EXCLUSIVE / As leaders of the G8 will get together without Russian President Vladimir Putin at today’s G7 meeting in Brussels, Russian ambassador to the EU Vladimir Chizhov spoke to EURACTIV about this summit, the 70th anniversary of D-Day in Normandy, EU-Russia energy relations and the Ukraine crisis.

Vladimir Chizhov is a career diplomat. Before being appointed ambassador to the EU in 2005 he was Russia’s deputy minister of foreign affairs. He spoke yesterday (3 June) to EURACTIV’s Senior Editor, Georgi Gotev.

The Commission has asked the Bulgarian government to stop the construction of the South Stream pipeline. It has also opened an infringement procedure against Bulgaria regarding the way the tendering has taking place. How would you comment?

I haven’t seen the statement by the Commission so far, if it was a written statement. But in case such a move has been undertaken by the Commission, it appears to be in line with an overall highly politicised line of the EU towards the South Stream project as such. And also on a number of other issues.

It appears that against the background of a lot of talk on the need to diversify energy supplies to the EU member states, the EU is anxious to retain the almost monopolistic position of Ukraine as a transit country.

But the Commission says rightly that the gas from South Stream is also Russian gas, and that this planned pipeline doesn’t contribute to diversification of supplies. That’s why it doesn’t treat it as a priority project…

Well… To begin with, Russian gas is good. It smells nice [smiles] and of course is the cheapest gas available on the European market. I know some countries have been complaining about Gazprom pricing, but this is not state-level business. These are commercial deals between the various companies involved.

What I would like to stress in this context is that approximately two-thirds, in some countries three quarters of the price the final consumer pays in some countries, are taxes. It’s a sector of the economy in which all EU member states want to have a cut for their budget, so the taxes are quite high. So from the end price any consumer is paying, here in Belgium or elsewhere, more than half of it is going to the state coffers, not to the supplier.

There have been many discussions lately of the possible alternative sources in the form of LNG, or even shale gas coming from other parts of the world including the USA. Some politicians here in the EU became very agitated over the issue. But in reality, I don’t believe this is a viable option to replace Russian gas in the short and medium term.

For the time being, there is no viable alternative to hydrocarbons, with all due respect to all the wind propellers and other exotic gadgets. Secondly, in Europe, for the time being, there is no economically viable alternative to Russian gas. And my country has always been a reliable supplier of gas and oil to the European market, for over 40 years now.

So whatever artificial obstacles are created now and then can hinder of course cooperation, but it doesn’t serve the interest of consumers.

But how about the use of gas as a political tool? Ukraine pays $485 per thousand cubic meters, much more than any EU country…

The funny thing is that Ukraine is not paying $485. Until a week ago it was not paying anything, for half a year already. Now they’ve paid and that money reached Gazprom accounts only yesterday. They paid for February and March. January had been paid earlier by the previous government. But November and December of last year remain unpaid, and also April, May, and now we’re already in June.

This was the topic of the high-level discussion held yesterday (2 June) in Brussels. You know, there are countries that are paying much more than the sum you mentioned. Here in Europe, some countries are paying well over $500. To say nothing of Asia.

Can you name a country in Europe who pays more than $500?

Some indeed are. Of course the exact price remains a commercial secret. Can you imagine how much Japanese consumers pay for gas?

They pay a lot, but it’s a different market.

Yes, indeed. That’s why I say that Europe is fortunate to have all these pipelines bringing gas from Russia. And when we hear senior politicians from the USA saying, wow, we have this great shale gas revolution, we are going to supply Europe and the rest of the world – that’s a lot of bluff, because gas exports from the USA are highly restricted. They are only allowed, with the exception of Canada, on licences issued by the Department of Energy of the US, and there are only six licences issued so far, none of which relating to gas exported to Europe.

And I can hardly imagine an American gas company choosing to supply gas to Europe, where the Asian market would pay 50% as much. That’s my answer to the question who is using energy for political means.

