UPDATE 2-EU's Barroso warns Ukraine over gas flows, IMF
Thursday November 05, 2009 09:34:17 PM GMT
* EU warns Yushchenko to ensure no obstacles to gas flows
* EU's Barroso concerned over Ukraine's IMF programme
By Pete Harrison (Adds background, detail)
BRUSSELS, Nov 5 (Reuters) - The European Union urged Ukrainian President Viktor Yushchenko on Thursday to prevent any delays in payments for Russian gas that might affect gas flows to EU citizens.
European Commission President Jose Manuel Barroso told Yushchenko by telephone it was essential that there be no blockages to Ukrainian payments for gas supplies from Russia, a Commission spokesman told Reuters.
"European citizens must not be subject to further disruptions of gas supplies from Russia through Ukraine," the spokesman added.
European leaders have started to become nervous about winter gas supplies since Moscow said last week it feared Kiev may fall behind on payments as the economic crisis empties state coffers.
The EU fears a repeat of January's three-week gas supply cuts, caused by a pricing dispute between Kiev and Moscow.
Barroso expressed concern that the International Monetary Fund's programme for financial support to Ukraine was not on track and this could adversely affect Ukraine's economic stability, the spokesman said.
Russia has urged the EU to help Ukraine with payments but the EU has played down the chances of that as it has no centralised mechanism, budget or organisations to do so.
Ukrainian Energy Minister Yuri Prodan said on Wednesday that state energy firm Naftogaz would make this month's payment of around $460 million for October gas deliveries before a Nov. 7 deadline.
The EU is waiting until Nov. 7 before making any decision over whether to send monitors back to Ukraine to scrutinise gas flows. About a fifth of EU gas comes from Russia via Ukraine.
ELECTIONS
The Russian warning over supplies coincided with the start of a presidential election campaign in Ukraine. Analysts said Moscow wanted to pressure Ukraine to choose a relatively pro-Russian leader while avoiding a gas row with Kiev ahead of the vote.
Ukraine is scheduled to hold a presidential election on Jan. 17 in which Yushchenko, his bitter rival Prime Minister Yulia Tymoshenko, and former premier Viktor Yanukovich, will run.
The president and prime minister have been embroiled in a fierce rivalry for 18 months that has blocked privatisation projects, delayed policy making and almost derailed the IMF programme.
The IMF warned this week that some policies, such as a new minimum-wage law signed by Yushchenko and a large 2010 budget, threaten gains made so far under the $16.4 billion IMF loan programme.
Barroso urged Yushchenko on Thursday to work with the government to put the IMF standby arrangement in order as quickly as possible, the spokesman said. (Editing by Dale Hudson)
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