Books on Ukraine
Update No: 327 - (26/03/08)
Gas cut-off by Russia
Russia effectively halved its supply of gas to Ukraine in early March. This is
not for the first time. A similar dispute between Moscow and Kiev in 2006 had
sent jitters through customers in Europe, after Gazprom cut all gas supplies to
Ukraine sits on the main transit route for Russian gas exports to Europe,
accounting for the transmission of a quarter of the continent's gas supply.
Ukrainian President Viktor Yushchenko has urged the government to resume gas
talks with Russia immediately. "This is the only way to settle the
Ukrainian-Russian gas dispute," Yushchenko said in a letter to Prime
Minister Yulia Tymoshenko, according to a presidential press service statement
released Tuesday night.
Yushchenko asked the government to order state gas company Naftogaz to
immediately resume negotiations with Russia's gas monopoly Gazprom, in line with
the agreement on simplifying gas supplies reached by the leaders of the two
nations in Moscow in February.
"The gas row has caused concern in the European Commission,"
A debt dispute prompted Gazprom to cut supplies to Ukraine by a further 25
percent on March 4, doubling a 25-percent cut already in force since the
previous day, as the two countries slide toward a new energy war that has put
Europe on alert.
Naftogaz said that it may have to divert some of the Russian gas earmarked for
Europe that transits through Ukraine if the country's own energy security comes
Yushchenko versus Timoshenko
The two dominant figures in Ukrainian politics are constantly at loggerheads.
Indeed they are dire enemies. President Yushchenko has forwarded a letter to
Prime Minister Yulia Timoshenko. He called attention to the fact that the
government "withdrew from the solution of a number of topical
problems," Prime-Tass reports.
"The problem has emerged with ensuring the balanced character of the
movement of financial resources of Naftogaz Ukrainy," the president wrote.
"The government's proposals on the additional financing of the company from
the state budget, dividends etc. leave without balance the revenues and
expenditures of Naftogaz Ukrainy to the sum of at least 3.5 billion hrivnas."
Yushchenko pointed to the fact that the financial plan of Naftogaz Ukrainy had
not yet been adopted, in violation of the presidential decree.
Yushchenko agreed with the proposals of the government on a number of problems,
specifically "the beginning of the building of dwellings available for the
population, the need for the legal settlement of the sale or lease of plots of
land on the competition-free basis, as well as the increase of budget
allocations for VAT compensation payments."
At the same time, Yushchenko wrote that "the government has actually
withdrawn from the solution of problems in some other spheres, including the
growth of expenditure for the needs of the defence ministry, the financing of
projects of the Ukrainian State Service on Road Construction, the beginning of
the comprehensive reforming of relations between budgets on various levels,