Thursday

23rd Mar 2017

Ashton off to Kiev with new financial offer

  • Ashton broke news of the new 'Ukrainian Plan' in an interview with the Wall Street Journal at a security congress in Munich over the weekend (Photo: securityconference.de)

EU foreign affairs chief Catherine Ashton is going to Kiev to offer money in exchange for a political solution to the crisis, as the number of pro-sanctions EU countries grows.

Ashton’s officials gave some details of the new financial offer to EU ambassadors in the Political and Security Committee (PSC) in Brussels on Monday (3 February).

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They said it will be conditional on President Viktor Yanukovych making concessions to opposition demands, but not on his signature of an EU association and free trade treaty or on International Monetary Fund recommendations for long-term economic reform.

They did not reveal the amount for fear of leaks.

But they said the money will come from an international group of donors, including the EU, the US, Azerbaijan, Japan and Norway.

The PSC meeting also witnessed growing support for Lithuania’s idea the EU should prepare sanctions against Yanukovych’s inner circle.

EU sources said three member states, including one country whose banks host large amounts of regime assets, backed Lithuania’s proposal.

Germany was not one of them.

But German foreign minister Frank-Walter Steinmeier told Germany’s national TV broadcaster, ARD, on Monday evening: “We need to show sanctions as a threat at this point.”

Ashton is due in Kiev late on Tuesday and to hold meetings with regime and opposition leaders on Wednesday.

The new offer of financial assistance comes after Russia froze disbursements of its $15 billion Ukraine bailout and warned Yanukovych that he has $2.7 billion of gas debts.

The freeze puts him in a vulnerable position, because a sovereign default amid the popular uprising could see him lose power.

But some EU diplomats are concerned Ashton will sell the aid too cheaply.

“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,” a diplomatic contact from one large EU country told this website.

The source said conditions should include: ceding control of Ukraine’s finance and economy ministries to opposition leaders in an interim government; reform of electoral laws; enhanced international monitoring of early presidential elections; and constitutional reform to give parliament more power.

The diplomat urged Ashton not to settle for a “cosmetic solution,” such as top jobs for opposition MPs Arseniy Yatseniuk or Petro Poroshenko.

“This would be a betrayal of the Maidan [the popular opposition movement]. It would simply enable Yanukovych to go back to Russia to extract more money,” the contact said.

On the sanctions front, EU sources noted that a credible threat of asset freezes and visa bans would be more effective than implementation at this stage.

“Once you actually introduce sanctions, political dialogue with that country is dead,” an EU diplomat who attended the PSC debate told this website.

The contact said the more likely scenario is for a group of EU countries to explore measures at national level instead of EU28-level.

Meanwhile, Ukrainian authorities on Monday made a humanitarian gesture by letting tortured activist Dmytro Bulatov leave the country for medical treatment in Lithuania.

His release was negotiated by the EU embassy in Kiev and by Germany over the weekend.

“He needs physical and psychological care. I saw the smile, I saw the relief on his face as he was getting ready to leave,” a Kiev-based contact involved in arranging Bulatov’s departure said.

Stolen Russian billions ended up in EU states

Illicit money flowing out of Russia ended up in almost every single EU state, an investigation has found, posing questions on the integrity of Europe’s banking systems.

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