Ukraine leaders split under Russian pressure - Yulia Timoshenko accused of committing

Ukraine leaders split under Russian pressure - Yulia Timoshenko accused of committing "high treason"
telegraph.co.uk ^ | 18 Aug 2008 | telegraph.co.uk

The feud between the onetime allies over Ukraine's strategic outlook raised fears that Kiev is vulnerable to political chaos should Moscow hatch a campaign to destablise a second pro-Western neighbour having humilated Georgia.

Key aides to Mr Yushchenko, who has incurred Russia's wrath by taking measures to retaliate against Moscow's aggression in Georgia, said Miss Timoshenko was plotting to use a deepening crisis with Moscow to take over as president.

"The actions of the current prime minister show signs of high treason and political corruption," said Andriy Kyslynskyi, the president's deputy chief of staff. "We said last week that Timoshenko systematically works in the interests of the Russian side. Unfortunately, this information is being confirmed."

Mr Kyslynskyi hinted that Mr Yushchenko would seek a secret service investigation of the alleged acts of national betrayal committed by Miss Timoshenko. A spokesman for Miss Timoshenko refused to comment on the allegations.

Although the presidential official provided no evidence to back up the assetion that crimes had been exposed, the remarks took a developing confrontation between the two liberal reformers to a new level.

"Russia's leaders are seriously considering supporting Prime Minister Yulia Timoshenko in the presidential campaign once she fulfils the condition of adopting a passive position in the conflict with Georgia," the spokesman said.

"The public has a right to know how far politicians will go beyond the boundary where political battles end and the betrayal of national interests begins."

Mr Yushchenko has made membership of Nato a prime goal of his presidency but Ms Timoshenko puts more emphasis on the country joining the European Union.

(Excerpt) Read more at telegraph.co.uk ...

Ukraine comes to the forefront

Sep 11th 2008
From The Economist print edition
An already fragile Ukraine has been made a lot more nervous by Russia’s war with Georgia—and it is not alone


EPAhttp://mail.google.com/mail/?ui=2&ik...c5244ab264b274
THE first priority for Europe after Russia’s short August war with Georgia was to secure a ceasefire and a genuine pullback of Russian forces (see article). The second was to start fretting about Russia’s other neighbours. And the most significant of these by far is Ukraine.
Ukraine could not have ignored the war even if it had wanted to. Sebastopol, on the Crimean peninsula, is home to Russia’s Black Sea fleet, some of whose warships dropped anchor off the Georgian coast during and after the fighting. Evidence of Ukraine’s proximity to the conflict is also on show at Moscow’s military museum, where visitors can gawp at war booty: Georgian T-72 battle tanks that were modernised in Ukraine. This, say the Russians, shows Kiev’s support for what it sees as a “criminal regime”. Indeed, Viktor Yushchenko, Ukraine’s president (pictured above) flew to Tbilisi to support his counterpart and friend, Mikheil Saakashvili.
Add to this the fact that Russian nationalists believe Crimea, which has a large ethnic Russian population, should be returned to Russia (there are rumours of new Russian passports being handed out, just as happened in South Ossetia and Abkhazia). Throw in, too, the fact that Ukraine, like Georgia, has for years been trying to secure a place in both the European Union and NATO. The inevitability of Ukraine catching a post-war cold becomes clear.
Ukraine’s always anarchic politics have been directly shaken up by the war. The usually pro-Western government led by Yulia Tymoshenko, the prime minister, is unravelling. The first cracks emerged when Ms Tymoshenko blocked a parliamentary motion to condemn Russia’s aggression. She also resisted Mr Yushchenko’s attempts to impose restrictions on the Black Sea fleet, accusing him of populism ahead of a presidential election in 2010 that both will contest. But it was her decision to join, temporarily, with the pro-Russian Party of the Regions, led by Viktor Yanukovich, so as to push through legislation diluting presidential authority, that incensed Mr Yushchenko, who promptly pulled his own Our Ukraine party out of its coalition with the Tymoshenko block.
Mr Yushchenko claimed that Ms Tymoshenko had formed a de facto rival coalition with Mr Yanukovich’s party. Ms Tymoshenko urged him to reconsider and “save” a political partnership that burst on to the world stage in the Kiev snow in the 2004 “orange revolution”. Both went on television to put their case, evidence (said some) that their relations had become so sour that they could no longer bear to sit down and talk to one another.
Even by Ukrainian standards, the recriminations have got out of hand. Mr Yushchenko accused Ms Tymoshenko of “high treason”, suggesting she was a Kremlin agent out to win Moscow’s support (and financial backing) for her presidential bid. Even as she begged his party to rejoin the coalition, she poured scorn on him, poking fun at his abysmal popularity ratings. (One poll gave him 5%, against 22.5% for her.) Yet Ms Tymoshenko is no Russian stooge. She says her muted response to the Georgian war is motivated by a desire to guarantee Ukraine’s territorial integrity—without inflaming relations with Russia.
Ukraine faces three political options: a fresh parliamentary election, a face-saving truce between Mr Yushchenko and Ms Tymoshenko or a new coalition between Ms Tymoshenko and Mr Yanukovich. America’s vice-president, Dick Cheney, made his preference abundantly clear on his recent whistle-stop tour of Baku, Tbilisi, Kiev and Rome by calling for orange unity. He said that Ukraine should be “united domestically first and foremost, and united with other democracies.” He reiterated that the Bush administration backed Ukraine’s NATO aspirations, angering Mr Yanukovich, who pointed out that a majority of Ukrainians are against joining.
At a European Union-Ukraine summit in Paris on September 9th, the EU too had little beside warm words of support to offer. The “maximum” it could do, said France’s Nicolas Sarkozy, was to offer to sign a vague “association agreement” next year. But unlike similar-sounding agreements for the Balkan countries, this one would not carry any implication of eventual membership. Countries such as Belgium, the Netherlands and Germany are unwilling at this stage even to hint at candidate status for Ukraine.
The Russians have been publicly silent about Ukraine in recent weeks, knowing that they hold some strong cards, besides having just defeated Georgia. Ukraine is almost entirely dependent on Russia for its oil and gas, for uranium enrichment, and as a market in which it can sell its own goods. It may agonise about its east-west choice, but in reality it will have to maintain reasonable relations with Moscow as well as the rest of Europe.
The Georgian war is reverberating among Russia’s other western neighbours. The Baltics, already in both the EU and NATO, are still wary. Belarus, Europe’s “last dictatorship”, is trying to use the war to thaw its frosty relationship with the West. Resisting Russian pressure to recognise South Ossetia and Abkhazia immediately, Belarus’s president, Alyaksandr Lukashenka, said he would let a new parliament decide the matter, after an election at the end of September. It is not, he hinted, a foregone conclusion; he even added that it would be wrong to “run with the crowd” (what crowd?) and recognise the two regions simply because Russia had done so.
Mr Lukashenka’s diplomatic tiptoeing came as the EU publicly voiced a desire to reward Belarus for releasing three political prisoners in August, a move that led to a slight easing of Western sanctions on the country. Mr Lukashenka seems also to have ruled out the possibility of hosting Russian nuclear missiles on his soil as part of the Kremlin’s response to America’s planned missile defences in Poland and the Czech Republic. Yet he still rejoiced, in an interview with a Russian daily, Izvestia, that Moscow had got one over Washington. “The Americans got kicked in the teeth for the first time in years,” he said. “That means something, you know!”
Tiny Moldova is also anxious. Like Georgia, it has a breakaway enclave, Transdniestria, that is “protected” by Russian troops. Although Moldova has no aspirations to join NATO, it is keen to get into the EU. Its president, Vladimir Voronin, met his Russian counterpart, Dmitry Medvedev, in late August. Mr Medvedev said there was a “good chance” of settling the dispute. But after the August war, the Moldovans fear, rightly, that this might be done only on Russian terms.

