Bloomberg News

Ukrainian Demonstrations Surge Before Yanukovych Meets Putin (3)

December 16, 2013

Ukraine Protests

Police separate the demonstrations of the anti-government camp and of Ukrainian President Viktor Yanukovych supporters in Kiev on Dec. 14, 2013. Photographer: Viktor Drachev/AFP via Getty Images

Ukrainian President Viktor Yanukovych goes to Russia tomorrow for talks on a trade deal as anti-government protests over his decision to scupper a European Union cooperation pact show no sign of ending.

Hundreds of thousands joined competing demonstrations of the anti-government camp and supporters of Yanukovych in Kiev yesterday as the U.S. and the European Union ratcheted up pressure on the administration.

Kiev’s center has been brought to a standstill by protests since last month after the government pulled out of a planned EU trade accord in favor of closer Russian ties. A police crackdown fueled anti-government support. Talks three days ago between the sides failed to ease the crisis in the country of 45 million, a key transit region for Russian gas going to western Europe.

“People’s patience has just run out,” said Oleksandr Ivanyshyn, 45, an entrepreneur from Lviv listening to the speeches with his family yesterday. “They squeezed everything from business and now all that’s left is ordinary people. The refusal to sign the EU deal and the dispersal of the protests by force was the last straw.”

EU foreign ministers are meeting in Brussels today with Russian Foreign Minister Sergei Lavrov and EU chief diplomat Catherine Ashton to discuss Ukraine.

‘EU Door Open’

“The EU door remains open to Ukraine, but clearly they are not willing or able to walk through it,” U.K. Foreign Secretary William Hague told reporters in Brussels before the talks. “Ukraine should be able to decide on these things without external pressure.”

Yanukovych is due to hold talks with Russian President Vladimir Putin tomorrow. Russia’s Finance Ministry said today it’s in talks about a loan for Ukraine, in a response to e-mailed questions.

Ukrainia’s hryvnia weakened today against the dollar to 8.2850 as of 10:47 a.m. in Kiev. The yield on Ukraine’s dollar-denominated notes due 2023 declined to 10.13 percent from 10.16 percent on Dec. 13. The country’s credit default swaps were almost unchanged at 1,056.74 compared with 1,056.37 on Dec. 13.

Mykhailo Chechetov, a Ukraine Party of Regions governing lawmaker, told reporters today in Kiev that cabinet changes will be made by year-end. Hanna Herman, another ruling lawmaker, said the party asked Prime Minister Mykola Azarov to change 90 percent of his ministers.

Ministers Under Threat

Yanukovych will dismiss Economy Minister Ihor Prasolov, Foreign Minister Leonid Kozhara and Industrial Policy Minister Mykhailo Korolenko for failing to inform the government in time about risks linked to signing the EU Association Agreement, Kommersant reported, without citing where it got information.

U.S. senators and European Parliament members addressed anti-government protesters yesterday, while the pro-Yanukovych crowd listened to ruling-party lawmakers. No violence was reported, police said in a statement.

Between 150,000 and 200,000 pro-EU, anti-Yanukovych demonstrators gathered at Independence Square on Sunday, the Interfax news service reported. Police estimated the crowd at more than 30,000 as of 4 p.m. local time, spokeswoman Olha Bilyk said by phone. A pro-government rally at the parliament building drew more than 15,000 people, she said. About 5,000 people were at the anti-government protest early today, Unian news agency reported.

Police Limited

Police presence was limited at the weekend and security forces have pulled back since an attempt to clear demonstrators off Independence Square last week. The next two nights will be critical, said Olexiy Haran, professor of comparative politics at the National University of Kiev-Mohyla Academy.

“People on the streets are weakening Yanukovych’s position in talks with Putin,” Haran said in a phone interview. “That’s why there are fears he may use force to disperse protests, including a state of emergency.”

The U.S. threatened to impose trade sanctions on Ukraine over the crackdown and European lawmakers urged the 28-nation bloc to consider steps against Russia. EU Enlargement Commissioner Stefan Fule said yesterday on his Twitter Inc. (TWTR:US) account that the Ukrainian government’s “words and deeds” are “further and further apart” on the EU deal.

Won’t Budge

“Having failed to secure a financially attractive deal with either the EU or Russia, Yanukovych is going for the second attempt at the best deal, regardless who would offer it,” Lilit Gevorgyan, a political analyst at IHS Global Insight in London, said by e-mail. “However, this shuttle diplomacy between the EU and Russia seems to be failing as neither is budging with their demands to Kiev.”

Ukraine hasn’t given up talks with the EU on signing an association agreement, First Deputy Prime Minister Serhiy Arbuzov said in a 1+1 television interview late yesterday, as confirmed by his spokesman.

U.S. Senator John McCain and Senator Chris Murphy, chairman of the Foreign Relations Subcommittee on European Affairs, met opposition leaders and addressed the anti-government rally.

“Ukraine will make Europe better and Europe will make Ukraine better,” McCain said in a speech to protesters.

The senators met with Yanukovych late yesterday and discussed Ukraine’s foreign policy, according to a statement on the president’s website. The Ukrainian leader vowed to guarantee people’s right to peaceful protest and to investigate the Nov. 30 violence at Independence Square.

Russia Unhappy

The flurry of Western diplomatic activity in past days has drawn Moscow’s ire.

“We are surprised by the almost hysterical reaction” of the West “to the sovereign decision of Ukraine’s legitimate authorities,” Foreign Minister Lavrov said, according to Russia’s RT television.

Ukraine’s largest protests in almost a decade are entering a fourth week. Yanukovych’s supporters were fewer and more subdued yesterday than those at the anti-government rally. Flanked by orderly lines of wood-fired military field kitchens dispensing stew, the pro-government rally took place in a park on a hill overlooking the Dnieper River that flows through Kiev, a city of 2.8 million.

Won’t be ‘Slaves’

“We want to be friends with Russia,” said Kyrylo Smyrnov, 32, a construction worker from the Black Sea port city of Sevastopol, holding a flag displaying a red star and the communists’ hammer-and-sickle symbol. “We don’t want to be slaves under Poland and Germany. If Yanukovych will push us to the EU, we will support another person.”

Crowds at the anti-government rally about 1.5 kilometers (1 mile) away, shouted “Resign! Resign” and “Together we are Strong!”

Anti-government protesters rebuilt barricades around the square that were removed by police last week. Fortifications include barbed wire, snow-filled sacks reinforced with logs, lumber and old tires. Alcohol is banned on the square by the organizers.

Borys Tarasyuk, an opposition lawmaker, told the anti-government rally today that another protest is planned for Dec. 17 as a show of strength aimed at preventing Yanukovych from signing the Russian customs union deal.

Ukraine’s consideration of the EU deal was followed by Russian bans on exports such as chocolate. Yanukovych warned on Dec. 13 that the protests are hurting the country’s economy, going through its third recession since 2008, with foreign-currency reserves at a seven-year low.

The president said Dec. 10 that he intends to sign the EU accord at a March meeting and restart talks with the Washington-based IMF if “conditions are acceptable.” Ukraine is seeking 20 billion euros ($27.5 billion) in financing from the EU, Azarov said Dec. 11.

To contact the reporters on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net; Kateryna Choursina in Kiev at kchoursina@bloomberg.net; Olga Tanas in Kiev at otanas@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; James M. Gomez at jagomez@bloomberg.net; James Hertling at jhertling@bloomberg.net


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