European help to Ukraine ‘unprecedented’ €11bn-EU representative

 

 

Vygaudas Usackas.(AFP Photo / Petras Malukas)

Vygaudas Usackas.(AFP Photo / Petras Malukas)

RT news – November 06, 2014

The European Union is ready to give Ukraine lots of money to help pay its multibillion dollar gas debt to Russia, according to the head of the EU office in Russia Vygaudas Usackas.

“The European Union is allocating up to an unprecedented €11 billion in financial aid to Ukraine,” Vygaudas Usackas said in an interview with the Echo Moscow radio station on Wednesday.

“We helped to reach agreements between Russia and Ukraine over a wide range of complex gas issues, and both the EU and IMF will continue to allocate sums needed for paying off the Ukrainian gas debt,” he added.

The EU representative also said that a sovereign and economically independent Ukraine is in the interests of everyone.

“I still hope that someday we will agree at a round-table discussion that Ukraine being an independent economic subject is of our common interest,” Usackas said. “So that neither Gazprom, nor the European commission and the IMF had to take care of it.”

Usackas says economic, political and social reforms are essential tools that Ukraine should use in achieving this goal.

However, Russian President Vladimir Putin has assured Western Europe that there won’t be any interruption of natural gas supplies from his country this winter unless Ukraine again tries to meet its own energy needs by stealing fuel from the pipeline running through its territory.

“I can reassure you that there will be no crisis that could be blamed on Russian participants in energy cooperation,” the Russian leader said Oct. 16 during a visit to Serbia. He added, however, that “transit risks” are looming.

After months of negotiations Russia and Ukraine reached a gas agreement on October 31, which says Kiev needs to pay $3.1 billion by the year end. On Wednesday Russia’s gas monopoly Gazprom confirmed it had received the first tranche of $1.45 billion from Ukraine’s Naftogaz which settles its gas debt for November and December 2013.

The winter plan worked out in Brussels also means that Ukraine will need to pay in advance for the gas it’s going to use. This means that on top of the debt repayment, Ukraine will have to pay $1.5 billion in advance for 4 billion cubic meters it’s going to buy from Russia this winter.

Ukraine plans to buy $770 million worth of gas (2 billion cubic meters) from Russia this winter to keep the heat on, but before that, they must pay off $1.45 billion in debt. The question is: who is going to pay the bill?

All three parties, Russia, the EU, and Ukraine met in Brussels on Tuesday and confirmed Kiev will pay $385 per 1,000 cubic meters of Russian supplied gas through the end of March. Before Ukraine can start purchasing gas, they need to pay off $1.45 billion in debt.

“There’s one obstacle: Ukraine failed to pay for Russian-supplied gas for seven months,” Oettinger said Tuesday. It will be difficult for Ukraine to find a benefactor, since, as Oettinger pointed out, its credit history is less than stellar. The economy is in ruin and may already need extra IMF money to stay afloat.

On Thursday, Ukraine’s state-owned Naftogaz said it had no schedule of prepayments for supplies from Gazprom, according to company representative talking to PRIME.

EU to Consider Lifting Sanctions on Russia This Month: Diplomat

The European Union countries will discuss cancelling sanctions against Russia in late October, the head of European Union's delegation in Russia, Vygaudas Usackas said Tuesday

The European Union countries will discuss cancelling sanctions against Russia in late October, the head of European Union’s delegation in Russia, Vygaudas Usackas said Tuesday

Topic: Sanctions Against Russia

Updated 2:05 p.m. Moscow Time

MOSCOW, October 14 (RIA Novosti) – European Union member states will discuss the lifting of sanctions against Russia in late October, the head of European Union’s delegation in Russia, Vygaudas Usackas said Tuesday.

“The sanctions will be reviewed in the end of this month, it depends on progress and how the situation stabilizes, [as well as on] troop withdrawal and border control. On the basis of these results we will make our decision on possible partial or full removal of sanctions,” Usackas told reporters.

On September 5, representatives of Kiev and southeastern Ukraine’s independence leaders reached a ceasefire deal at a meeting of the Contact Group on Ukraine, also comprising Russia and the Organization for Security and Cooperation (OSCE) in Europe. The Group’s next meeting in Minsk on September 19 resulted in signing of a memorandum outlining steps for ceasefire implementation.

Among other points, Minsk memorandum specified that all the foreign armed groups, military equipment, as well as fighters and mercenaries shall withdraw from the Ukrainian territory under the supervision of the OSCE. Border demarcation between the Ukrainian forces and eastern Ukraine independence supporters would also pass along the line of contact of September 19.

The European Union has imposed several rounds of sanctions against Russia’s largest banks, energy and defense companies, as well as certain individuals, over the country’s alleged meddling in the Ukrainian conflict. Moscow has repeatedly denied any involvement in what it describes as “Ukraine’s internal conflict” and made every effort possible to de-escalate the ongoing tensions.

As for the sanctions, Russia deemed them as counterproductive and threatening to international peace and stability. Earlier in the day, Russian Foreign Minister Sergei Lavrov reiterated that attempts to sever economic ties between Russia and the European Union would not contribute to successful business activities. The top diplomat added that Russia would not discuss any preconditions for the lifting of sanctions as it sees them as illegal to begin with.