Thursday, February 06, 2014

European Official Takes Measured Tone On Ukraine Aid

KIEV, Ukraine -- On a visit to Ukraine to try to prod the country’s embattled president and his opponents into resolving a volatile standoff, Europe’s foreign policy chief, Catherine Ashton, said Wednesday that a package of economic assistance was in the works but dampened hopes of a sudden infusion of cash.

Europe’s foreign policy chief, Catherine Ashton.

Russia decided last week to suspend a $15 billion loan package, and the European Union has repeatedly said it does not want to get into a bidding war with Russia for Ukraine’s allegiance.

But it has come under growing pressure to complement a high-minded emphasis on the appeal of European values with more concrete measures to influence events in Ukraine.

Unless Russia restarts the flow of cash or the West comes up with a substitute, Ukraine will probably be forced to default on some of its debts or devalue its currency, the hryvnia, which has fallen sharply in recent days because of mounting doubt about the possibility of a swift exit from a crisis that former President Leonid M. Kravchuk warned had pushed the country to “the brink of civil war.”

At a news conference in Kiev, the Ukrainian capital, on Wednesday, Ms. Ashton said Europe and its partners wanted to “pull together an economic package,” but emphasized that the aid was not just about “large dollops of money” but would be a broader effort involving technical assistance and other help “that would provide for the clear economic needs of the country in the context of economic reform.”

Ukraine’s economy, economists say, is harmed by corruption and bureaucracy and needs a sweeping overhaul to strip away opportunities for graft. 

Ukraine’s pro-Europe opposition has been pushing for more immediate economic assistance, hoping that a major aid package will help promote a political settlement and reverse a decision in November by President Viktor F. Yanukovych to reject a trade and political deal with Europe in favor of closer relations with Russia.

Mr. Yanukovych’s spurning of Europe, under heavy pressure from Moscow, ignited street protests that, months later, have left the center of Kiev sealed off by protesters’ barricades.

The European Union has made some efforts to sweeten the deal rejected by Ukraine, with a senior official in Brussels suggesting that the country could one day join the Union as a full member, a possibility that had not previously been on the table.

Ukraine was instead offered only so-called association, a status with no prospect of full membership in the 28-nation bloc.

But Brussels has yet to come up with solid cash.

At a conference in Munich last week attended by Secretary of State John Kerry and European officials, a Ukrainian opposition leader, Arseniy P. Yatsenyuk, called for a program of economic assistance akin to American aid to Europe after World War II. 

“Ukraine desperately needs a Marshall Plan — not martial law — in order to stabilize the political and economic situation,” said Mr. Yatsenyuk, who last month rejected an offer to become prime minister because real power would remain in the hands of Mr. Yanukovych.

The opposition has tried this week in Parliament to enact constitutional changes that would strip the president of much of his authority and elevate the position of prime minister.

But its efforts have gotten nowhere in a legislature dominated by Mr. Yanukovych’s governing Party of Regions.

Ms. Ashton, who has made repeated trips to Kiev since November, met with Mr. Yanukovych and opposition leaders during her current visit but seems to have made little headway in easing the stalemate.

At the news conference, she spoke of frustration with the political paralysis:

“What I really need to feel is a growing sense of momentum on this. I think that that is where we need to see more work.”

Source: The New York Times

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