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Putin: Russia won't rescind loans, gas price cuts for Ukraine

Jan. 30, 2014 at 12:03 AM   |   Comments

BRUSSELS, Jan. 30 (UPI) -- Moscow won't rescind the loans and gas price cuts it signed with Ukraine despite its change in government, Russian President Vladimir Putin said this week.

Putin, speaking at a press conference Tuesday following an abbreviated Russia-European Union summit in Brussels, reiterated Moscow's intention to follow through with the $15 billion loan and 30 percent cut in natural gas prices negotiated last month with embattled Ukrainian President Viktor Yanukovych.

Yanukovych earlier in the day accepted the resignation of hardliner and key ally Prime Minister Mykola Azarov and his cabinet in the face of widespread violent protests over the government's rejection of a free trade deal with the EU.

Despite the possibility of the pro-EU opposition emerging as country's new government, or Yanukovych himself resigning, Putin said it would make no difference for Russia's commitment to help Ukraine.

"Regarding (the) question of whether we will review our agreements on loans and the energy sector if the opposition takes power ... no, we will not," Putin told reporters.

The loan and gas price reduction were made to "support the people of Ukraine, not the government," he said, adding, "It's the ordinary people who always suffer."

Putin said Russian the loan does not have strictly defined conditions, Interfax reported.

"We had an agreement with Prime Minister Mykola Azarov which lay in the fact that the loan was taken not only to support the budget ... but also to create the conditions for structural changes in the economy."

Putin noted Ukraine has already requested a deferral of payments for Russian gas, which the Russian energy giant Gazprom is now supplying at discounted prices. However, the Russian leader said Moscow is working with Kiev on the repayments and indicated the dialogue will continue.

At the same time, he cautioned the EU not to get involved in forging an agreement between Yanukovych and the opposition, which continued this week to demand the president's resignation and new elections.

"The more intermediaries there are, the more problems there are," Putin said shortly after European Council President Herman Van Rompuy had announced EU High Representative for Foreign Affairs Catherine Ashton was leaving for Kiev to talk with political leaders.

Russian First Deputy Prime Minister Igor Shuvalov echoed Putin's comments after press conference, saying Moscow intends to honor the economic commitments to Ukraine.

"If the Ukrainian government, whatever it is after its formation, announces another agenda, other priorities, then for us it will probably be an occasion to review the arrangements," he said. "But within those agreements, it is important for us to fulfill all our obligations."

Even so, Shuvalov said the second tranche of the loan to Kiev had yet to be agreed upon, the BBC reported.

"We have not yet reached terms on the second tranche of the agreements," he said. "Finance ministers continue to negotiate."

The first tranche of $3 billion with an annual interest rate of 5 percent has already been disbursed.

The summit, which was originally scheduled for December, was shortened and no deals were signed between the two sides, which for years have been negotiating a new "basic agreement" governing Russia-EU relations.

The talks will resume June 3 in Sochi, Russia, preceding the G8 summit which is also to be held there.

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