The European Union has criticised Ukraine, saying it is only half keeping its reform promises. The IMF agrees, raising doubts about Kiev’s ability to meet gas payments to Russia on Monday. A tense summit in Kiev confirmed any association deal was still some way off.
Europe buys a quarter of its gas from Russia. Eighty percent of that is piped through Ukraine. Last winter, a Kiev-Moscow dispute left millions of Europeans without heat. The Swedish EU presidency hinted at a credibility deficit. Prime Minister Fredrik Reinfeldt said: “The main interest of many consumers in Europe is that there is a predictability when it comes to transporting natural gas.” Pro-western President Viktor Yushchenko said Ukraine will ensure that Russian gas flows to the EU. But he said Ukraine could only do this properly if it charges European rates to move it. He needs desperately to encourage investment ahead of January elections. A French energy expert said no investor would touch Ukraine till it gets responsible government. Meanwhile, the EU said, it has plenty of stored gas this winter, and lower demand. Yushchenko is running again for office against Prime Minister Yulia Timoshenko and opposition leader Viktor Yanukovych. The resumption of hundreds of millions of euros of EU aid money to Ukraine is linked to a further massive Internationa Monetary Fund bailout for the former soviet republic, suspended on grounds that Kiev is dithering over reform.