March 05, 2014 08:16
With military tensions running high between Russia and Ukraine, Moscow is increasing economic pressure on the debt-ridden Kyiv government.
Russia says starting next month it will end the 33 percent discount on the natural gas it has been selling to the one-time Soviet state.
Russia's Gazprom says it is halting the discount because Ukraine has failed to pay its natural gas bill and owes the energy company more than $1.5 billion.
Russian President Vladimir Putin said the gas price increase "has nothing to do" with the standoff in Ukraine's Crimean peninsula. He said, "We gave them money. They failed to deliver."
Gazprom offered Ukraine a $3 billion loan to cover the debt. The French news agency reported the European Union will offer to give Ukraine $2 billion to pay the gas bill as part of an economic package it is working on to aid Kyiv.
Ukraine says it is running out of money and needs $35 billion over the next two years to pay its bills.
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