Ukraine's government falls apart

http://mail.google.com/mail/?ui=2&ik...c6ca572537c15a Relations have soured between the 2004 Orange Revolution allies

Ukraine's ruling pro-Western coalition has officially collapsed, the speaker of the Ukrainian parliament says.

President Viktor Yushchenko has been involved in a long-running dispute with Prime Minister Yulia Tymoshenko.

The president's Our Ukraine bloc left the coalition earlier this month.

Parliament now has 30 days to try to form a new ruling coalition.

If those efforts fail, Mr Yushchenko can dissolve parliament and call a snap election.

The Our Ukraine party pulled out of the coalition on 3 September after the Tymoshenko Bloc sided with the pro-Moscow opposition Party of Regions to pass several laws that Mr Yushchenko saw as a threat to his presidential powers.

"I officially declare the coalition of democratic forces... in Ukraine's parliament dissolved," parliament speaker Arseny Yatsenyuk announced on Tuesday.

"This has been long expected, but for me it is extremely sad," he told the chamber.

"I would not call this a political apocalypse, though it is true that it is another challenge of democracy. I hope we can overcome it."

Presidential vote
Mr Yushchenko and Ms Tymoshenko led the 2004 Orange Revolution, which overturned the fraudulent presidential election victory of a pro-Moscow candidate, Viktor Yanukovych. But since then the two former allies have become bitter rivals, vying for power ahead of the 2010 presidential election.

Ms Tymoshenko leads the second largest group in the 450-seat assembly, after Mr Yanukovych's Party of the Regions.

Ukraine's Vice Prime Minister Hrihoriy Nemyria, a member of Ms Tymoshenko's bloc, denied the party was trying to form a coalition with Mr Yanukovych's party.

"Our priority is to re-establish the Orange coalition... The worst case scenario would be an early election in the mid winter," he told the BBC's HARDtalk programme.

Ms Tymoshenko dismissed the breakdown as "a storm in a teacup".
"Let me assure you that the government is going to work for a long time and successfully too, regardless of these storms," she said.

Opposition leader Mr Yanukovych said any new coalition should include his Party of the Regions.

"Any configuration leaving out the country's biggest political forces is doomed to fail," he said.

The HARDtalk interview with Hrihoriy Nemyria will be broadcast on Wednesday 17th September 2008 at the following times on BBC World News at 0330, 0830, 1430, 2030 and 2330 GMT and on the News Channel at 0430 and 2330

Yushchenko says will dissolve parliament if no coalition formed
1 hour ago

KIEV (AFP) — Ukraine's President Viktor Yushchenko warned Friday that he would dissolve parliament if a new governing coalition was not formed or the old one was not revived shortly.

"Negotiations are ongoing and I would like them to bear their fruits shortly. If not, I will use my constitutional right to dissolve the parliament," he said in a statement.

The coalition government collapsed in September after Yushchenko's party pulled out in protest at Prime Minister Yulia Tymoshenko's decision to support a bid by the pro-Russian opposition to reduce the president's powers.

Talks on re-establishing the coalition have made little headway since, raising the prospect of new elections, which Tymoshenko warned would likely be won by pro-Russian parties.

Under Ukraine's constitution, the president can dissolve parliament if a new government is not formed within 30 days of the previous one collapsing.

But there is confusion over Yushchenko's deadline to do this because the pro-West leader pulled his party from the ruling coalition on September 3, while parliament officially announced its collapse on September 16.

