Well, it looks like Russia’s off to a great new start this year. But I don’t think that a “kinder, gentler” neighbor is part of their resolutions. Gazprom, Russia’s natural gas monopoly, has cut-off supplies of natural gas to the Ukraine after they refused to pay their increased energy bills.
“Talks over price and transit fees unraveled late Wednesday with Gazprom demanding about $50 more per 1,000 cubic meters of gas than Ukraine’s president, Viktor Yushchenko, said the country — which itself has severe financial problems — was willing to pay. Later Thursday, Gazprom’s chief executive raised the asking price to $418 per 1,000 cubic meters from $250, saying that Ukraine had missed its chance to accept the lower rate. Currently, European nations pay around $500 per 1,000 cubic meters.”
Remember who Viktor Yushchenko is? He was the candidate who was poisoned with Dioxin during the previous election (by the Kremlin???).
What’s currently happening with energy prices around the world? They’ve been dropping. Hard, fast, and low. So how does Russia decide to recover their lost revenues? By raising the price! In keeping with leftist/socialist government policies, they cannot cut government size nor spending — that must ALWAYS increase.
But the price-increase has other implications as well :
“The shutoff at the peak of the heating season carried more than financial overtones; it is the most confrontational move by Russia toward a neighboring country since the August war in Georgia.”
Not only is just the Ukraine “held hostage” but Russia’s energy monopoly, but other nations in Europe as well, because the centralized pipelines to much of Europe go through Ukraine. When Russia cuts off their supplies, the pressure drops in the rest of the system (slowly but steadily) and affects other regions, even France and Italy. Ah, the brilliance of central planning!
Europe, when you make a deal with the “devil”, don’t be surprised if you get burned…