|
|
| By Meg Clothier and Nick
Antonovics January 2, 2006
MOSCOW/BERLIN (Reuters) - Germany warned Russia on Monday that its unilateral decision to cut off gas supplies to Ukraine could harm Moscow's economic relations with the West. Gas supplies through Ukrainian pipelines to Europe started to fall off dramatically, at the height of winter, as a result of the Russian blockade, which has aroused Western fears about insecurity in the energy sector. Russia, which takes over the G8 chairmanship for the first time this month and has sought to promote itself as a reliable energy source, cut its neighbor's gas supplies on Sunday after Ukraine rejected Moscow's demand for a fourfold price rise. Ukraine accused Russia of blackmail on Monday, saying Moscow wanted to destabilize its economy. Moscow accused it of stealing supplies that were destined for Europe -- which Ukraine in turn denied. Russia said it had had no choice but to turn off the taps after Ukraine refused to sign a new contract that would have ended the preferential price treatment of the Soviet era. German Economy Minister Michael Glos, whose country is Russia's biggest gas customer, said Moscow must act responsibly. "Thirty percent of our gas comes from Russia at the moment. That should be increased," Glos told the German radio station WDR. "But it can only be increased if we know that deliveries from the east are dependable." "Russia has the G8 presidency and also here (in this dispute) one should naturally act responsibly," Glos said. Washington also stepped in. "Such an abrupt step creates insecurity in the energy sector in the region and raises serious questions about the use of energy to exert political pressure," State Department spokesman Sean McCormack said in a statement on Sunday. Pipelines taking Russian gas to Europe cross Ukraine, and the cut in supplies to Ukraine quickly affected central Europe. Austria, Hungary, Poland, Romania, Croatia and Slovakia all reported a sharp fall in deliveries. Ordinary European consumers are unlikely to be affected in the short term, but any cut-off to industrial users could cause significant economic damage. The Kremlin says the dispute is a commercial matter. But Kiev sees it as an attempt to undermine its pro-Western government, with a parliamentary election due in three months. There was no indication from either side on Monday that talks were going on, or of when they might resume. FREEZING WEATHERWestern Europe, where demand is near peak levels because of freezing weather, imports 25 percent of its gas from Russia, most of it via pipelines running across Ukraine. Norway, Western Europe's biggest natural gas exporter, said it was producing at full capacity and would not be able to make up the shortfall. The Russian state monopoly, Gazprom, said enough gas was still being piped via Ukraine to supply other countries, and if they were not getting their gas, Ukraine must be diverting it. Gazprom said Ukraine had "stolen" gas destined for Europe worth more than $25 million. Ukraine denied this but said it would take gas if temperatures fell below freezing. "A scenario aimed at creating economic pressure and blackmail has started," the Foreign Ministry in Kiev said. Ukrainian President Viktor Yushchenko said he wanted international experts to help with negotiations, calling for a moratorium on prices rises while talks go ahead. "We think moving to market principles in the gas sector could secure a resolution to the conflict about gas supplies and transit," he said during a meeting with European ambassadors. German, Italian, French and Austrian energy ministers have made a joint appeal to Moscow and Kiev to keep gas flows steady and an emergency European Union meeting is due on Wednesday. The Western-leaning Yushchenko is trying to take his state into the EU and NATO. This annoys Moscow, which does not like any loss of influence over the former Soviet Union. Ukrainian officials say that is why the Kremlin is punishing Ukraine with a huge price increase while giving Moscow-friendly ex-Soviet states such as Belarus a much easier ride. Yushchenko, struggling to live up his people's high hopes after the "Orange Revolution" a year ago, says Ukraine is prepared to pay more for its gas but will not agree to a big jump all at once. Moscow wants to raise the price to $230 per 1,000 cubic metres from the current $50. Ukraine had threatened to retaliate by raising the rent that Russia's navy pays to use the Ukrainian port of Sevastopol as headquarters for its Black Sea fleet. (Additional reporting by Olena Horodetska in Kiev, Jo Winterbottom in Milan and Boris Groendahl in Vienna) |
|
|