Wednesday

25th Apr 2018

Ukraine to use EU and IMF money to pay for Russian gas

  • Anti-Gazprom stunt by Greenpeace activists in 2013 (Photo: greenpeace.org)

Ukraine plans to use EU and IMF money to pay for Russian gas, but will not pay a cent unless Moscow agrees a market price, its authorities say.

Its caretaker PM, Arseniy Yatsenyuk, made the point at a meeting with European Commission chief Jose Manuel Barroso in Brussels on Tuesday (13 May).

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

He said: “We want a deal based on market conditions. If Russia rejects this, we will bring Russia to [an international arbitrage] court in Stockholm. If I’m not mistaken, there’s 20 days left - this is the final call for Russia to sit at the negotiating table.”

He noted that Russia’s ultimatum on gas debts is offset by its seizure of Ukrainian energy assets in Crimea last month, worth “tens, if not hundreds, of billions of dollars.” He listed stolen assets as: 2 billion cubic metres of gas in storage vats; two energy firms; onshore and offshore drilling facilities; and offshore gas fields.

Ukraine’s ambassador to the EU, Kostyantin Yeliseyev, told EUobserver on Wednesday that no EU or International Monetary Fund (IMF) money will be used to pay Russia’s “political” gas price.

“We are not so stupid or naive as to pay this price,” he noted.

“The situation is not easy and time is running: We need to start filling our underground storage facilities so that we can ensure transit of [Russian] gas to European countries [in winter],” he added.

Russian supplier Gazprom has said it will halt deliveries to Ukraine on 2 June unless it makes a pre-payment of $1.7 billion based on a price of $485 per thousand cubic metres (tcm) - almost twice the amount charged to its EU customers.

Last year it offered Ukraine $268.5 per tcm as part of a bailout for its former leader Viktor Yanukovych.

But it cancelled the offer when he fell from power and Ukraine resumed preparations to sign a free trade pact with the EU.

For its part, the EU on Tuesday signed off a €1.6 billion macro-financial aid package to Ukraine, saying the first part, worth some €600 million, will be disbursed “soon.” The deal comes on top of an IMF bailout tranche of $3.2 billion paid out one week ago.

A commission spokesman, Simon O’Connor, noted: “It is aid for the Ukrainian budget to meet its external financing needs, which includes payments in the energy sector.”

Barroso told press alongside Yatsenyuk: “Russia, if it wants to be seen as a credible supplier cannot play political games with energy.” He added: “If Russia continues with this kind of behaviour, it will only lead to its further isolation.”

The EU is trying to set up a meeting with Ukraine and Russia’s energy ministers before 2 June to solve the gas dispute.

It is also taking steps on the broader crisis in Ukraine.

Barroso noted that preparations are afoot to sign the free trade pact with Ukraine after elections on 25 May, legally cementing its pro-Western path.

EU ministers earlier this week threatened to trigger economic sanctions against Russia if it derails the May vote.

Yatsenyuk also said Ukraine’s new president is likely to come to Brussels on his first international trip after the election to sign the trade treaty.

The gas row comes amid continued fighting between Ukrainian forces and pro-Russia separatists in eastern Ukraine, which saw six Ukrainian soldiers and one rebel killed in an ambush on Tuesday.

The US the same day released fresh satellite footage showing that Russian President Vladimir Putin did not make good on his promise to move troops away from the Ukrainian border.

“Russia will fail to make Ukraine a failed state,” Yatsenyuk said in the EU capital.

News in Brief

  1. UN expects over $4bn in pledges for Syria
  2. Commission wants more public data made available for reuse
  3. Study: Brexit will hit all European farmers
  4. European media face rise in 'verbal violence' from politicians
  5. Greenland PM to keep power despite poll slump
  6. Commissioner optimistic on FYROM name solution
  7. Italian court keeps NGO migrant rescue boat docked
  8. German Jews warned not to wear skullcap in public

Stakeholders' Highlights

  1. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May
  2. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  3. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  4. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  5. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  6. Mission of China to the EUProgress on China-EU Cooperation
  7. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  8. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  9. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  10. Martens CentreJoin Us at NET@WORK2018 Featuring Debates on Migration, Foreign Policy, Populism & Disinformation
  11. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  12. UNICEFCalls for the Protection of Children in the Gaza Strip

Latest News

  1. Whistleblowers could be enforcers of rule of law in Europe
  2. EU shelves Macron idea for 'European Darpa'
  3. Don't play EU 'games' with military HQs, Italian admiral says
  4. EU had a plan for Jordan - now it's time to make it work
  5. Time for EU to take charge of global health research agenda
  6. EU in race to set global Artificial Intelligence ethics standards
  7. Juncker delays air quality action due to busy agenda
  8. Spain makes bid for EU naval HQ

Stakeholders' Highlights

  1. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  2. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight
  3. Macedonian Human Rights MovementMacedonians in Bulgaria Demand to End the Anti-Macedonian Name Negotiations
  4. Counter BalanceThe EIB Needs to Lead by Example on Tax Justice
  5. ILGA EuropeTrans People in Sweden to be Paid Compensation for Forced Sterilisation
  6. International Partnership for Human RightsThe Danger of Standing Up for Justice and Rights in Central Asia
  7. Mission of China to the EUChina and EU Must Work Together to Promote Global Steel Sector
  8. Swedish EnterprisesEU Tax Proposal on Digital Services Causes Concern for Small Exporting Economies
  9. European Jewish CongressCondemns the Horrific Murder of Holocaust Survivor Mireille Knoll in Paris
  10. Mission of China to the EUAn Open China Will Foster a World-Class Business Environment
  11. ECR GroupAn Opportunity to Help Shape a Better Future for Europe
  12. Counter BalanceControversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan