Ukraine Prime Minister: ‘We are against South Stream’


This article is part of our special report EU-Ukraine Relations.

With Ukraine as a reliable partner, Russia doesn't need the South Stream gas pipeline and can pump any amount of gas in "whatever direction" it wishes, Mykola Azarov, prime minister of Ukraine, said yesterday (13 October) in a joint interview with EURACTIV, Bloomberg and Reuters.

Mykola Azarov has been Ukraine’s prime minister since 11 March 2010. He is also leader of the Party of the Regions, the political platform of Ukrainian President Viktor Yanukovich which is seeking associated status with Socialist International. He gave this interview in Russian.

He was speaking to EURACTIV’s Georgi Gotev, Ewa Krukowska of Bloomberg and Pete Harrison of Reuters.

To read a shortened version of this interview, please click here

Mr. Prime Minister, welcome to Brussels and to the European Parliament. What is the political agenda of Ukraine vis-à-vis the European Union, what are the next steps on this agenda, when do you expect to sign an association agreement with the EU, how important are Ukraines's relations with the EU and do you see the European Parliament as your future home?

Ukraine has clearly identified the European integration path for itself. We don't want to give ourselves any time schedules, primarily because those depend on the process of internal transformation of Ukraine, of Ukraine becoming more Europeanised.

The most important thing for us is to do ourselves the work necessary to bring Ukraine closer to European standards. We view this as a process. Step by step, we will get closer to the way of life of the EU and European standards.

But this doesn't mean that we currently fail to possess sectors which are up to EU standards. Let's take the cultural field, for instance. Ukraine possesses a great European culture. But if we take other sectors, for instance business, or the level of life, then indeed it is obvious that we have a lot of work to do. That's why in the political domain we task ourselves with realistic objectives.

Does the Association Agreement bring us closer to the EU? Yes it does, therefore we work to be able to sign this agreement. When at some point we feel in a position to apply for EU membership, we shall do that.

For us, the Association Agreement, which includes a series of important elements, such as a free trade area and a visa-free regime, is of primary importance on our agenda.

A question on your country's relations with Russia. You are meeting Russian Prime Minister Vladimir Putin on 27 October. What issues are you going to discuss, and in particular, are you going to discuss gas price cuts?

We are not talking of price cuts. We are talking of normal prices on the basis of market mechanisms. We are talking about bilateral relations, and we are talking about the unfair agreement signed by the former government, which should be revised.

Russia doesn't want to revise it. Why? Because it's profitable for them. Why do we want to revise it? Because we believe this is an ill-profitable agreement for us. How much time should an agreement live for, if one party sees it as profitable and the other as highly unprofitable? Something needs to be done with this agreement. Quite obviously, it is not viable.

I would like to stress again that we are not talking about any kind of discount, of any kind of privileged quotas for Ukraine. We are talking about mutually beneficial contracts that need to be signed.

Moving closer to Europe creates two big challenges. Firstly, the EU has called for Ukrainian gas company Naftogaz to be unbundled. Is it possible for Ukraine to do, and when? Also, what is more important for Ukraine: the free trade agreement with Europe, or a customs union with Russia?

You said "moving closer to Europe". But we are in Europe geographically, just look at the map. Ukraine is the largest European country in territory and the fifth in terms of population. Not to notice Ukraine on Europe's map is just impossible. Or else, one would have to have zero political outsight.

Now, talking about Naftogaz as a structure: we have adopted a law on the natural gas market, and this is, by the way, one of the necessary steps towards EU integration. This law foresees the independent existence of structures responsible for gas extraction, gas transportation and gas delivery. The law was drafted by our government, adopted by our parliament and signed by our president. This means that this law will be implemented.

On your second question: one should never oppose or see as contradictory the work done by Ukraine for achieving a free trade agreement [with the EU] withthe work by Ukraine leading to facilitating the access for its exports eastwards, in Belarus, Kazakhstan, Russia.

Once again, by looking at the map, you will find the answer. To the East, we have a big neighbour, Russia, to the West – the European Union. The answer is quite obvious: we are interested in having the most favourable regime both from the EU and from Russia. And we shall never oppose our relations with Russia against our relations with the EU.

What is your country's position with regard to the Gazprom-sponsored pipeline project South Stream [which is designed to bypass Ukraine]?

