Gazprom slashes supplies to Europe

Gazprom, the Russian gas monopoly, halted nearly its entire export of natural gas to Europe on Tuesday in a sharp escalation of a dispute over prices with neighboring Ukraine that also underscored Russia's increasingly confrontational stance toward the West, IHT reported.

Across Europe, supplies of Russian gas stopped in whole or in part. From France to Turkey, countries reported sharp drops in gas supplies, at the peak of the winter heating season in a bitterly cold January.
In one sign of the extent of the shutoff, Ukraine's president said Gazprom intended to halt all shipments that pass through his country, which account for about 80 percent of Russian gas exports to Europe. Gazprom said it was continuing to ship about a fifth of its typical exports across Ukraine, and still supplying via other routes.
Still, with temperatures plunging, European leaders expressed mounting concern.
A European Commission spokesman said the cut came "without prior warning and in clear contradiction of the reassurances given by the highest Russian and Ukrainian authorities," adding that "this situation is completely unacceptable."
While both sides blames the other for the scope of the shutoff, Russia's prime minister, Vladimir Putin, had personally ordered the gas shutoff on Monday evening on state television here. For a leader who has taken a personal interest in the energy business, the escalation was a gambit at a perilous time for Russia. Revenue from oil and gas that underpinned the country's resurgence are drying up.
Putin, a man some analysts of Russian politics thought might become more conciliatory as energy prices fell, has, instead, consistently taken a hard line, and the dispute with Ukraine proved no exception for a leader who has often blended the country's political and economic agendas.
Ukraine has angered Russia by seeking membership in the North Atlantic Treaty Organization, as has Georgia, a country Russia fought a brief war against in August.
"They're still playing hardball, when they have to realize the rules have changed," Marshall Goldman, a senior scholar for Russian studies at Harvard and the recent author of the book "Petrostate: Putin, Power, and the New Russia," said in a telephone interview. "It happened so quickly that I don't think they've had time to realize the implications."
Putin, under heavy domestic and budgetary pressure, is using the crisis with Ukraine to jack up natural gas prices that are critical for the Russian budget and economy.
Ukraine has paid lower-than-average European rates for natural gas, in unspoken exchange for charging less than it might as the near monopoly shipper of Russian energy to higher-paying customers in Europe.
Oil and gas exports make up about 60 percent of the budget. Oil prices, meanwhile, have fallen by about two-thirds since their peak last summer and the effects are rippling through the economy. The ruble is devaluing, Russian companies are facing bankruptcy and the budget will be in deficit next year if oil prices do not rebound.
At the same time, Russia's relations with the West skidded to post-Cold War lows after the war in Georgia in August and options are dwindling for attracting foreign investors to a country with a poor track record of property rights, at a time of tightening capital markets globally.
Gazprom is seeking to raise the price Ukraine pays for gas from $179.50 last year to $450, and to collect what it says are fines for late payments on previous shipments. Ukraine, in exchange, wants to raise tariffs for gas shipped across its territory.
As they have in the past, Gazprom executives blamed Ukraine. In his announcement, Putin and Gazprom's chief executive, Aleksei Miller, said they would cut 65.3 million cubic meters of gas supply intended for European customers. In fact, the cut totaled about 240 million cubic meters, out of Russia's total exports via Ukraine of 300 million cubic meters.
Company officials said they had intended to ship more fuel Tuesday, but Ukraine had blocked two of three principal export pipelines. Ukrainian energy officials denied this.
"We are shocked that we're not in the position to bring gas to the border of Ukraine because they shut down the pipelines," Aleksandr Medvedev, a deputy chief executive of Gazprom, said at a news conference in London. "We are now seriously thinking about our reputation as a reliable supplier. There is no reason to blame Russia or Gazprom."
Medvedev declined to say how much longer before European consumers would feel the gas shortage but said "the situation is very serious."
In Ukraine, Sergiy Teriokhin, former minister of economy, said the talks with Gazprom were often fruitless because there was no market for gas or transit services: Both are monopolized.
As there are no alternative players on either side of the transaction, the deal cannot be based on market principles, said Teriokhin, who is a parliamentarian allied with Ukraine's prime minister, Yulia Tymoshenko.
"When there are two monopolies, then you need a political negotiation," he said. "It is not just any two corporations talking. It's a political problem. It's a problem of the European Union. It is not just a problem of Ukraine and Russia."
Oleh Dubyna, the director of Ukraine's national energy company, Naftogaz, said he would fly to Moscow on Thursday to resume negotiations. Gazprom's spokesman, Sergei Kupriyanov, said the company was "ready to begin negotiations at any moment. Gazprom was, and will be, a reliable supplier."
Also, countries in Western Europe have greater interconnectedness, ample reserves, spare pipeline capacity, the flexibility to draw on reserves of neighbors or swap Russian gas with flows from the North Sea. As countries succumb to the shortages, authorities will likely interrupt service to industry and electrical power generating stations that can swap coal or bunker oil first to maintain pipeline pressure for residential users, energy experts said.

