Friday, September 26, 2014

Will EU call Gazprom's bluff?

A trilateral meeting on gas issues between Ukraine, the EU and Russia is due to take place on Friday September. 26.

The German "Handelsblatt" newspaper reports that Russian Energy Minister Alexander Novak has threatened to stop the supply of gas to Europe if some consumer countries re-export gas to Ukraine in its hour of need.

Both Russia and the EU are well aware, both as gas supplier and gas consumers, they are absolutely, irrevocably linked. As Owen Matthews in 'Newsweek' explains: "An all-out gas war between Europe and Russia would be the economic equivalent..... “of the old MAD thinking”—MAD being the Cold War acronym for the mutually assured destruction that would follow a nuclear strike. "

So when are individual European countries going to smarten up their act and finally call Russia's bluff?

EU gas utility companies can stop taking back-handers from Gazprom and take control of purchase of Russian gas in a co-ordinated and synchronised manner in order to obtain the best possible single price, most importantly, at the Russian-Ukrainian border. They can sort out further transportation and storage down the line amongst themselves.

It can be done, if the political will exists. Europeans have to sort this out ASAP otherwise they will continue to be blackmailed  by the Kremlin.

Meanwhile Ukrainians, in extremis, will not allow their children and grandparents to freeze in their apartments and houses whilst vast quantities of gas flow through their country.

Could turn out to be quite a battle of wills...

No comments: