Título: Europe "Isolates" Putin? Considers "Reframing" Energy Relations With Russia
Texto: It appears President Obama's "costs" imposed on Russia have boomerang'd just too much for Europe to take. As Reuters reports, The EU is seeking to create a single energy market, based on cross-border connections to improve security of supply and reduce dependence on Russia, which supplies roughly one third of EU energy. The headline pivot away from Putin, likely misses the fact that there is very little a stagnating Europe can do, even in the medium term, to 'reduce' dependence on Washington's nemesis.
As Reuters reports,
The European Union will consider "reframing" energy relations based on market conditions with Russia when the time is right and for now is focusing on building a strategic gas partnership with Ukraine, a draft document shows.
The European Commission, the EU executive, is seeking to create a single energy market, based on cross-border connections to improve security of supply and reduce dependence on Russia, which supplies roughly one third of EU energy.
Next week, the Commission is expected to publish formally its strategy on an energy union.
"When the conditions are right, the EU will consider reframing the energy relationship with Russia based on a level playing field in terms of market opening, fair competition, environmental protection and safety, for the mutual benefit of both sides," a draft of the Energy Union Package seen by Reuters says.
For now, it says particular attention will be paid to upgrading "the strategic partnership on energy" with Ukraine.
It says it will address Ukraine's importance as a transit country, as well as improving infrastructure and Ukraine's energy efficiency to reduce its dependence on imports.
Russia's long-standing gas relations with the EU and Ukraine, the main transit route for Russian gas to the EU, have deteriorated since Russia's seizure of Ukraine's Crimea region last year.
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Título: Putin tells Europe Ukraine gas debt 'critical', transit threatened
Texto: President Putin has written to 18 European countries, warning that Ukraine’s debt crisis has reached a “critical” level and could threaten transit to Europe. He also called for urgent cooperation, blaming Russia’s partners for a lack of action.
Among the countries who’ll receive the letter are major consumers of Russian gas such as Germany, France, Italy, Greece, Turkey, Bulgaria, Moldova, Poland and Romania.
Given the accumulated $2.2 billion gas debt owed by Ukraine’s Naftogas, Russia’s Gazprom will be forced to ask Ukraine for advance payments, Putin said in his letter to European partners, referring to the 2009 gas contract signed between Moscow and Kiev.
“In other words, we’ll be supplying exactly the volume of gas that Ukraine pays for a month in advance,” as Itar -Tass quotes Putin's letter.
Putin added that introducing advance payments would be an extreme measure.
“We understand that this increases the risks of unsanctioned retrieval of gas flowing through the territory of Ukraine to European consumers. And it could also hinder accumulation of gas supplies in Ukraine necessary to provide for consumption during the autumn-winter period.”
Stable transit of Russian gas to Europe would require an additional 11.5 billion cubic meters of gas for Ukraine’s underground storages, which would cost $5 billion, Putin explained.
Aid from Moscow
Given all the discounts Russia has provided in the last four years, Moscow has subsidized Ukraine’s economy to the tune of $35.4 billion, coupled with a $3 billion loan tranche in December last year.
“I would underline – nobody except Russia has done this,” Putin wrote in the letter.
“And what about [our] European partners? Instead of real support for Ukraine – declarations about intentions. Promises without real action.”
The European Union has traditionally used Ukraine as a source of foodstuffs, metals, mineral resources and as an export market for its machinery, chemicals and other highly-processed goods. This creates a trade deficit of above $10 billion, which is almost two-thirds of Ukraine’s 2013 current account deficit, the letter explained.
“Russia should not and cannot any longer bear the brunt of supporting the Ukrainian economy alone, giving it gas discounts and forgiving debts. In fact, with these subsidies Russia pays for a deficit in trade between Ukraine and the EU member states.”
Immediate consultations with European countries receiving the letter are the only possible way to resolve Ukraine’s crisis, Putin said.
We need “to start coordinated action as soon as possible. And we urge our European partners to do this,” he wrote.
Russian gas in Europe
Russia’s biggest gas client is Germany which imports over 25 billion cubic meters of gas from Gazprom each year, about a third of its energy needs. Italy is another big importer, also relying heavily on Russian imports as deliveries from North Africa have proved unreliable.
Lithuania, Estonia, Finland, Latvia, Bulgaria and the Czech Republic import 100 percent of their natural gas from Russia.
Ukraine’s total debt to Russia, including the $2.2 billion bill for gas, now stands at $16.6 billion, Prime Minister Dmitry Medvedev said on Wednesday.
Gazprom has revoked all discounts and now charges $485 per 1,000 cubic meters of gas, a price Ukraine says it will not be able to pay because it threatens Ukraine's ability to continue normal gas transit operations to Europe.
Moscow cut off gas transit through Ukraine to Europe in the winters of 2006 and 2009 over similar unpaid bills to Gazprom, which left parts of Europe without heat. Moscow claims Ukraine illegally siphoned off supplies intended for Europe during this time, an accusation Kiev denies.