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03/29/2024 10:38:03 am

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Putin, Merkel Solving Ukraine Gas Crisis

Russian President Vladimir Putin and German Chancellor Angela Merkel

(Photo : REUTERS/ALEXEY NIKOLSKY) Russian President Vladimir Putin (R) meets with German Chancellor Angela Merkel in Rio de Janeiro July 13, 2014.

Russian leader Vladimir Putin and German Chancellor Angela Merkel have agreed on Thursday to rapidly prepare and implement agreements to address the Ukraine gas crisis.

According to the Kremlin press service, Putin and Merkel talked over the phone and both expressed interestes in helping the Ukraine.

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Reports said the conversation of the two leaders centered on the strict compliance with the cease-fire agreements and the withdrawal of weapons of both the Ukraine and Russia.

Last week, the European Commission and Moscow addressed the growing concern of the Ukraine and released a strategy called "Winter Plan." The plan specified Russia will deliver gas to Kiev, Russian Energy Minister Alexander Novak said on Tuesday.

A trilateral talk between the European Commission, Russia and Ukraine will discuss the Winter Plan before it is forwarded to the Russian government. The trilateral gas talks was initially planned to be held in Berlin from Oct. 2 to 3, but was moved next week with no specific dates yet.

However, the plan stated that the Ukraine should repay at least US$3.1 billion from the US$5.3 billion gas debt of the country to Moscow. The amount should be paid in advance before the delivery of five billion cubic meters of gas will commence.

However, Kiev refused to pay the gas debt upon delivery, but Russia insisted that they should pay at least US$2 billion in October then the remaining US$1.1 billion can be paid by the end of the year.

Ukraine's Minister of Energy Yuri Prodan introduced a new proposal that will pay US$1.9 billion in advance for the gas that will be transported from Moscow and another US$1.5 billion by the end of October. The remaining balance will be split into two, US$800 million each in November and December.

Sources said that 1,000 cubic meters of gas is sold at US$385. The amount already has been discounted by US$100.

The Ukraine refused the proposed amount and would like to have the contract price reduced rather than discounted.

Ukraine has asked Russia to have a debt repayment schedule together with terms and schedules of the remaining gas deliveries. Ukraine is also asking Russia to amend the existing gas contract in order to clarify that the authorization of the deliveries from Russia to Europe and eventually sent to Ukraine is legal.

Putin and Merkel also talked about the threats posed by the Islamic State of Iraq in the Levant militants also known as Daesh. The two leaders also talked about the Ebola Virus spreading in West Africa and they have agreed to cooperate in order to ensure that their countries are protected from the health outbreak.

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