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Ukraine Blames I.M.F. for Collapse of Accord With European Union
Ukraine Blames I.M.F. for Collapse of Accord With European Union
(about 11 hours later)
MOSCOW — Prime Minister Mykola Azarov of Ukraine told enraged opposition lawmakers on Friday that the government’s decision to walk away from far-reaching political and free trade agreements with the European Union was prompted by excessively harsh terms demanded by the International Monetary Fund in a debt refinancing plan.
MOSCOW — Prime Minister Mykola Azarov of Ukraine told enraged opposition lawmakers on Friday that his government’s decision to walk away from far-reaching political and trade agreements with the European Union was based on fiscal imperatives, and ultimately triggered by the International Monetary Fund’s overly harsh terms for an aid package.
In response to the decision to abandon the accords with Europe, which were due to be signed next week at a major conference in Vilnius, Lithuania, opposition leaders called for the resignation of the Ukrainian government and for the impeachment of President Viktor F. Yanukovich.
The accords with Europe were due to be signed next week at a major conference in Vilnius, Lithuania. Opposition leaders furious over the decision called for the resignation of the Ukrainian government, for the impeachment of President Viktor F. Yanukovich, and for mass protests across the country. Many also blamed Russia for pressuring Ukraine to scuttle the deals.
Kiev was pulsing with emotion that officials and commentators said they had not experienced since the Orange Revolution of 2004. On Thursday night, more than 1,000 people demonstrated against the government’s decision, waving European Union flags, and chanting “Ukraine is Europe!”
Protests against the government’s decision were held in several Ukrainian cities, including Lviv, the largest city in western Ukraine, where more than 5,000 people joined a rally in the main square, led by Mayor Andriy Sadovy. Kiev, the capital, was pulsing with emotion that officials and commentators said they had not experienced since the Orange Revolution of 2004.
Another rally was scheduled for Friday evening and the country’s jailed former prime minister, Yulia V. Tymoshenko urged Ukrainians to take to the streets. “I am calling on all people to react to this as they would to a coup d’etat — that is, get out on the streets." Ms. Tymoshenko said in a statement that was read by her lawyer, Serhiy Vlasenko, in the city of Kharkiv, where she is hospitalized for back problems.
On Friday evening, about 1,000 people protested in the rain in Independence Square, the revolution’s central gathering point, waving European Union flags and chanting, “Ukraine is Europe!” A bigger rally was set for Sunday. The jailed former prime minister, Yulia V. Tymoshenko, issued a statement urging people “to react to this as they would to a coup d'état” and take to the streets.
Two high-level European emissaries, Pat Cox, the former president of the European Parliament, and former President Aleksander Kwasniewski of Poland, visited Ms. Tymoshenko in the hospital on Friday. Mr. Cox and Mr. Kwasniewski were in Kiev on Thursday hoping to see the Parliament approve the last pieces of legislation that the Euorpeans had demanded to move ahead with the politicla and trade agreements, including a bill that would have freed Ms. Tymoshenko to seek medical treatment in Germany.
The Ukrainian government on Thursday said it was suspending plans to complete the agreements and would instead pursue improved economic relations with a competing trade bloc led by Russia. The decision upends the European Union’s top foreign policy initiative, a bid to draw in former Soviet republics and promote Western-style political and economic reforms.
It was their 27th visit to the Ukrainian capital, underscoring how much effort Brussels has expended on the Eastern Partnership program.
Ukraine is facing severe economic problems, and is expected to soon need financial assistance of $15 billion or more. In Parliament on Friday, where he appeared with other government ministers, Mr. Azarov said the conditions for aid from the West were too stiff and Ukraine needed to take steps to improve its economic relationship with Russia.
The Ukrainian government on Thursday said it was suspending plans to complete the agreements and instead would pursue improved economic relations with a competing trade bloc led by Russia.
“The I.M.F. position presented in the letter dated Nov. 20 was the last straw,” Mr. Azarov said. “This decision is hard, but it’s the only one possible in the economic situation in Ukraine.”
“The I.M.F. position presented in the letter dated November 20 was the last straw,” Mr. Azarov told the Parliament in Kiev, where he appeared on Friday with other government ministers. “This decision is hard but it’s the only one possible in the economic situation in Ukraine,” he said, drawing a roar of jeers and denunciations from opposition lawmakers.
His comments drew a roar of jeers and denunciations from opposing lawmakers, who also threw sheaves of papers at him.