Our position is negative. We tell Russia that Ukraine is a reliable transit country for Russian gas in whatever direction you wish. We have traditional pipeline routes [like] Pomary-Urengoy-Uzhgorod. We are ready to upgrade our southern capacity and access the same city of Burgas in Bulgaria, which South Stream has as its objective via an offshore pipeline under the Black Sea.

We ask Russia: how much gas do you want to be pumped through to Europe? Tell us the volumes: one hundred billion [cubic metres]? Two hundred billion? We are ready to pump and transit those. Just give us guarantees for ten-twenty years ahead, and we will shall invest in southern pipeline modernisation, and we shall pump whatever volume you see fit into Europe.

The policy of previous governments – which confronted Russia for over five years – led to Russia wanting to diversify its supply routes to Europe. And definitely, after the gas crisis of January 2009, works on the North Stream pipeline were very much accelerated. Most probably, in the nearest future, North Stream will be working at full capacity. But construction of South Stream is yet to begin. We are ready to extend guarantees to Russia for years ahead that Ukraine is a reliable transit country for them, for any volume of gas. Therefore, it is a problem of confidence.

Will you discuss this with Prime Minister Vladimir Putin in two weeks time?

We have already been discussing this with him. We have submitted our proposals. Today [13 October] I have a meeting with [EU] Energy Commissioner [Guenther] Oettinger, and we will submit to him our official proposal as well. We actually believe that we can reassure our Russian partners of the absolute reliability of our proposal. But then, what decision Russia will take: we will have to see.

Returning to your country's gas imports from Russia, aside from the question of the price, did you also discuss the volumes?

As for the price, as I explained, we are not asking for a low price, but for a civilised way to determine the price. We hope to achieve a mutually beneficial agreement. We cannot live with a one-sided agreement which gives all rights to Gazprom and no rights to Naftogaz.

I need to say that we have restored with Russia very good bilateral relations. And those are not only based on gas. I can give several examples. We have signed a long-term agreement for the supply of nuclear fuel to our nuclear centres. We will build a joint uranium-enrichment plant. We plan to establish a joint aircraft-building consortium. In a nutshell, a lot of common Ukraine-Russian projects are underway and we attach great importance to developing our relations with Russia. But this doesn't mean at all that we will continue to agree to this highly unprofitable gas agreement.

And the faster we renegotiate it, the better the perspective for cooperation in other sectors will be.

Do I read you correctly: if there is no new agreement on gas, then there will be no cooperation on aircraft, space or other areas?

No, you read me incorrectly. In our relationship there is no room for diktat from any of the sides, or from ultimatums. We depend on each other. And we are in a mode to seek compromises. By the way, in our relations with the EU not everything looks smooth either. But we are not making a tragedy out of it. We have failed to sign a free trade agreement until the end of this year. But we will sign it in the first half of next year. We are calm and confident negotiators. And we have the same stance with Russia and with the EU. Sooner or later, we will reach agreement.

Do you think that your country is a victim of bad press in the West?

It is difficult for me to judge, as I do not read everything that's been published or broadcast. But from next year, Euronews will broadcast in Ukrainian. This is an important step towards European integration. We hope that the citizens of the EU, including journalists, will receive more objective information about Ukraine.

I'm not making a tragedy from the fact that from time to time tendentious articles appear, obviously commissioned by our political opponents. Currently, they try to spread the message that press freedom is under threat.

The former prime minister [Yulia Tymoshenko] complained on national television that she appeared in very rare cases on television. It happened that in the next days I could watch the national channel, and I saw her on TV every day. And on Friday, another central channel will have a special programme with her. While in my capacity of prime minister, this month I have never appeared live. So the question is: who is actually limited in access to the media?

The majority of TV channels, if not all, are privately owned. They fight for their audience ratings, they fight for their share of the advertisement market, and they have the following logic: if someone's statement would constitute a scandal and boost the audience, let's have him on air. The statements of the current prime minister don't constitute scandals and will not boost their ratings.

Speaking to our Ukrainian journalists, I ask them only one thing: please, do not re-formulate my words, please use quotations. I don't want my words embellished or distorted.

Days ago, all the Ukrainian newspapers quoted me as saying that the free trade agreement [with the EU] will be signed on 22 November. I never said that. I said I would like the agreement to be signed, but the agreement is not ready. So much about the freedom of press.

Subscribe to our newsletters