Ukrainians Clashes Violence as National Strike Called

Ukrainian street violence escalated
between police and anti-government demonstrators, who called for
a nationwide strike today to protest President Viktor Yanukovych’s refusal to sign a European Union trade agreement.

A throng estimated by the opposition at about half a
million, angered by an earlier police crackdown, converged on
central Kyiv yesterday to hear boxing champion Vitali Klitschko
call for a new government. They seized the mayor’s office and a
group stormed the headquarters of the presidential
administration. The clashes left at least 265 people hurt. The
opposition plans to block government buildings from 6 a.m. today
and urged workers to walk off the job.

“Our first and main political demand for tomorrow: the
government’s resignation,” Arseniy Yatsenyuk, a lawmaker from
jailed ex-Premier Yulia Tymoshenko’s party, said yesterday.
“Our main task is Yanukovych’s resignation. But the first step
is the resignation of Azarov’s government.”

As in the Orange Revolution in 2004, emotions are flaring
in the debate whether Ukraine should tie its future to Russia or
the EU, which each buy a quarter of its exports. The protests
gripping the country from Lviv to Kharkiv are the biggest
political crisis since the events nine years ago, when a group
including Tymoshenko overturned a presidential election
initially won by Yanukovych.

EU Snub

Demonstrations began on Nov. 21 when Yanukovych suspended
progress toward an association agreement with the EU, opting
instead to strengthen ties with Russia, which supplies 60
percent of Ukraine’s gas. The protests grew over the weekend
after the president failed to reconsider the deal at an Nov.
28-29 EU summit in Vilnius and the first clashes broke out.

Ukraine’s 2023 government bonds fell on Nov. 29, sending
the yield up 11 basis points, or 0.11 percentage point, to to
9.966 percent, the highest level since Nov. 14, data compiled by
Bloomberg show. The cost to insure the country’s debt against
non-payment using credit-default swaps was unchanged at 987
basis points, leaving the Black Sea state the world’s fourth-riskiest nation behind Argentina, Venezuela and Cyprus.

Russian President Vladimir Putin said last month he doesn’t
oppose the EU deal and suggested three-way negotiations.
European Commission President Jose Barroso reiterated that the
idea of such talks is unacceptable. The two sides accused each
other of pressuring the Ukrainian government.

Putin’s government may have offered Ukraine $15 billion in
loans, debt restructuring and asset purchases to persuade it not
to proceed with the EU deal, the Ukrainian magazine Zerkalo
Nedeli said. Azarov also said yesterday on Inter television he
wanted to agree a new price of gas in two weeks.

Cheaper Gas

Russia will offer cheaper natural gas to Ukraine if the
government in Kyiv opts to join the Moscow-led economic bloc,
First Deputy Prime Minister Igor Shuvalov said in an interview.

“A gas agreement could help relieve Ukraine of a huge
problem,” Shuvalov said said in comments cleared Nov. 30 for
publication. “We can also give them a loan, but we will not
help them without commitments on their part.”

NATO Secretary General Anders Fogh Rasmussen urged
protesters and police to remain peaceful, according to a
statement on the military alliance’s website. U.S. and EU
ambassadors to Ukraine did the same.

“We condemn today’s violence near Bankova and attacks on
public buildings and call on all sides to avoid confrontation,”
the latter said in a statement on the Facebook page of the EU’s
delegation to Ukraine.

‘Bidding War’

In a joint statement, Radek Sikorski and Carl Bildt, the
foreign ministers of Poland and Sweden, repeated that the EU
remains prepared to sign the accord and said Ukraine itself must
press ahead with transforming its economy to grow closer to the
28-member bloc.

“In the absence of any evidence of economic reform, we
will not be drawn into a meaningless bidding war over Ukraine’s
future,” they said in the statement.

Ukrainian parliamentary speaker Volodymyr Rybak called
politicians to hold talks today. Yanukovych said yesterday he
still favors “moving toward the EU,” as long as that doesn’t
hurt the country economically.

“Our country should integrate with the European nations as
an equal partner,” Yanukovych said in yesterday’s speech to
mark the 22nd anniversary of a referendum that clinched
Ukraine’s independence after the Soviet Union collapsed in 1991.
“I will not allow any serious economic losses and decline of
living standards.”

Violence Erupts

Violence started on the night of Nov. 29. About 40 people
were injured when Ukrainian police broke up a rally on
Independence Square after midnight on Nov. 30. In the 24 hours
to midnight, 165 people sought urgent medical aid and 109 of
them were admitted to hospital care, the city government said in
a statement. Crowds dwindled to a few thousand by 9:30 p.m.

Authorities want protesters to leave public buildings and
have begun criminal proceedings against those occupying the
mayor’s office and a trade union headquarters in central Kyiv,
the Interfax news service reported, citing a police statement.

Police spokeswoman Olha Bilyk, who declined to estimate the
crowd size, said 100 police officers were injured when they
clashed with the group that stormed the presidential
administration building.

Those leading demonstrations urged people to keep rallies
peaceful and is convinced that violence by protesters yesterday
was orchestrated by the government to justify a crackdown,
Yatsenyuk said on television.

Some protesters forced their way inside the mayor’s office
in Kyiv after requests for a meeting were ignored. They set up
temporary headquarters for the demonstrations at the trade union
building, television channel 1+1 reported.

Interior Minister Vitaliy Zakharchenko said the police
won’t allow Ukraine to become another Libya or Tunisia, where
uprisings toppled governments in recent years.

“If there is call for public disorder, we will react,”
the minister said in televised comments yesterday.

Oleksandr Sidorov, 56, an entrepreneur from the eastern
Ukrainian city of Zaporizhzhya who’s been protesting in Kyiv for
eight days, said Yanukovych promised to take Ukraine closer to
the EU, then “outrageously cheated” the nation.

“His place is to be hanged on a Christmas tree,” he said.

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:
Balazs Penz at
bpenz@bloomberg.net

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