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Financial Times: Moscow lures Ukraine with cheap gas

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April 7, 2011, 4 p.m. | Ukraine abroad — by Roman Olearchyk

Moscow tried to trump free trade talks between Ukraine and the EU by offering its southern neighbour an $8 billion annual discount on natural gas prices if it instead joins Russia, Belarus and Kazakhstan

Moscow on Thursday tried to trump free trade talks between Ukraine and the European Union by offering its southern neighbour an $8 billion annual discount on natural gas prices if it instead joins Russia, Belarus and Kazakhstan in a free-trade and customs union. The geopolitical tug of war comes amid what EU officials have described as a “critical” round of negotiations with Kyiv over free-trade and associate membership agreements, which both sides hope to finalise this year. But a day before a weeklong round of negotiations between Kyiv and Brussels were expected to conclude, a deputy chief at Russia’s state controlled gas group Gazprom said his country would treat Ukraine as a domestic consumer, cutting its gas bills by $8bn per year, if it joined the Russia-led union. “We would use the principle of profit equalisation” in respect of Ukraine if it joined, said Valery Golubev, Gazprom’s deputy chief executive. Read the story here.
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