The president's office has not specified which deadline it favours, but Yushchenko's spokeswoman Irina Vannikova said Friday he is planning to meet his Our Ukraine party members to help form a new coalition.

On Wednesday Tymoshenko said she would accept any conditions to salvage the previous ruling alliance amid fears the Moscow-backed opposition would seize control of parliament.

Yushchenko and Tymoshenko have had a love-hate relationship since 2004, when they joined forces in the so-called Orange Revolution to overturn the rigged election of pro-Russian candidate Viktor Yanukovych as president.

Fresh parliamentary elections would be the third in two years for Ukraine and could jeopardise the country's bid to join NATO and the European Union.

http://afp.google.com/article/ALeqM5...RQRX4cjh_DHVMw

Putin warns Ukraine of 'severe consequences' in gas standoff

MOSCOW (AFP) - Russian Prime Minister Vladimir Putin on Wednesday warned Ukraine of ""severe consequences"" if Kiev disrupted the transit of Russian gas to European customers.

""If our partners say that they are not intending to fulfill the conditions of a contract signed previously then that means that they are intending to annul it,"" Putin told President Dmitry Medvedev in televised remarks.

""And this will be a completely different story with very severe consequences for the transit country, in my opinion. Not only in its relations with Russia, as the exporter, but also with consumers in EU countries.""

Putin's uncompromising warning came after Russian energy giant Gazprom said Ukraine's state gas firm Naftogaz had threatened to divert gas supplies transitting Ukraine for delivery to Europe.

Russia turns off Ukraine’s gas

Tension high between two countries

By Tom Lasseter
McClatchy Newspapers
Friday, January 02, 2009

Moscow —- Russia’s state-run gas monopoly halted natural gas delivery for Ukraine on Thursday, delivering a New Year’s blow that further heightened tensions between Russia and the former Soviet republic.

The dispute could affect not only Ukraine, but much of Europe. About a quarter of Europe’s gas is supplied by Russia, and most of it —- an estimated 80 percent —- goes through Ukraine. The gas flow to big customers like France, Germany and Italy hasn’t been affected, and Russian Prime Minister Vladimir Putin has threatened “serious consequences” for any disruption.

During a similar dispute in 2006, when gas to Ukraine was cut for three days, several European countries experienced shortages.

A similar scenario this year could be especially bad for both Ukraine and Russia, given the financial crunch of low oil prices and a plummeting stock market in Moscow.

A statement from President George W. Bush’s Texas ranch issued Thursday called for “restoration of normal deliveries” of gas to the Ukraine and “good-faith negotiations without supply cutoffs.”

Ukrainian leadership has come under harsh criticism for its internal bickering —- President Viktor Yushchenko and his prime minister have traded public insults, and their parties broke apart a parliamentary bloc last year. The political turmoil is often cited as a main reason the country has not gained membership to the European Union or NATO, both key initiatives for Yushchenko. A row with Russia that disrupted gas delivery to Europe would almost certainly deepen hesitations about Ukraine in European capitals.

Beyond the details and accusations of this particular spat, there is a deep acrimony between Russia and the Ukraine. Yushchenko’s efforts to gain entry to NATO enraged the Kremlin, which resents western expansion in the former Soviet bloc. Several Ukrainian analysts said last year that they expected the Kremlin to bring the Gazprom negotiations to a halt to make Yushchenko look weak. That would likely hurt his chances in presidential elections scheduled for later this year or early-2010 in which his two main opponents are widely viewed as being closer to Moscow.

Gazprom, the world’s largest natural gas company, said the supply to Ukraine was cut after the country failed to pay its debts —- a point of contention between the two nations and the web of companies used to transit the gas.

Both agree that Ukraine’s national energy company, Naftogaz Ukrainy, transferred $1.5 billion to RosUkrEnergo, a Swiss-based trader used by Gazprom. But there is some question whether those funds have gotten to Gazprom.

Gazprom maintains that Ukraine owes at least an additional $500 million in fines; some reports have put the figure at $600 million.

Yushchenko’s office issued a statement on Tuesday saying that his country had paid all of its debts and, “thus all the obstacles to reaching agreement on gas supplies for 2009 are removed.”

Russia disagreed, and the gas flow for Ukraine was stopped Thursday morning.

Russia flexes its military muscle

A draft document on Russia's security strategy suggests it is geared up for the possibility of conflict over energy resources

Comments (124)

Roger McDermott
Sunday 4 January 2009 10.00 GMT

As Russia once again resorts to aggressive economic tactics in its latest dispute over gas supplies with neighbouring Ukraine, its official state documentation is raising the spectre of future military conflict over energy resources. Russia's security council prepared a draft document on national security strategy until 2020. At a joint security council and state council meeting held in Moscow on 25 December and chaired by Russia's president, Dmitry Medvedev, the document in question was to be discussed, but this was postponed at the last minute, instead concentrating on Russian policy in the Commonwealth of Independent States (CIS).

President Medvedev ordered a new security strategy in June 2008, and its draft form has been discussed among all its regions. The "strategy of national security of the Russian Federation until the year 2020" – written under the direction of Nikolay Patrushev, secretary of the security council, is expected to be adopted at a state council meeting on 20 February 2009.

In early December 2008 Patrushev toured Russia's federal districts promoting the new security strategy. Following a meeting on national security in the far eastern city of Blagoveshchensk he said the proposed draft was pragmatic and practical, and lists specific measures to ensure Russia's national security.

The document itself begins with the claim that Russia has overcome the "consequences of the systemic political and socioeconomic crisis of the late 20th century" and has now restored its capacity to promote its national interest through "multipolar international relations". After predictably designating the United States as Russia's main rival, it then turns to how Russia may maintain its position in the world in future and describes rivalry for controlling global energy resources as a longer term source of conflict.

