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EU tells Ukraine not to challenge gas deal

Published 27 January 2009
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European Commission President José Manuel Barroso will today (27 January) put pressure on Ukrainian President Viktor Yushchenko not to challenge the recent gas deal, which allowed supplies of Russian gas to Europe to resume after a twenty-day crisis.

Securing the Russian-Ukraine gas deal is the main reason behind Yushchenko's visit to Brussels, according to Ukraine's Deputy Prime Minister Hrihoriy Nemyria, speaking in Brussels on Monday (26 January) after being questioned by EurActiv as to the political background of his visit. 

Fears that the ruling Ukrainian coalition might unravel the agreement rose after reports suggested that Yushchenko had announced his intention to re-write the deal, signed on 17 January between Prime Minister Yulia Timoshenko and her Russian counterpart Vladimir Putin. The information had been leaked by Oleksander Shlapak, an economic aide to Yushchenko. 

Robert Fico, prime minister of Slovakia, one of the countries worst hit by the crisis, reportedly described the attempts by Yushchenko as "completely crazy". 

Speaking on Monday at a public debate organised in Brussels by the German Marshall Fund of the US, Nemyria seemingly launched an attack on the official who leaked the information. "Usually we say that a civil servant has to be colourless, tasteless and odourless. Well, this civil servant is colourless and tasteless, but as for the smell, I think he is quite smelly," Nemyria said. 

Next problem: Belarus? 

The deputy prime minister hinted that new problems might arise. Belarus has not yet signed a new gas agreement with Russia, which Nemyria described as "not normal". 

From Brussels, Yushchenko will fly to the Polish city of Wroclaw, where he will meet Polish President Lech Kaczynski and Czech Prime Minister Mirek Topolánek, whose country holds the rotating EU presidency. The 76% drop in gas supplies to Poland, after reductions in imports via Ukraine and Belarus, appears to be a major issue on the agenda. 

Poland has been importing increasing amounts of gas through Belarus to partially compensate for the complete halt of deliveries through Ukraine during the gas crisis. 

Russia policy 'anti-European' 

Pierre Noel, senior policy fellow at the European Council of Foreign relations and author of a recent policy paper entitled 'How to deal with Russian gas', said at the conference that Russia has EU policy ambitions, which he personally believes is "an anti-EU policy". 

Russian ambassador to the EU Vladimir Chizhov, who also took part in the debate, strongly rejected the accusations. 

"I believe that the Sarkozy regime has a better view of EU-Russia relations," Chizhov said. 

"We don't have a Sarkozy regime. We have a French Republic," Noel answered, amid applause from the audience. 

Positions: 

In his policy paper, Pierre Noel, a research associate at the Electricity Policy Research Group  of the University of Cambridge, made recommendations for what the EU should do to decrease the ability of Russia to conduct "divide-and rule" policies vis-à-vis the Union. 

"The proposed powers of the new Agency for the Cooperation of Energy Regulators (ACER) should be increased," Noel writes, adding: "Without the creation of effective pan-European regulatory oversight, it is unlikely that the third gas directive will succeed where the second failed. What is needed is a powerful regulatory coordinator with a clear political mandate to deliver market integration. […] A true, powerful and independent European energy regulator should be the long-term goal. Furthermore, the new Strategic Energy Review should be the occasion to launch a political debate on pan-European regulatory oversight of energy markets." 

Without directly referring to the 'Gazprom clause', Noel also writes: "Allowing Gazprom to acquire European transmission or storage assets carries the risk of reinforcing barriers to market integration. Therefore the authorities in charge of the European market should screen all proposed takeover projects. Typically this would be a task for a European energy regulatory agency, or for national energy regulators as co-ordinated and controlled by ACER. The European competition authorities should also be involved." 

Background: 

Formerly allies from the 2004 'Orange Revolution', Ukrainian President Viktor Yushchenko and his Prime Minister Yulia Timoshenko are now engaged in a deep political feud. 

The recent gas crisis began after Yushchenko vetoed a gas deal that Timoshenko had struck with her Russian counterpart Vladimir Putin. Specialists consider the latest agreement, dated 17 January, to be worse for Ukraine in economic terms than the previous one. 

According to Bloomberg, the present agreement will increase Ukraine's spending on gas by almost 7%, to $9.16 billion, at a time when the country stares into an economic-political "abyss". Observers believe that Russia will use all its leverage in Ukraine against Yuschenko, whom the Kremlin wants to punish for his pro-NATO agenda. 

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