Fri, Dec 26, 2008 - Page 6 News List

Russia threatens Ukraine with sanctions

PAY UP Russian President Dmitry Medvedev said Ukraine must pay the debt it owes for gas or Kiev will face the prospect of sanctions and no more gas will be delivered


Russian President Dmitry Medvedev told Ukraine on Wednesday to pay its gas debts “to the last ruble” or face the prospect of sanctions from Moscow against its wider economy.

His comments came after Russian energy giant Gazprom on Wednesday warned Ukraine it would cut gas deliveries on Jan. 1 if a new contract were not signed for next year and the debts for this year not paid back in full.

“The money must be paid until the last ruble if they do not want their economy to be hit by demands and sanctions from the Russian Federation,” he said in an end-of-year interview on Russian television. “We cannot carry on like this. They should just pay up.”

Medvedev did not say what sanctions Russia could use against Ukraine’s flagging economy, but menacingly warned it had a “whole arsenal of possibilities” at its disposal.

“We do not have any aim to cut off [the gas]. Our aim is just to get our money,” he said. “But if Ukraine does not pay we will use a whole arsenal of possibilities and it is completely clear that there can be no illusions there.”

Earlier, Gazprom spokesman Sergei Kupriyanov told reporters that “if a contract for 2009 is not signed then we are not going to deliver gas without a contract.”

“When there is no contract, we cannot realize deliveries. The situation is not simple. It is even critical,” Kupriyanov said.

Kupriyanov said Ukraine owes Gazprom over US$2 billion.

“They finally paid for October. But they are not paying for November and December. This became clear today,” he said. “To our frank question if they would pay by the end of the year, we received a frank answer — ‘No,’” he said.

Ukraine is a major transit country for Russian gas exports to the EU and a dispute over gas prices led to a brief interruption of gas supplies in several EU countries in January 2006.

But Kupriyanov said: “We will deliver the full volume of gas destined for transit and we will fulfill all our obligations toward European consumers.”

His comments were echoed by Medvedev.

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