The regions where such confrontations are expected to sharpen is also defined: "The international policy will focus on the access to the energy sources of the world, including the Middle East, Barents Sea, the Arctic Region, Caspian Sea and Central Asia. The struggle for the hydrocarbon resources can be developed to the military confrontation as well, which can result with violation of balance on the Russia's borders with the allies and increasing of the nuclear countries". It also suggests existing conflicts in Iraq and Afghanistan, Middle East, some of the South Asian and African countries, as well as in Korean peninsula will have a continued negative impact on the international situation over the next 12 years.

Emphasising possible future Nato enlargement, the new strategy promises to resist US plans to develop its missile defence capabilities, which the Russian elite claims are being aimed against Russia, rather than North Korea or Iran. Furthermore, Russia will pursue a "pragmatic foreign policy" which eschews a new arms race, which clearly the country cannot afford in any case.

Despite widespread disagreement among Russian academics and security experts, the document assumes the possibility of future military conflict erupting over energy resources. Its current gas dispute with Ukraine compelled the Russian government to downplay fears within the EU of any possible disruption to energy supplies, has triggered speculation of increased gas prices in the UK and recently disclosed British government documents confirm that during the last Russo-Ukrainian energy dispute in 2006 the UK energy minister Alan Johnson was briefed eight times on threats to energy security emanating from Russia.

Russia's pursuit of the "multipolar world order" will involve support from its allies in the CIS and its partners elsewhere. It pledges deeper participation within the G8, G20, RIC (Russia, India, China) and BRIC (Brazil, Russia, India, China). Although referring positively to its allies within the collective security treaty organisation, there is no doubt that drawing on the lessons of its experience of the Georgia war last August, Russia will rely more on its own devices and especially its armed forces, which are promised financial and other resources "sufficient" for the creation of a new image of the armed forces while retaining its strategic nuclear potential. The strategy also calls for establishing a "highly professional community of Russian secret services" as a means of ensuring the external and internal security of Russia and developing a "national framework of dealing with international terrorism, extremism, nationalism, and ethnic separatism". All this implies that Russia will continue to use its intelligence services at home and abroad to exaggerate Russia's power and its image in the world.

Almost bombastic in its tone, once again portraying an "image" of a resurgent Russia, the new security strategy neglects real risks stemming from falling production and social hardship – these are not risks based on an imaginary enemy attacking Russia for its energy resources. The price of oil has fallen sharply, the world's economy is slowing down and the financial crisis is hitting Russia hard: the country's political leadership must adjust to new harsh economic realities, but instead chooses to flex military "muscle".

Russia gas disruption spreads to Czechs, Turks

Sun Jan 4, 2009 1:29pm EST
By Yuri Kulikov and Tanya Mosolova

KIEV/MOSCOW (Reuters) - Russian gas supplies to the Czech Republic and Turkey dropped on Sunday, the latest victims of a deepening row between Russia and Ukraine over debts and pricing.

Russian natural gas supplies fell by five percent to the Czech Republic as a result of the stand-off, which began when Russia cut off the gas to Ukraine on New Year's day. The two sides blame each other for the dispute.
"It is the first signal of the Russia-Ukraine crisis in the Czech Republic," said a spokesman for gas importer RWE Transgas.

European energy firms, which received about a fifth of their gas via pipelines through Ukraine, said they had enough gas stockpiled to maintain supplies for several days.

But analysts said Europe, where temperatures in many places were below zero, could face problems if the row dragged on beyond that.

European Union ambassadors will hold an emergency meeting in Brussels on Monday, where the Czech presidency of the bloc will brief members about talks it has been holding with officials from Kiev and Moscow.

Turkey reported a small fall in the gas it receives from Russia through a pipeline that passes through Ukraine, joining Poland, Romania, Bulgaria and Hungary which also said their supplies had dropped. Germany and France were unaffected.

Ukraine -- long at odds with the Kremlin over its ambition to join NATO -- accused Moscow of deliberately cutting flows to Europe and said the bloc needed to send a signal to the Kremlin that it cannot bully its pro-Western neighbors.

"If Europe ... does not help us get out of this situation, then it can expect a more aggressive position from Russia on gas and other issues," Oleksander Shlapak, a senior Ukrainian presidential aide, told Reuters.

Russian gas export monopoly Gazprom blamed Ukraine for siphoning off or blocking deliveries of gas equivalent to one sixth of the total Russian supply to Europe, and said it was increasing exports to make up some of the shortfall.

"While we have been trying for four days, regardless of the holidays, to try to find a way out of this crisis, (the Ukrainian negotiators) are staying in Kiev and not continuing talks," said Gazprom spokesman Sergei Kupriyanov.
Igor Yolkin, an official with a Gazprom subsidiary in Bulgaria that distributes gas to the Balkan region, told Reuters supplies to Greece and Macedonia were also reduced. That could not immediately be confirmed with domestic importers.

POSITIONS ENTRENCHED
The gas row, which mirrors a similar dispute three years ago that also disrupted supplies, is likely to raise new questions in Europe about Russia's reliability as a gas supplier.

Russia's ties with the West are still fraught after it waged a war with Georgia last August. Some policymakers see parallels between that conflict and Russia's treatment of Ukraine.

Analysts say whether consumers and industries in Europe suffer problems with their fuel supplies depends on a swift resolution of the dispute.

Gazprom and Ukrainian state energy firm Naftogaz have been in daily contact by telephone, officials said, but with no face-to-face negotiations in sight both sides seemed to be entrenching their positions.

Moscow and Kiev said they would bring cases against each other in an arbitration court in Stockholm that deals with international commercial disputes.

