The Benefits to Armenia as Custom-Union member

[man]

The Economics of the CU: Economists say membership in Armenia’s best interest

By Siranuysh Gevorgyan

ArmeniaNow reporter

http://armenianow.com/economy/48429/customs_union_eurasian_development_bank_european_union

 

A group of economists have drafted a research upon the initiative of the Eurasian Development Bank on “Economic Calculations of Armenia’s Integration Processes with the Customs Union and the Eurasian Economic Union.”

 

The group, lead by Ashot Tavadyan, head of the Faculty of Economic-Mathematical Methodology at the Yerevan State University of Economics, summing up the results of the four-month research told the press on Wednesday that in the event of Armenia’s membership in the Customs Union (CU) “an Armenian citizen will have a safer and better life”.

 

The economist shared an opinion that Armenia has not matured for European standards yet and could have found itself “in trouble”, just like Baltic countries have, if it entered the EU free trade area.

 

The experts have concluded that with the CU Armenia may have a 4-percent economic growth in the initial period, while in case of joining the EU free trade area that index would have ranged between two and three percent only (they referred to European experts’ analysis of Armenia’s Association Agreement with the EU to draw parallels).

 

As opposed to Bagrat Asatryan, former chairman of the Central Bank, who voiced rather pessimistic perspectives in this concern, Tavadyan claims the Customs Union agreement with Armenia is “about economic security, as part of security in general”.

 

“This is an agreement of unprecedented investments and employment growth,” stated Tavadyan.

 

The economist says that the public transport fares will drop in Armenia, as Russia has promised to make a $470-million investment in that field.

 

“The other important factor is the $100 million investment by the Eurasian bank, which will ensure high tempo of economic growth in our country. As for the energy bloc, joining the CU means we will have a good chance of exploiting the nuclear power plant and building a new one in the future,” says Tavadyan, predicting that in the future Armenia, as a CU member, would import natural gas from Russia at a 30-percent cheaper price: today’s $270 per 1,000 cubic meter would cost $187.

 

“It will happen automatically, since the union ideology provides for fair competition, meaning that the gas tariff, in our case, would include only transportation and transit fees,” assures Tavadyan.

 

Another conclusion is that in the event of joining the CU Armenia's labor migrants would send 3 percent more remittances to Armenia, as they would have less trouble “finding employment and dealing with administrative issues”.

[man]

EXPERTS: ARMENIA MAY BECOME CUSTOMS UNION'S GATES INTO MIDDLE EAST AND SOUTH ASIA

 

by Gayane Isahakyan

 

ARMINFO

Wednesday, September 25, 20:02

 

Russia is interested in Armenia as a transit corridor to the Middle East and South Asia, Director of the Center

for Integration Studies at the Eurasian Development Bank (EDB) Yevgeny Vinokurov said on wednesday

during a Moscow-Yerevan video conference on the economic advantages of the Eurasian project for Armenia.

 

"All the members of the Customs Union are interested in the building of the North-South transport corridor

and the reopening of the Abkhazian railway. This project will be financed by the EDB-controlled EurasEC

Anti-Crisis Fund," Vinokurov said.

 

He said that one of the issues of the joint agenda may also be the Georgian problem. "According to surveys,

59% of the Georgians are interested in normal relations with Russia and are well disposed towards the Customs

Union. This is a good chance for Armenia and all the member states," Vinokurov said.

 

Deputy Director of the Noravank Scientific Education Foundation Sevak Sarukhanyan stressed the importance

of railway projects in the territory of Armenia. "Armenia may become the Customs Union's gates into the

Middle East and South Asia," he said.

 

The expert believes that the reopening of the Abkhazian railway will foster integration in the South Caucasus.

"All the transport and energy corridors built in the region so far run from east to west rather from north to

south," Sarukhanyan said.

 

He welcomes Armenia's wish to join the Shanghai Cooperation Organization as China may also be interested

in the Iran-Armenia railway project.

 

The 556 km long North-South transport corridor will give access to the Black Sea and Europe through the

territory of Armenia (Meghri-Kapan- Goris-Yerevan-Ashtarak-Gyumri-Bavra) and Georgia.

 

While visiting Yerevan in Jan 2013, Georgian Prime Minister Birdzina Ivanishvili mentioned the possibility

of restarting the Abkhazian railway stopped as a result of the Georgian-Abkhazian conflict in 1992- 1993.

 

Edited September 27, 2013 by man

[man]

RUSSIAN EXPERT:

ARMENIA'S MEMBERSHIP IN CUSTOMS UNION TO INCREASE ITS GDP BY 4-5 PERCENT A YEAR

YEREVAN, September 26. ARKA /.

According to preliminary estimates, two years after Armenia's accession to the Customs Union, its GDP will be

increasing by 4-4.5 % annually, according to Yevgeny Vinokurov, who is the director of the Center for Integration

Studies of the Eurasian Development Bank.

"First of all, Russia will abolish gas export duties for Armenia that will translate into $140 million of economic effect a year.

Second, Russia will eliminate export duties on rough diamonds - 6.5 %- for Armenia," he said during Moscow - Yerevan video

news conference.

According to Vinokourov, the accession will also have a beneficial impact on Armenian migrant labors in Russia as it will

increase the amount of transfers they send home as Russia would abolish quotas and licenses for them.

Out of $1.7 billion non-commercial remittances sent t Armenia last year, $1.4 billion came from Russia, more than 85 % of

all transfers or round 15% of Armenia's GDP, Vinokurov said.

Viktor Spassky, director of the Department of Integration of the Eurasian Economic Commission, claimed that as much Armenian migrant labors took home in their pockets.

According to Central Bank of Armenia, $1.687.2 billion, or about 17 % of Armenia's GDP were remitted to Armenia in 2012 as non-commercial transfers, a 9 % rise form 2011.

At the same time, Armenia's trade with Russia increased last year by 20 %. Moreover, more than 45 % of direct investments

in Armenia are from Russia. There are also Kazakh investments in Armenian banking sector and Belarus investments in trade.

Armenia's Gross Domestic Product at market prices last year amounted to almost 4 trillion drams, resulting in a 7.2 percent economic
expansion.

Edited September 27, 2013 by man

[man]

Turkey and India (a major world economy) would consider signing a free trade agreement with the Euroasian Custom Union of Putin in the near future. This means that, Armenia as a member of CU, will have opportunities of a wider range to trade and prosper.

Moreover Turkey plans to create a free trade zone with Ukraine and expand relations with the other states of Eurasia by signing a free trade agreement with CU of Putin. There would be obstacles before Turkey but they will dissipate in the long term and Turkey's chances of joining may become reality sometimes in the future. Turkey currently gets up to 60 per cent of its gas from Russia, joining CU means cheaper gas for Turkey.

In April of this year Turkey received the status of partner in dialogue with the Shanghai Cooperation Organization; a status of partnership in cooperation with CU could be the next logical step for Turkey.

From another news release: Russia sees no problem regarding Nagornyy Karabakh when Armenia's joining the Customs Union is completed in 2015. Andrey Ivanov, Russian Embassy's counsellor in Armenia, said at today's, 24 Oct. 2013, press-conference:

"I arrived in Yerevan several months ago and first met with my counterparts from the EU, which asked me what I think about opening of the Customs point at the border of Armenia to Nagornyy Karabakh after Armenia's joining the Customs Union. And asked them, how the EU was going to settle this problem when signing the Association Agreement and DCFTA with Armenia. They replied, that the EU sees no problem in this issue, and I said that Russia sees no problem either".

