New threat: to gas flows to Europe via Ukraine
EU bids to broker $4bn gas loan for Kiev
The International Monetary Fund (IMF) and the European Bank for Reconstruction & Development (EBRD) are in talks with the European Union in a bid to line up a stop-gap loan of $4 billion to help Ukraine pay Russian gas giant Gazprom for gas supplies.
Ukrainian state-run company Naftogaz does not have the cash to pay the bill for next month's supplies, due on 7 July, the Times reported today, adding that Europe is fearful that Gazprom will stop flows along the export trunklines that cross Ukraine.
This morning, the newspaper quoted European Commission president Jose Manuel Barroso as saying: “We must not sleep-walk into another gas crisis. There is, indeed, the risk of another major crisis in weeks, not months, and we must protect European citizens.”
Barosso also warned vulnerable EU states to make contingency plans and to prepare for the worst.
Ukraine needs to buy 19 billion cubic metres of gas for storage to meet winter demand, but the cash provided under an IMF rescue package have run out and Kiev has admitted that it cannot pay the July gas bill.
A European Commission spokesman told the Times: “We need stop-gap funds and we need a sustainable solution.”
Barroso ruled out EU help for Ukraine, saying: “We don’t have that money in the budget. We want to help our Ukrainian friends, but they have a structural problem . . . The basic problem is with Ukraine’s ability to pay for its gas supplies from Russia. But that is not our problem.”
The Commission has called a meeting at the end of this week between multilateral lenders, gas companies and the parties to the dispute in the hope of preventing a gas cut-off in July.
Meanwhile, Ukrainian President Viktor Yushchenko said today that there was no guarantee Russia would not resort to new "gas blackmail" as it did when it halted supplies in January to Ukraine and Europe beyond.
"What happened in January is not a problem just for Ukraine but for all of Europe. There is no guarantee that this sort of gas blackmail will not occur in the future," Yushchenko told Reuters in an interview.
The president said the two-week cutoff of supplies of Russian gas to Europe in January "was in no way a problem of transit, but rather a problem of supply. I believe it was one of the elements of blackmail against not just Ukraine but the European consumer as a whole."