Gazprom chief executive Alexei Miller said that since Ukraine had turned down a previous proposal to pay $418 per 1,000 cubic meters of gas, he was raising the price to $450. That is more than twice the sum Kiev says it is willing to pay.

Political leaders of Russia and Ukraine, most of them on holiday, have been silent on the issue for days.

Ukraine's financial markets re-open on Monday after the New Year holiday, offering the first indications of how badly the gas crisis could hurt its already fragile economy.

Presidential aide Shlapak told Reuters on Sunday the economy was set to contract by between 3 and 5 percent this year, leaving it little room to accept the higher gas prices Russia is demanding.

European Union customers pay about $500 per 1,000 cubic meters of Russian gas, though that price is set to drop in line with crude oil, which tumbled in 2008. Gas prices traditionally follow oil prices with a time lag of about six months.

(Additional reporting by Alexandra Hudson in Ankara, Toni Vorobyova and James Kilner in Moscow, Sabina Zawadzki, Pavel Polityuk and Guy Faulconbridge in Kiev and European bureaux)

(Writing by Christian Lowe; Editing by Jon Boyle)

© Thomson Reuters 2008.

Europe: Feeling the Cold Blast of Another Russo-Ukrainian Dispute

January 6, 2009 | 2134 GMT
http://www.stratfor.com/mmf/129979/two_column
BARBARA SAX/AFP/Getty Images
The flame of a gas stove in a kitchen in Berlin


Summary
The Russo-Ukrainian natural gas price dispute has led Russia to cut off natural gas supplies to Ukraine. The dispute reached a new level Jan. 6, however, when Russia reduced shipments through Ukraine to Europe. As a result, natural gas shortages are being felt throughout the continent, with the sharpest drops and even complete cutoffs seen in some Central European countries. In the near term, the Europeans are responding to the cutoff, urging the Kremlin to get the issue resolved; in the long term, they are working to wean themselves from Russian energy.

Analysis
The Russo-Ukrainian dispute over natural gas supplies hit a new level Jan. 6. Previously, Russia simply reduced natural gas flows to the Ukrainian trunk lines equal to the amount of natural gas that Ukraine used, while continuing to ship the natural gas that transits Ukraine on its way to Europe. But now, Russia is accusing Ukraine of siphoning supplies meant for Europe and is further reducing shipments by the amount it accuses Ukraine of stealing. The results of this reduction are rippling from Turkey to Germany, with the sharpest drop — and even full natural gas cutoffs — concentrated in the triangle of states from Italy to the Czech Republic to Bulgaria.


http://www.stratfor.com/mmf/129987
(click image to enlarge)



Each government is scrambling to respond to the Russian cutoff. Prague, which is the new sitting EU president, has “ordered” the Kremlin to schedule a set of meetings on the issue, but Russia has postponed all talks until after the Russian Orthodox Christmas on Jan. 7. The Bulgarian government has already called this an emergency and ordered industrial users to switch to alternative fuels, such as oil. It has even started to shut down some of the country’s largest gas-hungry industrial plants, like its chemical plant Neochim. Bulgaria has also urged households to use other means for heating rather than central heating that runs on natural gas. Romania and Serbia are considering shutting down some of their industrial centers as well.


http://www.stratfor.com/mmf/129988
(click image to enlarge)



In terms of amounts of supply reduction, the 2009 cutoff is now larger than a similar energy crisis that struck — for similar reasons — in 2006. In fact, some of the Ukrainian lines that lead into Romania have now been shut off completely for safety reasons. (If pressure is too low in pipes, breaches can occur.) The only reason the Europeans are not panicking is that the 2008-2009 winter has been exceptionally mild thus far (though temperatures are expected to soon drop with an arctic front sweeping across the Continent), and the Europeans’ storage facilities at the moment are filled to the brim to cover their needs even without new Russian supplies. But when temperatures drop, those supplies can be emptied pretty quickly.

Just because they are not panicking does not mean the Europeans will simply reach for a heavier coat. Most European governments are already working diligently to secure alternatives to Russian natural gas. Indeed, the pan-European plan is actually ahead of schedule, and the Europeans look set to cut the amount of natural gas they receive from Russia by two-thirds by the end of 2010.

Related Special Topic Page

• Russian Energy and Foreign Policy

However, the geographic concentration of the natural gas shortages seen Jan. 6 will push the Europeans to make some specific changes in terms of energy projects. More than alternative supplies in general, what are needed now are specific supplies for a specific region: Southeastern Europe. To reach this goal, the Europeans have four main options (listed below in the order in which they are likely to be adopted):

The Poseidon pipeline: This is a subsea pipeline with an annual capacity of 8 billion - 10 billion cubic meters (bcm) that will connect Greece to Italy under the Adriatic Sea. Poseidon will connect to the existing line running up from Turkey to Greece. Once active, the line will give Italy the ability to tap natural gas supplies from the Middle East (as opposed to North Africa and continental Europe) as well from as the Caspian Basin. It also will greatly weaken Russia’s grip on the Italian market. Currently, Gazprom maintains an extremely tight link to Italy’s national energy distributor ENI, but the Poseidon project is run by Edison, a relative upstart that is broadly unaffiliated with Gazprom and far more efficient in providing services. Currently, Poseidon is slated to be complete by the end of 2009.

Nuclear: Much of Europe (excluding France) has attempted to shy away from the nuclear power option, with the 10 EU members who joined the bloc in 2004 being forced to negotiate away their nuclear facilities as part of the terms of their accession. (And the countries being hit hardest by the Russian cutoff are some of those EU countries). The Bulgarian government is currently holding emergency meetings to discuss reopening as soon as possible its Kozloduy nuclear plant, which it had to shut down upon joining the European Union in 2007, and the cutoffs have spurred many countries to start planning new nuclear power facilities, which take years to build. In Southeastern Europe, only two nuclear plants are under construction, and both are in Bulgaria. All of these are for electricity generation, so they will not remove the need for all natural gas, but they will certainly lighten the load.

