EU gives Russia ultimatum over Ukraine

The European Union gave Russia three days to stop a separatist rebellion in Ukraine or face deeper sanctions as the government in Kiev prepared to extend a cease- fire originally due to expire tonight.

EU leaders meeting in Brussels demanded separatists, whom Ukraine and its allies say are backed by Russian President Vladimir Putin’s government, return border checkpoints, release hostages and start talks to implement a peace plan drawn up by Ukrainian President Petro Poroshenko by June 30. Failure to do so will result in “further significant restrictive measures” against Russia, the leaders said in a statement.

Trying to bolster solidarity from richer nations to Ukraine’s west against what it calls Russian aggression, Poroshenko also signed a free-trade pact with the 28-member bloc, which he said showed Ukraine’s “sovereign choice in favor of future membership of the EU.”

“What a great day, maybe the most important day for my country after independence day,” Poroshenko said after signing the agreement in Brussels today. “The external aggression faced by Ukraine gives another strong reason for this crucial step.”

Truce extended

Accusing Putin’s government of allowing weapons, manpower and other support to flow across its border into Ukraine, the U.S. also is preparing sanctions against Russia on technology aimed at exploiting and producing oil and gas products, a major part of that country’s economy, according to three people briefed on the plans.

Ukraine will prolong the week-long truce, which it says has been repeatedly flouted by pro-Russian separatists, by 72 hours from an original plan to end it at 10 p.m. tonight, two European government officials said. The officials asked not to be named because the discussions were private.

“I’ll have to conduct consultations with the minister of defense, the defense council, the heads of the General Staff and other people from the national defense and security council,” Poroshenko said in Brussels before he returned to Kiev. “Time will be up today at 10 p.m., so the decision will be taken today.”

German Chancellor Angela Merkel was the prime mover behind the crafting of the ultimatum, an official from the bloc said. In charge of the EU’s largest economy and its longest-serving leader as well, Merkel said yesterday that Poroshenko’s account would be crucial to shaping a response.

‘Third-stage’ penalties

Diplomatic solutions are preferable, “but if nothing else helps, sanctions can be put back on the agenda, and this time they would be third-stage,” Merkel said in the speech to the lower house of parliament, the Bundestag, in Berlin on June 25. Third stage refers to the EU’s threat of sanctions on broad sectors of the Russian economy.

The EU has imposed asset freezes and travel bans on 61 people connected with unrest in Ukraine and Russia’s seizure of Crimea in March. It has stopped short of broader curbs on investment and trade that might damage the European economy as it shakes off the effects of the debt crisis.

The government in Kiev blames Putin for supporting rebels and stoking violence the United Nations says has killed more than 400 people in the country of more than 40 million.

The rejection of the free-trade accord by the man Poroshenko replaced, Viktor Yanukovych, triggered street protests in Kiev last November that ousted the then pro-Russian government after more than 100 people died in street clashes.

Society split

Russia responded by annexing Crimea from Ukraine and has expressed support for Russian speakers in the country’s southeast, who it says are under attack by their own government.

“The anti-constitutional revolution in Kiev and the attempts to force the Ukrainian people to make an artificial choice between Europe and Russia have led to a split in society,” Putin said at a meeting with new ambassadors in the Kremlin today.

The free-trade deal -- similar versions of which were also signed by Moldova and Georgia today -- gives Ukrainian companies better access to the EU market, the world’s biggest trading bloc.

The EU estimates a 1 billion euro ($1.4 billion) annual boost for Ukraine’s exports, and in exchange, Ukraine pledges to use EU funds to meet EU product, safety, consumer standards, bolster human rights and fight corruption. The deal doesn’t offer Ukraine the prospect of membership.

‘Landmark agreement’

“This is a landmark agreement for Ukraine, and will be transformational,” said Tim Ash, chief emerging markets economist at Standard Bank Group Ltd. in London.

With its output per capita at about a third of its biggest neighbors -- EU member Poland to the west and Russia to the east -- Ukraine may face short-term costs in the form of trade penalties from Russia, the destination of about a third of Ukraine’s exports, Ash said.

Putin, who is trying to establish a Eurasian trading bloc made up of former Soviet states to rival the EU, has said the agreement will damage Russia’s economy. His government has said those who sign agreements with the EU may face consequences.

About 67 percent of Ukrainians would vote to join the EU in a referendum, according to a June 6-11 Razumkov Center poll of 2,012 voters, versus 20 who wouldn’t.

The truce extension will let talks continue on the release of hostages held by separatists in Ukraine’s eastern border regions, one of the EU government officials said. Though it has been backed by Putin and separatist leaders, violence continued as peace talks this week failed to produce a result.

Patience exhausted

The conflict is taking a toll. Along with the death toll, the UN estimates that about 54,000 people have fled their homes to other places inside Ukraine, while 110,000 displaced Ukrainians have arrived in Russia this year.

Militants attacked Kramatorsk airport with mortars overnight. Nine Ukrainian soldiers were killed in attacks in Donetsk and Slovyansk today, the national guard said in a statement. Five guardsmen were also wounded in Donetsk and rebels captured their captain.

“There are unfortunately more than 20 dead this week on the Ukrainian side,” Interior Minister Arsen Avakov said on Channel 5 today. “We have a huge amount of wounded and our patience has run out.”

Four monitors for the Organization for Security and Co- operation in Europe who were abducted in Donetsk region in May were released yesterday after 32 days in captivity, the organization said on its website. A second team seized in Luhansk hasn’t been released, the OSCE said.

Sanction process

Russia’s failure to comply with the EU deadline could lead to additional asset freezes and travel bans after June 30. A move toward stage three sanctions could come as early as mid- July, when the leaders are scheduled to meet again to fill high- level positions including foreign-policy chief.

EU sanctions require a consensus of the 28 governments, making it possible for countries such as Austria, Slovakia or Italy to stand in the way. Austria, for example, deepened its economic ties with Russia this week by signing an accord with OAO Gazprom for direct pipeline access to Russian gas.

Amid the unrest, Putin’s popularity among Russians continued to rise to near its 2008 peak, Moscow-based polling company Levada Center said in a statement yesterday. His approval rating is 86 percent, up from 65 percent in January and compared with a highest-ever 88 percent, according to the June 20-23 poll of 1,600 people with a 3.4 percentage-point margin of error.

About the Author