EU foreign policy chief Catherine Ashton and US Assistant Secretary of State Victoria Nuland agreed on a financial plan for Ukraine that should back up the opposition. Ashton said that the EU-US-IMF talks were about finding the best possible way to help the Ukrainian economy, yet she emphasized that any aid package would be linked to the political reforms. The agreement comes out as a result of the growing pressure of the international community to end the two-month demonstrations that have already claimed at least four casualties. And while the number of pro-sanctions EU countries grows, EU foreign affairs chief Catherine Ashton visited Kiev earlier this week to hold meetings with regime and opposition leaders while offering money in exchange for a political solution to the crisis.
Ashton’s officials explained that the aid – coming from an international group of donors, including the EU, the US, Azerbaijan, Japan and Norway – will be conditional on Ukrainian President Viktor Yanukovych making concessions to opposition demands, but not including his signature of an EU association and free trade treaty or on International Monetary Fund recommendations for long-term economic reform. The Political and Security Committee (PSC) meeting was also marked by a growing support for the idea, put forward by Lithuania, that the EU should prepare sanctions against Yanukovych’s inner circle. According to well-informed EU sources, Lithuania’s proposal was backed by at least three member states, including one country whose banks host large amounts of regime assets. To that end, German foreign minister, Frank-Walter Steinmeier, stressed earlier this week that Monday evening: “We need to show sanctions as a threat at this point.”
The new offer of financial assistance from the EU and US came after Russia froze disbursements of its $15 billion Ukraine bailout and warned Yanukovych that he has $2.7 billion of gas debts for supplies in 2013 and 2014, thus effectively putting the president in a highly vulnerable position since a looming sovereign default amid the popular uprising could see him lose power. But some EU diplomats are concerned Ashton will sell the aid too cheaply because, as one of them stressed, “this is the moment to negotiate as much as possible – to impose conditions that will lead to deep and irreversible change in the political establishment.”
In the meantime, the fighting opposition to the incumbent President Yanoukovitch has already called for a new “Marshal Plan” to save Ukraine. The minimum amount required is 11 billion euro, which is the sum promised by Moscow in a bailout which currently on hold. An anonymous source from Brussels said that it might be very difficult to offer more than Russians. The Ukrainian economy is tightly linked to Russia and dependent on its credit. Scrambling over Ukraine has caused a major disruption in the relations between the West and Russia. Moscow has accused the West and mainly Brussels for interfering in Ukraine’s domestic affairs and described opposition protesters as “far-right extremists”.
