Putin Says Ukraine Must Pay Cash for Gas in June
2014-05-15 14:53:22.219 GMT
By VLADIMIR ISACHENKOV
Moscow (AP) -- Russia has ratcheted up pressure on Ukraine,
with President Vladimir Putin saying in a letter released
Thursday that it only will deliver gas to its struggling
neighbor next month if it pays in advance.
Putin first warned of the move in April in a letter to
European leaders whose nations are customers of Russian state-
controlled Gazprom natural gas giant. He said that Moscow would
switch to pre-paid deliveries if Ukraine, which serves as a
major conduit for Russian gas supplies to Europe, failed to
start settling its mounting gas debt.
In the second letter released by the Kremlin Thursday,
Putin said that a meeting involving Russian, Ukrainian and the
European Union officials has failed to settle the issue. He said
that Ukraine's gas debt to Russia has kept rising and reached
$3.5 billion, even though Ukraine has received $3.2 billion
bailout from the International Monetary Fund.
"Given the circumstances, the Russian company has issued an
advance invoice for gas deliveries to Ukraine, which is
completely in accordance with the contract, and after June 1 gas
deliveries will be limited to the amount prepaid by the
Ukrainian company," Putin said in the letter.
The move is part of Russia's efforts to retain control over
its struggling neighbor, which has been teetering on the verge
of financial collapse and facing a mutiny in the east, where
pro-Russian separatists seized administrative buildings, fought
government troops and declared two regions independent following
Sunday's referendum.
In his letter, Putin sought to cast the move as a purely
economic decision, saying that Russia is "still open to continue
consultations and work together with European countries in order
to normalize the situation."
"We also hope that the European Commission will more
actively engage in the dialogue in order to work out specific
and fair solutions that will help stabilize the Ukrainian
economy," he added.
Ukraine has said it could start paying off the debt if
Moscow restores the gas discounts canceled following the ouster
of pro-Russian President Viktor Yanukovych. He fled to Russia in
February after months of protests, triggered by his decision to
dump a pact with the EU in favor of closer ties with Moscow.
Gazprom has scrapped a discount granted to Yanukovych in
December and then another rebate linked to a 2010 deal on
Russian navy presence in Ukraine's Crimea, which Moscow annexed
in March. Canceling the discounts raised the price by 80
percent, which has quickly swelled the Ukrainian debt.
A possible halt in gas supplies could affect European
customers as it did during previous pricing disputes, when
Ukraine siphoned Russian gas intended for Europe. However, the
threat of a halt in supplies comes in the summer, and the impact
would likely be far less severe than a January 2009 shutdown
that left European customers freezing amid a harsh winter.
Gazprom also has built a new pipeline bypassing Ukraine and
increased the capacity of existing ones.
-0- May/15/2014 14:53 GMT
2014-05-15 14:53:22.219 GMT
By VLADIMIR ISACHENKOV
Moscow (AP) -- Russia has ratcheted up pressure on Ukraine,
with President Vladimir Putin saying in a letter released
Thursday that it only will deliver gas to its struggling
neighbor next month if it pays in advance.
Putin first warned of the move in April in a letter to
European leaders whose nations are customers of Russian state-
controlled Gazprom natural gas giant. He said that Moscow would
switch to pre-paid deliveries if Ukraine, which serves as a
major conduit for Russian gas supplies to Europe, failed to
start settling its mounting gas debt.
In the second letter released by the Kremlin Thursday,
Putin said that a meeting involving Russian, Ukrainian and the
European Union officials has failed to settle the issue. He said
that Ukraine's gas debt to Russia has kept rising and reached
$3.5 billion, even though Ukraine has received $3.2 billion
bailout from the International Monetary Fund.
"Given the circumstances, the Russian company has issued an
advance invoice for gas deliveries to Ukraine, which is
completely in accordance with the contract, and after June 1 gas
deliveries will be limited to the amount prepaid by the
Ukrainian company," Putin said in the letter.
The move is part of Russia's efforts to retain control over
its struggling neighbor, which has been teetering on the verge
of financial collapse and facing a mutiny in the east, where
pro-Russian separatists seized administrative buildings, fought
government troops and declared two regions independent following
Sunday's referendum.
In his letter, Putin sought to cast the move as a purely
economic decision, saying that Russia is "still open to continue
consultations and work together with European countries in order
to normalize the situation."
"We also hope that the European Commission will more
actively engage in the dialogue in order to work out specific
and fair solutions that will help stabilize the Ukrainian
economy," he added.
Ukraine has said it could start paying off the debt if
Moscow restores the gas discounts canceled following the ouster
of pro-Russian President Viktor Yanukovych. He fled to Russia in
February after months of protests, triggered by his decision to
dump a pact with the EU in favor of closer ties with Moscow.
Gazprom has scrapped a discount granted to Yanukovych in
December and then another rebate linked to a 2010 deal on
Russian navy presence in Ukraine's Crimea, which Moscow annexed
in March. Canceling the discounts raised the price by 80
percent, which has quickly swelled the Ukrainian debt.
A possible halt in gas supplies could affect European
customers as it did during previous pricing disputes, when
Ukraine siphoned Russian gas intended for Europe. However, the
threat of a halt in supplies comes in the summer, and the impact
would likely be far less severe than a January 2009 shutdown
that left European customers freezing amid a harsh winter.
Gazprom also has built a new pipeline bypassing Ukraine and
increased the capacity of existing ones.
-0- May/15/2014 14:53 GMT