Ukraine and Russia are in talks with international lenders and the European Union to hammer out a loan deal to help Kiev pay for Russian gas.
Ukraine transports the bulk of Russian gas supplies to Europe and was seeking up to three billion euros in funds to stockpile gas before winter. But donors say they are only prepared to come up with half that amount. The International Monetary Fund, The European bank for Reconstruction and Development, the European Investment bank, Russian gas export monopoly Gazprom and Ukrainian state energy firm Naftogaz are meeting in Brussels. The aim of the talks is to avert a new crisis that could cut off European supplies as happened in January of this year. Ukraine’s political leadership is badly divided and Kiev’s relations with Moscow are tense – increasing European leaders’ fears that Russia could again turn off the taps. But banks are wary of pouring money into Naftogaz without assurances it will be radically restructured to cope with Ukraine’s severe economic crisis.