Ukraine Rejects EU Financial Aid for Russian Deal

Viktor Yanukovich (right) and Russian Prime Minister Dmitry Medvedev in 2012. Photo: Government.ru for Wikimedia Commons.

Viktor Yanukovich (right) and Russian Prime Minister Dmitry Medvedev in 2012. Photo: Government.ru for Wikimedia Commons.

On Tuesday, December 17,Ukrainian President Viktor Yanukovich struck a deal with Russia, investing $15 billion (€11 billion) into the failing economy of the former Soviet nation. Russia also offered to reduce the price of its natural gas exports to the Ukraine by one-third, minimizing the amount paid by Naftogaz, Ukraine’s chief industrial gas company.

These negotiations between Russian President Vladimir Putin and his Ukrainian counterpart Yanukovich took place against the backdrop of intense pressure from the European Union (EU) to join the EU’s Association Agreement, in order to build greater cooperation and strengthen the economic framework between Ukraine and the EU member states.

On Thursday, December 19, an official from the EU-summit in Brussels reported that the EU had offered Ukraine a financial deal that was equally, if not more, beneficial. According to a draft document released on Wednesday to multiple journal sources, the EU deal offered a financial support plan that would amount to $26 billion (€19 billion) in aid over the coming seven years.

During a press briefing in Brussels, EU Commissioner Stefan Füle voiced the EU’s desire to “step up” financial aid for implementing EU laws in participating states, under which Ukraine would fall if it accepted the Association Agreement. Other statements made during the brief included a pledge to “top up” International Monetary Fund loans, as well as a promise to “bring on board other international partners,” gaining the Ukraine support of other agencies, such as the World Bank.

Füle further noted that the EU’s rationale for extending these offers was “the looming financial crisis in Ukraine,” which could have collateral effects across Europe.

President Dalia Grybauskaite of Lithuania, which controls the EU presidency until the end of December, struck a different tone: “Europe is open to the Ukrainian people. But not necessarily for this government.”

Yanukovich’s deal with Russia has not only caused international controversy, but splits within his own party and country as well. After the announcement of the President’s decision to reject the trade deal with the EU in favor of Russian aid, thousands of protestors took to the streets on Kiev’s Independence Square.

With presidential elections looming in 2015, and Yanukovich himself up for re-election, his chances of fairly gaining the necessary number of votes is slim.

Despite Ukraine’s deal with Russia, the EU has reiterated the continued opportunity for Ukraine to reinstate discussions of the association process.

Trackbacks

  1. […] Ukrainian President Viktor Yanukovich struck a deal with Russia to invest $15 billion (€11 billion) into the failing economy of the former Soviet nation. Russia also offered to reduce the price of its natural gas exports to Ukraine by one-third, minimizing the amount paid by Naftogaz, Ukraine’s chief industrial gas company. These negotiations took place against the backdrop of intense pressure from the European Union (EU) to build greater cooperation and strengthen the economic framework between Ukraine and the EU member states. Read more about the situation in the Ukraine. […]

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