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EU holds emergency talks on Russia-Ukraine rift
(Reuters)
Updated: 2006-01-04 09:29
The EU holds emergency talks on Wednesday to seek ways to secure energy
supplies in the face of a Russian-Ukrainian gas dispute that triggered shortages
earlier this week.
Russia's gas supplies to Europe returned to normal on Tuesday after European
customers complained about delivery shortfalls to a wintry continent when Moscow
stopped supplies to Ukraine on January 1 after Kiev rejected a fourfold hike in
prices.
Russian and Ukrainian officials met but neither side signaled any softening
in the standoff between the two republics which formed the industrial axis of
the former Soviet Union.
Ukrainian President Viktor Yushchenko (C) speaks during a
meeting on gas issues in Ukraine's capital Kiev, January 2, 2006.
[AP] | With Europe highly reliant on Russia for
energy, officials from the European Union's 25 member states were expected to
discuss how the dispute had affected them and how they could ensure their gas
needs were not disrupted in the future.
The officials were also likely to discuss a request for help in negotiations
with Russia by Ukraine and Moldova, another former Soviet republic hit by
Moscow's decision to raise prices.
The EU's Energy Commissioner Andris Piebalgs, who will chair the meeting,
said the bloc would be interested in helping negotiations if Russia agreed. But
he gave no details on what role Brussels could play.
"We expect to also establish some form of community solidarity mechanism in
the case if there is a gas disruption. I don't mean in this particular case, but
in general," Piebalgs told Reuters.
ACCUSATIONS TRADED
Russia's state-run Gazprom and Ukraine's Naftogaz Ukrainy gas companies have
been invited to give briefings at the meeting, which will also be attended by
European industry representatives and consumer groups.
Russia blames Ukraine for refusing to pay the same prices as its European
neighbors and has accused Ukraine of stealing gas intended for European
customers.
Ukraine says Russia is lying and accuses the Kremlin of punishing it for its
pro-West ambitions.
Pipes and a pressure gauge are seen at the
Solokhovskoe gasfield near the city of Poltava, 330 km (198 miles) east of
Ukraine's capital Kiev, January 3, 2006.
[Reuters] | The Kremlin makes no secret of its dislike of the West-leaning stand of
Ukrainian President Viktor Yushchenko, who rose to power a year ago after mass
protests forced a rerun of elections initially won by a Moscow-backed candidate.
European countries and the United States have accused Russia of using energy
supplies as a political tool.
"We're glad to see that the (gas) flow has been resumed, and we hope that the
Russians and the Ukrainians can reach some type of accommodation," said a White
House spokesman.
Moscow wants Ukraine to pay $230 per 1,000 cubic metres of gas, up from the
current $50 price that is rooted in Soviet-era subsidies, but Ukraine says such
a big hike could wreck its weak economy.
Ukraine's gross domestic product may fall by 5 percent and inflation rise to
27-30 percent in 2006 if the price for Russian gas increases to $230, a senior
government official was quoted as saying on Tuesday by Unian news agency.
The wobble in gas supplies to Europe this week sent a chill through capitals
and energy markets, with some analysts saying the disruption had hurt Russia's
credibility as a dependable supplier of energy.
Prices for oil, Russia's other major money earner, jumped a dollar to just
over $60 a barrel as consumers feared the row could yet crimp fuel supplies to
Europe.
In Britain -- Europe's only major, freely traded gas market -- wholesale
prices rose as much as 8 percent on Tuesday.
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