Russia: Ukraine gas debt source of anxiety

Moscow is troubled by Ukraine's rising debt to Russia for natural gas and wants Kiev to clarify its plans in light of pro-European protests, the Kremlin said. "The growing debt for gas supplies is a source of anxiety," Dmitry Peskov, spokesman for President Vladimir Putin, told Russia's Kommersant-FM radio. "As we know, Gazprom has been saying that the debt is growing, and very rapidly as well," Peskov said in remarks quoted by state-run external broadcaster Voice of Russia, the successor to Radio Moscow. Russia's OAO Gazprom is the world's largest natural gas extractor and one of the world's largest companies. Russia and Ukraine have a nine-year history of gas disputes over supplies, prices and debts. Russia also provides some 25 percent of the natural gas consumed in the European Union, with 80 percent of those exports piped through Ukraine before arriving in the EU. Pro-European and anti-government protests were ignited in Ukraine Nov. 21 after President Viktor Yanukovych made a surprise decision to suspend longstanding plans to sign political and free-trade agreements with the EU. He decided instead to agree to a $15 billion financial aid package from Russia. The U-turn was made under heavy pressure from Moscow, the New York Times said. The protesters demanded Yanukovych and his government resign and new elections be held. Yanukovych has been president since February 2010. The protests became violent Jan. 19 and much of the center of Kiev, Ukraine's capital, is now sealed off by protesters' barricades. Moscow decided last week to suspend the loan package, and Ukraine did not receive an expected $2 billion payment Friday. Prime Minister Dmitry Medvedev said last week, and Putin agreed, it make no sense to fulfill aid agreements until "we know what economic policies the new government will implement, who will be working there, and what rules they will follow," the official ITAR-Tass news agency reported. EU foreign policy chief Catherine Ashton said Wednesday in Kiev a package of economic assistance from the 28-member bloc was in the works, but said the EU would not get into a bidding war with Russia for Ukraine's allegiance. The aid being put together would not be just about "large dollops of money," she told reporters, but would also involve technical assistance and other help "that would provide for the clear economic needs of the country in the context of economic reform." Peskov told Kommersant-FM Wednesday Moscow would resume the bailout package when Kiev explained how much it "intends to keep to the previously declared course" of closer relations with Russia. Peskov said Russian authorities hoped to see Ukraine, "a brotherly country for us, be prosperous, stable, democratic, rich and very close to us spiritually, economically in terms of investments and so on." But the authorities are "watching what is happening in Ukraine with concern," he said.