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Ukraine and Russia in talks to end crisis

Meetings held in Kiev and Brussels aim to end separatist insurgency and gas crisis by the end of the week.

Last updated: 09 Jun 2014 23:44
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Ukraine refused to pay its gas bills after Russia decided to nearly double rates [AFP]

Ukraine has embarked on delicate diplomatic negotiations with Russia aimed at averting a debilitating gas cut and ending a bloody separatist insurgency by the end of the week.

Monday's meetings in Brussels and Kiev were the first challenges for new Ukrainian President Petro Poroshenko, who has vowed dialogue with Moscow to try to prevent the bitterly divided former Soviet state from splitting.

Washington expressed hope "significant progress" could be achieved after a flurry of diplomacy, including a meeting between Poroshenko and Russian President Vladimir Putin last week.

The 48-year-old confectionery tycoon promised late on Sunday to end fighting "this week" in Ukraine's economically vital eastern region, that has claimed more than 200 lives.

And he affirmed after being sworn in as Ukraine's fifth president on Saturday that Kiev would sign a landmark pact with the European Union that would finally wrest it out of Russia's orbit.

Gas talks

The EU-mediated gas talks under way in Brussels come on the eve of a Russian deadline for Ukraine to cover a debt of nearly $4.4bn (3.2bn euros) or have its shipments end on Wednesday.

About 15 percent of Europe's gas from Russia transits through Ukraine - a dependence that EU nations have been trying to limit.

Analysts said the fuel freeze would also deal a bruising blow to a Ukrainian economy that the IMF already expects to contract by five percent this year.

Ukraine has refused to pay the bills in protest at Russia's decision to nearly double rates in the wake of the February ouster of Kiev's Kremlin-backed president.

Sources said the pressure on all sides to agree greatly boosted the chances of a compromise.

"There is a high likelihood that this really will be the final meeting at which we expect to agree on a schedule of payments for the already delivered gas," a Russian source close to the negotiations told Moscow's Vedomosti business daily.

An unnamed Ukrainian official said he expected Kiev's Naftogaz to make an immediate payment of $1.0bn (730m euros) for gas it received in the last two months of last year.

"Another $451 million may be paid in the near future," the Ukrainian source said.

"And for April and May, we expect an initial payment of $500 million."

Airport attacks

Meanwhile, as the diplomatic efforts continued, the eight-week insurgency that Kiev and the West accuse Russia of orchestrating flared unabated.

Ukrainian sources said separatists had staged a wave of failed attacks on the airport in the Russian border city of Lugansk.

Intense artillery fire and air bombardments also continued in the rebel Donetsk region stronghold of Slavyansk - an industrial city of 120,000 where many have been sheltering in basements for weeks.

The Ukrainian army also said pro-Russian gunmen had taken several of its soldiers prisoner.

"Some were out in the field, but others were abducted," military spokesman Vladyslav Seleznyov wrote in a Facebook post.

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Source:
AFP
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