Ukrainian Prime Minister Nikolai Azarov said Aug. 16 that the idea of Ukraine striking an energy deal similar to the recent agreement between Belarus and Russia is "unacceptable." The previous day, the CEO of Russia's energy behemoth Gazprom encouraged Ukraine to follow the "Belarusian model" in terms of forming a natural gas agreement with Russia. Azarov's comments indicate Ukraine's resistance to further integration with Russia along the same path as Belarus. However, increasing tensions between Kiev and Moscow, combined with increasing political and economic pressure on Ukrainian President Viktor Yanukovich's administration, eventually will make it harder for Ukraine to avoid following Belarus' example. The Belarusian model involves a deal between Minsk and Moscow for reduced natural gas prices, which Russian Prime Minister Vladimir Putin said was a reward for Belarus' pursuit of integration with Russia. On Aug. 15, Russia agreed to lower the price of natural gas for Belarus beginning in 2012. The agreement involves an "integration descending rate" into the natural gas pricing rate and will continue to be negotiated until the end of the year. No details are currently available on what the rate will be. Despite Putin's claim that the reduced natural gas prices are a reward for Belarus' integration with Russia — including membership in the Union State with Russia and the customs union with Russia and Kazakhstan, as well as the forging of security agreements between Moscow and Minsk — this is not the case. Belarus has been a member of the Union State for years, and Moscow rejected Minsk's request for lower natural gas prices immediately after it joined the customs union in January 2010. Rather, the new natural gas agreement comes after Belarus began talks to sell Russia some of its most strategic assets, including 35 percent of potash producer Belaruskali (and talks are under way to give Gazprom the 50 percent of natural gas infrastructure firm Beltransgaz that it does not already own). Belarus is facing serious financial problems — partly because of political isolation from the West and partly because of Russian maneuvering — and will be selling many more state assets to Russia, with Russia's Sberbank taking the lead on Belarus' privatization program set to launch Sept. 6. Furthermore, Russia is looking for new customs union members and could be granting Belarus lower natural gas prices as a means of persuading other countries to join the bloc. Ukraine would like lower natural gas prices — and it has been talking with Russia about renegotiating the countries' current agreement signed in 2009 — but Kiev does not want to follow the Belarusian model to get them. The Ukrainian economy is in better shape than Belarus', and unlike Minsk, Kiev is not politically isolated from the West. Thus, Ukraine has sought to balance itself economically between Russia and the European Union. For example, instead of joining the customs union, Ukraine has a preferred "3+1" relationship with the bloc, and it wants to sign a free trade agreement with the European Union by the end of 2011. Furthermore, instead of agreeing to Russia's proposed merger between Gazprom and Ukraine's natural gas firm Naftogaz, Kiev wants to form a natural gas consortium that would involve both the European Union and Russia. This is something Europe and Russia are both interested in, as long as the Europeans and the Russians are in control of the process. Naturally, Ukraine wants to make sure it does not get overwhelmed by the two great powers. Despite Ukraine's desire for balance between Russia and the West, Kiev could be losing its room to maneuver. Ukraine has begun showing signs of problems similar to Belarus, both politically and economically. Politically, the European Union's condemnation of the recent arrest and trial of former Ukrainian Prime Minister Yulia Timoshenko has created tensions that could threaten the Ukrainian-EU free trade agreement. Economically, the high natural gas prices Russia charges are pressuring Ukraine during a tenuous recovery. Furthermore, Ukraine will lose much of its transit revenue — and leverage as a major transit state — when the Nord Stream pipeline and other future projects come online. Ukraine's political and economic difficulties are not nearly as severe as Belarus', and Kiev has more tools than Minsk to combat these problems. However, Russia is well aware of the increasing pressures within Ukraine and could use them, along with several other economic and energy-related tools at its disposal, to bring Kiev closer to Moscow and away from Europe, just as it has done with Belarus. Ukraine's ability to balance between Russia and the European Union has been weakened in Russia's favor, and it is becoming more difficult for Ukraine to avoid making the concessions Russia wants in exchange for meeting Ukraine's need for lower natural gas prices.