Strongman, The

emergency meeting on 4 January. But before they met it was suddenly announced that the Russian and Ukrainian presidents had reached a deal. On the face of it, the agreement was a decent compromise: Ukraine agreed to pay the market rate for Russian gas, but Gazprom would also sell it much cheaper gas from Turkmenistan, bringing the overall price down to $95 per 1,000 cubic metres; to sugar the pill Gazprom would also pay 47 per cent more to Ukraine for transporting gas to Europe.
    The West’s new worries arose because all the gas would now be sold not directly by Gazprom but by a murky Swiss-registered trading company called Rosukrenergo, which was half-owned by Gazprom, partly owned by two shady Ukrainian businessmen. Rosukrenergo’s creation in July 2004 was overseen by Putin and ex-President Kuchma of Ukraine. Western observers could not understand why Yushchenko had now got involved with it.
    The American ambassador John Herbst recalls: ‘The Ukrainians came in and described the deal. And I was dumbfounded. My German colleague and my other European colleagues were all dumbfounded. Because again we thought that the Ukrainians had a reasonable negotiating position and a reasonably strong one. And the result was less than optimal, to be diplomatic.’ 21
    Damon Wilson described the consternation back in Washington: ‘Here we are with a president who presides over a deal with Russia that introduces Rosukrenergo, an intermediary with all sorts of shady transactions and dealings, in a process that, it became increasingly clear to us, was a vehicle for facilitating side payments, facilitating the worst of business practices in Ukraine. This was corruption at the heart of the Orange Government.’
    Yushchenko’s chief of staff, Rybachuk, conceded it was a controversial deal, but they had no choice: ‘Yushchenko’s position was: Putin is president; yes I understand that gas is a dirty business but we can’t do business with Russia in any other way.’
    So now Washington and Europe found their dreams fading. The Ukrainian democrat they had championed was proving to be decidedly flaky. Wilson described it as a moment of disillusionment, of realisation that old habits were still strong in the “new Ukraine’. And in Moscow, Putin had demonstrated his willingness to use a weapon never tried before – energy supplies. Those few days of gas cuts in early January caused immense nervousness throughout Europe and triggered a radical rethink of the EU’s energy policies. From now on, Vladimir Putin was not a man the West enjoyed doing business with.

 
    8
A NEW COLD WAR
    Tempers get frayed
    Now a spiral of disenchantment began to wreck relations between Washington and Moscow – and even between the ‘friends’, Bush and Putin, each of whom began to accuse the other of bad faith. At a bad-tempered summit in the capital of Slovakia, Bratislava, in February 2005 (just after the Orange Revolution), Putin pulled a pack of 3-by-5 cards from his inside jacket pocket – the Americans called them his ‘grievance cards’ – and began lecturing Bush about ... well, about how fed up he was being lectured to by the Americans. The rant went something like this: We’ve done everything we can to accommodate you, we supported you in the war on terror, we closed down bases, we let you destroy the ABM treaty without making a big fuss, we didn’t even let Iraq get between us, and what did we get in return? Nothing. You haven’t abolished Jackson-Vanik, you keep moving the goalposts on our WTO entry, you don’t even ratify the Conventional Forces in Europe arms control treaty, you want to build a missile shield that makes us vulnerable, and you’re trying to bring all our neighbours into NATO. Instead of praise for our policies aimed at reforming our economy and tying it into the world system, all we hear are complaints about our internal affairs – about human rights, about our supposed ‘backsliding’ on democracy, about Chechnya, about our media, about Khodorkovsky. When will it end?
    Bush’s new national security adviser, Stephen Hadley, recalled that this was ‘probably the testiest meeting the two leaders had had’. 1 It was here that Putin tried to turn the tables on Bush by claiming that America did not have a free press – as witnessed by the fact that Bush had allegedly had CBS’s senior news anchor Dan Rather fired for criticising him. 2 Bush tried to explain that this was not the case, but Putin was in no