The burdensome list of economic compromises is the prize Ukraine has received in return for better relations with Russia. It includes the accords on the manufacture of nuclear fuel, in accordance with Russian technologies, setting up an aircraft production joint venture, Russia’s Foreign Economic Bank’s loans to Ukraine’s government-run Antonov aircraft design business, and Navy and Air Force search-and-rescue operations on Black Sea and the Sea of Azov. In the case of any other country, similar results for a one-day visit would be considered a major achievement. In the case of Ukraine and Russia, this should be regarded as a special diplomatic occurrence. Ukraine appears to have always traveled on the blade side when dealing with Russia’s leadership. A small step taken to the left would mean the loss of national independence; a little step to the right would mean economic collapse. The Russian Federation would likewise stand to lose much and gain little by upholding the discord with Ukraine.
Business is the best indicator of relations. Following a period of genuine decay, the situation appears to be on an upward curve. Over the past eight months, the bilateral trade turnover increased by 84 percent, reaching a level of over 25 million dollars. According to Ukrainian Prime Minister Mykola Azarov, the intergovernmental commission’s meeting was about furthering integration ties, implementing such large-scale projects as a bridge spanning the Strait of Kerch, the Moscow-Kharkiv-Simferopol Highway, and Kyiv-Moscow express trains.
Prime Minister Vladimir Putin has also pointed to “serious positive dynamics” in the economic relations between Russia and Ukraine, and diplomatically noted stabilization being made in the energy sphere. It is true that some progress has been made, including the intergovernmental framework agreement on Russian oil transit through Ukraine, although Ukraine would like to see a guaranteed pumping of 2.5 million tons every year. No one can guarantee this, not in the foreseeable future, not even in the contract to be made by Ukrtransnafta and Transnafta. Nevertheless, Russia’s Energy Minister Sergei Shmatko says Ukraine “has upgraded its oil transit price-setting guidelines.”
Talks on gas supplies between the prime ministers of Ukraine and Russia leave one even less optimistic, considering that both heads of government have apparently decided to keep mum. Their silence, however, can serve as proof of the existing differences remaining unsettled, and may even be getting worse. Prior to the Russian prime minister’s visit to Kyiv, his Ukrainian counterpart declared that Ukraine would insist on a revision of the gas prices, and on Russia’s guarantees that its gas transit prices, using the Ukrainian gas transportation system (GTS), would be lowered. One of the arguments in this favor is a change to Ukrainian legislation, following the signing of the European Energy Charter Treaty and Energy Market Law. Russia is known to have been after Ukraine’s GTS, wishing to get it under its control practically from the outset. It was only in this case that Russia would be willing to make concessions. It appears that neither side is willing to meet the other one halfway, and they are deadlocked.
Meanwhile, the [natural] gas topic seems to top the Ukraine-Russia political agenda. All Kyiv-Moscow accords, signed and remaining to be signed, look like the ribs supporting the skeleton of relations [between Ukraine and Russia]. In this context, I would like to direct the reader’s attention to two new guidelines in these relations. Both governments, and also TNK-VR Co. have signed a memorandum on joint prospecting for and development of a tight sandstone gas field in Donetsk oblast. In other words, this is about methane, this constant deadly menace to Ukrainian miners. This can only be described as a positive aspect (add here the even more positive statement, made by the company on the date of signing this agreement, to the effect that they will invest up to 50 million dollars in Ukraine’s shale gas extraction debut project, and that they will be investing between 1.5 and two billion in the next 25 years). There is a question: Could this unprecedentedly generous decision be made as a result of Ukraine’s final refusal to use the Odesa-Brody pipeline in reverse mode?
