Ukraine announces economic blockade of rebel-held areas

Kiev demands rebels hand back businesses they seized before cargo traffic with separatists-held areas can resume.

    Ukraine announces economic blockade of rebel-held areas
    Poroshenko said the ban 'is dictated by the necessity to prevent the destabilising of the situation in the country' [File: Getty]

    Ukrainian authorities have halted all cargo traffic with separatist-held areas in the east of the country, demanding that pro-Russian rebels hand back businesses they have seized.

    President Petro Poroshenko on Wednesday called an emergency meeting of the country's security and defence council to ask it to implement the ban.

    The decision "is dictated by the necessity to prevent the destabilising of the situation in the country, which is being undermined by political operators", he told the council.

    "Our wish is to prevent social strife," he said.


    WATCH: Is Russia testing Donald Trump in eastern Ukraine? (24:59)


    All railway and road connections will be cut, according to Oleksandr Turchynov, the council's secretary.

    He said the suspension will remain in place until rebels hand back control of a number of Ukraine-registered businesses and comply with a 2015 peace agreement.

    Financial burden

    Separatists have sought to take control of some Ukrainian assets in their territory in response to a rail blockade by a group of Ukrainian activists that has also caused problems for the Ukrainian government due to its squeeze on strategic coal and steel supplies.  

    The cargo ban is expected to put additional pressure on Ukraine's economy, which is already facing potential rolling blackouts and monthly economic losses of up to four billion hryvnias ($150m) from an existing rail blockade by activists and some Ukrainian politicians, according to the government.

    The central bank has warned that expected economic growth could nearly halve this year to 1.5 percent if rail traffic between the two territories does not resume.

    The trade squeeze has highlighted the complicated economic relationship between the two sides and represents a new phase in a periodically violent standoff that has killed more than 10,000 people in the last three years.ukraine donbass donestk luhansk who controls what map infographic

    SOURCE: News agencies


    YOU MIGHT ALSO LIKE

    Double standards: 'Why aren't we all with Somalia?'

    Double standards: 'Why aren't we all with Somalia?'

    More than 300 people died in Somalia but some are asking why there was less news coverage and sympathy on social media.

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    Kobe Steel: A scandal made in Japan

    Kobe Steel: A scandal made in Japan

    Japan's third-largest steelmaker has admitted it faked data on parts used in cars, planes and trains.