How is PUTIN isolating UKRAINE? - VisualPolitik EN

How is PUTIN isolating UKRAINE? - VisualPolitik EN
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    Ukraine is the Paris Hilton of countries… anytime it's in the news, it's not for
    anything good.
    For the last few decades, Ukraine has been the
    scene of the worst nuclear catastrophe, a military conflict with Russia and the biggest
    corruption scandals you can imagine.
    But… look, there is another thing Ukrainian politicians have in common with Paris Hilton:
    they both have a lot of money.
    After the fall of the
    Soviet Union, Ukraine's economy stopped being managed by the state and started being
    managed by the state's friends.
    These are the so called
    oligarchs and you can find them in all of the country's political parties, pro Russian
    and anti Russian alike.
    For example, the current
    president, PETRO POROSHENKO is also known as the 'King of Chocolate' because he
    owns the biggest chocolate company in the country.
    And the
    former president, YULIA TIMISHENKO is known as the 'Gas Princess' because she made
    a lot of money in the gas industry.
    In other words: things
    changed, but everything stayed the same.
    Nonetheless, things are really starting to change in Ukraine.
    But, make no mistake; these changes are not for the better.
    In fact, the opposite
    is true.
    You see, in a previous video, we told you how Russia is Europe's main gas provider.
    For example, Germany buys 60% of their natural gas from
    Russian companies like GAZPROM or ROSNEFT.
    And how does this gas arrive?
    most of it comes from gas pipes that cross Ukrainian soil.
    So what does this all mean?
    It means that, despite Ukraine having little gas resources, they are still a hot spot in
    this business.
    And this… is
    when Vladimir Putin comes into the picture!
    To this day, Putin needs Ukraine to supply Europe with gas.
    But, as you know, the relationship between Putin and Kiev currently has a status of
    'it's complicated', to say the least.
    So after decades of love and Slavic fraternity, the Government of Ukrainian president Poroshenko
    wants to
    stay away from Putin as much as possible.
    As you can imagine, this political divorce doesn't make Russia happy.
    Anytime their gas goes through Ukrainian territory, they have to pay a
    millionaire's share of alimony to their ex wife.
    But this is not the end of the story!
    As long as Ukraine is in the center of the gas routes,
    Kiev will have a better position to negotiate with Moscow and even Brussels.
    In other words: Ukraine matters as long as we need them for gas.
    So what's Putin's strategy, then?
    Well, check this out.
    Russians Insist On New Pipeline To Bypass Ukraine, And Europeans Fine With It
    Yes, my dear viewers, Russia wants to take Ukraine out of the gas route equation.
    This way, Ukraine would lose their strategic value, which
    would mean that neither America, nor the European Union would really care about them in the
    case of a potential new Russian invasion.
    So the question now is…
    Can this strategy work?
    Will the European Union let Russia bypass Ukraine?
    Today we're going to answer all of these
    questions but, before we do, let's take a look back at the history.
    In the year 2000, 70% of the Russian gas arriving to Europe came from Ukraine.
    More specifically, it came from the so called BROTHERHOOD gas
    This pipeline was built in the times of the Soviet Union and it become more important
    as the demand for Russian gas grew.
    The other 30%
    came from the YAMAL pipe, in Belarus, but that's another story.
    When the Soviet Union fell apart, Ukraine became an independent nation.
    And this was the moment when the Kiev politicians started to see the
    business clearly.
    "Russia has the gas reserves but they need us to sell to the Germans so… they should
    pay us a fare."
    Nowadays, this fare is more than 2 billion dollars a year, but it used to be even higher.
    Thanks to the so called TRANSIT RIGHTS, the State
    owned gas company in Ukraine, NAFTOGAZ, became a behemoth: all of this, despite having almost
    no gas resources in the country.
    As you can imagine, this isn't just about economics here.
    Both in Russia and Ukraine, everything is a political weapon.
    So anytime Kiev had a
    Russian friendly government, GAZPROM sold them cheap gas.
    But when Kiev didn't have Russian friendly politicians in office, prices went sky
    We already discussed this in another video, the first one in this series on Russian Gas.
    The gas negotiations between Russia and Ukraine led to
    a supply cut in 2006 and 2009.
    The last one, in 2009, caused the rest of Europe to go without gas too.
    And this was when Russia started a new strategy.
    Putin phoned his friend, the former German chancellor and current ROSNEFT president,
    And GERHARD SCHROEDER phoned the current German chancellor, ANGELA MERKEL.
