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Weary of EU deal, Russia warns Ukraine over gas debt

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(Globalpost/GlobalPost)

Russia warned Ukraine on Tuesday it owed nearly a billion dollars in overdue gas payments, a notice that came amid Kiev efforts to strike an historic partnership agreement with the European Union.

Gazprom chief executive Alexei Miller said the Russian government-owned gas exporter had already extended the deadline on $882 million (640 million euros) in debts owed by Ukraine's state gas company until October 1.

"But now October is ending and the bills are still not paid," Russian news agencies quoted Miller as saying.

"The situation is very serious," said Miller. "This issue must be resolved -- and it must be resolved now."

Russian Prime Minister Dmitry Medvedev later suggested during talks with Miller that Ukraine could be forced to make advance payments for future shipments of gas.

Ukrainian Prime Minister Mykola Azarov told reporters in Kiev that "there are problems, but they can hardly be called critical."

But Medvedev responded moments later by saying he firmly disagreed with his Ukrainian counterpart.

"I believe that there are payment problems, and that they are critical," Interfax quoted the Russian prime minister as saying.

Moscow has been frequently accused of using its gas exporting monopoly as a weapon aimed at influencing decisions of ex-Soviet nations that rely on Russian energy and contemplate closer relations with the West.

Gazprom has already twice interrupted shipments to Ukraine -- once in January 2006 and then again in January 2009 -- in moves that also disrupted supplies to some central and western European countries at the height of winter heating seasons.

Ukraine hopes to strike an association and trade agreement with the European Union at a November 28-29 summit in Vilnius that would provide Kiev with an opening for future membership in the 28-nation bloc.

That deal remains uncertain because of EU leaders' demand on Kiev to release and pardon the jailed opposition leader Yulia Tymoshenko -- a rival of President Viktor Yanukovych who served as prime minister during Ukraine's 2009 gas dispute with Russia.

Moscow meanwhile wants to see Ukraine join a Russian-led customs union that already includes Belarus and Kazakhstan.

Russian President Vladimir Putin's spokesman said Tuesday that Gazprom's warning was in no way related to Ukraine's hopes of striking the EU pact.

"Without a question, the gas debts are not a political issue and are in no way related to the subject of the associated membership (agreement) with the EU," ITAR-TASS quoted Kremlin spokesman Dmitry Peskov as saying.

But Peskov added that Russia was not taking the issue lightly even if it "coincidentally" arose in the heat of Kiev's negotiations with Brussels.

"It is absolutely apparent that the time has come for us to spell out our position," said Peskov.

Ukrainian producers have already suffered in recent months from a Russian ban on a brand of chocolates and the introduction of strict new customs checks.

Russia denies that the chocolate ban is rooted in politics and cites concerns over product quality issues.

But Moscow also argues that it needs to impose more restrictive border policies with Ukraine in case it establishes free trade relations with the European Union and becomes flooded with cheaper and more competitive goods.

Putin received Yanukovych on Sunday for a private meeting at his Black Sea retreat.

The talks ended without formal announcements and were followed a day later by a threat from Russian Foreign Minister Sergei Lavrov to require Ukrainians to have passports for visits to Russia.

Ukrainians and Russians can currently cross the border using only their domestic identity papers.

Moscow's Higher School of Economics professor Nikolai Petrov said Russia was now "on the warpath" with Ukraine.

"It will only get worse," Petrov predicted.

"Russia was ready to offer Ukraine a huge amount of money if it joined its customs union. Now Russia is going to use that money to wage war."

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http://www.globalpost.com/dispatch/news/afp/131029/weary-eu-deal-russia-warns-ukraine-over-gas-debt