Daily Insight-Natural gas price talks take another step; Ifo index for May; government bond auction results

Yesterday, Ukraine\'s top officials met the Russian envoy on natural gas price talks that were initiated this year by Ukraine\'s government amidst the ever-rising price of the crude oil price. In attendance were President Yanukovych and Energy Minister Yuriy Boyko meeting with Alexei Miller, head of Gazprom. Interestingly, absent from the meeting was PM Azarov, who was until recently the most vocal advocate among Ukraine\'s officials of the new agreement with Gazprom that would revise the price formula in order to reduce the price. The tightly worded official announcement of the meeting from the presidential website did not provide any clues on whether the sides proceeded forward in the talks, instead providing quotes that were fairly even in terms of expression. Mr Yanukovych talked on mutual understanding between \"old partners\" over the need for discussing the issue, while Mr Miller delivered the Kremlin stance by mentioning \"future cooperation in the natural gas sphere.\" On the previous occasions, Russian President Medvedev, referring to the issue, said (and his stance does not deviate from PM Putin\'s, in our view) that firstly, the agreement must be honoured [by Ukraine\'s government, which is to pay upon the agreement] the higher price this year]; and secondly, any revision of the agreement is subject to proposals to be tabled from the side of Ukraine\'s government (it is understood that these proposals must be bold enough to pacify the other side). Likely, Miller\'s arrival in Kiev was about receiving the proposals from a top local official, though we cannot figure out yet what kind of concessions Mr Yanukovych may bear this time.