Mass protests in Ukraine over its decision to halt talks with EU

Protestors are reported to be clashing again with police on the streets of Kyiv, a day after more than 100,000 turned out on November 24 in anti-government protests across Ukraine over its decision to halt talks over signing an association and trade pact with the EU. With tear gas...

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Mass protests in Ukraine over its decision to halt talks with EU



bne - 25.11.2013

Protestors are reported to be clashing again with police on the streets of Kyiv, a day after more than 100,000 turned out on November 24 in anti-government protests across Ukraine over its decision to halt talks over signing an association and trade pact with the EU. With tear gas being used on the crowds in front of Kyiv's parliament buildings, the scenes are reminiscent of 2004's Orange Revolution. 

Protestors filled Kyiv's central squares on November 24, many of them waving European Union party flags and chanting pro-Western and antigovernment slogans: "Ukraine is Europe!" resounded from the crowd who remained on the streets until late in the evening. Riot police used tear gas and batons to turn protestors back when they attempted to storm the building containing the cabinet offices. "Our task is to sign the agreement with the EU," Arseniy Yatsenyuk, the head of jailed ex-Prime Minister Yulia Tymoshenko's Fatherland party told a rally. "We want to go to Europe. This is our future." 

Similar protests where held in other cities across the country on a nationwide day of action. The crowds in Lviv, home to Ukrainian nationalists that are largely pro-Europe, were as big as those in Kyiv, according to local reports. 

The protests were largely peaceful, and even featured a violinist serenading the crowds in Lviv with "Ode to Joy", the EU's official anthem. In Kyiv another man played the bagpipes amongst the marching protestors in perhaps a slightly more bizarre display of solidarity with the rest of Europe. However, things got rowdy in front of the government offices. Police formed ranks outside the building and sprayed teargas on protesters attempting to enter the building. Demonstrators had brought their own supplies also, and sprayed gas back. 

As is usual the headcount remains disputed, with the police putting the size of the crowds in Kyiv at 22,000. Oleksandr Turchynov of the Fatherland party said some 100,000 gathered on European Square in the centre of the capital. Whatever the actual number, it's symbolic that the crowd was large enough to fill Maidan Square, the famous font of events in 2004. That offers the implicit threat of a repeat of the 2004 Orange Revolution, which ironically saw current President Viktor Yanukovych ousted just as he came within grasp of the presidency for the first time after then winning a flawed election. 

The people are furious that Yanukovych announced on November 21 that his government has frozen negotiations with the EU over signing the Association Agreement and Deep and Comprehensive Free Trade Agreement. The deal, which was set to be sealed at an EU summit to be held in Vilnius on November 28, would have signalled a significant step toward the West by Ukraine. 

However, the president looks to be folding under pressure from Moscow - which has threatened to close its borders to Ukrainian companies and hike natural gas prices even further - and could instead join the Russian-led Customs Union. In recent polls, 56% of Ukrainians said they would rather continue towards the EU. Just 14% support a move to join the Russian bloc. 

Somewhat bizarrely, the ruling Party of Regions released a statement over the weekend claiming that it had done more than anyone to bring Ukraine closer to Europe, just as the government was preparing to abandon that journey. "Due to active support by our party faction, the European integration policy of Ukraine for the first time since independence has acquired the necessary dynamics and real pragmatic content. In a very short period of time we have managed to BRING UKRAINE CLOSER TO EUROPE, to pass the way, which other political forces could not even begin," the statement reads (with their capitalisation). 

Quick rewards 

While the government is feeling the wrath of the people, it is hoping to calm the situation by suggesting the potential rewards from Moscow will be quick in coming. Prime Minister Mykola Azarov said on November 24 that Kyiv has now secured a pledge to review the gas contract between the pair. "We have been persistently trying to persuade the Russian Federation to review the contract," Azarov noted to ICTV. "Now, generally speaking, there is such a pledge, and we hope we will implement it during the talks." 

Ukraine is paying around $411 per 1,000 cubic metres (cm) for Russian gas imports. That has been draining up to $1bn from the budget each month, piling huge pressure on the government as it attempts to stem a growing cash crunch. By way of contrast, Belarus - a founding member of the Customs Union - will pay only $171 per 1,000 cm in 2014. 

For its part, the Kremlin has turned the accusations of unwarranted pressure back on the EU. Russian President Vladimir Putin on November 22 accused Brussels of using "blackmail" to push Kyiv into the agreement. "We have heard threats from our European partners against Ukraine - up to the point of helping them stage mass protests. So, this is pressure. This is blackmail. And whether Ukraine and the Ukrainian leadership bow to this blackmail will be clear in the coming days," he said. 