Liquefied natural gas (LNG): LNG is an alternative version of natural gas that can be shipped in once frozen. However, LNG facilities are difficult to build and very costly — though in the long run, tapping LNG is relatively cheap and fast compared to building new pipelines. Currently in Southeastern Europe, only Greece has an LNG facility, but Croatia has long been planning one in Krk that is slated to start construction at the end of 2009 and be up and running by 2014. The Krk facility is set to have an annual capacity of 10 bcm and cost a little over $1 billion.

The Nabucco pipeline: The Russo-Ukrainian crisis may well prove to be the kiss of life for this project, which has not moved beyond the drawing board despite nearly 10 years of firm support from the European Commission. Nabucco’s primary problem has been that it is not clear exactly who would be supplying natural gas to the line. Candidates include Azerbaijan, Turkmenistan, Iran (should it mend its relations with the West), Iraq, Qatar and Egypt. The major change that has occurred in this realm since Stratfor last addressed the topic is that Iraq’s security situation has settled sufficiently for it to finally launch greenfield energy development projects. That raises the possibility of Middle Eastern natural gas, either sourced from Iraq or (more likely) transiting Iraq to Turkey, finding its way to Nabucco. Unfortunately, even in the best-case scenario, the prospect of bringing this gas to the European market remains five years away — because of the minor detail that Nabucco has yet to be built.

The one large obstacle preventing progress on all of these projects is the current global financial crisis, which is hitting Southeastern Europe hard. Countries in the region are struggling to keep their currencies, banks and economies afloat and are relying on aid from institutions like the World Bank and the International Monetary Fund. These large energy projects, though critical to implement, are simply too expensive right now. Some of the projects are Western-funded, but the financial crunch is hitting Western economies too, and there are rumors that many of these projects — specifically the nuclear plants and LNG facilities — could be postponed for years. Thus, the struggle will be Europe’s attempt to expedite these projects while balancing the financial capability to do so — all while Russia continues to use energy as a political tool now, when it hurts Europe the most.

Russia Refuses to Restart Gas Supply, Declares Deal Void

Fox News
Sunday, January 11, 2009

BRUSSELS, Belgium — Teams of EU monitors deployed Sunday at natural gas transit sites along Ukraine's vast pipeline network, but still no gas flowed to a freezing Europe.

Russia refused to restart gas supplies that have been stalled since Wednesday, saying the deal for the monitors was made void by Ukraine, which signed the document but then issued what it called a "declaration" to accompany it.

The European Commission insisted the declaration could not change the agreement, but Russian President Dmitry Medvedev said the document was void unless Ukraine withdrew the declaration.

He denounced the Ukrainian move as a "mockery of a common sense and a violation of previously reached agreements."

Russia has demanded monitors to track the movement of gas across Ukraine before it will restart supplies to other European countries. Russia stopped supplying gas to Ukraine on Jan. 1 amid a price dispute and later stopped supplying countries beyond Ukraine because it claimed Kiev was siphoning off the gas.

Russia's Prime Minister Vladimir Putin told EU Commission President Jose Manuel Barroso in a phone conversation that Russia considers any supplements to the deal unacceptable. He added that the Ukrainian declaration defies the pact and refers to commercial issues that aren't part of it.

Bohdan Sokolovsky, an energy adviser to the Ukrainian president, insisted the declaration was only a statement explaining the Ukrainian position. He accused Moscow of exerting political and economic pressure on Ukraine.

"Russia has turned the gas war into a gas circus where bears have already forgotten that they can be tamed," Sokolovsky told The Associated Press. "The Kremlin is consciously creating conflict."

Even before the gas cutoff, Russia and Ukraine had been at odds over Ukraine's efforts to join NATO and its support for the former Soviet republic of Georgia in its war with Russia in August. Last week, U.S. officials had warned Russia not to use its energy resources as a weapon against Europe.

Russia supplies about one-quarter of the EU's natural gas, 80 percent of it shipped through Ukraine, and the disruption has come as the continent is gripped by subfreezing temperatures in which at least 11 people have frozen to death.

Fallout from the gas cutoff reverberated Sunday, with the Hungarian capital, Budapest, issuing its first-ever smog alert because power plants had switched from natural gas to dirtier fuels. Austria also voiced alarm over neighboring Slovakia's plans to restart an aging Soviet nuclear reactor to get heat for its people.

Sales of electric heaters have soared across eastern Europe and thousands of businesses have been forced to cut production or even shut down.

The European Commission strongly urged Russia to move faster, noting that monitoring teams already had reached gas facilities on Ukraine's eastern border. "There is no reason to further delay gas supplies," it said in a statement.

Russia said it had to halt supplies because Ukraine was stealing gas intended for Europe. Ukraine angrily denied the accusations, saying Russia did not send enough gas to pump supplies west over Ukraine's 23,000 miles (37,800 kilometers) of pipelines.

One EU team reached the Sudzha gas measuring station on the Russian side of the border with Ukraine on Sunday, 250 miles (400 kilometers) east of Kiev.

Another EU team moved to a different unit at Luhansk on Ukraine's southeastern border and three groups of experts were traveling to gas pumping stations on Ukraine's border with EU countries at Orlovka, Uzhgorod and Drozdowichi.

EU monitors will also be in Kiev and Moscow, at the pumping centers for Ukraine's state gas company Naftogaz and Russia's state-run gas monopoly Gazprom.

