From Volume 8, Issue 2 of EIR Online, Published Jan. 13, 2009
Russia and the CIS News Digest

Soros-Advised Ukraine Cut Gas to Europe

Jan. 6 (EIRNS)—An economic and humanitarian emergency began to take shape across southern Europe on Jan. 6, after the government-run Naftohaz of Ukraine cut the flow of Russian natural gas in three pipelines across Ukrainian territory, which supply Russian Gazprom's customers in Turkey, the Balkans, and other European countries. Some affected parts of Eastern Europe were in the grip of a deep cold wave, with temperatures as low as minus 20 degrees C (minus 4 degrees F).

The dispute between Naftohaz and Gazprom escalated Jan. 1, when Gazprom stopped supplying Ukraine itself with gas, for lack of a contract, and it has been complicated by faction fights between the Ukrainian President and Prime Minister. But the outstanding feature of the situation is that the Ukrainian government, which left southern Europe freezing, is being advised on financial and economic policy by megaspeculator and ex-Nazi George Soros, during this same period. The Soros factor betrays the natural gas crisis as orchestrated from London.

British geopolitical strategy outlets, including the London Economist weekly, have repeatedly trumpeted their hopes for a Russia-Ukraine showdown to force all Eurasia onto the agenda of a new empire, run through the EU and NATO.

As of October, Russian and Ukrainian Prime Ministers Vladimir Putin and Yulia Tymoshenko had agreed on an outline for renewal of the Naftohaz-Gazprom contracts, based on a below-market price for the gas, no increase in the transit fees charged by Ukraine for Russian gas going to Europe, and payment in full of Ukraine's gas bills for 2008. Then Ukraine's main exports, steel and chemicals, collapsed. Its currency tumbled. Ukraine turned to the International Monetary Fund for a $16.5 billion loan in October, which the Economist Intelligence Unit stresses was chiefly for servicing the foreign debt of Ukrainian banks. As a term of that loan, Ukrainian sources report, the government agreed to hire the Soros-owned Blackstone Group as a consultant. Tymoshenko met with Soros on Nov. 8, just three days after the IMF loan agreement was signed.

As of Dec. 31, Gazprom reported receiving no payment for the Naftohaz arrears. The Russian side then withdrew the offer of a below-market price and proposed $450/thousand cubic meters for 2009. Naftohaz was demanding an above-normal $2/thousand cubic meter transit fee for the gas Gazprom ships to Europe. Kiev broke off the talks on New Year's Eve. Gazprom cut the supply of gas for Ukraine itself, continuing to send the "transit gas" for Europe. Several days later, Gazprom accused Ukraine of diverting up to 65.3 million cubic meters, and reduced its total supply to the pipeline network accordingly, by about 15%. Last night, Ukraine retaliated by cutting Europe off.

Bulgaria, Bosnia, Croatia, Macedonia, Serbia, Hungary, and Greece received no Russian gas via Ukraine for a week, beginning Jan. 6. The flow to the Czech Republic dropped by 75%, to Poland by 85%, to Austria by 90%, and to France by 70%. Slovakia, losing 70% of its supplies, discussed declaring a state of emergency, RIA Novosti reported. Bulgaria scrambled to prepare restart of a nuclear plant, shut down when it joined the EU three years ago.

Gazprom CEO Alexei Miller, at a press conference in Moscow, said Gazprom has boosted the supply of gas through the Blue Stream pipeline across the Black Sea to Turkey, and through the Yamal-Europe pipeline from northern Siberia through Belarus and Poland, as well as purchasing gas on the spot market and drawing down reserve pools it owns in Europe, in an attempt to meet its obligations.

Putin jumped into the situation, meeting Jan. 6 with Miller and the head of Russia's Customs Service (which had handed Gazprom a citation for shipping "contraband"—gas without a contract—to Ukraine).

