Russia cuts Ukraine's gas after talks fail

Europe risked gas supply disruptions yesterday after Russia rejected an 11th-hour compromise deal and cut supplies to Ukraine in a feud that has further fractured East-West relations.
Ukraine hosted the last-gasp talks hoping to keep an energy shortage from compounding the problems of the new pro-Western leaders as they confront a two-month separatist insurgency threatening the very survival of the ex-Soviet state.
But Russia's state gas giant Gazprom said it had switched Ukraine to a pre-payment system at 0600 GMT -- a move that effectively halts all shipments because Kiev has not forwarded any money for future gas deliveries to Moscow.
"We have been informed that gas deliveries to Ukraine have been reduced to zero, with only the volumes sent for transit to European states," Ukrainian Energy Minister Yuriy Prodan told a government meeting.
Prime Minister Arseniy Yatsenyuk called the supply halt "another stage of Russia's aggression against the Ukrainian state".
Gazprom said it had further notified Europe of possible gas disruption and lodged a $4.5 billion (3.3 billion euro) lawsuit against Ukraine with an arbitration court in Stockholm.
Ukraine is now trying to secure greater gas deliveries from its western European neighbours to make up for the lost Russian supplies.
Kiev also lodged a $6.0-billion (4.4-billion-euro) suit against Gazprom with the same Stockholm court to recover its past "overpayment" for gas.