There is a Hungarian slang expression: "there is gas" (gáz van). It means there is big trouble. The big trouble now is that there is no gas. That is, there is no gas coming from Russia via Ukraine. Of course, the trouble would be greater if Hungary didn't have enough reserves to survive for at least two more months. Other countries–Bulgaria, Slovakia, and Serbia, for example–are in much bigger trouble because they have practically no reserves. Serbia already turned to Hungary yesterday for help. The initial Hungarian answer was negative, but by today the Hungarian government decided that after all it could spare a couple of billion m³ of gas because yesterday Hungarian consumption was lower than expected. Also Hungary has some natural gas of its own and a smaller amount reaches the country from Austria as well. Thus while Bulgaria and Slovakia are entirely dependent on Russian gas, Hungary relies on Russian gas for somewhere between 50% and 75% of its needs. Today, for example, 4 billion m³ gas arrived from Austria. The problem is that countries in Eastern Europe that depend on Russian gas can't really help each other because there are no pipelines between Romania and Bulgaria, or Hungary and Slovakia, or Romania and Hungary.
No one knows what the real situation is between the warring business partners, Russia and Ukraine. If one can believe the Russian ambassador to Hungary, there are four "faucets" that can be turned on or off. Three of these were shut off by Ukraine yesterday morning and only then did Russia move to shut off the one remaining "faucet." The Ukrainians' version of events, not surprisingly, is different. They claim that they would be most willing to send on any natural gas that arrives in their pipelines. But there is none. The Russians have shut off the flow of gas.
Then there are the two entirely different interpretations of the Russian-Ukrainian feud. There are those who claim that it is simply a business quarrel while others think that it is fundamentally a political issue. Russia is putting economic pressure on Ukraine to keep it within the fold. Ukraine, on the other hand, is looking westward; it wants to belong to NATO and eventually to the European Union. A Hungarian political scientist currently in Kiev views the crisis solely in political terms, a manifestation of Russia's imperial aspirations. Even the Russian ambassador to Hungary admitted that Russia is unhappy with Ukrainian political ambitions. I'm inclined to think that Russia's dispute with Ukraine is not solely economic. Russia's loss of Ukraine must still be hard to swallow. After all, with the exception of a very brief period after World War I when Ukraine became independent, it was an integral part of Russia for over three centuries. Also there is a huge Russian population within Ukraine's borders.
This morning Vladimir Putin gave a press conference in which he denied that Russia was using natural gas as either a political or an economic weapon. It is business, pure and simple. According to Putin the international price of 1,000 m³ of natural gas currently is $470. The transit cost of 1,000 m³ of gas per 100 km is $3-$4. Since the natural gas that goes to the Ukrainian pipelines comes from Central Siberia the transit cost is high–$375 per 1,000 m³. Ukraine simply refuses to pay a decent price for the gas. According to Putin, since the fall of the Soviet Union and with it Ukraine's independence, Russia has supported Ukraine by selling it gas below the international price. He estimated that Russia has lost $43 billion through this "subsidy".
Ukraine cannot emerge from this mess a winner. Russia has already started to build new pipelines. Putin emphasized that the Northern Stream under the Baltic Sea is of great importance to Russia and Germany. The Southern Stream is also under construction. But analysts claim that Russia is also shortsighted because Russia's economy is overly dependent on its natural resources. The two recent disruptions in the natural gas supply to Europe will surely prompt the European Union to rethink its reliance on Russian natural gas. Building, for example, the Nabucco pipeline. Or promoting alternative sources of energy. And coming up with a unified energy policy as opposed to the current situation where there is no cooperation among the countries of the European Union.
In 2006 there was a similar crisis. At that time there was a proposal that the European Union should act as an intermediary between the two countries. Nothing came of it; Russia and Ukraine resolved their differences in relatively short order. Two years later the crisis is repeated, with no quick end in sight. This time it seems that the European Union is ready to assume an active role in resolving the crisis. Hungary and perhaps some of the other countries affected approached the EU and asked for diplomatic help. The representatives of Gazprom and Naftogaz arrived in Brussels, and apparently they agreed to accept EU observers on the spot who could help resolve the dispute between the two countries. The head of Gazprom, Aleksei Miller, announced that if the observers could travel to the Russian-Ukrainian frontier immediately the "faucets" could be open tomorrow. Ah, but the European Union can't move that fast. All members must agree. Who knows when Russian natural gas will flow again to Bulgaria, Romania, Slovakia, and Hungary.