    This is how they sold the first project to bypass Ukraine:
    the NORD STREAM 1 pipeline.
    This pipeline goes through the Baltic sea, straight from Russia to Germany.
    One year later, in 2010, YANUKOVICH won the Ukrainian presidency.
    YANUKOVICH is a Pro Russian politician.
    So the good times and the cheap gas
    prices came back.
    But in 2014, we had the EUROMAIDAN.
    Do you remember those protests in Kiev?
    This took YANUKOVICH out of office and brought a
    brand new anti Russian government to Ukraine.
    And this is when Putin said "If I can't have you, nobody can."
    Since 2015, GAZPROM, Russia's main gas company, started the ultimate plan to bypass Ukraine.
    For one, they started the NORDSTREAM 2, through the
    And on the Southern side, Gazprom is building the TURKSTREAM, that sends gas through the
    BLACK SEA as far as Turkey.
    According to the
    GAZPROM president, by the year 2020, that good old Brotherhood pipeline will carry less
    than 10% of what it used to.
    But hold on just a second!
    Because, so far, it seems like Russia is just plain bad and Ukraine is a poor victim, right?
    In fact, things are far
    more complicated.
    Let's dig deeper into this, shall we?
    THE UKRAINIAN JUGGERNAUT Naftogaz is far more than a gas company.
    In fact, it's sort of a job agency!
    They have more than 175,000 workers.
    Yes, you heard that right.
    put that into perspective, the equivalent of Naftogaz in Poland, PGNIG, which is also
    owned by the state, only employs 25,000 people.
    In other words, in Ukraine, you're nobody if you don't have a relative working for
    As you can imagine, Naftogaz is a black hole on Ukrainians' finances.
    It's like if Paris Hilton was taking care of the accounting.
    You know,
    with so many people working for a state owned enterprise, money disappears and nobody knows
    According to the Institute for Economic
    Research and Policy Consulting, a Ukrainian think tank, NAFTOGAZ loses more than 3 billion
    dollars a year from corruption.
    This company is
    always reporting financial loses.
    And we aren't talking about a little bit of money here.
    Just in 2014, Naftogaz losses accounted for 6% of the
    entire Ukrainian GDP.
    But right there, in 2014, we had the Euromaidan.
    And that meant very fast changes.
    Changes like this one.
    Ukrainian police detain Naftogaz Chairman of Board Yevhen Bakulin
    The new CEO of the company is this man you see on the screen, ANDRIY KOBOLIEV, a 40 year
    old consultant.
    His job could be summarized in two
    goals: ending corruption and ending Russian dependency.
    And now you might wonder… is he serious about this?
    Well… so far, things look good.
    Both the European Union and IMF have pushed Ukraine to do
    their homework and, it seems like they are trying…
    GSE announces new improvements of the storage transparency initiative - Naftogaz of Ukraine
    joins Gas Storage Inventory (AGSI+) Since then, Naftogaz has started to make a
    After decades of financial losses, now they account for 13% to the Ukrainian state's
    And now you might wonder… what did KOBOLYEV do?
    What was his magic formula?
    First of all, as is always the case with state monopolies, the prices were controlled by
    the Government.
    This meant really cheap gas, and
    Ukrainian consumers who were used to paying these artificially low prices.
    Now, Naftogaz has raised prices to a level equal to that of other
    European countries.
    Second of all, Kobolyev has confronted Putin with a lot of… lateral thinking.
    You see, Gazprom wanted to raise gas prices for Ukraine.
    But not
    for the rest of the European countries.
    So what did Ukraine do?
    Instead of fighting with Moskow, they started to buy gas from other European
    countries like…
    But, wait, wait a minute here…
    Does Slovakia have gas resources?
    Of course not!
    Listen to this.
    The contracts with GAZPROM say that, once the gas arrives in an EU country, Russia loses
    control over it.
    This means that, the buyer can do
    whatever they want with the gas.
    So now, Slovakia gets their Russian gas through the Brotherhood pipe and, then, it goes through
    the same pipe,
    back to Ukraine.
    So Slovakia buys Russian gas and then Ukraine buys it from Slovakia.
    Thanks to this, Naftogaz has cut a fourth of their
    importing costs.
    But this is just the beginning!
    Kobolyev keeps looking for alternatives!
    For example?
    As we said in other videos, Azerbaijan has
    lots of gas.
    And they are building a pipeline, the TRANS ANATOLIAN, which goes to Italy.
    Kiev wants to connect to this pipe through Bulgaria.
