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Paweł Zalewski

The Russian Proposal and the European Future of Ukraine

Unsurprisingly, the Russian offer of the construction of the Yamal gas pipeline to Slovakia and Hungary, and further to southern Europe has caused an emotional reaction in Poland. However, it is puzzling that participants of the discussions around this issue consider it using the context of 2005. Regardless of the perception of the Russian proposition – whether it is taken seriously or regarded as a bluff by others – it still shows the change in Russia’s policy towards Poland.

Paweł Zalewski, źródło: pawelzalewski.eu

Paweł Zalewski, source: pawelzalewski.eu

The significance of the proposal has been increased as it was made by the President of Russia himself. Until now, Russians were bypassing Poland while planning constructions of transit routes. Today, the Russian package contains the proposal to build an “energy bridge” (bypassing Lithuania) and a broad-gauge railway that leads through Poland to Vienna. The very fact of making such a proposal is beneficial for Poland. This allows to take advantage of the transit location between the East and the West, bringing a huge economy profit, though the necessity of negotiations with such a tough partner as Russia is obvious. However, if Russians demonstrate their interest in these projects, so the Poles have quite a favorable starting position. Therefore, regardless of the turmoil surrounding the memorandum with “Gazprom”, it is good that the government has taken the initiative.

As it usually happens in the case of negotiating with the Kremlin, in addition to the open agenda there is also a hidden aspect. this time it concerns Ukraine. Over the past few years, Moscow has stepped up the pressure on Kyiv regarding the issues of joining the Customs Union and the Eurasian Union, organized under its auspices. The tool of persuasion here is a possibility to cut off gas supplies to Ukraine without the simultaneous stopping exports to the West. That’s why there was – at first – the Nord Stream pipeline, and later – the project “South Stream” running under the Black Sea to the Balkans and then to Hungary, Italy, and Austria. Yet during last few years, the energy market has changed radically. Shares of “Gazprom”, which is involved in politically motivated and extremely costly investments, have significantly fallen in price. This is an important sign that the company can no longer afford the South Stream project. Additionally, there is no gas to fill the existing and planned pipelines, as the construction of infrastructure takes the lead over the investment in production. But that’s not all. The countries dependent on Russian gas, such as Poland and Ukraine, who are still paying the highest prices, have increased investments in their own conventional sources and shale gas. In 7-10 years, they can become fully self-sufficient in this matter.

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Also within the next two years, the European Union is expected to sign a free trade agreement with the United States, which would open the possibility to import U.S. shale gas at prices several times lower than those offered by Russia. This will change the rules of international trade in energy raw materials, causing a dramatic reduction of the revenues from natural gas trading that the Kremlin would have to face. Taking into account the economy based mainly on the sale of oil and gas and expectations regarding the state budget covering social needs, this situation could undermine the legitimacy of the existing system of government. Not surprisingly, Putin has started a race against time to retain the leadership. Before enormous reserves of shale gas are available, LNG terminals are built, and Americans sell their cheap gas, the Kremlin wants – by any means possible – to place the post-Soviet Eastern Europe, especially Ukraine, under their command. Hence the proposal about the so-called Yamal bridge from Poland to Slovakia.

On the one hand, the bridge will help fulfil Russia’s obligations to the southern partners even without the “South Stream”, on the other – it will provide an instrument of a real pressure on Kiev. The combined capacity of “Nord Stream”, Yamal and a possible land connection through Poland will be able to liquidate the route via Ukraine, and, therefore, to stop gas export to Ukraine without negative consequences in relations with the West. In short, this is a new way to implement the strategy from 1990s – Russia selling gas to the West while bypassing Ukraine.

The opposition, stating some concern over the growing energy dependence of Poland, feels extremely nervous about negotiations with Russians. Yet the reality is different from what it was 8-10 years ago. Ukraine has already had an opportunity to import cheaper gas (but also Russian) from German companies via Poland. Due to this fact, in March this year they didn’t take even a cubic meter of gas from “Gazprom” – and will continue omitting the neighbour in April. Poland is also expanding its potential (LNG terminal in Swinoujscie and shale gas) and, using the EU regulations, rapidly reduces its dependence on Russia. Moreover, perhaps thanks to the “bridge” idea (depending on the outcome of the negotiations) Poland would receive – as Germany today – the opportunity to export the cheaper Russian gas to Ukraine?

