Ukraine still blames Russia for gas cuts to EU

Ukrainian president Viktor Yushchenko has repeated that the three-week breakdown in gas supplies to Europe at the beginning of this year was not Ukraine’s fault, and has laid the blame on Russia.

He was in Brussels to meet with commission president José Manuel Barroso, who said he was “determined this will not become an annual event”.

Yushchenko told journalists at the commission, “Ukraine did nothing to stop gas supplies to Europe. Any blame against Ukraine regarding unsettled gas payments is unacceptable.

“The crisis was not a transit problem but a problem with supply, which resulted in inadequate steps towards Europe.”

The dispute centred on discounted prices that both companies were paying for transit and supply, and an allegation by Gazprom that Naftogaz owed it in excess of 615m US dollars before 1 January this year. Russia had previously shut off supplies in the winter of 2006 in a row over unpaid bills.

Last week in Moscow the heads of Russia’s state company Gazprom and its Ukrainian counterpart Naftogaz signed a 10-year agreement to resume the supply of gas through Ukrainian pipelines.

Under the agreement, both sides will have to pay European prices from 2010. For the moment, Ukraine will pay 20 per cent less than the European market price and Gazprom will maintain its discount for transporting gas through Ukrainian pipelines until December.

However, Ukraine remains unhappy with the agreement, Yushchenko said today – which is in no small part due to the fact that it was signed in Moscow by Ukrainian prime minister Yulia Tymoshenko. Relations between Kiev’s two leaders have been slowly unravelling since they were elected on a joint ticket in the 2004 ‘Orange Revolution’.

The situation highlights the need to diversify Europe’s energy supplies or at least secure transit, and to that end, Barroso and Yushchenko agreed to look at including Ukraine in the community electricity network and the energy community treaty.

This year Kiev hopes to sign an ‘association’ treaty with Brussels, which is to include a comprehensive free trade area. Talks on a visa-free regime are also ongoing.

However, while Barroso was careful to state that there was no breakdown of EU-Ukraine relations, he did admit that the country – and Russia – had lost credibility in Europe’s eyes after the supply cuts.

“There is an objective fact,” said Barroso. “The gas from Russia that should have come to Europe through Ukraine did not come.

“So there was a problem of credibility of Russia and Ukraine as suppliers of gas to the EU.”

Barroso is to visit Kiev in the coming months, and the commission is organising a conference in March to look at the European gas transit network.

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