Europe Shall Not Allow New “Gas Wars”

By Oleg Gorbunov

Long-standing “gas” talks between Moscow and Kiev, another round of which shall be held in Ukrainian capital on June 29th is the most significant issue in the agenda of bilateral relations. Ukrainian Government faces a sad prospect – to cover multiple holes in the budget is only possible by reducing gas price, as neither Europe, nor the USA, IMF, World Bank wish to credit Ukraine ”just as  that“. Partners demand a real respond and progress at least in reduction of budget deficit. And this again is not possible without re-conclusion of gas contracts. As in January of 2012 the “blue fuel” price has chances to grow up to $400 or even $500 per thousand cubic meters.

Which will be the results of talks on gas contract amendment between Russia ad Ukraine? Shall Ukraine address to Stockholm Arbitrage Court? Are the EU states ready to interfere into the talks as colleagues of Ukraine within Energy Community?

Rostislav Ishchenko, Director of the Center for System Analysis and Forecast (Kiev):

I think that the contract can be changed only if Ukraine as minimum agrees with the control of “Gazprom” over “Naftagaz” (in particular over the pipeline). How is that to be called – take-over, consortium or joint venture – doesn’t matter, the result is important. I really doubt. But if it addresses this shall be only propaganda, promotional step for domestic consumption. Ukraine can’t impose its conditions to Russia (another weight category). And Stockholm Court shall not help here, as with the help of court they are able to break the contracts, signed by Y. Timoshenko – then just try to conclude others for them to be not worse for Ukraine. The EU is not ready and shall not interfere.
Vladimir Kornilov, Director of the Ukrainian Office of the CIS-states Institute (Kiev):

The talks shall come to an end eventually with the revision of gas price formula for Ukraine, as the gas price can appear to be too high, and this is not within the interests of Russia to collapse the economy of its biggest consumer. By this for sure Russia has the right and should demand from Ukraine asymmetric reimbursement. But Kiev is not yet ready for this – which means that negotiations can last for long. There is no sense for Ukraine to address the Arbitrage Court. Naturally, speculations over the court can be used to enhance its talks positions. But Kiev perfectly realizes that court the can’t deal with pricing and dictate “Gazprom” prices on its products. Even if to suggest that Russian-Ukrainian treaty is abrogated on unilateral ground or judicial procedures Russia shall have the right to increase the prices on energy sources for Ukraine – and Kiev definitely doesn’t need it at all. Europe has repeatedly stated that the issue on Russian gas price for Ukraine is not its business. Europeans are worried only about one thing: for Ukraine to assure uninterrupted transit of Russian energy sources through its territory and not to allow again the situation with “gas war”. So Ukraine shouldn’t count on more serious support of Ukraine.
Translated by EuroDialogueXXI from politcom.ru