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On Monday, Russia and Ukraine both signed an agreement with the European Union which allows for the resumption of natural gas supplies to Europe. The agreement allows international monitors to be stationed at key pipeline checkpoints in Russia and Ukraine to verify that all gas intended for Europe gets through Ukraine.

This agreement only allows for the transit of Russian gas to European consumers. It does not resolve the existing price dispute between Ukraine and Russia.

An article in yesterday’s Huffington Post poses an interesting theory about the problem between the two countries. The argument goes back to Ukraine getting gas allocations from Soviet planners and expected the same after independence. When independent Ukraine failed to pay Russia for its gas, the supply was shut down, but Kyiv simply diverted gas intended for the rest of Europe.

The article continues by noting that the dispute is more an issue of economics for both countries than Russia wielding a heavy fist. Further, Russia is facing a budget deficit due to falling gas prices while Ukraine’s economic crisis makes it difficult to pay for its gas deliveries.
Kozloduy NPP 1-4As Russia and Ukraine continue their bitter natural gas dispute, several countries now report a complete shutoff of their gas supplies from Moscow. The countries are:

  • Bulgaria
  • Croatia
  • Greece
  • Macedonia
  • Romania
  • Turkey
Partial supply decreases have also been reported by Austria (90%), Slovakia (70%), the Czech Republic (75%) and Hungary.

Bulgaria has sufficient reserves for several days, but President Georgi Parvanov said his country should begin immediate preparations to re-start Unit 3 at the Kozloduy Nuclear Power Plant. It would take approximately one month to re-open the reactor.

Kozloduy-3 was shutdown in December 2006 as part of an agreement with the European Union (EU), which was concerned about inadequate safety levels. However, Bulgaria’s EU accession treaty apparently allows closed reactors to be temporarily re-started in the event of an acute energy shortage.

Varna and Dobrich in eastern Bulgaria have been left without natural gas supplies. In Varna, on the Black Sea coast, 12,000 households were left without central heating amid freezing temperatures.

Russia’s Gazprom is certain it can provide enough gas to Europe, but is attempting to find routes other than through Ukraine, which has been accused of siphoning gas from the pipelines. The Ukrainian government denies the allegations. Russia supplies Europe with approximately 25% of its natural gas, 80% of which is shipped through Ukraine.

Photo: Kozloduy NPP Units 1-4

On December 30, 2008 Russian President Dmitry Medvedev signed into law a constitutional amendment extending presidential terms from four to six years.

This law has increased speculation that Prime Minister Vladimir Putin will return as President after the next election. As President, Putin said he would prefer a longer term, but felt it was unethical to change the constitution while in office. Medvedev, perceived by many as Putin’s puppet, proposed the constitutional change six months after taking office.

The bill was rushed through the State Duma, much quicker than most laws. Officials have indicated the extension will not apply to Medvedev’s current term in office, raising further questions about the bill’s quick move through the Duma.

Apparently an anonymous Kremlin advisor has been quoted as saying the reform is intended to return Putin to the presidency as early as 2009. It has been suggested that Medvedev would enact the amendment and several unpopular social reforms. He would then resign and call a pre-term election in 2009. If Putin returns to power for two more terms, he would govern until 2021, allowing him to fulfill the Putin Plan for the social and economic development of Russia.

Russian gas pipelineOnce again, Russia has halted natural gas deliveries to Ukraine. The cutoff began at 10:00 AM January 1, 2009 after talks over a new energy contract between the two countries broke down.

Gazprom, the Russian gas monopoly, followed through on its threats after Ukraine’s leaders united to demand that Russia pay more to ship fuel to Europe through Ukraine. To avoid panic across the European continent and as a sign of goodwill, Gazprom is increasing shipments to other countries to avoid midwinter disruptions.

The dispute is about Russia wanting to charge higher prices for gas next year and collect over $2 billion in Ukrainian gas debts so far this winter. Ukrainian President Viktor Yushchenko and Prime Minister Yulia Tymoshenko, coming together in a rare display of solidarity, called on Russia to resume talks and continue providing fuel to their country at last year’s prices until a new contract is established. They offered to pay $201/1,000 cubic meters of gas, but also demanded that Russia pay at least 15% more for using Ukraine’s pipelines for gas deliveries to other European countries.

Before the talks collapsed, Russia offered a price of $250/1,000 cubic meters of gas, but Gazprom chief executive Alexei Miller has now stated Ukraine would have to pay $418/1,000 cubic meters of gas in 2009. That is more than double what Ukraine paid last year.

If this sounds familiar, Gazprom cut Ukrainian gas supplies in 2006 after a similar dispute, except that time supplies to the rest of Europe were affected.  Also, in March 2008, Gazprom decreased supplies of natural gas to Ukraine until the former Soviet republic paid outstanding debts.

US and the Russia/Georgia Conflict

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This incident has turned into a real mess. Against recommendations from the West, Georgian President Mikheil Saakashvili took military action in South Ossetia, leading to a quick and powerful response from Russia. As usual, the United States immediately got involved and began telling Russia what to do, threatening sanctions and other actions if Moscow did not comply.

