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Weary of EU deal, Russia warns Ukraine over gas debt

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Weary of EU deal, Russia warns Ukraine over gas debt

Alexei Miller - Photo Russian Presidential Press and Information Office

(MOSCOW) - Russia on Tuesday slapped Ukraine with a gas bill of nearly $1 billion and threatened imminent sanctions in apparent anger at Kiev's bid to strike a partnership deal with the EU.

Gazprom chief executive Alexei Miller said the Russian state-owned gas exporter had already extended the deadline on $882 million (640 million euros) in debts owed by Ukraine's state gas company until October 1.

"This is a dire state of affairs," Miller said in an official statement.

Russian Prime Minister Dmitry Medvedev later suggested that Ukraine could now be forced to make advance payments for future shipments of gas. Gazprom said a final decision on the new policy could be reached by Wednesday.

Ukrainian Prime Minister Mykola Azarov told reporters in Kiev that "there are problems, but they can hardly be called critical."

However Medvedev responded moments later by saying he firmly disagreed with his Ukrainian counterpart.

"I believe that there are payment problems, and that they are critical," the Russian prime minister said in televised comments.

Moscow has been often accused of using its gas exporting monopoly as a weapon aimed at influencing decisions of ex-Soviet nations that rely on Russian energy and contemplate closer relations with the West.

Gazprom has already twice interrupted shipments to Ukraine -- once in January 2006 and then again in January 2009 -- in moves that also threatened energy supply to some central and western European countries at the height of winter heating seasons.

Ukraine hopes to strike an association and trade agreement with the European Union at a November 28-29 summit in Vilnius that would provide Kiev with an opening for future membership in the 28-nation bloc.

That deal remains uncertain because of EU leaders' demand on Kiev to release and pardon the jailed opposition leader Yulia Tymoshenko -- a rival of President Viktor Yanukovych who served as prime minister during Ukraine's 2009 gas dispute with Russia.

Moscow meanwhile wants to see Ukraine join a Russian-led customs union that already includes Belarus and Kazakhstan.

Russian President Vladimir Putin's spokesman insisted that Gazprom's warning was in no way related to Ukraine's hopes of striking the EU pact.

"Without a question, the gas debts are not a political issue and are in no way related to the subject of the associated membership (agreement) with the EU," ITAR-TASS state news agency quoted Kremlin spokesman Dmitry Peskov as saying.

But Peskov added that Russia was not taking the issue lightly even if it "coincidentally" arose in the heat of Kiev's negotiations with Brussels.

"It is absolutely apparent that the time has come for us to spell out our position," said Peskov.

Ukrainian producers have already suffered in recent months from a Russian ban on a brand of sweets and the introduction of strict new customs checks.

Russia denies that the candy ban is rooted in politics and cites concerns over product quality issues.

But Moscow also argues that it needs to impose more restrictive border policies with Ukraine in case it establishes free trade relations with the European Union and becomes flooded with cheaper and more competitive goods.

Putin received Yanukovych on Sunday for a private meeting at his Black Sea retreat in Sochi.

The talks ended without formal announcements but were followed a day later by a Moscow threat to require Ukrainians to have passports for visits to Russia.

Ukrainians and Russians can currently cross the border using only their domestic identity papers.

Moscow's Higher School of Economics professor Nikolai Petrov said Russia was now "on the warpath" with Ukraine.

"Russia was ready to offer Ukraine a huge amount of money if it joined its customs union. Now Russia is going to use that money to wage war."

Russia has previously written off energy debts of nations such as Belarus that more closely tow Moscow's line.

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