Nice Exceptions

Sometimes I find articles that recover my trust in the freedom of press in Europe. In case with the Russian-Ukrainian gas conflict 99% of Western mainstream media were printing articles using blueprint: “Russia is imperialistic because it enslaves its neighbors with cheap gas. Russia is imperialistic because it enslaves its neighbors with market prices.” But from time to time one find out that there are some dissidents even in the UK. Here’s a articles published in The Times “Europe has left it too late to wrest back control from Russia over gas” By Carl Mortished.

It is brutal, but it is business. Gazprom’s imposition of an enforced new year energy slim on Ukraine brought a loud squeak from Kiev, followed by the sound of spanner on metal as Ukrainians tapped the Russian firm’s gas export lines to Europe.

If you think the Russians cruel for cutting off their neighbour, try the Ukrainian option when the gas bill next drops on your doormat (the price we pay in Britain, too, is about to soar). Tell the gas company that the price is unreasonable, refuse to pay and see what happens.

I can predict a flurry of indignant correspondence, the offer by the gas company of a brief period of relief and interim credit. Shortly thereafter, expect the arrival of a man in a little van to turn off your tap.

All this happened in Ukraine, except, unlike you, Ukrainians were enjoying very cheap gas, less than a quarter the price charged to most Europeans, a subsidy worth several billion dollars a year. Ukraine’s Orange Revolution (a declaration of independence from Moscow that never mentioned the word “gas”) released Gazprom from the political obligation to support financially a former Soviet comrade. So it behaved like any dominant supplier of a vital commodity in huge demand — it jacked up the price, in this case fourfold.
Europeans ought to know that the gas price is a thorny problem. It was the European Union and the United States that held up negotiations over Russia’s accession to the World Trade Organisation, arguing that Russian industry was enjoying an unfair energy subsidy from cheap gas. Eventually, the Kremlin agreed that Gazprom would raise gradually its domestic fuel price from $27 per 1,000 cubic metres in 2004 to a still cheap $60 by 2010. It would be difficult for Washington and Brussels to argue, then, that Ukrainians should be treated with kid gloves. Do we really want cheap Ukrainian steel, subsidised by underpriced Russian gas, dumped on our markets?

Russophobes in Washington and elsewhere may find it difficult to accept, but this is business, albeit of a Godfatherish variety. It may be true that President Putin egged on the gas merchants, savouring the discomfort of the naive President Yuschenko, who a year ago thumbed his nose at the Kremlin. Amusing, perhaps, for Mr Putin to present gas bills to Ukrainians as they shuffle to the polling booth next March. But Gazprom has its eyes on something bigger than Ukraine.

It is all about pipes. The Russian company wants control of its export routes, hence its insistence that payment for gas transit fees across Ukraine would no longer be made in gas but in cash at market rates. Initial talks about bringing the transit lines into a German- Russian-Ukrainian consortium are off the table, Ukraine having realised that it would lose its last bargaining chip.

Good job, Carl! You are among the few who can see the problem with eyes not harnessed.