Gas row adds pain to east Europe slowing economies

By Tsvetelia Ilieva

DEVNIA, Bulgaria (Reuters) - Russia turned the gas taps back on this week but the damage inflicted on central and eastern Europe will linger for months, adding to the pain the global economic downturn was already causing.

"We suffered two consecutive shocks. First the recession and then the gas crisis which hit quite unexpectedly," said worker Valentin Vladimirov, whose fertilizer plant in Bulgaria closed for more than two weeks during the Russia-Ukraine gas row.

"I have a loan, everyone I know has loans...I hope we will survive somehow," said Vladimirov, 53, who fears his job remains under threat despite an accord ending the gas row.

Russian gas resumed its flow to Europe via Ukraine on Tuesday, after Moscow and Kiev resolved their long-running row over prices and debts by signing a 10-year contract.

But in eastern and central Europe, which bore the brunt of the gas supply crisis, some companies face a loss of export markets as a result of the disruption.

And growth, already in decline before the dispute, is likely to fall further as the shockwaves from the crisis spread down the supply chain and into the broader economy.

"There will be some impact from the crisis and not only for us car-makers but also for suppliers, and smaller businesses," Dusan Dvorak, spokesman FOR Kia Motors Slovakia said.

"This is some kind of a domino effect."