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Russia fears sanctions and decides to give Ukraine discounted gas

Finally, Russia comes to senses and stops doing everything to pull itself into a deep economic downturn.

Russian Gazprom is going to supply Ukraine with discounted gas in order to avoid toughening of sanctions, Tyzhden reports with reference to Business Insider.

According to the news agency, last week the European Commission addressed to the Russian authorities with a request to supply Ukraine with discounted gas – "to abolish the export duty, which now costs $100 per thousand cubic meters of gas."

"Ukraine imported 58% of the gas needed for its domestic market from Russia in 2013, while Moscow has repeatedly used its gas bounty to exact major political concessions from Kiev,"
writes BI.

Although the European Commission asks Gazprom to provide six-month discount, so far, Russia is ready only for three.

In addition, "Russia's $3 billion loan to Ukraine from its sovereign wealth fund (due to be repaid in December) is one of the debts that may be renegotiated as Kiev seeks to lower its repayments by $5.2 billion in 2015. Because the loan is counted as "official debt," any unilateral default on Ukraine's side would breach IMF rules, meaning the IMF would not continue to provide funding," the article writes.