2014-10-31 08:59:00

Russia and Ukraine agree gas deal

(Vatican Radio) Moscow and Kiev have clinched a multi-billion dollar deal that will guarantee Russian natural gas exports flow into Ukraine and beyond to the European Union throughout the winter. The EU-backed agreement, announced in Brussels, came despite their intense rivalry over fighting between government troops and pro-Russian forces in eastern Ukraine.

Listen to this report by Stefan Bos

EU Commission President Jose Manuel Barroso, who mediated in difficult negotiations, said the European Union would help cash-strapped Ukraine with the payments for receiving Russian natural gas through aid and guarantees.

"There is now no reason for people in Europe to stay cold this winter," he said. "I expect all parties both suppliers and transit countries, to fully abide by the rules they have now agreed together, and act as reliable partners." 

Barroso added that he was "hopeful that the agreement can contribute to increase trust between Russia and Ukraine."

Under the agreement Ukraine will pay for its outstanding debt by making a whopping $1.45 billion deposit without delay followed by another $1.65 billion by year's end. Officials said that the final sum of debt would be determined through arbitration.

That's not all. For new natural gas, Russia will only deliver after pre-payment. Ukraine intends to buy some $1.5 billion by the end of December, with support from the EU.

The deal was welcomed by EU energy chief Guenther Oettinger.  

"We can guarantee a security of supply over the winter, not only for Ukraine but also for the EU nations" closest to the region that stood to suffer should the gas standoff have worsened, he stressed. 

A similar standoff in 2009 caused serious disruptions in natural gas flowing from Russia into the EU and it was a prospect the bloc sought to avoid.

"This is perhaps the first sign of a wise and well functioning neighborhood policy. And [it is] is perhaps the first glimmer of relaxation in the relationship between the two neighboring countries," the commissioner explained.  

The accord, just in time for a cold winter, came despite frosty relations between Kiev and Moscow over ongoing fighting between government troops and pro-Russian separatists in eastern Ukraine. 

Kiev and the West have accused Russia of using energy as a political weapon tool to influence events in Ukraine, while supplying military equipment and troops to the rebels, charges Moscow denies. 

Additionally Kiev and Moscow also quarrel over Russia's intention to recognize Sunday's elections in rebel controlled areas in Ukraine's war torn east.

And the NATO military alliance says it has stepped up policing international airspace after intercepting several Russian airplanes in recent days.   


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