Putin Threatens Europe With Gas Shortages In Aggressive Letter
On Thursday, Russian President Vladimir Putin asked European leaders to help Ukraine settle its gas debt — or else. In a letter sent to the leaders of 18 European nations, including Germany, France and Poland, Putin said that if they did not help Ukraine pay back the $35 billion it owes, they themselves could face gas shortages. In the letter, released by the Kremlin in English, Putin described the condition of the Ukrainian economy as "critical," and said that Russia was the only nation that had really been trying to help.
[D]uring the past four years, Russia has been subsidizing Ukraine’s economy by offering slashed natural gas prices worth 35.4 billion US dollars. In addition, in December 2013, Russia granted Ukraine a loan of 3 billion US dollars. These very significant sums were directed towards maintaining the stability and creditability of the Ukrainian economy and preservation of jobs. No other country provided such support except Russia.
Putin wrote that if Ukraine is unable to come up with the money it owes, Russian state gas company Gazprom would have to start demanding advance payments for gas — and, if these payments aren't met, "will completely or partially cease gas deliveries."
Seeing as Russia currently supplies around a third of the EU's natural gas, this is a major problem. And yes, Putin is more than aware that Ukraine probably won't be able to shore up enough gas to see it through the winter.
The International Monetary Fund has already agreed to give Ukraine between $14 billion and $18 billion to help the country avoid default, but that's a long way off the kind of money Putin's demanding. In his letter he blames unbalanced trade with the EU for driving Ukraine further into debt, and says that the West's "declaration of intent" to help the former Soviet nation is useless until it's followed up by some action.
Russia cannot and should not unilaterally bear the burden of supporting Ukraine’s economy by way of providing discounts and forgiving debts, and in fact, using these subsidies to cover Ukraine’s deficit in its trade with the EU member states.
Putin's letter is only likely to further fray tensions between Russia and Ukraine. As of Thursday hundreds of pro-Russia protesters, some of them armed, continued to occupy Ukrainian government buildings in the eastern cities of Donetsk and Luhansk.
On Tuesday the Kremlin even went so far as to warn that the use of force in eastern Ukraine could lead to civil war. Ukrainian acting Interior Minister Arsen Avakov said Wednesday that the unrest in the region would be resolved in 48 hours, either through negotiation or through force.
In the letter, Putin chastised European leaders for backing away from meaningful discussions on how to resolve the crisis in Ukraine:
[T]he fact that our European partners have unilaterally withdrawn from the concerted efforts to resolve the Ukrainian crisis, and even from holding consultations with the Russian side, leaves Russia no alternative.
He concluded by stating once again how completely unfair it is that he's the one doing all the work while being painted as uncooperative (!!), and urged the rest of Europe to join him on an equal footing in straightening out the Ukrainian economy:
It goes without saying that Russia is prepared to participate in the effort to stabilize and restore Ukraine’s economy. However, not in a unilateral way, but on equal conditions with our European partners. It is also essential to take into account the actual investments, contributions and expenditures that Russia has shouldered by itself alone for such a long time in supporting Ukraine.
Wonder if anyone will write back...