[man]

TURKEY IS INTERESTED IN CUSTOMS UNION - NAZARBAYEV
Kazakh President Nursultan Nazarbayev said some countries are interested in joining the Customs Union and the Eurasian Economic Union, which is now being created. "They say Syria wants to join [the Customs Union]. Turkish Prime Minister Erdogan has asked me if turkey can enter the Customs Union," Nazarbayev said at the meeting of the Eurasian Economic Council held in Minsk on Thursday. (Interfax, Russia. Oct 24 2013. MINSK)

The problem with Turkey is: Turkey will join the Customs Union when Russia joins NATO or more likely when Turkey leaves NATO....and second Turkey has closed it borders with Armenia.

Reflecting on the proposal to include Turkey in the CU, Russian political analyst Sergey Markedonov, said: "That is ruled out, and that's that!" He added: "Turkey is a NATO member, and this already is a weighty argument. How do you imagine
Turkey's and Armenia's joint accession to the Customs Union, when Turkey closed its borders with Armenia?"

Another benefit to Armenia: Russia is the largest producer of diamonds and gold, as CU member Armenia will be able to get cheaper uncut diamonds. Russia is one of the largest jewelry markets, and jewelers from around the world, including Armenia are seeking to enter this market.

[man]

Eurasian Economic Union to replace Customs Union
October 28, 2013 Nikolay Surkov, RBTH
India, Turkey and even Syria may become members of this new economic bloc
http://rbth.ru/international/2013/10/28/eurasian_economic_union_to_replace_customs_union_31237.html

At a summit held in Minsk, Russia, Belarus and Kazakhstan confirmed their intention to form a Eurasian Economic Union in 2015, on the basis of the Customs Union. Subsequently, Turkey, India and even Syria may join this new alliance, according to the leaders.

However, according to President Vladimir Putin, Ukraine, having set a course for associate membership in the EU, will not be able to enter.

The intention of creating a Eurasian Economic Union (EAEU) was confirmed on Thursday, Oct. 24, at a summit between Russia, Belarus and Kazakhstan. All domestic conciliation procedures necessary for its entry into force have to be completed by May next year. This was announced by the leaders of the three countries at the summit held in Minsk.

However, the transformation of the Customs Union (CU) into the Eurasian Economic Union still faces many obstacles. The status quo was most actively criticized by the president of Kazakhstan, Nursultan Nazarbayev.

“Participation in the Customs Union has brought more disadvantages than advantages to Kazakhstan,” said Nazarbayev, “and has led to increasing disparity in the trade balance of the country. We still face the same difficulties in the promotion of Kazakh food products on the Russian market; there is no free access to the Russian energy market; there are limited opportunities for electricity transit; the Customs Code of the CU is in need of maximum simplification and liberalization.”

The Kazakh leader also spoke out against the rapid expansion of the Customs Union. “First, we need to solve the existing problems, and then deepen the integration and accept new members,” said Nazarbayev.

Finally, Nazarbayev proposed discussing Turkey’s and even Syria’s accession to the Eurasian Union. “Whenever I travel to the West, I’m always asked: ‘Are you re-creating the Soviet Union under the guise of the Customs Union?’ So, to avoid such talk, let us admit Turkey. It is a big country, and there will be no more of these discussions,” said the president of Kazakhstan.

However, Nazarbayev laid down a condition: All members of the Union must have the same rights, as was the case when creating the European Union. Nazarbayev invited leaders to discuss the prospects of admitting Kyrgyzstan and Tajikistan. This requirement, Nazarbayev added, applies to Armenia, which has expressed its desire to join the Customs Union.

Nazarbayev also mentioned that, after the establishment of the Eurasian Economic Union in 2015, the EurAsAC, which duplicates its functions, would cease to exist. “We don’t need this organization. It has to be closed — that is obvious,” said the president of Kazakhstan.

Complaints about the functioning of the Customs Union were also expressed by his Belarusian counterpart Alexander Lukashenko. The particular discontent of the Belarusian leader was caused by the “numerous exemptions” from the current legislation of the CU.

“Since we have agreed, then let us create a real unified economy and remove these exemptions,” said Lukashenko. “The number of exemptions and restrictions has not decreased, in some areas it has even increased.”

Vladimir Putin neither argued against nor tried to persuade his CU colleagues. However, he recalled that, in the three years of its existence, the Customs Union has proven its effectiveness. The macroeconomic indicators of members of the CU are “quite good” against the background of the slowdown in the global economy, said the Russian leader.

Putin kept in reserve his main argument in favor of further integration. He said that, during Monday’s visit of the Indian prime minister to Moscow, the prime minister asked him to consider the possibility of signing a free trade area agreement with the Customs Union.

At the same time, Vladimir Putin, at a press conference after the meeting of the Supreme Eurasian Economic Council in Minsk, said that Ukraine would not be able to join the union after the signing of the agreement on associated membership in the EU.

“No, it’s impossible,” said the head of the Russian Federation in response to a question about the prospects of Ukraine's accession to the Customs Union. At the same time, Russia is not going to interfere in Ukraine’s process of European integration, the Russian leader said, adding that Moscow is neither for nor against. “It's not our business; it is the sovereign right of the Ukrainian leadership in the person of the president, parliament and the government,” said Putin.

According to Putin, the impossibility of Ukraine's accession to the CU lies in the creation of the free trade area between Kiev and the EU, reported ITAR-TASS. The fact is that Ukraine will have to abandon most of its import tariffs and open its market to products from the EU.

“Such an opening of the market is very dangerous for us and is not acceptable at this stage of our economic development,” said the Russian president.

Based on materials from ITAR-TASS, Kommersant and Gazeta.ru.

[man]

Ukraine Ditches Plans for EU Deal, Turns to Russia

KIEV, November 21, 2013 (RIA Novosti) — Ukraine’s government decided Thursday to call off the planned signing of landmark agreements with the EU that could have weakened the former Soviet nation’s bonds with Russia.

 

The Cabinet said in a decree that the decision was motivated by the need to consolidate economic ties with Russia and members of the Kremlin-led Customs Union trade bloc.

 

The stunning reversal will be greeted with dismay in the European Union, which had been hoping to steer Kiev toward closer economic integration with Europe.

 

Earlier in the day, Ukraine’s parliament rejected draft laws aimed at allowing jailed opposition leader Yulia Tymoshenko to seek medical treatment abroad, which EU officials had stipulated as a condition for the agreements to go ahead.

 

Tymoshenko, who is an avowed political rival to President Viktor Yanukovych, is currently serving a seven-year jail sentence on corruption charges that she insists are politically motivated.

 

Association agreements and free trade deals with the EU were expected to be signed next week at a summit in Vilnius.

 

Instead, Ukraine’s government proposed Thursday the creation of a trilateral commission between itself, Russia and the European Union to explore ways to deepen mutual ties.

 

The decree also ordered the resumption of an “active dialogue” with the Moscow-led Customs Union, which includes Russia, Belarus and Kazakhstan.

 

Kremlin spokesman Dmitry Peskov welcomed Ukraine’s decision to build up cooperation with Russia.

 

“We clearly welcome the desire of our close partner Ukraine to optimize and develop trade and economic cooperation,” Peskov said.

 

Kiev’s volte-face is likely to be hailed as a foreign policy victory for Russian President Vladimir Putin, who has not hidden his distaste for Ukraine-EU integration.

