BRUSSELS, March 1 (Reuters) - The European Union called on Mar. 1 for rapid progress on the modernisation and restructuring of Ukraine's gas sector and urged Kyiv to carry out reforms of its economy.
European Commission President Jose Manuel Barroso also said after talks with Ukrainian President Victor Yanukovych that it was important for Kyiv to get talks with the International Monetary Fund back on track.
"We need urgent progress on modernisation and restructuring of the gas sector in Ukraine," Barroso said, reiterating a long-running demand of the EU, which is heavily dependent on Russian gas supplies that flow through Ukraine.
He gave no more details.
Under a loan deal brokered by the EU to help Ukraine pay for gas and modernise the sector, Kyiv should have raised the subsidised domestic gas price but failed to do so. Yanukovych, who faces a deep economic crisis, was visiting Brussels on his first foreign trip since being inaugurated as president on Thursday. He will go to Moscow on Friday.
"I believe it is the fundamental interest of the European Union and Ukraine to have stronger and closer ties," Barroso said. But he added: "Reforms are necessary."
He said successful talks with the IMF, which suspended a loan programme to Ukraine last year, would be a first step to an improved investment climate and called for a free trade agreement with Ukraine in the coming year.
"We believe that a more dynamic and competitive Ukrainian economy is in our mutual interests and today we have discussed with the president the possibility of concluding this agreement as soon as possible. We have discussed an indicative date of one year to conclude this agreement," Barroso said.
