Eu/ukraine : Barroso Calls Yushchenko as Kiev Settles Russia Gas Debt

Article excerpt

On 6 November, Ukraine paid around US$470 million to Russia for gas imported in October. The troubled country used, for the first time, its special drawing rights' (SDRs) at the International Monetary Fund (IMF), worth some US$2 billion. "It is up to the member country how they want to use their reserves," explained an IMF spokesperson. There had been increasing concerns that Ukraine, and its state-owned gas company Naftogaz, would not be able to pay for gas received from Russia.

These concerns led, on 5 November, to European Commission President Jose Manuel Barroso telephoning Ukraine President Viktor Yushchenko. Earlier this amonth, Russian Prime Minister Vladimir Putin suggested that the EU lend Ukraine at least a "billion" to avoid a conflict. In January, non-payment by Ukraine led to a cut-off of some 80% of Russian gas that is transited via Ukraine to the EU.

In his telephone conversation, Barroso discussed the transit of gas supplies, Ukraine's current economic situation and a Ukrainian request for assistance to tackle the H1N1 flu virus. Barroso stressed that "it is absolutely essential that there are no blockages within the Ukrainian system on the payment of gas supplies from Russia". He also called on Yushchenko to do "everything possible to remove any possible obstacles, including on possible payments through special drawing rights, to ensure that Ukraine meets its commitments". The Ukraine government, though, had requested these rights already on 4 November. …