So then in the eleventh hour Mr. President rides in on a high horse:

“You have created a crisis not only in the energy sector,” Putin said. “This crisis looks more like crisis between two countries.”

“We are ready to grant a loan directly to Naftogaz to be secured by a leading international bank, either European or American,” President Vladimir Putin told participants in Russian-Ukrainian gas talks.

If the Ukrainians accept, that’s still a shoddy deal. If they don’t, the world condemns their failure to appreciate this outflowing of mild presidential goodness.

In fact this played reasonably well inside Russia, but, mysteriously, international TV channels don’t join their Russian counterparts in carrying presidential words at the top of the hour. Much embarrassement ensues and so on. I think Putin should be developing a particular species of Ukrainian dejavu by now.

Well, in a way this is what I’m suggesting. ‘Strong’ men often are, especially ones who need to go to the gym to demonstrate their prowess. Also trying to outlaw ONGs hardly seems to be the action of someone who is confident in his authority (also note what the reaction in Beslan has been of late).

I think Russia is politically unstable, and I think this is worrying.

Thanks Claus, that was my point. I think he/theyn thought he/they had to do something *now*, but did not correctly estimate the fall out, neither in the short term, nor in the long term. The baltic pipeline may make life more difficult for Ukraine and, hopefully, for Lukashenkow, increasing Russia’s clout there slightly, but with respect to demand flexibility, for all the growth in China, Russia’s almost as dependent on her customers as they are depending on Russian gas.

If you’re trying to play power politicy with natural resources, you better have a backup, otherwise this is just a non credible threat.

I think Russia got that one wrong.

http://www.eurotrib.com/story/2006/1/2/91937/81164

Well, I’m not a political scientist, but I would say what we have here is some kind of unstable authoritarian state.

The thing is, I think Russia is the one European society where a fascist-type state could be a real possibility. It depends which way the ball rolls next.

“but do Russia currently have the leverage for that?”

Obviously they don’t. But I think it may be a mistake to think that they are acting in a “consequentialist” fashion. It is probably wrong to conceptualise Russia as one single monolithic structure. There are obviously various factions/interests battling it out. There is, as you note Gazprom. There is also the military. Ukraine has threatened to retaliate by increasing the rents on the military instalations. All I see is significant instability.

Remember when Milosevic withdrew from Kosovo, and the Russia military went on a race for Pristina?

Putin is in charge, but he probably only stays in charge by making concessions now to this one, and now to that.

There are of course fascists in Russia:

http://www.mosnews.com/news/2005/12/05/barkashov.shtml

The wikipedia entry is also quite informative:

http://en.wikipedia.org/wiki/Russian_Fascism:_Traditions,_Tendencies,_Movements

The basic question, I suppose, is what happens when Putin’s popularity wanes?

That is not entirely right. It is Upper Volta with gas and rockets. The latter make sure that ownership on the former will stay as it is.

Gas imports into the EU will rise. This is inevitable. We will do everything we can to not increase the reliance on Russia, but there is very little we can do. Exchanging reliance upon Russia against reliance on North Africa or the Middle East is not an option.
The concept of the goose with golden eggs is easily within Mr. Putin’s mental grasp.

As noted by many sources this move migth also constitute Russian geopolitical muscle flexing but do Russia currently have the leverage for that?

We political scientists call that one “fascism”, no?

http://news.ft.com/cms/s/d6fa2974-7bb6-11da-ab8e-0000779e2340.html

There may be another reason why Russia is demanding such a high price of Ukraine: so it can force it into a compromise involving agreement to share control over its transit pipeline with Russia – as Belarus does. For a country seeking to increase gas exports to Europe, joint control over the main pipeline would be an important prize.

There are other precedents for handing over control of assets in return for lower gas prices. Following an increase in prices for Georgia, Gazprom is offering to fix the cost for 10 years in return for agreement to form a joint venture to operate and develop Georgia’s natural gas transportation system. Mr Medvedev says Gazprom would consider an asset swap with Ukraine in return for agreeing on a transition period to higher prices – and makes little secret of its favoured option. “We are ready to consider other assets that may be of interest to us,” he says. “But we are particularly interested in the transit pipelines in Ukraine.”