 

Ukraine has come under sustained pressure from the Kremlin in recent months as diplomatic negotiations over its alignment with the EU intensified.

 

As well as the threatening the imposition of a strict new customs regime, Russia also ratcheted up pressure on Kiev, which depends on Russia for its energy supplies, over payments for gas imports.

 

Putin said Thursday that Russia would be willing to take part in a trilateral commission with the EU and Ukraine, as long as Ukraine halted its current European integration plans, Russian media reported.

 

There have been signs of growing nervousness among Ukraine’s leadership in recent days about the impact that the EU agreement could have on all-important economic relations with Russia.

Prime Minister Mykola Azarov acknowledged on Wednesday that his country had already registered significant losses because of shrinking trade volumes with Russia and other members of an alliance of former Soviet countries, the Commonwealth of Independent States.

 

“Trade turnover grew significantly in 2012, but in 2013 we have lost nearly one-quarter of our trade turnover with CIS markets,” Azarov said. “Those economic losses are significant for us, and Ukraine has been facing serious [financial] hardships lately.”

 

Azarov said that his government’s top priority for next year was to have Russian trade barriers removed and to bring the rapidly worsening state of trade with Russia back to normal.

 

“It’s no coincidence that when drafting the budget, the main economic figures for 2014 will depend on whether we are able to create mutual understanding with Russia,” he said.

 

Azarov made the remarks after meeting with Russian Prime Minister Dmitry Medvedev on the sidelines of a CIS prime ministers’ council in St. Petersburg.

 

President Yanukovych, who was in Austria on a state visit Thursday, said that his country remained open to integration with Europe, hinting that the issue could be revisited at a later stage.

 

“We have a little way left to the peak. We are not afraid of difficulties, we are certain that we should in future go along the path of European integration,” he said.

 

Asked about the likelihood of Tymoshenko's release, Yanukovych said that any decision on the former prime minister could only be taken in parliament.

 

“This matter has spilled out into society and into the international community,” he said. “The release of Tymoshenko should be resolved primarily within the framework of the law.”

 

Ukrainian deputy Prime Minister Yuriy Boiko said Thursday that the decision to reverse course on EU policy was in the national interest.

 

“The government based itself on exclusively national interests, the interests of protecting employment, increasing the economic stability of the government and boosting productive potential,” Boiko said.

 

Boiko added that Ukraine had given up hopes of receiving International Monetary Fund credits as Kiev was unwilling to comply with demands to hike prices for household utilities by 40 percent.

 

“The position of our president is that we cannot impose the conditions of this onerous contract, which was signed by the previous government, on the shoulders of our people. So there will be no increase in tariffs,” Boiko said.

 

Updates with comments from Kremlin spokesman, deputy Ukraine prime minister.

[man]

-You spoke about the problem of absence of borders. Do you think the railway of Abkhazia may be restored? Can it solve the problem?

-For now the possibility is 50/50. I think there may some change of the situation as Georgia has a new Prime-Minister and president. Georgia is a country where the policy does not primarily depend on the president as it was during Sahakashvili’s office. Development of relations between Georgia and Russia depends on the solution of Armenia’s transport issue.

-If the railway of Abkhazia re-opens, will it solve the problem of the absence of border with the CU?

-It will partially solve the problem as the infrastructure will be strategic, it will help to transport most goods, Armenia will start to breathe, but of course it would be good to have borders. The ideal case would be if Georgia decided to become CU member as well, but it is impossible.

Ամբողջական հոդվածը կարող եք կարդալ այս հասցեով՝

http://en.168.am/2013/11/09/627.html
168 Ժամ առցանց լրատվական կայք

Edited November 21, 2013 by man

[MosJan]

Անգամ հզոր Ուկրաինան չդիմացավ ռուսական ճնշմանը

21.Նոյեմբեր.2013 - 23:09

 

Ուկրաինայի կառավարությունը համապատասխան որոշմամբ կասեցրել է Եվրոպական միության հետ ասոցացման նախապատրաստական աշխատանքները։ Կառավարությունը բացատրել է իր որոշումը Ռուսաստանի ու ԱՊՀ երկրների հետ տնտեսական կապերը զարգացնելու անհրաժեշտությամբ։

Անկախ պաշտոնական բացատրությունից՝ ակնհայտ է, որ այս որոշումը կայացվել է Ուկրաինայի իշխանության քաղաքական կամքի բացակայության հետևանքով։

Յանուկովիչի իշխանությունը տեղի տվեց Կրեմլի աննախադեպ ճնշմանը, մյուս կողմից՝ վախեցավ ազատության մեջ տեսնել իր հիմնական ընդդիմախոս Յուլիա Տիմոշենկոյին։

Ուկրաինան «Արևելյան գործընկերություն» ծրագրի առանցքային սուբյեկտն է և Վիլնյուսի գագաթաժողովն արժեզրկվում է՝ առանց Կիևի մասնակցության փաստաթղթի ստորագրման։

Բայց Կիևի որոշումն որոշակի մանևրի հնարավորություն է տալիս Հայաստանի իշխանություններին։

Մի կողմից՝ մերոնք կարդարանան, թե անգամ հզոր Ուկրաինան չդիմացավ ռուսական ճնշմանը, մյուս կողմից՝ եթե Եվրամիությունը հարկադրված համագործակցության նոր մոդել առաջարկի Ուկրաինային, դա կարող է կիրառելի լինել նաև Հայաստանի համար։

[MosJan]

i have merged 3 topics in to 1

[MosJan]

Belarusian expert says Armenia’s accession to CU will boost trade

http://media.pn.am/media/issue/172/950/photo/172950.jpg

November 21, 2013 - 15:54 AMT

PanARMENIAN.Net - Armenia’s accession to the Customs Union (CU) will provide groundwork for an increase in joint Belarusian-Armenian companies, Assistant Professor at the Department of International Economic Relations of Belarusian State University, Elena Semak said, according to BelTA.

Semak said there are currently 25 operators of the distribution network and two joint companies, Armenian-Belarusian Trading House and BelAZ Caucasus Trans Service, in Armenia.

With Armenia as a CU member state “we will continue expanding trading relations, opening joint companies,” Semak said, quoted by BelTA.

According to her, trade between Belarus and Armenia has a great potential for growth. Belarus’ main exports to Armenia include products of engineering and chemical industry. Armenia exports to Belarus liqueur and spirits, tobacco, fruit and vegetables.

Semak also named a number of advantages that the CU membership opens to Armenia. One of the main benefits, according to her, is industrial cooperation, which is able to improve the country’s export potential.

The expert believes that the Customs Union means bigger investment for Armenia from the CU member states. Russia has 1,300 companies in Armenia alone. “Once the project is launched, Russia will intensify its presence in Armenia, modernizing companies, opening new firms, putting more investment in equipment and infrastructure,” she said.

 

[MosJan]

Kishniev Mayor: 'The Customs Union is doomed to fail' Mаry Mamyan

http://hetq.am/static/news/b/2013/11/30832.jpg15:54, November 18, 2013

Hetq speaks with Dorin Chirtoacă, mayor of the Moldovan capital, Chișinău (Kishinev)

How would you compare the European Union and the Customs Union? What are the fundamental differences between the two?

The European Union is an international organization founded on democratic principles. It offers all possible freedoms and to date has shown that it is able to be the most successful international initiative in the world.

If we look at the other option, the Customs Union, we see that it is attempting to come to the fore on the foundation of the former Soviet Union. The USSR was created through aggression and violence; on the foundation of “occupied” territories. And now, the Customs Union is essentially trying to resurrect the former Soviet Union.

