Ukraine on Thursday said it was suspending preparations to sign a landmark agreement with the EU and would focus instead on restoring ties with Russia, appearing to yield to pressure from its powerful neighbor and dealing a harsh blow to plans for the former member of the Soviet Union to integrate further with the West.
The Cabinet’s decision follows the Ukrainian parliament’s refusal earlier on Thursday to pass a bill allowing the release of jailed former prime minister Yulia Tymoshenko, a key EU condition for signing the deal at a summit next week.
Kiev’s turnaround marks a major victory for the Kremlin, which has worked aggressively to derail the EU deal by offering Kiev loans and price discounts, but also by imposing painful restrictions on some of Ukraine’s exports.
“Ukraine government suddenly bows deeply to the Kremlin. Politics of brutal pressure evidently works,” Swedish Foreign Minister Carl Bildt, a key advocate of the signing of the treaty, wrote on Twitter.
Ukrainian Energy Minister Yuri Boiko told reporters on Thursday that Kiev cannot afford to lose economic ties with Moscow and that the EU has refused to offer compensation for the loss in trade with Russia.
Boiko also expressed hope that improving trade with Russia would make Ukraine less dependent on IMF bailouts, which it has long sought to get.
“We have not received a clear signal from our European partners that these losses, which we have been receiving over the past four months, would be compensated,” Boiko was quoted as saying by the Interfax news agency.
“The country cannot afford it; that is why this [government] resolution came into being,” he said.
The Kremlin-connected head of the foreign affairs committee in the Russian parliament’s lower house, Alexei Pushkov, sounded openly triumphant on Twitter: “The EU has overdone putting pressure on Ukraine: an agreement of dubious benefit for Ukraine was also contingent on political conditions. That was a major error.”
EU High Representative for Foreign Affairs and Security Policy Catherine Ashton called the decision a disappointment, saying the deal would have helped Ukraine reverse a decline in foreign investment and helped it in its talks with the IMF.
“We believe that the future for Ukraine lies in a strong relationship with the EU and we stand firm in our commitment to the people of Ukraine who would have been the main beneficiaries of the agreement though the enhanced freedom and prosperity the agreement would have brought about,” she added in a statement.
Some observers remained optimistic, saying Thursday’s developments did not mean Kiev’s complete surrender to Moscow, but was maneuvering by Ukrainian President Viktor Yanukovych, who hopes to convince the EU to sign the agreement even without his rival Tymoshenko’s release.
Theoretically, Yanukovych still had a week before the summit on Thursday to either pardon Tymoshenko or to get his parliament to pass a law on her release. Yanukovych’s office said he still plans to attend the summit in Vilnius, Lithuania.