Ukraine

Question 1

What was the build up to the crisis?

Answer 1

1) In the late 1980s communism collapsed in Europe and the USSR broke up
2) Many state owned companies were sold
3) In 2000, Putin became president and re-nationalised some companies
4) By 2007, Russia’s economy was dominated by oil and gas exports
5) Exports of gas and oil allowed Russia to re-establish its power
6) Meanwhile Ukraine maintained close ties to Russia until 2005 when a ‘western leaning’ government was elected with aspirations to join NATO and the EU

Question 2

What then happened?

Answer 2

1) In response to Ukraine’s aspirations, Gazprom threatened to raise prices
2) Ukraine refused to pay new prices
3) 1st January 2006 - Gazprom reduced supply through the pipelines
4) Because of this supply to Western Europe was affected. Croatia and Bosnia lost 100% of its gas supply, France lost 30%