From this perspective, it is impossible to compare the two, since the EU brings nations together. Furthermore, there are difficulties regarding a few countries. Here, I am particularly referring to Asia, which constituted a part of the USSR. In addition, these countries have limited choice options. On the one hand is China, on the other Russia. This further complicates the picture.

In order to form a union, you must first create a democratic system and government in your country. Before this happens, it is difficult to establish a union, because what is being created is via pressure and power, Sooner or later, it will collapse. We are the victims of a Soviet Union which collapsed and other empires. The pressures continue from Russia. We see what pressures are being exacted against the Ukraine. We see the pressures on Armenia and Georgia. We also see the pressures directed against Moldova. In the past few months we have learnt that no foodstuffs, wine or vegetables will be allowed to be transported to Russia from Moldova just because we want to join the EU.

So, what’s the resolution to this situation?

There is a problem with certain territories that have been split off and occupied by the Russian army. We understand that Russia has its interests. That’s its right. It’s a huge country. But, in the 21st century, each nation has the right to choose its own path. Even if Russia desires to see another future for Moldova, we must have the right to decide for ourselves.

We want to join the EU, because we are a part of Europe. Even certain Slavonic countries are a part of the EU; for example the Czech Republic and Bulgaria. Thus, if Russia wants to form another union, in competition with the EU, such an initiative must be done democratically and based on the free will of that country. Otherwise, it will be difficult to join those countries and soon or later the union will fall apart. That which is created through violence and pressure can’t survive for long.

What do you think about Armenia entering the Customs Union?

That decision was made in 24 hours. We all expected that Armenia would sign the Association Agreement in Vilnius, along with Moldova and Ukraine. Armenia’s overnight decision to go the other route amazed us all.

Is Moldova preparing to sign the Association Agreement?

Moldova will shortly approve the Agreement and sign it next year. We remain decisive on this; to become a part of the European family. On the other hand, it is difficult for us. We are a small nation with meager resources and have one million migrant workers abroad.

But because of this, Moldova must move towards the EU, in order to develop and have the possibility to overcome these social and economic problems.

 

P.S. We met Kishniev mayor during the High-level Covenant of Mayors Forum in Istanbul. The forum was orgnaized by Energy Cities (the European Association of local authorities in energy transition) on November 14-15.

[man]

http://rt.com/business/ukraine-eu-deal-suspended-088/
Putin’s Customs Union

Ukraine’s sizable economy (worth about $155 billion a year) and resource-rich land have both Moscow and Brussels eager to strike exclusive trade deals.

If Kiev chooses to pursue EU membership, it will foil Putin’s long-term ambition to create a trade bloc to rival the EU, which so far includes Belarus and Kazakhstan. Armenia has also expressed its intentions to join Russia’s trade orbit.

Russia has warned Ukraine that a step west toward joining the European Union would be "trade suicide" and result in billions in lost trade revenue - and that joining the Russia-led Customs Union is more beneficial.

Both deals are appealing to Ukraine. On one hand, by siding with Russia, Ukraine continues to foster good relations with its neighbor, which imports nearly 25 percent of Ukraine’s exports.

On the other hand, moving west to Europe would save Ukrainian exporters nearly $490 million over 10 years, as 95 percent of goods would have zero customs duties, according to the European Commission.

Europe has been courting Ukraine into an associate trade membership for the past four years, which has created a geopolitical battle with Russia.

All sides have employed much political brinkmanship in the period leading up to the trade deal. Ukraine threatened to stop buying Russian gas, and Moscow stoked speculation there would be another gas war between the two neighbors, which would leave Ukraine without enough heat to last the winter.

Gas divorce?

Over the last decade Ukraine and Russia have both been trying to sever their complicated gas relationship. Gazprom has been building a maze of pipelines to circumvent Ukraine to deliver gas to Europe, and Ukraine has been wooing foreign companies in joint ventures in shale and offshore reserves.

After Naftogas, Ukraine’s state-owned oil and gas company, said it was cutting ties with Gazprom, Yanukovych contradicted the statement saying he “hoped for a compromise” with Russia.

Former Ukraine Prime Minister Yulia Timoshenko signed a ‘pre-pay’ contract with Gazprom in 2009 and was later jailed on charges of abuse of power.

Since the pre-pay contract was established, Ukraine has complained about expensive gas prices, which average around $400 per 1,000 cubic meters, one of the highest in Europe. Ukraine currently imports more than half of its gas from Russia, but both countries are making efforts to cut down on business.

Russia and Ukraine waged two gas wars over prices in the winters of 2006 and 2009 (which lasted 3 weeks) over a claim that Ukraine was late in paying.
Debt and downgrades

Ukraine’s depreciating currency reserves and massive deficit have brought it close to economic collapse, and an IMF bailout of between $10 billion and $15 billion could be needed in the near future.

Russia holds a significant portion of Ukraine’s sovereign national debt.

The at-risk currency has prompted the big three rating agencies to downgrade their outlook on Ukraine. Fitch downgraded Ukraine’s long-term foreign local currency issuer default rating to ‘B-‘ from ‘B’ following S&P’s downgrade of its debt rating to ‘B-‘ - the same junk level as Greece and Cyprus. Moody’s cut its rating to Caa1 from B3 in September putting them at “very high default risk.”

Ukraine’s government reserves are so depleted they may no longer be able to keep national energy company Naftogaz afloat, and may be forced to find a foreign buyer.

US money manager Franklin Templeton picked up $5 billion of Ukraine’s international debt, nearly a fifth, in August.

[man]

EU’s ‘ridiculous’ plan to help Ukraine
“The problem is that Ukraine is in dire economic strains. Ukraine is 2-6 months from default. They cannot raise money in markets. They are running a deficit. They are having a lot of trouble keeping the currency stable.”

The European Union has actually done nothing to convince Ukrainian leaders that association with the EU would actually solve its economic crisis, Polish MEP Pawel Zalewski stated earlier this week.

As compared to hundreds of billions of euros channeled into Greek, Spanish and Portuguese economies, he said, one billion offered to Ukraine was inadequate and "ridiculous."

"It's a ridiculous amount compared to the resources allocated to rescue Southern Europe from bankruptcy," Zalewski said as cited by PR Newswire.

In the meantime Russia has the “means and willingness” to offer Ukraine what the EU lacks, which is money, Eric Kraus, Managing Director of Anyatta Capital told RT, adding that Ukraine is a “vital part” of the European Russian speaking space.

“The European Union offers a lot of words,” Kraus said, implying that nothing tangible would have come out of the deal. “What they don’t offer is what Ukraine needs – and that’s money.”

“Ukraine is not vital to the EU,” Kraus explained. “It is a part of a geopolitical chess game and they’d like to take that piece. They are not going to spend a lot of money for it. They can’t, they’ve got Portugal, they’ve got Greece. Pretty soon they’ve got France.”

The financial analyst also explained the economic problems that Ukraine is facing.

“The problem is that Ukraine is in dire economic strains. Ukraine is 2-6 months from default. They cannot raise money in markets. They are running a deficit. They are having a lot of trouble keeping the currency stable.”

[man]

http://rt.com/news/putin-eu-ukraine-blackmail-151/

Russian President Vladimir Putin has accused the EU of "blackmailing" and “pressuring” Ukraine over its decision to suspend preparations for a trade pact with the bloc. He added that Ukraine’s decision will be clear in the next few days.

