MOLDOVA’S “TRANSIT ARGUMENT” WINS REPRIEVE FROM CASH-STRAPPED GAZPROM.

Returning from negotiations with Gazprom’s management in Moscow, Moldovan Deputy Prime Minister Ion Sturza announced that the Russian company has consented to continue gas deliveries to Moldova beyond the August 1 deadline for repayment, reschedule Moldova’s debts and–most significantly–agreed in a protocol that Moldova may pay its arrears “mostly in the form of goods” rather than cash.

Sturza was tight-lipped about Gazprom’s considerations in agreeing to these concessions, particularly when the company is hard pressed for cash in order to pay its tax arrears. He only stated that Gazprom did not want to risk losing its markets in the region. (Flux, Basapress, July 20). The latter remark suggests that Gazprom was responsive to Moldova’s “transit argument,” which implied that the country might react to a cutoff by taking advantage of the transit pipeline which carries Russian gas to Balkan countries via Moldova. (See the Monitor, July 17)

By obtaining this concessions, Moldova may have set a precedent for Ukraine and Belarus to demand similar treatment from Gazprom, both in terms of rescheduling and–above all–in terms of Gazprom acceptance of goods, rather than cash. Sturza predicted as much by suggesting that Ukraine and Belarus can similarly use the “transit argument.” They can in fact do so with greater effect, considering the larger volumes of Russian gas they transit.

AZERBAIJAN BROADENS CRITICISM OF RUSSIA’S MILITARY INVOLVEMENT IN THE REGION.