17 December 2013 Russian–Ukrainian action plan

2013 defunct proposed agreement Signing 17 December 2013 Ukrainian-Russian action plan.jpg 250px Russian president Putin and Ukrainian president Yanukovych signing a joint bilateral programme of celebrations for the 200th anniversary of the birth of Taras Shevchenko in 2014 on 17 December 2013 Action plan December 17, 2013 Moscow, Russia RUS Vladimir Putin UKR Viktor Yanukovych Russian and Ukrainian The 17 December 2013 Russian–Ukrainian action plan was a de facto defunctUkraine crisis: Russia halts gas supplies to Kiev, BBC News (16 June 2014) proposed agreement between the Russian president Vladimir Putin and former Ukrainian president Viktor Yanukovych publicized on 17 December 2013 whereby Russia would buy $15 billion of Ukrainian eurobonds to be issued by Ukraine and that the cost of Russian natural gas supplied to Ukraine would be lowered to $268 per 1,000 cubic metres (the price was more than $400 at the time).Russia cuts Ukraine gas price by a third, BBC News (17 December 2013) The treaty was signed amid the escalating Euromaidan movement which sought closer ties between Ukraine and the European Union.http://main.omanobserver.om/?p=34172 Ukraine still wants historic pact with EU Oman Observer 27 November 2013 dead https://web.archive.org/web/20140125161035/http://main.omanobserver.om/?p=34172 25 January 2014 Ukraine police dismantle Kiev protest camps, BBC News (9 December 2013) The interest rate on the loan would be renegotiated every three months, based on a verbal agreement between the two leaders.Putin's meddling in Ukraine sinister - Winnipeg Free Press https://web.archive.org/web/20140222034857/http://www.winnipegfreepress.com/opinion/analysis/putins-meddling-in-ukraine-sinister-245490261.html?device=mobile February 22, 2014 The proposed agreement is de facto defunct since Russia has halted its purchase of the never issued eurobonds since the ousting of President Yanukovich of 22 February 2014 and in April 2014, the Russian natural gas discount was cancelled. Since December 2015, Ukraine has defaulted on the $3 billion debt payment to Russia that was part of the action plan. Yahoo News. Published 18 December 2015. Retrieved 2 February 2016.Ukraine won't repay $3 billion Russian debt due this weekend http://bigstory.ap.org/article/3266e1c4ee134eebacb860fb07b1ad06/ukraine-says-it-wont-repay-russian-debt-due-weekend dead https://web.archive.org/web/20160311162705/http://bigstory.ap.org/article/3266e1c4ee134eebacb860fb07b1ad06/ukraine-says-it-wont-repay-russian-debt-due-weekend 2016-03-11 2016-02-14, AP News (18 December 2015) Background Euromaidan the evolution of the price Ukraine paid to Gazprom from June 2010 till February 2013 Kharkiv Pact#Effects In mid-August 2013, Russia changed its customs regulations on imports from Ukraine.On 20 December 2013, Ukrainian prime minister Mykola Azarov stated that this should be seen as "Russia was trying to defend its interests".Azarov says Russia helped Ukraine in difficult times, Interfax-Ukraine (21 December 2013) nb Ukrainian Industrial Policy Minister Mykhailo Korolenko stated on 18 December 2013 that because of this Ukraine's exported had dropped by $1.4 billion (or a 10% year-on-year decrease through the first 10 months of the year). The State Statistics Service of Ukraine reported in November 2013 that in comparison with the same months of 2012 industrial production in Ukraine in October 2013 had fallen by 4.9 percent, in September 2013 by 5.6 percent and in August 2013 by 5.4 percent (and that the industrial production in Ukraine in 2012 total had fallen by 1.8 percent).Decline in industrial production in Ukraine in October 2013 slows to 4.9 percent, Kyiv Post (18 November 2013) https://web.archive.org/web/20140125230554/http://www.kyivpost.com/content/business/decline-in-industrial-production-in-ukraine-in-october-2013-slows-to-49-percent-332016.html January 25, 2014 In June 2010 (a few months after the 2010 Ukrainian–Russian Naval Base for Natural Gas treatyRussia, Ukraine agree on naval-base-for-gas deal, CNN (21 April 2010) https://web.archive.org/web/20140425153935/http://www.cnn.com/2010/WORLD/europe/04/21/russia.ukraine/index.html?hpt=T2 April 25, 2014 ), Ukraine paid Gazprom (the Russian government controls 50.002% of shares in GazpromGazprom http://www.gazprom.ru/documents/Report_Eng.pdf Gazprom's Annual Report 2006 2006 2007-08-15 https://web.archive.org/web/20070928040608/http://www.gazprom.ru/documents/Report_Eng.pdf 28 September 2007 dead ) around $234 per 1,000 cubic metres of natural gas.UPDATE 2-Russia threatens to cut Belarus gas supplies Monday, Reuters (18 June 2010) In January 2013, Ukraine paid $430 per 1,000 cubic metres.Ukraine set to sign landmark $10 billion shale gas deal with Shell, Reuters (24 January 2013)Shell for shale: Ukraine signs major deal https://web.archive.org/web/20201028005601/https://www.euronews.com/2013/01/25/shell-for-shale-ukraine-signs-major-deal 2020-10-28 , Euronews (25 January 2013)UPDATE 1-Ukraine signs landmark $10 bln shale gas deal with Shell, Reuters (24 January 2013) And at the time of the 17 December 2013 agreement, Ukraine still paid more than $400. Since August 2011, Ukraine seeks to reduce imports of Russian natural gas by two-thirds (compared with 2010) by 2016.Ukraine seeks to cut imports of Russian gas, Kyiv Post (30 August 2011) https://web.archive.org/web/20110831122050/http://www.kyivpost.com/news/russia/detail/111892/ August 31, 2011 