After marathon talks, Russia and Ukraine have reached a deal in their long running gas dispute.

With a freezing Europe hoping for a result, Ukraine’s Prime Minister Yulia Tymoshenko and her Russian counterpart,Vladimir Putin haggled long into the night to agree a price for the precious fuel. The deal proposed has Ukraine paying European prices for its gas from Russia, but with a 20%discount until next year. In return, Kiev’s fee for transiting Russian gas will remain unchanged. Several European Union countries, represented at the talks, had a vested interest in the row being resolved. When Russia switched off gas exports to Ukraine earlier this month, the rest of Europe got cold. Russian gas comes through Ukraine pipelines to eastern Europe. No gas coming via the former Soviet country has meant closed factories and created a midwinter energy crisis in much of the EU bloc. Gas supplies should start flowing as soon as both Ukraine and Russian gas companies formalise the agreement. That is assuming Ukraine’s President Viktor Yushchenko backs his prime minister and respects the deal.More about: Russia, Ukraine, Yulia Tymoshenko

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