Władimir Putin i Wiktor Janukowycz. Źródło: kremlin.ru

Vladimir Putin and Viktor Yanukovych, source: kremlin.ru

So why the angry protests, when Poland reduces the possibility of a blackmail from the Russian side and Ukraine itself presents its willingness to reduce the gas imports from Russia? Or perhaps the opposition does not see the changes that have occurred in recent years? Or maybe it does not understand the new logic that will determine the gas policy after the entry of Americans and Polish shale gas into the European market? Why should Russians always be just in the role of monsters from horror stories? Or maybe it is the traditional mobilization of the electorate by means of fear in front of – really weakening- Vladimir Putin? Perhaps, instead of taking offence from the very beginning, Poland should define its interests in the new project and tell Russians “I check”? Why should Poland refuse profits, which may be of interest to any country?

Perhaps there is a good reason for that. It should bring Poland more benefits than the transit of Russian gas to the south. This reason would be a real one, not just a declaration of Ukraine’s integration with the European Union. I have been supporting it consistently over the years. I am also very impressed by the young intellectuals, educated and courageous people, who actually form the Ukrainian civil society. However, today they are hostages of political games of the government that does not hesitate to selectively apply the law that restricts civil liberties and does not fulfil its own words about the shifting towards the West. It is clear that the authorities in Kyiv are playing a risky game – it is risky as well as double, giving different assurances to Brussels and to Moscow. Any further manoeuvring can not be accepted.

The Ukrainian authorities were given the chance. In the end, nobody rejects the possibility of signing an association agreement, because even if the imprisoning of Yulia Tymoshenko made it a remote perspective, the issue has not been definitely closed. If President Yanukovych has taken an honest decision on integration with the EU, a strong position regarding gas issues may be necessary. The potential modernisation of gas industry (with the help of the EU), including transit, gives an additional stimulus for development to the Ukrainian economy. Today Kyiv shows the Kremlin the alternative it has: purchasing gas from Germany. If, however, the lack of money for the “South Stream” and Polish refusal in regard to the gas bridge force Russia to negotiations with the neighbour, it may mean lowering gas prices for Ukrainians. Then Poland may expect indemnity from Kyiv for the losses resulting from its exit from the project. But first of all, we would have a strategic advantage. The extension of the European standards to the East of the continent would increase the security and predictability. These could reduce social tension at our borders, strengthen the chances of beneficial economic relations and weaken the influence of Russian policy in Central Europe.

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A real desire to integrate with the EU, which is a prerequisite for Warsaw’s refusal of participation in the so-called bridge, must be confirmed not only by the signing of the Association Agreement, but also by the rejection of using the law as a tool of political fight and the release of Yulia Tymoshenko. President Yanukovych, pardoning Yuriy Lutsenko, has shown that he is a serious partner in the talks with the Polish President and other European leaders. If he really thinks about stopping the double game between the West and Russia, he will have to take more steps. Then Poland will be able to refuse to participate in the gas bridge – the key project in relations with Russia. Otherwise, if Ukraine decides to face the Kremlin alone, such a step will not make sense. Such concessions could be made only if they were mutual, and only in exceptional cases.

Translated by MA

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Paweł Zalewski (1964) poseł do Parlamentu Europejskiego, wiceprzewodniczący Komisji Handlu Międzynarodowego PE, absolwent historii na Uniwersytecie Warszawskim, działacz NZS, w latach 1989-91 doradca Ministra Edukacji Narodowej, związany ze środowiskami konserwatystów, poseł na Sejm I, V i VI kadencji, przewodniczący Komisji Spraw Zagranicznych Sejmu RP, zaangażowany na rzecz zbliżenia Ukrainy do UE. W 2011 r. zajął 5. miejsce w prestiżowym rankingu TOP 10 lobbystów Ukrainy na świecie, sporządzonym przez kijowski Instytut Polityki Światowej, w oparciu o opinie 50-ciu niezależnych ekspertów międzynarodowych i ukraińskich. Od 24 stycznia 2013 r. współprzewodniczący Polsko-Ukraińskiego Forum Partnerstwa.

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