Natural gas is Ukraine's biggest import at present and is the main cause of the country's structural trade deficit.Kyiv's gas strategy: closer cooperation with Gazprom or a genuine diversification, Centre for Eastern Studies (15 July 2013) https://web.archive.org/web/20131023132057/http://www.osw.waw.pl/en/publikacje/osw-commentary/2013-07-15/kyiv-s-gas-strategy-closer-cooperation-gazprom-or-a-genuine-div October 23, 2013 Whatever the reason might have been; the economy of Ukraine was approaching a bad state by late 2013.Fitch: Ukraine protests increase pressure on credit profile, Interfax-Ukraine (16 December 2013) https://web.archive.org/web/20140125102535/http://en.interfax.com.ua/news/economic/182225.html January 25, 2014 https://www.bbc.co.uk/news/business-25430980 Russian bailout masks Ukraine's economic mess, BBC News (18 December 2013) and had poor solvency.Protests in Ukraine up risk of growth in foreign currency demand, says Moody's, Interfax-Ukraine (4 December 2013) https://web.archive.org/web/20140125145229/http://en.interfax.com.ua/news/economic/179320.html January 25, 2014 On 21 November 2013, a Ukrainian government decree preparations for signing an Association Agreement and Deep and Comprehensive Free Trade Agreement with the European Union (EU).Kyiv protesters brave the cold as political tug-of-war continues http://www.euronews.com/2013/12/12/kyiv-protesters-brave-the-cold-as-political-tug-of-war-continute/ 12 December 2013 Euronews 12 December 2013 https://web.archive.org/web/20131226070318/http://www.euronews.com/2013/12/12/kyiv-protesters-brave-the-cold-as-political-tug-of-war-continute/ 2013-12-26 live Ukraine drops EU plans and looks to Russia http://www.aljazeera.com/news/europe/2013/11/ukraine-drops-eu-plans-looks-russia-20131121145417227621.html aljazeera.com 21 November 2013Ukrainian government issues decree to suspend preparations for signing of association agreement with EU, Interfax-Ukraine (21 November 2013)Rada votes down all bills on allowing Tymoshenko's medical treatment abroad, Interfax-Ukraine (21 November 2013)Cox-Kwasniewski mission to continue until Eastern Partnership Summit, Interfax-Ukraine (21 November 2013) https://web.archive.org/web/20140125111429/http://en.interfax.com.ua/news/general/176135.html January 25, 2014 Despite that in the months before Ukrainian president Viktor Yanukovych had urged the parliament to adopt laws so that Ukraine would meet the EU's criteria.EU Commissioner Fule expects Rada to pass European integration bills on November 21, Interfax-Ukraine (20 November 2013) https://web.archive.org/web/20140125091913/http://en.interfax.com.ua/news/general/175853.html January 25, 2014 Ukrainian president asks for laws to be passed to facilitate EU association agreement https://web.archive.org/web/20201117165954/https://www.euronews.com/2013/09/03/ukranian-president-asks-for-laws-to-be-passed-to-facilitate-eu-association- 2020-11-17 , Euronews (3 September 2013)Ukraine leader urges pro-Europe drive despite Kremlin pressure, Reuters (3 September 2013) On 25 September 2013 Chairman of the Verkhovna Rada (Parliament of Ukraine) Volodymyr Rybak stated that he was sure that his parliament would pass all the laws needed to fit the EU criteria for the Association Agreement since, except for the Communist Party of Ukraine, "The Verkhovna Rada has united around these bills".EU-Ukraine Association Agreement to be signed, Ukraine to go to Europe – speaker, Interfax-Ukraine (25 September 2013) https://web.archive.org/web/20130927070845/http://www.interfax.co.uk/ukraine-news/eu-ukraine-association-agreement-to-be-signed-ukraine-to-go-to-europe-speaker-2/ September 27, 2013 The reason given for the (stop preparations for signing EU-agreement) decree was that the previous months Ukraine had experienced "a drop in industrial production and our relations with CIS countries". The government also assured "Ukraine will resume preparing the agreement when the drop in industrial production and our relations with CIS countries are compensated by the European market".Ukraine to resume preparing agreement with EU when compensation for production drop found – Boiko, Interfax-Ukraine (21 November 2013) https://web.archive.org/web/20140125114543/http://en.interfax.com.ua/news/general/176144.html January 25, 2014 During two years of negotiations, Ukraine did not raise the issue of large, unconditional grants from the EU and IMF until the eve of the Vilnius summit. According to Ukrainian prime minister Mykola Azarov "the extremely harsh conditions" of an IMF loan (presented by the IMF on 20 November 2013), which included big budget cuts and a 40% increase in gas bills, had been the last argument in favor of the Ukrainian government's decision to suspend preparations for signing the Association Agreement.https://www.nytimes.com/2013/11/23/world/europe/ukraine-blames-imf-for-collapse-of-accord-with-european-union.html Ukraine Blames I.M.F. for Halt to Agreements With Europe David M. Herszenhorn New York Times 22 November 2013 10 December 2013 dead https://web.archive.org/web/20131208033356/http://www.nytimes.com/2013/11/23/world/europe/ukraine-blames-imf-for-collapse-of-accord-with-european-union.html December 8, 2013 https://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10469065/Historic-defeat-for-EU-as-Ukraine-returns-to-Kremlin-control.html Historic defeat for EU as Ukraine returns to Kremlin control Ambrose Evans-Pritchard Daily Telegraph 22 November 2013 10 December 2013 