Putin has wanted to expand his client state empire to include Ukraine by "bribing" the people of Ukraine to elect a puppet government by offering them a below market rate for natural gas. It back fired. The Ukraine is now a democracy even after Russia's man tried to steal the election by handicapping his opponent and then election fraud.
Now Putin shows the world his real colors by seeking to quadruple the price of gas for Ukraine just to punish them for leaning towards the west.
WaPo
RUSSIAN PRESIDENT Vladimir Putin once again has overplayed his hand. In his zeal to reestablish Moscow's dominion over Ukraine, he has, as he did during the Orange Revolution, triggered an international crisis that could end up weakening rather than strengthening Russia's international position. Mr. Putin hoped that by shutting off gas supplies to Ukraine on Sunday, he could undermine its democratic and pro-Western government. Instead, he has provided a timely wake-up call to Western European countries dependent on Russian energy supplies. Those nations now see how Mr. Putin understands the question of "energy security," which he would make one of the principal topics for discussion by the Group of Eight this year.
[...]That leverage is considerable: Russia holds more than a quarter of the world's gas supplies and is a major supplier to virtually every country in Europe.
[...]In partially shutting down supplies on Sunday, Mr. Putin calculated that Ukraine would allow Russian gas free transit to countries farther west through the same pipeline -- or, if it did not, that Western governments would blame Kiev.
Instead, when gas pressure fell off sharply yesterday in Vienna, Rome and Paris, it was Mr. Putin who was reproached -- including by such customers as Germany, which recently agreed to a controversial plan for a new pipeline under the Baltic Sea. Mr. Putin was forced to back down, though the underlying price dispute with Ukraine remains unresolved. He has a sensible way out of the conflict, which the Bush administration is urging on him: a negotiation in which Ukraine agrees to a gradual shift toward world market prices. Poland and the Baltic countries have cut such deals with Russia in the past -- though the prices they pay Gazprom are nowhere near what Mr. Putin proposed to charge Ukraine.
Will the EU hear the warning? Will Putin back off and behave like a "civilized" state and gradually increase the price to cushion the impact on Ukraine, up to world market prices, not Russian's punishing price? Doesn't energy independence sound like a worthy goal?
3 comments:
Many are labeling Russia’s pressure on Ukraine to pay market prices for natural gas as “Cold War†tactics. Of course, the Ukrainian government is paying the full price for their anti-Russian rhetoric and pro-Western orientation. Russia is flexing the only muscles she has: natural resources. But, it’s not so much a message to the Ukraine as to the West. And it’s not so much “Cold War†as Realist geo-politics.
Putin quickly realized that Russia only has one card to play in today’s world of growing demand for natural resources. Domestically, this realization became clear with the takeover of the Yukos oil company. Disguised as retribution for legal transgressions, Putin removed the threat of a western-oriented Yukos
by imprisoning its managers, and paved the way for a predictable government takeover of Russia’s oil industry. Today, it is not so clear what the rules of oil investment are (i.e. no foreigner shall hold majority stock in a Russian oil company), but it is very clear who makes the rules.
Great comment, thanks.
My reference to Putin shooting himself in the foot is about his lack of finesse, very much like Bush. If he wants to wield influence, he needs to set his goals more realistically, use a carrot and stick approach, not a trudgeon. He may well have limited his influence in the west for years to come with his heavy handed approach.
Very impressive blog. I like your clear headed writing style and the interest in foreign affairs. I've subscribed to your RSS and will be checking back frequently.
Using subsidy and aid as tool of foreign policy is not limited to Russia.
US and Britain does not give any aid to Syria and Iran. If Russia just shut off the gas to Ukraine or demanded higher than market price, then it should be criticized.
You says "Now Putin shows the world his real colors by seeking to quadruple the price of gas for Ukraine just to punish them for leaning towards the west."
You forgot to mention about market price. Russia demands below than market price ($230, the market price is 280)
Why should Russia give huge amount of aid to an hostile country? If Ukraine wants to be part of the west, it should pay the market rate.
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