The good times are over

The financial meltdown, the war between Russia and Georgia, and disruptions in natural gas supplies from Russia have left people in Central Europe and the Balkans feeling vulnerable and angry, coming as they do after years of strong economic growth. The result: riots in Lithuania, Latvia and Bulgaria, and considerable anger directed at the national governments.

Meanwhile, the deadlock over natural gas shipments from Russia continues. Germany told Russia that its credibility as a supplier is in jeopardy; Russian prime minister Putin in turn proposed a consortium to deliver the gas. Ukraine interprets that proposal as an attempt to get control over Ukrainian pipelines. The EU is resisting Russian efforts to enlist it against Ukraine, and is more likely to declare a pox on both houses.

With extremely cold weather in Europe, this ain't no fun. It's worst in Bulgaria and elsewhere in the Balkans, but many European countries also have shortfalls in deliveries. There may be one silver lining to the cloud: EU energy forecasts typically assume ever greater dependency on Russia. This crisis may serve as a wake-up call.

EU will investigate gas pipeline

Well, my previous entry seems to have shamed EU officials into agreeing to monitor natural gas shipments from Russia into Europe via Ukraine...or maybe that's my megalomania peeking through. Seriously, with gas deliveries to many EU member states interrupted, Russia has now gotten the EU to focus on this problem. Whether this is really how a supplier should treat a major customer is of course another issue.

To interfere or not to interfere

The EU has dispatched an official mission to the Mideast in hopes of brokering a ceasefire between Israel and Hamas and sending humanitarian aid to Gaza (French President Nicholas Sarkozy is going on his own separate mission, but that's another story).

At the same time, the European Commission (a major EU institution) declined Russia's request to send EU monitors to investigate the source of shortfalls in Russian gas shipments through Ukraine to Europe. The Russians say the Ukrainians are to blame; the Ukrainians say it's the Russians. The Commission spokesman said the EU had no plans to get involved in what it regarded as a bilateral dispute. (Thanks to euobserver.com.)

Does anybody else notice the disconnect? Why isn't the Mideast problem a 'bilateral dispute' that the EU will wisely avoid? Perhaps the truth is that, much as the Europeans malign Israel, they know the Israelis practice restraint and respond to Western imprecations. No particular evidence the Russians would do the same - and they're important energy suppliers.

Fighting over gas

The dispute between Russia and Ukraine over gas shipments has once again reduced gas supplies to EU countries. Ukraine for years benefited from the artificially low prices for natural gas shipments from Russia that it inherited from Soviet times. Russian attempts to raise these prices have been stymied more than once by the fact that the same pipeline carries gas on into Europe - and that Ukraine could and did syphon off gas from those shipments.

Russia and Ukraine assured the EU that the latest dispute would not disturb the onward shipments. Unsurprisingly (at least to me), that assurance turns out not to be accurate. RFE/RL reports supply shortfalls to a number of EU member states. Russia and Ukraine, naturally, are engaged in mutual recriminations as to who caused these shortfalls.

Meanwhile, the Russian gas firm Gazprom, the largest natural gas company in the world and the owner of the pipeline to Ukraine, asked for help last November. Its share prices have plunged, due to declining energy prices and to the war in the Caucasus, which dealt a body blow to confidence in the Russian economy.