Despite Ukrainian officials announcing the deal over the weekend, a winter gas pact with Russia is not actually finalized, according to both EU and Russian officials, though the terms do seem to be more or less settled.
The big question looming over the deal is when Russia’s OAO Gazprom, the world’s largest natural gas company, is going to actually start to get paid the billions owed it by Ukraine’s Naftogaz monopoly.
The terms of the deal included a $385 per 1,000 cubic meters price for new gas shipments, but also a promise that $3.1 billion in debts would get paid back as well, and neither Naftogaz nor Ukraine’s government appear to have that money.
Naftogaz primarily resells gas imported from abroad, overwhelmingly from Russia, but has struggled to collect payments in recent months, particularly in the rebellious east. This has left them cash poor, and has President Poroshenko once again pushing for a Western bailout, having blown through the $30+ billion already provided.
Once again the 'music department' in Kyiv is playing on different sheet music than the rest of the world.
This could be interesting. The Ukrainians don't have the money – perhaps hoping that the US/EU comes up with the cash. But despite the many calls by some of the Congressional warmongers, paying off the debt from the US Treasury would be extremely hard to explain to a citizenry who is tired of government spending they can't afford. The cost of fighting ISIS is starting to percolate up to the Lazy American Goober's radar screen and shelling out Billions of $$$$ to bail out neo-Nazies would not play well with the home districts.
The President of Ukraine is democratically elected. Next Sunday, the Parliament will be democratically elected. The "neo-nazi" line is runnung out of steam. Unlike ISIS, the conflict with Russia is not in some far-away and foreign place. It is with the country which sits just accross the Bering Strait from Alaska and is Canada's immediate neighbour to the north. And where did you get the idea that the "Lazy American Goober" had anything against neo-nazis? Quite the contrary, I would have thought!
The Ukrainians are putting further pressure on Putin, who, in practice, has no choice but to sell to other European countries and has no choice but to take the risk that they will pay up. And any problems getting payment from the "rebellious east" have been caused by Putin himself. Little by little, rest of Europe is reminding Putin which side Russia's bread is buttered on. If he wants the benefits of being a member oif the club (and he does!), then he has to play by the rules of the club.