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Russia’s government is getting anxious. The Energy Minister said Gazprom will stop delivering natural gas to nearly bankrupted Ukraine if it fails to pay the firm the $1.6 billion it owes in arrears, scheduled to be paid for in January.

Energy Minister Alexander Novak said that Russia and Ukraine reached an agreement in October that gave Kiev roughly three months to pay nearly $5.3 billion in overdue gas bills in order to lock in a low rate. The two countries have locked horns on natural gas deliveries for years, with Russia often shutting off supplies due to Ukraine’s penchant for not paying its bills.

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Originally posted by SIGNYM:
And just wait until ....

Russian Government Ready To Shut Off Gas Supplies To Ukraine

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Just when one thought the story of Ukraine and its (now non-existant) gold could not get any more surreal, it did.

As a reminder, it was about a month ago when we learned courtesy of an interview on Ukraine TV with the country's central bank head Valeriya Gontareva, that Ukraine's gold was virtually all gone, when she made the stunning admission that "in the vaults of the central bank there is almost no gold left. There is a small amount of gold bullion left, but it's just 1% of reserves."

That in itself would have been sufficient to explain why just a few short days later, the Netherlands shocked the world when it announced it had secretly repatriated 122 tonnes of gold from the NY Fed, and had the story of Ukraine's missing gold ended there (or even with the criminal probe launched by Ukraine whether the central bank head had abused her power and misused her office when she "intentionally committed an extremely unfavorable transaction for the gold and forex reserves of Ukraine"), it still would have been one of the most bizarre, surreal stories of 2014.

Luckily, the story just got far better, and far, far more bizarre and surreal.

As Bloomberg reports, Ukraine opened a criminal probe after several gold bars at the central bank’s storage in the southern city of Odessa turned to be painted lead.

"The management of the central bank’s branch in Odessa asked us to investigate fraud by their employee," Volodymyr Shablienko, head of the Odessa police’s press office, said by phone today. "We are conducting a forensic audit now."

As Bloomberg explains, the latest gold fraud involved a central bank employee passing lead bars covered with golden paint to the storage unit, registering them as gold, the Vesti newspaper reported today, citing an unidentified person with knowledge of the matter in Odessa’s police department.

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Originally posted by kpo:
Of course it would be the people in the separatist-held regions of Donbas who would suffer most from this, as they rely on free gas and electricity from Kiev.

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Originally posted by 1kiki:
Cites?

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Originally posted by kpo:
Of course it would be the people in the separatist-held regions of Donbas who would suffer most from this, as they rely on free gas and electricity from Kiev.

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As of 1 December, all allocations from the State budget, (including for social payments) to areas not controlled by the Government ceased. To continue receiving social payments, residents of Donetsk and Luhansk regions under the control of the armed groups are required to register by 31 December, in territory under the control of the Government This was justified by the Government as necessary to prevent national budget funds falling into the hands of the armed
groups who had taken control of social institutions, including local branches of the Pension Fund, as well as banks. However, pensions and other social payments will be redirected and may be received by beneficiaries and may be received in territory under the control of the Government. For humanitarian reasons the Government continues to supply gas and electricity to the areas under control of armed groups without receiving any payment for it.

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