Ukraine should recognize Crimea’s independence, reform the country’s constitution, regulate the crisis in its eastern regions and guarantee the rights of Russian speakers if it wants to get financial help from Moscow, Russia’s finance minister has said.
“If Ukraine fulfils these four conditions, then Russia will be able to propose further steps on additional help both on financial and gas issues,” Finance Minister Anton Siluanov said after meeting with his German counterpart, Wolfgang Schauble, in Washington.
Deescalating tensions in eastern Ukraine should be peaceful, based on Ukraine’s legislation, “without discrimination against Russian-speaking population, without victims and bloodshed,” Siluanov said.
It is necessary for Ukraine to conduct constitutional reform, hold legitimate presidential elections and “form a government with which one may negotiate,” he said.
Ukraine’s gas debt is now estimated at over $2.2 billion. On Thursday, President Vladimir Putin wrote letters to the leaders of 18 European countries, including Germany and France, warning that Ukraine’s debt crisis had reached a “critical” level and could threaten transit to Europe. He also called for urgent cooperation, urging Russia’s partners in the West to take action.
According to German Chancellor Angela Merkel"there are many reasons to seriously take into account this message […] and for Europe to deliver a joint European response.”
In total, Moscow has subsidized Ukraine’s economy to the tune of $35.4 billion, coupled with a $3 billion loan tranche in December. Due to Ukraine’s gas debts, Gazprom revoked all discounts and is now charging $485 per 1,000 cubic meters of gas, a price Ukraine says it will not be able to pay.
The deteriorating economic situation is coupled with escalating tensions in Ukraine. The country’s Interior Ministry promised a harsh response to the riots in the east, especially in the “separatist regions” of Donetsk, Lugansk and Kharkov. The coup-appointed authorities said they would arrest all violators, "regardless of the declared slogans and party affiliation."
Eastern and southern Ukraine have been showing discontent with the new government in Kiev for weeks. Tensions escalated Monday when protesters in several cities started seizing local administration buildings. Major protests took place in the cities of Donetsk, Kharkov and Lugansk, while smaller actions and some clashes were reported in Odessa and Nikolayev.
After Donetsk activists proclaimed the region independent and demanded a referendum on its future status, Ukraine’s coup-imposed president Aleksandr Turchinov ordered the sending in of armed personnel and armored vehicles to the east.
At least 70 activists have been arrested in the course of the crackdown launched by Ukraine’s Interior Ministry in the eastern city of Kharkov. Most of them remain in prison, with 62 people detained for at least two months.
Sanctions are ‘counterproductive’ for all
At the G20 finance ministers’ meeting in Washington, sanctions against Russia’s alleged interference into Ukraine’s affairs dominated the background. While speaking with journalists, Siluanov said that he was against US and EU sanctions against Russian and that the widening of such sanctions would be “counterproductive” for all sides.
In the latest series of sanctions, leading Crimean officials were targeted; those, according to the US Treasury, who were responsible for organizing the March 16 referendum, which led to the peninsula leaving Ukraine and joining Russia.
Among the seven officials forbidden from entering the US or engaging in economic activity with America-based companies are acting Sevastopol governor Aleksey Chaliy, the head of the Crimean security service Pyotr Zima, and Mikhail Malyshev, the head of the electoral commission that oversaw the poll.
Additionally, US-based assets of Chernomorneftegaz, the former subsidiary of the Ukrainian state gas company located on the Crimean peninsula, will be frozen.
The US, the EU and several international groups have imposed sanctions on senior Russian officials. The US also introduced measures including a ban on exporting defense items and services to Russia to pressure Moscow over recent events in Ukraine.
The G7 group has voiced its readiness to introduce additional sanctions against Russia, if Moscow continues to “escalate” the turmoil in neighboring Ukraine, US Treasury Secretary Jack Lew said.
Meanwhile, the Russian Foreign Ministry and parliament have repeatedly denounced the policy of sanctions as inappropriate and counter-productive.
Some Russian MPs have suggested the possibility of retaliatory sanctions against US businesses, but these ideas have not been implemented as they might harm all the countries.
“Sanctions hurt all countries. We do not intend to introduce reciprocal sanctions,” Deputy Prime Minister Igor Shuvalov told reporters during the International Eastern Forum in Berlin.
Meanwhile, the meeting between Russia, Ukraine, EU and the US to discuss the ongoing political crisis in Ukraine will take place on April 17 in Geneva, the office of EU foreign policy chief Catherine Ashton said. Proposals for Ukraine’s constitutional reforms will also be presented in Geneva. However, Russian FM Sergey Lavrov on Tuesday expressed concern that Ukraine’s southeastern regions were not being invited to take part directly in the discussions on a new constitution for the country.
Siluanov said that similar concerns were voiced on Friday during a meeting with Treasury Secretary Lew.
He added that “Russia is ready to participate in supporting Ukraine together with the IMF and the European Union.” He also told Lew that Russia was concerned about Ukraine’s unpaid debt for supplies of natural gas.