20 May 2014, 02:00

'Ukraine is bankrupt' – Gazprom CEO

'Ukraine is bankrupt' – Gazprom CEO

Given the dire state of Ukraine's economy, Russia's gas giant doesn't expect Kiev to pay for its gas bills. In an exclusive interview for the state-owned Rossia 24 channel, Gazprom CEO Alexey Miller said that the problem transcends gas issues and is a systemic one. “Ukraine is bankrupt”, he added unequivocally.

According to Miller, all attempts to coerce Gazprom into either forgiving Ukraine's debt or offering a significant price reduction without an accompanying payment for delivered gas will be futile. He also mentioned that the pending complaint, lodged by Ukrainian government at the Arbitration Institute of the Stockholm Chamber of Commerce won't influence the Russian gas giant. After pointing out that the contentious gas contract was signed by the same officials who are now trying to fight it in court, Miller added that “Stockholm's court won't help and won't save them”.

Despite all claims to the contrary made by American politicians, European media and Ukrainian officials, the problem is not the price of gas itself, it is the systemic crisis of Ukrainian economy. Gazprom CEO is sure that no matter the price, Kiev won't pay, because it simply can't do it: “Ukraine doesn't pay at any price. With or without reductions. It must be understood that the situation is getting worse every month. The reason is the low solvency of Ukrainian consumers and what's more concerning, the degrading payment discipline of consumers.”

To a certain extent, it seems that Miller believes in the principle “you break it, you own it” and he is therefore convinced that the only chance for saving Ukraine lies with the US and the European Union: “We've heard much about the help from the European Union, the US, the IMF. Ukraine has recently received the first tranche but we haven't seen any payments for gas, no payments on debt and we still don't see anything. Meanwhile the debt has reached an astronomical figure of 3.5 billion dollars”. In this context it is safe to assume that all attempts made by the European Commission to solve the gas issue by talking to Gazprom and Kiev's Naftogaz are useless. The best solution would be to ask the IMF to force Kiev to use the money it got from the bailout package in order to pay its gas bills and not for financing punitive military operations.

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