Blame Russia 

Brussels is clearly upset and blames Russia for Yanukovych's abrupt about-face. Russia has indeed played hardball, but is perhaps not alone on bearing responsibility. 
Azarov said last week that trade with its giant neighbour has been falling and that has cost the government tax revenues at a time it is counting every penny. "Trade turnover grew significantly in 2012, but in 2013 we have lost nearly one-quarter of our trade turnover with {Commonwealth of Independent States] markets," he noted. "Those economic losses are significant for us, and Ukraine has been facing serious [financial] hardships lately." 

The PM said explicitly that the government was forced to postpone signing the EU deal because it was unable to negotiate compensation for harm to Ukraine's economy that would stem from "defensive measures" threatened by the Russia-led Customs Union. That casts the spotlight onto the EU and International Monetary Fund (IMF). Ukraine needs billions of dollars in loans to prevent a financial crisis that could only be months away. 

The double whammy of higher gas prices and reduced trade with Russia is unsustainable and would push Ukraine over the edge. Ukraine has been holding out for "compensation" to make up for the lost Russian export business in cash, something Brussels has refused to contemplate. Azarov said on November 24 that despite repeated requests for help from the EU, only a “word-of-mouth promise” of just €1bn over within the next seven years has come from the European block. “But what is €1bn? This is nothing. This is to say, helping a beggar on the porch,”Azarov told Russia’s 1TV Channel. 
"The question became: either we pause now and resolve the question of compensation, resolve the question of saving jobs, resolve the question of wages - or we sign the [EU association] agreement and, without any compensation at all, and take heed of all of the defensive sanctions of the Customs Union," Azarov said. "We could not take on such a responsibility, so we decided to put the question on hold.” 

Ukraine's trade is split more or less equally between Russia and the EU: In the first nine months of this year, exports to the EU stood at $14.6bn compared with $21.1bn to Russia, while imports totaled $22.4bn from the EU versus $21.2bn from Russia, according to Concorde Capital. For its part, the IMF has offered short-term relief on the money the government is due to repay under the terms of the old stand-by loan agreement. 

However, the IMF is also taking a hard line on its demands for the government to raise domestic gas tariffs and loosen its tight control on the value of the national currency. "I already said that the last straw was a letter from the International Monetary Fund from which we understood that getting a loan would be connected with very unacceptable conditions for our people," said Azarov. 

At the same time, Azarov stressed that the decision not to pursue closer economic ties with Europe right now does not mean Ukraine will instead seek entry into the Customs Union. "Since we decline to sign [the EU association agreement], it follows that we want to join the Customs Union. Who says?” he asked rhetorically. 

Door still open to an EU deal 

Thus, the door has not been entirely shut on striking a deal in Lithuania. An EU spokeswoman said on November 24 that Yanukovych is still welcome to attend the summit, and that Brussels still hopes Kyiv will take another step westwards. "Our firm belief is that the future of Ukraine still lies in a strong relationship with the EU," said Maja Kocijancic, spokeswoman for Catherine Ashton, the EU's top diplomat. 

European Commissioner for Enlargement and European Neighbourhood Policy Stefan Fuele also stressed the same day that Ukraine is still welcome. "Our intentions to modernize Ukraine are unwavering," he wrote on his Twitter account in Ukrainian. 

Azarov said on November 22 that Ukraine might sign an association agreement with Brussels, but only next year at an EU-Ukraine summit scheduled for the spring. "I see absolutely no tragedy if we return to this issue six months from now," Azarov was reported by Interfax as saying. 

He added in a televised interview two days later that "the EU fully understands our economic situation" and that no one in Brussels has ruled out signing the agreement. 

However, analysts suggest that if the November 28 signing date is missed, the chances of a deal between the pair any time soon are virtually zero. The EU has invested a huge amount of effort in bringing the association agreement to this stage and if Ukraine doesn’t sign now, it will not be offered another chance for several years. 

Jailed Ukrainian opposition leader Yulia Tymoshenko called on protesters to stay in the centre of Kyiv until the EU summit in Vilnius, due November 28-29. She also called on Yanukovych to sign the EU deal in a letter published on November 22. Organizers have also called on the people to rally every day for the next week and tents were already being put on the Kreschatik, Kyiv's main thoroughfare, in another scene reminiscent of the 2004 popular uprising that first put Tymoshenko into the PM's seat. 

bne


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