On 1 January, Russia cut off gas supplies to Ukraine in a quarrel over unpaid debts. On 5 January, the situation has escaladed and the EU gas supplies via Ukraine were seriously disrupted. The EU imports 40 percent of its natural gas from Russia of which 80 percent come through Ukraine. Russia and Ukraine have been accused each other for the disruption to Europe's gas supplies. Twenty days latter the gas started to flow again. The Czech Presidency and the Commission have pursued a continue dialogue with both parties so that they could reach an agreement immediately. Nevertheless, they have failed to deal efficiently with the dispute between Russia and the Ukraine.
Initially, the EU has tried to stay out of the dispute. The Czech Presidency has stated that the EU had no reason to get involved. The European Commission has refused to get involved in a commercial row. The EU believed that there was no immediate threat to Russian gas flows to the EU. According to the Energy Commissioner, Adris Piebalgs, “The EU trusts that we can count upon assurances given that gas supplies to the EU will be unaffected, as a demonstration of the reliability of its gas suppliers.” However, it did not take long for the crisis to aggravate.
The situation changed on 5 January. Gazprom has significantly cut gas transited to Europe through Ukraine to compensate for the amount it claimed Ukraine was stealing. Russian Prime Minister, Vladimir Putin, said the gas had been stolen "not from Russia but from western consumers because they have bought this commodity and paid for it.” In the other hand, Ukraine has denied stealing gas.
Russian gas supplies to some EU member States have been substantially cut such as, in Austria, Slovakia, Bulgaria, the Czech Republic, Greece and Romania as well as in Croatia, Macedonia and Turkey. One day before, the European Union has said it won't intervene and it was not expecting any shortages.
The European Commission and the Czech presidency have acted issuing a joint statement noting that “gas supplies to some EU member States have been substantially cut" which is "completely unacceptable." They "demand that gas supplies be immediately restored to the EU and that the two parties resume at once negotiations with a view to a definitive settlement of their bilateral commercial dispute." The EU political demand was completely ignored by Russia.
In the mean time, the European Commission and the Cezch presidency had dispatched a joint fact-finding mission to meet with representatives of Naftogaz in Ukraine and Gazprom in Germany. However, such mission has failed to bring any tangible results while gas supplies through Ukraine have stopped completely.
On 7 January, the European Commission President, José Manuel Barroso, spoke to Vladimir Putin and to Yulia Tymoshenko, urging both of them, without any result, to restore full gas supplies to the EU immediately. However, the EU got a promise from Vladimir Putin and Yulia Tymoshenko to allow the deployment of international observers to monitor gas supplies. The EU has decided, therefore, to intervene in the dispute by agreeing to send a team of observers to oversee the transit of Russian gas via Ukraine.
On 8 January, the Czech presidency issued another declaration calling on “(…) both parties to accept independent monitoring of the actual flows of gas through the pipelines.”
New hopes were raised for the European countries deprived of gas. The Czech EU presidency announced that Vladimir Putin had agreed on the key issue of deploying EU monitors to check gas supplies through Ukraine.
However, Russia had refused to sign a deal to restore supplies. Russia has demanded its own observers to monitor gas distribution in Ukraine. Then, the Czech Prime Minister, Mirek Topolánek, and Vladimir Putin, agreed on the conditions of monitoring supplies of Russian gas to the EU via Ukraine. Moscow agreed to allow Ukrainians from Naftogaz on Russian soil while Russians from Gazprom will be allow on Ukrainian soil. Vladimir Putin said that Russia would resume gas supplies once the monitoring team is deployed at gas stations on the Ukraine-Russia borders. The Commission has believed that the Russian gas would reach Europe through Ukraine very soon. But, the Ukrainian signature to the agreement was missing.