There is a big political idea that the EU should set up a body and buy the gas it needs from Gazprom, instead of having all these secretive bilateral deals. How about that?

So is this diversification [laughs]? I believe it’s contrary to the entire philosophy of EU energy policy, because EU energy policy is aimed at liberalisation of the energy market, isn’t it? That’s why the first, the second and the third energy packages were created, in the first place – to liberalise the market. And now in parallel they are talking about monopolising the market, with this single body as an executive arm of the Energy Union, proposed by Prime Minister Tusk of Poland. But he hasn’t found many supporter, even here in Brussels.

Ms. Merkel said something in support.

But not on this point. I would dare to suggest as an alternative an energy union between the EU and Russia.

What would it look like?

Enhanced cooperation, exchange of technology, long-term contracts, binding, including volume, prices and everything else. That would increase stability of the energy supplies and enhance energy security of the whole continent.

Now about a less specialised issue. The G7 is meeting Wednesday in Brussels without Russia, and on Friday celebrations will be held in Normandy to mark the 70th anniversary of D-day, with President Putin attending as well, together with President Obama and some of the EU leaders. This happens against the very heavy political background of the Ukraine crisis. What are your expectations, both from the G7 meeting from where Russia was excluded, and from the meeting in Normandy?

First I need to correct you. Russia was never excluded from G7, it was never part of G7, it was part of G8 and actually chairing the G8 this year. Today, 3 June, had everything gone according to plan, I would be at the EU-Russia summit in Sochi, followed tomorrow by the G8 summit.

Unfortunately, some members of the G8 chose not to attend and meet in the G7 format instead. And then the EU took the initiative to cancel our bilateral summit, which was supposed to take place today. Both decisions are bad, not for Russia, but in the case of G8, this is bad for promoting the issues on the G8 agenda, and those are global issues. So if we meet in (the) G8 to discuss fighting global poverty, or climate change, well, the G7 can meet and discuss similar or different issues, and I understand they will focus more on other issues tomorrow. And the global ones will remain sidelined.

And as far as the Russia-EU track is concerned, again, stalling on a number of issues that are of interest for both sides is not helpful.

You mentioned Normandy: yes, President Putin will be there, and he will also meet on the previous evening, on Thursday, President Holland for a bilateral dinner in Paris. He will also have bilateral contacts in Normandy with the other leaders present.

You know, some people claim that Russia is isolated, and President Obama is unfortunately among those. He said it at West Point a few days ago, as a measure of success of US policy. I think this is somewhat misplaced, because Russia has never been isolated and cannot be isolated. Nobody can be isolated in a globalised world, particularly a country of the size and weight of Russia.

The fact that President Putin will be in Normandy is an indication of that, as is his recent visit to China, where was signed the largest gas deal in the history of natural gas [read more], as well as other contacts.

So I hope that this fever, created by the turn of events in Ukraine will pass. Of course, the crisis in Ukraine requires concerted measures to facilitate a political solution. The framework is there, it was agreed in Geneva back in April [read more], and the Swiss chairmanship-in-office of the OSCE has proposed a roadmap which my country supports.

But the events that are unfolding in Ukraine today are not conducive to a long-term solution. When you have the army and the so-called National Guard fighting their own compatriots, with lots of civilian casualties, and indiscriminate use of force, including artillery and bombardment, this is hardly the basis for a long-term settlement. What is needed is putting an end to the so-called anti-terrorist operation and a start to substantive political dialogue.

Conversely, Ukraine says Russia has to stop the infiltration of militias, and stop the smuggling of arms across the border. You say that the Ukrainian forces are fighting against their own people, but I read that a lot of coffins with dead bodies have been sent to Russia, to be buried there?

Have you seen at least one?

I live in Brussels and I haven’t travelled there.

Look, yesterday there was an air attack with cluster bombs that are forbidden by international conventions, on the regional administration building in Lugansk. Pieces of those cluster munitions were shown on Russian TV as evidence. Now I switched to Euronews this morning, and they said that according to the Ukrainian authorities, the blast and the subsequent fire resulted from mishandling of munitions and explosives by terrorists hiding in the building. How can people believe that?

