Gazprom offered Moldova cheaper gas in return for loosening EU ties

Russian state gas group Gazprom has proposed that Moldova adjust its free trade deal with the EU and delay energy market reforms agreed with Brussels in exchange for cheaper gas. The former Soviet state has declared a state of emergency as it tries to secure enough shipments to make it through a winter gas crunch. Kremlin-controlled Gazprom cut supplies to Moldova by a third last month after the end of a longterm contract and demanded more than double the previous price to keep gas flowing. In negotiations this month, Gazprom told Moldovan officials that it would reduce the price if the country was prepared to amend its tariff-free trade deal with the EU, according to people briefed on the discussions. Gazprom also wanted Moldova to delay the implementation of EU rules that require gas markets to be liberalised and allow more competition, the people said. Two people briefed on the talks said the Kremlin saw the gas negotiations as part of a broader political settlement with Moldova after President Maia Sandu took office last year and her staunchly pro-EU party scored a landslide victory in elections in July. Analysts have suggested that Russia is leveraging Gazprom’s position as sole supplier to Moldova to put pressure on the government in Chisinau, which has vowed to steer out of Moscow’s orbit and towards the west. It comes amid a wider global gas crunch that has pushed market prices to record highs. Vladimir Putin, Russia’s president, this month dismissed as “complete rubbish” suggestions that the Kremlin used gas supplies as a political weapon against other countries. Gas market liberalisation would adversely affect Gazprom and Moldovagaz, its subsidiary in Moldova that owns and operates the country’s gas network and buys and sells shipments. Moscow also would prefer that Moldova abandons the Deep and Comprehensive Free Trade Area deal with the EU and instead sign up to its rival Eurasian Economic Union. Moscow views Moldova as within its sphere of influence and regards itself as the protector of the Russian-speaking population in the breakaway statelet of Transnistria, where it keeps a small military contingent. Dmitry Kozak, a Kremlin official who leads Moscow’s relations with postSoviet states, held talks last week with Moldovan officials that failed to reach a compromise over the gas price. Dmitry Peskov, Putin’s spokesman, said Gazprom’s offer was “carefully calibrated, clear, justified, and, from the standpoint of pricing, extremely fav - ourable to the Moldovan side,” according to Interfax. Moldova’s government fears mass unrest this winter from either a shortage of gas or unavoidably high prices of heating and energy.