Putin Enjoys Freezing Europe To Death In ‘Cold War’
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New cold war in Europe as Russia turns off gas supplies
By Daniel McLaughlin in Budapest and Vanessa Mock in Brussels
Fears of a deep chill spread across Europe yesterday after a row between Russia and Ukraine over gas prices cut supplies to the rest of the continent on a day of plummeting temperatures and heavy snowfalls.
The European Union said the situation was “completely unacceptable” as thousands of businesses were urged to switch fuels, and households struggled to keep warm in sub-zero temperatures. But there was no sign of an end to the standoff between Russia’s energy monopoly Gazprom and Ukraine, locked in battle since New Year’s Day.
Gazprom stopped pumping gas to Ukraine for domestic consumption on 1 January after the two countries failed to agree on a fixed price for 2009. The pipelines that cross Ukraine also carry gas to Europe but that continued to flow, until Moscow accused Ukraine of siphoning off Europe’s fuel and Prime Minister Vladimir Putin retaliated by ordering Gazprom to cut EU-bound exports by the amount being stolen.
Yesterday Russia stopped gas supplies through Ukraine to Bulgaria, Hungary, Greece, Turkey, Romania, Serbia, Bosnia and Macedonia. The government of Slovakia declared a national emergency; Austria and Italy reported falls of 90 per cent; France said Russian supplies had tailed off 70 per cent, and Germany also reported a decline although did not quantify it.
The Czech Republic, which took over the EU presidency this month, had sharp words for Moscow. “Drastically curbing deliveries this way is no solution to business disputes,” said Alexandr Vondra, the Czech Deputy Prime Minister. “It is impossible to hold other countries hostage.” He demanded the warring sides reach an agreement by the end of the week.
In Bulgaria, the government has declared a “crisis situation”. The country not only has the lowest GDP per capita in the EU, but relies on Russia for all of its gas.
“Everyone was sent home from school after the gas suddenly went off,” said Patrizia, an 18-year-old student in the provincial town of Pazardzhik, where the daytime temperature was minus 8C. “It’s the first time I remember this happening, there was no warning, and people are worried because they have no idea how long it will last.”
Douglas Erskine, a British expat, said many of Bulgaria’s seven million residents would struggle. “Houses are poorly insulated, the electricity supply is unpredictable, and the elderly will struggle to get coal and wood. In many towns and villages, people gather in cafés to keep warm because they can’t pay for heating at home. What will become of them if the heating goes off?”
Bakers say the price of bread could rise by 5 per cent because of gas shortages. The disruption has already forced two big fertiliser producers and a major brewery to stop production, and metals and pharmaceutical firms warned they may have to follow suit.
An EU delegation headed to Kiev for talks yesterday. Separate discussions are planned with Gazprom representatives today in Berlin.
Most European countries say they have enough gas in storage to cover at least a few weeks of disruption. The 27-nation EU gets about a quarter of its gas from Russia, of which 80 per cent is pumped through Ukraine.
Diplomatic chill: What caused it?
What sparked the gas wars?
On New Year’s Eve, the deadline expired for Russia and Ukraine to agree a new contract for 2009 gas supplies. Moscow had wanted to raise its prices and charge Kiev $250 per 1,000 cubic metres, up from $179.5 last year. The Ukrainians thought that excessive and refused to pay a cent more than $201. Russia promptly put its price up to $450. Then at 10am on New Year’s Day Russia’s Gazprom halted supplies of all gas meant for domestic use in Ukraine.
So why are other European countries suffering?
It wasn’t quite as simple as Moscow turning off the Ukraine gas tap. The EU gets about a fifth of its gas from Russia via the same pipes that pass through Ukraine. Russia cut the total volume of gas it was pumping by the amount Ukraine imports. But Russia says Ukraine stole some gas intended for Europe, and has cut deliveries by the same amount that was siphoned off.
Is this business or politics?
Russia’s economy has been shaken by the credit crunch. Gazprom has debts of about $50bn and Russia’s foreign reserves have dropped by more than a third, so Prime Minister Putin may be concerned about getting as much cash as possible for his gas. But the political dimension cannot be ignored given the bad blood between Kiev and Moscow. Mr Putin has not forgiven the Western-leaning President Viktor Yushchenko for sweeping to victory in the Orange Revolution in 2004, an animosity strengthened by Ukraine’s ambition to join Nato and its support for Tbilisi in the Russia-Georgia war in August. Compare Ukraine with Belarus, which made supportive noises about South Ossetia and has been promised cheaper gas.
