000 cubic meters of gas - more than four times the current price. The company has said the price hike marks a long-overdue transfer to free-market price mechanisms.

However, Andrei Illarionov, a former economic adviser to Russian President Vladimir Putin, said the increase instead was a political move signaling the rise of neo-imperialist trends in Kremlin policy.

Illarionov said the Kremlin had asked him to help cast the price hike as a free-market measure, but that he resigned this week because the move "had no relation not only to liberal economic policy, but to economic policy at all."

"Energy weapons are being used against neighbors," Illarionov said on Ekho Moskvy radio. "The move toward a policy of imperialism ... has a clear and high price that will eventually be paid by the citizens of a nation that embarks on the imperialist path."

Russia supplies about half of the European Union's gas, most of which flows through Ukraine. Gazprom informed European customers that, once it stops deliveries intended for Ukrainian use, supplies to other countries could be restricted if Kiev siphons off gas meant for transit further west, company spokesman Sergei Kupriyanov said.

Ukrainian President Viktor Yushchenko's office said his Cabinet introduced measures to ensure the unhampered flow of gas into Ukraine and its transit to EU countries until a new contract was signed. But his prime minister has said Ukraine has the right to take 15 percent of shipments through its territory as transit fees.

EU Energy Commissioner Andris Piebalgs said he was concerned about the Russian threat, but was confident an agreement would be reached "and that Russia and Ukraine will honor their commitments to supply European gas markets as they have at all times in the past."

[...]Illarionov said that in August 2004, Gazprom signed a deal with Ukraine's gas company that envisaged five years of gas supplies at $50 per 1,000 cubic meters - part of the Kremlin's efforts to support presidential candidate Viktor Yanukovych, who lost a tense race last fall to the Western-leaning Yushchenko.

"When the political situation changed, they remembered about subsidies," said Illarionov, who long had been a dissenter in the Kremlin, which is dominated by Putin's fellow veterans of the Soviet spy agency KGB.

Illarionov likened Russia's price hike for Ukraine to Nazi and Soviet ultimatums issued to Eastern European nations before their annexation on the
eve of the World War II, and urged the Kremlin to step away "from the brink
of a precipice that we are approaching so blindly and quickly."


At 8:02 PM, Anonymous Pindar said...

Once again Putin the Bully is making trouble. I agree that behind the 5-year contract was their conviction that Yanukovych would win the Ukrainian election...and as further insurance they decided it wouldn't hurt to kill Yushchenko...thank god that didn't work! And only third-world countries renege on contracts like Russia seems to have done. It's really laughable to give the G-8 presidency to such a backward country that can't even honor contracts, surely one of the requirements to be a modern, civilized nation.


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