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Europe

Ukraine’s president under pressure over deal with Russia

Text by FRANCE 24

Latest update : 2013-12-18

Ukraine’s President Viktor Yanukovich faced calls to resign on Wednesday, one day after securing $15 billion in loans from Russia and a major discount on natural gas prices in a move that has infuriated demonstrators.

Ukraine’s capital Kiev has been gripped by mass protests over the past few weeks after Yanukovich refused to sign a deal with the European Union in favour of apparent closer ties with its former Soviet-era ruler, Russia. Thousands of demonstrators have camped out at the city’s Independence Square to protest against the decision.

Yanukovich and Russian President Vladimir Putin finally reached an agreement on Tuesday, effectively ensuring that Ukraine remains firmly in Russia’s orbit. Protesters immediately reconvened at Independence Square, where they accused the government of selling out.

“I think the people will eventually have it their way. We will sign up to Europe. That’s why I’m here,” said Snezhana, a factory worker who was one of hundreds to spend the night at the protest despite freezing temperatures.

Irina Litvinianko, a businesswoman, echoed Snezhana’s comments. “It’s hard to imagine it could end up in anything else but a change of power,” she said.

Opposition leaders have called for mass rallies over the holiday season.

“He has given up Ukraine’s national interests, given up independence,” Vitaly Klitschko, an opposition leader and heavyweight boxing champion, told the crowd on Tuesday.

Ukraine’s troubled economy

Ukraine’s Prime Minister Mykola Azarov welcomed the deal on Wednesday, which he described as “historic”. The country needs money to cover an external funding gap of $17 billion next year - almost the level of the central bank’s depleted currency reserves - and avoid defaulting on its debts.

“Yesterday, a historic development occurred. The president reached agreement on exceptionally beneficial conditions for crediting Ukraine’s economy, which allows us to carry out wide-ranging plans for economic modernisation,” Azarov told his government.

“The head of state managed to agree lower gas prices as of January 1st and until the contract ends,” he said, referring to a ten-year gas contract that expires in January 2019. “This allows a revival of economic growth.”

Bids on Ukraine’s national hryvnia currency briefly rose 0.5 percent in early Wednesday trade to 8.25 against the US dollar - versus 8.29 per unit on Tuesday close - before easing back to 8.28.

Azarov also said he would propose lowering corporate tax in 2014 by one percentage point from the current level of 19 percent as well as continue raising social spending.

(FRANCE 24 with REUTERS)

Date created : 2013-12-18

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