Russia's Gamble

The EU is up in arms about Russia's latest show of strenght, because now, it affects them. Russia has cut off gas to many European countries because of a dispute with Ukraine over prices for the new year. Last year Ruissia charged $179.5 per 1,000 cubic meters, and now wants to charge $250, though Kiev has vowed not to pay a cent more than $201. At first glance, this looks like a desperate company (Gazprom) owned by a desperate nation, attempting to increase profits after a hard economic year. Gazprom is knee-deep in debt and would naturally want to increase profits to curtail this. Then things get interesting when Russia demads an astounding $450 per 1,000 cubic feet. This number is completely irrational, and personally, I don't believe that Putin expects anyone to pay.

The Czech Deputy Prime Minister, Alexandr Vondra has criticized Russia, saying "It is impossible to hold other countries hostage." Actually, I think it is. And that's what Russia's doing right now.
The nations of Europe aren't in a very good position to be bargaining with Russia. It seems Putin's holding all the good cards. Obviously, he doesn't expect Ukraine to pay $450 for gas, and he will probably relent, once the mounting pressure of a below zero winter without gas starts to hit parts of Europe. These nations will respond perhaps by blocking Ukraine and Georgia from entering NATO. After all, Putin has been outspoken about his opinion in this. Who knows, but a lot of European non-powers making fiery speeches and bold statements will lead them nowhere.