https://web.archive.org/web/20140329164040/http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10469065/Historic-defeat-for-EU-as-Ukraine-returns-to-Kremlin-control.html 2014-03-29 live London On 7 December 2013 the IMF clarified that it was not insisting on a single-stage increase in natural gas tariffs in Ukraine by 40%, but recommended that they be gradually raised to an economically justified level while compensating the poorest segments of the population for the losses from such an increase by strengthening targeted social assistance.MF not insisting on single-stage increase in tariffs, says resident representative in Ukraine, Interfax-Ukraine (7 December 2013) https://web.archive.org/web/20140125145455/http://en.interfax.com.ua/news/general/179958.html January 25, 2014 The same day IMF Resident Representative in Ukraine Jerome Vacher stated that this particular IMF loan is worth US$4 billion and that it would be linked with "policy, which would remove disproportions and stimulated growth".IMF links loan amount to Ukraine with reforms, Ukrinform (7 December 2013) https://web.archive.org/web/20140125163213/http://www.ukrinform.ua/eng/news/imf_links_loan_amount_to_ukraine_with_reforms_314404 January 25, 2014On 10 December, President Yanukovych stated "We will certainly resume the IMF negotiations. If there are conditions that suit us, we will take that path". However, Yanukovych also (once again) stated that the conditions put forward by the IMF were unacceptable "I had a conversation with U.S. Vice President Joseph Biden, who told me that the issue of the IMF loan has almost been solved, but I told him that if the conditions remained... we did not need such loans".Ukraine to resume talks with IMF soon, says Yanukovych, Interfax-Ukraine (10 December 2013) https://web.archive.org/web/20140125090634/http://en.interfax.com.ua/news/economic/180825.html January 25, 2014 nb The decision to put off signing the EU Association Agreement led to massive, ongoing protests in Ukraine (for closer ties between Ukraine and the EU) that began in the night of 21 November 2013 when up to 2,000 protesters gathered at Kyiv's Maidan Nezalezhnosti.ru Противники приостановки евроинтеграции Украины в ночи вышли на улицы Киева Opponents of suspension Ukraine's European integration in the night took to the streets of Kiev, NEWSru (22 November 2013) https://web.archive.org/web/20140125103941/http://www.newsru.com/world/22nov2013/ukr.html January 25, 2014uk Post by Arseniy Yatsenyuk, Twitter (21 November 2013) https://web.archive.org/web/20140301055356/https://twitter.com/Yatsenyuk_AP/status/403453433648148481 March 1, 2014uk УВАГА! Збір сьогодні на Майдані Незалежності о 22:30 !!! Watch out! Gather today at Maidan Nezalezhnosti at 22:30!!, Korrespondent.net (21 November 2013) https://web.archive.org/web/20140125145600/http://blogs.korrespondent.net/pro_users/blog/nadunin2/a125087 January 25, 2014 And that had risen to 400,000–800,000 protesters demonstrating in Kyiv on the weekends of 1 DecemberWhitmore Brian Putin's Growing Threat Next Door https://www.theatlantic.com/international/archive/2013/12/putins-growing-threat-next-door/282103/ The Atlantic 6 December 2013 https://web.archive.org/web/20131206220907/http://www.theatlantic.com/international/archive/2013/12/putins-growing-threat-next-door/282103/ 2013-12-06 live and 8 December 2013.https://www.bbc.co.uk/news/world-europe-25290959 Ukraine's capital Kiev gripped by huge pro-EU demonstration BBC News 8 December 2013 8 December 2013 https://web.archive.org/web/20140411023244/http://www.bbc.co.uk/news/world-europe-25290959 2014-04-11 live Negotiation thumb|Meeting of the Russian-Ukrainian Interstate Commission on 17 December 2013 Russian president Vladimir Putin and his Ukrainian counterpart Viktor Yanukovych held the sixth "interstate consultation" on 17 December in Moscow.Putin expects to make progress on sensitive bilateral issues during meeting with Yanukovych, Interfax-Ukraine (17 December 2013) https://web.archive.org/web/20140125131209/http://en.interfax.com.ua/news/general/182385.html January 25, 2014 Yanukovych flew to Moscow on the private jet airliner of Ukrainian oligarch (and alleged financier and chieftain of Yanukovych's Party of Regions D'Anieri Paul J. Understanding Ukrainian Politics Power, Politics, and Institutional Design https://books.google.com/books?id=Wp7VKL4p7kQC&pg=PA170 2007 M.E. Sharpe 978-0-7656-1811-5 170 Burnell Peter Gerrits Andre W.M. PROMOTING PARTY POLITIC IN EMERGING https://books.google.com/books?id=We7bAAAAQBAJ&pg=PA36 2013 Routledge 978-1-317-98597-6 36 ) Rinat Akhmetov.Ukraine's Yanukovich returns from Moscow on Akhmetov's plane – and on a tight leash – beyondbrics - Blogs - FT.com After the meeting, Yanukovych stated "We've prepared a joint action plan to resolve trade and economic restrictions, a so-called road map that will significantly improve performance in this area" and added this would benefit the entire sectors of the economies of the two countries.Action plan for settlement of trade restrictions to deepen Ukrainian-Russian strategic relations, says Yanukovych, Interfax-Ukraine (17 December 2013) https://web.archive.org/web/20140125150726/http://en.interfax.com.ua/news/economic/182490.html January 25, 2014 "Favourable conditions for the about 1.5 million people from Ukraine that are working in Russia" were also discussed.Putin calls for creation of favorable conditions for Ukrainian citizens working in Russia, Interfax-Ukraine (17 