Putin in new move to woo Ukraine

Russian President Vladimir Putin has made a new attempt to woo Ukraine after the European Union and United States stepped up their efforts to pull Kiev out of its former Soviet master’s orbit.

Protesters in Kievs Independence Square hold up a banner Yulia Tymoshenko. Picture: Reuters

A day after European and US officials held talks with Ukrainian president Viktor Yanukovich in Kiev, Mr Putin yesterday used a state of the nation address to tout the economic benefits of Ukraine joining a customs union he wants to establish.

Mr Yanukovich – who is seeking the best possible deal for his country of 46 million as it tries to stave off bankruptcy – provoked street protests in Kiev by spurning the chance to sign a free-trade pact with the EU last month, saying he wanted to revive ties with Russia instead.

But he has made no commitment to join the Moscow-led customs union so Kiev could still sign an association agreement deepening cooperation with the EU.

“Our integration project is based on equal rights and real economic interests,” Mr Putin said of the customs union with Belarus and Kazakhstan, which he wants to turn into a political and trading bloc to match the US and China. “I’m sure achieving Eurasian integration will only increase interest [in it] from our other neighbours, including from our Ukrainian partners.”

Mr Putin’s ambition to create a Eurasian Union stretching from the Pacific to the EU’s eastern borders depends largely on whether Ukraine signs up, bringing in its rich mineral resources and its large market, a bridge to the 28-nation bloc.

With thousands of people on the streets of Kiev demanding Mr Yanukovich’s resignation, the diplomatic battle over Ukraine’s fate is heating up.

EU foreign policy chief Catherine Ashton and US assistant secretary of state Victoria Nuland came away with no obvious sign of a breakthrough after their talks with Mr Yanukovich.

“Yanukovich made it clear to me he intends to sign the association agreement,” Ms Ashton told media in Brussels yesterday.

But making clear Mr Yanukovich was holding out for money to help repay Ukraine’s debts, she said: “What he talked about were the short-term economic issues that the country faces.”

Another EU official said that if anything, Mr Yanukovich’s stance had toughened. Ms Nuland’s visit was followed by a tough statement from Washington condemning the Ukrainian authorities over action by riot police who moved against a protest camp in the heart of Kiev but later withdrew without ousting them. “All policy options, including sanctions, are on the table, in our view, obviously that still is being evaluated,” State Department spokeswoman Jen Psaki told reporters.

US legislators are considering denying visas to Ukrainian officials or freezing assets if violence against protesters worsens.

Moscow has condemned what it sees as fierce foreign pressure on Ukraine, and the EU has accused Russia of using economic blackmail against Kiev. Russian media have raised the spectre of civil war in Ukraine to wave the flag for Mr Putin.

Russia is widely thought to have been trying to attract Ukraine with the promise of cheap credits, reduced prices for natural gas and the promise of trade benefits. The alternative would be crippling trade sanctions and energy prices.

Asked what Ukraine was seeking at talks, one Russian official said: “Money!”