Europe Folds As Putin Tells It To Pay Ukraine's Gazprom Bill, Or Else

Tyler Durden's picture

Another day ending in "y" means another day in which Putin plays the G(roup of most insolvent countries)-7 like a fiddle.

The latest: Europe should provide aid to Ukraine to ensure uninterrupted natural-gas deliveries to the region, President Vladimir Putin’s spokesman said as reported by Bloomberg.

"Russia is the only country helping Ukraine’s economy with energy supplies that are not paid for,"  Dmitry Peskov told reporters today in Moscow,  commenting on President Vladimir Putin’s letter yesterday to 18 European heads of state. “The letter is a call to immediately review this situation, which is absurd on the one hand and critical on the other.


Or, as we explained yesterday, Russia is quite happy to keep the EU gas flowing... as long as Ukraine has enough gas in storage to assure Gazprom it won't syphon off gas destined for Europe. So how much gas does Ukraine need to pre-stock? About $4-5 billion worth. The problem is that Ukraine doesn't have a dime to spend on gas.

So putting the question aside if Ukraine will or won't import even one bcf of Russian gas ever again (thanks to some fracking or US natgas exporting magic), what Putin just said is that if Europe wants an uninterrupted supply of gas it better find a way to fund Ukraine to the tune of up to $5 billion, or else the gas may just get shut off.

And guess what: Putin is about to win yet again:  

European Energy Commissioner Guenther Oettinger is working on a plan to help Ukraine pay some of its gas bills to Russia, he told Austria's ORF radio on Friday, saying there was "no reason to panic" about Russian gas supplies to Europe.


"We are in close contact with Ukraine and its gas company to ensure that Ukraine remains able to pay and the debts that the gas company has to Gazprom do not rise further," he said, adding he would meet Ukraine's energy and foreign ministers on Monday.


"I am preparing a solution that is part of the aid package that the IMF, the European Union and the World Bank is giving to Ukraine and from which payment for open bills will be possible."

The chass game continues: Putin X+1 - Pidgeons 0

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
H. Perowne's picture

Need a translator. Russian for "stick the knife in and break it off".

insanelysane's picture

The old guys would say that "Russia has Europe by the short hairs."

McMolotov's picture

Europe now waxes itself hairless because that's the way the bankers like it.

BaBaBouy's picture

So... Another EU Basket Case Country Gets Added To The
EU Welfare Rolls...

The Financial Shackles Of The IMF And Wirld Bank Makes Another Appearance.
Ukraine Joins Greece And the Gang With Their Hands Extended

Yeees... All Is Oh So Well In EU-Land...


greyghost's picture

notice how well europe responds when Putin talks their the fact that the russians want to be paid for supplies and services rendered is the only thing the europeans understand.

asteroids's picture

What will they do when he demands d gold or silver for payment in advance?

Vampyroteuthis infernalis's picture

The chass game continues: Putin X+1 - Pidgeons 0 

Excellent comment Tyler!! X is going to be a large number like the US debt pretty quickly.

Manthong's picture

" and the debts that the gas company has to Gazprom do not rise further,” 

You gotta’ love the way the credit money bankers play the game.

Note that they did not say anything about paying off the debt..

Because they don’t have any real money either.

 ( ?..  can I interest you in a nice < 5% bond in long term Greek debt that will never be paid off ?  )


furgheddubouddit's picture

This is the European approach to all debt isn't it;  'forget about paying even a single cent off, just keep it ticking over'.

This will work fine until, in the Ukrainian case the gas supplies get shut off, or in the European case the bond markets collapse.

The timing of this ultimate outcome may be questionable, however it's inevitability isn't.

Tic toc tic toc.......

mjcOH1's picture

"What will they do when he demands d gold or silver for payment in advance?"

Rush to sell Ukraine out in exchange for Xbillion BTUs?   Hey....when that's gone, Poland can always be traded for a decent discount on gas for a few years.   They're not out of options yet.

