Putin ignites new Cold War by turning off the gas while Europe shivers through the coldest winter in decades

By Aussiegirl

By baldly carrying out threats to cut off gas supplies to Ukraine and Western Europe, Putin has cast himself in the role of irresponsible international bully and self-proclaimed capricious Energy Czar. What is not mentioned often enough in articles covering this story, is that Russia and Ukraine signed a contract in August of 2004 in which Russia agreed to supply gas at the current price of $50 for the next five years. As such, Moscow and Gazprom are violating a valid, signed contract.

Of course this was before the Orange Revolution when Putin had every expectation that Yanukovych would win the staged election. When Yushchenko won in a revote, and survived a poisoning attempt, Russia suddenly discovered market prices and demanded an overnight quadrupling of the price, something no economy, no matter how stable, could tolerate. Aleksei Illarionov, who recently resigned as Kremlin finance advisor saying that "Russia was no longer free", has stated that he was pressured to invoke the blatantly false cover story about the increase in prices being merely a product of market pricing, when in fact he has said that it was always intended to be a blatant attempt at intimidation and threat.

In carrying out the threat to actually cut off the pipeline, Russia has shown the world that they cannot be trusted to honor their signed contracts, and that they will do whatever is expedient to exert their own power, no matter how outrageous or destabilizing, in order to punish former allies who fail to cooperate with Moscow. As such, Moscow can not be considered a member in good standing of any international economic system, which can only operate on the basis of the inviolability of signed contracts, the rule of law and the responsible behavior of its members.

For too long Moscow has operated under the delusion that the rules do not apply to them, and that as long as they control the commodity they are free to act as they wish. By acquiring a majority interest in Gazprom, Putin has put in place his plan to use state-owned energy as an instrument of raw political power and interrnational blackmail and pressure.

However, it may be that Putin's plan has backfired. By provoking this crisis and now by cutting off the gas supply, Putin may have seriously miscalculated. He intended to accomplish a number of goals with this transparent and clumsy gesture. He hoped to destabilize the Ukrainian economy at a politically sensitive time prior to a new election. He hoped to damage Yushchenko's chances for re-election and to enhance the chances of Yanukovych's victory. He hoped to make Yushchenko unpopular in the eastern regions of Ukraine that voted heavily for Yanukovych in the previous election. He hoped to turn Western Europe against Ukraine and cast Ukraine as an unstable partner in any future economic alliance, and to portray any shortages that result in Europe as being the fault of Ukraine.

But who looks like the dangerous unstable and unreliable partner here? Ukraine, which had a contract in hand and has reasonably agreed to an eventual rise to market rates gradually? Ukraine, which has negotiated in good faith despite no apparent need to do so with a valid contract with four years left to run? Ukraine which has said it will take its case to arbitration in Stockholm and abide by the decision? Judging by reactions in Europe and in the United States, it is Putin and Russia which look bad. And in Ukraine, the sentiment is rapidly changing to one in which Putin is being blamed for the crisis, and Yushchenko's popularity is rising due to his firm stand not to give in to blackmail.

What we have here is the equivalent of an economic Munich. Yushchenko has refused to play the part of Chamberlain. Europe must also refuse to appease and excuse this sort of bullying behavior from a country which pretends to international leadership and is set to take the helm of the G-8 Conference.

Putin has shown the world that Moscow is not ready for prime time. Will the world let him get away with acting unlawfully and irresponsibly? Will the various EU countries scramble to come to their own "arrangements" with Putin with the understanding that he will leave them alone for now? Or will a united Europe with the United States stand and demand that Russia behave responsibly.

Otherwise, the world is giving Putin a green light to become the world's lawless energy Czar -- who will blackmail and dispense energy as he sees fit, as an instrument of raw political power. The stakes couldn't be higher. In an energy starved world, a tyrant stands with his hands on the spigot of one-third of the world's gas supply and says: "Do my bidding or I'll cut off the pipeline."

BREITBART.COM - Europe feels pinch as Russia-Ukraine gas row deepens

The European Commission, the EU's executive arm, has already expressed its "concern" at the worsening crisis and has called a special meeting on Wednesday to review supplies.

Reflecting mounting concern in Western capitals, the United States warned that the dispute had created "insecurity" in Europe's energy sector and criticised Moscow for its "sudden" move to cut supplies to Ukraine.

"Such an abrupt step creates insecurity in the energy sector in the region and raises serious questions about the use of energy to exert political pressure," State Department spokesman Sean McCormack said in a statement.

"As we have told both Russia and Ukraine, we support a move toward market pricing for energy but believe that such a change should be introduced over time rather than suddenly and unilaterally."

Hungary, which depends completely on Russian gas imports, noted a 40 percent drop in gas pressure at its border with Ukraine on Monday and other European countries reported supply shortages.


Around a fifth of European gas imports come from Russia via Ukraine along a single trunk pipeline that splits off after entering Ukraine into smaller branches to supply the Ukrainian network and western Europe.

Ukraine's emergency situations ministry set up a special crisis centre on Sunday and officials warned stations that provide central heating for residential homes and industrial enterprises in southern and eastern parts of the country could face gas supply reductions.