Russian President Vladimir Putin speaks at a news
conference after an EU-Russia Summit in Brussels.
President Vladimir Putin has raised the pressure on
Ukraine, saying Russia would wait until it forms a new
government before fully implementing a $15 billion bailout deal
that Kiev urgently needs.
Putin repeated a promise to honour the lifeline agreement
with Ukraine in full, but left open the timing of the next
aid instalment as Kiev struggles to calm more than two months
of turmoil since President Viktor Yanukovich walked away from
a treaty with the European Union.
A day after Prime Minister Mykola Azarov resigned on Tuesday,
hoping to appease the opposition and street protesters,
Russia tightened border checks on imports from Ukraine in
what looked like a reminder to Yanukovich not to install a
government that tilts policy back towards the West.
Ukraine's new interim prime minister promised to try to limit
the economic damage inflicted by the sometimes violent street
protests, and said he expected Russia to disburse a further
$2 billion aid instalment "very soon".
Putin had less of a sense of urgency. "I would ask the
(Russian) government to fulfill all our financial agreements
in full," he said, repeating a promise made on Tuesday after
the government resigned in Kiev.
However, he signalled that the latest instalment was on hold
in remarks he made during a meeting with senior government
officials, extracts of which were broadcast later on Russian
"Let's wait for the formation of a Ukrainian government," he
said, before telling the meeting: "But I ask you, even in the
current situation, not to lose contact with our (Ukrainian)
colleagues," adding that discussions should continue before a
new government is formed.
Putin agreed the aid package with Ukraine in December,
throwing the ex-Soviet state a lifeline in what the
opposition and the West regard as a reward for scrapping
plans to sign political and trade deals with the EU and
promising to improve ties with Russia.
Alarm about Ukraine is growing in the West. German Chancellor
Angela Merkel telephoned Putin and Yanukovich on Wednesday,
urging a constructive dialogue between the government and
opposition in Kiev. "The situation must not be allowed to
spiral again into violence," a German government spokesman
quoted her as saying.
NATO Secretary General Anders Fogh Rasmussen was more
forthright, blaming Russia for Kiev's failure to sign the EU
deals. "An association pact with Ukraine would have been a
major boost to Euro-Atlantic security, I truly regret that it
could not be done," he told the French newspaper le Figaro.
"The reason is well-known: pressure that Russia exerts on
Ukraine badly needs the Russian money. Figures compiled by
UniCredit bank before the bailout put its gross external
financing requirements at $3.8 billion in the first three
months of this year alone, including $2.29 billion for gas
which is covered by the deal with Moscow.
That rises to $5.5 billion in April-June, including repaying
a $1 billion bond which matures then. Altogether the
government would need $17.44 billion this year to pay its
foreign bills, including for Russian gas.
The EU's foreign policy chief, Catherine Ashton, called for
sincere discussion during Ukraine's crisis. "The dialogue
which has happened from time to time needs to become a real
dialogue. We hope to see real progress in these coming days.
Time is really of the essence," she said after meeting
In an apparent sign of further pressure from Moscow, the
Ukrainian association of producers said Russia had started
extra border checks, backed by demands for increased duties,
on cargoes of food and machinery being shipped into the
country by road and rail.
Russia took similar action in August in what was seen as part
of Moscow's campaign to dissuade its neighbour from signing
the association and trade agreements with the EU.
Ukraine has been gripped by mass unrest since Yanukovich
walked away from the EU deals last November.
Leonid Kravchuk, the first president of independent Ukraine,
stressed the depth of the crisis on Wednesday.
"The state is on the brink of civil war. We must call what is
happening by its proper name. What is happening is revolution
because we are talking about an attempt to bring about a
change of power," he told parliament.
With Yanukovich and loyalist deputies in parliament now
making concessions to defuse the crisis and with Azarov, a
Russian-born hardliner, gone there had been speculation that
Moscow might slow or even halt the stream of aid.
But acting prime minister Serhiy Arbuzov appeared to have
been cheered by Putin's promise on Tuesday to extend the $15
billion in credits and cheaper gas.
"We have already received the first tranche of $3 billion and
expect to receive the second tranche of $2 billion very
soon," he said, chairing his first cabinet meeting. Russia is
offering the funds by buying Ukrainian government bonds.
In Kiev opposition deputies and Yanukovich loyalists were in
back-room talks on Wednesday over the wording of a draft law
under which protesters detained by police would get
In an unusual move, Yanukovich himself was reported to have
gone to parliament to intervene in the debate. Opposition
leaders, quoted by local media, said he was insisting any
amnesty law should conditional on barricades being removed
and government offices occupied by protesters being cleared.
Though the unrest began because of Yanukovich's U-turn on
policy towards Europe, it has since turned into a mass
demonstration, punctuated by violent clashes between radical
protesters and police, against perceived misrule and
corruption under Yanukovich's leadership.
Several hundred people camp round-the-clock on Kiev's
Independence Square and along an adjoining thoroughfare,
while more radical activists confront police lines at Dynamo
football stadium less than half a kilometre away.
Anti-Yanukovich activists have also stormed into municipal
buildings in many other cities across the sprawling country
of 46 million. Hundreds of protesters in Kiev have occupied
City Hall and the main agricultural ministry building.
Opposition leaders, including boxer-turned-politician Vitaly
Klitschko, were resisting demands by Yanukovich's Regions
Party for barricades to be removed from roads and for
protesters to leave occupied buildings as a pre-condition for
an amnesty for detained activists.
Klitschko, in a comment which also highlighted the tenuous
control the opposition leaders have over sections of the
protest movement, said: "For us to simply say to people 'you
have done your job, now go home' is now not possible."
In a big concession to the opposition and the protest
movement, pro-Yanukovich deputies voted on Tuesday to repeal
a series of sweeping anti-protest laws which they brought in
hastily on Jan. 16 in response to increasingly violent
But opposition leaders, who also include former economy
minister Arseny Yatsenyuk and nationalist Oleh Tyahnibok,
have won a mandate from protesters on the streets to continue
to press for further gains from Yanukovich.
The opposition also wants a return to the previous
constitution which would represent another significant
concession since it would reduce Yanukovich's powers.
Speculation that Russia might cut the financial lifeline it
has offered prompted the Standard & Poors agency to cut
Ukraine's credit rating to CCC+ on Tuesday.
Arbuzov said the central bank was ensuring stability on the
financial markets and he made no mention of any changes to
his predecessor's policy of keeping the hryvnia currency
pegged close to the dollar and maintaining subsidies for
domestic gas - both criticised by the International Monetary