Ukraine Halts Payments To Russia

Risk Of 'Gas War' Grows As Ukraine Halts Payments To Russia -- Reuters

(Reuters) - Ukraine said on Saturday it was suspending payments to Russia for deliveries of gas, ratcheting up the tension in a standoff that has the potential to leave European Union states cut off from the Russian gas supplies on which they depend.

In eastern Ukraine, where groups of pro-Russian activists have been emboldened by the Kremlin's annexation of the Crimean Peninsula, a band of armed men in mismatched camouflage outfits seized a police station in the town of Slaviansk.

Russia and Ukraine have been locked in confrontation since protests in Kiev forced the Moscow-backed president from office, and the Kremlin sent troops into Crimea. Now, the gas dispute threatens to spread the impact across Europe.

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My Comment: Ukraine has not made any payments to Russia since the revolution .... so this announcement is just making it official. As to the impact on existing Russian gas shipments to Europe, I predict that Ukraine will do the same thing that they did the last time when Russia suspended gas shipments to Ukraine over failed payments .... Ukraine simply took the natural gas that was heading to Europe and used it for themselves while requesting help from the Europeans. The difference this time is that they will try to deflect the blame on Russia .... and for the moment it is working. Fortunately .... it is now spring time in Europe so the need for natural gas is at a minimal. But pressures are going to be building up over the next few months to resolve this dispute, and if this is not resolved by the end of this year, it will not surprise me if the Europeans cave in and pay-off the bill like they did last time.

Update: This is only going to add "natural gas" to the fire .... Ukraine readies to sue Gazprom in Stockholm -- RT