Ukrainian officials said it would take three days for gas to reach Europe if Russia decides to resume supplies.

Sudzha officials on Sunday were measuring pressure in five huge, silver snow-covered pipes capped by round sensors. The pipes, stretching several hundred yards (meters) to the Ukrainian border, are extensions of underground pipelines that carry gas.

One EU monitor there, Michael Huesken of German energy giant E.ON AG, voiced hope that the mission will "help quickly restore gas deliveries through Ukraine."

Both Russia and Ukraine have been hard hit by the global economic slowdown. Energy is the driving force behind Russia's economy and the government's budget, and the drastic fall in oil prices since summer has decimated Moscow's currency reserves.

Ukraine, meanwhile, faces economic collapse and is desperate to avoid higher gas prices because it is heavily dependent on natural gas.

Last year, Russia charged Ukraine $179.50 per 1,000 cubic meters, about half what it charged its European customers, but both Putin and Medvedev have vowed that Ukraine will pay market rates for gas in 2009.

Naftogaz company chief Oleh Dubyna said the latest round of contract talks ended Saturday without result, with Gazprom demanding a price of $450.

Europe faces frozen weekend as gas crisis continues

Millions of Eastern Europeans face a freezing weekend without heat as Russia has refused to reconnect gas supplies to Europe via Ukraine.

By Bruno Waterfield in Prague
10 Jan 2009

A gauge shows zero gas pressure in the pipelines at an icy border delivery station in Slovakia Photo: REUTERS

European Union officials and diplomats had hoped the energy crisis would finally end if they sent international team of gas inspectors in Ukraine.

The team of monitors, including 20 European industry experts and officials, arrived in Kiev today to be deployed at pipeline pumping stations across Ukraine.

But the gas supplies remained blocked as Russian officials bickered over the precise conditions for the resumption of the critical energy supplies.

Mirek Topolanek, Czech Prime Minister, whose country holds the EU presidency, travelled to Moscow for talks tomorrow with Vladimir Putin, the Russian leader, amid continuing Russia-Ukraine tensions.

"The mission is sensitive. Both sides want to save face," he said. "I'm a bit optimistic, but don't expect me to give any assurance that it will be definitely solved."

EU diplomats have suggested the latest stalemate has exposed Russia's true role in the energy dispute that has hit gas supplies to 18 countries.

"If the monitors are there on the ground and Russia still refuses to turn on the gas, then everyone will be able to see who is responsible for the crisis," a senior EU diplomat told The Daily Telegraph.

The inspectors' mission is to verify that Ukraine is not diverting energy supplies and that Russia is sending sufficient gas for European consumers after bitter claims and counter claims of wrongdoing between Moscow and Kiev.

"All the conditions agreed between the leaders of the EU, Russia and Ukraine are in place for the immediate restart of gas supplies from Russia that are destined for European customers," said a Commission statement.

"The team of EU observers will be able to verify, on an independent basis, the data on the flow of gas deliveries to Ukraine and compare it with the data of gas volumes that will reach customers in the EU."

Even if a breakthrough is found tomorrow, shortages, rationing or heating cuts in sub-zero weather conditions will still be a daily fact of life for many Eastern and Central Europeans.

"It will take at least three days to get the whole system back up and to get first gas back to European consumers," said a European Commission spokesman.

Serbs, traditional allies of Moscow, on burned a Russian flag in the town of Kragujevac during angry protests at heating shortages, affecting up to 170,000 homes, caused by the continuing gas crisis.

In Bulgaria, 64 schools across the country remained closed and at least 30,000 households remained without any heating.

Over 70,000 households in the snow-blanketed Bosnian capital of Sarajevo remained without heating for a fourth day due to the halt in Russian supplies.

EU energy ministers will meet on Monday to discuss "the concrete measures to be taken" to insulate Europe from Russian gas supply disruption.

Pressure is growing for the creation of "a co-ordinated gas stocks programme" which could place critical national energy reserves under EU control.

Russia's New Ukrainian Disinformation Campaign

Publication: Eurasia Daily Monitor Volume: 6 Issue: 176
September 25, 2009 10:36 AM Age: 3 days
Category: Eurasia Daily Monitor, Home Page, Russia, Ukraine, Elite, Foreign Policy

By: Roman Kupchinsky

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Viktor Yushchenko

Disinformation, or the planting of false information to deceive or smear an enemy, is now being regularly used by both government and non-governmental players in Russia and Ukraine in the fierce battles for control of power and assets in these countries. During the January 2009 "gas war" between Ukraine and Russia, the Russian leadership accused Ukraine of preventing Russian gas from reaching customers in the E.U. The charges were shown to be blatantly false, but were repeated by Russian spokesmen in order to discredit Ukraine as a gas transit country, while building up support within Europe for the North Stream and South Stream pipeline projects. In what might have been a possible retaliation for this, Ukraine launched its own stealth campaign, claiming that the Russian consulate in the Crimea was handing out Russian passports to Russians living in the peninsula. Ukraine was never able to prove these charges, but the idea took hold and many Ukrainians seemed convinced that these "passports" were meant to stir up the Crimean population and were a prelude to the forcible separation of Crimea from Ukraine by Russian armed might.

In September a new and apparently more elaborate disinformation campaign began. This time it was between competing Ukrainian political parties, one of which seemed to be aided by the Russian media. The campaign is centered on the poisoning of Viktor Yushchenko in 2004 during the hotly contested presidential election in Ukraine, which Yushchenko eventually won. Members of the pro-Russian Party of the Regions, led by Viktor Yanukovych, have long claimed that the poisoning of Yushchenko was concocted and that the United States played a key role in this "hoax," meant to win sympathy votes for the pro-Western Yushchenko and discredit Russian politicians who openly supported Yanukovych in 2004.

