June 16 - Ukraine and Russia make a last-ditch attempt to reach a deal in a gas pricing dispute, hours before a deadline for Kiev to pay a $1.95 billion debt or have its gas supplies cut off. Sarah Toms reports.
Behind these doors in the Ukrainian capital, talks are being held with Russia to resolve a long running dispute on gas. The two countries disagree over the price and Moscow also wants Kiev to start paying off its gas debts. These talks are further complicated by political tensions between the two countries. The flag at the Kiev government building is flying at half staff after rebels in the east of the country shot down a military plane, killing 49 personnel on board. The Ukrainian government accuses Moscow of arming the pro-Russian separatists. These latest round of talks ended in failure despite the European Union's energy commission attempt at a compromise. (SOUNDBITE) (English) EUROPEAN ENERGY COMMISSIONER, GUENTER OETTINGER, SAYING: "And for the moment our Russian partners didn't accept this package, my proposal. And they insisted to get $1.9 billion immediately which means tomorrow, and they insisted have an overall price of 385 USD (per 1,000 cubic metres) for the whole year." The Ukrainian state gas company said the price was unacceptable and it would not pay. Russia said if there was no advance payment, restrictions will be imposed. This raises the prospect of not only a cut in Ukraine's supply but also disruptions to gas flows to the European Union.