"When we heard (I just found out yesterday) that Ukraine has suspended – not canceled but suspended – negotiations with the EU and wants to review everything, we heard a threat from the EU to Ukraine up to the point of holding mass protests. This is pressure and blackmail," Putin said at a joint press conference with Turkish Prime Minister Recep Tayyip Erdogan in St. Petersburg.

....Putin added that there “shouldn’t be any politicizing” of the situation, adding that Turkey has a “big experience of negotiating with the EU” and Russia will ask the advice of Ankara on how to behave in this situation.

Erdogan smiled, and said it “was a not a joke,” as Turkey has 50 years’ experience of trade talks with the EU.

 

-------------

Ukraine’s government signed a degree Thursday suspending preparations for the association agreement between Ukraine and the EU. Lawmakers said that the decision was taken after Kiev considered the effects of the association on its trade relations with Moscow.

Russia welcomed Kiev’s desire to rekindle ties with Moscow, and Putin said that he wasn't completely against Ukraine's association with the EU. The Ukrainian president however said that his country would continue its efforts towards European integration, despite the “difficulties.”

Putin said Friday that after Ukraine’s decision, the two countries now have a free trade zone agreement.

“It means that in many product groups, very sensitive to both countries, we have zero export and import tariffs. The level of customs protection of our territory in relations with EU partners is very different. We have achieved this status as a result of negotiations within the framework of the World Trade Organization, which were carried out over the past 17 years.”

If Ukraine signs a trade pact with the EU resetting its trade tariffs, then this would automatically affect Russia if it keeps its free trade zone with Ukraine, Putin said, adding that this could destroy entire sectors of the Russian economy.

Putin said that the competitiveness of Russian agriculture and a number of other industries had not yet met the European Union’s requirements. If Ukraine went ahead with its Euro-integration deal, Russia would be forced to cancel preferential tariffs with Kiev, he said.

[man]

Interview with Former Defense Minister, Lieutenant-General Vagharshak Harutyunyan

Interviewed by Nelly Grigoryan
Read more at: http://en.aravot.am/2013/11/22/162678/

Former Defense Minister, Lieutenant-General Vagharshak Harutyunyan
Nov.22. 2013

 

Vagharshak: Armenia and Karabakh have stronger positions in the sense that resumption of the war from military and political point of view does not generate from the interests of Turkey, the West, and Russia. In fact, Russia has unequivocally stated about it: from the UN platform, Putin and Medvedev have told that they would not allow the resumption of hostilities, and the Nagorno-Karabakh conflict settlement by force. Lavrov

 

Nelly- In this new situation, when Armenia is prepared for accession into the Customs Union, what are the potential threats to our country in the Karabakh front?

 

- There is no threat for resumption of war militarily. More precisely, this probability is not growing, on the contrary, it is decreasing. Because, if we pay attention to the statements raised in Azerbaijan, Russia’s position interferes them to win the war. At this point, when Armenia becomes a CU member, it further aggravates their fears. It is possible to use Nagorno-Karabakh conflict settlement as a lever to influence Armenia not to join the CU and not to be in deeper integration with Russia. Such an option is possible, but it will not have any impact on the policy chosen by Armenia.

 

- You mean by the West?

 

- Yes.

 

- In the process of joining the Customs Union, the authorities were constantly pushing the issue of Armenia and Karabakh security forward. In your opinion, by joining the CU, does Armenia solve the problem of security of Armenian states?

 

- In general, there is a wrong idea about the Customs Union. The membership to the CU is a whole process, the first phase of which is signing of a free trade are agreement, the membership to Eurasian Union is the final point of the CU membership. Tajikistan, Kazakhstan and Uzbekistan have submitted an application to join the CU and have announced that they have a positive attitude towards it. In other words, CU current and future members are the CSTO member states. The economy should not be separated from the security. It would be wrong to say that we only pursue an economic benefit. If an economic area is formed, it must first ensure its security. If security is not provided, then there could be no word about the development. So, these are correlated, they are natural questions, and Armenia entering into the CU, solves both economic and serious security issues.

 

- With respect to CU membership, there were a lot of criticism on economic aspect, because the European market is freer, rich and attractive in all ways. Weren’t the prospects on Armenia’s development in Europe wider?

 

- You know, if we consider the issue from the perspective of which market is more developed, then, of course, the European. This is an axiom, there is nothing to discuss here. But, as to what this market gives Armenia, that’s another matter, and here is the confusion. When judgments are made about Europe, they talk about how developed is the Europe, how rich, but they never ask what Europe has given to us, what Russia has given, and what CU will give. These are very different platforms, in the sense that when we are talking about the CU, it’s a specific organization with clear agreements and economic output. Nothing prevents us to go to the EU market as a member of the CU. Armenia is a member of the World Trade Organization. Europe put the question, either EU or CU. Eventually, today, Armenia also agreed to sign the Association Agreement, but Europe says, no. This is in political aspect. Economically, what CU and EU gives to Armenia are incomparable. I will answer the question related to economic interests by estimates of the Polish ambassador. He said that if Armenia had signed the Association Agreement of EU and the Deep and Comprehensive Free Trade Area agreement, then in a few years Armenia would have received an income of $ 150 million. Only the price of gas, which is formed today, decreasing by 30 percent, enables Armenia to save $ 150 million a year. Not to speak about that Armenian products will have free access to the Customs Union market, where our products are competitive. Today, Armenia can export very few products to the European market, which will be competitive. For example, Armenian grapes, apricots, and so on, if they are sold at the CU market without the customs duties, then they will be more competitive, as the Georgian and Azerbaijani ones are going to be more expensive. The same is true of other products. Armenia will definite receive advantages, and it would be apparent. In the case of accession to CU, Armenia must join 19 agreements and ratify 65 other acts, one of them is related to gas and other energy carriers, which would be sold to CU members without any taxes and customs duties. The status of Armenian migrants in social and other issues are almost equal to the status of Russian citizens: only the employment contract enable the person to move freely, social assistances are given to families, children are able to get education and so on. One of senior European officials, answering the question of what Armenia will export to Europe, what it will import and what it will gain, answered that Armenia will export textile, import agricultural products. It’s just ridiculous, and after all that to talk about what Armenia gets in the EU or CU is obvious and pointless. It is not always to go to the powerful and rich side provides necessary effect. Let me bring an example, in 1992, during the years of war in Karabakh, Azerbaijan and Georgia chose the direction to the powerful and wealthy west, Armenia went towards broken, weak Russia. As a result, Armenia won the war, rebuilt its economy, reopened the nuclear plant with the help of Russia and was able to overcome the consequences of war.

 

Edited November 23, 2013 by man

[MosJan]

EU ready for bilateral talks with Russia over Ukrainian trade deal - official

Published time: November 24, 2013 18:28

he European Union is ready to discuss issues that are of concern to “Ukraine’s neighbors” in the format of bilateral talks, a spokesman for Stefan Fule, EU’s Commissioner for Enlargement and Neighbourhood Policy, has said.

Speaking to the Ukrainian TV channel 1+1, Fule’s spokesman, Peter Stano, said the EU was willing to discuss the complications surrounding Kiev’s suspended decision to join the European trade zone.

“If Ukraine’s neighbors have some questions, we are ready to settle them on a bilateral basis,” the EU official said.

Stano then stressed that Kiev’s actual signing of the EU-Ukrainian agreement was an issue to be discussed only between the two sides of the deal.

