New Year, New Crisis
Civitas, 12 January 2009
2008 went out with a proverbial bang as the Russo-Ukrainian dispute threatened to, and eventually did, plunge Europe into an energy crisis, writes Lara Natale. As the bells chimed midnight ringing in the New Year, the price Kiev should pay for gas in 2009 still hadn’t been agreed, thus gas supplies have been disrupted. An inauspicious start to the New Year and the Czech EU Presidency…
Russia has been accused by critics of using its energy resources as a political weapon in a damaging power game to pressure European and former Soviet countries to adopt favourable stances towards Moscow. Russian President Vladimir Putin rebutted by blaming the dispute on a “clan war” between Prime Minister Yulia Tymoshenko and President Viktor Yushchenko. Both Russia and Ukraine insisted that the flow of gas through Ukraine to the rest of Europe would be unaffected by the breakdown in negotiations but this has turned out to be patently untrue, with the worst affected countries even forced to declare a state of emergency (Slovakia, Bulgaria, Bosnia and Serbia). By 7th January as many as 10 countries had reported a complete halt to their Russian gas supplies, not only affecting end users at home but also grinding industrial production to an enforced halt, and shutting down schools, hospitals and so forth.
The European Union has called the supply cut “completely unacceptable” and demands restoration and resolution between Kiev and Moscow, effective immediately. Of course, problems of this kind are nothing new and history is repeating itself after the similar 2006 emergency, in which Gazprom (the largest extractor of natural gas in the world and the largest Russian company) shut down the pipeline from the Ukraine in 2006, causing a reduction in flow to the rest of Europe by as much as 40%.
In the aftermath of the previous crisis, Gazprom had already embarked on plans for pipelines Nord Stream and South Stream that bypass Ukraine and Belarus, former Soviet states currently unavoidable in transit routes and signing up in their place big European partners from Italy, Germany and Holland.
Nonetheless, the EU has major apprehensions regarding security of supply and now has its own pipeline planned: Nabucco will bring gas from Central Asia and the Caspian across Turkey into the European Union. Its capacity, however, would meet a mere 5% maximum of Europe’s needs. Basically, Gazprom is indispensable to Europe, hence European companies and governments actively endorsing its two projects for new pipelines. Austria is likely to serve as a hub for both. EU officials say that even during the Cold War the Russian gas supply was stable, so it seems more sensible to rely on Gazprom than potentially unstable sources such as Turkmenistan and Uzbekistan. A Prague summit on Nabucco is due at some point during the Czech EU presidency.
The situation is still far from resolved and is developing hour to hour: in a German television interview Russian Prime Minister Vladimir Putin claims Europe now has “to give out a clear and comprehensible signal […] to Ukraine so that (Kiev) behaves in a normal and civilised way”. Furthermore, Slovakia announced over the weekend it will restart a nuclear reactor which was shut down recently in accordance with its EU accession treaty. “We are aware that this is a violation of the accession agreement, but this is happening at a time of crisis,” said Slovakian Prime Minister Robert Fico, quoted by Reuters.
The Slovak government’s decision has riled Austria, whose environment minister urged the European Commission to take action. Moreover, it may intensify tension in a meeting of EU energy ministers today (12th January), where short-term help for member states hit by the Russian gas cut-off will be agreed and longer-term strategies discussed to avoid more repeat scenarios. After all, the problems of 2006 are too much in the recent past to have been forgotten and “never two without three”* is a quintessential European saying that could prove disastrous if measures aren’t swiftly taken to prevent it playing out.
*Old French proverb “jamais deux sans trois”; also Italian “Mai due senza tre” and translated/commonly used in most other European languages.