Paying the gas man

Representatives from the World Bank, the International Monetary Fund (IMF), European Investment Bank and the European Bank for Reconstruction and Development are meeting in Brussels with the vice presidents of Russian gas giant Gazprom and Ukraine's gas monopoly Naftogaz to discuss how to best come up with enough money for Ukraine to pay its upcoming gas bill.

The talks, hosted by the European Commission, are taking place less than a week before Kiev will be expected to hand over three billion euros ($4.2 billion) to Russia for gas that it has started to store for the coming winter.

A dispute over payment earlier this year led to Russia shutting off gas supplies to Ukraine, which affected not only citizens there, but also those living in parts of the European Union which depend on gas coming from pipelines running through Ukraine.

A quarter of all the natural gas burned within the EU comes from Russia, with 80 percent of that flowing through Ukraine, mostly to the south-eastern corner of the continent.

Transparency an issue

Weighed down by the global financial crisis, Kiev claims it won't be able to come up with the money in time to buy the roughly 20 billion cubic meters of natural gas that it wants, and that has incited the EU to call on the international community to give Ukraine a short term loan.

However, many organizations, including the IMF, aren't convinced that Naftogaz is in a position to receive funding. Ceyla Pazarbasioglu, head of the IMF delegation, told the Reuters news agency that they were demanding that the state-owned gas giant undergo some serious reorganization, adding that the company needed to become more transparent and clean up its finances.

The multibillion euro loan would be part of the IMF's $16.4 billion program to help out nations hit hard by the economic crisis.

mrm/dpa/Reuters/AFP

Editor: Michael Lawton