Ukraines Uncertain Future
After a year of conflict, where does the confrontation over Ukraine between Russia and the West now stand? Who has won so far and who has lost?
The situation remains complex not least from a Western Europe point of view because Mr. Putin has not defined exactly what his objectives are.
That could be seen as a good strategy, given that so far the West appears to have retreated on most of the main issues.
First, the international community which means in this case mainly the European Union, and within the EU, Germany will pay the Ukrainian debts for past supplies of Russian gas in order to keep supplies coming through the winter.
Second, Russia will continue to supply Western Europe with gas because it is in the immediate interests of both that the trade continues. Russia needs the revenues, particularly since oil prices are so low. Europe, especially Germany, needs the gas, which could not easily be substituted.
Third, Russia is entrenched in Crimea defined by President Putin as Russias equivalent of Jerusalem and will not be moving anytime soon. Russia also remains in effective control short of military occupation of Eastern Ukraine. The facts on the ground are becoming very firm and hard to change.
Fourth and more negative for Russia, recent events have reminded the Europeans of their dependence on Russian gas, which provides one-third of total supply and 100% of gas needs in some Eastern European countries.
The European Union is preparing in its slow, methodical but ultimately effective way to diversify supply and reduce gas use. Dependence on Russia could fall by one-third within five years. That is why Russia is diversifying its gas trade to Asia a perfectly rational commercial step considering the circumstances.
Fifth, Russia continues to divide opinion within Europe. A strong group of the friends of Russia remains entrenched in Germany, although they are under far more political pressure now.
In addition, groups in Hungary and Bulgaria believe that heavy-handed European sanctions against Moscow have led to the decision to abandon the proposed South Stream gas pipeline, which would have brought more Russian gas into Europe.
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Ukraines Uncertain Future