Russian gas giant Gazprom on Tuesday announced it was ending a gas discount enjoyed by Kiev in a major blow for the Ukrainian economy, as NATO foreign ministers prepared to forge a response to Russia's intervention in Crimea.
Ukraine on Monday reported a partial withdrawal of Russian troops from its eastern border amid growing signs that the Kremlin is ready to defuse the worst East-West standoff since the Cold War.
But tensions still remained high and Russia appeared to resort to the familiar tactic of using Gazprom to put pressure on the troubled Ukrainian economy.
The crisis is at a critical juncture as Ukrainian politicians jockey for position ahead of May 25 presidential elections and tentative diplomacy gets under way between Moscow and the West to find common ground after the fall of president Viktor Yanukovych.
Ukraine will now pay $385.5 dollars per 1,000 cubic metres of gas from the previous cut rate of $268.5, Gazprom chief executive Alexei Miller said.
"The discount will no longer apply," he said in a statement. "This is due to the inability of the Ukrainian side to pay for debts from 2013 and realise full payments for current deliveries."
- Ukraine to disarm protest groups -
The discount had been agreed between Yanukovych and President Vladimir Putin in December 2013 as a form of financial aid to the former regime.
The price hike -- although widely expected -- is a new blow to the Ukrainian economy which needs an international rescue to stave off the risk of default.
With the situation still volatile in Kiev, a member of the radical Ukrainian nationalist group Pravy Sektor opened fire in central Kiev late Monday.
Three people, including the deputy leader of the capital's administration, Bogdan Dubass, were wounded, the interior ministry said.
Interior Minister Arsen Avakov said the gunman was apprehended two hours after the incident.
But meeting a key demand posed by both the West and Russia, Ukraine's parliament Tuesday voted to disarm all self-defence groups that had sprung up across the country during its political crisis.
"The Ukrainian people are demanding order," acting president Oleksandr Turchynov said. "Those who carry arms -- besides the police, the security services and the national guard -- are saboteurs who are working against the country."
NATO foreign ministers will gather in Brussels on Tuesday as the defence alliance seeks to reinforce its eastern frontier after Russia's takeover of Crimea and amid concerns about its emboldened foreign policy.
- 'Not business as usual' -
In a regular two-day meeting of the 28 ministers, including US Secretary of State John Kerry, NATO will confirm the suspension of cooperation with Moscow, a decision made on March 5 after Russian troops grabbed Crimea from Ukraine.
"Reassuring allies is most important for NATO," said Douglas Lute, the US ambassador to the Brussels-based Western alliance, in a pre-meeting briefing.
NATO has not ruled out the possibility of placing permanent military bases in the Baltic countries -- breaking a promise made to Russia in the 1990s that it would keep permanent troops out of new member countries that border Russia.
"We cannot do business as usual with Russia," Lute said.
"It is clear that Russia has not played by the rules, has not been consistent with our partnership... so we can review our own rules."
Over the weekend, General Philip Breedlove, NATO's supreme allied commander, was sent back to Europe early amid what the Pentagon called Russia's "lack of transparency" over the Ukraine crisis.
Ukraine and the United States have accused Russia of massing thousands of troops near the border and have expressed concern that Moscow intends to seize southeastern parts of Ukraine with large populations of ethnic Russians following the Crimea takeover.
- Pullback 'a small sign' -
But German Chancellor Angela Merkel's office said Putin had personally informed her of the troop pullback in a telephone conversation on Monday, while her Foreign Minister Frank-Walter Steinmeier called the move "a small sign that the situation is becoming less tense".
The apparent easing of Moscow's position was offset by an unannounced visit to Crimea by Prime Minister Dmitry Medvedev -- the most senior Russian official to visit the Black Sea peninsula since it voted on March 16 to come under Kremlin rule.
Ukraine's foreign ministry denounced Medvedev's visit as a "grave violation" of international law.
Ukraine's defence ministry said the start of the Russian drawdown appeared to coincide with a phone call that Putin had unexpectedly placed to US President Barack Obama on Friday evening.
Russia's defence ministry confirmed on Monday it had relocated one battalion -- usually made up of about 500 soldiers -- that had been stationed near Ukraine back to its permanent base, but reported no other troop movements.
Russia wants Ukraine be turned into a federation in which the regions enjoy broader autonomy from Kiev and have the right to declare Russian as a second official language -- a line that Putin pressed during his call to Merkel.
