Wednesday, May 7, 2014

Ukraine’s Unpaid Russian Gas Bills Dwarf U.S. Aid Offer - Businessweek

Ukraine’s best hope for keeping furnaces and factories running through next winter is to store as much natural gas as it can after a U.S. aid pledge fell far short of the nation’s needs.

Energy supplies have given Russian leader Vladimir Putin powerful economic leverage in his battle with Ukraine. The former Soviet republic gets half its gas from Russia, and it’s the transit route for 50 to 60 percent of the gas Russia sells to other European nations.

U.S. Vice President Joe Biden told Ukrainian leaders this week that the U.S. would provide help so that “Russia can no longer use energy as a weapon.” Biden announced $50 million in aid, an unspecified part of which would go to develop the country’s gas reserves, explore alternative energy and improve efficiency.

Russia responded yesterday, when Prime Minister Dmitry Medvedev said Ukraine would have to prepay for gas shipments unless it starts paying down the $2.2 billion debt it’s accumulated through March.

Tensions escalated today as Ukrainian military units moved against pro-Russia separatists in several eastern cities, prompting Russian Foreign Minister Sergei Lavrov to threaten retaliation if his country’s “legitimate interests” are “attacked directly.”

Complete story at - Ukraine’s Unpaid Russian Gas Bills Dwarf U.S. Aid Offer - Businessweek

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