Re: Russkie Knife in Back for Ukraine


Eugene Holman wrote:
> In article <1135903661.055927.13610@xxxxxxxxxxxxxxxxxxxxxxxxxxxx>,
> lorad474@xxxxxx wrote:
> > Maybe pooety will send Gerhardt out with a monkeywrench to turn off the
> > valves.
>
> Easier said than done, seeing as most of Russia's oil to the EU is shipped
> via pipelines traversing Ukraine.

Never stopped pootey before..

> If we are going to operate in a market economy, subsidies will have to be
> phased out,

So tell that to pootey who (soon to assume the presidency of the
ultimate capitalist clache; the G-8) is subsidizing the gas that he
sells to another totalitarian anti-market command economy market;
Belarus.

> so Ukraine will gain from this tempest in a teapot, while
> Belarus, with highly subsidized gas, will continue to stagnate.

So typical of you to overlook russian criminality. Between now and your
prognosticated Ukrainian economic nirvana lie the months of January,
February, March, and a severe winter...

...All of which pootey (" If we are going to operate in a market
economy) is attempting in a very non-market economic fashion - to use
in order to destroy Yukoshenko's reform minded presidency. Got that,
bozo?

That pootey attempts to do this will ultimately backfire for the
kremlin is, indeed, certain.
But probably sooner than you might imagine. The euro-sheep are starting
to get frightened
Read and learn:

"By C. J. CHIVERS
Published: December 30, 2005
MOSCOW, Dec. 30 - Worries of a winter gas shortage in Ukraine
intensified today as Russia's energy giant, Gazprom, renewed its threat
to cut supply lines to Ukraine on Sunday morning if the country did not
accept a nearly fivefold increase in price.

The impasse showed no sign of easing. Gazprom rejected an appeal from
Viktor A. Yushchenko, Ukraine's president, to freeze prices and
maintain gas flow through Jan. 10 to allow for further negotiations.

The company also said that it had run technical tests and was capable
of stopping flows for Ukraine, through which much of Europe's gasmoves,
while meeting export obligations to countries downstream.

The European Union proposed an emergency meeting of energy officials on
Jan. 4. The call reflected worries that the stalled negotiations could
tighten supplies in European countries, many of which buy large
portions of their gas from Gazprom but receive it after it has flowed
through Ukrainian pipelines.

Ukrainian officials and industry analysts played down any immediate
risk, saying gas reserves in Ukraine would ensure that its supply was
maintained for at least two days and perhaps longer than two weeks.
Europe's reserves would also prevent any immediate shortages there.

"I hope Gazprom will not turn off the tap," said Valery Nesterov, an
energy analyst at Troika Dialog, an investment firm in Moscow. But he
added that if the flow is cut, "they still have the time to negotiate."

The test of wills underscored enmities that have tainted relations
between Ukraine and Russia since Mr. Yushchenko and his supporters
overturned a fraudulent election last year, defeating a Kremlin-backed
candidate and pledging to steer Ukraine toward a more Western foreign
policy.

It also marked Russia's willingness to use its state-controlled gas
monopoly as an instrument of foreign policy, even coercion, in dealing
with energy-hungry neighbors.

That policy is not without risk. The Kremlin and its allies at Gazprom
have seized a strong position in the short term. But their threats
against Ukraine, their mocking of Ukrainian proposals and concerns, and
their willingness to foster worries among other gas customers have
raised fresh questions about whether Gazprom, Russia's largest company,
is a reliable energy partner.

The dispute centers on Gazprom's politically influenced pricing system.

Ukraine, through a deal arranged under former President Leonid D.
Kuchma, has been paying $50 for 1,000 cubic meters of gas, reflecting
Russia's practice of providing discounted energy to former Soviet
nations that remain within the Kremlin's orbit.

Gazprom, with President Vladimir V. Putin's approval, has proposed
charging between $220 and $230 for 1,000 cubic meters, in line with
prices in Europe. Mr. Putin has offered $3.6 billion loan to Ukraine to
help cover the costs, a gesture variously seen as pragmatic or
patronizing.

Mr. Yushchenko's government has said Ukraine is prepared to pay more,
but not so much or so fast, and proposed a transition period with a
much smaller hike. Mr. Yushchenko has also turned down the loan offer,
saying Ukraine should pay for energy itself, albeit "at a reasonable
price."

Ukraine's volatile domestic politics lie just beneath the surface.

Parliamentary elections are scheduled for Mar. 26. The elections will
be accompanied by constitutional changes, negotiated near the end of
the protests that ushered in a new government last year, that will
weaken the Ukrainian presidency and strengthen the Parliament and prime
minister.

The combination of the new Constitution and the elections means that
the faces and policies of Ukraine's government could shift remarkably
once again. Russia has made clear its disaffection with Mr. Yushchenko
and his government, and the gas dispute is widely seen as an effort to
undermine him in part to weaken his party's standing before voters.

A gas shortage during heating season could simultaneously tarnish the
revolution, discredit the president and weaken his party, perhaps
leading to a more pro-Russian government in Kiev, Ukraine's capital.

Ukrainian officials have acknowledged the risks. At a news conference
on Thursday, Anatoly Kinakh, secretary of Ukraine's National Security
and Defense Council, said that if talks break down, the effects on
Ukraine's heavy industry would be severe.

"It is forecast that Ukraine's G.D.P will decline 4 to 5 percent in
2006," he said, according to a translation by the B.B.C. "Inflation
will be at 27 to 30 percent. The social and economic situation in the
country may worsen significantly."

He added, "There is the potential loss of hundreds of thousands of
jobs."

Gazprom has been unflinching. Aleksei Miller, its chief executive,
reiterated the threat today.

"If Ukraine does not sign a contract on the purchase of gas in the
remaining hours before the start of the new year, on Jan. 1 at 10 a.m.
Moscow time, gas supplies from the territory of the Russian Federation
to Ukraine will be completely cut off," he said in televised remarks.

Gazprom officials later clarified his statement, saying gas would still
be sent through Ukraine to European customers, but flow would be
reduced to account for the cut to Ukraine.

Mr. Nesterov, at Troika Dialog, said it was impossible for Gazprom to
meet contractual obligations to European customers without sending gas
through Ukraine, because other transit options, through Turkey or
Belarus, lack the capacity for those markets.

This left open the possibility that if there was no settlement, Ukraine
might divert transiting gas for domestic use, which earlier in the week
Prime Minister Yury I. Yekhanurov threatened to do. Gazprom said
diversion would be regarded as theft. Ukraine's threat, if acted upon,
could also create shortages in Europe.

Mr. Nesterov said that if there is no settlement, Gazprom's position
could harm it over the long term. Gazprom is aggressively seeking new
markets, but its competitors might now raise new questions about how it
makes its decisions, and whether it can be trusted.

"This will not get the company international good will," he said. "The
gain is tactical, but the loss would be strategic."

The company seemed undeterred. According to the RIA Novosti news
service, it said it would invite Russian television stations to
broadcast the reduction in gas flow live on New Year's Day."

.

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