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EU ramps up pressure on Russia, Ukraine in gas dispute

The European Union gave Moscow and Kiev today a day to work out their gas dispute, accusing the two sides of taking its supplies hostage in the dead of winter.

world Updated: Jan 07, 2009 19:41 IST

The European Union gave Moscow and Kiev on Wednesday a day to work out their gas dispute, accusing the two sides of taking its supplies hostage in the dead of winter.

Czech Prime Minister Mirek Topolanek, whose country holds the bloc's presidency, warned that the EU would toughen its response to the gas crisis with unspecified actions if the flow to Europe were not restored by Thursday.

"If the supply is not restored by tomorrow we will see a stronger intervention from the (EU) presidency and the EU as such," he told journalists without saying what form the tougher action would take.

All deliveries of Russian gas through Ukrainian pipelines were halted on Wednesday, officials from Moscow and Kiev said as the two sides trade blame for the cuts.

European Commission chief Jose Manuel Barroso worked the phones to ratchet up pressure on Russian Prime Minister Vladimir Putin and his Ukrainian counterpart Yulia Tymoshenko to restore supplies.

"It is unacceptable that the EU's gas supply security is being taken hostage to negotiations between Russia and Ukraine," commission spokeswoman Pia Ahrenkilde Hansen said Barroso had told Putin and Tymoshenko.

"The two countries' reputation as reliable partners to the EU is at stake and Ukraine and Russia must find a stable and long-term solution on how to guarantee reliable gas supplies to the European Union," she added.

In Kiev, the Ukrainian government said Tymoshenko had agreed to "immediately" allow EU technical observers into Ukraine to monitor gas supplies in her telephone conversation Barroso.

Russia is the world's biggest natural gas producer and provides about one-quarter of the gas used in the European Union, or about 40 percent of the gas the bloc imports. Some 80 percent of those imports pass though Ukraine.

At least eleven European states, including Austria, the Czech Republic and Slovakia were reporting complete halts of Russian gas supplies on Wednesday amid freezing temperatures of almost minus 25 degrees Celsius (minus 13 Fahrenheit).

While the EU has repeatedly refused to referee what it sees as a commercial dispute between Moscow and Kiev, the commission proposed sending observers to Ukraine to measure the flow of natural gas arriving from Russia.

"The EU has been reluctant to get involved into the negotiations between Russia and Ukraine, but soon it may have no other option," Analysts Svitlana Maslova and Koon Chow at investment bank Barclays Capital said.

"In our view, the EU's more active engagement in the conflict would help to resolve the dispute, as it did in 2006," they added, referring to a similar but shorter dispute in the dead of winter that year.

Top officials from Russian gas group Gazprom and Ukrainian group Naftogaz were due in Brussels for meetings with EU officials on Thursday about the conflict.

Representatives from the two companies are also expected to participate in a meeting on Friday about gas coordination, bringing together officials from the European Commission and EU member states.

Washington threw its weight behind EU appeals for a solution, with a senior US envoy describing the crisis as "a very troubling development."

"It's critical that supplies resume," US Assistant Secretary of State Dan Fried told reporters in Brussels. "The United States agrees with the European Union that this current situation is unacceptable."

First Published: Jan 07, 2009 19:39 IST