Ukraine Bleeding
By Matthew Vadum
Parts of the Ukrainian capital were on fire last night as protesters battled security forces of that nation’s repressive government — months after it announced Ukraine would align itself with Russia instead of the European Union.
After a late-night pow-wow with opposition figures Vitaly Klitschko and Arseniy Yatsenyuk, Ukrainian President Viktor Yanukovych blamed the violent episodes on opposition leaders, but added that it was still “not too late to stop the conflict.”
Activists took over City Hall in Kiev yesterday and anti-riot police moved into Independence Square. BBC reports that at least 18 people were killed Tuesday, including seven police officers, in the worst outbreak of violence in weeks.
Many Ukrainians came to the main protest camp, the Maidan, to support activists who have reportedly been trained to defend barricades from riot police. Supporters had to walk because authorities completely shut down Kiev’s metro, claiming that there is a danger of “terror acts.” It was the first time the metro was shuttered since Ukraine declared independence in 1991.
The explosion of anger comes a month after four anti-government protesters were killed in central Kiev.
It also comes at the worst possible time for Russian President Vladimir Putin who wants to resurrect Russia’s empire and is trying to make Ukraine a key component in the revival. Putin is under special pressure right now because the eyes of the world are fixed on the Winter Olympics in Sochi, Russia, nearly 900 miles southeast of Kiev in the Islamist-infested Caucusus mountains. Opposition groups in Ukraine have reportedly called on Ukrainian athletes to stop competing in the ongoing Olympic competition to show solidarity with their cause.
In the words of one commentator yesterday “what is happening in Kiev tonight … is Vladimir Putin’s worst nightmare.” He continued:
The last time that this many people came out to the Independence Square (the Maidan) in Kiev, nine years ago, protesters undid the election of Victor Yanukovich and brought to power a Western-friendly government. In the process, they scared the living daylights out of Putin.
The initially peaceful protests in Independence Square first got underway back in November when President Yanukovych snubbed the European Union by embracing a closer relationship with Russia, a nation that has had what a polite diplomat might describe as acomplex relationship with Ukraine.
Ukrainians are also on edge because that nation’s public finances are in shambles. This year the country, which is the least creditworthy in Europe, has to refinance about $7 billion worth of foreign debt, which is difficult to do when investors view Ukraine as a likely deadbeat.
Russia announced yesterday that it would restart its $15 billion bailout of Ukraine, Bloomberg News reports. The promise of cash spurred a Ukrainian bond rally. The euphoria lasted barely an hour as news of deadly protests continued to accumulate.
Investors don’t want to bail out the cash-strapped Ukrainian government whose debt already is rated well below investment grade, which makes them “junk” bonds in American parlance.
“Money from Russia is not a solution,” said Frankfurt-based money manager Dmitri Barinov of Union Investment Privatfonds. “The situation is out of control. I fear there will be more blood.”
Ukraine’s financial condition continues to deteriorate, no doubt aided by its lavish subsidies for natural gas. Ukrainian consumers pay only about one fifth of the wholesale price of gas, which leaves the government with a huge bill and undermines the government-run energy monopoly Naftogaz Ukrainyi. Successive governments have refused to risk the wrath of voters by scaling back the subsidies that are driving that nation into bankruptcy.
To top it off, in 2009 Ukraine signed a 10-year deal with Russia, its main gas supplier. That pact has been described as “disastrous” because under it Ukraine pays significantly more than EU nations for gas.
Many of the protesters are upset with President Yanukovych for rejecting an association agreement between Ukraine and the European Union. Instead he ran into the arms of the Russian president who offered the struggling country a huge bribe in the form of a bailout.
Since 2010 Putin been taking steps to create a Eurasian Union, a large trade and political alliance of former Soviet states to rival the European Union and the United States. It began that year with the formation of the Customs Union of Belarus, Kazakhstan, and Russia, a kind of free trade, economic-integration zone.
The U.S. officially opposes the Customs Union, arguing it is an attempt to recreate a Russia-controlled USSR-like federation among the former Soviet republics. In 2012 then-Secretary of State Hillary Clinton said the Obama administration did not approve of Russia’s effort to “re-sovietize” its former captive states.
“It’s not going to be called that [USSR]. It’s going to be called customs union, it will be called Eurasian Union and all of that,” she said. “But let’s make no mistake about it. We know what the goal is and we are trying to figure out effective ways to slow down or prevent it.”
Clinton’s apparent hawkishness seems at odds with President Obama, who has made it his life’s mission to reduce the power and influence of the United States abroad.
It also seems at odds with her successor at the State Department, John Kerry.
Kerry spokeswoman Jen Psaki weakly called on President Yanukovych to “de-escalate” the situation and enter into peace talks with the opposition.
Secretary of State John Kerry “shares the grave concerns expressed by Vice President [Joe] Biden directly to President Yanukovych today regarding the unacceptable violence on the streets of Kyiv,” Psaki said. “Ukraine’s deep divisions will not be healed by spilling more innocent blood.”
It is unclear if Yanukovych and Putin will put any stock into what the Obama administration, font of left-wing weakness and mediocrity, has to say. As for the Ukraine, projections for de-escalation have consistently been defied. Now that violence has been let loose on the country in such a dramatic form, it is unlikely the genie will be able to be put back in the bottle.
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