WRAPUP 1-Russia steps up gas pressure on Ukraine

* Moscow threatens to fine Kiev for not buying enough gas

* Kiev says has paid March gas bill

* World Bank issues gloomier forecasts for Ukraine

* Germany says Russia should play a role in Ukraine-EU deal

By Pavel Polityuk and Vladimir Soldatkin

KIEV/MOSCOW, April 7 (Reuters) - Russia threatened to fine Ukraine on Tuesday for failing to buy enough gas in the first quarter, increasing pressure on its neighbour at a time when the World Bank said Kiev's economy was contracting fast.

Alexei Miller, chief executive of Russia's state-run gas giant Gazprom (GAZP.MM), told Reuters the corporation was in talks with Ukrainian counterparts over possible sanctions over lower than agreed gas imports.

"We are discussing this with our Ukrainian colleagues. This is spelt out in our agreements," he said.

The threat dealt a further blow to Ukraine, which is facing growing anger sparked by the authorities' handling of the economic crisis and political wrangling over the date of the next presidential election.

Gazprom had previously said it would not impose fines, in recognition of Ukraine's dire financial plight.

Russia's apparent rethink comes after Ukraine's leaders -- squeezed between traditional loyalty to former Soviet master Moscow and a desire to move closer to the West -- angered the Kremlin by signing an agreement in Brussels to overhaul Ukraine's ageing pipeline network.

Russia, which supplies a fifth of Europe's gas needs through Ukraine's pipelines, was furious that it had not been consulted.

Ukraine's state energy company Naftogaz said on Tuesday it had paid its March gas bill to Gazprom.

Analysts believe that although the gas bill is set to decline as gas prices get adjusted to oil with a lag of six to nine months, it is only a matter of time before cash-strapped Ukraine runs out of money it needs to pay Gazprom.