Every such incident should be thoroughly investigated. But do you deny that Russia is sending armament to these people…

Russia is not sending arms nor people…

Money, reportedly flows of money to the militias have been traced.

Lots of rumours, lots of speculation… You know, there was a story: one of the immediate issues in the besieged city of Slaviansk is to allow the civilian population to leave the town, a humanitarian corridor which the Ukrainian authorities never allow to be created. Somehow, 150 small children were evacuated. And immediately Ukrainian propaganda started talking about the disappearance of those children, and 24 hours they said the stolen children to be found hidden in Crimea. But they were taken to Crimea to summer camp at the request of their parents. If that’s infiltration, it’s the other way around!

OSCE observers are held hostages by the militias…

That’s quite unfortunate, and we are doing our best to assist their immediate release. Actually some groups have been released.

In a previous case, Russia has reportedly helped.

Yes, Russia solved the problem in the case you are mentioning, the one with the military observers that weren’t part of the monitoring mission.

So Russia has a stake, it can influence…

And a second group of OSCE monitors, 11 people was also released, but that was thanks to a coincidence, because one of the eleven was a Russian member of the OSCE mission, so he negotiated for the others. If you call this influence, perhaps it is.

One of the VIPs in Normandy will be the new President of Ukraine, Mr. Poroshenko.

President-elect. His inauguration will not have taken place by then.

Will President Putin meet with President-elect Poroshenko then?

They may well come across each other. I don’t see any problem.

Will Russia recognise him as the legitimate President of Ukraine?

It’s not the main problem.

But it’s important.

It is important. We have said publicly that the election was a step in the right direction. It was a positive step. But the problem is not with Russia. The problem for Poroshenko is to be recognised by the Ukrainian people. And you know, I will add: I don’t mean only people in the East, who have a reason against the Kiev coup and its perpetrators, but also people in Kiev itself and elsewhere, because not all people are happy. If you remember how Maidan started, it was a protest against the oligarchs and corruption. Well, Poroshenko’s background is slightly controversial, isn’t it?

He was elected by landslide…

Landslide, come on… Fifty and something per cent…

But it’s an excellent result, probably better than expected…

Probably better than that of many EU politicians at the latest EU elections [laughs].

Even the turnout was higher than in the most of the EU on that day. And people voted for everywhere in the country except in small parts where the security situation didn’t allow.

Where people no longer consider themselves to be subordinate to Kiev.

What should be the next step after the elections – the formation of a government?

No. If you read the Ukrainian constitution, the powers of the President only extend to two ministers – foreign affairs and defence. He cannot fire the Prime Minister, and that may become Poroshenko’s major problem.

Another issue is constitutional reform, and Russia has its own views on that…

Yes, we believe that the concept of a unitary Ukraine which appeared 23 years ago when it became independent has not worked. I truly believe you would agree that it’s not the best idea of democracy to have the constitution re-written for every subsequent president. The Constitution is something that should withstand the challenges of elections and of personalities.

Some people may not like the concept of federation. I accept that. But decentralisation, which nobody is against publicly these days, but it should be real, substantive devolution of powers. Otherwise it would not hold.

Otherwise Russia will continue to put pressure on Kyiv?

You know, I don’t think Russia is the best place to put pressure on those on power in Kiev today. Let me express my personal view. The presidential elections of 25 May are not the end of the story of the domestic Ukrainian political crisis. As Poroshenko has said himself, one of the immediate tasks is an early parliamentary election. I think that’s sensible. But I’m not sure that the other political figures that have already felt the sweet taste of power, since the February coup in Kiev, will be happy about that.

You mean the present Prime Minister Arseny Yatsenyuk will not like to step down?

You should ask him of course, but I think the constitutional reform as planned, which would actually mean a stronger position for a Prime minister, and a more ceremonial one for the President, may actually be in line with his own thinking.