At a recent meeting of Russian Prime Minister Dmitry Medvedev with a candidate for the presidency of Ukraine, representative of the Opposition Platform Yuriy Boyko and former head of the presidential administration Viktor Medvedchuk, Gazprom Chairman of the Board Alexey Miller put forward a plan that can be conditionally called ‘Belarusization’ of Ukraine. Miller proposed to extend the transit contract with Ukraine, reduce the price of gas as part of direct deliveries by at least 25% and enter the consortium for managing the gas transmission system.
Ukrainian journalist Vitaly Portnikov speculates on what this means for Ukraine and how it is connected with Belarus.
Between “freebies” and independence
Something similar was done in due time with Belarus. After a series of scandals, conflicts, and even suspension of Russian gas supplies to Belarus, Gazprom achieved full control over the country’s gas transportation system. Although the significance of the Belarusian and Ukrainian gas transmission system (GTS) is difficult to compare, for the regime of Alyaksandr Lukashenka his own pipeline is a real “road of life”. The Belarusian president tried to defend control over the GTS as much as the situation allowed him. But in the end, Lukashenka was made to understand that the preservation of this control is incompatible with the continuation of the post-Soviet paternalistic policy, on which, in fact, the stability of his regime is based.
Between “freebies” and independence Lukashenka habitually made a choice in favor of “freebies”.
The explanation of the circumstances in which Lukashenka made his choice allows us to answer the question of why Miller made his proposals to Kyiv right now. At first glance, the situation in Ukraine and Belarus cannot be compared at all. When surrendering to Gazprom, Belarus was already a privileged ally of Russia, and it was rather a matter of integration levels.
Ukraine is a country that is currently in a state of undeclared war with Russia; it has legally defined Russia as an aggressor state. What does Gazprom have to do with it all?
On the other hand, as a result of a reduction in transit through the Ukrainian GTS — which is quite possible in the event of the launch of “Nord Stream 2” and “Turkish Stream” — Ukraine will suffer significant financial losses.
Whether it will be possible to reduce the cost of raw materials for the people, most of whom are dissatisfied with the increase in tariffs depends on the price of gas. At the same time, lowering the tariffs is a sure way to the heart of the voter both at the end of the presidential election and during the parliamentary election campaign. Meanwhile, Western lenders are demanding completely different steps from the Ukrainian authorities — reforms in the energy sector, equal tariffs for the population and industry (this process is not finished yet) and, by the way, loan repayment. No one in the West will give money to fulfill numerous social promises made by Ukrainian populist politicians to their compatriots.
Miller’s “less harsh” option for populists in power
And here the aggressor state comes to the rescue — what a turn of events! Of course, the Kremlin is not going to just give money to any Ukrainian government — the bitter experience of subsidizing the regime of Viktor Yanukovych is still not forgotten. However, reducing gas prices in exchange for control over the pipeline is a very good option for anyone who wants to rule Ukraine with populist tools. Moreover, Miller offers the Ukrainians a “less harsh” option. Not a full transfer of the GTS to Gazprom, but an imitation of a consortium. That is, at first it will be possible to hold some trilateral talks, to include Europeans in the list of co-founders of the consortium, who are ready to play a decorative role for their own energy security and enable the Ukrainian president or prime minister, who agreed with Gazprom’s proposal, to save face even before the patriotic part of society. Because, well, not to include Russians who supply us with gas in the consortium is impossible! The gas is cheap by the way.
Sovereignty or gas?
The Ukrainian leadership should not be even bothered with making political concessions at this point. The Kremlin is used to communicating with consumers of its gas as if they were drug addicts — first make them addicted to the pipeline, and only then, when the dependence becomes critical, demand concessions for each new dose. If the very survival of the populist regime in Kyiv depends on the low gas prices, they will force it to look at Crimea, Donbass and the sanctions against Russia completely differently. There will simply be nowhere to go for such regime.
Another thing is that society always has a choice. There are still a lot of people who are convinced that independence from Russia is more important than gas prices. Their number is critically big. That is why it has not been possible to turn Ukraine into Belarus so far. Most likely, it will not be possible to do in the future, either. The case may again end with the collapse of the regime, which will try to exchange sovereignty for gas.
But Moscow will do its best.
Vitaly Portnikov for Belsat.eu
The views and opinions expressed in this article are those of the author.
