Ukraine’s cut-price gas deal with Russia is another ‘virtual discount’

Ukraine struck a major deal with Russia and dealt a blow to hopes of closer ties with the European Union. The contract gave Ukraine a US$15 billion loan and a gas contract with prices cut by a third. But is this deal as good as it looks or will Ukraine actually pay more?

<i>Ukraine signed a new 'take-or-pay’ gas contract with Russia in December 2013 lasting until 2019. It offers Gazprom’s gas prices reduced by a third and a US$15 billion loan from Russia. Both contracts highlighted far-reaching geopolitical implications following Ukraine’s suspension of its EU association agreement prior to the EU’s Vilnius summit in November. But Ukraine’s ‘unfair gas contracts’ of 2009 and 201...