The Communist Party of Ukraine, a large group in the Supreme Rada (parliament), called for an emergency session on the gas crisis and growing tension with Russia. Economist Natalia Vitrenko, chairman of the Progressive Socialist Party of Ukraine, issued a statement Jan. 3, calling Ukraine's negotiating posture a "dirty political attack" on Russia. She noted that the government took Ukraine into the World Trade Organization (WTO) last May, with a pledge to move to world market prices; furthermore, since Nov. 1, Naftohaz has been charging its domestic customers $320/thousand cubic meters, or nearly 60% more than the $201 it was offering to pay Gazprom in 2009. Has Soros advised the Ukrainian authorities on how to spend the difference?

Update: As of Jan. 12, Russia and Ukraine have reached an EU-mediated agreement for resumption of the transit gas deliveries, to be monitored by international observers.

Former Ambassador: Obama Should Push Ukraine NATO Membership

Jan. 5 (EIRNS)—Former U.S. Ambassador to Ukraine William Green Miller, speaking at an event at the Woodrow Wilson Center in Washington today, urged the incoming Obama Administration to continue working to bring Ukraine into NATO. Speaking of the recent conflict between Russia and Ukraine over natural gas prices, Miller commented, "Already when we negotiated with Ukraine to get them to give up their nuclear missiles, the Russian energy supply was deemed a possible complication." In the agreements with Ukraine in 1994, the "U.S. had given guarantees that there would be no pressure on Ukraine if they gave up their nuclear weapons. And this commitment was reaffirmed in the December 19th charter signed last year by Condoleezza Rice."

Miller proposed that the Obama Administration should set up a commission similar to the Clinton Administration's Gore-Kuchma Commission, with the participation of Vice President Joe Biden. He also urged, given the U.S. commitment to eventually bring Ukraine into NATO, that it be included in as many NATO operations as possible prior to membership. Miller praised Ukraine's Orange Revolution and urged greater support for President Viktor Yushchenko and Prime Minister Yulia Tymoshenko. "Ukraine's continued move toward democracy will be an important signal to all of Europe," he said. Miller served as ambassador to Ukraine during the Clinton Administration.

Currency Devaluation, Panic Buying in Belarus

Jan. 7 (EIRNS)—The Belarusian ruble has collapsed by 26% since Jan. 1, falling from 2,200 to 3,000 to the dollar. The National Bank announced a devaluation to 2,650, being one of the conditionalities attached to the IMF loan recently received by the country, but the Belarusian ruble quickly fell farther. Its plunge was accompanied by an inflationary shock, with prices of many consumer goods jumping by 10% to 60% overnight. Panic buying began, with people scrambling to buy imported consumer durables as security against the further collapse of the currency. The Russian agency quoted a saleswoman in one store who said they had sold 500 refrigerators in a day.

What Panarin Really Says: London Is the Problem

Jan. 9 (EIRNS)—There's more than meets the eye to Prof. Igor Panarin of the Russian Diplomatic Academy's forecast for the break-up of the United States in 2010, which has been getting enormous hype worldwide since his November 2008 interview in Finansovyye Izvestiya, and a year-end article about him in the Wall Street Journal. In a Dec. 8 radio interview on Finam.FM, Panarin presented his analysis in more depth. He said that threats to the existence of the U.S.A. as a nation originate from London-centered financial interests, including "aristocrats who have held on to their fortunes for many centuries," who intend to survive and retain power by destroying the United States, and that the terror attacks of Sept. 11, 2001 were a first step in their efforts.

NATO in Talks with Russia on Afghanistan Supply Route

Jan. 10 (EIRNS)—Russia is well-placed to hold important cards in dealing with NATO, as an unnamed NATO official in Brussels told AP on Jan. 8. He said that talks on setting up an alternative military supply route to Afghanistan are at an advanced stage. This is an issue of growing urgency, because of intensifying attacks by pro-Taliban forces on convoys coming through Pakistan. The route, according to the source, would pass through Russia, Kazakstan, and Uzbekistan. Moscow agreed last year to let NATO use its territory to re-supply the 62,000 NATO troops in landlocked Afghanistan.

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