Empresas y finanzas

EU and Ukraine eye closer ties to avoid gas snags

By Marcin Grajewski

BRUSSELS (Reuters) - The European Union and Ukraine agreed on Tuesday to seek closer ties in the energy sector to try to avoid future disruption of Russian gas supplies through the country after this month's crisis.

Visiting President Viktor Yushchenko said that accords signed with Moscow by his domestic political rival, Prime Minister Yulia Tymoshenko were "not easy" but gave no indication at a news conference that he would challenge them.

Many European countries were cut off from Russian natural gas for days because of an energy payment dispute between Moscow and Kiev, undermining their reliability as suppliers.

"We are all determined that this does not become an annual event," European Commission President Jose Manuel Barroso told a news conference after meeting Ukrainian President Viktor Yushchenko in Brussels.

He said the EU and Ukraine would work on bringing Ukraine to the European Energy Community, a loosely defined body created in 2005 to ensure close cooperation within the bloc and among some neighbouring countries and to liberalise the sector.

Barroso and Yushchenko said Ukraine should also integrate its electricity grid with those of EU members from central Europe and, crucially, link better its gas transit pipelines with the EU's wholesale gas system.

"It is important for Ukraine to join the European Energy Community agreement," Yushchenko said.

He said he counted on EU countries' investment to modernise Ukraine's gas transit system, which will be discussed at a high-level conference on March 23.

Yushchenko has warned that the deal signed with Russia to end the gas dispute could bring Ukraine's state energy company Naftogaz to its knees financially and allow Russians to move in and take over property to cover the resulting debts.

Bohdan Sokolovsky, Yushchenko's energy aide, said on Monday the deal could be declared invalid if it was shown to have been concluded under pressure. But Yushchenko did not give any indication that he would challenge them, saying only:

"The agreements signed are not easy ones," he said.

Barroso and Yushchenko voiced confidence the EU and Ukraine would sign this year as planned an association agreement, which would provides for easier trade and travel, some aid, and strong economic cooperation.

Some politicians in the 27-nation are blaming Ukraine for its role in the gas crisis, saying privately Kiev had failed to pass on Russian gas when Moscow made it available.

But Barroso said the EU would not punish Ukraine.

"In our bilateral relations, we are not taking any negative consequences," he said.

The EU is generally keen to draw Ukraine away from the sphere influence of its former Soviet master, but the bloc refused to grant Kiev membership prospect as irritation grows with endless internal political rows in the country.

(Editing by Dominic Evans)

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