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Russia Promises Ukraine Cheaper Gas and a $15 Billion Loan

Russia has promised to reduce the price of natural gas exports to Ukraine by a third and lend it $15 billion, as pro-European Union demonstrations continue in the capital Kiev and other Ukrainian cities.

The Russian aid was announced Tuesday following a meeting in Moscow between Russian President Vladimir Putin and Ukraine's President Viktor Yanukovych.

Mr. Putin said Russia would cut the price of gas for Ukraine to $268.5 per 1,000 cubic meters. He said it was a temporary measure.

He also said that Russia would invest $15 billion from its National Welfare Fund in Ukrainian government securities.

Ukraine needs at least $10 billion to avoid bankruptcy.

The meeting took place against the backdrop of anti-government protests in Ukraine, which were sparked a month ago when Mr. Yanukovych refused to sign an EU trade deal in favor of closer ties with Russia.

Ukrainian opposition leaders denounced the Russian aid package. Vitali Klitschko said Tuesday that Mr. Yanukovych had handed over Ukraine's national interests, independence and every Ukrainian's prospects for a better life.

He said the Ukrainian people have the right to know what Mr. Yanukovych promised the Kremlin in return for the financial assistance, and called for early elections, saying he was personally challenging the Ukrainian president.

On Monday, Klitschko announced he was vacating his WBC world heavyweight boxing title to focus on politics. He has said he will run for president in 2015.

Another opposition leader, Arseniy Yatsenyuk, also demanded to know the conditions for Moscow's largesse, saying: "I know only one place where there's free cheese -- in a mouse trap."

In Washington, White House spokesman Jay Carney said the deal between Kiev and Moscow for Russian financial aid will not address the concerns of the tens of thousands of Ukrainians protesting Mr. Yanukovych's decision to abandon an agreement with the EU.



On Monday, Ukraine's ruling party demanded a sweeping Cabinet reorganization, in a sign the leadership is seeking to placate the pro-EU demonstrators.

Lawmakers with President Yanukovych's Party of Regions met Monday with Prime Minister Mykola Azarov to ask for a "90 percent reshuffle" of his government.

Earlier, in a bid to ease tensions, Mr. Yanukovych offered a number of concessions, including firing senior officials over police violence against protesters. But the pro-EU opposition has dismissed the moves as half-measures, and leaders are demanding Mr. Azarov's resignation as well as early presidential and parliamentary elections.

Ukraine is facing its biggest political crisis in a decade after Mr. Yanukovych failed to sign the long-planned political and trade deal with the European Union last month. He said significant trade pressure from Russia meant he must first fix relations with his eastern neighbor.

Russia has strongly opposed the EU deal, which would have anchored Ukraine, a former Soviet republic, in the West.

The Ukrainian government, which has sought up to $20 billion in foreign assistance to prop up its struggling economy, has assured the demonstrators that eventually it planned to sign an association agreement with the European Union.

But the bloc abruptly suspended talks Sunday, saying Ukraine's leadership was being disingenuous. EU foreign ministers meeting Monday in Brussels reiterated their willingness to strike a deal, but said the next move is up to Kiev.

A poll by Ukraine's non-governmental Research and Branding group released earlier this month shows 46 percent of Ukrainians favoring the EU trade pact. Thirty-six percent were shown favoring a rival trade bloc of former Soviet republics and satellite countries that is being pushed by Moscow.

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