Russian gas giant Gazprom on Tuesday announced it was ending a gas discount enjoyed by Kiev in a major blow for the Ukrainian economy, as NATO foreign ministers prepared to forge a response to Russia’s intervention in Crimea.
Ukraine on Monday reported a partial withdrawal of Russian troops from its eastern border amid growing signs that the Kremlin is ready to defuse the worst East-West standoff since the Cold War.
But tensions still remained high and Russia appeared to resort to the familiar tactic of using Gazprom to put pressure on the troubled Ukrainian economy.
The crisis is at a critical juncture as Ukrainian politicians jockey for position ahead of May 25 presidential elections and tentative diplomacy gets under way between Moscow and the West to find common ground after the fall of president Viktor Yanukovych.
Ukraine will now pay $385.5 dollars per 1,000 cubic metres of gas from the previous cut rate of $268.5, Gazprom chief executive Alexei Miller said.
“The discount will no longer apply,” he said in a statement. “This is due to the inability of the Ukrainian side to pay for debts from 2013 and realise full payments for current deliveries.”
– Ukraine to disarm protest groups –
The discount had been agreed between Yanukovych and President Vladimir Putin in December 2013 as a form of financial aid to the former regime.
The price hike — although widely expected — is a new blow to the Ukrainian economy which needs an international rescue to stave off the risk of default.
With the situation still volatile in Kiev, a member of the radical Ukrainian nationalist group Pravy Sektor opened fire in central Kiev late Monday.
Three people, including the deputy leader of the capital’s administration, Bogdan Dubass, were wounded, the interior ministry said.
Interior Minister Arsen Avakov said the gunman was apprehended two hours after the incident.
But meeting a key demand posed by both the West and Russia, Ukraine’s parliament Tuesday voted to disarm all self-defence groups that had sprung up across the country during its political crisis.
“The Ukrainian people are demanding order,” acting president Oleksandr Turchynov said. “Those who carry arms — besides the police, the security services and the national guard — are saboteurs who are working against the country.”
NATO foreign ministers will gather in Brussels on Tuesday as the defence alliance seeks to reinforce its eastern frontier after Russia’s takeover of Crimea and amid concerns about its emboldened foreign policy.
– ‘Not business as usual’ –
In a regular two-day meeting of the 28 ministers, including US Secretary of State John Kerry, NATO will confirm the suspension of cooperation with Moscow, a decision made on March 5 after Russian troops grabbed Crimea from Ukraine.
“Reassuring allies is most important for NATO,” said Douglas Lute, the US ambassador to the Brussels-based Western alliance, in a pre-meeting briefing.
NATO has not ruled out the possibility of placing permanent military bases in the Baltic countries — breaking a promise made to Russia in the 1990s that it would keep permanent troops out of new member countries that border Russia.
“We cannot do business as usual with Russia,” Lute said.
“It is clear that Russia has not played by the rules, has not been consistent with our partnership… so we can review our own rules.”
Over the weekend, General Philip Breedlove, NATO’s supreme allied commander, was sent back to Europe early amid what the Pentagon called Russia’s “lack of transparency” over the Ukraine crisis.
Ukraine and the United States have accused Russia of massing thousands of troops near the border and have expressed concern that Moscow intends to seize southeastern parts of Ukraine with large populations of ethnic Russians following the Crimea takeover.
– Pullback ‘a small sign’ –
But German Chancellor Angela Merkel’s office said Putin had personally informed her of the troop pullback in a telephone conversation on Monday, while her Foreign Minister Frank-Walter Steinmeier called the move “a small sign that the situation is becoming less tense”.
The apparent easing of Moscow’s position was offset by an unannounced visit to Crimea by Prime Minister Dmitry Medvedev — the most senior Russian official to visit the Black Sea peninsula since it voted on March 16 to come under Kremlin rule.
Ukraine’s foreign ministry denounced Medvedev’s visit as a “grave violation” of international law.
Ukraine’s defence ministry said the start of the Russian drawdown appeared to coincide with a phone call that Putin had unexpectedly placed to US President Barack Obama on Friday evening.
Russia’s defence ministry confirmed on Monday it had relocated one battalion — usually made up of about 500 soldiers — that had been stationed near Ukraine back to its permanent base, but reported no other troop movements.
Russia wants Ukraine be turned into a federation in which the regions enjoy broader autonomy from Kiev and have the right to declare Russian as a second official language — a line that Putin pressed during his call to Merkel.
