Russia's gas price dispute with Ukraine disrupted gas deliveries across Europe on Monday and has damaged Russia's reputation as a reliable trading partner and energy supplier. The Russian energy giant Gazprom cut off the gas supply to Ukraine on Jan. 1 after the Kiev government refused to accept an immediate price hike from $50 to $230 per 1,000 cubic meters. Many European countries, including Austria, Hungry, France, Germany and Poland immediately experienced sharp drops in their gas supply. Gazprom has now promised to increase supplies to the EU countries, pledging to send an extra 95m cubic metres a day to make up for the gas which it claims was "stolen" by the Ukraine. Kiev denies that it siphoned off gas from a pipeline crossing its territory. Now the European Union is attempting to mediate between the two sides: EU foreign policy chief Javier Solana has said he is trying to persuade both sides to resume talks. The dispute comes just as Russia takes over the presidency of the G8 and the German press looks at the implications for Russia's reputation and for energy supplies to Europe.

The right-of-center Frankfurter Allgemeine Zeitung is not only critical of Russia's actions, but also of European leaders who have allowed their countries to become dependent on unreliable energy sources. According to the paper, Russia, Europe's biggest gas supplier, is trying "to exert influence over the economic infrastructure -- and more alarmingly -- over the domestic politics of a customer." The dispute reveals how short sighted most Europeans and particularly Germany have been in the past. "Perhaps German politicians will now understand how little it proves that even in Soviet times the gas supply from Siberia was reliable."  During the Cold War Moscow didn’t need to blackmail the "class enemy" with gas due to its military strength. "Putin's Russia by contrast is a half-developed raw materials economy that can only achieve influence through threatening to inflict damage on others."

The paper argues that the biggest danger to energy supply in the foreseeable future will not be scarcity but "the concentration of these resources in the hands of a few, often politically unreliable, states. The Who's Who of the most important oil and gas suppliers reads like a handbook of international crisis zones." The paper recommends that Europe start to diversify its energy sourcing in much the same way that the US has already done.

The left-leaning Berliner Zeitung wonders why Russia has been allowed to join the former G7 -- now G8 -- of industrialised nations when South Korea, Brazil, India, Australia, even Mexico all have larger economies. The answer seems to be that Russia "is not an industrial but rather a raw materials power." In its actions over the gas conflict with Ukraine Russia has shown that its wealth in oil and gas gives it the means to become an economic power. However, the paper comments that "even if President Putin continuously assures that he won't use the country's wealth in raw materials to apply political pressure, the current gas war with Ukraine proves the opposite." Although the paper argues that "there can be no objection to the increase in the gas price for Ukraine, nor to the fact that Russia protects its own interests in conflicts with neighbouring countries," it is critical of the manner in which Russia threatens and blackmails: "Will Russia's full membership of the G8 be a guarantee against this sort of behavior?"

Finally the newspaper comments that since the end of the Soviet Union democracy has been only a promise in Russia. "The modernisation of the country, its industry and its political institutions ended with Putin's assumption of office," it writes. "The G8 will in future be G7 plus Gazprom."

The Financial Times Deutschland has a slightly different take on Russia and its role as a major energy supplier. It doesn’t buy the argument that Russia is now in a very powerful position. "Powerlessness is usually the opposite of power. But the gas dispute between Russia and Ukraine shows that both can be surprisingly close to each other." The paper argues that Russia has overplayed its hand by turning off Ukraine's gas supply: "Now it is as helpless as its opponent and doesn’t know what to do next." By deciding on maximum escalation, the paper argues, Russia has damaged itself. The Ukrainian president Viktor Yushchenko was under pressure at home but is now enjoying the complete support of the Ukrainians. Meanwhile "world public opinion is following Vladimir Putin's power politics game with astonishment." According to the paper, "the Russian president has miscalculated. Just at the moment when his country takes over the presidency of the G8 group of industrial nations he is isolated. He is fighting for his international reputation."

The paper argues that the EU should intervene: as a customer of Russian gas it has an interest in an uninterrupted supply and relations are good enough between Russia and the EU for Putin to agree to mediation.  Germany will be involved in any resolution of the dispute, but the paper warns that it should be sure to sing from the same hymn sheet as it EU partners. "There is no special relationship with Russia since Schröder's departure and nor should there be."  German interest in Russia is the same as that of the rest of the EU: "Security of supply and the existence of a reliable democratic and stable partner in the east." A compromise shouldn’t be impossible, as Yushchenko has declared that he is willing to pay more, just not so much and not so quickly. According to the FTD, if the EU succeeds in getting both sides to negotiate a timetable for agreeing to a price "it would be a badly needed image boost".