Ukraine needlessly pokes Russia
As in 2006, many in Europe are again shivering through a dispute between Russia and Ukraine over natural-gas prices. But if only money were at stake, this row would be easily resolved, and gas would be flowing freely to the 18 countries downstream from the pipeline disruption.
Europe receives about 25 percent of its gas from Russia, and most of it travels via Ukraine. Kiev and Moscow will talk again this weekend, but they'll have to put aside deep political resentments if they are to reach an agreement.
The gas interruption has gone on for two weeks, but the underlying tensions stretch back further: to Russia's invasion of neighbor Georgia in August, to Ukraine's NATO aspirations, and to its "Orange Revolution" in 2004 that set it on a westward democratic course away from Russia.
The crisis tests Russia's role as a reliable energy supplier and responsible world player. Last week, the Monitor's View suggested that if Russia held up a mirror, it would see that its own policies exacerbate its economic and energy woes.
If Russia hadn't spent a gusher on renationalizing its energy sector, for instance, monolith Gazprom wouldn't be so desperate to raise cash and gas prices. If the hefty bear weren't so belligerent toward its neighbors, Ukraine might not now have its own hackles up.
Yet it's also time for self-reflection on Ukraine's part. It, too, has acted unwisely.
When contract negotiations with Russia broke down at the end of the year, Ukraine had spurned Russia's offer of $250 per thousand cubic meters of gas. Too high, Ukraine said, compared with $179.50 in 2008.
Yet Ukraine knows very well that Russia has been trying to gradually bring Kiev's discount rate in line with market prices. Russia's offer was still well below what Europe pays (about $500, including transit fees). Kiev should have taken it, or something close. Now Russia is seething, and demands $450.
Meanwhile, Ukraine says it has enough gas reserves to last until spring. But the longer it holds out, the more it also angers the European Union, which threatens to sue. This does not help Ukraine's EU aspirations.
It's said in Kiev that the country has only one foreign-policy challenge: Russia. Indeed, Russia has many levers to manipulate this former prized Soviet state.
Energy is one, but so are trade and Russian investments. Moscow also exerts influence through a large ethnic Russian minority – and its Black Sea Fleet, which holds a lease on the port of Sevastopol on Ukraine's Crimean Peninsula.
Last fall, it was widely speculated that after Georgia, Russia would next target Crimea. Moscow's mayor says Crimea – gifted to Ukraine in 1954 – should be returned.
Russian Prime Minister Vladimir Putin says he respects Ukraine's borders, but Kiev is also needlessly provoking tension in Crimea. The majority population speaks Russian, yet Kiev has banned Russian-language cable TV and movies and ordered the medical school to teach in Ukrainian.
Kiev is following a get-tough policy with Moscow, when the country's proximity and makeup call for a more balanced approach. Georgia saw what happened when it provoked Russia. Ukraine can learn from that experience.
