Russia Believes Gas Deal Will Help Ukraine’s Economy

Russia’s President Vladimir Putin has said a gas price discount deal offered to Ukraine was designed to help its economy.

After another round of negotiations, Ukraine rejected the price deal, saying it “won’t fall into Russian gas trap”.

But Mr Putin said on Wednesday that the offer was “to support the Ukrainian economy at a rather difficult time”.

The two sides have been locked in talks after Russia withdrew a deal to subsidise gas exports to Ukraine.

On Wednesday, Russia offered a discount of $100 for every 1,000 cubic metres of gas exported to Ukraine.

But Ukraine’s Prime Minister Arseniy Yatsenyuk said it was “a trap”. Ukraine wants a new gas deal based on “a contract, rather than on the basis of whether Russia likes the Ukrainian government or not”, he said

Speaking in Moscow later on Wednesday, Mr Putin said: “We believe that our offer is more than in a partnership spirit, aimed to support the Ukrainian economy at a rather difficult time.

“But if our offers are rejected it means we will enter another stage. This is not our choice. We do not want it.”

The European Union-brokered talks in Brussels come after Russia threatened to turn off the gas taps to Ukraine if Kiev did not pay for past deliveries.

However, Russia’s deadline for payment has been repeatedly pushed back after Ukraine paid off part of the sum.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza