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Putin threatens gas shutdown amid Ukraine standoff

Friday, Apr 11, 2014

Russian President Vladimir Putin chairs a meeting at the Novo-Ogaryovo state residence outside Moscow, April 10, 2014. Mr Putin threatened on April 11, 2014 to cut off Ukraine's gas unless Europe drummed up the cash to cover its debts and ensure its own supplies in a flaring standoff over the splintered ex-Soviet state.

DONETSK - Russian President Vladimir Putin threatened on Thursday to cut off Ukraine's gas unless Europe drummed up the cash to cover its debts and ensure its own supplies in a flaring standoff over the splintered ex-Soviet state.

The veteran strongman's most direct warning about deliveries on which EU nations' economies depend came with Ukraine facing a new secession crisis following its loss of Crimea and relations between Moscow and the West plumbing new post-Cold War lows.

Ukraine's embattled leaders tried to keep what was left of their nation of 46 million people whole by vowing to amnesty pro-Russian separatists occupying eastern state buildings if they laid down their arms and halted a four-day seige.

The militants' demand to join Russia has added extra urgency to the first round of direct talks that EU and US diplomats have managed to convince both Moscow and Kiev to attend in either Geneva or Vienna on April 17.

But Putin did not appear to be in a conciliatory mood as he dispatched a note to 18 EU nations warning that his energy-rich country was tired of accruing debts from a Western-backed leadership in Kiev whose legitimacy it did not recognise in the first place.

A copy of the letter distributed by the Kremlin showed Putin warning that Russia's state gas firm Gazprom would be "compelled to switch over to advance payment for gas deliveries, and in the event of further violation of the conditions of payment, (to) completely or partially cease gas deliveries" if Ukraine failed to settle a US$2.2 billion (S$2.7 billion) debt.

Putin added that "Russia is prepared to participate in the effort to stabilise and restore Ukraine's economy" but only on "equal terms" with the European Union.

About 13 per cent of the gas consumed by the bloc's 28 countries transits through Ukraine - a Russian neighbour whose two previous supply interruptions in 2006 and 2009 also came during efforts to build closer EU ties.

The threat of a Russian gas cutoff is a worry for Europe and a longer-term problem for cash-strapped Ukraine.

But the team that toppled Kremlin-backed president Viktor Yanukovych in February is more immediately anxious about regions where the ousted leader held sway breaking away to join Russia.

A group of armed assailants who stormed the state security building in the eastern city of Lugansk and the seat of government in nearby Donetsk want to hold independence referendums like the one that led to Crimea's annexation last month.

Ukraine's interior minister had earlier set a Friday morning deadline for the separatists to end their seige or face the possible use of force.

Acting President Oleksandr Turchynov tried to stave off the possibility of a bloody confrontation whose repercussions would be difficult to predict by offering to amnesty everyone who voluntarily gave up to the police.

"We can solve this problem today," Turchynov told lawmakers.

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