Russia, Ukraine Discuss Contentious Energy, Security Issues

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01 July 2008

Russian Prime Minister Vladimir Putin met with his Ukrainiancounterpart Yulia Tymoshenko in Moscow on Saturday to discusscontroversial economic and military issues that have raised tensionsbetween their two countries. Mr. Putin warned that resolution of theseissues could impose various costs on Ukraine, not only in terms ofhigher energy prices, but also the possible loss of lucrative contractswith Russia's security and space industries. But as Emma Stickgoldreports for the VOA from Moscow, Kyiv is seeking to minimize thosecosts.

Prime Minister Vladimir Putin said Saturday thatRussian leaders would like to slowly increase gas prices for Ukrainecloser to the higher rate encountered by its European neighbors. Butsome Central Asian suppliers are encouraging Moscow to do so startingin January of 2009.

 Mr. Putin says Turkmenistan andUzbekistan, who deliver natural gas to Ukraine via pipelines throughRussia, are to blame for the possible increase. The CEO of Gazprom,Alexei Miller, has said Ukraine will likely face more than double itscurrent rates, going from the $179 per cubic meter to more than $400.  

Ms.Tymoshenko told Ukrainian's One-plus-One television station that thetwo leaders agreed Russia would raise Ukraine's price to Europeanlevels over three-to-four years. There is no immediate confirmation ofthat from the Russian government.

Natural gas has been acontentious issue between the two countries, with Russia having reducedor cut off Ukraine's gas supply on a number of occasions in recentyears.

The Russian head of government praised Ukraine forbeing debt free when it comes to current gas bills for the first timein many years.

Mr. Putin says Ukraine has debts from previousyears, and both sides are still searching for a solution to this issue.However, there are no debts for the current bills, which he says is agood result of the work of the current Ukrainian government and a goodcondition for moving forward in resolving gas-related issues.

Turninghis attention to Ukraine's possible membership in the North AtlanticTreaty Organization, Mr. Putin said Russia would terminate its militaryand other contracts with Ukrainian weapons and space facilities thatdepend on Moscow, if Ukraine joins the Western defense alliance.

Moscowopposes bids by Ukraine and Georgia to join NATO, and Mr. Putin saysmembership in the organization would be counter-productive forinternational security.

Independent Russian military analystPavel Felgenhauer told VOA that efforts to recreate Ukrainianproductions lines may prove to be quite difficult.

"Howsuccessful will be these plans to create production lines - differentequipment and components that are being made in Ukraine today onRussian territory - that is another question," he said. "Maybepartially they will be successful, maybe partially not. It is not aneasy endeavor at all to simply cut off Ukraine - but the threats arethere for sure."

Another contentious issue is the dispositionof Russia's Black Sea fleet, which is stationed in Sevastopol onUkraine's Crimean peninsula. Russia's representative to NATO, DmitriRogozin, recently said Russia would never leave Sevastopol, despite alease agreement with Ukraine that stipulates a withdrawal in 2017.  

Recently, Moscow has been seeking to extend the lease, but Ms. Tymoshenko indicates that is not likely to happen.
 
TheUkrainian prime minister says both sides have an agreement until 2017and her country will observe it as it does all of its otherinternational agreements - very accurately, and without any deviations.

Pavel Felgenhauer notes that much can happen between now and 2017.

"Rightnow, there are no real plans at all of actually moving the fleet fromCrimea and its infrastructure and of course this entire issue right nowis now of course immediate," he said. "The fleet can stay until 2017,which is quite some time away - there can be elections in Ukraine thatmay bring a more pro-Moscow government to power - many things other canhappen."

Carnegie Moscow Center political analyst Sam Greenetold VOA this weekend's Putin-Tymoshenko discussions indicate much workis needed to repair strained relations between Russia and Ukraine.
 
"Ithink it was clear through this weekend that these issues remaintroublesome for both sides and that neither is quite ready to make thecompromises that would be needed to really make progress in terms ofmoving past these issues or working through them in some way," he said.
 
ButGreene notes there has been a change in the nature of the dialogue,noting that a cordial tone recognizes that neither country really wantsor needs the relationship to be problematic.