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Ukraine, Russian gas central to agenda of Asia-Europe summit

October 18, 2014, 8:24 UTC+3 MILAN

The Russian president, who took part in the ASEM summit for the first time, said he was pleased with the results of meetings and negotiations

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© Alexei Nikolsky/Tass

MILAN, October 18. /TASS/. The Asia-Europe Meeting (ASEM) at the summit level, just as many other multi-lateral international events held over the past six months was used by their participants for attempts to narrow differences over Ukraine and to put the march of events in that country on the peace settlement track.

In fact, the summit had two schedules - the official agenda, which included issues identified in advance, such as the problem of struggle with terrorism and spread of dangerous disease, and the Ukrainian settlement program. The latter proceeded in various formats - from the Normandy format to bilateral contacts.

Putin satisfied with the summit

The Russian president, who took part in the ASEM summit for the first time, said he was pleased with the results of meetings and negotiations.

“It was a useful trip. I managed to have a word with many counterparts, and not only within the forum’s framework,” Putin told the media afterwards. He said that at the summit’s meeting he briefed his counterparts “on the way Russia sees the development of relations in the world and between different continents in the struggle with current problems, such as terrorism, infectious disease and other issues of the day.”

Putin was also satisfied by the bilateral negotiations he held late Thursday night and during the day of Friday.

“Those negotiations were rather meaningful and comprehensive and, I am certain, will benefit Russia’s relations with its partners in both Asia and Europe,” he said. Putin held a number of separate meetings with foreign leaders, including German Chancellor Angela Merkel, Japanese Prime Minister Shinzo Abe, Italian Prime Minister Matteo Renzi and also Ukrainian President Pyotr Poroshenko, invited to the forum.

Although the general mood of participants was rather positive, it had been clear from the outset the negotiations would be far from easy. As Russian presidential spokesman Dmitry Peskov told the media Putin and Merkel had discussed progress in the implementation of the Minsk Accords on measures to settle the conflict in Ukraine and the gas issue. The Russian and German leaders held more than two and a half hours of talks “to synchronize watches and review progress in implementing the Minsk Accords,” Peskov said.

As follows from what he said, the parties are aware of the need for a peace settlement in Ukraine, but the “fundamental divergence of opinion regarding the genesis of the intra-Ukrainian conflict and the root causes of the current events” impair a common solution. In view of the approaching winter season the gas dossier was a no less serious theme of the discussion than the end of bloodshed.

Gas in focus

All partakers are perfectly aware the problem of gas supplies to Ukraine and to Europe must be addressed as soon as possible.

Putin said that the Milan meeting achieved certain progress on the gas issue. “It is true that we paid much attention to these issues, and there is progress here, too. We have come to terms with the Ukrainian partners regarding the conditions of resuming supplies of gas to Ukraine, at least for the winter period. We agreed the parameters of that agreement. The cash gap in Ukraine remains an unsettled issue,” Putin said.

He warned that Russia could no longer afford to take additional risks. He recalled that late last year Russia had lent Ukraine three billion dollars and that Ukraine’s debt for the previously supplied gas was already at 4.5 billion dollars. Gazprom shifted to mandatory pre-payment and under the contract it is unable to change the terms of supplies, Putin said.

Russia’s western partners, who are so eager to see a settlement of the gas issue, have chosen a very odd mode of behaviour, to say the least. On the one hand, they wish Russia to make allowances for the disastrous condition of the Ukrainian economy and take a more loyal attitude to Kiev, but on the other the Western countries have imposed economic sanctions against Russia, including Gazprombank, which is a lender to Ukraine. Besides, it is pretty clear that the European Union is in no hurry to fork up and help Ukraine itself.

Putin urged the Europeans to reconsider their attitude.

“We are aware of the financial condition of the Ukrainian partners. We do see that they really have problems, such as the cash gap. We have already agreed to meet them halfway in a sense as far as the payments for the already consumed gas are concerned, and we hope that our European partners, the European commission, will extend a helping hand to Ukraine to deal with the cash gap problem,” he said. Putin sees a number of instruments for that, such as a bridge loan or rescheduling of another IMF tranche, or guarantees from a top class European bank, which would cost far less than Russian assistance.

In the meantime, European Commission President Jose Manuel Barroso, who was present at the talks in Milan, told the media that Ukrainian President Pyotr Poroshenko had raised the question of increasing economic assistance to Ukraine. However, Barroso said that the EU was considering not the possibility of extending two billion euros in short-term loans to Kiev, but only a certain expansion of macro-financial assistance, which might be given only on certain conditions.

