Northwest Arkansas Democrat-Gazette
Putin: Ukraine’s natural-gas debt threatens Europe
MOSCOW — Vladimir Putin warned European leaders Thursday that unless they help Ukraine settle its enormous gas debt to Russia, their own supplies of Russian natural gas will be threatened.
The Russian president’s letter to 18 mostly eastern European leaders, released Thursday by the Kremlin, aimed to divide the 28-nation European Union and siphon off to Russia the billions that the international community plans to lend Ukraine. It was all part of Russia’s efforts to retain control over its struggling neighbor, which is teetering on the verge of financial ruin and facing a pro-Russian separatist mutiny in the east.
Hundreds of pro-Russian protesters — some armed — were still occupying Ukrainian government buildings in Donetsk and Luhansk while authorities sought a peaceful solution Thursday to the five-day standoff. And in northwest Romania, U.S. and Romanian forces kicked off a week of joint military exercises.
The amount that Putin claims Ukraine owes is growing by billions every week, and his letter raises the specter of a new gas dispute between Russia and Ukraine that could affect much of Europe.
In 2009, Moscow turned off gas supplies to Kiev in the dead of winter, leading to freezing cities across eastern Europe as Russian gas stopped moving through Ukrainian pipelines to other nations.
In the letter, Putin said Ukraine owes Russia $ 17 billion in gas discounts and potentially another $ 18.4 billion as a minimal take-orpay fine under their 2009 gas contract.
On top of that $35.4 billion, he said, Russia also holds $3 billion in Ukrainian government bonds.
The total amount is far greater than the estimated $14 billion to $18 billion bailout that the International Monetary Fund is considering for Ukraine.
Put in warned that Ukraine’s mounting debt is forcing Moscow to demand advance payments for further gas supplies.
He said if Ukraine failed to make such payments, Russia’s state-controlled gas giant Gazprom will “completely or partially cease gas deliveries.”
Putin told the leaders that a shutdown of Russian gas supplies will increase the risk of Ukraine siphoning off gas intended for the rest of Europe and will make it difficult to accumulate sufficient reserves for next winter. He urged quick talks between Russia and European consumers of Russian gas.
“The fact that our European partners have unilaterally withdrawn from the concerted efforts to resolve the Ukrainian crisis, and even from holding consultations with the Russian side, leaves Russia no alternative,” Putin said.
The letter was addressed to 18 heads of states in Europe, including Serbia and Bulgaria, which both rely on Russia for about 90 percent of their gas supplies.
Putin has been tightening the economic screws on the cash-strapped Kiev government since it came to power in February after Ukraine’s Russia-leaning president fled the country after months of protest.
Starting this month, Russia state energy giant Gazprom scrapped all discounts on gas to Ukraine, meaning a 70 percent price increase that will add to the debt figure. Ukraine also has promised the IMF that it will cut energy subsidies to residents in exchange for a bailout, which means gas prices were set to rise 50 percent on May 1 even before Putin’s latest salvo.
Ukrainian Prime Minister Arseniy Yatsenyuk added to European fears of a disruption in gas supplies when he accused Ukraine’s national energy company Naftogaz of mismanagement.
“Naftogaz has 7.2 billion cubic meters of gas in underground storage while it is supposed to be 20 billion. It wasn’t me who stole that gas,” he said.
Energy Minister Yuri Prodan said earlier this week that Ukraine has not been pumping in new gas from Russia, which means it has been relying on stored supplies it previously bought.
In other news Thursday, Ukraine’s acting president, Oleksandr Turchynov, said pro-Russian activists occupying government buildings in the eastern cities of Donetsk and Luhansk will not be prosecuted if they lay down their arms.
Protest leaders defied the request to leave.
Tensions were still high in Donetsk, where about 1,000 protesters stood outside the occupied building chanting “Russia! Russia!” Activists also reinforced the barricades, piling up rubber tires or building brick walls out of cobblestones. They have demanded a referendum on broader autonomy or even secession from the new Kiev authorities.
Meanwhile, in northwest Romania, some 450 U.S. and Romanian troops and technical workers kicked off a week of joint military exercises, flying U.S. F-16 fighter jets alongside Romanian ones. Romania, Russia and Ukraine all border the Black Sea.