28 May 2014 20:50

EU official's words mean Ukraine govt "incapable of making its own decisions"

MOSCOW. May 28 (Interfax) - Points about Ukraine's natural gas debt made on Wednesday by the European Union's energy commissioner mean Ukraine's government is "incapable of making its own decisions" and "fulfills demands from either the United States or the EU," a senior Russian lawmaker said.

"One has the impression that the European Union has come to realize that there is a partially irresponsible government in Kyiv, one that can't make rational decisions by itself, and so we hear quite definite statements from Brussels, which leave the Ukrainian authorities no chance of evading the payment of the gas debt," Alexei Pushkov, head of the State Duma International Affairs Committee, told Interfax.

He said European Energy Commissioner Guenther Oettinger's words that Ukraine should pay the debt mean the EU is worrying because otherwise Europe may be left without Russian gas in the autumn and winter of 2014, when its need for gas will go up.

"At the same time, this situation shows that the Kyiv government is absolutely incapable of making its own decisions. It fulfills the demands from either the United States or the EU. And if the EU puts some pressure on Kyiv, Kyiv will undoubtedly back down because it is fully dependent on the financial resources that it is to receive from the International Monetary Fund and the EU," Pushkov said.

This means that it is only under heavy international pressure that Kyiv would tackle economic problems that have built up in Russian-Ukrainian relations. "Pressure from the EU is decisive for it," he said.

Earlier on Wednesday, Oettinger said Ukraine, as a partner of the EU and member of the Energy Community, needs EU support in trying to resolve the gas issue since gas plays a key role in the country's stabilization.

"The question remains of paying the gas bills. If Russia is not going to ship gas to Ukraine anymore and only ship gas to the EU with transit through Ukraine, a number of questions can be asked relating to the amount of gas that will end up in Poland, Slovakia and Hungary; that is, whether Russian gas shipments will make it to Europe's territory," Oettinger said at a news conference in Brussels.

"We have an absolutely clear interest in this conflict being resolved as fast as possible," Oettinger said, adding that the gas bills must be paid, but prices must also be fair.

He said Ukraine wants the gas price problem to be solved before paying the debt while Russia refuses to raise the price issue before at least part of the debt is paid.

"Ukraine wants to discuss prices that are in line with the Market. And we completely agree with this approach. In our opinion, it is absolutely necessary for the price set for Ukraine to correspond to market prices. From November up to today, it's been clear that Gazprom [MOEX: GAZP] has presented the bills for supplied gas, but payment has not occurred. The amounts are growing, and they have currently reached $4 billion," Oettinger said.

"We are suggesting that 50% of the debt be paid - that is, $2 billion - and hold further talks with the EU as an intermediary in order to reach an agreement for future prices. As soon as the prices are agreed upon, the remaining debt could be paid. We believe that this is an honest approach. Our Russian partners will then be able to name a price that we could discuss," he said.

"I think that if there is not partial payment, if the accounts for previously shipped gas are not paid, [then] it will be difficult for Ukraine to maintain its position," Oettinger said.