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Putin: Ukraine bailout not aimed against EU

Economic deal with Ukraine was "brotherly" act, not designed to keep Kiev away from the EU, Russian president says.

Last updated: 19 Dec 2013 10:31
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Putin did not respond directly to a question on Ukraine's avoidance of a customs union with Russia [Reuters]

Russian President Vladimir Putin portrayed Moscow's bailout of Ukraine as a “brotherly” act to stave off an economic crisis and said it was not designed to keep Kiev away from the European Union.

Russia agreed on Tuesday to buy $15bn worth of Ukrainian bonds and cut the price Kiev pays for Russian natural gas, weeks after Kiev spurned a trade pact with the EU, touching off anti-government protests that have been going on for more than three weeks.

"Now we see that Ukraine is in difficult straits ... if we really say that they are a brotherly nation and people then we must act like close relatives and help this nation," Putin told his annual news conference.

"In no way this is related with the Maidan [protests in central Kiev] or the European talks with Ukraine."

Putin reiterated that the decision to reduce the gas price was a temporary move but he hoped to "agree on long-term cooperation" in the energy sector.

According to the Kiev-Moscow deal, Ukraine's Naftogaz energy company will pay Russia's state-owned Gazprom $268.5 per 1,000 cubic metres of natural gas, on which it is heavily dependent, instead of around $400.

Putin 'believes in' Kiev

The Russian president acknowledged that Ukraine's credit rating was not high but said Moscow believed in the competitiveness of its neighbour’s industry.

Ukraine, the second most populous ex-Soviet state, has a population of 46mn, which is a third that of Russia but has an ailing economy of less than a tenth of Russia’s size. The data raises concerns on the capability of Ukraine to pay-off the bailout in the future.

Putin did not respond directly to a question about his failure to persuade Ukraine to join a customs union with Russia, Kazakhstan and Belarus which he hopes to build into a larger trading and political bloc.

Putin previously said that there had been no discussions on Ukraine joining a Russia-led union during the talks regarding the economic deal. Moscow has been pushing Kiev to join the initiative. 

The president’s annual question-and-answer session is being attended by hundreds of journalists from across Russia and it was being broadcast across the nation. The annual news conference has often lasted more than four hours.

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