Russia sticks the boot into Ukraine over payment for gas
RUSSIA has turned the screw on Ukraine forcing the country to pay in advance for Russian gas supplies starting from next month, Russian President Vladimir Putin has said.
The move increases pressure on the struggling neighbour as Moscow voiced dismay over what it said is Ukraine's reluctance to implement an international peace plan. Mr Putin said in a letter to European leaders that Ukraine's debt for Russian gas supplies has reached $3.5 billion US dollars and because of its refusal to pay Moscow, it will have to switch to pre-paid gas deliveries starting from June 1.
The Russian president first warned of the move in April in a letter to European leaders, whose nations are customers of Russian state-controlled Gazprom. Ukraine serves as a major conduit for Russian gas supplies to Europe, and pricing disputes have led to shutdowns in the past.
Mr Putin said that gas talks involving Russia, Ukraine and the European Union have failed to reach a compromise, and pointed at Ukraine's refusal to pay even though it has received a $3.2 billion bailout from the International Monetary Fund.
Ukraine said it would pay if Moscow restores the price discounts cancelled after the toppling of pro-Russian president Viktor Yanukovych in February after months of protests.
Russia denounced Mr Yanukovych's ousting as a coup and quickly sent its troops to take over Ukraine's Black Sea peninsula of Crimea, which it annexed weeks later.
In April, a mutiny erupted across Ukraine's vast eastern industrial heartland, where pro-Russian insurgents seized government buildings and began fighting government troops. Many in the east see the new government in Kiev as nationalists bent on repressing Russian speakers.
The insurgents in the Donetsk and Luhansk regions declared independence after Sunday's referendum, which was rejected as a sham by Ukraine's government and the West.
Those in Donetsk even asked to join Russia, but the Kremlin has clearly signalled it has no intention to do so in an apparent hope to negotiate a settlement to the worst Russia-West crisis in a generation.