December 2013) https://web.archive.org/web/20131217221459/http://en.interfax.com.ua/news/general/182409.html December 17, 2013 According to President Putin and Russian presidential press secretary Dmitry Peskov this deal was "not tied to any conditions" and Ukraine's possible accession to the Customs Union of Belarus, Kazakhstan, and Russia was not addressed.Russia and Ukraine strike $15bln deal, Al Jazeera (17 December 2013) https://web.archive.org/web/20140130061124/http://www.aljazeera.com/news/europe/2013/12/ukrainian-president-seeks-cash-from-kremlin-201312179339772616.html January 30, 2014 Peskov also added "it is our principled position not to interfere in Ukraine's affairs" and accused other countries of doing the opposite.Putin's spokesman: Ukraine's accession to Customs Union was not discussed at Tuesday meeting, Interfax-Ukraine (17 December 2013) https://web.archive.org/web/20140125151650/http://en.interfax.com.ua/news/economic/182488.html January 25, 2014 According to President Yanukovych, the trade situation between Russia and Ukraine required urgent intervention, and that it should be coordinated with other Commonwealth of Independent States (CIS) countries.Situation in trade between Russia and Ukraine requires urgent intervention - Yanukovych, Interfax-Ukraine (17 December 2013) https://web.archive.org/web/20140125144534/http://en.interfax.com.ua/news/economic/182396.html January 25, 2014 He also added referring to Russia–Ukraine relations, "We'll have to learn lessons for the future and not to repeat such mistakes".Yanukovych: Kyiv, Moscow shouldn't replay past mistakes, Interfax-Ukraine (17 December 2013) https://web.archive.org/web/20140125125445/http://en.interfax.com.ua/news/general/182486.html January 25, 2014 And President Yanukovych also stated that Ukraine and Russia should strengthen cross-border and inter-regional cooperation "which create convenient conditions for the people".Ukraine, Russia should develop cross-border and inter-regional cooperation - Yanukovych, Interfax-Ukraine (17 December 2013) https://web.archive.org/web/20140125134649/http://en.interfax.com.ua/news/general/182398.html January 25, 2014 The next day Prime Minister Mykola Azarov stated that without the deal with Russia "bankruptcy and social collapse would have awaited Ukraine".https://www.bbc.co.uk/news/world-europe-25427706 Russia deal saved Ukraine from bankruptcy - PM Azarov BBC 18 December 2013 18 December 2013 https://web.archive.org/web/20140311133341/http://www.bbc.co.uk/news/world-europe-25427706 2014-03-11 live He also added that there was no way Ukraine could have signed the EU Association Agreement as Ukraine would have had to accept unfeasibly stringent IMF conditions for economic reform. The protest on Maidan Nezalezhnosti continued on 18 December 2013.Anti government protesters in Kyiv reject Ukrainian-Russian pact, Euronews (18 December 2013) https://web.archive.org/web/20140228152921/http://www.euronews.com/2013/12/18/anti-government-protesters-in-kyiv-reject-ukrainian-russian-pact/ February 28, 2014 He also stated "Nothing is threatening stability of the financial-economic situation in Ukraine now. Not a single economic factor".Nothing threatening Ukraine's economic, financial stability now - PM Azarov, Interfax-Ukraine (18 December 2013) https://web.archive.org/web/20140125120255/http://en.interfax.com.ua/news/economic/182569.html January 25, 2014 On 19 December 2013, Russian President Putin stated about the (which he described as an "act of brotherly love"On 20 December 2013, Chairman of the Verkhovna Rada Volodymyr Rybak commented on this statement ""If we are brothers, then I take the money and give it to you as a brother, but when they issue a loan at an interest rate that must be repaid these are economic relations between the two states".Rybak says EU-Ukraine Association Agreement can be signed without FTA, Interfax-Ukraine (23 December 2013) https://web.archive.org/web/20131224110011/http://en.interfax.com.ua/news/general/183388.html December 24, 2013 nb) 17 December deal between Russia and Ukraine "This is not at all linked to (protests at) Maidan, nor with the EU-talks that Ukraine leads... We're just seeing that Ukraine is in dire straits and we should support her".Ukraine and nuclear missiles dominate Putin's annual press address, Euronews (19 December 2013) https://web.archive.org/web/20140127014633/http://www.euronews.com/2013/12/19/ukraine-and-nuclear-missiles-dominate-putin-s-annual-press-address/ January 27, 2014 On 25 September 2014, Ukraine opened a criminal probe against (in December 2013) Minister of Finance of Ukraine Yuriy Kolobov; he is accused of illegally transferring a $450,000 fee to Russia's state-run VTB Capital as a kickback for the 17 December 2013 Ukrainian–Russian action plan.Ukraine Probes Ex-Minister Over $3 Billion Russian Bond, Bloomberg News (Sep 25, 2014) The agreement The "joint action plan" consisted of the Russian National Wealth Fund buying $15 billion of Ukrainian eurobonds and the lowering of the cost of Russian natural gas supplied to Ukraine to $268 per 1,000 cubic metres (Ukraine paid $400 at the time). The discount in gas was set contingent upon a quarterly review to be approved by both parties, upon which Russia reserved the right to rescind the discount. As part of the action plan, Russia committed itself to the restoration its customs regulations on imports from Ukraine that had existed before mid-August 2013.Eased Russian customs rules to save