In a situation like that, Putin believes, the Europeans must agree to take at least some risks.

“We are providing assistance. This is a hard fact. But we are taking risks. We have agreed to take these risks,” he added. Russia has been underpaid at least 5.5 billion dollars of Ukraine’s debt, and it is prepared to reconsider the price of gas. “The debt for gas is at least 5.5 billion dollars, if we assume that in April, May and June Ukraine was obliged to pay 485 dollars (per 1,000 cubic meters),” Putin told the media. “But we are prepared to recalculate that figure in retrospect and offer a 100-dollar discount. If we proceed from that, the overall debt will stand at 4.5 billion dollars. We are ready to compromise,” he said.

Although, according to his estimates, Ukraine’s overall debt to Russia may reach 10 billion dollars. Russia will no longer be giving anything to Ukraine on credit,” he said.

Outlook for ukranian settlement

About settling the situation in Ukraine Putin said that the Minsk Accords must remain the benchmark. “Regrettably, these agreements are not implemented to the full extent by either party - the militias of Novorossia and the representatives of Ukraine,” Putin said, adding that he saw “a number of reasons for this - both objective and subjective ones.”

Putin said that at his meetings in Milan he discussed the Ukrainian problems with his foreign counterparts in great detail. “We talked a lot about security, ceasefire and disengagement of the conflicting parties. We synchronized our positions almost using the maps, although in such matters one should rely on the opinion of specialists and participants in negotiations,” Putin said. He pointed out once again that Russia was not “a participant (in the intra-Ukrainian conflict) but might only help the conflicting parties address the problems that have developed of late.”

Certain progress has already been achieved, for instance, in addressing the problem of delimitation lines between the warring factions in Ukraine, Putin said after talks with Poroshenko. “The line of disengagement must be drawn to an end and acted on. This is precisely what will make it possible to put an end to the shellings and to the deaths of innocent people. That must be done as soon as possible,” Putin said, adding that the situation would be controlled with the use of drones and other advanced equipment capable of identifying the places from where the attacks are made, if any.”

“As for the unmanned aircraft, Italy, France and Germany have expressed the wish to work along these lines and Russia will participate in this. Specialists will gather in Vienna on the OSCE basis shortly to address technical issues,” Putin said.

He believes that at this point it is too early to consider punishment for those responsible for hostilities in Ukraine, because bloodshed should be brought to an end first.

“I believe that we shall agree with our colleagues on what is to be done (in relation to the participants in the fighting) in the future,” Putin said. “The main thing is to end bloodshed now.”

A great deal of work ahead

The ASEM meetings were clear evidence that a number of world problems, let alone the Ukrainian one, could not be settled without Russia having a say. However, it is likewise clear that some European Union states are reluctant to turn an attentive ear to the voice of common sense and address the outstanding issues in a constructive fashion. On the sidelines of the summit British Prime Minister David Cameron claimed that pressures on Russia should continue.

"Vladimir Putin said very clearly he doesn't want a 'frozen conflict' and doesn't want a divided Ukraine," Cameron said. "But if that's the case, then Russia now needs to take the actions to put in place all that has been agreed. If those things don't happen, then clearly the European Union, Britain included, must keep in place the sanctions and the pressure so we don't have this sort of conflict in our continent." He said nothing, though, what specific steps he would like Russia to take.

German Chancellor Angela Merkel’s remark about the situation in Ukraine sounded as harsh and abstract. "I cannot see a breakthrough here at all so far," Merkel claimed after one meeting. "We will continue to talk. There was progress on some details, but the main issue is continued violations of the territorial integrity of Ukraine," she said, keeping quiet, though, about the deaths of civilians in the Donetsk and Lugansk regions.

As far as Russia is concerned, Putin said that it was not a party to the conflict, but was prepared to “help, mediate and search for plausible solutions.”

“It goes without saying that the Minsk Accords are to be the benchmarks in efforts to bring about a settlement in Ukraine. Regrettably, these agreements are not being implemented to the full by either party - the militias of Novorossia and the representatives of Ukraine,” Putin told the media. He blamed that on a number of reasons: both objective and subjective ones.

“I proceed from the assumption that all parties shall seek to ensure these agreements be complied with in full,” he said.

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