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Ukraine may use EU’s 1.6 billion euro aid to repay gas debt to Russia

June 16, 2014, 19:27 UTC+3 BRUSSELS

The EU’s total financial assistance to Ukraine amounts to about 11 billion euros

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© AP Photo/Sergei Chuzavkov

BRUSSELS, June 16 /ITAR-TASS/. Ukraine can use the European Union’s 1.6 billion-euro aid to repay its gas debts for Russian natural gas supplies, European Commission spokeswoman Pia Ahrenkilde Hansen said on Monday.

From the legal point of view, certain modalities exist for the spending of these funds but they can be used for debt repayment, the spokeswoman said.

The European Commission has pledged 1.6 billion euros in financial aid to Ukraine this year, of which about 350 million euros have been paid out. The EU’s total financial assistance to Ukraine amounts to about 11 billion euros.

Aside from the 1.6 billion euros planned for disbursement this year, the aid package includes about 1.5 billion euros, which Kiev will be able to receive from the EU budget until 2020. The remaining 8 billion euros can be provided by the European Bank of Reconstruction and Development and the European Investment Bank for specific investment projects in Ukraine. A decision on the allocation of these funds will directly depend on how efficiently the Ukrainian economy will operate.

Experts from the European Union and Russia are holding a technical meeting on Monday on the issue of Ukraine’s association with the EU, Hansen said.

According to the EC spokeswoman, the talks are designed to assure the EU’s Russian partners that the agreement on Ukraine’s political and economic association with the EU will have no negative consequences for Russia.

During a telephone conversation between Russian President Vladimir Putin and European Commission President Jose Manual Barroso on Friday, the sides agreed to raise this expert exchange of opinions to the political level very soon, the EC spokeswoman said.

Russia will supply natural gas to Europe in full compliance with the requests of foreign buyers, Gazprom Export CEO Alexander Medvedev said at the world oil congress on Monday.

Gazprom has filed a $4.5 billion lawsuit against Ukraine’s national oil and gas company Naftogaz to the Stockholm arbitration court over the company’s “persistent non-payments” for Russian natural gas and switched Ukraine to an advanced payment system, the Russian gas giant said in a statement on Monday.

Gazprom will now supply Ukraine with only prepaid gas volumes At the same time, Naftogaz is obliged to secure natural gas transit to third countries in full compliance with the terms of the effective gas contract of January 19, 2009 on the volumes and conditions for natural gas transit through Ukraine from 2009 to 2019.

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