Posted on 01/09/2006 6:03:20 PM PST by Tailgunner Joe
While in the U.S., people speculated about the outcome of the Rose Bowl and the size of Samsung’s new humongous plasma TV at Las Vegas’ Consumer Electronics Show, Europe had a very cold New Year. Flaunting global warming, already freezing temperatures in the Old Continent managed to get colder thanks to Russian President Vladimir Putin.
2006 did not kick off promisingly when Gazprom, Russia’s Kremlin-owned energy monopoly, interrupted Ukraine’s natural gas flow through the ironically named “Brotherhood” pipeline. Ever since the downfall of the USSR, former satellite Soviet republics have benefited from heavily subsidized gas prices. Wanting to update Ukraine’s access to “international standards,” Gazprom raised the price of gas from $50 per thousand cubic meters to $230. The more than 400-percent increase was cleverly couched in the Western language of free trade and open international markets.
The Kremlin, however, failed to foresee the impact on the European countries that feed off the same pipeline and already pay the market price. European Union powers like Germany, Russia’s largest energy importer, and Italy saw their flows reduced by more than a third and, with U.S. backing, pressed Moscow to reach a stabilizing agreement with Ukraine. At a time when thre is reduced oil production in Iraq, and Norway is already pumping oil at full power, there was no excess capacity from which Europe could benefit. Clearly, the pressure was on. Not surprisingly, the involved parties swiftly reached an agreement—featuring gradual price increases and the involvement of third-party dealers—to save Muscovite face. Several lessons and comparisons can be drawn following this New Year’s freeze fiasco.
Moscow often courts thirsty foreign hedge funds with the possibility of making Gazprom public, but the fact remains that it is far from an independent company. In fact, Dmitry Medvedev, a close friend of President Putin and the first deputy prime minister of Russia, chairs the “corporation.” In the last months, this behemoth bought, in a throwback to good ol’ Soviet times, curious assets to “complete its portfolio”: Izvestia, a money-losing newspaper, and NTV, a leading TV network formerly owned by one of Putin’s rapidly vanishing rivals. This cold New Year, the company was used for a 21st-century taste of realpolitik.
The truth about the frigid feelings between Moscow to Kiev lies beneath: retaliation for last year’s Orange Revolution, which was built on the premise to take the country away from the Kremlin’s spheres of influence. Former Soviet republic Belarus, on the other hand, has an authoritarian government keen on close relationships with Moscow and still enjoys cheap energy. Thus, gas from murky companies like Gazprom flows with political scents—and according to Putin’s desires.
The problem with Russian politics is that increasingly, everything flows according to Putin’s cravings. Long gone are the days when Kremlin-watchers thought this sober former KGB officer would copy-cat feeble former President Boris Yeltsin. Damningly, when the Kremlin intervened to rectify most of the shady privatizations of his predecessor, media freedom was severely obstructed. The State took control of most media outlets and kept them, minimizing criticism within its borders.
According to Marshall Goldman, associate director of the Davis Center for Russian and Eurasian Studies at Harvard, when prosecuting oligarchs, Putin went “too far yet not far enough.” He went after the oligarchs that did not support him, like Mikhail Khodorkovsky, yet suspiciously overlooked friendly others such as Roman Abramovich. Furthermore, the increasingly complacent Parliament was cajoled into passing strict controls on civil liberties. In a move almost unnoticed by Western media, Andrei Illarionov, a top economic adviser to Putin, resigned last week, loudly proclaiming Russia to be “no longer a free country.” To our journalists, it seems gas is ultimately more important than testimonies regarding the status of democracy.
Oddly, Russia will chair the Group of Eight this year, at a time when its president behaves like another authoritarian leader sitting on vast fossil fuel reserves—Venezuelan President Hugo Chávez. Furthering his “Bolivarian” revolution and profiting from his oily dollars, Chávez is buying military equipment from Spain and AK-47s (guess where from) for his growing “security forces.” As the Bush administration turns its eyes away from Latin America, Chávez buys influence in the region by aiding Caribbean economies and helping his Argentine “brother” President Néstor Kirchner rid his country of the International Monetary Fund.
As it turns out, few lessons were learned from the oil crises of the past, even when Western Europe reduced its dependency on oil. Instead, Europe turned its reliance to gas—largely from Russia. And today, exorbitant fossil fuel prices give unprecedented power to leaders like Putin and Chávez—leaders that, in many cases, started rightfully defending the interests of their nations after damaging laissez-faire regimes featuring rotten privatization programs. Yet, as the case of Ukraine showed last week, they often go too far.
