Putin Gambles On Ukraine Bailout

[Purveyor]

By Lidia Kelly

MOSCOW, Dec 18 (Reuters) - President Vladimir Putin has taken a gamble with Russia's own fragile economy by bailing out Ukraine for the sake of keeping it in Moscow's orbit and out of the European Union's embrace.

His finance minister, Anton Siluanov, defended Tuesday's deal in the Kremlin with Ukrainian President Viktor Yanukovich, which offered Kiev $15 billion in credits and slashed a third off the price it pays for vital Russian gas supplies.

"I believe that Russia only won," Siluanov told Reuters on Wednesday, dismissing as baseless concerns the accord might damage Moscow's own credibility with investors.

The deal has boosted demand for Ukrainian government debt and its currency, the hryvnia.

But Russia has had to tap into a rainy-day fund to afford the bailout at a time when its own economy, driven by energy exports, is in trouble. And it is not clear what it gets in return bar influence over the second most populous ex-Soviet state, whose 46-million population is a third that of Russia but whose ailing economy is less than a tenth the size.

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http://www.reuters.com/article/2013/12/18/ukraine-idUSL6N0JX1I320131218

[FarCenter]

1. Putin gets to keep NATO out of the Ukraine

It's both military and economic.

[elfin]

2. Ukraine used to be called "Russia's Breadbasket"

Don't know if that holds today. But its rich soil and other resources were deemed to be of primary importance to Russia and the old Soviet Union.

Due to this important historical attachment, the Ukraine will be hard pressed to successfully break away successfully from Putin's Russia.

This could become horrifically brutal.