Not long after the report that anti-Russian sanctions had cost EU farmers €500 million, it seems the EU will have to pay the same amount to Russia's Gazprom for the gas Ukraine reportedly cannot afford to buy for itself
The Kiev coup-regime can't find $500 million to provide heat for its people, fund pensions, maintain roads, and the like, but it easily found $4.1 billion (90 billion Hryvnia) in 2015 to fund a contrived war against its own people, and wants to increase that amount in 2016. Nevertheless, Europe and particularly Germany, appear wary of continued conflict.
This article originally appeared at German Economic News. Translated by Paul Dunne for Russia Insider
Russia and the EU have apparently come to an agreement on natural gasdeliveries to Ukraine. This involves the EU tax-payer guaranteeing a credit for Ukraine worth half a billion Euros. The money will be transferred directly to a Gazprom holding account.
The EU tax-payer is being held responsible for Ukraine's gas supply this winter. According to TASS, the Russian Minister for Energy, Alexander Novak, confirmed the result of the meeting between the EU and Russia in Vienna on Friday.
Accordingly, the EU will transfer 500 million Euros to the Russian company Gazprom. The Russians consider this as payment for the fourth quarter of 2015 and the first quarter of 2016. It is expected that Ukraine will agree to this -- although Kiev had asked for an even higher discount. The head of the Ukrainian gas company Naftogas, Andrej Kobolew, has indicated that Ukraine could agree to the deal.
To get through the Winter, Ukraine urgently needs to fill its gas storage tanks. There has already been a two weeks delay. The current delivery covers approximately half of Ukraine's requirements. Then another 500 million Euros must be found. Ukraine does not have the money -- it is bankrupt. It is likely that the second tranche will also have to be paid by the European tax-payer.
The bill could also increase, should this winter be colder than last winter. The head of Gazprom, Alexej Miller, said that Russia was expecting an "unusually cold" winter.
The agreement can be taken as a further sign of the EU and Russia drawing closer together. It is remarkable that Russia, despite Kiev's on-going hostility, has nevertheless provided a discount. The German foreign minister said after a meeting on Saturday that the chances of a de-escalation in Ukraine were better now than ever.