Ukraine President Fails to Subdue Protests After Cashiering Ally
Ukrainian President Viktor Yanukovych failed to quell nationwide street protests calling
for his head after days of concessions culminated in the
departure of his loyalist prime minister.
Premier Mykola Azarov, 66, said yesterday that he stepped
down “for the sake of the peaceful resolution of the
conflict.” Opposition leaders maintained a demand for snap
presidential elections, while demonstrators held out at Kyiv’s
protest camp, filling sand bags with ice in temperatures of
minus 11 degrees Celsius (12 degrees Fahrenheit) to reinforce
barricades.
“The resignation of the prime minister is a concession
that’s too little, too late,” Lilit Gevorgyan, senior economist
at IHS Global Insight, said yesterday by e-mail from London.
“The protesters aren’t likely to go away. The authorities would
like to muddle through the entire year but it is highly
questionable if this tactics can work.”
Yanukovych, 63, is struggling to contain unrest that’s
spread from the capital to other cities across the nation of 45
million people, a key transit route for Russian energy supplies
to Europe. The two-month-old crisis, sparked by the president’s
rejection of a European integration pact, turned deadly last
week as the passage of anti-protest laws triggered riots.
The yield on dollar-denominated government debt due 2023
fell 62 basis points to 9.015 percent yesterday, data compiled
by Bloomberg show. That’s the biggest decline on a closing basis
since Dec. 17, when Ukraine agreed on a $15 billion bailout from
Russia, easing default concerns. The hryvnia dropped 0.4 percent
to 8.525 per dollar, the lowest level since September 2009.
‘Logical Step’
Azarov’s departure was accepted by Yanukovych and his
cabinet will stay on until the president names a new premier.
Opposition leader Arseniy Yatsenyuk, 39, has rejected an offer
to take the premier’s post twice in the last four days. Ex-world
heavyweight boxing champion Vitali Klitschko, who heads the
opposition UDAR party, said he wouldn’t consider working in a
government while Yanukovych was in power.
The president’s resignation would now be a “logical
step,” he said yesterday in a statement. The protesters “will
go home only after the authorities meet society’s demands.”
The opposition also wants to revise the constitution,
possibly reverting to the 2004 version under which parliament
picks the prime minister. At present, that decision is up to
Yanukovych, who has 60 days to install a new government.
Protesters at Independence Square and nearby Hrushevskogo
street, the epicenter of last week’s riots, want more than the
prime minister’s exit.
‘Not Enough’
“I’m not satisfied just with Azarov stepping down,” said
29-year-old Vasyl, a festival organizer who recently arrived in
Kyiv and declined to give his last name for fear of reprisal.
“If we look at what happened — people were killed, arrested,
kidnapped and tortured — it’s not enough. He and Yanukovych
should bear responsibility and should be tried.”
To placate the demonstrators, lawmakers also voted 361-2 to
repeal anti-rally laws that allowed the authorities to keep
closer tabs on mobile-phone use and criminalized erecting tents
in public places and occupying government buildings. They
delayed a vote on an amnesty for detained activists to tomorrow.
Justice Minister Olena Lukash said Jan. 27 that the amnesty
bill will only take effect if all state buildings seized by
demonstrators are handed back. She backed away yesterday from a
threat to call for a state of emergency after demonstrators
vacated her headquarters in Kyiv.
Regional Unrest
The unrest has spread beyond the capital, where activists
have taken over the agriculture and energy ministries.
Protesters are occupying or blocking the offices of governors
picked by Yanukovych in more than half of the nation’s 25
regions, while police have expelled demonstrators from others.
The opposition says six protesters have died and a thousand
have been injured. Police have begun an investigation after
three people died from gunshot wounds, while 116 people have
been detained on suspicion of participation in riots.
A policeman wounded on Jan. 27 in Kherson, south Ukraine,
died yesterday, the Interior Ministry said. More than 300
officers have sought medical help, according to the ministry.
Azarov had also warned frequently of the economic dangers
of the crisis for Ukraine, which is mired in its third recession
since 2008. The economy shrank 0.3 percent in the third quarter
from the previous three months, while foreign reserves have
fallen to $20.4 billion from $24.5 billion a year ago.
Rating Downgrade
Standard Poor (XOP:US) lowered its junk credit rating on Ukraine
by one notch yesterday, assigning it a negative outlook, which
suggests it may be cut further. The move, which SP said was
triggered by “political instability,” leaves Ukraine’s CCC+
rating as the lowest among rated countries along with Argentina.
It’s seven steps short of investment grade.
The European Union welcomed Azarov’s resignation and the
scrapping of the anti-demonstration laws. The moves are “a
first great success in the Ukrainians’ fight for freedom and
democracy,” Andreas Schockenhoff, deputy leader of Chancellor
Angela Merkel’s CDU-led block in Germany’s lower house of
parliament, said in an e-mailed statement
Russian President Vladimir Putin said an opposition
government in Ukraine wouldn’t affect the $15 billion bailout
granted last month to its neighbor. Even so, Putin balked at the
prospect of a resumption in Ukraine’s EU pact, which he deems a
threat to Russian manufacturing and agriculture.
Officials from the 28-member EU are still trying to broker
a conclusive peace deal in Kyiv, with foreign-policy chief
Catherine Ashton and Enlargement Commissioner Stefan Fule
visiting Kyiv yesterday.
Jailed ex-Premier Yulia Tymoshenko said the protesters’
fight isn’t over, issuing a rallying call from prison.
“You started your fight to reboot the authorities and win
Ukraine back for yourselves,” she said yesterday in an e-mailed
statement. “So do it! Don’t stop until you get what you want!”
To contact the reporters on this story:
Daryna Krasnolutska in Kyiv at
dkrasnolutsk@bloomberg.net;
Kateryna Choursina in Kyiv at
kchoursina@bloomberg.net
To contact the editor responsible for this story:
James M. Gomez at
jagomez@bloomberg.net