Reuters and GUARDIAN,
WASHINGTON and KIEV
US President Barack Obama yesterday said Russia’s troop buildup on the Ukraine border was out of the ordinary and called on Moscow to pull its military back and begin talks to defuse tensions.
“You’ve seen a range of troops massing along that border under the guise of military exercises,” he said on CBS This Morning in Vatican City. “But these are not what Russia would normally be doing.”
Obama said the moves might be no more than an effort to intimidate Ukraine, but could be a precursor to other actions.
“It may be that they’ve got additional plans,” he said in excerpts from an interview with CBS Evening News that was to be broadcast in full last night.
Obama made his comments at the end of a visit to Europe, where the US, Germany, France, Britain, Italy, Japan and Canada warned Russia it faced additional damaging sanctions if it takes further action to destabilize Ukraine.
Governments in Washington and Europe are in discussions about possible measures against Russia’s energy sector, but have signaled they would hold off on more sanctions unless Moscow goes beyond the seizure of Crimea.
Obama in his interview with CBS lamented that Russian President Vladmir Putin seemed stuck in a Cold War mentality.
“You would have thought that after a couple of decades that there’d be an awareness on the part of any Russian leader that the path forward is not to revert back to the kinds of practices that you know, were so prevalent during the Cold War,” he said.
Meanwhile, the IMF and Ukraine are discussing disbursement of US$3 billion in the first tranche of a US$14 billion to US$18 billion bailout package, Ukraine’s finance minister said yesterday.
The deal, announced on Thursday and which will also unlock further credits to a total of US$27 billion, is intended to help the heavily-indebted ex-Soviet republic stabilize its economy after months of political turmoil.
“They [the IMF] are ready today to talk about [disbursing] a first tranche of US$3 billion, of which half will go to the [Ukrainian} National Bank and half to the state budget,” Ukrainian Finance Minister Oleksander Shlapak told journalists on the margins of a government meeting.
The Ukrainian parliament on Thursday night approved an anti-crisis law supporting the IMF program of reforms that accompanies the financial package, and which the IMF says is necessary to get the economy back on track and avoid a debt default.
The agreement is also subject to approval by IMF management and the executive board, which will consider it next month.
Conditions sought by the IMF include allowing the national currency, the hryvnia, to float more freely against the US dollar, increasing the price of gas for domestic consumers, overhauling finances in the energy sector and following a more stringent fiscal policy.
The Kiev government has already taken a step toward the IMF by announcing it will raise gas prices for domestic users by more than 50 percent from May 1.
Meanwhile, controversial Ukrainian opposition leader Yulia Tymoshenko has formally joined the race to become president.
Tymoshenko, the gas tycoon turned Orange revolution leader who ended up in jail under the previous regime only to be released into the euphoria of the Maidan protests, pledged on Thursday to represent both halves of the fractured country.
“I will be the candidate of Ukrainian unity,” the 53-year-old said. “The west and center of Ukraine has always voted for me, but I was born in the east, in Dnipropetrovsk.”
However, it remains unclear how popular Tymoshenko is, and whether she can appeal to the nationalists in the west and the pro-Russian elements in the east. The latest opinion polls on the presidential race show oligarch Petro Poroshenko, known as the “chocolate king,” and former heavyweight boxer Vitaly Klitschko in first and second place respectively, well ahead of Tymoshenko.
Whoever wins the vote on 25 May will face a tough task. The International Monetary Fund on Thursday offered a bailout of up to $18bn over two years, in return for harsh economic reforms that may well worsen living standards for the already impoverished population. Further IMF aid will be unlocked if austerity measures are passed, including a sharp rise in the cost of domestic energy. In a first vote on Thursday night, the Ukrainian parliament approved a law required for the IMF bailout.