Putin: Ukraine Must Pre-Pay for Gas From June 1

KIEV, Ukraine (AP) -

Ukraine must pay in advance for Russian gas supplies starting next month, Russian President Vladimir Putin said Thursday, raising pressure on the struggling neighbor as Moscow voiced dismay over what it says is Ukraine’s reluctance to implement a global peace plan.

Putin said in a letter to European leaders that Ukraine’s debt for Russian gas supplies has reached $3.5 billion, and because of its refusal to pay Moscow, it will have to switch to pre-paid gas deliveries starting from June 1.

The Russian president first warned of the move in April in a letter to European leaders, whose nations are customers of Russian state-controlled Gazprom natural gas giant. Ukraine serves as a major conduit for Russian gas supplies to Europe, and pricing disputes have led to shutdowns in the past.

Putin said that gas talks involving Russia, Ukraine and the European Union have failed to reach a compromise, and pointed at Ukraine’s refusal to pay even though it has received a $3.2 billion bailout from the International Monetary Fund.

Ukraine says it would pay if Moscow restores the price discounts canceled after the toppling of pro-Russian President Viktor Yanukovych in February after months of protests.

Meanwhile, the insurgents in Donetsk on Thursday announced the creation of their own parliament and Cabinet. They appointed Igor Strelkov, the leader of the insurgents’ armed wing whom Kiev says is a Russian intelligence officer, as defense minister.

“A civil war is underway, and it’s important for us to create a power bloc to successfully fight the Kiev junta,” said Yelena Korovkina, a member of the self-proclaimed parliament.