Putin Blames Bush for Gas War, ‘Optimistic’ on Obama

Jan. 26 (Bloomberg) -

- Russian Prime Minister Vladimir Putin blamed George W. Bush for the dispute with Ukraine that left much of Europe without gas this month, saying the former U.S. president fostered political chaos in the region.

Putin, in an interview with Bloomberg Television yesterday, said he is "cautiously optimistic" that relations with the U.S. will improve with Barack Obama in the White House. The new president spoke by phone today with Russian President Dmitry Medvedev, Obama spokesman Robert Gibbs told reporters in Washington.

The Bush administration supported NATO membership applications from Ukraine and Georgia, which Russia opposes, and planned to site a missile defense system in Poland and the Czech Republic. The U.S. under Bush also signed a "strategic partnership" with Ukraine.

"What happened in recent years in Ukraine is the result, to a significant extent, of the activities of the previous U.S. administration and the European Union, which supported it," Putin, 56, said.

Ukrainian President Viktor Yushchenko and Prime Minister Yulia Timoshenko have feuded since they were swept to power four years ago in the so-called Orange Revolution, sparked by the victory of a pro-Russian candidate in a rigged presidential election. Bush said at the time the revolution was a "powerful example" of the movement toward freedom "for people all around the world."

‘Hostages'

Russia, which supplies about a fifth of Europe's natural gas through Ukrainian pipelines, and the EU "have become hostages of this domestic political situation," Putin said near Velikiy Novgorod, the 9th-century trading hub between Moscow and St. Petersburg. "It was that domestic political situation in Ukraine that left no chance for us to reach final agreements on the gas issue."

While U.S.-Russia ties reached a post-Cold War nadir in Bush's last months, Putin said there are "certain signals" that Obama is reassessing policies that Russia opposes, including the missile-defense system and fast-track membership for Ukraine and Georgia in the North Atlantic Treaty Organization.

Bush won approval to locate the planned missile shield in Eastern Europe after Russia's five-day war with Georgia in August, saying it was intended to protect against attacks from Iran or North Korea. Medvedev, who succeeded Putin in May, said in November he would place short-range missiles and radio- jamming facilities near Poland to "neutralize" the system.

‘No Commitment'

Obama has said he has "no commitment" to the shield and wants more analysis on whether it will actually work before deciding to proceed or abandon the project.

"In Mr. Obama's inner circle, they're saying there is no need to rush with it and it needs to be further analyzed, and we welcome such statements," Putin said.

On another issue of importance to Russia, NATO expansion, there are also "positive signals," Putin said in the interview. "They are saying that it is possible to provide security for Ukraine and Georgia in various ways and it is not essential to accept them into NATO now," he said. "We welcome that and are ready to take part in any discussion on working out the best options to ensure international security."

In Washington, Benjamin Chang, a spokesman for the White House National Security Council, declined to comment directly on Putin's remarks, while saying the new Obama administration is interested in talks.

‘Serious Dialogue'

"We're interested in a serious dialogue with Russia on cooperation on future missile-defense systems," Chang said in a prepared statement.

"The president has expressed his support for missile defense, if the system works and if it can be developed and deployed in a fiscally responsible way," he said. "If we determine that these two conditions have not been met, then delaying the development of this system makes sense."

The Obama administration, he said, would "continue to consult" with Poland and the Czech Republic on future plans for deployment of the missile-defense shield.

Two U.S.-based Russia analysts said the new administration has yet to sort out its approach toward Russia and the issues that matter to Russian leaders, such as missile defense.

"The administration is only getting organized," said Dimitri Simes, president of the Washington-based Nixon Center. "All I hear is that they are still debating these issues. It's not my impression that the president has made up his mind."

Timing, Diplomacy

Charles Kupchan, a senior fellow at the Council on Foreign Relations in Washington, said Obama's campaign statements on Russia and missile defense add up to "principled support for deployment" of the system "but needing to rethink the timing, deployment and diplomacy."

Kupchan called Putin's comments in the interview "certainly much more welcome" than Medvedev's threat in November to deploy new Russian missiles if the U.S. missile- defense system were installed in Eastern Europe.

"It's a sign the Russians are going to remain open-minded about working with the Obama administration, " said Kupchan, who also teaches international relations at Georgetown University.

Simes said Obama, Secretary of State Hillary Clinton and other officials must resolve a basic policy question: whether it's more important for the U.S. to push back against Russia's efforts to reassert its influence among former Soviet republics or secure the country's cooperation in dealing with issues such as nuclear proliferation and the Middle East.

"I don't think the Obama administration has seriously focused on this dilemma," Simes said.

More Slowly

Still it's likely that Obama will at a minimum move more slowly than his predecessor on missile defense and NATO expansion, said Andrew Kuchins, an analyst at Washington's Center for Strategic and International Studies. And that by itself would have an impact, he said.

"It gives the Obama people an opportunity to reverse the negative trajectory of the relationship," Kuchins said.

In their telephone call today, Obama and Medvedev expressed an intention to make "all efforts to recover the potential of Russian-American relations" and resolve disagreements, the Russian presidential press service said in an e-mailed statement. It said the two leaders plan to meet in the near future.

International Security

Bush's attempts to accelerate NATO entry for Ukraine and Georgia have been rebuffed by Western European countries. In December, the Bush administration signed a "charter on strategic partnership" with Ukraine that pledged "to strengthen Ukraine's candidacy for NATO membership," and concluded a similar agreement with Georgia on Jan. 9.

In the accord, which was signed as Ukraine was negotiating gas prices and transit fees with Russia, the U.S. also vowed "to work closely together on rehabilitating and modernizing the capacity of Ukraine's gas transit infrastructure."

Talks between Ukraine and OAO Gazprom, Russia's gas exporter, broke down at the end of December, prompting Russia to halt fuel supplies to and then through Ukraine, affecting supplies in more than 20 countries for almost two weeks. Gazprom said the U.S.-Ukraine accord on pipelines was "suspicious" and suggested Ukraine was "dancing to music" played by the U.S.

Putin and Timoshenko, with EU mediation, signed a deal on Jan. 19 to resume gas flows. The 10-year contracts oblige Ukraine to pay more for Russian gas and for Gazprom to pay more to Ukraine in transit fees. Yushchenko, though, is unhappy with the deal and wants new talks "no later than in the summer," said Oleksandr Shlapak, first deputy chief of Yushchenko's staff, on Jan. 23.

"A new attempt to review these agreements at the presidential level is the best confirmation" that the political instability in Ukraine is a threat to Europe's energy security, Putin said yesterday.