EU Concerned As Russia Cuts Gas to Ukraine

Germany and central Europe were bracing themselves for cuts in gas supplies last night when Russia stepped up a dispute with Ukraine by slashing supplies for a second day. The display of muscle promptly followed the election of Dmitry Medvedev as new Russian president on Sunday. He is also chairman of the giant gas monopoly, Gazprom.

The dispute, a replay of a mini-crisis two years ago that alarmed European policy-makers and highlighted their dependence on the Kremlin for keeping Europe's radiators running through the winter, erupted on Monday when Gazprom cut supplies to Ukraine by a quarter, citing unpaid debts. Gazprom cut supplies again last night by a further quarter, setting off alarms in Brussels and Berlin and bringing warnings of cuts to Europe by Ukraine's pipeline operator.

Andris Piebalgs, the EU's energy commissioner, convened an emergency meeting of the EU gas coordination group last night to "ensure a fully coordinated EU response".

Brussels stressed that no European country was reporting any interruption of gas supplies which flow from Siberia and central Asia to Europe via Ukraine. But the Ukrainian pipeline operator, Naftogaz, said it reserved "the right to adopt adequate and asymmetric actions to defend the interests of its customers," indicating it could interfere with the pipelines to Europe.

While Gazprom maintained the row was purely about money, analysts noted that it erupted within hours of Medvedev being anointed Russia's president-elect on Sunday. Medvedev has been chairman of Gazprom for six years. The timing suggested Medvedev was bent on showing he would be as robust as Vladimir Putin in his dealings with the west and Russia's post-Soviet neighbors.

Europe gets a quarter of its gas from Gazprom, but the post-communist countries of central Europe are almost entirely dependent on Russia for gas, while Germany, Gazprom's biggest customer, gets about 40%. Angela Merkel, the German chancellor, will travel to Moscow at the weekend to meet Medvedev. She is certain to press the Russians on the dispute.

The Ukrainian company said Kiev was being blackmailed by the Russian behemoth. "The Russian side has rushed to unprecedented psychological pressure on negotiators from Naftogaz Ukraine and Ukraine as a whole," it said.