Putin turns up heat
MOSCOW — Vladimir Putin warned Europe on Thursday that it may face a shutdown of Russian natural gas supplies if it fails to help Ukraine settle its enormous Russian gas bill — a debt that far exceeds a bailout package offered by the International Monetary Fund.
The Russian president’s letter to 18 mostly Eastern European leaders, released Thursday by the Kremlin, aimed to divide the 28-nation European Union and siphon off to Russia the billions that the international community plans to lend to Ukraine. It was all part of Russia’s efforts to retain control over its struggling neighbor, which is teetering on the verge of financial ruin and facing a pro-Russian separatist mutiny in the east.
Putin’s message is clear: The EU has tried to lure Ukraine from Russia’s orbit and into its fold, so it should now foot Ukraine’s gas bill — or face the country’s economic collapse and a disruption of its own gas supplies. The U.S. State Department on Thursday condemned what it called “Russia’s efforts to use energy as a tool of coercion against Ukraine.”
In the letter, Putin said Ukraine owes Russia $17 billion due to the termination of gas discounts and potentially another $18.4 billion as a take-or-pay fine under their 2009 gas contract. He added that on top of that $35.4 billion, Russia also holds $3 billion in Ukrainian government bonds.
The total amount is far greater than the estimated $14 billion to $18 billion bailout that the International Monetary Fund is considering for Ukraine. Putin warned that Ukraine’s mounting debt is forcing Moscow to demand advance payments for further gas supplies. He said that if Ukraine failed to make such payments, Russia’s state-controlled gas giant Gazprom will “completely or partially cease gas deliveries.” Putin told the leaders that a shutdown of Russian gas supplies will increase the risk of Ukraine siphoning off gas intended for the rest of Europe and will make it difficult to accumulate sufficient reserves to guarantee uninterrupted delivery to European customers next winter. He urged quick talks between Russia and European consumers of Russian gas.
“The fact that our European partners have unilaterally withdrawn from the concerted efforts to resolve the Ukrainian crisis, and even from holding consultations with the Russian side, leaves Russia no alternative,” Putin said.
The letter was addressed to 18 European heads of states, including Serbia and Bulgaria, which both rely on Russian gas for 90 percent of their supplies.