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Novak: EU, World Bank Could Act as Guarantors for Ukraine Gas Debt Payments

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The European Union and the World Bank could act as guarantors for the debt payments that Ukraine would be submitting to Russia under the plan proposed at the trilateral gas talks in Berlin Friday, Russian Energy Minister Alexander Novak said.

Updated 07:58 p.m. Moscow Time

BERLIN, September 26 (RIA Novosti) – The European Union and the World Bank could act as guarantors for the debt payments that Ukraine would be submitting to Russia under the plan proposed at the trilateral gas talks in Berlin Friday, Russian Energy Minister Alexander Novak said.

"The funds that Ukraine received today from the International Monetary Fund (IMF), which amount to $3.1 billion, could be used as a source of paying off the debt on the [Russian] gas deliveries, and the World Bank and the European Union can act as guarantors for the repayment of this debt," Novak told journalists after the talks.

The European Union proposed that Ukraine pay Russia's Gazprom a total of $3.1 billion by the end of this year. This "winter package" also stipulates that Russia supply Ukraine 5 billion cubic meters of gas at a proposed price of $385 per 1,000 cubic meters for six months.

Commenting on the proposals, Novak said that "The Russian side and the European Union have practically no disagreements on these packages. It can be said that our positions are similar."

However, no final decisions have been made yet. Russia will hold direct talks with Ukraine on the issue of gas supplies next week, where the sides might come to an agreement.

As a result of the ongoing political crisis in the country, Ukraine is currently on the verge of a default. Kiev authorities are trying to rescue the country's economy with international loans, including a $17 billion loan from the International Monetary Fund.

Kiev has a significant gas debt that its gas company Naftogaz owes to Russian gas giant Gazprom, which is estimated to stand at over $5.3 billion.

The IMF approved a loan to Ukraine in May in the form of a two-year stabilization program so that the country would be able to clear its debts, carry out economic reforms and recover.

To receive the IMF funds in full, Ukraine agreed to a severe austerity program that includes shedding 24,000 government jobs, raising taxes, selling off state assets and withdrawing subsidies on natural gas.

Tags:
gas, International Monetary Fund, World Bank, EU, Alexander Novak
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