This post may ruffle a few feathers, so before I say anything else, I do not believe that Russia was right in making the response they did. At the very least, it was too heavy-handed and seemed to go too far.

My issue however, is with the United States, not Russia. Why does it seem that the US has to get involved in almost every conflict around the world? At times, it seems as if the US government believes they own the planet and can tell other governments how to behave.

The US has to stop being the world’s dominant bully. Sometimes it seems like their behavior is very similar to the old Soviet Union, with the exception that the US is willing to let countries remain independent, where the Soviet Union wanted to incorporate them into a single, larger entity.

In this particular case, you can draw parallels to the current Russia/Georgia conflict and the Gulf War of the 1990s. In the current conflict, Georgia, without provocation, took military steps in South Ossetia. Russia did not like the move and took military action to push Georgia out of South Ossetia and create a buffer zone. In the 1990s, Iraq took military steps into Kuwait. America did not like what happened and took military action to push Iraq out of Kuwait and create a buffer zone.

So, why was it okay for the US to militarily push Iraq out of Kuwait, but it is not okay for Russia to militarily push Georgia out of South Ossetia? The politics of the situations may be different, but the events are basically the same.

There are many other examples of the US doing whatever they want, including the current war in Iraq, where President Bush conveniently changed the reason for US involvement to justify the military action. Russia was not in favor of invading Iraq, but never threatened the US over it. In general, it seems as if the US is constantly asking other countries to do as they say, not as they do.

The US better be careful with Russia. The Russian Federation is not some little child that can be kicked around. Most likely, Russia’s involvement in the current situation was in part an opportunity to show the world that they are, once again, a force to be reckoned with.

This is not a game. In today’s global economy, the US has no idea how knee-jerk actions taken against Russia could come right back and cause major economic problems at home. Things just aren’t as simple as they used to be.

If a peaceful, global society is ever going to occur, the US needs to stop telling other countries what to do. It is time for the American government to accept the fact that not every country and government is going to conform to their view of the world. Maybe, if the Americans stopped butting in all the time and started accepting cultural and political differences, they would be less hated around the world.

Edit: I guess I am not the only one that feels this way.  Check out this opinion piece on, "Putin's war enablers: Bush and Cheney."  The author, Juan Cole, puts it more in a more detailed and elegant way.

Putin Continues to Lead Russia


Vladimir PutinRussian Prime Minister Vladimir Putin is meeting today with French President, Nicolas Sarkozy to discuss European Union (EU) trade negotiations. In the past, G8 leaders only dealt with Russia at the presidential level. This seems to acknowledge that Putin remains the focus of power in Russia, not President Dmitry Medvedev.

Under Russia's Constitution, the President is responsible for setting foreign and domestic policy, while the Prime Minister is in charge of implementing presidential policies. Putin seems to have shifted the balance of power, taking the lead in setting the country's policy agenda. Putin appointees continue to dominate senior government positions, including the presidential staff. Only two of Medvedev's close allies hold senior positions - Konstantin Chuichenko is an aide and Alexander Konovalov is Justice Minister.

Putin has increased his policy-making authority by consulting with an inner circle of ministers instead of holding weekly Cabinet sessions. This group, called the presidium, includes the ministers of defense and interior and foreign affairs. Under the Constitution, these ministers are supposed to report directly to the President.

Since taking office, Medvedev's role has mostly been reiterating existing policy. It seems clear that Putin is still in control of the country. As President, Medvedev may not be acting as Putin's "puppet," but he has yet to exert any influence on Russian policy either. To be fair, Medvedev has only been in power for three weeks and is still getting acclimated to his new office. It will be interesting to see how Medvedev works with the government in the coming months. Will he begin setting policy on his own, or will he simply allow his mentor to continue with the status quo?

Dmitry Medvedev Sworn in as Russian President


Today, Dmitry Medvedev officially became the President of Russia. Medvedev took the oath of office in the Kremlin’s Andreyevsky Hall and vowed to promote freedom and the rule of law. Medvedev also promised to combat corruption and enhance civil and economic liberties.

Following the inauguration, Medvedev accepted the government’s resignation and nominated Vladimir Putin for the office of Prime Minister. The nomination is expected to be approved by Parliament tomorrow.

Here is a 6 minute section of Medvedev’s acceptance speech:

As his last presidential act, Vladimir Putin also spoke at the ceremony, saying that he kept his promise to safeguard  Russia’s interests, and called for support for the new President and the continuation of his policies.

“It is extremely important that we continue the course that has been taken and has justified itself, while prioritizing the interests of citizens ... Over the past eight years we have accomplished a breakthrough that enables us today to map out tasks and plans, not for the next month, but for 20-30 years ahead. We have set ambitious goals and I am absolutely confident that we can achieve them.”

Here is a 5 minute portion of Putin’s speech:

Yevgeny AdamovFormer Russian Atomic Energy Minister Yevgeny Adamov was released from prison today, two months after being sentenced to five and a half years in jail for abuse of office and defrauding the Russian Government of $31 million in US aid money. Some of this aid money was intended for upgrades to Russian RBMK nuclear reactors, the same style as those at Chernobyl.

