Putin defends position on Ukraine at EU-Russia summit

Russian president Vladimir Putin yesterday defended his country's involvement in Ukraine, arguing the $15 billion loan pledged by Russia to the debt-stricken country in December offered better terms than the International Monetary Fund package.

Speaking after an EU-Russia summit in Brussels, he indicated the loan was not predicated on the government staying in power, following speculation that Russia could renege on its commitment if the opposition took power.

“Both the loan or any sort of reduction in gas prices are based not on our desire to support any particular government in Ukraine, but to support the people of Ukraine, because it is the common people who suffer when the powers that be fight,” he said.

“Russia has always respected the sovereign rights of all states . . . Any decision in terms of cost benefits should be made by the country in question.”

Deferral of payments
Noting that Ukraine had already asked for a deferral of payments to Russian energy company Gazprom, Mr Putin said this would be a "major challenge for our economy, for Gazprom because this particular revenue stream was already booked for investment".

Mr Putin flew into Brussels yesterday for his first meeting with EU leaders since Ukraine controversially withdrew from an association agreement with the union, instead opting for a $15 billion bailout from Russia. He held a 2½-hour meeting with the heads of the European Commission and the European Council and with foreign policy chief Catherine Ashton. Outside the European Council building anti-Putin and feminist protesters were contained by security guards.

Describing the meeting as “frank and open”, the heads of the commission and council said a bilateral expert group had been set up to discuss the eastern partnership process, the EU’s strategy for engaging with the former Soviet republics to its east.

'Misunderstandings'
Though seen by some analysts as a concession to Moscow, the bilateral discussions will seek to address the "different interpretations and misunderstandings on the association agreements", European Council head Herman Van Rompuy said, adding that the association agreement that Ukraine initialled was still open.

“I made it clear that the eastern partnership does not affect Russia’s economic, trade, social, human and cultural links to many of our common neighbours,” he said.

With trade between Russia and the EU approaching €1 billion a day, economic matters were discussed at the summit, amid continuing conflict between the two blocs on protectionist measures.

The EU has criticised Russia for flouting free trade rules, and the European Commission is due to embark on an antitrust inquiry into the state-owned Gazprom.