Ukraine $1.5 bln in 2014, says minister, Interfax-Ukraine (18 December 2013)Russia to lift restrictions on Ukrainian pipe imports - Ukrainian ministry, Interfax-Ukraine (18 December 2013)Russia tightens customs rules to force Ukraine into union, Reuters (15 August 2013) The lowering of the natural gas price was done by amending the agreement that had ended the 2009 Russia–Ukraine gas dispute. According to President Putin, this amendment would enable Gazprom to lower the price of natural gas for Ukraine.Gazprom lowers gas price for Ukraine 33% to $268.5 per 1,000 cu m, Interfax-Ukraine (17 December 2013) https://web.archive.org/web/20131217221443/http://en.interfax.com.ua/news/economic/182467.html December 17, 2013 The natural gas prices was to be reviewed every three months.Ukraine bailout could derail Putin's drive to boost Russian economy, Financial Times (18 December 2013) According to Russian finance minister Anton Siluanov, the exact terms of the Russian purchase of Ukrainian eurobonds would be determined later, but a portion of the eurobonds, "significantly less, will be placed this year".Ukraine to issue Eurobonds; Russia will purchase $15 bln, says Russian finance minister, Interfax-Ukraine (17 December 2013) https://web.archive.org/web/20140125133629/http://en.interfax.com.ua/news/economic/182491.html January 25, 2014 Siluanov added that the bonds would be placed on the Irish Stock Exchange under English law with 5% interest per bond.uk Росія дає Україні в борг під 5% річних Russia gives Ukraine a loan at 5% per annum, Ukrayinska Pravda (17 December 2013) https://web.archive.org/web/20131217225412/http://www.pravda.com.ua/news/2013/12/17/7007436/ December 17, 2013 The bonds will mature in two years.According to The Financial Times, this is a short period; the newspaper literally wrote "The bonds will mature in just two years," and that "International Monetary Fund loans are much cheaper and last longer" Åslund Anders ARGUMENT Who's the Biggest Loser in the Ukraine-Russia Deal? https://foreignpolicy.com/2013/12/20/whos-the-biggest-loser-in-the-ukraine-russia-deal/ Financial Times Anders Åslund 23 December 2013 https://web.archive.org/web/20141217011219/https://foreignpolicy.com/2013/12/20/whos-the-biggest-loser-in-the-ukraine-russia-deal/ 2014-12-17 live nb On 23 December 2013, Siluanov stated that Russia would not be trading the bonds.Russia to pay Ukraine $3 bln for eurobonds on Tuesday - Siluanov, Interfax-Ukraine (23 December 2013) https://web.archive.org/web/20131224094817/http://en.interfax.com.ua/news/economic/183420.html December 24, 2013 Russia can demand early repayment of the loan at any time.Russia can call in Ukraine loan if situation warrants - Shuvalov, Interfax-Ukraine (23 December 2013) https://web.archive.org/web/20131224090428/http://en.interfax.com.ua/news/general/183432.html December 24, 2013 The terms of the action plan included the condition that if Ukraine's total state debt would exceed 60% of its annual gross domestic product (GDP) Russian could demand early repayment.Russia says Ukraine has violated loan terms: agencies, Reuters (Jan 10, 2015) Ratification and criticism Voting In response to the agreement, the opposition parties Batkivshchyna, UDAR and Svoboda immediately blocked parliament in order to defer its ratification since they quickly denounced the plan.Опозиція заблокує ВР, щоб не допустити ратифікації угод з Росією, - Яценюк INSIDER Criticism On 17 December, opposition leader Vitaly Klitschko told the approximately 50,000 people Euromaidan-protest on Kyiv's Maidan Nezalezhnosti "He [President Yanukovich] has given up Ukraine's national interests, given up independence and prospects for a better life for every Ukrainian".Ukraine opposition leader condemns Russia bailout deal, The Irish Times (17 December 2013) https://web.archive.org/web/20140125141932/http://www.irishtimes.com/news/world/europe/ukraine-opposition-leader-condemns-russia-bailout-deal-1.1630987 January 25, 2014 On 18 December 2013, BBC News reported that the deal "will not fix Ukraine's deeper economic problems" in an article called Russian bailout masks Ukraine's economic mess. The same day The Financial Times noted that the treaty could be bad for Gazprom, which was already planning to cut its overall investment in 2014, "With an additional burden from Ukraine, the state firm may be even less able to serve as a motor for Russia's sluggish economy". De facto collapse of the agreement Russian president Putin told his Dmitry Medvedev's Cabinet on 29 January (and just after the resignation of the second Azarov Government) that "it's reasonable" to wait until a successor cabinet was installed in Ukraine before extending more aid to Ukraine. Furthermore, Russian prime minister Dmitry Medvedev stated Ukraine wasn't paying its natural gas bills even with the lower price, which "seriously changes the situation".Ukraine asks for payment deferral on past, new gas deliveries; negotiations needed - Medvedev, Interfax-Ukraine (29 January 2014) https://web.archive.org/web/20140221065942/http://en.interfax.com.ua/news/economic/187913.html February 21, 2014 Meanwhile, Serhiy Arbuzov (who had replaced Mykola Azarov as acting Ukrainian prime minister) believed Russia would be its second $2 billion tranche "in the nearest future". Naftogaz Ukrainy blamed the delay in payment of Russian natural gas on a lack of payment of local "enterprises in the heating utilities sector".Ukraine's Naftogaz warns over Gazprom payments due