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Putin: Russia to buy $15 billion worth of Ukrainian bonds - ASHARQ AL-AWSAT English Archive
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Russia's President Vladimir Putin (R) looks at his Ukrainian counterpart Viktor Yanukovich during a signing ceremony after a meeting of the Russian-Ukrainian Interstate Commission at the Kremlin in Moscow, on December 17, 2013. (REUTERS/Sergei Karpukhin)

Russia’s President Vladimir Putin (R) looks at his Ukrainian counterpart Viktor Yanukovich during a signing ceremony after a meeting of the Russian-Ukrainian Interstate Commission at the Kremlin in Moscow, on December 17, 2013. (REUTERS/Sergei Karpukhin)

Moscow, AP—Russian President Vladimir Putin upped the stakes today in the battle over Ukraine’s future, saying Moscow will buy 15 billion US dollars worth of Ukrainian government bonds and sharply cut the price of natural gas heading to its economically struggling neighbor.

The announcements came after Putin held talks in Moscow with Ukrainian President Viktor Yanukovich, who is facing massive protests at home for his decision to shelve a pact with the European Union in favor of closer ties with Moscow.

Economic experts say Ukraine desperately needs to get at least 10 billion dollars in the coming months to avoid bankruptcy.

While Putin sought to calm the protesters in Kiev by saying that he and Yanukovich didn’t discuss the prospect of Ukraine joining the Russian-dominated Customs Union, the sweeping Kremlin agreements are likely to fuel the anger of demonstrators who want Ukraine to break from Russia’s orbit and integrate with the 28-nation EU.

Russian Finance Minister Anton Siluanov said after the Kremlin talks that Russia would purchase 15 billion dollars of Ukraine’s Eurobonds starting this month.

Putin emphasized that Russia’s decision to buy the Ukrainian bonds wasn’t contingent on the Ukraine government freezing any social payments to its citizens—a clear jab at the International Monetary Fund, which has pushed Ukraine to reduce spending as a condition for providing a bailout loan.

Putin also said the Russian state-controlled gas monopoly, Gazprom, would cut the price that Ukraine must pay for Russian gas deliveries to 268 dollars per 1,000 cubic meters from the current level of about 400 dollars per 1,000 cubic meters.

Yanukovich explained his decision to spike a landmark association agreement and free trade pact with the EU last month by saying that Ukraine needed to improve ties with Russia. His move has sparked massive demonstrations in Kiev demanding his ouster.

Moscow has strongly opposed the Ukraine-EU deal and sought to thwart it with a mixture of economic threats and promises.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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