Russia
Backs Off Ukraine Union After Kiev Lenin Statue Falls (3)
Russia cast doubt that Ukraine may soon join its customs bloc, a
plan that have sparked the ex-Soviet republic’s biggest protests in almost a
decade and fueled calls for President Viktor Yanukovych to resign.
Riot police and stick-wielding protesters squared off in central
Kiev a day after a group of youths tore down a statue of Vladimir Lenin in the
biggest rallies since the 2004 Orange Revolution yesterday. Angry over
Yanukovych’s snub of an EU pact in favor of bolstering Russian ties, activists
have vowed to stay until the government quits, while Russia said that joining
its rival customs union could take years.
“The situation in Ukraine is too explosive right now and the
president understands that,” Sergei Markov, a political adviser to Russian
President Vladimir Putin’s staff and vice rector of the Plekhanov Russian
University of Economics, said by phone from Moscow. “Putin believes that time
is on his side and Russia will benefit in the end.”
Ukraine, which is searching for $10 billion to avoid possible
default, has become a point of contention for Russia and the European Union.
Yanukovych met Putin last week after rejecting EU association and free-trade
accords, incensing pro-European opposition forces in Kiev, whose tent camps and
barricades in Independence Square are now into a third week.
The yield on Ukrainian dollar-denominated bonds due 2023 rose
for a second day to 10.502 percent earlier today, its highest since Dec. 4,
before falling to 10.46 as of 3:30 p.m. in Kiev, data compiled by Bloomberg
show. The hryvnia strengthened to 8.1710 per dollar from 8.2150 Dec. 6. The
Kiev interbank overnight rate was fixed at 20 percent, its highest since
January and a jump from 12 percent on Dec. 6.
Riot Police
Around 100 riot police were deployed close to barricades near
the Kiev mayor’s office along with ambulances. Scores more arrived at other
areas around Independence Square, also known as Maidan, where thousands of
protesters gathered, including several dozen wearing helmets and carrying long
sticks. Police closed three metro stations after what spokeswoman Olha Bilyk
said by phone was a bomb threat from an unidentified caller.
“All central tube stations have been blocked. The Berkut special
police forces are surrounding Maidan,” opposition leader Arseniy Yatsenyuk said
in a statement on his party’s website. “The opposition will protect Maidan.”
Yanukovych said he would meet three former presidents of
Ukraine, all of whom favor closer ties with the EU, to try to find a
compromise, while opposition parties have demanded the government’s dismissal
before talks start.
‘Complicated Path’
Russian Economy Minister Alexei Ulyukayev said today that
Ukraine couldn’t join his country’s customs union with Kazakhstan and Belarus
anytime soon.
“There are no preliminary agreements,” he told reporters in
Moscow. “It’s a long and complicated path because it assumes a massive amount
of work and a clear desire to join on the part of a country that’s a possible
candidate. We have seen no such clear desire.”
Ukrainian opposition leaders told crowds yesterday that they’d
met a goal to summon 1 million people into the streets and urged groups of
30,000 to set up camps near offices including the presidential administration.
The interior ministry estimated turnout at 100,000, while newswire Ukraynski
Novyny said about 600,000 people were on the capital’s streets.
Demonstrators are enduring freezing temperatures and snow to
picket official buildings and demand snap elections. Protests the previous
weekend were marred by clashes with riot police, leaving 400 people injured.
Diverging Paths
The protests underscore the diverging paths Russia and the
28-member EU are offering Ukraine, a key east-west energy transit route. Stuck
in a third recession since 2008 after the global economic crisis triggered a
drop in the price of steel, a vital export, the country of 45 million needs
cash to pay back debt and finance its budget deficit.
Foreign reserves have plunged more than $6 billion in the last
year and stood at $18.79 billion on Nov. 30, the lowest level since 2006. The
government has repeatedly rejected International Monetary Fund bailout terms.
It needs at least $10 billion to avoid a possible default, First Deputy Prime
Minister Serhiy Arbuzov said Dec. 7, Interfax reported.
After rejecting the EU accord, Yanukovych visited Beijing and
Russia’s Black Sea resort of Sochi last week in search for financial aid and
cheaper energy prices. Russia may offer assistance so Ukraine can avoid a
default, Markov said.
Putin’s spokesman, Dmitry Peskov, said Dec. 7 that Russia and
Ukraine were now “significantly” closer in negotiating positions over natural
gas after the meeting. Russia has said it would offer cheaper gas if Ukraine
joins the customs union.
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