Earlier this week, Ukraine’s proposal for holding trilateral talks with Russia and the EU on the controversial deal was thwarted by Lithuania currently presiding at the European Council. The country's Foreign Minister Linas Linkevicius said that “we do not see a role for any third country in this process.”

Fule on Saturday claimed that the EU has given a “clear signal” to Ukraine that there will be some financial aid for the Ukrainian economy, should Kiev sign the agreement and enter the EU trade zone.

However, the Ukrainian Prime Minister Nikolay Azarov on Sunday reiterated that, despite repeated requests for help to the EU, only a “word-of-mouth promise” of just 1 billion euro aid has come from the European block. As for Ukraine, it is going to suffer 165 billion euro losses ($223.6 billion) in the next decade in the course of adapting local regulation to European standards, Azarov added.

At the same time, Azarov did not rule out that Kiev could still sign the deal next year at the Ukraine-EU summit, as the EU Commissioner also indicated earlier.

 

“The association agreement could be signed at the Ukraine-European Union Summit at the end of winter, beginning of spring… Ukrainians have asked us [for] a pause and we respect this decision,” Fule said in Brussels on Saturday, adding “the doors remain open,” but the EU does not want this pause to last longer than until spring 2014.

 

[MosJan]

ohhh hima en uzzum xosel russnri het

[man]

Putin Beats Europe in Battle for Ukraine
By Leonid Bershidsky Nov 25, 2013
http://www.bloomberg.com/news/2013-11-25/putin-beats-europe-in-battle-for-ukraine.html

This is good analysis article about what is happening in Ukraine, if you have time click and read. Ukraine as member of Customs Union of Russia will have its persecutions in Armenia, for much good. Here are some thoughts from the article:

With the European Union afflicted by financial troubles and rising nationalism, it's particularly impressive that the people of one country -- Ukraine -- still want in; also some in Armenia want the same with the sick EU that may fall dead any day now.

Yanukovych (Ukraine prez) and his team were determined to sell their country's allegiance to the highest bidder. EU, afflicted by financial troubles, offered to Ukraine 1 billion euros over seven years, (while modernizing Ukrainian industry to EU standards will cost at least 150 billion to 165 billion euros).

Putin, when Yanukovich secretly went to Kremlin, offered Ukraine something more persuasive than whatever cheap loans and grants the EU was willing to put up. Putin promised to renegotiate Ukraine's contracts with Gazprom, the Russian state-controlled natural gas supplier. Ukraine pays about $410 per thousand cubic meters of natural gas, compared with the $175 Gazprom charges the more pliant Belarus.

"About half the country [of Ukraine] has been building their own personal [of Western] Europe at home, they start with small things: not chucking cigarette butts from their windows, planting flowers on balconies, trading cars for bicycles for a number of personal reasons, teaching their children tolerance and several foreign languages. With schizophrenic persistence, they refuse to bribe judges and police [the legacy of the Soviet Union], paying for this with lost cases and huge fines."

It was these people [some 100,000] who took to the streets on Nov. 24 to demand that Yanukovych, their president, sign the EU deal no matter what.

But the cynical Ukrainian government will go with whoever offers to bail it out.

[man]

Putin's RUSSIA TODAY

 

F. Stephen Larrabee writes in Journal of International Affairs
Issue: Vol. 63, No. 2, Spring/Summer 2010 Page 33-52
http://jia.sipa.columbia.edu/russia-ukraine-and-central-europe-return-geopolitics

For a decade [after the fall of the Soviet Union], Russia’s weakness prevented Moscow from exerting much influence in global and regional affairs, and Western policy makers became accustomed to having a free ride. Russia objected to many Western policies—NATO enlargement, Kosovo, etc.—but it was powerless to do much about them. The predominant Western assumption was that with time Russia would “come around” and see the advantage of closer cooperation with the West.

Many of these assumptions, however, proved to be wrong. Russia has recovered more rapidly than many observers expected. Much of the credit belongs to Vladimir Putin. Putin came to power determined to rebuild the power of the Russian state and reassert Russian power and influence abroad, particularly in the post-Soviet space. Aided by a significant rise in energy prices in the first years of his rule, he largely succeeded. During his presidency, the Russian economy significantly recovered, and Russia’s influence abroad visibly increased.

Indeed, there was a close connection between Putin’s domestic and foreign policy. In Putin’s conception, restoring Russia’s power and influence abroad required rebuilding the power of the Russian state at home, particularly halting the erosion of power from the “center” to the periphery that had occurred under Yeltsin, and regaining state control over the “commanding heights” (i.e. key strategic industries, particularly energy) of the economy. This in turn required reducing the independence and power of the oligarchs—who had exploited the free-wheeling economic climate and lack of strong state control under Yeltsin to amass great wealth—either through co-option, intimidation, or exile. It also meant exerting greater central control over the unruly media, and making it a more compliant tool and supporter of government policy.

The extent of Russia’s political and economic recovery, however, is not the only significant aspect; its nature and goals were also extremely important. Russia today has become, in effect, a revisionist power; it seeks to reestablish its influence in the post-Soviet space and wants to change the post-Cold War security order in Europe. Russia feels that order was imposed upon it by the West at a time when Russia was weak. This security order does not, in the Russian view, sufficiently take into consideration Russia’s recently changed status and interests.

This was the essence of Putin’s message in his famous speech at the Munich Security Conference in February 2007.1 In his speech, Putin made clear–in strident language reminiscent of the Cold War—that Russia was back and that it did not need, nor intend to take, lessons from the West about how to behave in the international arena. This statement was especially directed at the United States, which Putin claimed was ignoring and trampling all over international law. Russia had its own national interests, he stressed, and these interests would dictate Russian policy.

[man]

This article is of interest to Armenians as Armenia has chosen UC of Russia. Armenia faces some/few treatments that Russia gave to Ukraine.. Putin's Gambit: How the EU Lost Ukraine

By SPIEGEL Staff

25 Nov. 2013

http://www.spiegel.de/international/europe/how-the-eu-lost-to-russia-in-negotiations-over-ukraine-trade-deal-a-935476.html

This tug-of-war began four years ago, when the EU proposed an "eastern partnership" with Ukraine as well as Armenia, Azerbaijan, Georgia, Moldova and Belarus.

Russian President Vladimir Putin's decisive move came on Nov. 9. That day, after years of courtship, and several months of promises and threats, he met with Ukrainian President Viktor Yanukovych at a military airport near Moscow. The meeting was so clandestine the Russians initially denied that it had taken place at all.

 

Before that point, the plan had been for Yanukovych to sign a 900-page association agreement, a sort of engagement contract, with the European Union in the Lithuanian capital of Vilnius on Nov. 29. But in early November near Moscow, Putin seems to have sealed an alliance with Ukraine, preempting his rivals in Brussels. And last Thursday Yanukovych postponed the signing of the EU agreement indefinitely.

 

After giving temporary asylum to whistleblower Edward Snowden and brokering a deal to have Syria give up its chemical weapons, it was Putin's third recent victory over the West, albeit probably not a permanent one. After all, Yanukovych's agreement with Putin is a marriage of convenience, not a marriage of love.

 

Europe's 'Eastern Partnership' Dream

 

This tug-of-war began four years ago, when the EU proposed an "eastern partnership" with Ukraine as well as Armenia, Azerbaijan, Georgia, Moldova and Belarus. The EU offered cooperation, free trade and financial contributions in exchange for democratic reforms. Officials in Brussels spoke enthusiastically about the emergence of an historic Eastern European policy not unlike former German Chancellor Willy Brandt's rapprochement with the Warsaw Pact countries in the 1970s. The planned partnership agreements were intended to facilitate visa-free travel, reduce tariffs and introduce European norms. The only thing that was not offered was EU membership.

