Russia threatened to reduce natural gas exports to Ukraine by another 25 percent on March 4, and Ukraine warned it would stop transiting supplies to Europe until the dispute is resolved. Russia is using energy as a tool to punish Europe over Kosovo and to shatter Ukraine's pro-Western governing coalition.
Russia threatened March 4 to cut natural gas exports to Ukraine by another 25 percent, following a 25 percent cut on March 3. Kiev accused Moscow of already having cut much more than 25 percent, though Moscow denied the accusation. Ukraine also warned that it might stop the flow of transiting natural gas destined for Europe until the dispute is resolved. FREE PODCAST Another Ukrainian-Russian natural gas dispute is in full swing. The back-and-forth threats are to be expected, but, in the midst of it all, the Kremlin's agenda is pushing forward. Moscow is using the spat to send a message to Europe over Kosovo, and to knock the legs out from under the pro-Western Ukrainian government. The Europeans have a significant stake in the outcome: 25 percent of Europe's natural gas comes from Russia, transiting first across Ukraine. Despite the supply cuts, Russian natural gas behemoth Gazprom has vowed that Europe's supplies will not be touched unless Ukraine illegally siphons off supplies that are destined for European customers. That was what happened last time, however. In January 2006, Ukraine began siphoning off natural gas after a similar cutoff, reducing supplies to 15 European countries at the height of winter. But if Russia does indeed cut another quarter of the flow as threatened, it will be impossible for Ukraine to fulfill its obligations to Europe in any case. And if Ukraine makes good on its threat to stop transiting Russian natural gas westward, Kiev could experience a serious backlash from Europe — the Europeans, not the Russians, would be the ones feeling the pinch. Europe is already scrambling again. The European Union has begun to organize an emergency session on how to react to what feels like a very familiar situation. And Germany — which receives 30 percent of its natural gas from the Ukraine line — arranged a meeting between Chancellor Angela Merkel and French President Nicolas Sarkozy on March 3 to create a more united front before Merkel travels to Moscow on March 8. But the Kremlin's second objective — breaking the back of Ukraine's pro-Western Orange Coalition-led government, which was already on a razor's edge before the dispute began — looks to be almost realized. Ukrainian President Viktor Yushchenko has started the motions to dissolve parliament, which would spark yet another round of elections and political chaos in Ukraine. Moscow will be happy to see a more pro-Russian government emerge in Kiev — or, failing that, to prolong Ukraine's now-chronic instability, allowing Moscow to needle its neighbor when doing so works to its advantage.