President Vladimir Putin’s letter to leaders of European countries. Full text
Ukraine’s economy in the past several months has been plummeting. Its industrial and construction sectors have also been declining sharply. Its budget deficit is mounting. The condition of its currency system is becoming more and more deplorable. The negative trade balance is accompanied by the flight of capital from the country. Ukraine’s economy is steadfastly heading towards a default, a halt in production and skyrocketing unemployment.
Russia and the EU member states are Ukraine’s major trading partners. Proceeding from this, at the Russia-EU Summit at the end of January, we came to an agreement with our European partners to hold consultations on the subject of developing Ukraine’s economy, bearing in mind the interests of Ukraine and our countries while forming integration alliances with Ukraine’s participation. However, all attempts on Russia’s part to begin real consultations failed to produce any results.
Instead of consultations, we hear appeals to lower contractual prices on Russian natural gas – prices which are allegedly of a “political” nature. One gets the impression that the European partners want to unilaterally blame Russia for the consequences of Ukraine’s economic crisis.
Right from day one of Ukraine’s existence as an independent state, Russia has supported the stability of the Ukrainian economy by supplying it with natural gas at cut-rate prices. In January 2009, with the participation of the then-premier Yulia Tymoshenko, a purchase-and-sale contract on supplying natural gas for the period of 2009-2019 was signed. The contract regulated questions concerning the delivery of and payment for the product, and it also provided guarantees for its uninterrupted transit through the territory of Ukraine. What is more, Russia has been fulfilling the contract according to the letter and spirit of the document. Incidentally, Ukrainian Minister of Fuel and Energy at that time was Yuriy Prodan, who today holds a similar post in Kiev’s government.
The total volume of natural gas delivered to Ukraine, as stipulated in the contract during the period of 2009-2014 (first quarter), stands at 147.2 billion cubic meters. Here, I would like to emphasize that the price formula that had been set down in the contract had NOT been altered since that moment. And Ukraine, right up till August 2013, made regular payments for the natural gas in accordance with that formula.
However, the fact that after signing that contract, Russia granted Ukraine a whole string of unprecedented privileges and discounts on the price of natural gas, is quite another matter. This applies to the discount stemming from the 2010 Kharkiv Agreement, which was provided as advance payment for the future lease payments for the presence of the (Russian) Black Sea Fleet after 2017. This also refers to discounts on the prices for natural gas purchased by Ukraine’s chemical companies. This also concerns the discount granted in December 2013 for the duration of three months due to the critical state of Ukraine’s economy. Beginning with 2009, the total sum of these discounts stands at 17 billion US dollars. To this, we should add another 18.4 billion US dollars incurred by the Ukrainian side as a minimal take-or-pay fine.
In this manner, during the past four years, Russia has been subsidizing Ukraine’s economy by offering slashed natural gas prices worth 35.4 billion US dollars. In addition, in December 2013, Russia granted Ukraine a loan of 3 billion US dollars. These very significant sums were directed towards maintaining the stability and creditability of the Ukrainian economy and preservation of jobs. No other country provided such support except Russia.
What about the European partners? Instead of offering Ukraine real support, there is talk about a declaration of intent. There are only promises that are not backed by any real actions. The European Union is using Ukraine’s economy as a source of raw foodstuffs, metal and mineral resources, and at the same time, as a market for selling its highly-processed ready-made commodities (machine engineering and chemicals), thereby creating a deficit in Ukraine’s trade balance amounting to more than 10 billion US dollars. This comes to almost two-thirds of Ukraine’s overall deficit for 2013.
To a large extent, the crisis in Ukraine’s economy has been precipitated by the unbalanced trade with the EU member states, and this, in turn has had a sharply negative impact on Ukraine’s fulfillment of its contractual obligations to pay for deliveries of natural gas supplied by Russia. Gazprom neither has intentions except for those stipulated in the 2009 contract nor plans to set any additional conditions. This also concerns the contractual price for natural gas, which is calculated in strict accordance with the agreed formula. However, Russia cannot and should not unilaterally bear the burden of supporting Ukraine’s economy by way of providing discounts and forgiving debts, and in fact, using these subsidies to cover Ukraine’s deficit in its trade with the EU member states.