 

The EU's other goal, even though it was not as openly expressed, was to limit Russia's influence and define how far Europe extends into the east. For Russia, the struggle to win over Ukraine is not only about maintaining its geopolitical influence, but about having control over a region that was the nucleus of the Russian empire a millennium ago. The word Ukraine translates as "border country," and many feel the capital Kiev is the mother of all Russian cities.

 

This helped create Cold War-style grappling between Moscow and Brussels. The Russian president, hardened by his fights in the Kremlin, is more adept than EU bureaucrats at manipulating people with venality and affections. None of the top European politicians made a serious effort to win over Ukraine, with neither German Chancellor Angela Merkel nor European Commission President José Manuel Barroso flying to Kiev to convince its wavering president.

 

'Unprecendented Pressure' from Russia

 

"I believe the unprecedented pressure from the Russians was the decisive factor," says former Polish Prime Minister and intermediary Aleksander Kwasniewski. "The Russians used everything in their arsenal." Elmar Brok, chairman of the foreign affairs committee in the European Parliament, says: "Yanukovych kept all options open until the end, so as to get the best possible deal."

 

The official reason for the agreement's failure is Yulia Tymoshenko, the opposition politician who has been in prison for the last two years. The EU had made her release a condition of the agreement. Yanukovych was unwilling to release his former rival, and last week the parliament in Kiev failed to approve a bill that would have secured her release.

 

But then there are the financial incentives. In the end, the Russian president seems to have promised his Ukrainian counterpart several billion euros in the form of subsidies, debt forgiveness and duty-free imports. The EU, for its part, had offered Ukraine loans worth €610 million ($827 million), which it had increased at the last moment, along with the vague prospect of a €1 billion loan from the International Monetary Fund (IMF). Yanukovych chose Putin's billions instead.

 

The EU had been banking on its radiant appeal, and on its great promise of prosperity, freedom and democracy, but now Brussels must confront the fact that, for the first time, an attempt at rapprochement was rebuffed because the price was wrong. "If Yanukovych doesn't want to make a deal, then he simply doesn't want to," says Brok.

 

Battle of the Unions

 

The EU's eastern partnership had gotten off to a rocky start even before the Ukrainian incident. Belarus dashed the EU's hopes it would join when protesters were violently suppressed after the reelection of President Alexander Lukashenko in 2010. Armenia called off an association agreement with the EU this September.

 

In the case of Ukraine, it initially seemed as if the Europeans' rational arguments would prevail over Russia's threatening gestures. According to an internal EU analysis, joining the "Eurasian Union" -- a Russia-backed proposed political and economic union including Russia, Tajikistan, Kazahkstan, Belarus and others -- would severely limit Ukraine's sovereignty. Once such a union had been formed, Kiev would no longer be able to enter into any other free trade agreements without Moscow's approval. An alliance with Moscow would thus have the exclusive nature of a marriage. The EU's eastern partnership, in contrast, would still allow Ukraine to enter into other alliances.

 

And Yanukovych, who has been considered a puppet of the Kremlin, even implemented many of the reforms demanded by the EU. The legal system and criminal law were modernized, trade restrictions were reduced and a few political prisoners were released. "He implemented more reforms than the pro-Western predecessor regime under Tymoshenko," says an EU negotiator.

 

EU Hopes Dashed

 

But it turns out those reforms didn't go as the EU hoped. According to the Freedom House organization, democratic basic rights in these eastern partnership candidate nations have not been strengthened in the wake of EU reform demands. Instead, they claim, many of the reforms were implemented half-heartedly and governments only consolidated their power.

 

The Europeans had mistakenly believed Kiev would automatically turn to the West. After all, isn't half of the population in favor of closer ties with the EU? And aren't there more Ukrainian immigrant workers living in the West than in Russia? They based their argument on economic sustainability, believing they could convince Yanukovych with the prospect of long-term growth rates of at least 6 percent. By contrast, a customs union with Russia would reduce Ukraine's economic growth in the long term.

 

But in truth, the most important goal for Yanukovych -- who may come across as unsophisticated, but is in fact a shrewd poker player -- is to hold onto power. In order to be reelected in 2015, he needs rapid economic improvement. Ukraine has slid into recession and could even be insolvent soon. The rating agencies have repeatedly downgraded the country's credit rating. Besides, Ukraine is dependent on Russian natural gas, and Moscow has already flexed its muscles by turning off supplies in the winter on three occasions.

This is why Yanukovych needs the Putin who in recent months has made the consequences of an EU deal unmistakably clear to Ukraine. In August, Russian officials began painstakingly inspecting trucks from Ukraine bringing goods across the border into Russia. Ukrainian oligarch Viktor Pinchuck was barred from importing steel pipes to Russia, and a former cabinet minister was prevented from selling his chocolate in the country.

 

These measures have led to a 25 percent decline in exports since 2011. Ukraine exports a third of its goods to Russia and other former countries of the former Soviet Union, and only 25 percent to the EU. Russia also threatened that it would require Ukrainians to apply for visas to travel to the country in the future.

 

Three days after the secret meeting in Moscow, Ukrainian oligarchs, apparently in consultation with the Kremlin, asked Yanukovych to postpone signing the EU association treaty by a year.

 

Zurkov the Manipulator

 

The Kremlin made it clear the harassment could become permanent. Sergei Glazyev, Putin's adviser for the economic reintegration of the republics that gained their independence after the collapse of the Soviet Union, predicted that Kiev would experience an "economic disaster" if it signed the agreement with the EU. "Ukraine is sacrificing its sovereignty," he said threateningly at a conference on the Crimean Peninsula, which is former Russian territory.

 

Vladislav Zurkov -- the Kremlin's former main ideologist, who had fallen out of favor but was brought back by Putin two months ago -- was sitting in one of the back rows. His mission was to help Moscow regain its control over the countries of the former Soviet Union.

 

When someone like Zurkov appears at a meeting, it means intrigues are under way. In Russia, Zurkov has founded parties and let them fade away based on Putin's needs. He could do the same thing in Ukraine, by siphoning off Yanukovych's pro-Russian voters and all but destroying Yanukovych's chances of reelection.

 

It is unclear whether Putin had to voice all of these threats in his meeting with Yanukovych. It was probably no longer necessary. Yanukovych had already understood that his only hope for political survival was to throw in his lot with the Russians.

 

The threats were also accompanied by promises. Putin held out the prospect of loans, lower gas prices and debt forgiveness with Russian energy giant Gazprom, to which Ukraine owes $1.3 billion.

 

Pipeline Under Threat

 

Another project could suffer a fate similar to that of the association agreement: a natural gas contract, negotiated under the auspices of the EU, which was supposed to be signed on Nov. 22. Once again, everything seemed to have been agreed upon, but then the Ukrainians were suddenly saying minor technical details had yet to be ironed out. "This has already been going back and forth for a year now," says one of the frustrated lead negotiators.

 

Everyone had expected the agreement to be signed, because it would have enabled the Ukrainians to liberate themselves, gas-wise, from the clutches of the Russians, especially as they now pay significantly more for Russian gas than major Western companies, such as German energy conglomerate RWE. Under the new agreement, pipelines in EU member-state Slovakia would be rebuilt to allow for reverse gas flows, so gas destined for Western Europe could also be transported to Ukraine in the future.

