Putin warns Russia could cut gas to Ukraine, Europe

Putin also called for immediate consultations with European leaders on stabilizing Ukraine's economy, and said that about $5.5 billion in gas would need to be pumped into Ukrainian gas storages to guarantee uninterrupted transit, Reuters reported.

Putin’s remarks, which come as pro-Russian activists engage in tense standoffs with Ukrainian authorities in the country’s Russian-speaking east, stoked fears that Russia could abruptly cut off gas to Ukraine as it did during price disputes in the winters of 2005–06 and 2008–09. In both cases, gas supplies dwindled in Europe, which receives about 30 percent of its gas from Russia.

Analysts say Russia’s critical role as a primary supplier of natural gas to Europe has helped safeguard against a harsher EU response to Moscow’s annexation of Crimea and its heightened troop levels along Ukraine’s eastern border, which Western leaders have widely condemned.

They have been especially critical of Putin over the past few days as pro-Russian actions have flared in cities including Donetsk and Luhansk. The United States and its allies accuse Moscow of stoking pro-Russian sentiment and sending Russian agents to call for greater autonomy or secession from Ukraine — charges Moscow has vehemently denied.

Hundreds of armed pro-Russian protesters have occupied a regional government administration building in Donetsk and a branch of the Ukrainian Security Service in Luhansk since Sunday. They have demanded a referendum on broader autonomy or even secession from the new Kyiv government authorities, who took power after the Kremlin-allied former President Viktor Yanukovych fled the country in February following months of street protests.

In an effort to quell tensions and stave off the threat of violence — which many suspect would offer Russia the pretext to intervene militarily — Ukraine's acting president promised Thursday that pro-Russian activists occupying government buildings in both cities will not be prosecuted if they lay down their arms.

Oleksandr Turchynov, speaking to the Ukrainian parliament in Kyiv, commended the activists in Luhansk, who have begun negotiating with national authorities in Kyiv. He encouraged those in Donetsk to follow their example.

But Western leaders have not relented in their condemnation of what they perceive to be Russian aggression on sovereign Ukrainian territory. NATO chief Anders Fogh Rasmussen, visiting the Czech Republic on Thursday, once again denounced the annexation of Crimea.

"Russia is trying to justify its actions by accusing the Ukrainian authorities of oppressing Russian speakers and by accusing NATO of a Cold War mentality," he said. "This is nothing but propaganda designed to subvert the Ukrainian government, pervert the truth and divert attention from Russia's own illegal and illegitimate actions."

The Russian Foreign Ministry lashed back at Rasmussen, condemning him for "zealously reproducing Cold War–era rhetoric."

Another step was taken to isolate Russia geopolitically on Thursday when the Council of Europe, the continent’s human rights watchdog, voted to suspend Russia's right to vote and take part in monitoring elections this year. The council, which includes lawmakers from 47 nations including Russia and Ukraine, was acting to punish the nation for its takeover of Crimea.

As Ukraine wrangles with its debt to Russia, the country’s parliament passed legislation on Thursday to end corruption in government purchases and promote transparency in tenders. The new law fulfills some of the requirements attached to an $18 billion bailout from the International Monetary Fund.

The IMF has thrown a financial lifeline to Ukraine, whose economy is staggering after four years under Yanukovych, on the condition that it enact reforms and austerity measures. Those steps are needed to avoid a debt default following months of turmoil, the IMF has said.

Ukraine has already passed an anti-corruption bill, freed the exchange rate of the national currency and raised the price of gas for household consumers. Passing the procurement law was one of the last conditions to be met.

The IMF loan replaced a previous bailout offer from Russia, after Moscow withdrew its offer to save Ukraine from default and imminent economic collapse following the months-long uprising that toppled Yanukovych and brought a pro-Western interim government to power.

Russia also canceled its offer of discounted natural gas to Ukraine. In the coming weeks, Kyiv will be required under the IMF deal to lift costly subsidies on gas — a change that is expected to be extremely unpopular around the country.

Al Jazeera and wire services