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Ukraine Admits It's Losing Control in East

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Ukraine’s acting president says that the Kyiv government has effectively lost control over the situation in the country’s eastern Luhansk and Donetsk regions where a number of government buildings have been taken over by pro-Russia separatists.

Oleksandr Turchynov says that Russia is now eyeing six more regions in the country’s east and south. A takeover by Russia of two such regions, if it were to take full control of Donetsk, would secure Russia’s land connection with Crimea, which it annexed last month.

The takeover of two more regions along the Black Sea coast would connect Russian mainland with Moldova’s Russian-speaking Transdniestria enclave.

Speaking Wednesday at a meeting of regional leaders in Kyiv, Turchynov operatives have received instructions from Moscow to destabilize, via "acts of sabotage," the regions of Kharkiv, Dnipropetrovsk, Kherson, Zaporizhzha, Mykolayiv and Odesa.

Kyiv says that many such operatives have received training and are being financed by Russia, a charge Moscow denies.

On full alert

Bracing for a possible invasion by Russian troops massed on the border, Turchynov says Ukraine’s military has been put "on full combat alert."

Speaking at a ministerial meeting in Kyiv on Wednesday, he said there was a real threat of Russia starting a war against Ukraine's mainland. A Ukrainian soldier stands guard in front of armored personnel carriers at a check point near the village of Malynivka, southeast of Slovyansk, in eastern Ukraine, April 29, 2014

A Ukrainian soldier stands guard in front of armored personnel carriers at a check point near the village of Malynivka, southeast of Slovyansk, in eastern Ukraine, April 29, 2014

Moscow, meanwhile, has voiced concern over Turchynov’s statement, criticizing it as “militaristic.”

“We insist that Kyiv immediately cease its militaristic rhetoric aimed at intimidating its own population,” said a Foreign Ministry statement calling on Ukrainian authorities to start a dialogue toward national reconciliation instead.

The criticism comes as pro-Russian gunmen seized yet another administrative building in eastern Ukraine. Armed insurgents took control of the local council building in Horlivka early Wednesday, a town of more than 260,000 people. Police say the pro-Russian rebels have also overtaken the town’s regional police department.

Hundreds of pro-Russian separatists overran more Ukrainian government buildings near the Russian border earlier this week, taking control of several in the Donetsk and Luhansk regions.

The pro-Moscow rebels in Donetsk have set a referendum on secession for May 11. A similar vote last month led to Russia's annexation of Ukraine’s Crimean peninsula.

Possible reshuffle

Ukrainian Prime Minister Arseniy Yatsenyuk threatened his government on Wednesday with a reshuffle if it failed to meet the demands of the people, venting frustration with Kyiv's failure to restore law and order in the country's east.

Some critics say the central government has become all but paralyzed by infighting.

“The country demands action and results. If there is such action and results that means the government is doing its job,” Yatsenyuk told a government meeting.

“If in the near future such action and results fail to materialize, that means there will be personnel changes,” said Yatsenyuk.

He said ministers would also pass to parliament a law on conducting a nationwide poll on Ukrainian unity and territorial integrity, “those issues which concern Ukraine today,” on May 25 when Ukraine is due to hold a presidential election.

Recruiting agents

To bolster its claims that unrest in Ukraine is being fomented by Russia, Ukraine’s Security Service (SBU) today released a video it says proves that Moscow is actively recruiting agents from among Ukrainian citizens.

The video purports to show “citizen K.” who says he was recruited by Russian intelligence during a trip to the Crimea region earlier this month.

According to “citizen K.”, recruits are paid a daily stipend of 100 hryvnias (approximately $10) for collaborating with Russian agents, with those having military experience receiving several times that amount.

Although officially released by the SBU on its YouTube channel, the video’s authenticity could not be independently confirmed.

OSCE monitors

Meanwhile, negotiations resumed to gain the release of seven European observers taken hostage last week in the eastern Ukrainian city of Slovyansk.

Its self-proclaimed pro-Russian mayor said Tuesday he would be willing to swap the observers for pro-Russian activists held by Ukrainian authorities.

The monitors - four Germans, a Pole, a Dane and a Swede - had been sent to Ukraine by the Organizations for Security and Cooperation in Europe (OSCE).

In Washington, U.S. Secretary of State John Kerry Tuesday called on Russia "to leave Ukraine in peace." In a speech at the non-governmental Atlantic Council, Kerry blamed Russia for the current crisis in Ukraine, accusing Moscow of attempting to change the security landscape in eastern and central Europe.

Russia has denied direct involvement in Ukraine.

Calls for stronger sanctions

In Washington Wednesday, the top Republican on the Senate Foreign Relations committee, Bob Corker, called for stronger sanctions against Russia.

He proposed sanctions on Russia's banking and energy sectors that would “actually do something that affects the Russian economy to the extent that they pull troops away from the Ukrainian border and remove operators inside Ukraine."

He said current sanctions on Russia are inadequate.

Corker added that the U.S. has not yet demonstrated that it is willing to use sanctions in a way that would force a change in Russia’s behavior.

Meanwhile, Russia will not take any immediate retaliatory measures following Western sanctions over the Ukraine crisis but could reassess that stance in the future, Foreign Minister Sergei Lavrov said on Wednesday.

“We are not going to act, to do stupid things ... we want to give our partners the possibility of calming down,” Lavrov said at a news conference during a visit to Chile.

However, he said Moscow could change its position depending on whether sanctions, which he said "defy all common sense'' are prolonged or deepened.

Costs to Russia

There are further signs that Russia is paying an economic price for its involvement in Ukraine. The International Monetary Fund said international sanctions imposed on Moscow over the crisis in Ukraine were hurting the economy.

The IMF cut its 2014 growth forecast for Russia to 0.2 percent from 1.3 percent and forecast capital outflows of $100 billion this year.

The IMF mission chief to Russia, Antonio Spilimbergo, also told reporters that Russia was “experiencing recession” and that a resolution of the Ukraine crisis would significantly reduce Russia's own economic uncertainties.

Ukraine is also suffering from the turmoil, with economic output falling 1.1 percent year-on-year in the first three months of 2014, according to government figures released on Wednesday. Gazprom said Ukraine's unpaid bill for gas supplied by the Russian energy giant was now $3.5 billion.

However, the European Union said it was ready to provide economic aid to Ukraine along with the IMF.

Some reporting by Reuters

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