Russia makes new threats over Ukraine's pro-Europe policy

Sat Sep 21, 2013 2:40pm EDT
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By Pavel Polityuk

YALTA, Ukraine (Reuters) - Ukraine's prime minister sought on Saturday to calm Russian fears over Kiev's plans to sign a free trade pact with the European Union, but a Kremlin official repeated threats of retaliatory action.

Officials from Ukraine and its old Soviet master Russia clashed at an international gathering in the Black Sea resort of Yalta over Kiev's plans to sign landmark agreements in November with the European Union on political association and free trade.

Moody's Investor Service cut Ukraine's sovereign credit rating on Friday, partly on concern over relations with Russia.

Russia says it fears its market could be flooded by competitive EU goods entering Ukraine free of import duties and being re-exported across the long border with Russia.

But Prime Minister Mykola Azarov, in a speech to the conference, dismissed the threat of illegal transit of EU goods into Russia as a "hypothetical" one that would not happen in practice.

"We are convinced that the signing (of the agreements with the EU) does not hold any risks (for Russia)," he said, adding that he would give personal assurances of this to Russia and its trade allies in the Moscow-led Customs Union.

He also expressed frustration at Russia's refusal to cut the price of the gas it sells to Ukraine and said Kiev may have to reduce further the volume of its gas imports.

Ukraine's pro-Europe drive has already drawn threats of counter-measures from Russian President Vladimir Putin, as well as pressure on Kiev to join the Customs Union.   Continued...

Russia's Prime Minister Dmitry Medvedev (R) shakes hands with his Ukrainian counterpart Mykola Azarov during a meeting at the Gorki state residence outside Moscow, August 26, 2013. REUTERS/Dmitry Astakhov/RIA Novosti/Pool