NOMOS: Energy and policy contexts
Express–analysis of the current situation in Ukraine and around it
No. 4, 9 December 2013
Іn the context of the events that take place in Ukraine it is crucial to pay attention to three things:
– Statement of V. Zubkov, the Chairman of Gazprom’s Board of Directors that after postponing the payment of Naftogaz’s debts to Gazprom the gas supplies to the EU will be not in danger;
– Disregard by the Ukrainian side of the meeting devoted to signing of agreement about the reverse gas flow supplies through Slovakia;
– Opening of Gazprom representative office in Brussels on 4th of December and the meeting of the so–called European Business Congress (Berlin, December 6)
European Business Congress is an international non–governmental nonprofit organization. It consists of 141 members. The biggest corporations and banks are the members of it, for instance, Open Joint Stock Company Gazprom, Shell, ExxonMobil, Total, Wintershall, E.ON Ruhrgas, GDF SUEZ, ENI, Siemens, MAN Ferrostaal AG, Daimler, Alcatel, Deutsche Bank, Dresdner Bank, BNP Paribas, UBS, Societe Generale etc. The Cogress members are represented by 25 member-states of OSCE. Head of the Board of Directors of JSC Gazprom Alexey Miller is a President of EBC (Gazprom).
«We compromise in order to make them pay us the gas bill in spring», – Head of the Board of Directors of Gazprom said. According to him, Ukraine guarantees that unauthorized gas takeoff will not take place. V.Zubkov’s statement addresses exceptionally Brussels and fixes several objectives:
1. In retrospective to remind to the EU that disruption of gas supplies in the past (gas crises in 2006, 2009) were caused only by the events in Ukraine and a current situation in Ukraine also contains a sort of threat.
2. To demonstrate to the European Commission «a good will» of Gazprom and Russia in general in the resolving of the problem, that could benefit the stability of Russian gas supply to the EU.
3. To demonstrate to Brussels that Gazprom control over the JSC Naftogaz is a positive factor enforcing the stability of gas supplies to the EU and that the transit through Ukraine is a part of Gazprom’s responsibility before the European clients.
“Today we support an active dialog with the institutions of the European Union, and the opening of Gazprom’s representative office in the capital of the EU will help to do it more effective”,– the first deputy of head of board of directors Alexander Medvedev said on the ceremony of the office opening. This statement sounds ambiguously as well as the functioning of the EBC in Europe. Obviously, the representative office of Gazprom besides officially declared goals and objectives has a hidden mission. Informed sources in Moscow formulated it as follows - "in order to make proposals which European officials cannot refuse" or "fund for the payment of fees to individual Europeans for their merits to Russia." (It is possible that in 2014 in Brussels more representative offices of another Russian state giant - the company "Rosneft" will appear).
Simultaneously it is worth to pay attention that Zubkov’s statement contains a red herring for the EU. Kremlin comes from the fact that for the EU gas supplies to Europe are more important and of a bigger priority than the safety of the political situation in Ukraine. According to the Kremlin, in the case of a dilemma "interruption of gas supply or pro-Russian regime in Kiev" Brussels will keep the first without considering the other. Thermal comfort in Europe during the cold winter is a priority number one for the European policy makers in the context of forthcoming elections to the European Parliament in 2014 so if Russia will be able to provide it through its efforts in Ukraine, it will be a lot to forgive. Such a logic of the Kremlin’s campaign managers based on the experience of 2008, when Moscow in answer to its tough action against Georgia met only verbal response from Brussels and the capitals of the leading EU countries. Also in Moscow it was not left unnoticed that Brussels officially didn’t blame Russia to be guilty for the gas crisis of 2009, but shared responsibility for it on both sides, putting more blame on Kyiv. Therefore, in Moscow the option of gas crisis provoking is being planned and modeled in case the events in Kiev will go on the scenario different from the current scenario proposed by Kremlin. According to unofficial and non-public assessments of Russia's ruling circles, the current scenario is still quite successfully implemented:
– The government in Kiev fully perceived and converted to the mode of the external control from Moscow (indicators – Azarov’s statement that the issue of visa-free regime for the Ukrainians EU should decide in the format of 3rd-party negotiations in triangle EU - Ukraine – Russia; the delegation of "UkrTransGas" did not come to sign an agreement with Eustream on the reverse supply from Slovakia);
– The system of national security is completely disabled, NSDC doesn’t function in the regime of security and external state interest protection, de facto the NSDC mechanism is involved in the framework of Russian interests promotion vis–a–vis Ukraine;
– “final, complete and unconditional capitulation” of V. Yanukovych before V.Putin de facto took place after his Chinese visit fiasco, de jure everything must be settled in the near future, if it is not so, the additional time resource exists up to the end of Christmas holidays, as even now Europe enters in the Winter Holidays period and there will be less attention paid to Ukraine;
– The EU and the U.S. do not use a hard response, their reaction fits into the standard and well predicted model - verbal responses without imposing economic and political sanctions (nobody mention the possibility of a boycott of the Olympic Games in Sochi in the context of Russia policy towards Ukraine, some thoughts on boycott sound only in the context of homophobic legislation of Russia);
– The EU always reacts with a significant time lag so it gives the additional resource of time to Russia, which is always one step ahead. The problems creates a position of the U.S. but Americans are not much interested;
– the standard reaction of the European diplomats and policy makers is ensured successfully enough by the “spot investment”, demand on which rises in the context of formatting of the European Parliament and European Commission in 2014 (more difficulties exist with the western medias where is no significant progress).
However, the risk of failure nevertheless persists. Some informed analysts in Moscow believe that the crisis becomes protracted and Yanukovych ultimately will lose, as it was in 2004. If this prospect definites (and it will become clear this week), the Kremlin will turn "the option of crisises plurality" which provides:
– Stimulating of action of radicals, communists and agents of the Russian special services designed to bloodshed, that will cause the dissociation of the EU from "bloody Square" in Ukraine;
– Mass cyber attacks on the state institutions of Ukraine that will find displaying in Medias as revenge actions of Euromaidan participants against the authority;
– The need for Russian intervention in the internal affairs of Ukraine in the connection with the escalation of the crisis, as the only option "to prevent violence", especially at a time when "Europe rests on Christmas."
In this connection, the Russian banks in Ukraine could take measures directed to the further disbalance of financial situation. According to Moscow’s plan, the cyber attacks on the institutions and energy companies should lead to disorganization of work of the United energy system of Ukraine and of GTS. All this must have as a result a disruption of the transit gas supplies to the EU. On this background, the Russian side will not have another choice as to interfere to the situation in Ukraine in order to save the comfort of the Europeans during holidays. Under such circumstances, there will be no objections in the EU except the verbal ones.
