Ukraine-Russia-EU gas talks restarted on Oct. 29, may continue today

Макроэкономика 30.10.2014 The natural gas talks between Ukraine and Russia, with EU mediation, restarted on Oct. 29 in Brussels and lasted nearly eight hours, the Russian media reported. They may resume in the evening of Oct. 30, according to the RIA Novosti news agency, citing Russian Energy Minister Alexander Novak. At the last meeting, the sides discussed three documents: a trilateral protocol (EU, Ukraine, Russia); an addendum to a contract between Naftogaz and Gazprom; and a bilateral protocol between the EU and Ukraine. The key parameters of the first two documents, which demand signatures from the Russian side, have been fully agreed upon, Novak said. In turn, Gazprom CEO Alexey Miller said Ukraine and the EU have yet to agree on the third document, which will provide guarantees that Ukraine will be able to repay its debts and prepay for new Russian gas. If there is no consensus between Ukraine and EU on their bilateral protocol, there will be no meeting and no documents will be signed on Oct. 30, Miller said. In other news, German Chancellor Angela Merkel threatened on Oct. 29 that the EU might not be able to supply gas to Ukraine this winter if there is no deal between Ukraine and Russia. It may happen that the EU will need all the gas that it receives from Russia, so no gas would be left to supply Ukraine, she said. Alexander Paraschiy: At first glance, it seems like the deal is done. The only thing needed is for the EU and Ukraine to reach a common position on securing enough financing for Ukraine to purchase Russian gas. Meanwhile, the offered interpretation from the Russian side looks not sincere. According to Miller, the gas deal is under threat due to a lack of consensus between the EU and Ukraine. Yet beforehand, both sides revealed no differences in their vision of the gas deal. We look forward to seeing the perspective on the deal of the EU and Ukraine, though we remain pessimistic on any solution today.