to heating utility indebtedness, Interfax-Ukraine (3 February 2014) https://web.archive.org/web/20140221070625/http://en.interfax.com.ua/news/economic/188524.html February 21, 2014 On 17 February, Russian finance minister Anton Siluanov stated that Russia would release the next $2 billion tranche of the 17 December 2013 $15 billion loan to Ukraine the same week.Russia to buy eurobonds worth $2 bln from Ukraine this week - Siluanov, Interfax-Ukraine (17 February 2014) https://web.archive.org/web/20140511113525/http://en.interfax.com.ua/news/economic/190508.html May 11, 2014 But on 18 February Ukraine decided not to issue these $2 billion eurobond.Ukraine decides not to issue eurobonds worth $2 bln, says ISE, Interfax-Ukraine (21 February 2014) https://web.archive.org/web/20140225171047/http://en.interfax.com.ua/news/economic/191593.html February 25, 2014 Since the ousting of President Yanukovich of 22 February 2014, Russia had halted its purchase of eurobonds (after it had on 23 December 2013 Russia transferred $3 billion in payment for the eurobonds to Ukraine).Ukraine to Honor Russian Eurobond Payments in Crimea Dispute, Bloomberg news (19 March 2014) On 1 April 2014, Gazprom cancelled the Russian natural gas discount as agreed in the treaty because Ukraine's debt to the company had risen to $1.7 billion since 2013.https://www.bloomberg.com/news/2014-04-01/gazprom-raises-gas-export-price-as-ukraine-looks-for-cash.html Bloomberg Elena Mazneva Gazprom Raises Gas Export Price as Ukraine Looks for Cash 1 April 2014 After trilateral months of talks between the European Union, Ukraine and Russia, a deal was reached on 30 October 2014 in which Ukraine agreed to pay (in advance) $378 per 1,000 cubic metres to the end of 2014, and $365 in the first quarter (ending on 31 March) of 2015.Russia-Ukraine gas deal secures EU winter supply, BBC News (31 October 2014)Ukraine secures winter gas supplies from Gazprom, Kyiv Post (31 October 2014) Since December 2015, Ukraine refuses to and hence de facto defaults on the $3 billion debt payment to Russia that was part of the action plan. On 17 February 2016, Russia filed a lawsuit against Ukraine at Her Majesty's High Court of Justice in England over this debt.[Russia files lawsuit against Ukraine over $3bn debt Russia files lawsuit against Ukraine over $3bn debt], BBC News (17 February 2016) Effects On 23 December 2013, Russia transferred $3 billion in payment for the eurobonds to Ukraine.Russia buys 1st tranche of Ukrainian bonds for $3 bln - PM, Interfax-Ukraine (24 December 2013) https://web.archive.org/web/20131224211928/http://en.interfax.com.ua/news/economic/183597.html December 24, 2013 But so far trade between Ukraine and Russia has not been normalized. Economic effect According to the plan, "protective measures" of both countries should be lifted so that "normalized trade" can resume.Ukraine, Russia to discuss easing some safeguard measures in trade in H1 2014, Interfax-Ukraine (20 December 2013) https://web.archive.org/web/20131224090441/http://en.interfax.com.ua/news/economic/183123.html December 24, 2013 Ukrainian wagons, Roshen sweets to return to Russian market in early 2014, says Russian economy ministry, Interfax-Ukraine (20 December 2013) https://web.archive.org/web/20131224111355/http://en.interfax.com.ua/news/economic/183145.html December 24, 2013 The days after the 17 December 2013 agreement (Ukraine's natural gas importer) Naftogaz did cut its imports of Russian gas to a minimum.Naftogaz cuts imports of Russia gas to minimum after signing of new gas price deal, Interfax-Ukraine (23 December 2013) https://web.archive.org/web/20131224114131/http://en.interfax.com.ua/news/economic/183466.html December 24, 2013 But on 9 January 2014, Ukrainian Energy and Coal Industry Minister Eduard Stavytsky stated that Ukraine (at that time) will buy only Russian natural gas "because it's currently the most profitable".Ukraine to buy only Russian gas due to advantageous price - energy minister, Interfax-Ukraine (9 January 2014) https://web.archive.org/web/20140109201337/http://en.interfax.com.ua/news/economic/185162.html January 9, 2014 The same day Naftogaz and Russia's Gazprom signed a supplement to the Russian-Ukrainian gas contract, setting the price of natural gas for Ukraine in the first quarter of 2014 at $268.5 per 1,000 cubic meters.Naftogaz, Gazprom sign supplement to gas contract, set gas price for Ukraine in Q1, 2014 at $268.5 per 1,000 cubic meters - Stavytsky, Interfax-Ukraine (9 January 2014) https://web.archive.org/web/20140109190152/http://en.interfax.com.ua/news/general/185134.html January 9, 2014 A representative of European Commissioner for Energy Günther Oettinger stated soon after that shipping gas from EU member states represents an opportunity for Ukraine to increase its competitiveness and the security of its natural gas supplies.Brussels notes that gas shipments from EU ensure Ukraine's competitiveness, supply security, Interfax-Ukraine (9 January 2014) https://web.archive.org/web/20140109190312/http://en.interfax.com.ua/news/general/185217.html January 9, 2014 Since November 2012, Ukraine was diversifying its suppliers of imported natural gas.Naftogaz to buy 18 b cubic meters of gas from Gazprom in 2014, says Bakulin, Interfax-Ukraine (13 June 2013)Naftogaz Ukrainy buys 320-350 mcm of gas from Gazprom in May, says Stavytsky, Interfax-Ukraine (13 June 2013)German RWE ready to supply gas to Ukraine via Slovakia, Interfax-Ukraine (14 June 2013)Ukraine