Notwithstanding all the EU diplomatic efforts Russia has not resumed gas exports through Ukraine. Several drafts of the agreement text were presented by the Czech EU presidency. It was agreed that the EU monitors would be joined by Russian and Ukrainian officials. On 11 January, Russia has rejected the latest agreement on international monitoring of Ukraine gas transit accusing Ukraine of unilaterally modified it by adding to the document an annex declaring that Ukraine does not have any outstanding debits to Gazprom.
The EU observers have already been deployed. Whereas several countries were freezing Russia has not resumed supplies to Europe even after the European Commission President, Jose Manuel Barroso, said that “(…) all conditions expressed by the two parties have been met” therefore there were no longer obstacles to an immediate restoration of gas supplies. The Czech EU presidency also called on the Russians and Ukrainians to fulfil their obligations.
Finally, on 12 January all the parties signed the agreement on monitoring of the transit rout for Russian gas. Consequently, Russia promised, again, that gas supply to the EU through Ukraine would resume on the morning of the 13 January. Such promise was welcomed by the Cezch Presidency and the European Commission. Andris Piebalgs has said "There is a clear agreement that tomorrow at 8:00 a.m. European time, well, Brussels time, the gas will start to flow in the direction of the EU."
However, the main issues hampering relations between Russia and Ukraine have not been solved yet such as debts owed to Gazprom, the transit fees that Russia owes to Ukraine as well as the issue of “compression gas.”
In spite of the signing of the agreement, the deployment of EU observers, and Russian promises, on 13 January no gas has flown from Russia through Ukrainian pipelines to the EU. According to the EUobserver, a European Commission spokesman has said "Nothing, not one drop has reached the EU." The EU observers could not explain the reasons for the non-delivery of gas. According to Europolitics a Commission official said “Quite frankly, we are not able to establish a mission with the obstacles being placed by both sides.” Moreover, he said “The information that observers can gain at entry and exit points is limited. We hope that this situation can be sorted out.”
Jose Manuel Barroso has phoned Russian Prime Minister Putin to expressed the "EU's disappointment.” The Czech EU Presidency and the European Commission sent a join letter, on 13 January, addressed to Sergey I. Shmatko, Russian Minister of Energy and Yuriy Prodan, Minister of Fuel and Energy of Ukraine, urging immediate resumption of gas supply. They warned Ukraine and Russia that their credibility “as reliable partners will be irrevocably damaged should gas supply to European consumers not be immediately resumed.”
In the mean time, having no sign that the situation will improve, the leaders of Slovakia and Bulgaria, the two countries worst hit by the gas crisis, have decided to visit Ukraine and Russia in a desperate attempt to reopen gas supplies. However, they achieved nothing.
Russia and Ukraine continued to exchange accusations whereas the EU could not coordinate its foreign policy response. The EU has not spoken “strongly with one voice.” Russia has not dealt seriously with the European Commission or the EU presidency but it has directly dealt with the EU Member States in which it has interests such as Germany.
According to Europolitics Mr Piebalgs has confessed never expecting a full disruption of supply. He said “You can blame me as energy commissioner. But it was something new that has never happened before.”
Dmitry Medvedev, Russian President, proposed to host an international summit on 17 January, in Moscow, to discuss the stability of gas supplies to Europe. The EU was represented by the Czech Minister of Industry and Trade, Martin Říman, and European Commissioner for Energy Andris Piebalgs. Once again, the EU has urged both Russia and Ukraine to resume gas supplies to the EU immediately and to respect the agreement on the "Terms of reference for the monitoring of the transit of natural gas through Ukraine." However, the Czech Presidency announced its dissatisfaction with the outcome of the international summit. Martin Říman has said “We expected both parties to announce that they had reached an agreement on the resumption of Russian gas supply to the EU via Ukraine. This was not the case.”
On 18 January, Russian and Ukraine reached an agreement on the several issues as regards gas supply to Ukraine and its transit to Europe. The agreement was signed on 19 January by Vladimir Putin and Yulia Tymoshenko. Under such agreement, Ukraine would be granted a 20% discount on the European price on the condition of not raising the fees it charges Russia for transit of gas across its territory. In 2010, Russia and Ukraine will pay full market rates.
