RUSSIA DEAL SAVED UKRAINE FROM BANKRUPTCY - PM AZAROV

18.12.13


BBC.  Ukraine's decision to suspend a deal on closer EU ties and sign a Russian aid agreement instead has helped avoid bankruptcy, Prime Minister Mykola Azarov has told ministers in Kiev.

Russian President Vladimir Putin has agreed to buy $15bn (£9.2bn, 11bn euros) of Ukrainian government bonds and slash the price of Russian gas.

Mr Azarov said the package would protect financial stability.

But the opposition has demanded to know what was offered to Russia in return.

The government's surprise U-turn on an EU association agreement last month sparked mass demonstrations.

'Revival'

Mr Azarov defended the deal with Russia in a government meeting on Wednesday.

"What would have awaited Ukraine? The answer is clear - bankruptcy and social collapse," he said.

"What a present for New Year that would be for the people of Ukraine.

"The agreements between the Ukrainian and Russian presidents allow us to plan the years to come as years of development and people's confidence about their stable lives."

He said a pact to lower gas prices by about a third would allow for "a revival of economic growth".

There was no way Ukraine could have signed the EU agreement as Kiev would have had to accept unfeasibly stringent IMF conditions for economic reform, he added.

"Yesterday was a historic event," Russia's Interfax news agency quoted Mr Azarov as saying.

Russian Foreign Minister Sergei Lavrov criticised the West on Wednesday for exerting pressure on Ukraine to choose closer EU ties, and said the deal with Moscow was "mutually beneficial".

He told Russia's parliament he was "surprised by blatant attempts to exert overt pressure on the government of Ukraine, which continue despite the decisions that were taken yesterday in Moscow".

Much of the detail of the agreement remains unclear.

Ukraine urgently needs to cover an external funding gap of up to $17bn (£10.4bn; 12.3bn euros) next year to avoid defaulting on its debts.

Opposition leader, Vitali Klitschko, told pro-EU protesters in Kiev on Tuesday that Mr Yanukovych was betraying Ukraine's independence by joining with Russia.

"He has given up Ukraine's national interests, given up independence," said Mr Klitschko, a former boxing champion.

He called on the Ukrainian president to hold a snap election.

 

The US has warned the Ukrainian government that the deal with Russia would not satisfy the protesters, who have been occupying Independence Square in Kiev.

BBC

SEE ALSO:

Reuters: Ukraine dollar bonds extend gains after Russian bailout

Reuters: Ukrainian president under pressure over Russian bailout


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