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Sunday, September 28, 2014

Putin Applies The Economic Thumbscrews on Ukraine

Putin Applies The Economic Thumbscrews on Ukraine

Despite global energy prices not going his way, Russian president Vladimir Putin continues to press his advantage, this time by making strides towards a settlement to the long-festering energy dispute between Gazprom and the Ukrainian government. The Wall Street Journal:

The two sides tentatively agreed that Ukraine would pay $3.1 billion in debt by the end of the year in return for OAO Gazprom the Russian state-owned gas giant, resuming some deliveries—but only for the winter months and at an above-average price, according to European Union and Russian energy officials.

Ukraine’s energy minister was more cautious about the deal, which still needs approval in Kiev and Moscow. But he didn’t dispute the size of the payment and signaled Ukraine would be willing to agree to Russia’s price for now. [...]

Russian threats of a trade war led Brussels and Kiev to agree on Sept. 12 to delay a major part of a landmark trade-and-political association deal between Ukraine and the EU that Moscow opposes.

Despite that concession, the Kremlin has demanded the terms of the deal be changed, threatening to impose tariffs on a wide range of Ukrainian imports if its wishes aren’t taken into consideration.

Fearing further conflict, EU officials this past week backed off previous assurances the deal wouldn’t be reopened, a move likely to increase Russian pressure on Kiev.

Putin is dancing on the face of the West, and in Tehran, Beijing and across the world, the message is clear: Western statesmen are not serious, they don’t think before they act and they don’t mean what they say.

Ukraine continues to pay the penalty for standing up to Russia at the instigation of a ditzy, incoherent and vainglorious EU. History’s contempt for this generation of european leaders—authors of the euro disaster, disarmers of Europe as threats grew to the east and the south, creators of the worst mass unemployment in Europe since the depression—will be harsh and deep. The price for two decades of policy incompetence is going to be high, and the bill is already coming due.

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