International

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Russia and Ukraine Settle Gas Dispute

February 12, 2008 01:14 PM
by findingDulcinea Staff
The countries resolve their latest energy disagreement, but tensions remain. Russia says it may target its missiles at Ukraine if it joins NATO.

30-Second Summary

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Ukrainian President Viktor Yushchenko and Russian President Vladimir Putin reached a deal Tuesday, resolving a dispute that threatened Russian gas supplies to Ukraine.

Russian energy giant Gazprom had presented Ukraine with a bill for $1.5 billion.

The agreement was reached after Ukrainian Premier Yulia Tymoshenko softened her earlier stance on the intermediaries channeling the money between Ukraine and Gazprom, writes Russian newspaper Kommersant. Tymoshenko blames the intermediaries for the $1.5 billion debt Ukraine has accrued.

Gazprom and the Kremlin are closely intertwined. The Russian state owns 51 percent of Gazprom, which supplies 77 percent of the gas consumed in Ukraine. The chairman on Gazprom’s board of directors is Dmitry Medvedev, Russia’s deputy prime minister and Putin’s choice to succeed him as president.

For these reasons, many are inclined to interpret Gazprom's actions as expressions of Russia's political will.

In this cae, the suspicion is that Moscow is trying to intimidate its neighbor into abandoning its pro-Western ambitions, the Kiyv Post reports. Gazprom’s threats came only a day after Ukraine became a member of the World Trade Organization.

In fact, during the news conference announcing the gas deal, Putin threatened to target its missiles at Ukraine if the country joins NATO or plays host to the U.S. missile defense shield. Yushchenko stood alongside the Russian president during the conference.

Ukraine’s president and premier played key roles in the Orange Revolution three years ago that ousted the nation’s pro-Russian government. Their government has since sought closer relations with the West.

Headline Links: Russia and Ukraine in gas bill dispute

Background: Gazprom threatens to cut gas supplies

Historical Context: Orange Revolution, 2006 gas cut and Tymoshenko’s re-election

The Orange Revolution: election, corruption and poisoning
Russian energy disputes: 2006 gas cut
Tymoshenko’s re-election

Opinion & Analysis: Gas and politics

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