Energy is central focus at G-8 finance meeting in Russia
(AP)
Updated: 2006-02-12 14:43

While France's Thierry Breton listed Russia's gas price fight with Ukraine alongside supply fears over the nuclear standoff with Iran and the victory of Hamas in Palestinian elections as "uncertainties" facing the world energy market, there was no overt criticism of the G-8 host over the Ukrainian spat, which led to European gas supplies being briefly cut.

Russia maintains that the fight _ over the insistence on an immediate hike to market prices by state-controlled gas behemoth OAO Gazprom _ was driven by financial considerations, but observers have said Russia was using its energy muscle to pressure Ukraine's Western-leaning government.

German Finance Minister Peer Steinbrueck, however, gave a vote of confidence to Russia and its dependability as an energy supplier, saying the dispute was "much more differentiated and complex than has been presented by many media in western Europe."
"I have no doubt about the reliability of Gazprom, or Russia in general, as a supplier of energy to western Europe," he told German television.

Kudrin, who earlier described Saturday talks as "stormy," told reporters that discussion between ministers "are always quite tense." He said there had been tough negotiations on the so-called Doha round of trade talks for the World Trade Organization.

"It was a serious, deep conversation, employing figures and analysis," he said. "All developing countries spoke in favor of accelerating the process."

Despite Russia's key role in the international energy sector, it has yet to be admitted as a full member of the WTO and has been largely kept out of discussions among the finance ministers on big issues such as exchange rates and the U.S. trade deficit - which hit an all-time high of US$725.8 billion (euro606.3 billion) in 2005.
In an indirect reference to the deficit, the ministers noted that more work needed to be done to right global trade imbalances "and promote the sustainable growth of the global economy."

At a Kremlin meeting with ministers, President Vladimir Putin also hinted at the issue in a reference to the world's "fragile financial architecture has shown signs of instability."

The United States is one of the only countries Russia has yet to reach agreement with on WTO membership. Negotiations have stuck in particular over Moscow's insistence that foreign owned bank branches should not be allowed to operate in Russia.

Commenting on Russia's own bid, Snow said: "I think we're in the home stretch."
The ministers also welcomed "Russia's improved fiscal position," which has enabled it to make an offer to pay down nearly all of its Soviet-era debt this year to the Paris Club of creditors. Russia's suggestion that the foreign creditors use the money as part of aid to poor nations was still under discussion however, Kudrin said.

Kudrin said Thursday that Russia would pay back US$11 billion to US$12 billion (euro9 billion euro10 billion) it owes the 19-member group.

Also at the G-8 meeting, Paul Wolfowitz, the World Bank president, said the bank would be ready to provide full debt forgiveness for its poorest borrowers by July 1.
Last year, World Bank shareholders agreed to write off 100 percent of debts owed by 28 countries, as well as agreeing to replenish the World Bank's trust fund for poor countries to make up the $14 billion (euro11.7 billion) cost.