hopes for diversification of gas supply sources and emergence of new suppliers, Interfax-Ukraine (17 June 2013)Ukraine to continue diversification of energy supplies, says president, Interfax-Ukraine (30 August 2013) May 2014 On 18 June 2013 Prime Minister Mykola Azarov stated "We currently buy gas from RWE and pump it through Poland, Slovakia and Hungary. This gas costs us less than the Russian gas that we buy on the border with Russia, and RWE sells us the same gas that it buys from Russia".Azarov: Russian gas from RWE costs Ukraine $100 less than gas bought on border with Russia, Interfax-Ukraine (18 June 2013) May 2014 He also stated that Ukraine annually overpaid Russia $7 billion for natural gas. nb On 9 January 2014, Ukrainian prime minister Mykola Azarov stated "at full capacity the program of industrial cooperation with Russia that will give us in the coming years hundreds of thousands of jobs and guarantees for budgets of all levels, which will be a financial base for the development of our domestic market".Ukraine has to bring industrial cooperation program with Russia up to speed in Feb - PM, Interfax-Ukraine (9 January 2014) https://web.archive.org/web/20140109190229/http://en.interfax.com.ua/news/general/185144.html January 9, 2014 On 29 January, in response to the resignation of the second Azarov Government, and despite pledging to honor agreements with Ukraine, Russia restarted tight border controls and other restrictions at the border for Ukrainian goods.Ukraine at Impasse on Amnesty After Russia Warns on Aid , Bloomberg L.P. (30 January 2014) https://web.archive.org/web/20140221084828/http://www.bloomberg.com/news/2014-01-29/russia-raises-stakes-for-ukraine-as-yanukovych-digs-in.html February 21, 2014 EuroMaidan rallies in Ukraine (Jan. 30-31 live updates) https://web.archive.org/web/20140509113033/http://www.kyivpost.com/content/ukraine/euromaidan-rallies-in-ukraine-jan-28-live-updates-335735.html May 9, 2014 Russia imposed inspections on 100% of Ukrainian exports to Russia.СМИ: Россия готовится к "таможенной войне" с Украиной События - В Украине Mignews.com.ua https://web.archive.org/web/20140421002334/http://mignews.com.ua/ru/articles/154262.html April 21, 2014 A government source suggested the customs war with Ukraine was a measure to pressure Ukrainian oligarchs into maintaining a pro-Russian policy vector.Россия приготовила новую торговую войну с Украиной - Экономика - zn.ua https://web.archive.org/web/20140219085249/http://zn.ua/ECONOMICS/rossiya-gotovit-novuyu-torgovuyu-voynu-s-ukrainoy-137645_.html February 19, 2014 Political effects thumb|Euromaidan protesters gathered at Kyiv's Maidan Nezalezhnosti on 18 December 2013 The Euromaidan movement continued in spite of the 17 December 2013 agreement.Ukraine's Opposition Vows to Block Russian Bailout in Parliament Opposition leaders vowed to continue their protests, if necessary, through New Year and Orthodox Christmas (celebrated on 7 January annually). They repeated their demands for the firing of the second Azarov Government, early presidential and parliamentary elections.Putin: Russia to buy $15 billion in Ukraine bonds, USA Today (17 December 2013) On 20 December, high-ranking EU-officials stated that the EU is still ready to sign the Association Agreement with Ukraine "as soon as Ukraine is ready for it", that this agreement was also beneficial for Russia and that the EU "is totally not concerned about the fact that Ukraine is signing agreements with Russia".EU offer to Ukraine is long-term, says Rompuy, Interfax-Ukraine (20 December 2013) https://web.archive.org/web/20140125120907/http://en.interfax.com.ua/news/economic/183240.html January 25, 2014EU reiterates sovereign right of states to make their own decisions without external pressure, Interfax-Ukraine (20 December 2013) https://web.archive.org/web/20140125141137/http://en.interfax.com.ua/news/general/183250.html January 25, 2014EU-Ukraine partnership treaty not to infringe on Russia's interests, says EU Council president, Interfax-Ukraine (20 December 2013) https://web.archive.org/web/20140125111859/http://en.interfax.com.ua/news/general/183230.html January 25, 2014EU to sign association agreement with Ukraine as soon as Ukraine is ready for it - Rompuy, Interfax-Ukraine (20 December 2013) https://web.archive.org/web/20140125100951/http://en.interfax.com.ua/news/general/183200.html January 25, 2014EU not concerned about Ukraine's signing agreement with Russia, says Barroso, Interfax-Ukraine (20 December 2013) https://web.archive.org/web/20140125111509/http://en.interfax.com.ua/news/general/183201.html January 25, 2014 The day before Polish foreign minister Radosław Sikorski stated "I do not know any formal facts that should say that it is impossible to sign the association agreement between Ukraine and the European Union".Polish foreign minister sees no obstacles to signing EU-Ukraine partnership treaty, Interfax-Ukraine (19 December 2013) https://web.archive.org/web/20140125150742/http://en.interfax.com.ua/news/general/182972.html January 25, 2014 On 19 December, Ukrainian president Viktor Yanukovych stated that his government had decided to pause work on the Association Agreement in order to determine the conditions that should be in place for them to sign the Free Trade Zone Agreement, a part of the larger Association Agreement. He continued to say that there was not any contradiction inherent in Ukraine's course on the EU integration issue. Yanukovych asserted that the