While Mr. Azarov sought to pin responsibility on the I.M.F., other officials said the decision to back away from the agreements with Europe was the result of fierce pressure by Russia, including threats of trade embargoes and other punitive steps that would have devastated the Ukrainian economy, which is already facing a severe crisis.
While Mr. Azarov sought to pin responsibility on the I.M.F., other officials said the decision to back away from the agreements was the result of fierce pressure by Russia, including threats of trade embargos and other punitive steps that would have devastated the Ukrainian economy.
Jovita Neliupsiene, the chief foreign policy adviser to the Lithuanian president, Dalia Grybauskaite, said on Friday that Mr. Yanukovich had told her boss in a telephone conversation on Wednesday that he could not sign the agreements with Europe because of potential economic damage to eastern Ukraine.
Jovita Neliupsiene, the chief foreign policy adviser to the Lithuanian president, Dalia Grybauskaite, said on Friday that Mr. Yanukovich had told her boss in a telephone conversation on Wednesday that he could not sign the agreements with Europe because of potential economic damage to eastern Ukraine.
Mr. Yanukovich’s base of political support is in the mostly Russian-speaking southern and eastern parts of the country, which are also home to a large portion of Ukrainian industry.
Mr. Yanukovich’s base of political support is in the mostly Russian-speaking southern and eastern parts of the country, which are also home to a large portion of Ukrainian industry.
The phone conversation between the two presidents was first reported by the Baltic News Service, a news agency based in Vilnius.
The phone conversation between the two presidents was first reported by the Baltic News Service, a news agency based in Vilnius.
“Ukraine could not withstand the economic pressure and blackmail,” Ms. Neliupsiene told the news service. “It was threatened with restricted imports of its goods to Russia, particularly from companies in eastern Ukraine, which accommodates the greater share of its industry and employs hundreds of thousands of people.”
The Russian president, Vladimir V. Putin, speaking to reporters after a meeting with Prime Minister Recep Tayyip Erdogan of Turkey in St. Petersburg, denied any strong-arming and said Russia had merely informed Ukraine that if it signed a free trade deal with Europe, Russia would take steps to protect its businesses from an influx of cheap European goods through Ukraine by imposing new trade restrictions.
Ms. Neliupsiene said Friday that Mr. Yanukovich had spoken about “the immediate cost Ukraine will face after signing the association agreement.”
Mr. Putin said it was the Europeans who were trying to pressure Ukraine and refusing to accept its decision to delay the accords. “This is pressure, this is blackmail,” Mr. Putin said, according to a Kremlin transcript of his remarks.
The assertions of Russian strong-arming fit a recent pattern.
Asked about the phone call between Mr. Yanukovich and Ms. Grybauskaite, Mr. Putin used the moment to take a jab at the United States over its surveillance programs. “I don’t know what the Ukrainian and Lithuanian presidents discussed — you could maybe ask our American friends,” he deadpanned. “They will tell you.”
In recent months, Russian officials have taken aggressive steps to prevent Ukraine and other former Soviet republics from moving forward with political and trade accords with Europe.
It remained unclear if the Kremlin had offered Ukraine any promise of financial assistance. Olga Stankova, a spokeswoman for the International Monetary Fund, said that talks with Ukraine over an aid package had been underway for months, and that Ukraine had been aware of the requirements for securing such help since a visit by I.M.F. officials in October.
Russia has banned imports of numerous products, such as wine from Moldova, imposed new restrictions on goods at border crossings, and issued a series of threats, not only of grave economic consequences but also political fallout.
The European Union had set some conditions for the agreements, including a deal that would free Ms. Tymoshenko, the former prime minister, and allow her to seek medical treatment in Germany for chronic back problems. Western governments have long criticized her conviction on charges of abuse of authority and her seven-year sentence as politically motivated. She is currently in a prison hospital in the city of Kharkiv.
Russian officials at various points have suggested that the agreements with Europe were part of secret plots — in the case of Ukraine to remove Mr. Yanukovich from power and in the case of Moldova to facilitate an eventual absorption of the country by Romania. Allies of the Russian government, including Kirill I, the patriarch of the Russian Orthodox Church, have issued statements criticizing European society as immoral.
Ms. Tymoshenko, who now seems likely to remain in prison, released an open letter to Mr. Yanukovich imploring him to find a way to resurrect the accords. “Yesterday after the government decision to deny signing of the association agreement, I wanted to kill you; I think 70 percent of people felt the same way,” she wrote. “But now it is important not to sink into aggression, but to save the situation by all means.”