Catherine the Great once said that because of the size of the country, “the sovereign must be autocratic,” crystallizing the perennial Russian dilemma between authoritarian regimes and revolutions. Putin once deemed the fall of the Soviet Union the greatest political catastrophe of the century; the world hopes he won’t try to emulate what was lost under Mikhail Gorbachev. Gazprom’s New Year surprise, however, shows a future as dark as oil, and as volatile as natural gas.
"In the last months, this behemoth bought, in a throwback to good ol’ Soviet times, curious assets to “complete its portfolio”: Izvestia, a money-losing newspaper, and NTV, a leading TV network formerly owned by one of Putin’s rapidly vanishing rivals"
Yeah - that's the "Free Market" at work.
BWAHAHAHA
Except once again, according to the Germans who received the gas, it was your employer the socialist Yushchi who stole the gas. But why bring that little fact up for a candidate with the Clinton spin team as his employer. Hope you're not getting paid by the percentage point, it'll be a lonely year for you.
The MSM likes to call Putin "authoritarian." Let's just call him what he is, a socialist.
Other editorials in this issue of 'the Crimson' (can't get much more of a Red paper than that) include...
COLUMNS
PUBLISHED ON Monday, January 09, 2006
Jumping The Track
Accounting 101 be darned—a liberal arts education is something special
By ADAM GOLDENBERG
“The increasing trend toward concentration in Economics…might at first appearances seem to indicate an increased desire on the part of college men to be well acquainted with modern affairs,” opined this page in December 1929. “But unfortunately many of these men are interested in Economics because they believe it to be an open sesame to a fortune.”
"'the Crimson' (can't get much more of a Red paper than that)"
LOL.
Would you support the unfriendly state with subcidizing gaz? No and Russia will not. Let Ukarine pay the market price!
"The MSM likes to call Putin "authoritarian." Let's just call him what he is, a socialist."
Once a communist always a communist
"Other editorials in this issue of 'the Crimson"
Whats that have to do with Russia's despotism during this gas war.
"Would you support the unfriendly state with subcidizing gaz? No and Russia will not. Let Ukarine pay the market price!"
What about the two contract prices ? You keep talking about "market" prices while ignoring the fact that Putie reneged on two contracts Ukraine had to purchase gas at $50 until 2009.
But whats a contract to a communist.
We're talking about the college newspaper of Harvard. I do not find it a credible source.
Ukraine admitted to stealing gas from Russia (quite separatly from taking Turkmen gas from the line) before and after the contract thus rendering the contract null and void.
What about the two contract prices ? You keep talking about "market" prices while ignoring the fact that Putie reneged on two contracts Ukraine had to purchase gas at $50 until 2009. ===
Ukraine didn't have such contract or already has been in court waving it. But no such things except propaganda by mister Ekhanurov.
"Ukraine didn't have such contract or already has been in court waving it"
Checkmate!
Well which is it RusIvan? How can they be in court waing it if it never existed. You can't keep up with the tangled web you weave.
"Ukraine admitted to stealing gas from Russia (quite separatly from taking Turkmen gas from the line) before and after the contract thus rendering the contract null and void."
"Ukraine didn't have such contract or already has been in court waving it."
Boy, you ask 2 putiephiles a simple question and you get three mutually exclusive answers.
Double Checkmate
1. The contract was null and void is the same as saying there is no contract.
2. If you read what RusIvan said it's clear that if Ukraine had a contract that WASN'T null and void that they'd have been waving it in the Belgium arbitration court, instead they were afraid to go.
Since then they've made a deal which the Gas Princess Tymoshenko (who got rich stealing Russian gas) objects to. Hmm isn't in interesting that a deal that prevents Ukraine from stealing gas is objected to by the one who profited most from stealing it.
"if Ukraine had a contract that WASN'T null and void that they'd have been waving it in the Belgium arbitration court,"
What, do you think a suit in the Hague is like walking into McDonalds? First you have to get world opinion against Putie and then you crush his nuts in court.
Talking nonsense again I see.
Russia has invited them to take it to the arbitration court before. There Russia can prove beyond a shadow of a doubt that Yushchenko and Tymoshenko are theives and liars and make a mockery out of the west in general.
First you have to get world opinion against Putie and then you crush his nuts in court.==
You create your "world opinion" by what? By lies? You think it will work in court?:)
You are very spoiled person if you rely on lies to win your cause.
If you think that your cause in strong you go to court or wait when your opponent will do that.
If you think that your case is weak then you flap you tongue before media to lie and lie and lie with hopeless attempt to make your case before "world opinion".
"Russia has invited them to take it to the arbitration court before"
Reference Please
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