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European Union demands Russia restore gas supplies as fuel prices rise

The European Union has demanded the immediate restoration of gas supplies from Russia as the East-West energy crisis sharply pushed up fuel prices and as shortages began to bite across a freezing Europe, The Daily Telegraph reported.

Gas prices, traded in London, were up 18.5 per cent as energy operators, national and EU officials warned that a protracted energy dispute between Russia and Ukraine would start to hit consumers, including Britons, during a hard winter.
Furious EU officials hit out at Vladimir Putin, Russia's prime minister and Victor Yushchenko, Ukraine's President, for breaking personal pledges that a bitter gas price dispute between Moscow and Kiev would not spill over into Europe.
Following instructions from Mr Putin, Russia's Gazprom energy giant on Tuesday cut gas supplies, carried across the Ukraine by pipelines to Europe, by almost 80 per cent, with Greece, Bulgaria, Hungary, Turkey, Serbia, Macedonia, and Croatia cut off completely.
France, Italy, Austria and Romania reported drops in supply of between 70 and 90 per cent as Germany, Europe's largest economy, warned of an energy crunch if the crisis dragged on and sub-zero temperatures continued across Europe.
A statement issued by the EU Presidency, currently held by the Czech Republic and the European Commission, with British support, has demanded "that gas supplies be restored immediately to the EU".
"Without prior warning and in clear contradiction with the reassurances given by the highest Russian and Ukrainian authorities to the EU, gas supplies to some EU member states have been substantially cut. This situation is completely unacceptable," said the statement.
Russia has drastically cut energy supplies after accusing the Ukraine of siphoning off gas meant for Europe after Kiev, reeling from the global financial crisis refused to pay a Moscow demand for a huge price hike.
President Yushchenko telegrammed EU governments to deny that the Ukraine was stealing gas.
But Gazprom Deputy Chief Executive Officer Alexander Medvedev, brother of Russia's President, accused Ukraine of having "throttled deliveries to western Europe to one- quarter of normal". "Regrettably, Ukraine has threatened to cut deliveries further," he said. "This is an example of real barbarian behaviour."
For the first time since the Russia-Ukraine crisis broke on Jan 1, countries across Europe, both in the prosperous West and poorer East, have begun to feel its effects, with emergency situations declared in Bulgaria, Slovakia and Serbia.
"The situation has dramatically changed. Supplies have been substantially reduced," said a Commission official.
The head of Ukraine's state energy firm said he would fly to Moscow on Thursday. Gazprom, which held talks with EU officials in Berlin on Tuesday said it was ready to talk any time but did not expect Ukraine to return to the talks table for now.
EU sources have told The Daily Telegraph that officials are drawing up a contingency plan should the situation continue over the next 48 hours.
European foreign ministers meet to discuss the issue in Prague on Thursday and an emergency meeting of the EU's "gas coordination group" of national experts will take place on Friday.
"We are not yet detailing all the things that we could do as that would take the pressure off Russia and the Ukraine to sort out the problem," said an EU source.
"There are possibilities of extra measures to help countries in distress."
Analysts have suggested that while Moscow will seek to avoid a head on confrontation with the West the dispute could drag on because of its political roots in Russia's hostility to Ukraine's Western ambitions and Kiev's request to join Nato.
"This is Russia's way of meddling in Ukrainian politics," said Nick Day, CEO of Diligence, a private business intelligence firm. "At the same time, they don't want to allow it to get to the stage where Europeans are starting to freeze in their houses.”

