Ukraine scratches around for the scratch to pay Gazprom the gas bill for October & November

The Ukrainian government website said Tuesday the state-controlled gas company Naftogaz will pay a $2 billion gas debt to Russia's OAO Gazprom with credit from state banks.(WSJ) See Tuesday, December 23, 2008 Putin on the prowl in Ukraine and Rawtenstall cut off from world - the Bigger the Bang the bigger the silence

Under the order, issued by Ukraine's government on Dec. 29 and published on the Ukraine Governmentwebsite it has been announced that Naftogaz will borrow from Oshadbank and Ukreksimbank to pay a US $2 billion gas debt to Russia's OAO Gazprom . The government also said it guarantees that Naftogaz would fulfill the order which they hope (?) to pay off by the end of 2008.

Gazprom spokesman Sergei Kupriyanov said in an interview with Echo of Moscow radio on December 27. Gazprom is well aware that Naftogaz Ukraine cannot pay out of its own funds.

Gazprom says Naftogaz owes it over US $2 billion for gas delivered (plus fines for late payment) in November and December. If the debt issued, isn't settled before Jan. 1. 2009 Gazprom is threatening to halt supplies from January 1st 2009 and hike the price of gas for Ukraine to US$418 from US $179.5 per 1,000 cubic meters. (Kiev Post)

Gazprom spokesman Sergei Kupriyanov noted , without a trace of humour, “There is no technical problem in shutting off gas supply from January 1,”

Ukrainian Prime Minister the beautiful, blonde blue eyed Ice maiden, Yulia Tymoshenko has canceled her visit today to Yevpatoria to console the survivors and relatives of the 26 dead, from the massive apartment block explosion last week - not caused by gas. Labour and Social Policy Minister Liudmyla Denysova deputised for her as the PM was busy with, " important state issues." The Government have promised that the residents of the five-storey apartment building will be given new apartments by the end of the year.

The Government website said she was busy today ....."within the framework of consultations and negotiations on gas supply and transit Prime Minister of Ukraine Yulia Tymoshenko held telephone conversations with Federal Chancellor of Germany Angela Merkel, Secretary-General of the Council of the European Union, EU High Representative for the Common Foreign and Security Policy Javier Solana and European Union Energy Commissioner Andris Piebalgs. Yulia Tymoshenko has informed them about the process of Ukrainian-Russian negotiations."

Ukraine struck a deal with the IMF for a US$16.4 billion loan at the beginning of November just as the economy suffered a dramatic turnaround. Growth shrank 14.4 % in November year-on-year after industrial output fell almost 30%. President Viktor Yushchenko and Prime Minister Yulia Tymoshenko, and IMF chief Dominique Strauss-Kahn are still engaged in discussions over next year's budget abot conditions of the loan and when the balance of the loan will available.

Gazprom supplies a quarter of Europe's gas needs. The majority of that is shipped through pipelines crossing Ukraine. Cutting Ukraine's gas supplies would disrupt supplies to Europe, as it has done previously, because theUkraine siphoned off gas intended for Europe.

PS : Europe is facing 4 weeks very cold weather.

PPS : The Ukraine hryvnia last half of its value since September touching 10 to the US dollar earlier this month, although it has since strengthened to about 7.7/US $.

PPS : Get some candles and firewood in.