However, this time the European Commission and the Czech presidency cautiously welcomed the announcement that Russia and Ukraine have resolved their issues and will start the gas flows to Europe after signing their agreement. A spokesman for the Czech presidency of the EU has said "We welcome the announcement of a political accord, but we are quite cautious because there have been too many broken accords and promises not kept.” Whereas millions of Europeans were still without heat in a very sever winter, the Commission has admitted that the only thing that could be done was to wait and see what happens. The European Commission said in a statement “It now appears that these talks are bearing fruit. But we have seen many false dawns in this dispute, and the ‘test’ in this case is whether or not the gas flows to Europe’s consumers. Until that point, the wait goes on for Europe.”
On 20 January, Russia and Ukraine announced that EU gas supplies started flowing at 8:30 am Brussels time. On 21 January, the European Commission announced that the situation was “getting back to normal.” According to the Czech presidency “(…) this bilateral dispute has harmed the confidence placed into the two countries. To rebuild European consumers' confidence is now a challenge for both Russia and Ukraine.” José Manuel Barroso, said to be very “very disappointed” about the Russian and Ukraine way of negotiating, he said “There were announcements several times that agreement was reached and then there were no consequences. This is very negative for the image of any country. I will not forget that.”
The control of energy policy is being transferred from the Member States to the EU. Member States are loosing their autonomy on energy issues. If Member States are not able to regulate their own energy policy this will lead to instability in the security of supply. Member States should cooperate with each other but their policies should not be coordinated by Brussels. In fact, the gas crisis has shown that the EU energy policy is not effective.
The EU has now realized that it has to diversify its energy supplies and to reduce its dependency on Russia. However, the Nabucco project, deemed to be an important alternative to Russian gas supplies to the European Union is facing several problems. The Nabucco gas pipeline will bring gas from the Caspian region, Middle East and Egypt via Turkey to the EU. However, it should be mentioned that Turkish Prime Minister, Recep Tayyip Erdogan, has recently threatened to “review” Turkey’s position on the Nabucco project if the energy chapter continues to be blocked in his country’s EU accession talks.
It should be recalled that following the cuts on gas supplies from Russia via Ukraine, Bulgaria as well as Slovakia started considering reopening their power plants. In 1993, Bulgaria had closed Units 1 and 2 of the Kozloduy nuclear power plant under an agreement with the EU and it has closed units 3 and 4 after its accession to the EU. Slovakia has closed its units after accession to the EU. This was one of the conditions of the countries’ EU accession.
These countries are totally dependent on Russia for gas supplies. The closure of their power plants has considerably reduced their energy capacity.
Under Article 36, of Bulgaria's accession treaty, Bulgaria could reopen the nuclear reactors within three years of entering the EU. Such safeguard clause has already expired for Slovakia.
On 23 January, the Bulgarian parliament has endorsed a motion calling the Government to initiate talks with the European Commission to reopen two nuclear reactors. Bulgaria will now formally request from the Commission the reopening of the Kozloduy nuclear plant’s units 3 and 4. However, the Commission has already said that Article 36 of the country’s Accession Treaty provides for several conditions. According to the Europolitics an EU official has said “The last three weeks we were in a crisis situation. That crisis has been resolved. The question of the opening takes place in a different context.”
During the crisis, Slovak Prime Minister Robert Fico has announced that Slovakia will restart its nuclear power plant at Bohunice. He said "Damage from violation of the accession agreement is smaller than damage that would be caused by a collapse of the electricity system.” However, the European Commission has reacted negatively. Ferran Tarradellas Espuny, the Commission’s energy spokesperson has said “The reopening of the Bohunice plant would be a clear breach of the accession treaty of Slovakia. (…) This would be a serious violation of primary law of the EU. The EU would react in consequence.” Moreover, he said that reopening Bohunice is not possible from a legal point of view.