What happens next?
Kiev and Moscow need to return to the negotiating table, and with disruption starting to hit Europe, pressure for a deal is mounting. The EU is sending a mission to meet separately with Ukrainian and Russian officials, and if all else fails there could be a three-way EU gas summit. In the meantime, affected countries will have to rely on their gas stocks, which vary in size; for some, it’s a matter of weeks, for others just days.
WSJ:
EU to Monitor Gas Flow Through Ukraine
Russia Will Restart Supplies to Europe With Controls in Place
By MARC CHAMPION in Brussels and ANDREW OSBORN in Moscow
The European Union said Moscow and Kiev agreed to allow international experts to monitor the natural-gas transit system through Ukraine, and once they are in place, to restart Russian gas flows to the EU.
As alarm over the deteriorating midwinter gas-price dispute spread in Europe, German Chancellor Angela Merkel and European Commission President José Manuel Barroso telephoned Russian Prime Minister Vladimir Putin and his Ukrainan counterpart to press for a solution.
Both sides accepted international monitors, Mr. Barroso told reporters in Prague on Wednesday, warning that if gas supplies to the EU don’t return to normal levels soon, the credibility of both countries as reliable suppliers and potentially their wider relations with the EU could be damaged.
Deliveries through Ukraine, which normally account for 80% of all Russian gas imports to the EU, stopped entirely on Wednesday, after falling dramatically a day earlier, gas and government officials said.
“Gazprom will restart deliveries only after a control mechanism is put in place with the participation of international observers,” Mr. Putin’s press office said late Wednesday.
The complete halt to EU gas supplies via Ukraine makes the dispute far more serious than an earlier 2006 Russia-Ukraine gas price dispute, which lasted just three days and affected only a handful of EU countries — but prompted several years of soul-searching in Europe over how to reduce the reliance on Russian gas.
The EU initially treated the dispute as a commercial, bilateral issue in which it didn’t want to get involved, after Russia turned off gas deliveries for Ukraine’s domestic consumption on Jan. 1. A deadline for a new gas contract had expired with no agreement on price. EU officials resisted offering independent monitors to police Russian accusations that Ukraine was siphoning off gas from transit pipes to supply its domestic consumers. But on Wednesday, they switched gears.
Czech Prime Minister Mirek Topolanek, whose country holds the EU’s rotating presidency, told reporters in Prague on Wednesday that there would have to be “stronger intervention” to resolve the dispute by the EU, if gas doesn’t flow again soon. He said EU foreign ministers would review what action to take when they meet on Monday. Mr. Topolanek also spoke to Mr. Putin and said the Russian leader had agreed to resume supplies once monitors are in place.
The Russian and Ukrainian gas companies are due to restart price negotiations in Moscow on Thursday, although OAO Gazprom Chief Executive Alexei Miller will be in Brussels to meet with EU officials and address the European Parliament. Also on Thursday, the parties are due to meet in Brussels to decide the details of deploying EU monitors, according to a spokesman for EU energy commissioner Andris Piebalgs.
Gazprom and Ukrainian state energy company Naftogaz Ukrainy appear to be as far apart as ever from agreeing on a new gas price. After initially offering to sell Ukraine gas for $250 per 1,000 cubic meters in 2009, up from $179.50, Gazprom is now demanding a price of $450. Ukraine, meanwhile, says it is sticking with its last offer of $201 per thousand cubic meters of gas, and wants to raise the price Gazprom pays to transit gas across Ukraine to the EU.
“Three years ago, Ukraine had no gas in storage and couldn’t take a tough line in its talks with Gazprom. It was forced to accede quickly to Russia’s demands. Now it has much more gas stored and so has more leverage,” Naftogaz spokesman Valentin Zemliansky said in an interview.
As on previous occasions, Russia and Ukraine blamed each other for the total shutdown of transit gas on Wednesday. Gazprom officials said they turned off the taps at 6:30 p.m., long after Ukraine said gas stopped flowing and shut the last remaining export pipelines. Naftogaz officials disputed that account, insisting that Gazprom switched off the last entry pipe to Ukraine much earlier.
