Crisis talks bid to end gas dispute

Russia, Ukraine, and the European Union (EU) are bidding to end a crisis which has left at least seven EU countries facing major gas shortages amid a winter freeze.

Talks in Moscow between Russia's state-controlled Gazprom gas company and Ukraine's Naftogaz are aimed at resolving a row in which Gazprom has turned off the gas tap to Ukraine - hitting onward supplies to the EU in the process.

Meanwhile, Gazprom boss Aleksey Miller is holding talks in Brussels with EU Commission president Jose Manuel Barroso and Euro-MPs to answer mounting fury that member states are being hit in the midst of a bitter winter.

Barroso telephoned Russian prime minister Valdimir Putin and Ukraine's prime minister Yuliya Tymoshenko, to warn them that it was unacceptable to hold the EU's gas supply hostage and that the credibility of both countries as "reliable partners" of the EU was now at stake.

As today's meetings began, exports of Russian gas to Europe via Ukraine were reported to have stopped completely - with no sign of Russia's commitment to maintain supplies via other routes being fulfilled.

Russia has accused Ukraine of siphoning off gas destined for Europe to replace the supplies Ukraine lost when Gazprom turned off the tap last week in a dispute over unpaid bills and price increases.

But Ukraine denies the charge and no-one is predicting a swift outcome of today's Moscow meeting between senior Gazprom and Naftogaz executives.

In Brussels the Gazprom boss will be at the centre of a series of meetings at European Commission headquarters and at the European Parliament. He will be asked to justify allowing a "commercial" dispute to spill over with potentially devastating consequences for EU energy supplies.

So far seven EU countries - Austria, Greece, Hungary, Romania, the Czech Republic, Slovakia, Bulgaria - as well as Bosnia-Herzegovina, Croatia, Macedonia and Serbia, have reported a total stoppage of gas supplies from Russia, while Italy says its supply is down one-tenth of the normal flow.

The UK is immune for now - only 2 per cent of its gas supply comes from Russia, and if that stopped, it could easily be topped up from other sources, according to the government.

However a prolonged dispute could see retail gas prices rise, affecting consumers.

Barroso has made clear that the EU was actively seeking to help resolve the dispute - and was cutting short a formal visit to Prague to return to Brussels to meet the Gazprom chief.

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