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The European Union, which for years has chastised Russia for charging its domestic consumers a sixth of what it charges Europe for natural gas, finally has reached a compromise with Moscow. As a result, Russia has received much-needed EU backing in its bid to join the World Trade Organization (WTO).
Talks between European Union Trade Commissioner Pascal Lamy and Russian Economic Development and Trade Minister German Gref resulted in the May 21 agreement, which takes Russia a giant step closer to membership in the 147-nation international trade organization.
The agreement presages the near doubling of natural gas costs in Russia, and will mean that nearly all investment into the Russian natural gas industry will come from Russia -- not Europe.
EU resistance to Russia's WTO bid specifically centered on natural gas prices. Europe has charged that Gazprom -- Russia's state-owned natural gas monopoly, the world's largest natural gas producer and single largest supplier of natural gas to Europe -- indirectly subsidizes the domestic economy by charging Russians significantly lower prices than it charges Europe. Moscow had countered that, as a producer of natural gas, it was its prerogative to offer lower domestic prices.
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