    But… we'll dig deeper into this in our closing video for this series.
    Because, believe me, Azerbaijan is another interesting topic that deserves
    a video on its own.
    If you don't want to miss it, don't forget to subscribe.
    So going back to our story, it seems that Ukraine is doing a great job cleaning up corruption,
    Well… wait a minute because, as we always
    say on VisualPolitik, not everything is all sunshine and rainbows.
    If Ukraine wants to fully adapt to European standards, they should liberalize
    their gas market.
    This would mean that Naftogaz would no longer be a monopoly and they would have to split
    the company into several, smaller
    One would be focused on gas production, another one would manage domestic consumption… and
    so on.
    And, as you can imagine, this is where
    the problems come in!
    EU and Ukraine in tug of war over Naftogaz unbundling
    As you can imagine, as much as Kobolyev wants to clean up the company, too many oligarchs
    have been too good to the company for too long.
    the company can be owned by the state but… this is no excuse to not have millionaire
    salaries and millionaire bribes.
    And this is hard to just
    stop from one day to the next.
    But this is not the worst part!
    You see… in march 2019, Ukraine will have elections again.
    And the result will be decisive for Naftogaz's
    And… of course, my dear viewers, Russia has a perfectly defined agenda for this.
    Let's have a look at it!
    ECONOMICS VERSUS GEOPOLITICS Germany has made it all clear: they will build
    the NORDSTREAM 2 pipeline.
    Both Brussels and Washington are against it.
    In fact, Donald Trump has
    been the biggest critic.
    He kind of said that even Paris Hilton would do a better job than Germany when it comes
    to having a good energy policy.
    And now you might wonder…
    How is it possible that Angela Merkel has let herself be seduced by Vladimir Putin?
    Yes, you know that the former
    German chancellor, Gerhard Schroeder, is Putin's man in Europe.
    But… there is more to it than that.
    Basically, Germany has a big dilemma.
    On one hand, their industry needs gas.
    A LOT of gas.
    The safer and cheaper, the better.
    And, putting
    politics aside, NordStream 2 is the best option economy wise.
    First, it is cheap.
    Second, it avoids all the potential gas wars with Ukraine.
    The problem?
    This gaspipe would make Germany even more dependent on Russia.
    Meanwhile, Putin is happy.
    He can bypass Ukraine and also, destroy their economy.
    In this regard, Russia's intentions are more obvious than your
    ex girlfriend's when she wanted to "have a coffee with you".
    Want an example?
    Have a look at this map!
    This is the Black sea.
    And this little sea to the North is the AZOV sea.
    Both seas are connected by the KERCH strait.
    And Ukraine has two
    important harbours in the AZOV sea.
    So what did Russia do?
    They built a bridge right at the Kerch strait.
    A bridge that makes most of the ships
    unable to arrive or to leave the Azov sea.
    This is why you hear so much news about military escalation in this region now.
    So now you might wonder… why is Russia trying so hard to bankrupt Ukraine?
    It is all about jealousy?
    Of course not!
    The thing is… the worse the
    anti Russian Ukrainian government does, the better things are for the pro Russian candidates
    in the elections.
    And is there any pro Russian candidate running in the 2019 Ukrainian elections?
    Well… the answer is… anything is possible here!
    Here's an example of how crazy this country can be.
    In Ukraine they have a TV show called 'Servant of the people'.
    The star is a teacher who
    fights corruption.
    OK, so there's already an actual political party based on this series.
    The actor who plays the role of that teacher is the
    His name is VLADIMIR ZELENSKY.
    And… does he have any real chance of winning?
    Well… just look at this.
    Tymoshenko leading presidential candidate poll, followed by Poroshenko, Zelensky and
    Hrytsenko Yes, you heard that right.
    He's in the third place, followed by the King of Chocolate and the Gas Princess.
    So… yes, it is impossible to predict
    what's going to happen.
    There is just one clear thing in this story.
    And that's that AZERBAIJAN is having a really good time.
    But we'll talk
    about this in the next video.
    So in the meantime, the question for you is…
    What would you do if you were Germany?
    Would you take that cheap
    Russian gas in exchange for leaving Ukraine alone?
    Or you would sacrifice competitiveness for political interest?
    Please, leave your answer in the comments section below.
    Also, visit RECONSIDER MEDIA.COM, the podcast that provided the vocals in this episode that
    were not mine.
    If you liked this video, give us a
    thumbs up and, as always, I'll see you next time.
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