Russia throws Ukraine economic lifeline
As anti-government protests continue in Kiev, Russia agrees to buy $15 billion of Ukrainian debt and to reduce the price of natural gas.PT1M57S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2zjsc 620 349 December 18, 2013
Berlin: Germany's new Foreign Minister Frank-Walter Steinmeier criticised Russia in his inaugural speech for exploiting Ukraine's economic plight to prevent it from signing a free-trade deal with the European Union.
The Social Democrat returned on Tuesday to the post he held during Angela Merkel's first "grand coalition" government in 2005-09. Dr Merkel's conservatives came out on top in a federal election in September but were forced into another alliance with the centre left.
"It is utterly scandalous how Russia used Ukraine's economic plight for its own ends, also in order to prevent the signing of the association agreement with the EU," he said. "Of course, the violent behaviour of the Ukrainian security forces towards peaceful demonstrators was also scandalous."
Foreign Minister Frank-Walter Steinmeier awaits the start of the first cabinet meeting following the swearing-in ceremony of the new German coalition government in Berlin. Photo: Reuters
He repeated questions raised by Polish President Bronislaw Komorowski about whether the EU had underestimated how divided Ukraine was and how determined Moscow was.
"I say quite openly I have no answers to that. But I'm certain we need to be able to answer that before we can respond to calls for help in stabilising the situation there."
He will travel to Poland on Thursday for talks on Ukraine.
Just days ago Mr Steinmeier's Free Democrat (FDP) predecessor Guido Westerwelle walked through Kiev's Independence Square flanked by opposition leaders, earning a stiff rebuke from Russia for his "interference".
One of the opposition leaders in Ukraine, Vitaly Klitschko, called on Mr Steinmeier to visit the square and mediate.
Mr Steinmeier omitted from his speech a comment that appeared in a text version circulated earlier, saying the EU's offer to Ukraine fell far short of what was needed by the country.
Russia threw Ukraine an economic lifeline on Tuesday, agreeing to buy $US15 billion ($16.8 billion) of Ukrainian debt and to reduce the price its cash-strapped neighbour pays for vital Russian gas supplies by about a third.
The deal, reached at talks in Moscow between the Russian and Ukrainian leaders, is intended to help Ukraine stave off the economic crisis, though Moscow will hope it keeps Kiev in its political and economic orbit.
Russia had threatened to impose sanctions on the country of 46 million, including hindrances to Ukrainian imports should Kiev opt to strengthen its links to the EU.
Ukraine needs help to cover an external funding gap of $US17 billion. The most Brussels had so far offered Ukraine was €610 million ($838 million).
Mr Steinmeier and the Social Democratic Party (SPD) are viewed as more pragmatic towards Russia than Dr Merkel's conservatives or the FDP, and their coalition agreement with the chancellor contains a separate section dedicated to ties with Russia, which her 2009 deal with the FDP did not.
As the architect of Germany's "modernisation partnership" with Moscow, and an ally of Dr Merkel's predecessor Gerhard Schroeder, who cultivated a hearty, macho rapport with Mr Putin, Mr Steinmeier is seen to be launching a greater push for dialogue.