Gas war costing EU 'hundreds of millions a day'
PHILIPPA RUNNER
14.01.2009 @ 17:35 CET
EUOBSERVER / BRUSSELS - The cost of the Russia-Ukraine gas war to the EU economy is spiralling into the billions, experts warn, with the European Commission encouraging EU companies to take legal action.
"European gas companies are not selling gas to the tune of about €150 million a day. Electricity producers are also losing hundreds of millions a day," International Energy Agency (IEA) analyst Ian Cronshaw told EUobserver on Wednesday (14 January).
Empty gas vat: EU-wide gas stocks have dropped from 95 percent full to around 60 percent over the past week (Photo: naftogaz.com)
"In Bulgaria, Slovakia and the Czech Republic industry is being forced to slow down or shut down. This will spread as European [gas] stock volumes drop and the economic cost will go up exponentially at a time when Europe can least afford it."
A meeting of the Gas Co-ordination Group - EU member states' energy ministry officials - in Brussels on 19 January is to pool data on the impact of the gas crisis so far. But European Commission President Jose Manuel Barroso has already indicated that Brussels will back any legal claims.
"If the agreement sponsored by the European Union is not honoured as a mater of urgency, I will advise European companies to take this matter to the courts," he told MEPs in Strasbourg on Wednesday.
The Hungarian government has also pledged diplomatic support for law suits after Hungarian energy firm Emfesz this week filed a claim in Budapest courts for €23 million against Ukraine gas transit firm Naftogaz.
Most EU energy firms have contracts with Russian state gas supplier Gazprom or intermediaries. But the Ukrainian side may bear the brunt of attacks due to Gazprom's powerful market position.
"They will not sue Gazprom because they have signed supply contracts until 2030 or 2035. And you don't want to get into trouble with your partner if you have that kind of contract," European Council on Foreign Relations' (ECFR) expert Pierre Noel told this website.
The EU, Russia and Ukraine agreed to resume supplies on Tuesday after Brussels sent in a team of monitors to oversee transit.
But the deal broke down when Ukraine accused Russia of holding back "technical gas" - needed to push EU volumes through its pipelines - and of pumping gas down a route that would force it to stop supplies to its own people.
The IEA estimates that EU-wide gas stocks have dropped from 95 percent full to around 60 percent over the past week. Individual countries, such as Bulgaria and Slovakia, say they have just a few days' worth left.
Meanwhile, Russian President Dmitry Medvedev on Wednesday proposed holding a gas summit with affected EU states and Ukraine, indicating the energy dispute will not be resolved before next week.
Sympathy remains
Ukraine diplomats fear that a vigorous Russian media campaign will see Europeans blame political infighting and high-level corruption in Kiev for the gas mess, damaging bilateral relations.
The crisis comes ahead of an EU-sponsored donors' conference on modernising Ukraine's gas transit system in March and an EU summit on deeper integration with Ukraine and other post-Soviet states in April.
But sympathy remains for Kiev in the EU capital after the commission's gas monitors in Russia and Ukraine reported on Tuesday that Gazprom's choice of transit route to resume EU supplies was not the best possible.
"To turn off the gas to a country of 45 million people [Ukraine] in the middle of winter is energy blackmail and nothing else," one EU official said, with Ukrainian companies also forced to cut production as stocks dwindle.
