Ukraine protesters fume over deal with Russia

AFP , Wednesday 18 Dec 2013

Pro-European Union activists gather during a rally in the Independence Square in Kiev, Ukraine, Sunday, Dec. 8, 2013 (Photo: AP)

President Viktor Yanukovych on Wednesday faced angry criticism from Ukraine's opposition who accused him of selling out its interests to Russia and robbing the country of a European future after a landmark bail-out deal.

The opposition to Yanukovych feared there must be hidden strings attached to Russia's $15 billion bond purchase and low gas price announced Tuesday and vowed to keep pushing for early elections.

"Yanukovych used Ukraine as pawn," opposition leader and world boxing champion Vitali Klitschko told the crowd of about 50,000 on Kiev's Independence Square late Tuesday, accusing the president of handing Ukraine's industries to Russia as collateral in order to get the deal.

Russia's President Vladimir Putin gave Ukraine precious backing by agreeing to buy $15 billion of its debt in eurobonds and slash its gas bill by a third as it battles mass protests over the rejection of a historic EU pact.

"It's a big question what it is that Yanukovych signed," Klitschko said.

The massive aid package, which surfaced after several hours of meetings in the Kremlin behind closed doors between Putin and Yanukovych, was a surprise for European diplomats.

"Russian emergency loans to Ukraine risks further delaying urgent economic reforms and necessary EU modernisation," Swedish Foreign Minister Carl Bildt tweeted. "Decline might continue."

The help from Russia may allow Kiev to stave off the threat of an imminent balance of payments crisis and possible default amid a recession that has seen the economy shrink since the first half of last year.

The deal, hailed by the two leaders as a new page in Kiev-Moscow strategic partnership, also marks a further step away from the path of integration with the European Union by Yanukovych.

Last month his refusal to sign the historic Association Agreement sparked the biggest protests since the 2004 Orange Revolution centred on Independence Square in Kiev, known locally as the Maidan.

"We see this very negatively. We consider that Yanukovych sold away our country," said pro-EU protester Artur, braving the freezing winter temperatures on the Maidan.

White House spokesman Jay Carney indicated that Washington was unimpressed by the deal, saying it would "not address the concerns" of the thousands of protesters camped out day and night on Independence Square over the last weeks.

German Chancellor Angela Merkel warned against stoking further tug-of-war battles over Ukraine, saying in a televised interview that "a confrontation would not lead anywhere."

Putin's spokesman Dmitry Peskov said that unlike Western politicians, many of whom have visited and even spoke to the protesters, Russia had acted quietly.

"Unlike other countries, our representatives don't go to the Maidan (square), they don't make demands or explain their positions. We are for developing mutually beneficial cooperation, and our principal position is not meddling in Ukraine's affairs," he told Interfax.

Putin, in a clear message to the protesters in Kiev, said Russia did not discuss Ukraine's membership in the Moscow-led Customs Union in exchange for the announced benefits -- something the opposition widely expected.

"I would like to calm everyone down, today we have not discussed the issue of Ukraine joining the Customs Union at all," Putin said.

It remained unclear however what Russia is getting in return for cutting natural gas price to Ukraine from about $400 to $268.5 per 1,000 cubic metres -- a remarkable boon to the embattled Yanukovych.

With Ukraine's economy struggling, Ukraine Prime Minister Mykola Azarov last week said Kiev would like to secure a 20-billion-euro ($27.5-billion) loan from the EU before signing a deal with the bloc.

Brussels immediately dismissed the idea, saying the EU would not get involved in a bidding war over Ukraine's future.

The ex-Soviet nation of 46 million has been at the heart of a furious diplomatic struggle since Yanukovych's shock decision last month to ditch the landmark EU partnership agreement and seek closer ties with its traditional master Russia.

Analysts said the deals announced by Putin should reduce Ukraine's current account deficit by around $4.5 billion a year but does not take the urgency out of overdue economic reforms.

"Today's deal will provide some short-term relief for Ukraine. But significant challenges remain over the next couple of years," said Neil Shearing of the London-based Capital Economics consultancy.

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