Russia controls the natural gas but Ukraine has the bill. US$3.5 billion is owed to Russian energy giant Gazprom. Russia is squeezing Ukraine. It has ended gas price subsidies, is demanding up-front payment, and has threatened to cut gas supplies if bills are not paid. But Ukraine’s economy is already in crisis. The IMF has stepped in – but it has been warned that matters for Ukraine might only get worse as tranches of payment go to Russia instead of being used to shore up Ukraine’s collapsing economy.

<i>Ukraine is heading for sovereign default - likely before the end of 2014. The country is caught in a tug-of-war between Russia and the West, where the Kremlin insists that all...

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Professor Stefan Hedlund
Russia would be willing to open talks with Ukraine if the US$2.2 billion owed on April 1, 2014, were paid
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