Ukraoine: Game-match to Russia

Yesterday, John McCain was hobnobbing with the demosntrators; today Britain's William Haig is “inspired” by Kiev demonstrators standing up for closer ties to European Union.

Meanwhile, it seems Russia may have won out – Russia has money where the EU has none.

Europe Officially Loses Fight For Ukraine, Russia Wins

Zero Hedge,

17 December, 2013

Over the past month, an interesting conflict emerged between Putin's Russia and, well, some unelected person's Europe. The conflict was over who would be the Ukraine's big brother, and strategic ally for the future, and whether the Ukraine would snub Europe, i.e. the West, and reorient to its Soviet Union roots, by aligning with Russia. Moments ago, the fight over Ukraine ended. Russia won, and not only pledged $15 billion in future Ukraine investments, but de facto became the lender of last resort for the troubled nation.

• PUTIN SAYS RUSSIA-UKRAINE TALKS IN MOSCOW WERE CONSTRUCTIVE
• PUTIN SAYS GAZPROM TO SELL GAS TO UKRAINE AT $268.50
• PUTIN SAYS UKRAINE BENEFITING FROM DISCOUNT ON RUSSIAN GAS
• PUTIN: RUSSIA TO USE SOVEREIGN WEALTH FUND TO INVEST IN UKRAINE
• PUTIN SAYS RUSSIA TO INVEST $15B IN UKRAINIAN SECURITIES
• PUTIN SAYS UKRAINE'S MEMBERSHIP IN CUSTOMS UNION NOT DISCUSSED
• SILUANOV SAYS UKRAINE TO SELL $15B BONDS TO RUSSIA IN 2013-14

Europe, like a jilted lover, was sad but understood it had been bested. 

• GERMANY’S STEINMEIER: EU’S OVERTURE TO UKRAINE FELL SHORT
• STEINMEIER: EU MAY HAVE UNDERESTIMATED RUSSIA DETERMINATION

Notably, this is the second major geopolitical gambit that Europe has lost this year: first the Syrian escapade, where it tried aggressively to replace Gazprom with Qatar (and failed), and now it has lost Europe's "bread basket."

Ukraine bonds welcomed the clarity, and that the nation is now officially once again under Russia's sphere of influence:

And now, with Ukraine firmly in the pocket of Russia, it remains to be seen how the local opposition and the pro-European protesters will react. They will hardly be enthused.

Vladimir Putin offers Ukraine financial incentives to stick with Russia

Moscow to buy $15bn of Ukrainian government bonds and cut gas price after Kiev resists signing EU deal amid mass protests

the Guardian,

17 December, 2013

The Russian president, Vladimir Putin, has raised the stakes in the battle over Ukraine's future, saying Moscow will buy $15bn (£92.bn) worth of Ukrainian government bonds and sharply cut the price of natural gas for its economically struggling neighbour.

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

Economic experts say Ukraine desperately needs at least $10bn in the coming months to avoid bankruptcy.

Putin sought to calm the protesters in Kiev by saying on Tuesday that he and Yanukovych did not discuss the prospect of Ukraine joining the Russian-dominated Customs Union. But the sweeping 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.

The Russian finance minister, Anton Siluanov, said after the Kremlin talks that Russia would purchase $15bn in Ukraine's Eurobonds, starting this month.

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

In brief remarks to the media before they began the talks, Putin said Ukraine "is without doubt, in the full sense of the word, our strategic partner and ally". He said that over the past two years, trade levels between the countries had dropped, but that the range of new agreements would rectify that.

"The time has come to take energetic steps not only to return to the levels of recent years but to go further," he said.

Membership of the Customs Union, a Moscow-led trade grouping into which the Kremlin has been keen to entice Ukraine, is unlikely to be on the agenda in the near future, but it is believed that in return for a package of loans and trade concessions, Yanukovych has agreed not to sign the EU deal.

Putin looked relaxed before the meeting, slouching in his chair, while Yanukovych sat bolt upright and spoke with long pauses between sentences. Ukrainian media reported that Yanukovych's delegation had asked the Russians not to arrange a joint press conference after the meetings finished.

Nevertheless, Yanukovych said the documents on the table represented a "strategic decision" and that the two sides should work harder to develop closer relations in future. He told Putin he hoped the "traditional" issue of gas prices could be solved.

Demonstrators have sealed off the centre of Kiev for several weeks and repulsed police efforts to remove them. On Tuesday morning, several hundred protesters stood on Yanukovych's route to the airport, holding signs that read: "Turn the plane round to Europe!"