Europe Versus Gazprom

NEW YORK – For years, Russian President Vladimir Putin has wielded Europe’s dependence on his country’s natural gas as a foreign-policy weapon, without fear of the European Union calling his bluff – until now. With the EU launching an antitrust case against the state-controlled gas conglomerate Gazprom, Europe has sent a clear signal that Putin’s brutishness is no longer as intimidating as it once was.

The message from the European Commissioner on Competition – that market rules apply to everyone – is one that Putin has dismissed for years. Reliance on economic and legal means to achieve his political goals has long been a hallmark of his rule. More than a decade ago, the Kremlin expropriated Yukos Oil, which at the time produced 20% of Russia’s output, and jailed its founder, Mikhail Khodorkovsky, for ten years on trumped-up tax evasion charges after he dared to oppose Putin.

All major players in Russia’s energy-centric economy quickly fell into line politically, enabling Putin to use the country’s oil and gas exports as a geopolitical cudgel. EU countries that he could not intimidate militarily, owing to NATO, were wooed with discounts – or punished with price hikes.

Hungarian Prime Minister Victor Orbán is Putin’s staunchest friend in Europe (though Greek Prime Minister Alexis Tsipras seems to want to change that), while Poland’s leaders have consistently warned that Russia could become a menace to the continent again. As a result, whereas Hungary pays Gazprom $260 per thousand cubic meters of gas, Poland pays $526 – the highest price in the EU.