The gas deal between Ukraine and Russia became possible because Europe realized that it wouldn’t get the gas if it didn’t get behind Ukraine, Wall Street analyst Michael Hudson told RT.
RT: How important is this gas deal for Ukraine and for Europe?
Michael Hudson: It’s apparently most important for Europe because it was Europe that gave in on the deal. The problem was never about the price of the Russian gas. The problem was whether Ukraine was doing to keep up trying just to run up a larger and larger gas bill every month and every year and finally default. In the US Treasury, strategists have already discussed in public how Ukraine can simply avoid paying Russia the money that it owed by going to court and stalling it. So Russia understandably said, “We need credit in advance.” Mr. Oettinger of the European Commission said “Wait a minute, Russia, why don’t you just lend them the money. They will repay you.” And Mr. Putin at the Valdai Club speech in Sochi last week made it very clear. Look, [Russia] has already lent them 11 billion dollars, much more than anyone else has lent to Ukraine. Ukraine is bankrupt, it’s torn itself apart. Why didn’t perhaps a European Bank underwrite the loan? Finally, Mr. Oettinger gave in. Europe said “OK, the IMF is going to lend Ukraine the money to pay Russia for the gas for the balance of the year.” So that Ukraine would end up owing the IMF money and the European Commission money, not Russia. So Russia will not be exposed to having to lend any more money to a dead-beat economy.
RT: You think that it was the EU who gave in on that deal and not Ukraine or Russia. Why?
MH: Ukraine has passed. Ukraine said “We are broken, we don’t have any money, we have spent all our money on war. Our export industry is collapsing. If we need gas, we’ll simply steal the gas that Russia is sending to Europe. We are not going to starve – we’ll just take your gas.” And Putin said, “Well, if they try to steal gas like they did a few years ago, we’ll just turn off the gas and Europe won’t get gas”. So Europe realized that it wouldn’t get the gas if it didn’t step behind Ukraine and all of a sudden Europe is having to pay for Ukraine’s war against Russia. Europe is having to pay for the whole mess in Ukraine so that it can get gas, and this is not how they expected it to turn out.
RT: Do you think this deal will improve relations between Europe and Russia?
MH: Europe is very uncomfortable with being pressured by the US that essentially said “Let’s you and Russia fight.” Europe is already suffering. Germany has always been turning towards Russia, all the way. 50 years ago, I remember Konrad Adenauer in Germany always spoke very pro-Western and pro-American, but always turned economically towards Russia. So of course Europe, and Germany especially, has wanted to maintain its ties with Russia. The problem is the US [wants] to start a new Cold War. It created a lot of resentment in Europe, and Europe is finally capitulating. This means that the US pressure to set Europe against Russia has failed.
RT: Could we expect now easing of sanctions on Russia?
MH: No, Europe is still being pressured, the sanctions are pressured by NATO, and NATO is pressing for a military confrontation with Russia. The sanctions are going to continue unless Russia gives back Crimea, which of course it won’t. The sanctions are hurting Europe, they are turning out to be a great benefit for Russia because finally Russia is realizing: “We can’t depend on other countries to supply our basic imports, we have to rebuild our industry.” And the sanctions are enabling Russia to give subsidies to its industry and agriculture that it couldn’t otherwise do. So Russia loves the sanctions, Europe is suffering and the Americans are finding that the Europeans are suddenly more angry at it than they are at Russia.