This conspiracy-disinformation attempt did not gain a significant following at first, and was apparently shelved, but with new presidential elections scheduled to take place in Ukraine in January 2010, the old charges surrounding the poisoning were resurrected, and new lurid details were added and set in motion. On September 18 the Ukrainian newspaper Segodnya published a sensational report stating that Larysa Cherednichenko, the former head of the department for supervision over investigations into criminal cases of the Ukrainian prosecutor general's office, claimed that high-ranking officials from the presidential secretariat and family members of Yushchenko had falsified evidence in his poisoning case (www.kyivpost.com, September 19).

"As [Davyd] Zhvaniya [member of the Our Ukraine People's Self-Defense faction of the Ukrainian parliament, who has more than once denied Yushchenko's poisoning] said, the victim had blood samples taken from him in September-October 2004 with help from an Austrian doctor. However, the samples were not studied in Ukraine or another European country. They were secretly taken to the U.S., where they were enriched with dioxin and were later taken to the U.K. with help from the U.S. special services."

The scenario provided by Zhvaniya was elaborated upon in the Russian newspaper Kommersant Daily on September 24. Kommersant quoted a report in its possession that Cherednichenko ordered a forensic test of a conversation recorded between two persons speaking primarily in English interspersed with occasional Ukrainian.

The conversation was about an unnamed American intelligence service whose agents were due to take Yushchenko's blood sample to Austria. Furthermore, the investigation claimed that one of the voices on the recording belonged to Kateryna Yushchenko, the wife of Viktor Yushchenko and the other voice to Roman Zvarych, a former Ukrainian justice minister and close supporter of Yushchenko (Kommersant, September 24).

What the paper failed to mention was how and where this alleged recording was made and by whom?

Both Kateryna and Zvarych were born in the United States and belonged to the same Ukrainian nationalist organization until moving to Ukraine in the 1990's where they eventually obtained Ukrainian citizenship. After Yushchenko's election as president, Kateryna was often accused in the Russian media of being a U.S. CIA agent.

According to a report on the BBC on January 28, 2005, "In 2001, the Russian television presenter Mikhail Leontiev, known for his controversial pro-Kremlin sympathies, accused Kateryna Yushchenko of being a "CIA agent" sent to Ukraine to bring her husband to power. Kateryna Yushchenko subsequently won a libel case in a Ukrainian court against Leontiev and his "Odnako" [However] program."

Austrian doctors responsible for examining Yushchenko several months after the poison was reportedly administered said the Ukrainian politician had ingested a concentrated dose of dioxin. The powerful toxin caused bloating and pockmarks on Yushchenko's face, giving his skin a greenish hue and adding a macabre note to a tumultuous political season culminating in the mass Orange Revolution protests in December 2004.

For unexplained reasons, the current disinformation campaign fails to name who poisoned Yushchenko and why.

Jeff Nyquist and Serge Kabud interview Boris Chikulay, formerly employed by Radio Liberty and an expert on Ukrainian politics.

The penetration by the KGB into their political landscape is startling.

Here is the interview.

Ukraine under KGB Control

Friday, 01 January 2010 05:13
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The following is a downloadable PDF file of an investigative paper compiled by Boris Chykulay on the presence of KGB Agents and high-ranking communist and komsomol member of the former Soviet Union among Ukranian state officials. The file can be downloaded and read using Adobe's Acrobat Reader software:

http://www.strategiccrisis.com/image...pdf_button.pngUkraine Under KGB Control

Kremlin-Friendly Viktor Yanukovych Leading In Ukraine Election

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17 Jan 2010

Viktor Yanukovych, the Kremlin-friendly politician defeated by the pro-Western Orange Revolution five years ago, was on course for a big win in the first round of Ukraine's presidential election on Sunday.

Early exit polls suggested Mr Yanukovych , 59, would claim almost a third of the vote and be anything up to ten percentage points ahead of his nearest rival Yulia Tymoshenko, the current prime minister.

The result underscores the failure of a revolution meant to pull Ukraine out of Russia's orbit and set it on a firmly Western course. Both candidates say they will abandon efforts to join Nato and pledge to repair ties to Russia, the region's dominant power.

It is an unlikely comeback for Mr Yanukovych, who was accused of rigging the same contest five years ago. He confidently promised Ukraine would enter a new phase of development under his leadership "very soon". Viktor Yushchenko, the man who beat him to the presidency in 2005, appeared by contrast to have suffered a dramatic reversal of fortune and was on track to win less than five per cent of the vote. He swept to power in 2005 on a wave of popular euphoria after surviving an apparent poisoning that left his face disfigured.

That euphoria has now turned to disappointment, however, and even some of his supporters say he squandered an opportunity to bring about desperately needed reform. On Mr Yushchenko's watch, Ukraine has fallen into a deep recession, seen its relations with key trading partner Russia sour, and seen promises of EU membership come to nothing.

A promise to deliver European-style living standards has also failed to materialise, leaving millions mired in poverty.

Instead, Ukrainians have been treated to the unedifying spectacle of Mr Yushchenko bickering with his one-time ally Yulia Tymoshenko, plunging the country into one political crisis after another.

Mr Yanukovych's victory sets up a second and final run-off on February 7 with whoever comes second.

Polls suggest that will be Yulia Tymoshenko, the tough-talking prime minister who played a key role in the mass street protests of 2004 that culminated with Mr Yanukovych being stripped of a fraud-tainted election victory.

Sergey Tigipko, a former Central Bank chairman, was also expected to do well, making the battle for second place less predictable. All sides were expected to accuse one another of fraud.

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