November 18, 2009 8:14 pm

Gas fears to dominate Russia-Ukraine talks

Ukraine's Yulia Tymoshenko with President Viktor Yushchenko©Getty

Power shift: Ukraine’s Yulia Tymoshenko, pictured with President Viktor Yushchenko, would welcome a boost for her presidential ambitions

The fate of eastern Europe was once decided in the Crimean resort town of Yalta. When Vladimir Putin, Russia’s prime minister, and his Ukrainian counterpart, Yulia Tymoshenko, meet there on Thursday the region will be watching closely.

Relations between Russia and its former vassal are at a post-cold war low. And, as Europe heads into winter unsure of whether Ukraine will be able to pay for natural gas supplies from Russia, the goodwill of its larger neighbour could be critical.

Experts fear that strained relations between the two could lead to a repeat of January’s gas crisis, which left tens of thousands of east Europeans without heat and power.

The European Union and Russia have put in place an early warning system of notification in case of energy supply stoppages, signed this week, just to be on the safe side following last winter’s crisis, which also knocked out supplies to several European cities.

The Ukrainian presidential election in January, which incumbent Viktor Yushchenko is all but sure to lose, adds a further element of chance into the unstable mix. The results of the election are sure to please Russia, which would prefer almost anyone to Mr Yushchenko, and improve relations between the two countries.

But some fear that the election could spark a crisis – Mr Yushchenko, who is unabashedly pro-western, may think his chances will be better if he campaigns against Russia rather than his rivals, Ms Tymoshenko and Viktor Yanukovich, currently running second and first in the polls, respectively. That could result in confrontation with Moscow on the eve of the vote.

“The likelihood of a crisis is very high, as it serves Yushchenko’s interests,” says Modest Kolerov, formerly the Kremlin’s point man on Ukraine.

Others take the view that a gas crisis would do more to further Russia’s interests in Ukraine. “Were an energy crisis to break out, it is likely to be triggered by Russia to provoke an election-time crisis,” says Adrian Karatnycky, senior fellow at the Atlantic

Natural gas and the elections are but two elements of a bigger picture of competition in eastern Europe. “There is a big geopolitical game with a lot at stake for Ukraine and Europe’s energy security,” said Oleksandr Todiychuk of the Kiev International Energy Club.

“This game will ultimately determine where the line delineating Russia’s sphere of influence will be drawn. Will it be at our eastern or western borders? This remains to be seen.”

Following a Ukrainian bid to deepen relations with Nato in 2008 and its support for Georgia in a short war with Russia, Moscow all but froze relations with Kiev. The Kremlin considers Ukraine to be part of a Russian-dominated “zone of privileged interests” while Kiev has sought to build bridges to the west to get out from under Russia’s shadow.

Gas will be the main cause of friction between the two countries – and any conflict could have effects across Europe, as happened last January. Experts say that, with its International Monetary Fund loan programme on hold, Ukraine may find January’s gas bill difficult to pay.

But Ukrainian officials say the state gas company has built up a record 27bn cubic metres of gas in underground storage facilities, which they say is more than enough to satisfy domestic demand and ensure stable supplies to Europe even in winter.

But energy is not the only problem Kiev has with Moscow. “There are plenty of flashpoints to choose from,” says Mr Kolerov, naming, for example, ethnic issues between Russians and Tatars in Crimea, or the status of Russia’s Black Sea Fleet.

Beyond wanting Mr Yushchenko out of the Mariyinsky Palace, Russia has no preferred candidate, Mr Kolerov says. “Any Ukrainian president is going to be in an unstable position. That is just the nature of the country.”

Mr Kolerov also notes that Mr Yanukovich, whose constituency is the Russified east of the country, has been sounding off against Russia for the past two weeks in an effort to widen his appeal to voters in the west of the country.

Ms Tymoshenko, meanwhile, could use a boost from Thursday’s meeting with Mr Putin to shore up her standing.

Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from and redistribute by email or post to the web.


Sign up for email briefings to stay up to date on topics you are interested in