There was a giant sigh of relief across Europe on the news that a Russian-Ukrainian natural gas deal was agreed on Friday regarding winter supplies. The agreement, brokered by the European Union (EU), also secures Russian natural gas supplies that go through Ukraine to EU member states.
Following seven rounds of natural gas negotiations, Friday night’s talks moderated by European Commission Vice-President Günther H. Oettinger, finally yielded a breakthrough, the Commission informed.
The $4.6 billion dollar package agreed by Ukraine and Russia secures natural gas supplies for Ukraine and ultimately for Europe, the Commission added.
President of the European Commission, José Manuel Barroso, who looked on as representatives of the two nations and the EU signed the winter package, said:
“I am delighted that I can announce a major success at the end of my mandate as President of the European Commission. With our strong support, Ukraine and Russia have today found agreement on their outstanding energy debt issues, and on an interim solution that enables supplies to continue this winter. I am glad that political responsibility, the logic of cooperation and simple economic sense have prevailed.”
Signing the Russian-Ukraine winter natural gas deal. Russian Energy Minister Alexander Novak (left), European Commission Vice-President Günther H. Oettinger (middle), and Ukrainian Energy Minister Yuri Prodan. (Photo: European Commission)
Mr. Oettinger said the breakthrough is good news on two fronts: 1. It resolves the impasse that threatened fuel supplies during the winter. 2. It contributes towards the de-escalation between Ukraine and Russia.
The winter agreement consists of two documents:
- A binding protocol signed by Ukrainian Energy Minister Yuri Prodan, Russian Energy Minister Alexander Novak, and European Commission Vice-President Mr. Oettinger.
- An addendum to the current gas supply contract, signed by Naftogaz (of Ukraine) CEO Andriy Kobolyev and Gazprom (of Russia) CEO Alexey Miller. The agreement comes after months of talks between EU officials and the energy ministers of Russia and Ukraine.
The EU will act as guarantor for Ukraine’s natural gas purchases from Russia, as well as helping Ukraine meet its outstanding obligations.
The $4.6 billion package includes money from the EU and IMF (International Monetary Fund).
The European Commission said in a statement:
“Unprecedented levels of EU aid will be disbursed in a timely manner, and the International Monetary Fund has reassured Ukraine that it can use all financial means at its disposal to pay for gas. Further work with the international financial institutions on financial assistance to Ukraine, also in relation to gas supplies, will still continue. But all three sides are reassured that Ukraine will have the necessary financial means.”
The Eurozone, which risks falling into a triple-dip recession, the rest of the EU, Ukraine and Russia urgently need to resolve their problems, get rid of sanctions, and focus on economic growth and co-operation.
There is some real hope in Europe today that the latest breakthrough could be the first step towards warmer relations with Russia and the restoration of normal business activities.