Sat, Jan 17, 2009 - Page 6 News List

European gas crisis mounts as Ukraine hosts conference


Europe’s gas crisis mounted yesterday as Ukraine prepared to host an energy summit likely to take a hard line against Moscow, while huge swathes of central Europe and the Balkans remained in the cold.

Ukrainian President Viktor Yushchenko was expecting “five counterparts from eastern Europe” including Polish President Lech Kaczynski and Lithuanian President Valdas Adamkus, Yushchenko’s spokeswoman said late on Thursday.

The Ukrainian leader has accused Russia of trying to seize hold of Ukraine’s pipeline network and of fomenting a domestic revolt against his rule.

Russia has denied this and in turn said Ukraine was blocking Russian gas flows to Europe.

German Chancellor Angela Merkel, meanwhile, said Russia was at risk of losing its credibility as an energy supplier ahead of talks yesterday with Russian Prime Minister Vladimir Putin in Berlin set to be dominated by the crisis.

With gas stocks running low in many European countries, there have been frantic diplomatic efforts to resolve the current impasse as well as to find alternatives to Russian gas imports from countries such as Algeria and Norway.

The EU depends on Russia for around a quarter of its total gas supplies.

On Thursday, Putin proposed that European energy companies establish a consortium that would pay for the “technical gas” requested by Ukraine in order to be able to pump Russian gas supplies to European consumers.

The proposal came ahead of planned crisis talks between Putin and Ukrainian Prime Minister Yulia Tymoshenko today in Moscow that EU Energy Commissioner Andris Piebalgs was also expected to attend.

Russian President Dmitry Medvedev has called for a broader summit of gas transit countries and consumer states in Moscow on the same day but the EU has held off on responding to his offer and Ukraine’s president has turned it down.

“The gas war has been recognised as political. The two sides are gathering their allies,” a headline in Russian daily Kommersant said.

“Vladimir Putin is trying to hold the decisive battle in the gas war on his own territory,” Vedomosti said, referring to the Putin-Tymoshenko talks.

The EU presidency has been loath to take sides in a dispute it called “incredible” and has warned of “significant financial, economic and political consequences” for both Russia and Ukraine if they did not resolve it.

After talks with Yushchenko in London on Thursday, British Prime Minister Gordon Brown urged “an urgent resolution to this problem which is causing severe economic and social difficulties,” Brown’s office said.

Gas-fired central heating has been rationed or cut off for millions of people in central Europe and the Balkans and supplies slashed to industry in a crisis that has already cost EU states hundreds of millions of euros.

Russia cut off supplies to Ukraine’s domestic market on New Year’s Day in a payment and prices dispute and then halted deliveries to Europe via Ukraine on Jan. 7, saying Kiev was stealing the gas.

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