Bloomberg News

Ukrainian Opposition Gets Boost as Focus Shifts to Western Aid

February 03, 2014

Ukraine Protests

An anti-government opposition activist places European Union and Ukrainian flags side by side at a barricade in the Ukrainian capital of Kiev on February 2, 2014. Photographer: Sergei Supinsky/AFP via Getty Images

Ukraine’s opposition got a boost in its struggle to wrest power from President Viktor Yanukovych as Western nations consider new aid for the east European country after Russia suspended its bailout program last week.

The European Union is discussing “if we can do something more in this particular phase,” European Commission President Jose Barroso said in Brussels today. Ukraine needs “real financial help” to end its crisis, Arseniy Yatsenyuk, the head of the opposition Batkivshchyna party, said in a statement.

Ukraine has been rattled by anti-government protests, which turned violent last month, since Yanukovych snubbed an EU cooperation agreement in November. Western aid may ease a transition and shows trust in the opposition leaders, who met U.S. Secretary of State John Kerry and leading European diplomats in Germany over the weekend, said Ariel Cohen, a senior fellow at the Heritage Foundation.

Unrest in Ukraine

“Clearly, the rescue package is something that the West didn’t offer to Yanukovych even in exchange for the EU association agreement, but the opposition has more credibility and creditworthiness,” Cohen said by phone from Washington yesterday. “It will be very painful for Ukraine and for any opposition politician to take charge of the necessary reforms.”

Declining Yields

The hryvnia weakened 0.7 percent to 8.6750 per dollar at 6:12 p.m. in Kiev, the lowest level on a closing basis in four years. The yield on Ukraine’s dollar noes due in June dropped 189 basis points, or 1.89 percentage point to 12.80 percent, receding from a seven-week high set on Jan. 31, according to data compiled by Bloomberg.

Barroso said EU’s main offer for Ukraine continues to be the association agreement that Yanukovych refused to sign three months ago, which would open the bloc to Ukraine’s exports.

“Our big offer to Ukraine is the agreement itself,” Barroso told reporters. It’s a “very generous offer. We are not going to” get into “a bidding competition to say who pays more for a signature from Ukraine.”

Russia in December agreed to lend Ukraine $15 billion and to reduce the price for natural gas deliveries after Yanukovych rejected an EU pact. After buying $3 billion of Ukrainian bonds in December, further aid may be on hold until a new cabinet is formed, President Vladimir Putin said Jan. 29.

Presidential Powers

Yatsenyuk has said he had declined Yanukovych’s offer to be prime minister twice and seeks a return to the 2004 Constitution that limited presidential powers, casting doubt on the opposition’s will to share power with Yanukovych.

“There is no question about whether to return to the 2004 Constitution,” Vitali Klitschko, the leader of the opposition UDAR party, told parliament today. “We must this immediately so parties and lawmakers become decision-makers.”

Under pressure from Western diplomats, Ukraine allowed an activist, who said he was abducted and tortured, to leave to Lithuania to get medical treatment, Rasa Jakilaitiene, spokeswoman for Lithuania’s foreign ministry, said by phone.

“Although they almost destroyed me physically, they didn’t break my spirit,” Dmitri Bulatov said in a statement from the Vilnius University Hospital, where he is being treated. “I’ll continue the battle that’s begun, I’ll continue forward and seek democracy in Ukraine. I won’t withdraw.”

Abduction Claim

Bulatov, part of the AutoMaidan group who deliver supplies to demonstrators and to block roads to government buildings, said unknown assailants beat him, cut off part of his ear and nailed his hands to a door during an eight-day ordeal which ended with him getting thrown from a car near Kiev.

The Interior Ministry said in a statement today that police tried to question Bulatov three times and didn’t gain “any essential details” about his abduction. Police are investigating the case and can’t rule out that it was a hoax to stir up emotions, according to an earlier statement.

Yanukovych, returning to work today after a four-day sick-leave, said Ukraine had to reject “extremism, radicalism and stoking of antagonism” amid a “fight for political power,” according to a statement on his website.

Ukraine’s government argued that the EU deal offered in November would have damaged the Ukrainian economy, with then-Prime Minister Mykola Azarov saying that it would have lead to “bankruptcy and social collapse.”

The anger over the Russian deal stoke anti-government rallies and the demonstrations turned violent when the government pushed through anti-protest laws last month.

Rapprochement Falters

Violence receded after parliament repealed the laws and Azarov resigned last week. The rapprochement faltered as reports of abductions of protesters increased and Yanukovych ignored opposition objections to push through a bill that requires activists to relinquish seized government buildings before their comrades in custody are freed.

Protest organizers say 26 people are unaccounted for since demonstrations began. The opposition says seven protesters have died -- three from gunshot wounds and one from exposure after being sprayed by a water cannon in freezing temperatures -- and about 1,000 have been injured.

The opposition is gathering evidence of human-rights violations, including “torture and abductions” of demonstrators, for international tribunals, Svoboda party leader Oleh Tyahnybok told the rally yesterday. Opposition leaders said an international commission will be set up this week to investigate violence against protesters.

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

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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