The debt of NAK Naftogaz Ukraine for delivered gas has been growing monthly this year. In November-December 2013 this debt stood at 1.451,5 billion US dollars; in February 2014 it increased by a further 260.3 million and in March by another 526.1 million US dollars. Here I would like to draw your attention to the fact that in March there was still a discount price applied, i.e., 268.5 US dollars per 1,000 cubic meters of gas. And even at that price, Ukraine did not pay a single dollar.
In such conditions, in accordance with Articles 5.15, 5.8 and 5.3 of the contract, Gazprom is compelled to switch over to advance payment for gas delivery, and in the event of further violation of the conditions of payment, will completely or partially cease gas deliveries. In other words, only the volume of natural gas will be delivered to Ukraine as was paid for one month in advance of delivery.
Undoubtedly, this is an extreme measure. We fully realize that this increases the risk of siphoning off natural gas passing through Ukraine’s territory and heading to European consumers. We also realize that this may make it difficult for Ukraine to accumulate sufficient gas reserves for use in the autumn and winter period. In order to guarantee uninterrupted transit, it will be necessary, in the nearest future, to supply 11.5 billion cubic meters of gas that will be pumped into Ukraine’s underground storage facilities, and this will require a payment of about 5 billion US dollars.
However, the fact that our European partners have unilaterally withdrawn from the concerted efforts to resolve the Ukrainian crisis, and even from holding consultations with the Russian side, leaves Russia no alternative.
There can be only one way out of the situation that has developed. We believe it is vital to hold, without delay, consultations at the level of ministers of economics, finances and energy in order to work out concerted actions to stabilize Ukraine’s economy and to ensure delivery and transit of Russian natural gas in accordance with the terms and conditions set down in the contract. We must lose no time in beginning to coordinate concrete steps. It is towards this end that we appeal to our European partners.
It goes without saying that Russia is prepared to participate in the effort to stabilize and restore Ukraine’s economy. However, not in a unilateral way, but on equal conditions with our European partners. It is also essential to take into account the actual investments, contributions and expenditures that Russia has shouldered by itself alone for such a long time in supporting Ukraine. As we see it, only such an approach would be fair and balanced, and only such an approach can lead to success.
I used to do exhibitions at a mall. The organiser of the exhibition used to keep increasing the rent of my stall. When I would confront him, he would say discounts were being offered but now you have to pay the prevailing rate. Putin sounds similar here. This is like a “Shylock” letter.
They did supply cheaper gas but it was to meet political ends. They have the right to stop supply now that their interests are threatened. But lets not pretend it was all charity.
What the EU has been doing is similar to what the British Empire did to its colonies: buy raw material, sell finished products, make money and screw the natives.
I guess it would have been simpler if an alternative was available. Any sane EU diplomat would see that with the US and Russia, they are between a rock and a hard place. As for US policies coming head on with Russia’s, one can say its like “an unstoppable force meeting an immovable object”.
For now at least, Putin has all of them by the b$@@s.
Mindfriedo
Mindfriedo, I’m sorry but you’re wrong – this letter simply sets out the facts. Back in 2009, Russia and Ukraine negotiated this gas contract which stipulated a price for gas and a minimum quantity – failure to purchase the minimum quantity resulted in a financial penalty. Yulio Tymoshenko didn’t do a particularly good job for Ukraine but caveat emptor as the old saying goes – she was Prime Minister, she negotiated and signed the contract and contracts exist to be honoured.
Several discounts were offered to Ukraine on the contract price. Firstly, there was a discount, paid in advance, to take account of the arrangements for the basing of Russia’s Black Sea fleet in Crimea. Secondly there was an additional discount given as part of the December 2013 bail-out package offered by Russia on the condition that Ukraine agreed to abide by a debt-repayment schedule drawn up by Russia’s PM and agreed to by the then Ukrainian PM and thirdly, certain industries were given reduced tariffs.
Since Crimea has now retuned to Russia, the discount re the Black Sea fleet no longer applies and because most of it was paid in advance, Russia is seeking to recover that proportion relating to future time periods. Ukraine never complied with the debt repayment schedule so has lost that discount element in accordance with the agreement. I’m not sure what the status is concerning the reduced tariffs given to specific industries.
