Money Talks In Battle For Control Of Ukraine
Updated: 11:21am UK, Monday 24 February 2014
By Tim Marshall, Diplomatic Editor
Money talks and the EU, the US, and Russia are all shouting.
Having overthrown the government of Viktor Yanukovych, the new powers in Kiev are not about to receive the $15bn bailout Moscow had offered to keep Ukraine leaning eastwards.
President Putin might also decide that the 30% discount he gave Ukraine for Russian gas last year might have been a little generous.
The new Ukrainian Speaker of Parliament may have made him think it was way too generous with a statement about "returning to the path of European integration".
With Ukraine's economy on the brink of default and its foreign reserves draining away, the EU has re-entered the game.
The deal probably being put on the table is for up to $20bn in return for Kiev signing the trade deal it rejected late last year.
Hence the arrival of the EU foreign policy chief Baroness Ashton.
The Americans made sure they are noticed by sending along Ambassador Geoffrey Pyatt to meet the new government, have his photo taken, and issue a statement that the US will be pressing the IMF to make emergency loans.
Ukraine's debt is $73bn and it needs to pay $12bn of that this year.
The Russians are not out of the game. They would have taken Friday's EU-brokered deal which left Yanukovych in power for the rest of the year, but now they must fall back on Plan B.
Assuming Plan B does not involve military manoeuvres (still unclear) then they can now still offer some funds in order to keep influence on Kiev, and shore up the pro-Russian support in parts of eastern and southern Ukraine.
The senior figure in the new government is the newly released from jail Yulia Tymoshenko.
She may have been imprisoned by the Yanukovych government, but it was on charges of improperly overseeing the original Russia/Ukraine gas deal when she was Prime Minister.
She has cordial relations with President Putin whereas Yanukovych is reportedly held in disdain by the Russian strongman.
The Ukrainian economy is weak. Corruption and misrule, involving members of successive governments has meant that while its neighbours to the west, who escaped the Soviet Union 20 years ago, have become more prosperous, it has lagged behind.
Per capita economic output is about $7,300, next door in Poland it is $22,000.
Ukraine has an educated population of 46 million people and the potential to become a far more prosperous country.
Those who believe its future is linked to closer ties with the EU believe they are on the right track, those who look to the Russian and Kazakhstan markets disagree.
Down in the Russian-speaking Crimea a few town halls area are already flying Russian flags, although this is localized and not an official decision at regional level.
All talk of economic development would be meaningless if wide-scale violence breaks out and the country is dismembered.
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