Gazprom's $1Bln Gift to Tymoshenko

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Prime Minister Vladimir Putin made it clear that he would never forgive Ukrainian President Viktor Yushchenko for his role in sending arms to Tbilisi to help Georgian President Mikheil Saakashvili fight in the August war -- although the conflict between the two goes back much further, to 2004, when Yushchenko beat out Moscow's preferred candidate in the presidential election. After this, many wondered if Russia would really start a war against Ukraine.

On Jan. 1, Russia started a war, using the single most effective weapon in its arsenal -- energy. This was not a war between Russia and Ukraine but one between Putin and Yushchenko. The clear winner in this conflict is Ukrainian Prime Minister Yulia Tymoshenko, and the biggest loser is Yushchenko. The Kremlin was also a loser, but the losses were offset by its success in exposing Yushchenko's incompetence in managing the gas dispute. But what price did Moscow pay for its supposed victory?

Tymoshenko, the indisputable winner in the conflict, is a brilliant politician who set her former enemy, the Kremlin, against Yushchenko, her former comrade-in-arms in the Orange Revolution.

In the three-week gas war, Gazprom incurred more than $1 billion in lost profits, but this can be written off as a campaign contribution to Tymoshenko's 2009 presidential election campaign.

If, in the war between Putin and Saakashvili, it was really South Ossetian leader Eduard Kokoity who emerged as the winner, then in the war between Putin and Yushchenko the clear winner is Tymoshenko.

But the Kremlin will pay a huge price for defeating Yushchenko. The European Union's energy commissioner, Andris Piebalgs, has already confirmed that on the same day Putin and President Dmitry Medvedev accused Ukraine of refusing to transport Russian gas, the pumping stations at Orlovka and Sudzhu could not have possibly sent the gas to Europe for technical reasons. Thus, Piebalgs was implying that this was a deliberate, underhanded attempt by Moscow to frame Ukraine as the main culprit in the conflict.

It is safe to say that the EU views Russia as an unreliable gas supplier, and I am sure many European politicians are now asking themselves: "Today, the Kremlin is trying to topple Yushchenko --what if tomorrow it uses the same energy weapon to bring down German Chancellor Angela Merkel or French President Nicolas Sarkozy?"

There are three planned pipeline projects to supply gas to Europe. The first is the Nabucco pipeline, which is intended to supply Caspian gas to southeastern Europe via Turkey. Nabucco, which is backed by the United States and the EU, is meant to undermine Gazprom's South Stream pipeline, which would also deliver gas to southeastern Europe, but via the Black Sea.

The third project is Nord Stream, a Russian-German pipeline that would bypass Ukraine to bring Russian gas directly to Germany via the Baltic Sea. But if as a result of the latest round of the Moscow-Kiev gas conflict the EU decides to build Nabucco and kill the Nord Stream project, this would mean a crushing defeat for the Kremlin's entire European gas strategy.

Such a dramatic turn of events is unlikely given that the EU has little resolve to stand up to Russia's blackmail attempts. Moreover, European steel producers, who are in dire financial trouble, are in desperate need of securing the pipeline construction contracts.

When a country is able to get anything it wants from its partners because they are weak, I wouldn't call it hooliganism. It is a rational business and political strategy.

Yulia Latynina hosts a political talk show on Ekho Moskvy radio.