European Commission Cautiously Welcomes Russia-Ukraine Agreement

The European Commission on Sunday cautiously welcomed the agreement between Russia and Ukraine on the resumption of gas supplies, particularly the announcement that gas could start flowing to Europe as early as Monday.

"The Commission welcomes the announcement of the agreement reached by Russian Prime Minister Vladimir Putin and Ukrainian Prime Minister Yulia Tymoshenko, especially the announcement that gas transit could be resumed on Monday. The Commission and the Czech presidency have been urging both sides for some time to engage in serious discussions, emphasizing that the talks this weekend in Moscow are a test for the credibility of Russia and Ukraine as gas suppliers," the European Commission stated. However, the Commission expresses caution, emphasizing that announcements are not as important as the actual flow of gas.

"It now seems that these talks are yielding results. But in this dispute, we have seen many good announcements, and the test in this case is whether gas flows to European consumers or not. That moment is still awaited by Europe," the statement adds. The Prime Ministers of Russia and Ukraine, Vladimir Putin and Yulia Tymoshenko, reached a framework agreement in Moscow early on Sunday regarding the resumption of gas supplies, which is expected to occur soon, reported a spokesperson for the Russian government. After marathon negotiations that lasted all Saturday and into the early hours of Sunday, Putin and Tymoshenko agreed that Ukraine would pay the market price for Russian gas, reduced by 20 percent this year, said Dmitry Peskov. This means that this year Ukraine will pay around $350 instead of the previously privileged $179 per thousand cubic meters of Russian gas.

Until now, Ukraine has claimed in negotiations that it can pay between $200 and $210 because there is not enough money in the budget for larger increases. From January 1, 2010, Ukraine will pay the full market price, and in return, Russia will start paying the market value of transit fees for the use of Ukrainian pipelines to Kyiv from the same date. The two officials did not mention the Ukrainian debt of $600 million to Russia, which has also been cited as one of the problems for the cessation of supplies. The Prime Ministers of the two countries instructed the heads of their state companies, Gazprom and Naftogaz, to draft an official contract, and as soon as it is signed, gas supplies to Europe through Ukraine will be resumed, Peskov said. "This will happen in the very near future," he added. (Hina)