FinalCollapse's picture

It 's a national day of mourning in Poland - they really hoped that Gazprom will shut down flow through the Yamal-1 pipeline. Poland pays 30% above average price on long term contract and now they can easily replace any Gazprom gas from other sources (from West via brand new infrastructure). Another chance lost to invalidate the long term Gazprom contract.

I will repeat - and you can Google the facts if you can - Poland is right now totally independent in terms of energy. Besides - 90% of energy is generated from the coal - and they have abundant supplies of it for hundreds of years forward. 

weburke's picture

"independent" hmmm, poland had its govt killed on the ground and blamed it on an air crash, and the independent movement died. 

FinalCollapse's picture

Have you taken meds today? The topic is energy and gas in case you missed it. I have clearly refered to energy indepedency. I know what you are refering to but it was an air crash. You question even this? What caused it may be subject to controversy forever. I have my opinion on it but I am not 100% sure. Looks like you are one of these simpletons that knows everything 100%. PiS -right?

You are out of topic. Check your meds again.

Bendromeda Strain's picture

He saw the same video I did - survivors being shot on the ground and a cameraman scared shitless.

Seer's picture

"Besides - 90% of energy is generated from the coal - and they have abundant supplies of it for hundreds of years forward. "

Maybe if they sit on it...

If you wish to make your numbers(?) meaningful you'll have to include a consumption rate.  And if it's not static then be prepared for that abundance to not be all that abundant.

dunce's picture

I believe you know the facts , but what is that average price you refer to? They can not break the contract but can they do some arbitrage?

FinalCollapse's picture

They did arbitrage it. In 2012 they got out of court settlement - for $525/tcm iirc. It's still 30% above what Germans pay - after the arbitrage. If you have more accurate numbers then please let me know. They (Polish) would be soooo happy if Gazprom breaks the contract like they threatened recently. The era of these old style take-or-pay contracts is over. Welcome to modern natgas marketplace. The spot price will rule the future energy markets because they are diversified now.

zaphod's picture

Its the US government's approach to debt as well. Forget about paying it off, has the US ever even paid down thier debt (more than 10%-20% from peak, not 1 or 2 years of near break even) in the past 100 years? The answer is no.

Greenskeeper_Carl's picture

We have never actually paid any debt off. The statistics Keynesians like to site regarding after WWII, when our debt went down by a good bit was only our debt as a percentage to GDP, we didn't actually pay debt off. And the Gingrich/Clinton balanced budget thing they like to say we had for a year or two was just accounting gimmicks, mainly how we were using SS money, that was a myth too, it was never actually balanced. And our GAAP debt, the one that matters, goes up 5-6 trillion a year.

Seer's picture

The Gingrich/Clinton era was about bubbles, in addition to adding other gimics.

As long as  we insist on operating our existence based on perpetual growth (on a finite planet) we will NEVER pay off our debts.  Compounding eventually kills the future, as there is assuredly at point at which the infinite growth of interest/debt is derailed by the finite world.

jeff montanye's picture

it is the current global approach to all debt owed by sovereigns and other important people.  for students and the working poor, not so much.

ukraine might have some hope of paying its bills had the cia not stolen all its gold and most of its foreign reserves ("safekeeping").  like iraq and libya, first they take your gold, then they kill you.  who wouldn't want a world run this way?. 

Oh regional Indian's picture

Poor ukranians, cannot get a break.

Remember the real holocaust...

Ask who really really  did this?

Bugger all heartless F!#@$%sticks...Zio, Neo whatever...


Rory_Breaker's picture

I dunno abt Zio or Neo, but I know that it was a government that did the holodomor. Down with them all I say!


ps: saw your TED talk, really enjoyed it

Oh regional Indian's picture

in deed and word Roryb. And thanks for the good words re. TEDx :-)

centerline's picture

(nevermind... found it!)  I am a moron.

centerline's picture

Yeah - I got it!  ha ha.  See my post below.  I wrote the one above before watching the video actually.  I had previously asked for link... but managed to Google it myself (yeah, I know LMGTFY).