Russia has simply reverted to the terms and conditions of the contract negotiated with Yulio Tymoshenko and signed by her. If anything, this letter sets out the huge extent to which Russia has subsidised Ukraine – it is, as Putin says, a strange state of affairs when the EU which fully supports Kiev’s new rulers but which hasn’t yet provided one penny of financial support to them whereas Russia, who doesn’t recognise the current government in Kiev, has provided support.
Russia as a whole is roughly as rich (per capita) as Poland, yet they are expected by the West to spend money subsidizing Ukraine irrespective of Ukraine going directly against Russia’s interests. I read a piece discussing how Poland’s success in EU was bankrolled by $150 billion in aid, and that the same amount will be spent in the next 6 years. Obviously such EU support for Ukraine is nowhere in the cards. Russia has likely spent the same figure or much more subsidizing Ukraine since collapse of USSR, with “charity” gas prices. Russia also benefitted from trade with Ukraine, as did EU with Polish trade, but Russia cannot sustain that while not receiving reciprocal benefits. Independence means independence, not being entitled to other’s countries’ wealth.
Western propaganda is full of emotional manipulation and avoidance of facts in favor of “good guy/bad guy” skits. The end result of that approach historically has been the Bay of Pigs, Bosnian Civil War, and countless other pointess bloody conflicts. The EU needs to break itself from propaganda and psy-ops manipulation of the US meant to ensure the EU’s permanent subjugation to the US, and actually try diplomacy, engagement, and honest dealing with facts.
When a legitimate President invites a neighboring ally in to protect citizens against illegal coup forces, that is not an invasion. When a people holds an independence referendum for self-determination under conditions of illegal usurpation of President and Constitutional Court, there cannot be talk of violating territorial integrity because the constitutional integrity of the state has already been broken and there is no legitimate court to legitimately rule against independence. When the EU Parliament has previously sanctioned Svoboda as Nazi fascists that should never be cooperated with, that needs to be respected and violations acknowledged and dealt with. When the EU negotiates and signs as guarantor agreements between governments and their protestors, the agreements need to actually be followed thru with, or else EU diplomacy is a sham that none will ever trust.
What may seem “inconvenient facts” to “Atlantist” Europeans are in fact the handles on reality that provide Europe’s only independence from the US’ propaganda fantasy factory which believes it can twist any situation to justify any policy it wants… Never with any repurcussions for violations of international law or war crimes, even when broadly acknowledged by UN, EU members themselves (e.g. French opposition to Gulf War I never resulted in one sanction vs. US), even German former PM Schroder openly admitting he committed war crimes in Kosovo war yet repurcussions/sanctions are never IMAGINED to apply there. The West has been interfering in Somalia non-stop for how many decades under the premise “it’s chaos”, yet how is that different from a breach in the constitutional order of Ukraine by coup forces?
It is in their own interests to do this, because as the West allowed itself free reign for such violations, with no opposition since the USSR, we have seen the result is a failure and completey unsustainable, and they know it. Something has to change.
No time to posture and philosophise. Good faith negotiation is what it will take. I don’t want any Ukrainians to die for the sake of keeping EU lit up and fed well. If enough of them do die, expect Russian troops in Brussels. Paris 200 years ago. Berlin 70 years ago. Check your history books: Ukraine *is* Russia, since about the 11th century. All invaders pay the price.
Hath not a Jew eyes?
Shylock:
“I am a Jew. Hath not a Jew eyes? Hath not a Jew hands, organs, dimensions, senses, affections, passions; fed with the same food, hurt with the same weapons, subject to the same diseases, heal’d by the same means, warm’d and cool’d by the same winter and summer, as a Christian is? If you prick us, do we not bleed? If you tickle us, do we not laugh? If you poison us, do we not die? And if you wrong us, do we not revenge? If we are like you in the rest, we will resemble you in that. “
The Merchant Of Venice Act 3, scene 1, 58–68
Putin’s letter outlines Western perfidy quite clearly. That the West chose this time to launch what is, plainly, a reckless regime change destabilisation effort aimed not just at Ukraine, but at Russia, too, shows that something BIG is going on. The large share-market falls, the inability to end QE without tanking the economy, the rigging of the gold market to prop up the US dollar, the mysterious refusal to repatriate German gold reserves, these are all straws in the wind. The West is sowing this wind, and must desire the whirlwind, if only to rouse the plebs to a frenzy of hatred for the latest ‘Great Enemy’ in order to divert them from their own plight.
