Ukraine hosts Russian gas talks with deadline looming

AFP , Sunday 15 Jun 2014

Ukrainian Energy Minister Yuri Prodan (front) leaves after talks with members of the Russian delegation and European Union Energy Commissioner Guenther Oettinger in Kiev June 14, 2014 (Photo: Reuters)

Ukrainian leaders consulted the EU ahead of last-gasp talks with Moscow to avert a Russian gas cut Monday that would also hit most of Europe.

The crunch meeting Sunday came with the crisis-hit nation in mourning over nine crew and 40 paratroopers killed when pro-Kremlin rebels downed their plane with weapons Kiev believes were supplied by Moscow.

The loss of life was the biggest suffered by Ukrainian forces in their escalating two-month push to reclaim control of separatist areas of the industrial east.

But the gas negotiations and commemorations were both clouded by a new diplomatic feud that exploded after an irate Ukrainian mob in Kiev on Saturday smashed the Russian embassy's windows and overturned cars while the police looked on.

The Russian foreign ministry called the lack of a police response "a grave violation of Ukraine's international obligations" and accused Europe of condoning the attack.

"They wanted to see blood spilt," Russian Foreign Minister Sergei Lavrov said on Sunday.

Ukraine's new, more nationalistic leaders and their Western allies accuse Russia of supplying rocket launchers and even tanks to the insurgents in a bid to break up its western neighbour following the February ouster of a pro-Kremlin regime.

NATO released satellite images purporting to show three Russian tanks that had crossed the border and were later spotted being raced across the eastern city of Donetsk by militants flying the flag of their self-declared "People's Republic".

But Moscow has hit back by accusing Western powers of backing dangerous Ukrainian "fascists" who are oppressing the east's ethnic Russians and waging a "punitive operation".

The third "gas war" between Russia and Ukraine since 2006 flared when Moscow nearly doubled its rates in the wake of the deadly winter uprising that now threatens to pull Kiev out of the Kremlin's historic orbit for the first time.

Ukraine receives half its gas supplies from Russia and transports 15 percent of the fuel consumed in Europe -- a reality that prompted EU Energy Commissioner Guenther Oettinger to try to urgently broker a long-term solution to the dispute.

Kiev said heading into the negotiations that it was ready to make a $1.95 billion (1.45 billion euro) payment demanded by Moscow if Russia agreed to cut its ongoing price to $326 from $485.50 for 1,000 cubic metres of gas.

But Russian President Vladimir Putin says $385 per 1,000 cubic metres is his final offer and has threatened to turn off Ukraine's taps if no payment was made by 0600 GMT Monday.

The negotiations broke up after just two hours late Saturday without a hint of a comprise.

"No solution was found," Ukrainian Energy Minister Yuriy Prodan told reporters outside the plush central Kiev hotel hosting the high-stakes meeting.

A Ukrainian government source said Oettinger was conducting last-minute consultations with Prime Minister Arseniy Yatsenyuk before Sunday's resumption of trilateral talks.

Ukraine's newly-elected President Petro Poroshenko tapped into the fury provoked by Saturday's plane downing near the eastern city of Lugansk by vowing to deal the insurgents "an adequate response".

His comments were soon followed by what appeared to be a spontaneous protest outside the gated Russian embassy compound in Kiev that soon turned violent.

Nationalists with signs reading "Kremlin -- hands off Ukraine!" climbed the perimeter fence while others smashed the building's windows with boulders and overturned diplomats' cars.

One man managed to pull down the Russian national tricolour with a long metal pole while about a dozen police officers looked on before simply leaving the scene.

Washington delivered Kiev a rare rebuke by urging "authorities to meet their Vienna Convention obligations to provide adequate security".

Acting Foreign Minister Andriy Deshchytsya put himself in the crosshairs of the diplomatic spat by being filmed being telling protesters "Putin is a prick" in a bid to restrain the seething crowd.

The insult has become something of a catchphrase for pro-Kiev Ukrainians after it was chanted by thousands of local football fans at a match.

But Deshchytsya's comments became headline news in Russia and the anger among senior Moscow figures was palpable.

Deshchytsya "allowed himself to make comments that cross all lines of decency," Lavrov said. "I do not know how we are going to work with him from now on."

Kiev media speculate that Deshchytsya's days as Ukraine's top diplomat may indeed be number because Poroshenko intends to name his own close associate to the post in the coming days.

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