Putin's response to Europe

Europe Folds As Putin Tells It To Pay Ukraine's Gazprom Bill, Or Else

Zero Hedge 
11 April, 2014



The latest: Europe should provide aid to Ukraine to ensure uninterrupted natural-gas deliveries to the region, President Vladimir Putin’s spokesman said as reported by Bloomberg.


Another day ending in "y" means another day in which Putin plays the G(roup of most insolvent countries)-7 like a fiddle.

"Russia is the only country helping Ukraine’s economy with energy supplies that are not paid for,"  Dmitry Peskov told reporters today in Moscow,  commenting on President Vladimir Putin’s letter yesterday to 18 European heads of state. “The letter is a call to immediately review this situation, which is absurd on the one hand and critical on the other. 

And guess what: Putin is about to win yet again:  

Said otherwise: PUTIN SAYS EUROPE GAS TRANSIT DEPENDS ON UKRAINE: IF

Or, as we explained yesterday, Russia is quite happy to keep the EU gas flowing... as long as Ukraine has enough gas in storage to assure Gazprom it won't syphon off gas destined for Europe. So how much gas does Ukraine need to pre-stock? About $4-5 billion worth. The problem is that Ukraine doesn't have a dime to spend on gas.

So putting the question aside if Ukraine will or won't import even one bcf of Russian gas ever again (thanks to some fracking or US natgas exporting magic), what Putin just said is that if Europe wants an uninterrupted supply of gas it better find a way to fund Ukraine to the tune of up to $5 billion, or else the gas may just get shut off.

European Energy Commissioner Guenther Oettinger is working on a plan to help Ukraine pay some of its gas bills to Russia, he told Austria's ORF radio on Friday, saying there was "no reason to panic" about Russian gas supplies to Europe.
"We are in close contact with Ukraine and its gas company to ensure that Ukraine remains able to pay and the debts that the gas company has to Gazprom do not rise further," he said, adding he would meet Ukraine's energy and foreign ministers on Monday.

"I am preparing a solution that is part of the aid package that the IMF, the European Union and the World Bank is giving to Ukraine and from which payment for open bills will be possible.

The chass game continues: Putin X+1 - Pidgeons 0 

Putin to US: It’s bad to read other people’s letters

RT,

11 April, 2014

President Vladimir Putin says it was “strange” to learn of the US reaction on a Russian letter to the leaders of EU’s top gas-consuming nations, as it was in no way designed for Washington’s eyes.

US State Department spokeswoman Jen Psaki has accused Russia of reneging on an agreement that offered reduced gas prices to Kiev and using “energy as a tool of coercion against Ukraine.”

The price Ukraine is currently paying is “clearly not set by market forces and well above the average price paid by EU members,” she added.

“It’s a bit strange,” Putin said after Foreign Minister Sergey Lavrov informed him of the US comments during a Russian Security Council meeting. “It’s strange, at any rate, as it’s bad to read other people’s letters. It wasn’t addressed to them, but the consumers of gas in Europe.”

“Everybody is used to the fact that our American friends are eavesdropping, but turning to peeping is shabby altogether,” he said.

RIA Novosti / Igor ZaremboRIA Novosti / Igor Zarembo

But, joking apart, the pricing on gas for Kiev is regulated by the contracts Russia’s Gazprom and Ukraine’s Naftogaz signed back in 2009, Putin said.

He added that he wrote his letter because “Russia can’t carry the Ukrainian burden alone,” urging the European leaders to hold a joint meeting as soon as possible “to find ways to help and support the Ukrainian economy.”

“Handing out cakes at the Maidan isn’t enough to prevent the Ukrainian economy from plunging into complete chaos,” he said.

The comment dates back to a PR stunt by US Assistant Secretary of State for European and Eurasian Affairs, Victoria Nuland, who tried to feed snacks to protesters and police as she visited Kiev during the standoff in December last year.

In his letter Thursday to European countries including France, Italy, Greece, Turkey, Bulgaria, Moldova, Poland and Romania, Putin warned that Ukraine’s debt crisis had reached a “critical” level and could threaten gas transit to Europe

EU taking Putin’s letter on gas transit ‘seriously’ – Merkel

RT,

11 April, 2014

The EU is taking seriously President Vladimir Putin’s letter to 18 European countries, in which he warned that Ukraine’s debt crisis could affect gas transit from Russia, German Chancellor Angela Merkel said.

"There are many reasons to seriously take into account this message […] and for Europe to deliver a joint European response,” Itar-Tass reported Merkel as saying.

She said the issue would be discussed in a meeting between European Union foreign ministers Monday.

Speaking in Athens on Friday, Merkel stressed that the price on natural gas should be negotiated. She also said that EU Energy Commissioner Gunther Oettinger and representatives of European states should talk to Russia’s biggest gas producer, Gazprom.

“When we take all these steps, we can be sure that we have reached a joined response for the countries that face this problem because they are getting gas from Gazprom,” Merkel said, adding European states"would like to be good clients but we would also like to be sure Russian gas supplies are not interrupted."

Merkel said that she also discussed this stance with Greek Prime Minister Antonis Samaras. “There are no disagreements on this,” she said.

On Thursday, Putin wrote a letter to the leaders of 18 European countries, major consumers of Russian gas such as Germany, France, Italy, Greece, Turkey, Bulgaria, Moldova, Poland and Romania, warning that Ukraine’s debt crisis reached a “critical” level and could threaten transit to Europe.

He told Russia’s European partners that Gazprom would be forced to ask Ukraine for advance payments.

“In other words, we’ll be supplying exactly the volume of gas that Ukraine pays for a month in advance,”he wrote.

After the coup in Kiev, Gazprom ended all discounts and now charges $485 per 1,000 cubic meters of gas. This is a price Ukraine says it will not be able to pay because it threatens Ukraine's ability to continue normal gas transit operations to Europe.

Putin also said, however, that introducing advance payments would be an extreme measure.

“We understand that this increases the risks of unsanctioned retrieval of gas flowing through the territory of Ukraine to European consumers," he said. "And it could also hinder accumulation of gas supplies in Ukraine necessary to provide for consumption during the autumn-winter period.”

On Friday, Putin said that still Russia would fully honor its obligations to supply natural gas to European partners.

"Russia is acting very exactly, very considerately and respectfully towards our partners. We will certainly guarantee in full the honoring of all our obligations to our European consumers. We are not the problem, the problem is ensuring transit via Ukraine," he said.