At the request of US prosecutors, Adamov was arrested in Switzerland in 2005. When authorities attempted to have Adamov extradited to the US, Russia filed their own extradition request, claiming that Adamov would be tortured to reveal nuclear secrets if sent to the US. After six months of deliberations, the Swiss courts sent Adamov to Moscow.

Adamov, who served as Russia's Atomic Energy Minister from 1998 - 2001, was found guilty in February and sentenced to serve his sentence in a Russian penal colony. Two of Adamov's partners, Vyacheslav Pismenny (former head of the Troitsky Institute of Innovation and Thermonuclear Research) and Revmir Frayshut (former director of Russian uranium enrichment giant Tekhsnabeksport) were also found guilty, but given four year suspended sentences due to their advanced age and poor health.

Adamov's attorney immediately filed an appeal, requesting his client receive the same circumstances as his co-defendents. After considering the motion, Moscow's Zamoskovorestky District Court, the same court involved in the original trial, granted Adamov a four-year suspended sentence with probation.

Believe it or not, Adamov defended himself by saying he kept the US government aid in several personal accounts to save it from falling victim to Russia's turbulent economy. Granted, there were a lot of shady things going on in Russia at that time (besides this scheme), but I can't believe this guy was a government minister and actually believed that excuse would allow him to be found innocent. Once again, you just can't make this stuff up!

Putin: "Ukraine is not even a Nation"


Vladimir PutinIn the eyes of Russian President Vladimir Putin, Ukraine is not an independent nation.

Apparently, during a private meeting with US President George W. Bush at the recent NATO summit in Bucharest, Putin said, “Don’t you understand, George - Ukraine is not even a nation! What is Ukraine? Part of her territory is Eastern Europe, and part, a considerable part, was given by us!”

The summit agenda included the consideration of Ukraine and Georgia's applications to be included in the NATO Membership Action Plan (MAP), the initial stage required to joining the alliance. The applications were blocked, at least temporarily, by Germany and France.

Putin, who feels that NATO's expansion toward Russia is a threat to his country, made it clear that if Ukraine and Georgia are included in the MAP, Russia will acknowledge the independence of Georgian regions Abkhazia and Southern Ossetia. These two autonomous Georgian republics both passed referendums in 2006 declaring their independence, but their sovereignty has yet to be recognized by any country. Putin's recognition of these republics as independent nations would create a buffer zone between NATO forces and the current Russian border with Georgia.

The real surprise was Putin's bold assertion that if Ukraine and Georgia were included in the MAP, Russia may initiate a process to incorporate the Russian-speaking regions of eastern Ukraine and Crimea into its own territory, possibly by force. Yes, that's right ... Russia would claim a large amount of Ukraine as their own! This is hilarious - inclusion in the MAP does not even guarantee NATO membership.

After hearing this statement, Ukrainian Prime Minister Yulia Tymoshenko responded by saying, "If this was really said, it indicates the utmost irritation with the fact that Ukraine began to defend its own national interests, defend its independence, and build its own strategy.” Huh? Believe it or not, Tymoshenko also noted this response was her own personal view, and not an official statement. First of all, the statement was nothing earth-shattering. Actually, it was a whole lot of nothing and a pointedly weak response. Second, I hate to break it to her, but as a high-ranking government official, anything she says in public will be considered an official statement.

So, to recap, the outgoing President of Russia has decided that his country will deny sovereignty to a fellow former Soviet republic and neighbor, possibly by force, if NATO formally considers Ukraine's application for membership, and Ukrainian Prime Minister Tymoshenko makes a weak public response, but declares it to not be official. You just can't make this stuff up - it truly writes itself!

Gazprom Cuts Gas Supplies to Ukraine


Russia Gas PipelineRussian gas giant Gazprom cut supplies of natural gas to Ukraine on Monday, despite Prime Minister Yulia Tymoshenko’s assurances that would not happen. An initial cut of 25% was followed by a second 10% reduction later in the day.

Gazprom followed through on its threat to cut off Ukrainian gas supplies after Naftogaz Ukrainy failed to pay $600 million for 1.9 billion cubic meters of gas already received this year. Naftogaz has also rejected proposals from the Russian gas giant to re-negotiate the gas trade between the two countries.

Tymoshenko wants to restructure the control of the Ukrainian gas market and remove the middlemen from the gas trade with Russia. Ukrainian President Viktor Yushchenko urged Tymoshenko to avoid a “gas war” with Russia and reach a deal with Gazprom this week.

If this situation sounds familiar, Gazprom completely cut gas supplies to Ukraine at the beginning of 2006 due to a similar dispute. An unintentional side effect of the 2006 cut off was a major reduction in gas supplies to other European countries. According to Gazprom, European supplies are not under serious threat this time.

The partial gas cutoff came hours after Gazprom chairman Dmitry Medvedev won Russia’s Presidential election.