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Old September 9th, 2012 #21
Dawn Cannon
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Default Low growth and a heavy social burden

Moscow was no longer prepared to subsidise eastern Europe.

President Vladimir Putin has condemned as "unconstructive" a European Union anti-trust probe against Russian energy giant Gazprom, saying Moscow was no longer prepared to subsidise eastern Europe.

Putin was reacting to the EU Commission's decision to probe Gazprom over concerns it is hindering competition in central and eastern European gas markets.

"We believe this approach to be unconstructive," Putin told reporters on Sunday, the final day of the annual APEC summit in the Pacific port of Vladivostok.

"We regret that this is happening. We hope that we can get out of this situation, without losses for any side, through a businesslike and well-meaning dialogue."

He implied that the probe was aimed at making Moscow help ease the EU out of its economic crisis by making it sell struggling eastern European economies cheap energy.

"This (the probe) is caused by many things, but above all the difficult economic situation in the eurozone," he said.

Putin accused the European Commission of forcing Gazprom to take some of the burden of "subsidising" economically weak eastern European countries.

"United Europe wants to retain some political influence and wants us to pay for it," he said.

Putin recalled that under the Soviet Union Moscow had supplied hugely subsidised energy supplies to its communist bloc satellites but insisted that post-Soviet Russia would only export hydrocarbons at market prices.

"We need to stay on the path of reality today so that modern Russia does not take upon itself additional obligations linked to the anti-market solutions for the economies of those countries," he said.

The EU said earlier this week it had launched the probe over concerns that Gazprom is hindering competition in Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia.

The EU suspects Gazprom "may have prevented the diversification of gas supplies" and "imposed unfair prices on its customers by linking the price of gas to oil prices".

Gazprom has insisted its activity on the EU market and its pricing principles were "in accord with the standards used by other gas producers and exporters".

The energy firm, a cornerstone of the modern Russian state, grew out of the USSR's gas industry ministry and was partly privatised from 1993.

The Russian government retains a controlling stake.

Putin meanwhile unfavourably compared the eurozone's economic prospects with those of the Asia-Pacific region, saying Europe was saddled with low growth and a heavy social burden.

"This region, the APEC region, is the locomotive of the world economy today," he said.

"If the eurozone has zero growth or even a recession then here there is at least growth, and decent growth."

He said one APEC leader, whom he did not name, had said in a closed-door APEC session that the eurozone's problems were linked more to politics than economics.

Putin said he agreed with that assessment as European states had to take on too heavy a social burden in their economies whereas APEC states were not held back in this way.

Read more: http://www.brisbanetimes.com.au/busi...#ixzz261IdwrNo