 

But Yanukovych is hesitating. Because of the necessary upgrading work, the gas from the West could not begin flowing to Ukraine until next September. This would make the Ukrainians vulnerable to blackmail, at least this winter. And the negotiations over the new contract already seem to have helped Yanukovych, with the Russians signaling significant price cuts for Ukraine. It appears Yanukovych has played his cards right once again.

 

That is, if he can contain the political anger within Ukraine. On Sunday, the largest demonstration in the country since 2004's Orange Revolution took place in Kiev. According police estimates, 23,000 people protested the withdrawal from the EU pact negotiations, including boxing champ Vitali Klitschko. Organizers place the number at over 100,000. Yulia Tymoshenko's daughter, Eugenia, personally reached out to Angela Merkel for help in an interview with Germany's Bild tabloid, saying that, if nothing was done, her mother would die.

 

What Now?

 

In Brussels, European Commissioner for Enlargement Stefan Fule tried to compose himself last Friday. "Only when the summit officially begins will we know, once and for all, whether or not Ukraine intends to sign." But no one expects a quick agreement anymore. Even Fule is already thinking about possible next steps. He also seems somewhat at a loss when he says that the EU has no interest in engaging in a competition with Russia -- as if one hadn't already happened.

 

"It's difficult to say when the negotiations will be resumed," says middleman Kwasniewski. The European Parliament will be elected next year, there will be changes at the European Commission, and a presidential election in Ukraine in 2015. "It seems to me that the pause is going to be longer rather than shorter," Kwasniewski adds.

 

REPORTED BY CHRISTOPH PAULY, JAN PUHL, MATTHIAS SCHEPP, GREGOR PETER SCHMITZ AND CHRISTOPH SCHULT

--------------------------------

P.S by MAN: The situation in Ukraine is bad, when it split from the Soviet Union IT HAD NO DEBT AT ALL, but after liberation and privatization of its economy it had debt in the billions and billions and not being able to pay back; Ukraine's dept keeps increasing. Its people left by the millions & millions seeking work outside Ukraine. Its girls and women went into prostitution so they can survive, Turks specially are crazy visiting Ukraine for blond beauty of Ukrainian women ready to sell their bodies in sex for money. Russia is the few countries in the world now that has no debt or just a little; Russia is so large (larger than USA) that minerals, gas and oil in their land is enough to keep Russia debt free.

[MosJan]

Eu has been using EU membership. as a bate a " ransom " to dictate many ....

[man]

Georgia, Moldova Ink EU Agreements as Ukraine Backs Off

Nov.29.13

VILNIUS, November 29 (RIA Novosti) – Georgia and Moldova signed agreements with the European Union at a summit Friday as another ex-Soviet country, Ukraine, confirmed it would not go ahead with a similar deal.

 

The agreements with Georgia and Moldova, which are set to be ratified next year, put the two countries on a path to stronger economic ties with Europe amid a wider EU push to integrate Eastern European and Southern Caucasus nations formerly ruled from Moscow.

 

“The agreements initialed today are the most advanced of their type ever negotiated by the EU,” said European Commission President Jose Barroso during the signing ceremony, according to a copy of his speech.

 

“From now on, our economies and a growing number of sectors in our societies will be linked. We will increasingly work together.”

 

The Eastern Partnership summit in Lithuania began Thursday with EU heads of state and leaders from Armenia, Azerbaijan, Belarus, Ukraine, Georgia and Moldova in attendance.

------

Vilnius Summit: No Agreement initialing due to Armenia’s new international commitments http://armenianow.com/news/50485/armenia_eu_statement_vilnius_summit

The European Union and the Republic of Armenia have adopted a joint statement as a result of the EU Eastern Partnership summit in Vilnius, Lithuania, in which they said that they have completed negotiations on an Association Agreement, including a Deep and Comprehensive Free Trade Area, but will not proceed with its initialing due to “Armenia’s new international commitments.” They also agree on the need to update the EU-Armenia ENP Action Plan.

 

“The EU and Armenia enjoy close links and reconfirm their commitment to further develop and strengthen comprehensive cooperation in all areas of mutual interest within the Eastern Partnership framework,” the statement published by the Ministry of Foreign Affairs of Armenia reads.

 

“Based on common values, both sides are committed to further cooperation aimed at the continuous improvement of democratic institutions and judiciary, the promotion of human rights and rule of law, good governance, the fight against corruption, the strengthening the civil society, the further improvement of the framework for enhanced trade and investments, the continued implementation of the mobility partnership and increased sectoral cooperation.

 

“Based on their common endeavour to build upon the existing framework of cooperation, the EU and Armenia stress the importance of revisiting the basis for their relations.”

[man]

Summit Flop: EU Needs New Russia Policy after Ukraine Debacle

'An Almost Fearful Awe of Putin'
Nov.29.13
Full at kink:
http://www.spiegel.de/international/europe/ukraine-debacle-and-eu-vilnius-summit-shows-need-for-new-russia-policy-a-936410.html


"at the summit, an almost fearful awe of Russian President Vladimir Putin's power politics could be detected. Unlike the EU's own mistakes, his tactics are not under constant scrutiny, and when it comes to crossing the finishing line, he appears to be more clever at power politics"

It is not just the failure of the agreement that is on display in Vilnius, but also the failure of the EU's strategy toward Eastern Europe as it devolves into mere helpless announcements.

Officials admit that the task is a complicated and time-consuming one, but they still believe that controversial leaders like Yanukovych must eventually take the plunge toward Europe. "The door is open," said Chancellor Merkel after her 40 minute-long meeting with the Ukrainian president, though she added that the opposition there cannot be forgotten, either. At the chancellor's bidding, her foreign policy adviser Christoph Heusgen met with opposition leader and heavyweight boxer Vitali Klitschko in Vilnius to learn more about reprisals against Ukrainian civil society.

But it is also clear that accusations against Ukraine's leaders will accomplish little. The huge country seems torn between a western part that looks towards Brussels and another region that remains highly influenced by Russia. The mawkishness of its president, who is reputedly corrupt, is also too great, with Yanukovych complaining in the conversation with Merkel about the International Monetary Fund's refusal to simply give him billions in loans without conditions.

But Europe's helplessness is just as clear. Kiev's rejection of the agreement has driven a stake through the heart of the "Eastern Partnership." Although Georgia and Moldova both signed similar agreements with the EU in Vilnius, the latter is tiny and the former a rather opaque partner.

[hagopn]

This is how I have been interpreting the EU:

 

Q/A with EU during the evaluation process:

 

EU: Have you given rights to gays and have you now recognized and officially inserted into your national Encyclopedia that most important of all term "LGBT", because sexual preference is absolutely central to the economic well being of all citizens, great and small?

 

Petitioning Country Rep: "Well, we plan to, but what incentives can you give us and what benefits can we get on educational and vocational training opportunities?"

 

EU: "Well, as long as gays have the same rights and homosexual awareness education curricula are in place, then we can discuss the actual benefits."

 

Petitioning Country Rep: "??? Premature exposure to homosexuality is against our societal norms!"

 

EU: "Well, then, you will have to adjust your societal norms accordingly."

 

Petitioning Country Rep: "What about the benefits of market integration, lowering of export tariffs, assistance in implementing safety and industry standards?"

 

EU: "So long as gays are full participants."

 

It's all about "rights" and "democracy".