Putin turns up economic heat before Ukraine talks

Published on NewsOK Modified: April 9, 2014 at 4:13 pm •  Published: April 9, 2014
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MOSCOW (AP) — Russian President Vladimir Putin turned up the heat on Ukraine on Wednesday by threatening to demand advance payment for gas supplies, a move designed to exert economic pressure as Ukraine confronts possible bankruptcy, a mutiny by pro-Russian separatists in the east and a Russian military buildup across the border.

NATO's top commander in Europe warned that the alliance could respond to the Russian military threat against Ukraine by deploying U.S. troops to Eastern Europe, but Putin's latest tactics suggest he may be aiming to secure Russia's clout with its neighbor without invading.

Speaking at a Cabinet session, the Russian leader voiced hope that diplomatic efforts to ease the Ukrainian crisis would yield "positive results," an apparent reference to talks set for next week that will bring together the U.S., the European Union, Russia and Ukraine for the first time.

Russia wants the talks to focus on a roadmap for Ukraine that would include constitutional reforms to turn it into a federation and guarantee its neutral status. Those demands reflect the Kremlin's hope of retaining influence over its neighbor and ensuring it does not join NATO. Ukraine has responded by saying it will not be dictated by Russia.

Taking a tough stance before the negotiations set for next week, Putin instructed the government to be prepared to charge Ukraine in advance for gas supplies — a step that would inflict more pain on a nation already teetering on the verge of bankruptcy. He said the change needed to be taken if "additional consultations" with the European Union fail to yield results.

Russia has already eliminated a gas discount it had given Ukraine, arguing that it was tied to a lease for Russia's Black Sea Fleet base in Crimea, a Ukrainian region that Russia annexed last month. And Ukraine has promised the International Monetary Fund that it will cut energy subsidies to residents in exchange for a bailout loan of up to $14 billion. That means gas prices were set to rise 50 percent on May 1, even before the latest salvo from Putin.

The Kremlin pressure comes as pro-Russia protesters have continued to occupy government buildings in eastern Ukraine.

Ukraine and the West have accused Moscow of fomenting the unrest to create a pretext for another Russian military incursion similar to last month's takeover of Crimea.

Ukrainian Interior Minister Arsen Avakov said the standoff in Luhansk and the two neighboring Russian-leaning regions of Donetsk and Kharkiv must be resolved within two days.

"I want to repeat that there are two options: political settlement through negotiations and the use of force," Avakov told reporters. "We are ready for both options."

Russian Foreign Minister Sergey Lavrov quickly responded by warning against "making 48-hour ultimatums."

"The situation can only be settled through an equal and respectful dialogue," he said.

All the cities affected by the uprisings are in Ukraine's industrial Russian-speaking heartland in the east, which has a large population of ethnic Russians and strong economic and cultural ties to Russia. Many residents are suspicious of the government that took power in February after pro-Russian President Viktor Yanukovych fled the capital following months of protests.

While Putin kept a military option on the table, saying that "all means" could be used to protect Russian speakers, Moscow is clearly concerned about the grave military, political and economic consequences of invading eastern Ukraine.