Germany warns Russia over decision to cut Ukraine gas

Germany warned Russia today that its unilateral decision to cut off gas supplies to Ukraine could harm Moscow's economic relations…

Germany warned Russia today that its unilateral decision to cut off gas supplies to Ukraine could harm Moscow's economic relations with the West.

Gas supplies through Ukrainian pipelines to Europe started to fall off dramatically, at the height of winter, as a result of the Russian blockade, which has aroused Western fears about insecurity in the energy sector.

Russia, which takes over the G8 chairmanship for the first time this month and has sought to promote itself as a reliable energy source, cut its neighbour's gas supplies yesterday after Ukraine rejected Moscow's demand for a fourfold price rise.

Ukraine accused Russia of blackmail today, saying Moscow wanted to destabilise its economy. Moscow accused it of stealing supplies that were destined for Europe -- which Ukraine in turn denied.

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Russia said it had had no choice but to turn off the taps after Ukraine refused to sign a new contract that would have ended the preferential price treatment of the Soviet era.

German Economy Minister Michael Glos, whose country is Russia's biggest gas customer, said Moscow must act responsibly.

"Thirty per cent of our gas comes from Russia at the moment. That should be increased," Mr Glos told the German radio station WDR. "But it can only be increased if we know that deliveries from the east are dependable."

"Russia has the G8 presidency and also here (in this dispute) one should naturally act responsibly," Mr Glos said.

Washington also stepped in.

"Such an abrupt step creates insecurity in the energy sector in the region and raises serious questions about the use of energy to exert political pressure," State Department spokesman Sean McCormack said in a statement.

Pipelines taking Russian gas to Europe cross Ukraine, and the cut in supplies to Ukraine quickly affected central Europe. Austria, Hungary, Poland, Romania, Croatia and Slovakia all reported a sharp fall in deliveries.

Ordinary European consumers are unlikely to be affected in the short term, but any cut-off to industrial users could cause significant economic damage.

The Kremlin says the dispute is a commercial matter. But Kiev sees it as an attempt to undermine its pro-Western government, with a parliamentary election due in three months.

There was no indication from either side on Monday that talks were going on, or of when they might resume.