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10/12/2016

Russia, West say new Ukraine government is condition for aid

Europe's East

Russia, West say new Ukraine government is condition for aid

Ukraine.jpg

The United States and the European Union are in preliminary discussions on possible financial assistance for Ukraine once a new government is formed, a State Department spokeswoman said yesterday (3 February). Russian President Vladimir Putin has also said Moscow would wait until a new government was formed before releasing aid to Ukraine. 

 

 

"This is a very preliminary stage. We are consulting with the EU […] and other partners about support Ukraine may need after a new technical government is formed," spokeswoman Jen Psaki told a daily briefing.

US officials have emphasized that Ukraine will need an IMF-backed economic program to put its economy on a more stable footing. Psaki said any final decision on US financial support for Ukraine "will be guided by events in Ukraine and consultations with the new government after it is formed."

As the largest member of the IMF, the United States will have sway over how much funding and conditions are put into any IMF-supported program for Ukraine.

Ukraine's economy has been hard hit by more than two months of unrest, which followed a decision by President Viktor Yanukovich in November not to pursue trade and other deals with the EU, which would have brought Kyiv closer to Western Europe (see background).

Yanukovich is caught in a tug of war between Russia and the West. Russia committed a $15 billion (11 billion) bailout for Ukraine after Kyiv scrapped plans for EU deals.

Russian President Vladimir Putin said Moscow would also wait until a new government was formed before fully implementing the agreement.

Also, the Ukrainian press announced on Monday that the country owed to Gazprom $3.3 billion (2.4 billion) for gas imported in 2013 and in January 2014.

US confirmation of initial talks with the EU on a financial package follows comments at the weekend by EU foreign policy chief Catherine Ashton who told the Wall Street Journal that the financial help "won't be small".

She said the package, which she referred to as "a Ukrainian Plan" would not only consist of money but also contain "guarantees" or help on luring new investment. But other EU officials yesterday played down weekend comments from Ashton that Europe and the United States were working to offer funds to help Ukraine enact reforms to stabilise its political system.

Ashton arrives in Kyiv late today (4 February) for separate meetings on Wednesday with Yanukovich and opposition leaders.

Yanukovich will not use force, political ally says

Yanukovich will not use force to clear the streets and may challenge his opponents to early elections if they fail to compromise, according to reported comments by a political ally.

However, Yanukovich, possibly comforted by an opinion survey last week showing both he and his party topping polls with about 20% support in Ukraine's fragmented political system, may be ready to call the bluff of opponents who want him to quit.

A leading member of parliament from Yanukovich's Party of the Regions was quoted in local media late on Monday saying the president had told his allies he would not declare a state of emergency or use troops or other force to clear central Kyiv's Maidan protest camp or public buildings occupied by protesters.

"We have every possibility of liberating administrative premises and even liberating Maidan by force," Yanukovich was quoted as saying by lawmaker Yuri Miroshnichenko. "I will never do that, because these are also our citizens."

No comment was immediately available from the president and there was no immediate response from opposition leaders.

Miroshnichenko said there had been discussions recently within the party about declaring a state of emergency, a move that could, among other things, let the government use troops.

"There will be no state of emergency," he said.

The member of parliament went on to cite Yanukovich's willingness to hold a presidential election a year early, and a parliamentary election that is otherwise not due until 2017. Normally the presidential election should be held in February 2015.

"The president said that if politicians can't now come to an agreement, reach joint decisions and implement them, then the only democratic way of resolving the situation is early elections," Miroshnichenko was quoted as saying.

"And he [Yanukovich] said: 'Both you will face early elections and I will face early elections.'"

Tough choices

Yanukovich faces tough choices, caught between the West, which backs the protesters – though largely with words rather than deeds or cash – and Putin, who has given him a large, but conditional, economic lifeline.

Russia has suspended financial aid granted in November when Yanukovich turned down the EU deal. Moscow is waiting to see whom he now appoints as prime minister following his removal of Mykola Azarov in an attempt to appease the opposition.

The speaker of parliament, a Yanukovich ally, said on Monday the president still wanted to discuss the post of premier with opponents this week. Yanukovich may meet Putin on Friday at the opening of the Sochi Winter Olympics in Russia and he may hope to have named a new prime minister by then.

Some analysts say Yanukovich's allies among the business elite may also prefer loans from Russia to EU and IMF terms.

On his first public appearance since Wednesday, following a sick leave some saw as a tactical move to buy time, Yanukovich looked in fair health but confined himself to warning against the actions of radical protesters:

"We must say no to extremism, radicalism, the fanning of enmity in society, which is the basis of the political fight against the authorities," he said in remarks on video.

When parliament meets, opposition leaders want further concessions, including a broader amnesty for detainees than one granted last week and a return to an earlier constitution, which would curb presidential powers and give parliament greater control over the formation of governments.

Party allegiances in the single-chamber legislature have been fluid and it is unclear what majority Yanukovich commands.

Background

The Ukrainian government announced on 21 November that it had decided to stop its preparations to sign an Association Agreement (AA) with the EU. 

Following the news that Yanukovich failed to sign the AA at the Vilnius summit on 28-29 November, hundreds of thousands of Ukrainians took to the streets demanding his resignation [read more]. The protests, called EuroMaidan, have lasted ever since.

On 16 January supporters of Ukrainian President Viktor Yanukovich hastily pushed through in Parliament new laws, in an attempt to curb anti-government protests. The Commission called these laws “shocking” and “disrespectful to democracy” [read more].

The new legislation, which ran to more than 100 pages and a summary of which in English was obtained by EurActiv, appeared directed mainly at preparing the ground for action to end the street protests. On 28 January the parliament revoked this legislation and the Prime Minister Mykola Azarov resigned. He was replaced by Serhiy Arbuzov, a close ally to Yanukovich.

Six people have been killed and hundreds have been injured in street battles between anti-government demonstrators and police which escalated sharply after the authorities toughened their response. The police officer who died on the street on Wednesday night took the death toll to seven.

Timeline

  • 5 Feb.: Ashton to hold talks with Ukraine leadership, opposition;
  • 7 Feb.: Yanukovich to meet with Putin in Sochi.

Further Reading