Romania's PM-designate renouncing premiership

Romania's Prime Minister designate Theodor Stolojan said, today, that he renounces the premiership in favor of a younger candidate. At 2 p.m. (Bucharest time), Romania’s President Traian Basescu said he will sign new decree to designate the Democratic-Liberal leader, Mr. Emil Boc, instead.

Stolojan, 65, said in a short statement that he would let Traian Basescu nominate somebody who will "give a hope to the young generation."

Stolojan was nominated by Basescu last week as prime minister designate following Nov. 30 elections.

Mr. Basescu later made a statement, shortly on Stolojan's decision, and said he will sign new decree to designate Mr. Emil Boc, instead. Mr. Boc is president of the Democratic-Liberal party, which won the parliamentary elections by a slim margin, on Nov 30.

The new government had been expected to face a parliament vote on Dec. 22 but it was unclear whether this would now be possible.

A former World Bank expert, Stolojan was prime minister between 1991 and 1992. He also served as finance minister. Mr. Emil Boc is the boss of Democratic-Liberals since 2005, and is in his second term as mayor of Cluj-Napoca (the second largest city of Romania).

Romania's coalition government will be formed by the left-leaning Social Democrats and the centrist Democratic Liberals who have about a 70 percent parliamentary majority.

Romania’s Prognosis Commission: it is likely to have a 4 to 6% economic growth in 2009

An economic growth of 4 to 6% in 2009, as against the extraordinary economic evolution in 2009, is a natural situation, head of the National Commission for Prognosis (CNP) Ion Ghizdeanu said on December 3 at a conference on the retail market in Romania.

Also, the CNP representative estimated an unemployment level of maximum 5% in 2009 against its 4% level so far.

The GDP has soared, in real terms, 8.9%, in the first nine months of the year against the same period in 2007, standing at 335.2 billion lei, according to data centralized by the CNP.

In Q3 of 2008 the GDP stood at 139.4 billion lei, some 9.1% more than over July-September 2007.

The European Commission forecasts that Romania’s economic growth will exceed expectations this year, going up over 8.5%, while in 2009 it will drop to 4.75% and to 5% in 2010.
In its turn, the International Monetary Fund (FMI) is expecting an economic growth of 8-9% in 2008, followed by a significant slowdown in 2009, up to 4-5%.

Romania’s centre right Democrat-Liberals won parliamentary elections

The official results from Romania’s elections have given the centre-right Democrat Liberal (PD-L) party a thin margin lead over their Social Democrat (PSD) rivals, overturning exit polls that had forecast a resounding win for the Left, last Sunday.

As expected PD-L, PSD+PC, the national Liberal Party (PNL), and the Democratic Union of Hungarians in Romania (UDMR) will be part of the future Parliament, as being the only parties that beat the electoral 5 percent threshold.

The Central Electoral Bureau (BEC) has announced that, according to the data centralized from all of the voting centers, the Democrat-Liberals (PD-L) won 115 seats in the Lower Chamber, while the PSD+PC alliance received 114 seats, the National Liberals (PNL) won 65 seats and UDMR 22 seats.

In the Senate, PD-L managed to get 51 seats, with PSD+PC coming second with 49 seats. PNL won 28 senators, while UDMR has but 9 seats.

The initiative now passes to Traian Basescu, the president, who must invite a party to form a government. Alina Mungiu, director of the Romanian Academic Society, a think-tank, said: “It’s always been more likely that the Democrat Liberals will form a government, because the president prefers them.” Mr Basescu was a senior figure in the Democrat Liberals’ predecessor party before ascending to the presidency four years ago.

With no party likely to achieve an overall majority, a coalition government is a certainty. The National Liberals, who came third, are regarded as potential coalition partners for either of the two leading parties. Until two years ago, they governed in coalition with the PD-L, and have subsequently run a minority government with ad hoc support from the PSD.

”The PD-L will first try for a coalition with the Liberals, but if their price is too high, then a grand coalition with the PSD is a possibility,” Ms Mungiu said.

Sebastian Lazaroiu: We will rather have a 2-year Government instead of a 4-year one

Presidential adviser Sebastian Lazaroiu stated that it is possible for early elections to be held two years after the start of the new Government’s term, arguing that in the first two years the parties will close ranks in order to overcome the crisis, with their competition set to restart after that period.