In September, after a visit with President Vladimir V. Putin in Moscow, President Serzh Sargsyan of Armenia abruptly announced that he was abandoning talks with Europe and that Armenia would instead join a customs union formed by Russia, Belarus and Kazakhstan.
Despite the pressure from Moscow, Moldova and Georgia have both said they intend to move forward with the agreements under the European Union’s “Eastern Partnership” program — but they are not as far along in the process as Ukraine.
Among the conditions Europe had set for signing the accords with Ukraine was a deal to free Ms. Tymoshenko, who is the main political rival of Mr. Yanukovich, and allow her to go to Germany for medical treatment. Ms. Tymoshenko has suffered from chronic back problems.
The Ukrainian Parliament on Thursday resoundingly defeated six bills that would have dealt with Ms. Tymoshenko’s situation, and it now seems likely that she will remain in prison indefinitely.
Some European Union member states have suggested that it was a mistake to connect Ms. Tymoshenko’s situation to the agreements with Ukraine because it gave Mr. Yanukovich yet another reason to back away. Mr. Yanukovich is planning to run for re-election in 2015.
In the end, though, it seems that economic imperatives drove the decision-making. Because of its severe economic problems, Ukraine is expected to soon need a major package of financial assistance. It is still unclear if Mr. Putin’s government has offered such help.
The decision largely scuttles what had been the European Union’s most important foreign policy initiative: an ambitious effort to draw in former Soviet republics and lock them on a trajectory of changes based on Western political and economic sensibilities. The project, called the Eastern Partnership program, began more than four years ago.
Ukraine’s decision is a victory for President Vladimir V. Putin of Russia. He had maneuvered forcefully to derail the plans, which he regarded as a serious threat, an economic version of the West’s effort to build military power by expanding NATO eastward. In September, similar pressure by Russia forced Armenia to abandon its talks with the Europeans.
European leaders reacted with fury and regret, directed at Kiev and Moscow. “This is a disappointment not just for the E.U. but, we believe, for the people of Ukraine,” Catherine Ashton, the European Union’s foreign policy chief, said in a statement. Calling the pact that Ukraine was walking away from “the most ambitious agreement the E.U. has ever offered to a partner country,” Ms. Ashton suggested the country would suffer financially.
“It would have provided a unique opportunity to reverse the recent discouraging trend of decreasing foreign investment,” she said, “and would have given momentum” to negotiations for more financial aid from the International Monetary Fund. Ukraine faces a growing economic crisis, and it is widely expected to need a major aid package soon.
Others were more pointed in blaming Russia. “Ukraine government suddenly bows deeply to the Kremlin,” the Swedish foreign minister, Carl Bildt, wrote on Twitter. “Politics of brutal pressure evidently works.”
In Brussels, Stefan Fule, the European Commission’s senior official responsible for relations with neighboring countries, canceled a trip to Ukraine that he had announced just hours earlier, suggesting that officials saw little hope in reversing the decision. “Hard to overlook in reasoning for today’s decision impact of #Russia’s recent unjustified economic & trade measures,” he wrote on Twitter.
Ukraine’s announcement came in the form of a decree issued by the cabinet of ministers ordering the government “to suspend” preparations for concluding the agreements with Europe and instead begin planning for new negotiations with the European Union and Russia.
At virtually the same time, President Yanukovich, who was on a visit to Vienna, issued a statement saying, “Ukraine has been and will continue to pursue the path to European integration.”
In a move emblematic of Ukraine’s often inscrutable politics, Mr. Yanukovich barely acknowledged the developments in Kiev and, responding to a reporter’s question about the pacts with Europe, said, “Of course, there are difficulties on the path.”
Moldova, the poorest country in Europe, is expected to move forward with the agreements in Vilnius even though Russia has banned imports of Moldovan wine, one of the country’s most important exports, and has threatened other repercussions including an immigration crackdown on more than 100,000 Moldovans working in Russia.
Georgia, which fought a brief war with Russia in 2008 and remains in conflict with Russia over the territories of Abkhazia and South Ossetia, is also planning to move forward with the accords. At his inauguration on Sunday, the country’s new president, Giorgi Margvelashvili, said Georgia hoped to join the European Union and NATO.
It was unclear if the Kremlin had given Mr. Yanukovich any assurances of financial assistance. It seemed probable that Ukraine would face difficulties obtaining additional help from the I.M.F. after backing out of the agreements with Europe.
Andrew Higgins contributed reporting from Brussels, and Alison Smale from Berlin.
