KIEV: Ukraine, which has secured a $15bn bailout package from Russia, expects it to be fully disbursed in early 2014, Ukrainian Prime Minister Mykola Azarov said yesterday after Kiev received the first $3bn tranche.
“We expect the remaining $12bn in the beginning of next year,” he told a government meeting. Azarov said the country’s economy, which grew 0.2 percent in 2012, would remain flat this year.
President Vladimir Putin offered Ukraine the lifeline last week, along with a big cut in the price Kiev pays for vital Russian gas supplies, as he tries to persuade Russia’s Slavic neighbour to join a customs union of ex-Soviet republics.
“The first tranche of Ukrainian sovereign debt was acquired for $3bn,” Russian Prime Minister Dmitry Medvedev told his Ukrainian counterpart Mykola Azarov at a meeting in Moscow, in televised comments. “The money went to the central bank of Ukraine yesterday,” he said.
President Viktor Yanukovich’s pivot back towards Moscow and away from an offer of closer trade ties with the EU has sparked huge protests in Ukraine. The protesters accuse Yanukovich of selling out to Ukraine’s Soviet-era overlord with the deal on debt and gas prices, which looks to have headed off what could have been a funding crisis for the Ukrainian state next year.
Azarov later joined Putin and the leaders of Kazakhstan, Belarus, Armenia and Kyrgyzstan — ex-Soviet republics that have joined or plan to join trade alliances Russia is building, part of Moscow’s drive to restore its influence in its former empire.
Customs union
Ukraine has so far resisted joining a Russia-led customs union that includes Belarus and Kazakhstan — a big step because membership would scupper any lingering possibility that Kiev might reverse course and sign a free trade deal with the EU.
Any signal that Ukraine might join the customs union would re-invigorate protests in Ukraine, which have started to show signs of flagging despite a constant crowd of a few thousand people at the tent camp in Kiev’s Independence Square.
Increasingly concerned by an economy set to grow just 1.4 percent this year and only slightly more in 2014, Putin has made closer integration among ex-Soviet states a priority of his third term after 14 years in power.
He is using the customs union as a foundation for a Eurasian Economic Union, due to come into existence in 2015 and has won victories with decisions by Kyrgyzstan and Armenia to move toward joining.
But analysts doubt the union will solve the deep-rooted structural problems the region’s economies face and the leader of oil-producing Kazakhstan on Tuesday also repeated a warning that Putin’s post-Soviet integration plans must not go too far.
Agencies
