Tuesday, January 03, 2006

On again?

The gas is still on and Russia has promised to pump in more supplies to make up for the gas they say has been stolen by Ukraine over the past couple of days. Bloomberg quotes Medvedev, Putin’s crony head of Gasprom, as saying

"By tomorrow evening gas supplies to Europe will be restored in full, in accordance to their contract,'' Gazprom Deputy Chief Executive Alexander Medvedev said at the press conference. "However, the situation in which Ukraine continues to steal gas and we continue to supply European customers can't continue indefinitely.''

Ukraine denies this of course but in this area of the world, both of these positions may be the truth. Gas may be siphoned off and the government not know anything about it—or at least the head of the government. There are other interests here with other power that might be doing this.

But Medvedev continues the stupid statements. By saying it can’t continue suggests that Russia will do what to stop it? Turn off the flow again? Or something “fatal?” If it is European concerns that caused them to turn it on, which it was, is making this kind of noise speaking to European concerns? The answer is a flat no. But it is not commerce that is the issue here, it is Russian prerogatives—that is, Kremlin prerogatives-- in what it considers its own backyard. They are narrowly focused on these and on nothing else—at least until a big European customer puts in a call and reads them the riot act. But even then, after that, they quickly slip back into character and talk stupid. So will they turn it off again? I wouldn’t put it past them.

For those who think it is simply a commercial spat, think again. The Christian Science Monitor:

"We have vast resources and they give us political influence," says Vladimir Zharikhin, deputy director of the state-funded Institute of Commonwealth of Independent States Studies in Moscow. "If we give a lower price to somebody, we have the right to demand political concessions. So, we will give economic aid only to the countries that are loyal to us. This may not be a great geopolitical policy, but it's better than nothing."


Mr. Markov [an advisor close to the Kremlin] says the stakes are high, and the Kremlin is unlikely to back off its harsh stance toward Ukraine. "Failure will undermine Russia's image, but victory will strengthen it," he says. "To be a guarantor of energy security,it's important to be firm. If Moscow were to agree to continue paying for Ukraine's anti-Russian behavior, who would ever take us seriously?"

It is about Russia and Russian interests as defined by the Kremlin, that is, short-term and very narrow.

One other thing. Putin said the other day that turning off the gas was not the thing to do or was not going to happen or something like that. (That’s a weak quote I know. I don’t have the exact quote but that is the gist of it.) Now he’s on board and talking tough. This reminds me of Yukos, first a no by Putin then a yes and it suggests to me once again that Putin is not as in charge of things as most people tend to think he is. This is just more evidence that there are competing power centers in the Kremlin that Putin has to broker.

Meanwhile, on the home front, we woke up to a noticeably cooler apartment this morning. I checked the radiator and it was still on and hot but I could hold onto it without getting burned. Last week, I would have been burned. So it is hot but not as hot.

We’ll bundle up a bit.

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