Putin's Brusque Ukraine Diplomacy Stymies the EU and America

Diplomacy is generally regarded as a skillful cat-and-mouse game in which directness is seldom used. However, President Vladimir Putin has put aside the niceties of diplomacy in his battle over the future of Ukraine. Putin's meat-axe approach to the diplomatic arts was front and center this week as he threatened to undertake what he called the "extreme measure" of cutting off Russian gas for Ukraine unless the country pays in advance for all its supplies. In a forceful letter to 18 world leaders, Putin acknowledged that, in such a "critical situation," gas deliveries to the European Union would also be jeopardized. The EU buys a third of its gas from Russia, half of which is delivered by pipelines running through Ukraine. But, in addition, Putin accused the EU of causing the current crisis, leaving Russia with "no alternative" but to be tough. Putin's threat means that Russia is using its gas supplies to pressure Ukraine and its European allies to agree with his progeam for Ukraine -- making it a neutral federation with no ties to NATO. Ukraine is particularly exposed because it depends on Russia for almost all of its gas. The EU is less vulnerable. The range of EU dependence on Russian gas supplied through Ukraine varies from 80% for Hungary to zero for Britain. The time of year also affects Mr Putin's leverage : in summer, the EU buys very little gas from Russia. In his letter, Putin claims that Russia has always tried to help the "stability of the Ukrainian economy by supplying it with natural gas at cut-rate prices." These "unprecedented privileges and discounts," according to Putin, have saved Ukraine $17 billion since 2009. In addition, the country has failed to pay various fines totalling $18.4 billion. All together, Russia has provided a subsidy of $35.4 billion to the Ukraine economy. Russia's only thanks for this generosity, Putin added, was that Ukraine had stopped paying for its gas last August, but the Russian president wrote that Gazprom, the Russian state energy giant, would respond by demanding "advance payment. In the event of further violation of the conditions of payment," he added, Gazprom would "completely or partially cease gas deliveries." From now on, Russia would supply "only" the volume of gas that Ukraine had paid for "one month" in advance." Undoubtedly, this is an extreme measure," wrote Putin. "We fully realize that this increases the risk of siphoning off natural gas passing through Ukraine's territory for delivery to European consumers. We also realize that this may make it difficult for Ukraine to accumulate sufficient gas reserves for use in the autumn and winter." But, Mr Putin wrote : "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." However, analysts say that the EU is the biggest single buyer of Russia's oil and gas, and thus Putin's government would lose billions of dollars from any disruption of supplies. Russia would be the biggest loser, according to analysts at Commerzbank : "A voluntary suspension of Russia's deliveries or EU sanctions in the form of commodity export imitations would be disastrous for the Russian economy, above all, and would far exceed the potential damage for the Western world." The impact on Europe would also be reduced by the fact that large quantities of gas remain in storage after the mild winter. At the end of March, Britain's biggest storage facility was more than 40% full, compared with 1% at the same time last year. ~~~~~ Putin's letter also suggests that Russia is opening a new front against Ukraine. President Putin has already deployed between 35,000 and 40,000 troops on Ukraine's eastern frontier, raising the possibility of a full scale invasion. While Russia downplays its position on the Ukraine border, saying it can keep troops anywhere it chooses in its own territory, yesterday NATO released 20 satellite pictures of the military build-up, showing a concentration of tanks, helicopters and MiG-31 jet fighters close to the border. Brigadier Gary Deakin, of NATO's military headquarters, said this "very capable" force could go into action within 12 hours of receiving the order, adding that the strike aircraft were only a "few minutes" flying time from Ukraine. Meanwhile, Britain, Sweden and Poland are circulating a paper in the EU proposing the creation of an advisory "police force" to be sent to Ukraine to help train and add strategic weight to its military. ~~~~~ Dear readers, Vladimir Putin's latest actions are open to several interpretations. Is he simply using the biggest stick in his bag to slam home the truth that Europe may posture all it wants, but at the end of the day, it will be Russia's death grip on Europe's natural gas supply that will decide the fate of Ukraine. Or, is Putin challenging US President Obama to do something he normally does not do - act. Is Putin trying to show Europe that depending on Obama to supply either gas or additional on-the-ground military support is a dead end because Obama will not act to help Europe in any measurable way - the corollary being that Russia and Europe, especially Germany and eastern Europe, are more clearly natural allies. Or, has Putin merely decided to fill his coffers with the West's money - getting repayment for Russia's years of financial support for Ukraine. It is probably a little of all these, but the clear conclusion is that the EU and America have not yet found the key to successfully dealing with Vladimir Putin's brusque diplomacy.