EU says deal struck with Russia over gas supply

• Moscow accepts European monitors on Kiev pipeline• Freezing Balkans face catastrophe if pact fails
Ian Traynor in Prague
The Guardian, Friday 9 January 2009

European leaders announced a breakthrough deal with Moscow last night that could see Siberian gas flowing to the households and heating systems of Europe. But hundreds of thousands of families across the Balkans and central Europe faced a freezing weekend without heating amid uncertainty over whether the deal settling the dispute between Russia and Ukraine would stick.
With large stretches of eastern and southern Europe blanketed in snow in some of the coldest weather in a decade, an air of panic gripped parts of Bulgaria, Macedonia, Serbia, and Bosnia, all almost entirely dependent on Russian gas for central heating. The gas has been cut off since Wednesday.
Dozens of companies and factories were closed across the region, while some schools, clinics and hospitals also had to shut or improvise heating systems.
In Sarajevo, Skopje and Sofia, all Balkan capitals, tens of thousands of households were without central heating yesterday.
Demand for coal and wood soared and use of electric heaters brought surges in power systems, which threatened to break down under the strain.
The Russian gas monopoly, Gazprom, has refused to pump any gas through Ukraine's pipeline system to customers in Europe, claiming that Ukraine is siphoning off the gas for its own use after refusing to pay Gazprom's gas price. The emergency seems certain to worsen in the days ahead. Even if deliveries resume, it could take at least two days for gas to feed through to users.
Hido Biscevic, a diplomat who heads the Regional Co-operation Council grouping Balkan countries, warned of a "looming humanitarian catastrophe" in the region.
But the Czech prime minister, Mirek Topolánek, in the second week of his EU presidency, claimed a breakthrough in the dispute late last night after Europe's first attempt to engineer a settlement seemed to have failed.
At a meeting in Brussels between senior EU officials and the chiefs of the two parties to the dispute, Gazprom and its Ukrainian rival Naftogaz, the Russians initially rejected the terms for a new independent monitoring mission on the pipelines through Ukraine, aimed at guaranteeing the flow of Russian gas to Europe.
After talking to Vladimir Putin, the Russian prime minister, and Angela Merkel, the German chancellor, however, Topolánek said the Russians accepted the monitors.
"This deployment should lead to Russian supplies of gas [to Europe] being restored," said a statement from the Czech Republic. "Tomorrow is an important day," said Alexandr Vondra, the Czech deputy prime minister.
Andris Piebalgs, the European energy commissioner, said that up to 12 EU monitors would be sent to Kiev today, ready to be deployed on the pipelines to try to establish the facts about gas transmission in the midst of a fierce propaganda war between Moscow and Kiev.
"We do not intend to supply gas which is simply disappearing in Ukraine's gas transportation system," Alexander Medvedev, Gazprom's deputy chief executive, told the Reuters news agency.
Putin delivered a blistering attack on Kiev, describing the Ukrainian leadership as criminals. "Ukraine's political leadership is incapable of resolving its problems. What we see in Ukraine is the criminalisation of power," he said. "The leadership of Ukraine is not capable of organising the country's normal economic functions according to economic principles. Its power structures are corrupt."
Eighteen out of 27 EU countries are affected by the gas crisis.
While European officials blame both Russia and Ukraine for the crisis, and indirectly accuse both sides of lying, the blame game and the longer-term settlement of the dispute have quickly become sidelined by the urgent need to get the gas flowing again.
Europe imports a quarter of its gas from Russia, 80% of that via Ukraine. But while Germany is by far the biggest buyer of Russian gas, the post-communist countries of eastern Europe are much more reliant on Russian supplies and lack alternative sources of heating.
With Gazprom insisting on more than doubling the price of its gas to Ukraine, Russia cut gas supplies to the country on New Year's Eve and then stopped all gas through the pipelines to Europe on Wednesday.
European energy ministers are to hold an emergency meeting in Brussels on Monday to discuss the fuel crisis.
In Sofia, the Bulgarian capital, protesters denounced both Russia and Ukraine as "gas terrorists". Hungary said it was sending supplies of gas across its southern border to help Serbia. Poland did likewise to aid Slovakia.
US officials in Brussels said that if the fuel crisis continued, Nato might need to come to the aid of its newer members in eastern Europe.