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Ukrainian PM Admits No Discounts From 2010 Gas Deal With Moscow

Ukrainian Prime Minister Mykola Azarov: "In reality, there was no reduction in price."
Ukrainian Prime Minister Mykola Azarov: "In reality, there was no reduction in price."
KYIV -- Meeting with members of the European Parliament in Brussels this week, Ukrainian Prime Minister Mykola Azarov acknowledged what the critics of President Viktor Yanukovych have been saying all along: The much-ballyhooed April 2010 Kharkiv natural-gas deal with Russia has brought the country no tangible benefits.

When Yanukovych and Russian President Dmitry Medvedev signed the deal in Kharkiv, it was touted as a huge foreign-policy win for Kyiv and a turning point in Russian-Ukrainian relations. Yanukovych agreed to allow the Black Sea Fleet to remain based in Ukraine until at least 2042, saying publicly that, in exchange, Moscow had reduced Ukraine's gas rate by 30 percent.

"In reality," Azarov said on May 16, "there was no reduction in price. There was rent for the [Sevastopol] base of [Russia's] Black Sea Fleet. But it gave us breathing room."

Parliament deputy Taras Steckiv of the opposition Our Ukraine/People's Self-Defense bloc said Azarov's admission proves the opposition was right all along.

"Azarov said what the opposition has said since April 2010: There was no discount, but what amounts to a one-sided concession that was not justified by anything and which threatens Ukraine's national interests," Steckiv said. "Russia got a base for its fleet while selling us gas for the highest-possible price, and it does not plan to make any concessions to Ukraine on gas prices."

Tensions Piqued

Azarov's statement is all the more embarrassing because the 2010 gas deal was presented as a corrective to a 2009 agreement negotiated by then-Prime Minister Yulia Tymoshenko. Tymoshenko is now serving a seven-year prison sentence on charges that she had abused her authority with that agreement.

The Tymoshenko prosecution has piqued tensions between Ukraine and the European Union, which feels it was a politically motivated vendetta.

Blogging for Russia's RIA Novosti agency, Fyodor Lukyanov, a foreign policy analyst and editor of "Russia In Global Affairs," wrote that the 2010 deal has borne no fruit because Ukraine's divided political elite "cannot set a clear course toward rapprochement with Moscow."

Lukyanov said Russia will only "budge" on gas prices if Kyiv agrees to "share" its gas-pipeline system or join the Russia, Kazakhstan, and Belarus customs union.

'Win Over Ukraine'

Lukyanov notes that the customs union, which has gained little traction so far, is a precursor to the Eurasian Union project, which both Medvedev, now Russia's prime minister, and President Vladimir Putin are pushing enthusiastically. Lukyanov says one of the priorities of Putin's new presidency will be "to win over Ukraine," suggesting that the Kremlin has adopted the tactics of a "siege."

Myhailo Honchar, director of energy programs at the Nomos think tank in Kyiv, said Azarov's comments show the difficult position Ukraine is in now, with relations strained both east and west.

"There are definitely no simple solutions to getting out of the present situation," Honchar says. "I think that the admission we heard in Brussels is intended to send a signal both to Russia and also to Europe. In order to conduct negotiations with Russia, you must formulate a position of strength, which Ukraine just does not have.

"Under such circumstances, you must rely on the support of the European Union. But the political situation that we see today regarding the European Union does not lend itself to this."

RFE/RL correspondent Robert Coalson contributed to this story from Prague

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