As recently as Monday, European officials had been reassuring their populations that the quarrel — which began Jan. 1 when Gazprom cut deliveries meant for Ukraine’s domestic consumption — didn’t pose a significant threat to EU consumers further downstream.
On Tuesday, however, gas deliveries via Ukraine dropped far more than during a similar dispute in 2006. As regional temperatures fell well below freezing, thousands of households in Bulgaria were left without heat. Poland and Bulgaria ordered chemical and other gas-intensive factories to cut back their consumption or shut down operations.
Jonathan Stern, director of gas research at the Oxford Institute for Energy Studies, said on Tuesday that in contrast to the 2006 dispute, “this time people perceive that Ukraine is a major part of the problem.” But, he said, the longer the fight goes on, “the more damage will be done to Gazprom” and to its reputation as a reliable energy supplier. The Russian gas giant is also likely to face legal claims for damages by its EU consumers, he said.
12 deaths blamed on snow and cold across Europe
MILAN, Italy (AP) – Freezing temperatures and exceptional snowfall caused travel delays Wednesday across Europe and were blamed for at least 12 deaths, including that of a man in Milan who was crushed when a canopy collapsed under the weight of snow.
In Poland, the Interior Ministry said at least 10 people have frozen to death due to temperatures reaching minus 13 degrees Fahrenheit (minus 25 Celsius ).
Italian police said a Milan businessman standing on his balcony was killed when the snow brought down a canopy and part of a wall. A 47-year-old Serbian was found frozen to death in his home in the town of Zagarolo, east of Rome.
The winter weather temporarily closed Milan’s two airports, halted trains in the normally sunny south of France and pressed into service ice breakers in the Dutch port of Rotterdam. But it also sent Dutch skaters storming onto canals, and earned chimpanzees in Rome’s zoo hot tea and cookies for extra calories.
Milan’s Malpensa and Linate airports shut down briefly, then struggled to overcome a morning of delays and cancellations when the facilities reopened in the early afternoon. The city, Italy’s financial capital, had to dig out from a foot (30 centimeters) of snow, and the airport authority said flight crews and other workers had been unable to reach the airports.
Snow blanketing much of northwestern Italy delayed trains up to three hours as the Italian railway had to slow track speeds. Schools closed in many cities.
A rare snowfall in France’s normally sunny Cote d’Azur sent the national railway into crisis mode, halting trains in Provence as well as the Alps. Authorities stopped all buses in the port city of Marseilles and closed surrounding highways, urging drivers to stay home. Several minor car accidents caused long traffic jams.
The operator of France’s electricity grid and a unit of Electricite de France SA, called on customers in southern and western France to limit power consumption during peak evening hours amid expected record demand.
In Rome, keepers at the capital’s zoo fed primates a special breakfast of warm barley porridge, croissants and cookies to make sure they had enough calories to keep up their body temperatures. At lunch, the animals sipped hot tea along with rice and yoghurt.
The chimpanzees and orangutans also have been treated to modern floorboard heating and raised beds of hay and wood chips, the zoo said in a statement.
Germany had its coldest night of the winter, with a temperature of minus 18 Fahrenheit (minus 28 Celsius) measured at one weather station in eastern Germany. At the Berlin Zoo, Knut the polar bear relished the bitter temperatures, scampering about his ice-encrusted closure as visitors watched.
In the Netherlands, authorities at Rotterdam’s port sent out an icebreaking ship Wednesday morning to ensure passage for barges using a vital artery to ply the country’s inland waterways. It was the first time since 1996 that the port has used an icebreaker.
But the freezing temperatures warmed the hearts of Dutch skaters, with sports stores reporting a run on skates and skaters flocking to the country’s famed canals. Serious speed skaters were hoping the cold spell would continue long enough for the country to stage its 11 cities tour, a 125-mile (200 kilometer) race over frozen canals and rivers in the country’s northern province of Friesland.
The race was last run in early 1997 and has only been staged 15 times since the first official event in 1909.
Despite the freeze, the group that organizes the event played down hopes of a 2009 race, saying in a statement on its Web site that two more weeks of severe, around-the-clock frost and 6 inches (15 centimeters) of ice were needed.
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