East Ukraine clashes persist as Russia gas talks progress

Bloomberg

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Pro-Russia militants fire from a residential area at Ukrainian border guards defending the Federal Border Headquarters in Luhansk, eastern Ukraine. Pro-Russia militants fire from a residential area at Ukrainian border guards defending the Federal Border Headquarters in Luhansk, eastern Ukraine.
Clashes continued in eastern Ukraine between pro-Russian separatists and the armed forces, with the authorities reporting deaths among the insurgents.
The speaker of parliament, Oleksandr Turchynov, told lawmakers “a large number of terrorists” were “liquidated” in an industrial area at Severodonetsk in the Luhansk region this morning. The anti-rebel operation around the city of Slovyansk, about 80 kilometers (50 miles) to the west, is “in an active offensive phase” involving “very active exchanges of fire,” Interior Minister Arsen Avakov said on Facebook.
At least 12 deaths were reported in Luhansk yesterday after about 500 insurgents attacked the border-guard headquarters. Five rebels died in that assault, the border guards said, and a blast in the center of the city killed seven people, according to the local health service. Rebels initially said it was an air strike, which the government denied.
The U.S. and the European Union say Russia, which annexed Crimea from Ukraine in March, is behind the unrest in Luhansk and nearby regions. President Barack Obama arrived in neighboring Poland today and will meet leaders including Ukrainian President-elect Petro Poroshenko to discuss the crisis. Obama also will cross paths with Russian President Vladimir Putin during commemorations of the World War II allied landings in northern France later in the week.
Defense fund
Obama may announce as soon as today a $1 billion fund to help boost defensive capabilities of European allies shaken by the crisis, according to a U.S. official. NATO defense ministers will discuss the Ukraine crisis during two days of talks in Brussels that start today.
Russia’s Micex stock index declined 0.4 percent at 11:56 a.m. in Moscow following a 2.3 percent gain yesterday to its highest level in three months, after Russia gave Ukraine an extra week to pay in advance for gas supplies before risking a cutoff that could also lead to shortages in Europe.
Russian Energy Minister Alexander Novak said talks with Ukraine in Brussels in their dispute over gas prices, brokered by the EU, were “constructive.”
Ukraine carries about 15 percent of the natural gas used by Europe through its Soviet-era pipelines and accuses Russia of using energy as a political weapon by ramping up prices.
Meanwhile, Ukrainian Justice Minister Pavlo Petrenko proposed confiscating Russian companies’ assets in Ukraine and abroad to compensate for losses of about $92 billion resulting from the annexation of Crimea, Russia’s Kommersant newspaper reported. It said Petrenko made the comments in Kiev.
Obama’s trip offers a series of venues for possible talks on the Ukraine conflict. He’ll meet other Group of Seven leaders in Brussels starting tomorrow and also attend a dinner with Francois Hollande the following night, the same day the French president hosts Putin.
Vice President Joe Biden will travel to Ukraine for Poroshenko’s inauguration on June 7, the White House said yesterday.

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