Financial Times graphic based on IEA, Eurostat, EIA data
President Putin has written to 18 European countries, warning that Ukraine’s debt crisis has reached a “critical” level and could threaten transit to Europe. He also called for urgent cooperation, blaming Russia’s partners for a lack of action. Among the countries who’ll receive the letter are major consumers of Russian gas such as Germany, France, Italy, Greece, Turkey, Bulgaria, Moldova, Poland and Romania. Given the accumulated $2.2 billion gas debt owed by Ukraine’s Naftogas, Russia’s Gazprom will be forced to ask Ukraine for advance payments, Putin said in his letter to European partners, referring to the 2009 gas contract signed between Moscow and Kiev. “In other words, we’ll be supplying exactly the volume of gas that Ukraine pays for a month in advance,” as Itar -Tass quotes Putin's letter. Putin added that introducing advance payments would be an extreme measure. “We understand that this increases the risks of unsanctioned retrieval of gas flowing through the territory of Ukraine to European consumers. And it could also hinder accumulation of gas supplies in Ukraine necessary to provide for consumption during the autumn-winter period.” Stable transit of Russian gas to Europe would require an additional 11.5 billion cubic meters of gas for Ukraine’s underground storages, which would cost $5 billion, Putin explained. Given all the discounts Russia has provided in the last four years, Moscow has subsidized Ukraine’s economy to the tune of $35.4 billion, coupled with a $3 billion loan tranche in December last year. “I would underline – nobody except Russia has done this,” Putin wrote in the letter.
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