‘Hath not a Jew eyes? ‘
It is an incontestable fact that the word “Jew” did not come into existence until the year 1775. Prior to 1775 the word “Jew” did not exist in any language. The word “Jew” was introduced into the English for the first time in the 18th century when Sheridan used it in his play “The Rivals”, II,i, “She shall have a skin like a mummy, and the beard of a Jew”. Prior to this use of the word “Jew” in the English language by Sheridan in 1775 the word “Jew” had not become a word in the English language. Shakespeare never saw the word “Jew” as you will see. Shakespeare never used the word “Jew” in any of his works, the common general belief to the contrary notwithstanding. In his “Merchant of Venice”, V.III.i.61, Shakespeare wrote as follows: “what is the reason? I am a Iewe; hath not a Iewe eyes?”
http://www.biblestudysite.com/factsarefacts.htm
How far down the rabbit hole we’ve gone, even Shakespeare has been tranlated into English,
@EVERYBODY Hath not a Jew eyes?
Oh not *again*?! I don’t know about a Jew and his eyes and I don’t give a bleep, but I am getting tired of each post getting sidetracked into long Jew-centric conversation. I mean, of course, if the original post is about Jews, no problem, but don’t “export” it to the next posts, this is really becoming tedious for me (and I am sure for others too). So, for Pete’s sake, STOP IT! Or take it somewhere else.
Please, please, please, with sugar on top, be nice – stop that, ok?
Many thanks,
The Saker
@Fern
Will clarify. I don’t think Putin is doing anything wrong, illegal or immoral. He is using gas prices as leverage, as a political tool. Will avoid the Shylock analogy. His goal is not monetary. I mentioned it because he is using money/finance/pricing as a weapon.
By alternative I meant this. Say that both sides see each other as extreme view points. Even though you may argue that the Russian view is not extreme. But if the EU was independent it might have towed a line between the US and Russia. Now it’s just adding to the mess.
There is one thing that as a Ukranian, if I were one, I would find insulting. I don’t mean it in the sense of who is right or wrong. Russia takes away “part of my country” (in quotes because this would be debatable). And then says that your bill annually is higher cause we can’t pay you for what is now ours. That’s like adding insult to “injury.”
Mindfriedo
One of the reasons we were taught to hate the Soviet Union was the lack of market pricing. A lack of market pricing, we were told, led to inefficiencies that had to be propped up through force.
You have to charge market prices, we told them!
Whoops.
Mumblebrain well defines the Big Picture. The Dollar Empire now enters its death throes, and the globalist plutocrats/politicians who have run it into the ground with debt now seek to distract people and prolong the agony by picking a fight with Russia. I say this as a former believer in the Empire: Russia, led by Putin, will be the Third Rome. America, corrupted by Zion, is Carthage. And Carthage will be destroyed.
StukaPilot, the collapse in the latest tech stock bubble continues apace. It could be the proverbial straw that brings the whole rotten house of cards crashing down (I love mixed metaphors)!If it is not, something else will soon be, hence the mad recklessness. If it wasn’t such a grotesque danger and if so many innocents won’t be made to pay for the vampires’ greed, it would be wonderful to watch. I think that the presence of Obama, a complete fraud and a hollow man, the most fully controlled (by his Zionazi patrons)US President ever, is a real complicating factor. Obama, as the decision to scuttle the Iranian talks with the UN visa refusal outrage (Netan-yahoo must be laughing into his Bloody Marys)shows, will do whatever the people who talent-spotted him in college, got him his first job, launched him into politics and financed him all the way to the White House, tell him to do, head tilted back slightly, and to one side, gazing, slightly cross-eyed at the inspiring vision of his own ego-projection in the sky, his ‘personal God’. We (if we are lucky) shall not see his like again.