Tuesday, February 04, 2014

U.S. And Europe Work On Aid Package For Ukraine

BERLIN, Germany -- Looking to defuse Ukraine’s crisis, the United States and Europe are trying to assemble a financial package that could ease the path for a new government there to guide the country out of its current impasse between Europe and Russia, American and European officials say.


A crowd in Independence Square in Kiev listened to a political speech on Monday.

The diplomatic push involves regular contact with government and opposition leaders in Ukraine, which has been embroiled in months of turmoil since its president, Viktor F. Yanukovych, rejected political and free-trade accords with Europe and accepted a $15 billion loan package from Moscow.

If that initial snub left the European Union looking outmaneuvered, Mr. Yanukovych now appears more embattled.

Last week, in the face of unrelenting street protests, the president was forced to make concessions to his opponents, including sacrificing his pro-Moscow prime minister, who resigned.

That prompted the Kremlin to suspend the promised loans, after having disbursed just $3 billion.

The Russian president’s suspension of his aid package to Ukraine last Wednesday, a signal of his displeasure at Mr. Yanukovych’s talks with his opponents, may also provide a chance for the Americans and Europeans to take up an economic lever that Ukraine desperately needs as it faces default on its debts.

On Monday, José Manuel Barroso, president of the European Commission, the European Union’s executive body, said that the bloc was trying to help Ukraine, but denied that there was any direct competition with Russia.

“We are not going to a bidding competition of who pays more for a signature from Ukraine, because we believe that this is the path that most Ukrainians prefer,” Mr. Barroso said in Brussels.

“They want to come closer to the European Union, and certainly we are ready to support that.”

Senior American and European officials, speaking in Berlin and on the sidelines of the Munich Security Conference last weekend, said they would try to assemble a financial package to help a new government, though one led by an opposition leader or a technocrat.

The diplomatic effort appears aimed to help the Ukrainian leader and his opponents reach an agreement in their negotiations that would give Ukraine a government of experts, possibly led by an opposition leader, Arseniy P. Yatsenyuk, as well as a leadership that would be acceptable to protesters who have been on the streets for more than two months.

At the same time, the negotiations appear intended to allow Mr. Yanukovych to serve out his term, which ends in the spring next year, albeit with reduced constitutional powers.

As part of the inducements, the financial package by the Western officials, if a new government is approved, would be intended to get the highly indebted country through a transition period and allow it to carry out an economic overhaul that is a prerequisite for receiving a long-delayed loan from the International Monetary Fund. 

All involved emphasized that given the volatility of Ukraine’s politics since the country gained independence from the Soviet Union in 1991, there is no guarantee of success.

Moscow remains an important player, bound by centuries of history to Kiev, and is Ukraine’s chief energy provider.

Vice President Joseph R. Biden Jr., Chancellor Angela Merkel of Germany and Mr. Barroso have been in daily, rotating contact with Mr. Yanukovych since Kiev turned violent after the passage of tough laws against protesters on Jan. 16, officials said. 

Those laws were overturned by a parliamentary vote last week, but progress on an amnesty law for jailed protesters was then stymied by Mr. Yanukovych’s suddenly taking a sick leave.

He returned to work on Monday.

A stream of Western officials have visited Kiev or made their concern known to Ukrainian and Russian officials.

Catherine Ashton, the European Union’s foreign policy chief, was scheduled to return there on Tuesday, while Victoria Nuland, the assistant secretary of state for European and Eurasian affairs, will visit the Ukrainian capital on Thursday.

Any aid package “is very much a work in progress,” Maja Kocijancic, a spokeswoman for Ms. Ashton, said on Monday.

During the Munich conference, Secretary of State John Kerry and senior aides met with the Ukrainian opposition figures Vitali Klitschko, Petro Poroshenko and Mr. Yatsenyuk, as did the German foreign minister, Frank-Walter Steinmeier.

Mr. Klitschko, a former heavyweight boxer whose name has been on a column in Germany’s biggest-selling newspaper, Bild, since Ukraine’s revolt erupted, received an ovation after speaking to the conference — in contrast to the stony silence that greeted the Russian foreign minister, Sergey V. Lavrov, and his Ukrainian counterpart, Leonid Kozhara.

Late last month, Mr. Yatsenyuk turned down an offer from the Ukrainian president to serve as prime minister, citing the need for real power over the flailing national economy.

In the carousel that has been Ukrainian politics, Mr. Yatsenyuk has already served as foreign and economy minister and governor of the central bank.

In an interview in December, he made plain that 12 years of dealing with Mr. Yanukovych had convinced him that the president was a tactician who would never voluntarily relinquish power, and would say or promise anything in maneuvering to keep it.

However, the president’s room for such moves has narrowed, and it is in that space that foreign officials and the forces in Ukraine are seeking a solution to stave off more violence and economic pain in the country of 46 million people.

Any financial package would be crucial, given Moscow’s offer of a sizable sum to Kiev after its rejection of the agreement with Europe.

“These discussions are just at the beginning,” one European official said in Munich, adding that Mr. Yanukovych was “still playing for time,” despite last week’s blunt demand from the German foreign minister to stop moving so slowly.

Source: The New York Times

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