After MH17 EU must act against Putin and stop importing Russian gas

Writing from Kiev, the city is boiling with rage. And now all Europeans too may boil with rage as 189 Dutch and smaller numbers of Belgians, British, French and Germans perished, when their Malaysian Airlines flight was shot down over a separatist-controlled location near Donetsk city. The next step must be for hard-headed EU politicians to make some hard-nosed decisions.

To whom should their anger be addressed? EU officials may await official answers, but they should be preparing a robust riposte for the most likely explanation. That would involve measures to quickly rob Russia of crucial gas revenue.

Minutes after the aircraft crashed to the ground Ukrainian intelligence services intercepted phone calls from separatist forces. “We just shot down an aircraft”. Earlier in the week a leader of the separatists had been boasting of their competence to shoot down military aircraft at high altitudes, having done just this to two Ukrainian military aircraft a few days before. And how does one shoot down an aircraft flying at 10,000 metres, as in the case of the Malaysian Airlines plane?

Expert commentators are unanimous in their missile of choice, the Soviet/Russian BUK ground-to-air missile that has the adequate range. So it seems the separatists have these BUKs, which also need sophisticated radar-guidance systems. And where did all this come from, and who is in the chain of command?

Putin propaganda

The political and military leadership of the Donetsk separatists are Russians from Russia. In Putin’s “vertical of power” regime it is not credible that the Kremlin has no responsibility. It is well documented that arms as well as fighters have been flowing across the frontier from Russia into the Luhansk and Donetsk regions. Putin’s most recent comment since the crash is: “The responsibility for this tragedy has to be with the state on whose territory the plane fell”. The appalling truth here is that the president of a self-styled Great Power can talk such cynical lies. Months of propaganda have polluted the mind-set of the Russian population to believe that Kiev is run by “fascists”.

As it stands is seems likely that the ill disciplined separatist thugs made a “mistake”, thinking it was a military plane. But commander-in-chief Putin has apparently been giving no instructions for his compatriots in Donetsk to return home with their weapons in order to do their part in consolidating the ceasefires that President Petro Poroshenko tried.

Back now on what to do. This mass murder has to be the game-changer. The EU’s leaders have to come together on smart sanctions that will have real impact. It’s time for the soft end of the European political spectrum to get real. In particular the new charismatic Italian leader, Matteo Renzi, whose country currently presides over the EU Council, and who ad personam is currently leader of the “softies” on Russia, has now to show that he has political guts. Let’s assume an emergency meeting of EU foreign ministers, and/or of prime ministers and presidents, decides to act seriously. What should they do?

Gas giant

The main thing that would really matter for Russia would be for its gas earnings from the EU to decline precipitously. That should be feasible, without damaging European industry. Russia supplies only about one third of the EU’s gas imports. The first move would be for all EU gas importers to maximise imports from Norway, Algeria, Azerbaijan and LNG suppliers and fill up every storage site, while minimising or stopping imports from Russia. At this point comes the question of contractual obligations, and in particular Gazprom’s “take-or-pay” clauses, which oblige the buyer to pay for any shortfall taken in the contracted volumes. This however can fit perfectly into the antitrust case going on between the commission’s competition department and Gazprom.

The take-or-pay clauses are manifestly constraining competition, and are believed to be considered illegal by the commission as breaches of competition policy law. Let the commission now accelerate its handling of this case, and order that Gazprom’s take-or-pay clauses be deleted from all contract with EU buyers. And then various importers will be even freer to stop imports from Russia. Finally the EU can do everything to accelerate the completion of gas pipeline network linkages, and of various new LNG reception facilities (as for example in Lithuania, which will soon allow the Baltic states to escape the Russian monopoly supply).

Actually, the EU does not have to stop importing Russian gas forever. The point has to be for Russia to understand that it is vulnerable to crippling economic damage unless it becomes a decently cooperative partner for its European neighbours, including Ukraine as well as the EU itself. For the present the above plan should go ahead at full speed, with Russian export earnings to be seen also to be declining at full speed. This should go on at least until Putin gets the Russians among the separatists to go home with their weapons. The idea that Russia cannot influence the separatists is bogus – the Kremlin has all kinds of instruments for enforcement.

Author

1. 

   Michael Emerson

   Associate Senior Research Fellow at The Centre for European Policy Studies