crux of the matter is not about integration, but about economic relations.Ukraine's Yanukovych explains Russia and EU ties status, criticises Western politicians, Euronews (19 December 2013) https://web.archive.org/web/20131226055255/http://www.euronews.com/2013/12/19/ukraine-s-yanukovych-explains-russia-and-eu-ties-status-criticises-western-/ December 26, 2013 Although he added "If we talk about the work on the free trade agreement [a part of the EU Association Agreement], this will take us some time, and we still have a lot of uncertainties. Surely, we should see how this will benefit us in the short term, midterm, and long term".Yanukovych: Still too many uncertainties in association agreement with EU, Interfax-Ukraine (19 December 2013) https://web.archive.org/web/20140125152224/http://en.interfax.com.ua/news/general/182886.html January 25, 2014 He also added that Ukraine may combine the EU Association Agreement with observer status in the Customs Union of Belarus, Kazakhstan, and Russia and the Eurasian Economic Union.Association with EU compatible with Ukraine's observer status in Customs Union - Yanukovych, Interfax-Ukraine (19 December 2013) http://en.interfax.com.ua/news/general/182886.html Yanukovych: Still too many uncertainties in association agreement with EU December 21, 2013 January 25, 2014 https://web.archive.org/web/20140125152224/http://en.interfax.com.ua/news/general/182886.html bot: unknown According to the Ukrainian president Viktor Yanukovych, Ukraine expects to be granted observer status in the Eurasian Economic Union. "As concerns the Eurasian Union, we filed a written bid in Astana in August this year to consider Ukraine's participation in the Eurasian Union as an observer".Ukraine seeking observer status in Eurasian Economic Union - Yanukovych, Interfax-Ukraine (19 December 2013) https://web.archive.org/web/20140125090313/http://en.interfax.com.ua/news/general/182869.html January 25, 2014 On 29 January and just after the resignation of the second Azarov Government First deputy head of A Just Russia, Mikhail Emelyanov, stated the need to cancel the Ukrainian-Russian Action Plan and its discount in natural gas, and refuse the redemption of eurobonds 'if the government will resume Eurointegration'.http://zn.ua/ECONOMICS/rossiya-gotovit-novuyu-torgovuyu-voynu-s-ukrainoy-137645_.html Россия приготовила новую торговую войну с Украиной April 2014 end of discount price for Ukraine Mid-June 2014 the price Ukraine paid to Russia for natural gas was $485.50 per 1,000 cubic metres, the highest in Europe. After trilateral months of talks between the European Union, Ukraine and Russia, a deal was reached on 30 October 2014 in which Ukraine agreed to pay (in advance) $378 per 1,000 cubic metres to the end of 2014, and $365 in the first quarter (ending on 31 March) of 2015. Expert analysis Swedish economist Anders Åslund criticized the agreement, saying "Details will continue to emerge, perhaps pulling the bigger picture into focus, but right now it appears that this deal is heavily one-sided and greatly favors Russia." James Sherr, a fellow at the Russian and Eurasian program at London-based think tank Chatham House, and key Western expert on Ukraine and Russia described the deal: "the conditions that Yanukovych has accepted from Moscow perpetuate weakness and subservience. Nothing in the Moscow accords even addresses the causes of Ukraine's economic disaster."James Sherr: Ukraine 'is in a dangerous situation' Kyiv Post http://www.kyivpost.com/content/politics/james-sherr-ukraine-is-in-a-dangerous-situation-334161.html 23 December 2013 https://web.archive.org/web/20140507085508/http://www.kyivpost.com/content/politics/james-sherr-ukraine-is-in-a-dangerous-situation-334161.html 2014-05-07 live "While Ukraine has every right to alter its course, Russia has no right to force Ukraine to alter it. The December 1994 Budapest Memorandum obliges all parties to 'refrain from economic coercion.' Coercion does not show respect for sovereignty. It is a violation of sovereignty. A number of European leaders are as persuaded as I am that Russia employed economic coercion.""The Customs Union is yesterday's story. The new framework will be built on interlocking, inter-sectoral integration, in other words Russian co-ownership and co-management of key sectors of Ukraine's economy. In 2010, Medvedev presented Yanukovych with precisely such a model, embracing shipbuilding, chemicals, and of course, aerospace, the defense complex and energy, which every Ukrainian president has regarded as a mainstay of national independence. All of this was very public at the time. In 2010, Yanukovych rejected it. Now he has accepted it. There are still questions about details and bigger questions about how much can and will be implemented. But the Russians are very happy. Their conclusion is that 'Ukraine is now ours'. Azarov can still insist that Ukraine won't join the Customs Union. But that is now irrelevant. The story has moved on." Notes nb References 30em 17 December 2013 Ukrainian-Russian action plan External links Category:2013 in Ukraine Category:2013 in Russia Category:Treaties concluded in 2013 Category:Treaties entered into force in 2013 Category:Treaties of Ukraine Category:Bilateral treaties of Russia Category:Russia–Ukraine relations Category:Russia–Ukraine gas disputes Category:7th Ukrainian Verkhovna Rada Category:Political scandals in Ukraine 17 December Category:December 2013 in Europe Category:December 2013 in Russia