Note:  This article is from the British newspaper The Daily Telegraph:

(by Adrian Blomfield, KIEV – Fears of a new energy crisis in Europe were mounting last night after Russia threatened to cut gas supplies to Ukraine just two days after an election that could result in a pro-Western government formed in Kiev.

The warning, which brought fresh accusations that Russia was using its natural resources to bully its neighbors, raised the prospect o fa repeat of a gas dispute between the two countries last year that led to substantial energy shortfalls in the rest of Europe. The E.U. Commission called for a “swift settlement” to the crisis.

Russia’s state-owned energy giant Gazprom denied charges that the Kremlin was seeking to punish Ukraine for an election that looks likely to hand control of Parliament to the leaders of the 2004 Orange Revolution.

Claiming that Ukraine had debt arrears of $1.2 billion, Gazprom delivered an ultimatum to President Yushchenko’s government, giving it to the end of the month to pay up.

“If the debt is not settled in October, Gazprom will be forced to begin to cut natural gas supplies to Ukrainian consumers,” Gazprom said in a statement. Ukrainian government officials said they were baffled by the threat and denied owing Gazprom anything near the amount it was demanding.

“We don’t understand what Gazprom means,” Oleksy Fyodorov of the Ukrainian state gas company Naftogaz said. “We don’t understand where this sum has come from.” In January last year the Kremlin briefly severed supplies to Ukraine, amid a pricing dispute that critics said was motivated by the Kremlin’s desire to punish its neighbor for the Orange Revolution.

The dispute caused panic in the rest of Europe, which receives 80% of Russian gas imports through pipelines that cross Ukraine, as several countries reported major supply disruptions.

Under heavy pressure from the international community, Russia and Ukraine signed a deal – much criticized for its financial opaqueness – but the dispute did much to damage Moscow’s claims to be a reliable purveyor of energy.

Relations between Moscow and Kiev improved after Prime Minister Yanukovych, the Moscow-backed candidate in the fraudulent presidential elections that triggered the Orange Revolution, returned as premier last year. But, following a snap parliamentary election on Sunday, Mr. Yanukovych looks set to lose his job after pro-Western parties were on course to win a razor-thin majority – a result that would give the Orange coalition control of both Parliament and the presidency.

Analysts had long warned that an Orange victory could prompt Kremlin retaliation – though few expected it to be so swift. But President Putin of Russia, who regarded the Orange Revolution as both a personal humiliation and a Western plot to encircle Russia, has been in increasingly bullish mood of late.

On Monday, he announced he would swap the presidency for the premiership after elections next March in a deft conjuring trick that paid lip service to the Russian constitution.

Buoyed by soaring energy prices, Mr. Putin has increasingly begun to flex his muscles on the international stage.

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1.  a) What is Gazprom?
b)  For what reason has Gazprom said it will cut gas supplies to Ukraine by the end of the month?

2.  How did Oleksy Fyodorov of the Ukrainian state gas company respond to Russia’s accusations?

3.  What is believed to be the real reason for Russia’s threats to cut gas supplies to Ukraine?

4.  Why is the dispte between Russia and Ukraine cause for great concern in the rest of Europe?

5.  Name the countries that would be affected by Russia’s dispute with Ukraine. (Find the answer at Gazprom’s website, – On the website’s left nav bar, look for the “DISTRIBUTION” category and click on “Europe”)

6. CHALLENGE QUESTION. What could the Ukrainian government use as a bargaining chip with Russia to negotiate a solution to this dispute? (To find the answer, read about Gazprom’s distribution in Europe


For a map of Europe, go to

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