Why is Moscow helping Kiev?

Why is Moscow helping Kiev?

 

By Vestnik Kavkaza


Protests in Ukraine have already been continuing for a month. But if at first the protesters have demanded only an association agreement between Ukraine and the EU, now they want the resignation of President Viktor Yanukovych.

 

Week and a half ago after the meeting with Yanukovych, Russian President Vladimir Putin said : "Realizing certain difficulties which develop today in the Ukrainian market, which is largely a consequence of the global economic crisis, "Gazprom" and "Naftogaz Ukraine" signed a supplement that gives the possibility to "Gazprom" - that it intended to do - to sell gas to Ukraine at a price 268.5 dollars per thousand cubic meters. Now this price is about $ 400. This is also a temporary solution, because the long-term agreements must be achieved. This applies to gas supplies to Ukraine, as well as ensuring uninterrupted transit for our Russian consumers in Europe. Russia is ready to continue to meet our partners, but our goal is to develop a truly effective and long-term pattern of interaction, to move from constant discussions about the price to pragmatic cooperation on gas supplies to Ukraine and on the reliability of transit".

 

Experts agreed that the decision to grant a loan of 15 billion dollars to Kiev and to reduce gas prices to 268.5 dollars is beneficial for both Russia and Ukraine.

 

“For me, as an economist, it is important that Vladimir Putin has made a very important decision in the field of cooperation and specialization”, Ruslan Grinberg, director of the Institute of Economics of the RAS, says. “No matter how events unfold, whether Ukraine will sign an association agreement next year, or later, or will not sign it, in any case, no one can help us but ourselves in modernizing and restoring a more or less decent industrial landscape. Here this should be understood. Similarly, the European Union will not help here. They have their own problems, their own program of life and, frankly, they are not very strongly interested in our production of raw products with high added value. And I think it's very important to understand here - maybe we should postpone this issue and see if Ukraine will sign the agreement, where it will go – to the CU or not. We must firmly and equitably ... But this is a win -win situation, not a zero sum game. We need to produce finished products. Thank God there are still chances - in the nuclear industry, in the missile industry, in the aircraft industry, in space. This is a very important thing. I immediately wanted to focus on precisely this aspect of our interaction. Then we must, of course, increase our turnover. Recently, from the Russian side, in my opinion, there were some awkward steps, but this is just my point of view. There we could somehow have a softer approach to this whole debate about Ukraine's accession to the EU, especially given that, perhaps, this will not happen, and Ukraine will have to wait for decades. There's nothing to talk about. Associate membership, in general, cannot be considered, in my view, as a special obstacle to our economic relations. So I must say, I welcome the recent decisions. There may be all sorts of interpretations, but it is a very beneficial thing – in spite of the fact that it looks like a unilateral concession, but in fact it is beneficial for Russia and Ukraine”.

 

“The agreements that have been reached now with Russia on various modernization projects, mainly high-tech, they would not directly interfere in this, as they do not even prevent the signing of an association agreement with the EU”, Vladimir Zharikhin, deputy director of the Institute of CIS Countries, said. “But they are definitely in contradiction with the conditions that are written in the agreement on a free trade zone. That is, in case of the introduction of zero customs duties on goods between the EU and Ukraine, these projects already cannot work, i.e. a step was made that requires from the EU, in fact, renegotiating the agreement on the free trade zone. Is this some excess demand from Ukraine? No, it isn’t”.

 

In order to illustrate his point of view, Zharikhin mentioned Turkey which has a multi-year agreement on a free trade zone with the EU: “But, nevertheless, it has wished to enter into a free trade zone with the CU. That is, the agreement on a free trade zone with the EU does not prevent Turkey from entering a free trade zone with Russia. And here artificial barriers were apparently created in order to, in fact, economically try to tear Ukraine away from Russia and create a preference for the products from some EU countries. It seems to me that after all the stormy and controversial behaviour of the Ukrainian leadership, which... The impression is, though perhaps it is not so, that finally they did read an agreement with the EU about three weeks before signing. Otherwise, it is difficult to understand this logic. But the logic was really calling for internal political conflict. Indeed, in this situation Russia should provide credit for its part, not to watch this, and Russia should get its costs from it, too – in fact, the destruction of the Ukrainian economy and very heavy and rigid tension in the social sphere in the case of the implementation of the IMF conditions in Ukraine”.

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