Wednesday, January 7, 2009

What Great Friends!

Sometimes friends give you more problems than enemies. This is something Europe has discovered as gas shortages spread across Europe as the Russian and Ukrainian gas crisis escalated from a financial dispute to an international crisis.

For those of you who have no idea what the dispute is about, here’s the lowdown. Russia supply gas to Ukraine and then use the Ukrainian gas pipelines to supply gas to Europe as well.

However the global financial crisis has affected Ukraine very badly and they are unable to pay Russia for the gas supplied to them in November and December last year. Not only that, they also admit that their financial situation is now so bad that they will be unable to pay for any new gas that Russia supply also, failing to reach agreement with Moscow over debts and gas prices. Quite naturally, Russia is refusing to supply more gas unless Ukraine pays up what they own.

Seems like a simple dispute about money to me, but then when Russia reduced volumes to Ukraine on New Year's Day, gas supplies from Russia to Europe dropped suddenly. Russia accused the Ukrainians of diverting the gas bounded for Europe to their own country. Basically, they accused the Ukrainians of stealing the gas.

An accusation Ukraine isn’t exactly denying. Playing hardball, Ukraine's pro-West President Viktor Yushchenko all but dared Moscow to close gas taps to Ukraine. With Europe heavily dependant on Russian energy, 17 European countries reported sharp falls in Russian gas shipments, the European Union is now pressuring both sides to come to a compromise and demand that the flow of gas be restored.

So the EU is now asking Russia to supply gas to Ukraine that Ukraine cannot pay for, while they let the Ukrainians go without any word on Ukraine stealing gas bound for them! If this is the way the EU treat their friends, I strongly suggest that the Singapore government increase contacts with the EU.

If we are their friends, Singapore can get away with murder as well.


Gar said...

Yet another very interesting perspective! I just read in the news yesterday about this "gas crisis". Of course, the news here in America is blaming it squarely on Russia. They claim that Putin is trying to start another "cold war". I'm still on the look out for a news organization that can tell all sides to a story rather than spinning it for a political agenda.
Thanks for the other side of the story!

Ghost said...

Sorry but we don't get American news here in Singapore, outside maybe CNN. How are they blaming Putin? I mean even the EU admits Russia should be paid, surely they don't think Russia will supply gas for free?

Gar said...

From "Associated Press":
Putin orders halt in gas supplies to Ukraine

2 hours ago

MOSCOW (AP) — Prime Minister Vladimir Putin has ordered Gazprom to stop all shipments of natural gas to Europe through Ukraine.

Russian gas is already not getting through the pipelines that cross Ukraine. Gazprom has blamed Ukraine, saying Russia has delivered the gas but Ukraine has shut down the pipelines and is stealing gas intended for Europe.

Ukraine insists that Russia stopped supplying the gas on Wednesday morning.

Putin told Gazprom CEO Alexei Miller to go ahead and stop deliveries. He said this should be done "publicly and in the presence of international observers."

Sixteen countries have stopped receiving Russian gas or have seen a sharp drop in supplies.

Europe depends on Russia for a quarter of its gas, 80 percent of which goes through Ukraine.

If you can, go here.

It's Fox News giving full blame to Putin.

Ghost said...

That's really kind of funny. It's almost as if they are demanding free gas for Ukraine.