Ukrainian President Viktor Yanukovych leaves chaos for China

Viktor Yanukovych heads to Beijing in search of loans to avert a debt crisis as anger continues back home over decision to spurn EU accord

PUBLISHED : Tuesday, 03 December, 2013, 9:57pm
UPDATED : Wednesday, 04 December, 2013, 12:32pm

Embattled Ukrainian President Viktor Yanukovych flew to China yesterday, leaving behind a country in turmoil over his decision to spurn a landmark accord with the European Union under Russian pressure.

Besides anger in the streets and from opposition politicians, the president faces growing pressure from international markets, increasing the risk of a financial crisis that could force his hand.

With riot police facing off against several thousand pro-EU protesters outside parliament, opposition leaders inside the chamber demanded a vote of no-confidence in the government. However, parliament rejected the motion against Prime Minister Mykola Azarov's government after the ruling party abstained.

Addressing an emergency parliament session, Azarov apologised for the brutal police crackdown on weekend protests.

"On behalf of our government, I would like to apologise for the actions of our law-enforcement authorities on Maidan [Independence Square]," he said to chants of "resignation" from pro-EU opposition lawmakers.

The fiery debate reflected growing anger on the streets of the capital, Kiev, where 350,000 protesters massed on Sunday and thousands are still manning barricades and picketing government buildings.

The government's November 21 decision to reject a deal on closer trade ties and integration with the EU has plunged the country of 46 million into turmoil, laying bare once more a deep split in thinking between the Russian-speaking East and Ukrainian-speaking West.

Ukraine's currency, bonds and share prices have come under severe pressure. The central bank has been forced to assure people their savings are safe, while the finance minister said Ukraine was repaying its debts and would continue to do so.

"Ukraine is a reliable borrower and is flawlessly fulfilling, and will fulfil, all of its obligations on time," Yuri Kolobov said in a recorded message broadcast by state television yesterday.

The cost of insuring Ukraine's debt against default, already at its highest since September, rose further yesterday, however, while the government must find US$17 billion to meet debt repayments and the cost of gas imports next year.

"I ask Yanukovych - resign!" Vitaly Klitschko, a former heavyweight boxing champion and now leader of the opposition Udar party, told parliament.

Yanukovych flew to China seeking loans and investment to avert a debt crisis. The decision to travel suggested the president felt the security situation was under control. But some felt leaving was unwise nevertheless.

"It is a very bad time to go abroad. The president's absence may make talks with the opposition much more difficult," said Ukrainian political analyst Gleb Vyshlinsky.

Russia wants to draw Ukraine into a Moscow-led customs union and prevent it moving closer to the EU, a decision that would signal a historic shift towards the West and away from Kiev's former Soviet masters.

But the tug-of-war between Brussels and Moscow for influence in Ukraine has so far done little to alleviate its looming debt crisis and the China visit will involve the signing of at least 20 economic and trade agreements.

"Yanukovych is trying to show that the European Union and Russia are not the only possible partners for Ukraine," said Volodymyr Fesenko, of Ukraine's Penta think-tank. However, he said Beijing may now demand assurances over Ukraine's political and economic stability, adding: "Ukraine is unlikely to secure direct financial aid [from China]."

Beijing has already provided the former Soviet republic with loans worth US$10 billion.