EU Warns of Potential Legal Actions

January 15, 2009

By Anatoly Medetsky, The Moscow Times


The European Union remained without most of its Russian gas imports for an eighth day Wednesday, prompting its chief executive Jose Barroso to raise the prospect of legal action from European energy companies.

Russia and Ukraine, which is the transit country for 80 percent of Gazprom exports destined for the EU, continued squabbling for a second day about how to move the gas westward.

Proposals for dismantling the deadlock began emerging late in the afternoon after the prime ministers of Bulgaria, Slovakia and Moldova, among the countries hardest hit by the disruptions, spent a day of urgent talks in Moscow and Kiev.

President Dmitry Medvedev proposed that European gas-consuming countries dispatch their leaders to Moscow for a summit this Saturday.

Ukrainian President Viktor Yushchenko backed the idea but said the summit should be held in Brussels or Prague, which currently holds the EU presidency, his office said in a statement.

Gazprom chief Alexei Miller said Gazprom would replenish Ukraine's gas reserves with as much gas as the country sent to Slovakia and Moldova. He spoke after meeting with Slovakian Prime Minister Robert Fico.

The arrangement, however, won't work for Bulgaria, Miller said.

Bulgarian Prime Minister Sergei Stanishev said after talks with Prime Minister Vladimir Putin that he had brought proposals that could end the disagreements. It was unclear late Wednesday what they were.

Stanishev spoke after he, Fico and Moldovan Prime Minister Zinaida Greceanii met with Putin.

Putin supported some of the proposals put forward at the meeting and offered more ideas for restarting the transit, said Gazprom deputy chief Alexander Medvedev.

President Medvedev also scheduled meetings with the European prime ministers on Wednesday.


European Commission President Barroso said his commission would recommend that European companies seek legal redress if the Russia-Ukraine dispute continued. He called the standoff "most unacceptable and incredible."

Moscow and Kiev promised to resume deliveries to Europe under an EU-brokered deal signed Monday that deployed international monitors at gas metering stations to make sure none of the gas disappeared in transit. Gazprom and Naftogaz Ukrainy, however, have been haggling since Tuesday over technicalities concerning the supplies.

"Russia and Ukraine are showing they are incapable of delivering on their commitments to some member states," Barroso said during a debate on the gas dispute in the European Parliament in Strasbourg, France. "If the agreement is not honored, it means Russia and Ukraine can no longer be considered reliable partners for the European Union in terms of energy supply."


Meeting the visiting prime ministers, Putin again blamed Ukraine for blocking transit and suggested that the European Commission apply more pressure on Kiev.

"We are hearing from our Ukrainian colleagues and friends that they are having problems with the transit of our natural gas to you," Putin said. "But these are not our problems but the problems of the transit country.
And they must solve these problems."

Deputy Prime Minister Igor Sechin said Gazprom has lost $1.2 billion in potential revenues