Ukraine blames IMF for halt to agreements with Europe

Prime Minister Mykola Azarov of Ukraine told enraged opposition lawmakers on Friday that his government’s decision to walk away from far-reaching political and trade agreements with the European Union was based on fiscal imperatives, and ultimately prompted by the International Monetary Fund’s overly harsh terms for an aid package.

The accords with Europe were due to be signed next week at a major conference in Vilnius, Lithuania. Opposition leaders furious over the decision called for the resignation of the Ukrainian government, for the impeachment of President Viktor F. Yanukovich and for mass protests across the country. Many also blamed Russia for pressuring Ukraine to scuttle the deals.

Protests against the government’s decision were held in several Ukrainian cities, including Lviv, the largest city in western Ukraine and a hotbed of anti-Yanukovich sentiment, where more than 5,000 people joined a rally in the main square, led by Mayor Andriy Sadovy. Kiev, the capital, was pulsing with emotion that officials and commentators said they had not seen since the Orange Revolution of 2004.

On Friday evening, about 1,000 people protested in the rain in Independence Square, the revolution’s central gathering point, waving European Union flags and chanting, “Ukraine is Europe!” A bigger rally was set for Sunday. The jailed former prime minister, Yulia V. Tymoshenko, issued a statement urging people “to react to this as they would to a coup d’état” and take to the streets.

The Ukrainian government on Thursday said it was suspending plans to complete the agreements and would instead pursue improved economic relations with a competing trade bloc led by Russia. The decision upends the European Union’s top foreign policy initiative, an effort to draw in former Soviet republics and promote Western-style political and economic overhauls.

Ukraine is facing severe economic problems and is expected to soon need financial assistance of $15 billion or more. On Friday in Parliament, where Mr. Azarov appeared with other government ministers, he said that the conditions for aid from the West were too stiff and that Ukraine needed to take steps to improve its economic relationship with Russia.

“The I.M.F. position presented in the letter dated Nov. 20 was the last straw,” Mr. Azarov said. “This decision is hard, but it’s the only one possible in the economic situation in Ukraine.”

His comments drew a roar of jeers and denunciations from opposing lawmakers, who also threw sheaves of papers at him.

While Mr. Azarov sought to pin responsibility on the I.M.F., other officials said the decision to back away from the agreements was the result of fierce pressure by Russia, including threats of trade embargoes and other punitive steps that would have devastated the Ukrainian economy.

Jovita Neliupsiene, the chief foreign policy adviser to the Lithuanian president, Dalia Grybauskaite, said on Friday that Mr. Yanukovich had told her boss in a telephone conversation on Wednesday that he could not sign the agreements with Europe because of potential economic damage to eastern Ukraine.

Mr. Yanukovich’s base of political support is in the mostly Russian-speaking southern and eastern parts of the country, which are also home to a large portion of Ukrainian industry.

The phone conversation between the two presidents was first reported by the Baltic News Service, a news agency based in Vilnius.

In Washington, the White House said that Vice President Joseph R. Biden Jr. had called Mr. Yanukovich to express disappointment over the decision to “delay preparations for signature” of the European Union accords.

The Russian president, Vladimir V. Putin, speaking to reporters after a meeting with Prime Minister Recep Tayyip Erdogan of Turkey in St. Petersburg, denied any strong-arming. He said Russia had merely informed Ukraine that if it signed a free trade deal with Europe, Russia would take steps to protect its businesses from an influx of cheap European goods through Ukraine by imposing new trade restrictions.

Mr. Putin said it was the Europeans who were trying to pressure Ukraine and refusing to accept its decision to delay the accords. “This is pressure, this is blackmail,” Mr. Putin said, according to a Kremlin transcript of his remarks.

Asked about the phone call between Mr. Yanukovich and Ms. Grybauskaite, Mr. Putin used the moment to take a jab at the United States over its surveillance programs. “I don’t know what the Ukrainian and Lithuanian presidents discussed — you could maybe ask our American friends,” he said. “They will tell you.”

(NYT)

ANN.Az