‘We might have a two-year Government instead of a four-year one. But it is hard to anticipate at this time,’ the Presidential advisor answered when asked if the new Government will resist throughout its current term, set to expire in 2012, or if he foresees early elections.

All parties have promised a combination of public-sector pay rises tax cuts and infrastructural spending as a means of economic stimulus. But with growth set to plummet to as low as 3 to 4.5 per cent next year from its current level of 7.5 per cent, and the budget deficit forecast to widen from this year’s level of 2.4 per cent over the next two years, the next government will have little leeway on spending. Already, analysts are warning that Romania may have to follow its neighbours Hungary and Ukraine in turning to the International Monetary Fund for help financing its $75bn external debt.

December the 1st: The 90-th anniversary of the Great Union of 1918, the National Day of Romania

The popular assembly of Alba Iulia on Dec. 1, 1918 (archive photo)

On December the 1st, 1918, at Alba Iulia, in the e center of Transylvania, the Great National Assembly (Marea Adunare Nationala) approved the unification of Transylvania, Banat, Crisana and Maramures with Kingdom of Romania.

The first of December 1918 represents, for the Romanian people, the triumph of centuries of struggle and sacrifices for achieving the national unitary state. This historical process, taking place on the entire Romanian area, scored significant developments in the 1784's popular revolts, 1821 and 1848's revolutions, the unification of Moldova with Wallachia (Muntenia) in 1859, the Proclamation of Independence after the 1877-78 anti-Ottoman war and was completed with the expression of the self-determination's will, in Chisinau, Cernautzi and Alba Iulia, during the year 1918, of the Romanians living under foreign domination.

Living in separate States, always threatened by the powerful neighbors, with parts of its original territory - Transylvania, Bessarabia, Bucovina, sometimes Dobrogea too - annexed to the three big empires - Ottoman, Habsburgic (later, known as Austro-Hungarian) and Russian, the Romanians always preserved the philosophy of being part of the same nation.

This philosophy of the Romanian nation unity was permanently strengthened by political, military, economic and cultural relationships between the Romanian Kingdoms along the centuries. The 19th century, called the "century of the nationalities", brought a new reality in the Romanians-living space, the consolidation of the Romanian nation, based on unity, consciousness and a common destiny.

The accomplishment of the national aspirations of all Romanians at the end of the First World War (WWI) should be understood as a natural and logical fulfillment of an historical necessity imposed by the evolution of the national state, and not as a result of the Romanian military effort. The WWI did not create the Great Romania, but the will of the Romanian nation did so.

The military victory was not the basis of the national Romanian state, even though the unification of the Romanian provinces was the only reason behind the Kingdom of Romania's entering WWI. The huge human and material sacrifices in the military campaigns in 1916-1918 were rewarded with the collapse of the irrational empires and the affirmation of the right of peoples to self-determination, based on the Woodrow Wilson's principle of nationalities.

The Romanian troops entered Bessarabia at the beginning of 1918 not to install a military dictatorship, but to re-establish order and peace and to hinder the Bolshevik actions aiming at imposing the Soviet power in the province.

The Romanian military had the same role in Bucovina, at the request of the Romanian National Council (the parliament), taking into consideration the disorder created by the retreat of the Austrian military units and the plan of the Ukrainian National Council to annex the Northern Bucovina to Ukraine. The Romanian military intervention came only after the Constituent Assembly of Bucovina decided, in October 14/27, 1918 "the unification of the entire Bucovina with the other three Romanian provinces in one national and independent state".

On 1st of December, 1918, at Alba Iulia, in the e center of Transylvania, the Great National Assembly (Marea Adunare Nationala) approved the unification of Transylvania, Banat, Crisana and Maramures with Kingdom of Romania. The large impressing popular gathering represented the crowning of the previous self-determination acts of unification from Chisinau (March 27/April 9, 1918) and Cernautzi (November 15/28, 1918) stipulating the return of Bessarabia and Bucovina to Romania, respectively.

At the time of the Paris Peace Conference, the Romanian unitary State had been already a reality: The Conference had only to endorse the legitimate decisions taken in Chisinau, Cernautzi and Alba Iulia successively, in 1918. The Versailles and Trianon Treaties represented a political and diplomatic acknowledgement of an inalienable historical right of the Romanian nation.