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Russia Says European Gas Deal is Off

Russia's president says a deal to resume the supply of natural gas to Europe is off, crushing the hopes of Europeans suffering without heat.   Moscow has said it will not restart gas supplies to Europe until it has a valid deal.

Russian President Dmitry Medvedev says an agreement on international monitoring of gas transit through Ukraine cannot be implemented until contradictions in the document are cleared up.

Earlier in the day, Ukraine, Russia and the European Union signed an agreement that would enable the resumption of Russian natural-gas supplies via Ukraine to Europe.  But Ukraine attached a handwritten note to the document asking for a declaration to be attached.  Several of the clauses in the declaration contradict Russia's position.

After reviewing the declaration, President Medvedev said Russia was forced to consider the signed document invalid.  He said it would not be implemented by Russia until the stipulations of the declaration are removed or revoked in any other way by the Ukrainain side.

European Union president, Czech Prime Minister Mirek Topolanek, had mediated the deal.

In comments aired by Russia Today television, Ukrainian Prime Minister Yulia Tymoshenko said it would allow international observers to monitor the natural gas flows from Russia.

"Today we have signed an agreement to give access for EU monitors to visit all Ukrainian gas stations and exporting stations from the Russian side," said Yulia Tymoshenko.

Russian energy giant Gazprom says monitors are needed to ensure all the gas it sends via Ukraine will reach European customers.

Moscow halted deliveries nearly a week ago, saying Ukraine was stealing natural gas, charges Kyiv denies.
 
But the Russian president's announcement is bad news for Hungary and nearby countries such as Serbia, where Serbian Foreign Minister Vuk Jeremic expressed concern about the situation.

"Serbia depends 100 percent on the Russian gas coming from Ukraine physically," said  Vuk Jeremic. "And that supply has stopped. Serbia is in a very difficult situation."

Even when gas deliveries resume to Europe, Ukraine will not receive Russian natural gas.  Moscow first wants Kyiv to settle alleged unpaid bills of more than $2 billion.  Gazprom also demands Ukraine pays $450 per 1,000 cubic meters for future natural gas deliveries, about twice the amount offered by Kyiv.  
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