May 22, 2009

Russia proposes joint loan to Ukraine

Russian President Dmitry Medvedev proposed that the European Union help with a loan to Ukraine to secure natural gas supplies.

Ukraine has asked Russia for a $5 billion loan, RIA Novosti reported Friday. But Russia should not be the only one tackling the problem, Medvedev said at a Russian-EU summit in Khabarovsk, Russia."

Russia has not approved the loan and has doubts in relation to Ukraine's ability to make payments, Medvedev said.

Natural gas supplies to Europe have been disrupted on several occasions, including a winter dispute over Ukraine's gas bill that led to Russia shutting down supplies for two weeks.

The trans-Ukrainian pipeline delivers about 25 percent of Europe's gas supplies and the shutdown left Europeans scrambling for alternative heating sources.

As a cushion against further disruptions, Ukraine needs to fill underground storage facilities with about $4 billion worth of natural gas, Medvedev said.