May 15, 2010

Flashback: Moscow buys sea power with Ukraine gas deal

Moscow buys sea power with Ukraine gas deal - Times Online
April 22, 2010

Moscow buys sea power with Ukraine gas deal

Russian President Dmitry Medvedev tastes a bread during a welcome  ceremony

Russia achieved an important strategic ambition yesterday by striking a deal to keep its Black Sea Fleet in Ukraine until the middle of this century.
President Medvedev said that the fleet would remain at its port in Sevastopol for 25 years after its present lease expires in 2017, following talks with Viktor Yanukovych, his Ukrainian counterpart. The agreement allows a further five-year extension to 2047.
In return, Ukraine will receive a 30 per cent discount on the price of gas imported from Russia. President Yanukovych said that the concession amounted to $40 billion (£26 billion) in Russian aid over the next decade.

The deal is a triumph for the Kremlin two months after the election of the pro-Russian Mr Yanukovych ended Ukraine’s Western-leaning Orange revolution. His predecessor, Viktor Yushchenko, had insisted on closing the base when the lease ended.

The meeting in the Ukrainian city of Kharkiv was the fifth between the two leaders since Mr Yanukovych took office in February — an indication of the intensity of Russia’s efforts to restore influence over its neighbour after a breakdown in relations with Mr Yushchenko. Mr Medvedev had denounced Mr Yushchenko as “anti-Russian” and said that he would no longer meet him.
Mr Yanukovych has ditched Mr Yushchenko’s policy of seeking Nato membership, a goal strongly supported by the US under President Bush. President Obama was far less supportive. His policy “reset” focused on improving relations with Moscow.
Mr Obama is likely to come under attack from Republicans who will see the deal as evidence of his failure to challenge Russia’s attempts to establish a sphere of influence over former Soviet republics.
Ukraine’s Foreign Ministry sought to pre-empt criticism by saying that Russia’s military presence would “contribute to stability and peace in Europe”. It added: “We do not regard the Black Sea Fleet as a source of threat to Ukraine’s sovereignty and territorial integrity. Its presence should not cause concern among our Western partners for the independence of Ukraine.”
Mr Medvedev said that the energy agreement would save Ukraine $100 per 1,000 cubic metres of gas, at present prices, that could be “spent for domestic economic purposes”. In exchange, Russia had gained certainty on the future of the fleet. “This document symbolises our friendship,” he told reporters, adding that retention of the base created “better conditions for guaranteeing security in the Black Sea area”.
Mr Yanukovych called the gas deal unprecedented. Ukraine at present pays $330 per 1,000 cubic metres under a ten-year contract agreed last year by Yuliya Tymoshenko, the former Prime Minister, and Vladimir Putin, her Russian counterpart.
With Ukraine’s economy reeling from the global economic crisis, Mr Yanukovych was desperate to secure concessions from Russia. A lower gas price allows his Government to set a budget for 2010 and release the final tranche of a $16.4 billion bailout from the International Monetary Fund that was suspended late last year.
Mrs Tymoshenko is certain to seize on the agreements to rally opposition to Mr Yanukovych, who beat her in the presidential contest. She described the lease extension as illegal. Mr Yushchenko, who defeated Mr Yanukovych in the 2004 Orange revolution, is also likely to encourage protests after denouncing his rival as a Kremlin lackey.

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Lifeof TheMind wrote:
We should have crushed Russia when they invaded Georgia during the Olympics. The staggering bear is spreading death and thuggery. It is a fools policy to align with Russia. New technologies will collapse energy prices within 10 years. That will end the Putin power bubble. Islamic subversion and a culture of death mired in alcoholism and drugs are hollowing Russia out. The lackeys of the Kremlin have tied themselves to a weak horse.
April 23, 2010 11:35 AM BST on

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