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Putin sends message to EU on Ukraine’s debt

He expects Europe to foot bill or face gas supplies cut-off

The Columbian
Published: April 10, 2014, 5:00pm

Other news Thursday

o Ukraine’s acting president Oleksandr Turchynov said pro-Russian activists occupying government buildings in the eastern cities of Donetsk and Luhansk will not be prosecuted if they lay down their arms. Protest leaders defied the request to leave.

o Tensions were still high in Donetsk, where about 1,000 protesters stood outside the occupied building chanting “Russia! Russia!” Activists also reinforced the barricades, piling up rubber tires or building brick walls out of cobblestones.

o Ukraine’s Deputy Interior Minister Serhiy Yarovyi said authorities are still hoping for a compromise in both Donetsk and Luhansk but they reserve the right to forcibly seize the buildings.

o In northwest Romania, some 450 U.S. and Romanian troops and technical staff kicked off a week of joint military exercises. Romania, Russia and Ukraine all border the Black Sea.

Other news Thursday

o Ukraine's acting president Oleksandr Turchynov said pro-Russian activists occupying government buildings in the eastern cities of Donetsk and Luhansk will not be prosecuted if they lay down their arms. Protest leaders defied the request to leave.

o Tensions were still high in Donetsk, where about 1,000 protesters stood outside the occupied building chanting "Russia! Russia!" Activists also reinforced the barricades, piling up rubber tires or building brick walls out of cobblestones.

o Ukraine's Deputy Interior Minister Serhiy Yarovyi said authorities are still hoping for a compromise in both Donetsk and Luhansk but they reserve the right to forcibly seize the buildings.

o In northwest Romania, some 450 U.S. and Romanian troops and technical staff kicked off a week of joint military exercises. Romania, Russia and Ukraine all border the Black Sea.

o The Council of Europe rights group voted to suspend Russia's participation for the rest of the year.

o The Council of Europe rights group voted to suspend Russia’s participation for the rest of the year.

MOSCOW — Vladimir Putin warned Europe on Thursday that it may face a shutdown of Russian natural gas supplies if it fails to help Ukraine settle its enormous Russian gas bill — a debt that far exceeds a bailout package offered by the International Monetary Fund.

The Russian president’s letter to 18 mostly Eastern European leaders, released Thursday by the Kremlin, aimed to divide the 28-nation European Union and siphon off to Russia the billions that the international community plans to lend to Ukraine. It was all part of Russia’s efforts to retain control over its struggling neighbor, which is teetering on the verge of financial ruin and facing a pro-Russian separatist mutiny in the east.

Putin’s message is clear: The EU has tried to lure Ukraine from Russia’s orbit and into its fold, so it should now foot Ukraine’s gas bill — or face the country’s economic collapse and a disruption of its own gas supplies.

The tough warning raises the ante ahead of international talks on settling the Ukrainian crisis that for the first time will bring together the U.S., the European Union, Russia and Ukraine.

The U.S. State Department on Thursday condemned what it called “Russia’s efforts to use energy as a tool of coercion against Ukraine.”

Hundreds of pro-Russian protesters — some armed — were still occupying Ukrainian government buildings in Donetsk and Luhansk while authorities sought a peaceful solution Thursday to the five-day standoff. And in northwest Romania, U.S. and Romanian forces kicked off a week of joint military exercises.

The amount that Putin claims Ukraine owes is growing by billions every week — and his letter raises the specter of a new gas dispute between Russia and Ukraine that could affect much of Europe. In 2009, Moscow turned off gas supplies to Kiev in the dead of winter, leading to freezing cities across Eastern Europe as Russian gas stopped moving through Ukrainian pipelines to other nations.

In the letter, Putin said Ukraine owes Russia $17 billion due to the termination of gas discounts and potentially another $18.4 billion as a take-or-pay fine under their 2009 gas contract. He added that on top of that $35.4 billion, Russia also holds $3 billion in Ukrainian government bonds.

The total amount is far greater than the estimated $14 billion to $18 billion bailout that the International Monetary Fund is considering for Ukraine.Putin said that Ukraine’s mounting debt is forcing Moscow to demand advance payments for further gas supplies. He said that if Ukraine failed to make such payments, Russia’s state-controlled gas giant Gazprom will “completely or partially cease gas deliveries.”

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