Russian Natural Gas

The lead article in today’s New York Times, “Kiev Struggles to Break Russia’s Grip on Gas Flow,” describes an economic stranglehold making Ukraine dependent on Russia’s natural gas to heat its homes and run its factories.

Moreover, Russia, through its state-controlled gas company, Gazprom, changes the price of its natural gas to Ukraine depending on who is in power. With the current European-friendly government, it is charging $485 per thousand cubic meters compared to $268 when President Viktor Yanukovych was in charge.

In order to break this dependency, Ukraine is trying to arrange “reverse-flow” deliveries from Slovakia, even though that nation gets 60 percent of its own supply from Gazprom. And Europe as a whole gets about a third of its natural gas supply from Gazprom.

These facts on the ground give Russia tremendous leverage during geopolitical crises because it becomes problematic to arrange effective economic sanctions when so many nations in Europe are vulnerable to a complete cutoff. And Vladimir Putin knows how to utilize this reality to the full power of his ability.

Should the power supply be interrupted in European households, it is the democratically elected leaders who will face an outcry, especially during the winter. Putin knows this, and European leaders know that he knows, and that makes the situation in Ukraine all the worse for its peaceful law-abiding citizens.

Who is that Masked Man?

The lead article in today’s New York Times, “Photos Link Masked Men in East Ukraine to Russia,” shows the hypocrisy of the Russian government as they carry out a “special war” against Ukraine.

A special war avoids the open use of military troops and instead relies on the secret service, subversion and terrorism to gain its goals. Russia used a “special war” against its rebellious province of Chechnya and the recent takeover of Crimea as well.

Now, photographs have surfaced tying the pro-Russia militia in East Ukraine to actively serving Russian troops. This loosely kept secret is now exposed, and it puts Russia on warning to comply with the recent agreement in Geneva to withdraw its forces.

These so-called militia have now taken over government buildings in 10 towns in East Ukraine, and their refusal to back down is clearly in accordance with Russia’s wishes. The Geneva accord is now interpreted solely as Russia buying time to avoid new sanctions.

President Obama must step up the pressure on Russia to comply. Its economy is based almost entirely on the energy sector, so a well-targeted boycott could have a major effect. It would also start to erode Mr. Putin’s popularity as the Russian people realize that their political victories come with a cost as the price of food staples starts to rise inexorably.

Insurgent Intransigeance

The lead article in today’s New York Times, “Insurgents Balk at Pact, Keeping Grip in Ukraine,” shows the delicate nature of the surprise agreement in Geneva between Russia and Ukraine, primarily because the masked militants are refusing to go along with it.

The pro-Russian forces who have seized government buildings in East Ukraine, many believe with tangible support from Vladimir Putin, refused to honor the agreement. This development called into question the whole diplomatic process and made many wonder if it was just a ruse by Russia to avoid sanctions.

Of course, the Russians claim to have no power over these militants, but unless the impasse is broken, Ukraine will move in with its “counter-terrorism” forces to take back its government buildings. If there is resistance, that could spur the Russians to invade like they did in Crimea. And it would probably mean annexation of more of the country.

Mr. Putin, a former KGB agent, is probably working three steps ahead of the rest of us, and the increase in his popularity after the annexation of Crimea cannot bode well for other areas of Ukraine. He is known to want to restore the Soviet empire, and one wonders if he is just getting started.

Suspicions are running high, and the United States is conducting military exercises in eastern Europe to make sure Putin’s ambitions do not extend to any of the new NATO countries.

Russia and East Ukraine

The lead article in today’s New York Times, “In East Ukraine, Protesters Seek Russian Troops,” describes an increasingly tense situation, where demonstrators are calling for intervention by Russia and are pledging to hold a referendum on secession no later than May 11. Three cities in East Ukraine were besieged by these protests, in a similar scenario to Crimea, where Russian troops entered the region and eventually annexed it.

Ukrainian government officials in Kiev will not let any aggression by Russia go unchecked like they did with Crimea. Moats are being built, and Ukrainian soldiers are taking up positions to defend their nation. But against 40,000 Russian troops, it does not seem like they would have much success.

With Ukranian Presidential elections scheduled for May, the Russian influence is bound to affect the results, and the alignment of Ukraine with Europe seems increasingly unlikely. Some form of federalism to give Russian-speaking provinces autonomy seems almost inevitable, if only to keep Russia’s troops at bay.

Meanwhile, the IMF is demanding austerity measures if it is to help bail out the Ukrainian economy. And those legislative steps may be forestalled as Ukraine tries to maintain its territorial integrity and keep Eastern Ukraine as part of the country. Europe and the United States are watching these developments helplessly.