Russia's Prime Minister Vladimir Putin called on the European Union on Monday to lend money to Ukraine to help Kiev pay for Russian gas supplies and avoid disruptions to gas flows to European customers this winter.
"If there are problems, we are asking our European colleagues to get involved and lend Ukraine the necessary money. Give them a least a billion. Why be greedy? They (the EU) have the money, so why don't they fork it out?" Putin said after talks with Danish Prime Minister Lars Lokke Rasmussen.
Putin did not specify the currency of the loan.
EU leaders were shocked when a three-week January dispute over gas prices between Kiev and Moscow led to supply cuts for hundreds of thousands of Europeans last winter.
The EU receives about 20 percent of its gas from Russia via Ukraine and several eastern and southern European countries are almost entirely dependent on that gas.
Ukraine has been regularly paying off its gas bills since January, but Moscow last week said it feared Kiev may fall behind as economic crisis empties state coffers.
The Russian warning coincided with the start of a presidential election campaign in Ukraine. Analysts said Moscow wanted to pressure Ukraine to choose a relatively pro-Russian leader while avoiding a gas row with Kiev ahead of the vote.
Last week, Putin said the EU had not done enough to help Ukraine, a charge the EU's executive Commission denied.
"The European Commission has done everything it can during the summer to avoid that European citizens have to suffer the consequences of another dispute between Russia and Ukraine," a Commission spokesman said on Monday.
The Commission proposed to lend Ukraine 500 million euros ($740 million) last week to fight its economic crisis but it has never considered lending it money directly for gas bills.
The EU brokered a $1.7 billion loan deal for Ukraine from various international institutions but all the cash, bar $300 million, was earmarked for the modernisation of gas sector infrastructure and was highly conditional.
On Sunday, Putin's office said he spoke on the phone with Swedish Prime Minister Fredrik Reinfeldt, representing the EU's Swedish Presidency, and also warned him of possible problems with Russian gas transit to Europe because of Ukraine.
COMPLEX TRANSACTIONS
Putin said his Ukrainian counterpart Yulia Tymoshenko told him President Viktor Yushchenko risked provoking a new crisis by obstructing work between the central bank and the government.
Arch-rivals Tymoshenko and Yushchenko are competing for the presidency in a Jan. 17 election and for months have traded accusations of jeopardising Ukraine's economy.
Putin and Tymoshenko signed landmark deals in January to settle the gas dispute and resume supplies to Europe. Tymoshenko has since then been seen as Moscow's favourite Ukrainian politician.
Yushchenko called again on Monday for the government to scrap a January gas deal -- a sign his rhetoric is unlikely to ease before the vote.
The state energy firm that buys the Russian gas, Naftogaz, was unavailable for comment on payments due. It must pay October's bill of between $400-500 million by Saturday.
Doubts over Ukraine's ability to pay for its gas have arisen as the country has slumped deep into recession, its currency has plummeted, Naftogaz's finances have continued to crumble and doubts have grown over an IMF bailout programme.
For some monthly payments the transactions have been complex -- the central bank has issued cash, or printed money, for a state bank so the bank could lend the cash to Naftogaz to pay the Russian bill.
This method of helping Naftogaz means there should be no problems with gas payments to the end of this year as long as the central bank is willing to issue cash -- but that is likely to have a negative impact on both inflation and the currency.