Oh regional Indian's picture

For anyone interested in said TEDx talk...

12 minutes and good speakers if available...


Overfed's picture

That was pretty good. I think I'll watch it again when I'm not surrounded by distractions.

Day_Of_The_Tentacle's picture

ORI, I just had to log in to thank you for the videolink. That was very inspiring... and funny at the same time ;-)

centerline's picture

That was awesome ORI.  Really, really enjoyed it.  Going to share this with my family tonight.

I am laughing now because of calling myself a moron and then hearing you mention this word in your talk.  ha ha.  How ironic.

Oh regional Indian's picture

:-) I'm telling you centerline, there is something to this more-on Less-on thing! 

And yes, you are a MORE-ON!

centerline's picture

Working on it!

For what it is worth, I use the Centerline name not because of a funny road thing (just seemed to work for ZH).  It is actually a term from Wing Chun, which I am sure you know always has surface level meanings like the centerline of combat (which can be further broken down into the centerline of each person and the centerline of combat itself)... but also reach much further... to balance, harmony, etc. (internal and external).  Neat stuff.  I stink at it all... but I figure it is the journey that matters.

Oh regional Indian's picture

The interesting thing is that we've had this exact same discussion on your avatar a couple of years ago. :-)

Check this out...


centerline's picture

My memory is not what it used to be it seems!  Bookmarked your site.

Hook Line and Sphincter's picture

Hey V!

Enjoyed that TedX, just glad it wasn't TedTripleXXX. I'm going to need to fly out to Mumbai and lift that first instrument from you when you're not looking.



Oh regional Indian's picture

;-) Just make sure it's when I'm not looking HLS, because I do know how to swing it!!!

I will gladly buy you a kingfisher and swap ZH and other tales though....

Seer's picture

I too would like to thank your for your talk.  And in an ironic kind of way, it's really about talk -WORDS- being insufficient to describe what really IS.

The real communication was with TOUCH.  That is, the driver was touch, as from it the sounds were then emitted.  I guess what I'm trying to get at here is that what you really unlocked was touch- That is the connection you made.  Prior to this point you had been coming at things as sight and sound, things which came to/at you, more of something else than of oneself.

Anyway, nice touch :-)

Oh regional Indian's picture

Seer, thanks and that is indeed a very good observation. I've been trying to bring myself to an original haptic state, what I call the "first touch" state, always fresh. Haptic guitar playing, haptic cooking...everything...


BigJim's picture

Yeah, I saw your TEDx talk too, thought it was excellent.

Hephaestus's picture

I saw your TEDx talk as well. The ditty you play at the end has tremendous Power. Great work.

Oh regional Indian's picture

Thanks Heph. Long time no see?

That is a raag (Indian Classical Piece) with no name. That is the opening, warming up phrase.

Hephaestus's picture

Have you a complete recording?  It is so close to perfection and the multi dimesional aspects you created are like nothing I have ever heard before. It felt like Hendrix with peace, clarity and purpose. I also felt drawn to listen. Does the melody have no name or so many that none stick.

Long time no see? Nice bodhi joke.

Oh regional Indian's picture

Heph, I'm going to tell people that today, that somebody saw me play and Hendrix even popped into their mind (in whatever way) when describing it.

I have an album in the making. You can bet I'll announce it here :-) As a music maker, good to hear.


Flagit's picture

well, at least you're not in a cave anymore : )

Rafferty's picture

Be careful, ORI...Jews have cornered the Holocau$t and genocide markets.  Trade marks and all that.


Who was really responsible?  Lazar Kaganovich (Kagan - Jewish) organised it and was implemented by Collectivisation Units each headed by a Political Commissar, almost all of whom were Jewish.  It's fascinating by the way to see how expertly this has been sanitized on Wikipedia.