KRUK REPORT: Europe, Gazprom is going after you.

KRUK REPORT: Europe, Gazprom is going after you.
The Kremlin has reached for blunt blackmailing and threatening tactics.
By Kateryna Kruk in Kyiv March 13, 2018

As a student of political science, I very well remember the "art of negotiations" class. Among others, we were studying national negotiations styles, with the Russian one among them. As a Ukrainian, I was fully aware of the patterns of Russian behaviour - history has taught us well. But for my Western European colleagues, it was a shocking revelation that Russia, seemingly so close to Europe, is in fact so far away.

That is the mistake that I later often saw among many politicians, journalists or think-tankers. Many still think they can understand Russia from their European perspective to only learn afterwards that they are wrong. That is why many fail to see that in Gazprom's recent decision to tear up its gas contracts with Ukraine, the Russian giant isn't striking Ukraine. It is aiming at Europe.

In the last weeks Russian state-owned Gazprom has seen a dramatic defeat at the Stockholm arbitration court to Ukrainian national gas company Naftogaz. "Naftogaz succeeded in its claim for damages for under-delivery in transit arbitration with Gazprom. Naftogaz was awarded damages of $4.63bn for Gazprom's failure to deliver the agreed transit gas volumes. Gazprom will have to make a net payment of $2.56bn to Naftogaz following the awards in two [previous] gas arbitrations. The tribunal rejects Gazprom's claim for penalties for transit volumes allegedly unlawfully off-taken by Naftogaz,” Naftogaz said on its Facebook page.

The victorious mood in Ukraine didn't last long. The next day Gazprom decreased the gas pressure at the entry point in the gas transmission system at the Russian-Ukrainian border by 20%. Obviously, Gazprom has violated the technical conditions of the contract with Naftogaz and risked the stability of gas supply to the European consumers.

The internet exploded immediately, linking Gazprom's sabotage with the Nord Stream II pipeline, seeing the decisions to reduce gas pressure as proof of how unreliable and politicised Gazprom is. That looked like a disastrous decision for the Russian gas monopolist, which spends millions of euros buying lobbyists that try to convince politicians and journalists that Nord Stream II is a pure business, not a political, project.

The following days brought even more staggering news: Gazprom planned to terminate all gas contracts with Ukraine. This seems like a suicidal decision for a company that delivers about 49% of all European supplies through Ukraine. However, it is not about suicide. It is about threatening and pressuring Europe.

Let's go back to the negotiating particularities of Russia. Russians are known for their confrontational, blunt, and combative style. Often what is standing behind this tactic is a willingness to hide weakness.

It is not by coincidence that Russia is often compared to a bear: both of them are ready to strike the hardest when they are the weakest. No wonder that in a situation when according to all standards of the civilized world Russia has lost, the Kremlin reaches for blunt blackmailing and threatening tactics.

Threatening to cut off transit contracts with Ukraine and providing no plan of how Gazprom intends to deliver gas to Europeans is a playbook example of Russian negotiating tactics. Nothing has changed since Soviet times: Russia opens with an extreme position and sticks to it unless the other side takes the burden on itself. And apparently, Russia knows it counterparts quite well. One of the first official EU reactions was an offer to mediate and a call for both Ukraine and Russia to find a compromise.

I wonder, what kind of compromise is possible in the situation when one side is refusing to obey the court ruling and one-sidedly breaks the provisions of the contract. I know we are talking about geopolitics, but even so, a position that Ukraine ought to look for a compromise because Gazprom refuses to follow the rules is simply wrong. If there is one thing that Russia has learned from the past EU foreign policy choices is that the Union values stability over (almost) everything else. This is what Russia hopes to get: in the choice between a bad Russian gas deal or no deal, Russia wants Europe to choose the first one.

That would be a really bad choice. Over and over again Russia keeps repeating that it has no respect for the international law, that it is ready to play along with the rules as long as it is the one establishing them, and that Gazprom is just one of the branches of the presidential administration.

Sometimes I have a feeling that Western countries live in a dream that Russian will never repeat the way it is treating Ukraine in the way it treats European countries. Since Russia has no respect for Ukrainian sovereignty it allows itself to treat Ukraine brutally and nastily.

Here's one more thing you should bear in mind: Russia has no respect for countries whatsoever; Russia only has respect for force. And as long as Europeans will continue dreaming of "business as usual" and hoping Russia will change its policies, criticising and sanctioning Russia and doing big geopolitical projects at the same time, Kremlin will think of Europe as weak and easy to blackmail. In fact, there's nothing extraordinary we must do, just stick to our rules and principles. If Europe is reinforcing the rule of law in other countries it should also lead by example and show that no thugs with a gas needle can threaten so many countries.

For sure, Germany just like any other country can plan and develop business projects and try to create better conditions for its own economy. But there is never business without politics. No cheaper gas can be more important than a political independence. It is naive to think that once having even bigger leverage over Europe, Russia won't use it. It is shortsighted to suppose Ukraine will be the only one Russia will be waging gas war against. So Europe, don't surrender to blackmail and stop building a Trojan horse with Russia, a Nord Stream II.

An activist, journalist and co-founder of Global Ukrainians, an international network of Ukrainians worldwide, Kateryna Kruk was awarded the Atlantic Council Freedom Award for her work communicating the Euromaidan revolution to the world. She predicted a frozen conflict in July 2014, which has largely come to pass, and now comments on the progress of crucial reforms in Ukraine.