Thursday, December 29, 2005

A play for the Crimea?

Review of Ukraine base lease 'fatal'--Russia

Ukrainian President Viktor Yushchenko, who is resisting Russia's demand for a nearly five-fold increase in gas prices in 2006, has hinted Ukraine could hit back by reconsidering the terms of leasing the Sevastopol base in the Crimean peninsula.

"The agreement on the Black Sea fleet base is one part of a bilateral treaty, the second part of which contains recognition of mutual borders," Sergei Ivanov said in televised comments. "Trying to revise the treaty would be fatal."

The 1997 pact gave new legal status to the historical home base of the Black Sea fleet, which Russia inherited from the Soviet Union, and ruled out Moscow's territorial claims to Ukraine.
One wonders what the Kremlin means by all this. Does it mean that Russia will make a play for the Crimea? Are they going to invade? When we were there, close down by where the Russian fleet lies at acnhor we came upon a new monument celebrating the "Russian city" Sevastopol's 300th anniversary. And the Russian flag flies not only over the fleet but also over the train station there. (When we asked someone on the train we were with, who said he was Ukrainian through and through even though he lived in the Crimea and spoke Russian predominantly, why the flag flew over the train station, he was perplexed by it. I don't think he had taken note of it before.)

Maybe they could take the Crimea back. Maybe the people in Crimea would welcome them back. (The Tartars might not feel all that comfortable doing it, one would think.) I guess that would solve the Tuzla problem once and for all.

But this is just irresponsible on the part of the Kremlin, if they want to take their place in the world. I guess though they want their place to be on their own terms. And those terms sound an awful lot like empire.

Tymoshenko pointed at the Russians as the culprits every time something went wrong. She was wrong on all counts and is one other reason why she is unfit to govern. Ukraine needs good relations with Russia and Russia shouldn't be blamed for everything to stir up the people.

But Russia does deserve blame here. One commenter here says that Russia shouldn't subsidize a country that kicks them at every turn. This is a breathtaking charge. For one thing, it suggests that Russia is not as big a power as it asserts itself to be that it cannot ignore a country that is smaller than it is, poorer than it is, with not much in terms of any military that could challenge it.

But the problem really is that it's got the morality skewed badly. A guy has someone pinned down, beating him, gets a face full of spit for his troubles. "Can I really give a guy like that a break who would spit in my face?" His friends shake their heads. You can hear this talk from inmates quite a bit. "Well, if he hadn't gotten in my way, he'd be alive today." Or, "It was the way he looked at me. If he hadn't looked at me like that he'd be alive today." Or, better, from the rapist: "She had it coming to her." They have their points don't they? In an amoral world, yes.

I can't see that Russia comes out of this better off. Maybe Europe will bury its head in the sand and ignore it as long as the gas keeps coming. But that can't be true for all of Europe. For the newer states, this just confirms what they feel already about Russia. And maybe they would be as bothersome as a couple of ticks on a steers hide for all they could do in Europe. And thsi would not be the case for all Europeans. Some are advocating moving away from Russian dependence right now. Would that be good for Russia?

1 comment:

LEvko said...

Dear Scott - The Ukraine-Russia gas crisis is part of a trial of strength in the wake of Kremlin's humiliation during and after last year's Orange Revolution - "The Empire Striking Back?"

Putin's Kremlin has rather overplayed its hand so early in this poker game - Western European countries are already getting anxious about their gas supplies.

A piece in today's 'FT' on the gas crisis states:
"The Austrian government on Wednesday attempted to calm fears of gas shortages across Europe as Ukraine's fuel and energy minister arrived in Moscow for emergency talks aimed at finding a solution to a row over prices that could see Russia cut exports. Martin Bartenstein, economics minister, said ensuring energy supplies would be a priority of Austria's presidency of the European Union from January 1. "Europe needs more investment and greater diversification of its energy sources," he said.

Suez, the Franco-Belgian energy group, said the dispute was an "alarm bell" for Europe's politicians over the risk of becoming too dependent on Russian gas imports. Gerard Mestrallet, Suez chief executive, said: "Geographical concentration of supply at a time when our dependence is growing does not set the stage for prices to ebb from the high levels they have reached in recent months."

Echoing these sentiments, the German Embassador in Ukraine, in an interview in today's Ukraininan 'Delo' newspaper [http://www.delo.ua/ru/news/2598.html?PHPSESSID=160de54f24628e12d50b0121370249fb] is clearly sympathetic to Ukraine's plight, considers Gazprom's attitude unreasonable, its ultimatums unacceptable, and suggests gas price increases should be staged. Worryingly for Russia, he says, "..Russia and Ukraine are our partners, and if they mess us about, we will look for energy sources in other places."

Putin and his Kremlin associates, for it is they who are pulling the strings, by uncompromisingly threatening to terminate gas supplies to Ukraine and recklessly increasing the price of gas from $160 to $230 per Mcm, have nailed their colours to the mast and left little 'wiggle room' in any further negotiations. Any lower figure when a deal is finally done will look like defeat and more loss of face for Putin when dealing in Ukrainian matters.

Apparently if no deal is reached by 1st January, in a propaganda stunt straight from the Khruschev era, some Russian TV channels will transmit live pictures of the theatrical turning off of valves on pipelines supposedly transporting gas to Ukraine.

As in any dispute where goods or services are provided by long-term suppliers to consumers, 'status quo ante' conditions normally apply until agreement is achieved, and then back-dated financial adjustments and repayments made. I suspect that EU Embassadors are beginning to lean on the Kremlin telling them to bear this in mind, and get things sorted.

European consumers, transit countries, and supplier countries whether they like it or not are mutually interdependent and are bound together is this dispute. In my opinion the Ukrainian authorities are doing OK in trying to get as good a deal for themselves as possible, I hope they don't get too cocky. Yushchenko's comments to the press tend to be bland, and [deliberately?] obfuscating, so maybe they won't.

On the internal politics front in the run-up to the VR elections, statements from Yanukovych have been somewhat contradictory. Although he considers $230 per Mcm unacceptable and " a blow below the belt," he blames the current government for this crisis. How it is affecting voters' preferences I'm not sure. It's all most interesting..