Deal reached in Ukraine gas row

The Presidents of Russia and Ukraine have announced a deal over gas, which will ensure supplies are not cut-off. Gazprom had given Ukraine just hours to reach an agreement, and a last-minute meeting between Vladimir Putin and Viktor Yushchenko appears to

Ukraine will be covering its debt of $US 1.5 billion starting from Thursday. During their meeting in Moscow on Tuesday the two presidents agreed a pattern for co-operation.

“The payment is to start next Thursday and it will be finished as soon as possible. As far as deliveries in 2008, we agreed that the price for gas entering Ukraine will remain the same – $US 179,” Viktor Yushchenko said.

The pair explained that Gazprom and its Ukrainian partner Naftogaz will create a working group to ensure greater transparency.

At the press conference after the meeting President Putin noted that both countries have an opportunity to develop strong energy co-operation and raise the significance of Ukraine as a major energy power in Europe. “Such a possibility exists and we are interested in this,” he concluded.

Ukrainian possible NATO membership  

But the gas bill is one sticky card removed from the deck. The Presidents admit they're walking on egg shells as some of the issues are very sensitive, such as the possibility Ukraine’s membership in NATO.

“Certainly, we are aware that a number of delicate problems can arise and they must be discussed with friends and partners openly. The Ukrainian constitution does not allow for the deployment of foreign bases on national territory. Everything Ukraine is doing is not targeted against a third country,” Viktor Yushchenko said.

This puts into question the fate of Russian Black Sea Fleet, currently based in Sevastapol in Crimea.

Hardly anyone hoped the meeting would improve the relations but many hoped it would lay the foundation for improvement. Among the positive signs is the increase in trade and Ukraine’s support of Russia’s accession to the WTO (World Trade Organisation).

But there is always a fly in the ointment. Both Russia and Ukraine regard brinkmanship as the cornerstone of their relations.