A high-level EU meeting over Russia is to be held in Brussels. Prior to the meeting, US Secretary of State John Kerry has pressed for Russia to face toughened sanctions, unless it takes concrete steps to stop armed separatists in eastern Ukraine. European leaders, also, are expected to consider imposing more economic sanctions on Russia and to sign a free-trade accord with Ukraine.
The trade deal, to be signed between the EU and Mr Poroshenko, will establish a “deep and comprehensive free-trade area” between Europe and Ukraine. Two other former Soviet republics, Georgia and Moldova, are also expected to sign similar agreements. Despite these prospective agreements, tensions are still extremely high in Ukraine.
Clashes with pro-Russian separatists saw several fatalities again this week. An explosion ripped through a natural gas pipeline in central Ukraine earlier this week. The country’s interior minister said it might have been an act of sabotage. Meanwhile, Gazprom officials reassured that the blast along the Urengoy-Pomary-Uzhgorod pipeline near Poltava hadn’t disrupted its gas deliveries to Europe, thanks to the existence of alternate routes.
Winter in mind
The Russians, in the meantime, are waiting. The parliament rescinded its authorization to send troops into Ukraine prior to the EU meeting. The move was sensed by international media as “relatively insignificant, and easily reversible.” Yet, it shows that Mr Putin is playing a patient game, waiting to see exactly what the EU’s intentions are.
As the New York Times explains, Russia has been strongly opposed to closer ties between the ex-Soviet republics, such as Moldova and Georgia, and the West, saying that the trade agreements meant to be signed in Brussels are aimed at fostering a broader military and strategic alliance that could lead to further expansion of NATO, which Russia opposes.
The EU, therefore, must choose its next move carefully. Particularly since the EU has a lot less room to maneuver than the Americans. The Europeans know they need to get ready for winter, and they do not wish to compromise their Russian gas supply too much. Russia, on its part, knows very well the extent to which Central and Eastern European nations are reliant on its natural gas.
Not incidentally, the Russian government is the major shareholder in Gazprom. Back in April, the Kremlin increased the price of natural gas sold to Ukraine by more than 80%, in a move seen to be in retaliation to the expulsion of Ukraine’s former pro-Russia president, Viktor Yanukovych. This gesture was a clear message from Russia to show the EU and others what it is capable of doing. Therefore, while the US government has been adamant about sanctions, the EU is more concerned about its energy supply and the economic welfare of the countries on the Eastern border with Russia. These considerations lead us to conclude that tensions will decrease over the next few days.
Russian bullying risks alienating ex-satellites
According to the BBC, “Ukraine, Georgia and Moldova have signed partnership agreements with the European Union, in a move strongly opposed by Russia. The pact - which would bind the three countries more closely to the West both economically and politically - is at the heart of the crisis in Ukraine. Russian President Vladimir Putin said making Ukraine choose between Russia and the EU would split it in two.”
Crash Magazine explains, “Russia has said it will flex its considerable muscle to squeeze any nation in the former Soviet orbit that seeks a future with Europe. Ukraine, Moldova and Georgia are facing intense pressure ahead of the deal’s signing, including threats of export bans and tightened immigration rules, as well as the specter of strengthened separatist movements.” But, the article points out “the warnings may be backfiring, with leaders in all three countries saying Moscow’s ominous tone demonstrates more than ever why they need to pick a different path.”
Business as usual for oil and gas companies
Despite social and diplomatic pressures, the economic players of this crisis are really the ones who hold the reins. Decisions between companies, not governments, will define the relationship between Russia and Western countries. As separatists and loyalists make grand claims in the vast and flat Ukrainian east, it’s business as usual for American and European companies eager to get ahold of precious oil and gas resources, and who have gone forward signing deals with Russia even at the height of the crises.