Russia Backs Off Ukraine Union After Lenin Statue Falls

[Purveyor]

Russia cast doubt that Ukraine may soon join its customs bloc, a plan that has sparked the ex-Soviet republic’s biggest protests in almost a decade and fueled calls for President Viktor Yanukovych to resign.

Riot police and stick-wielding protesters squared off in central Kiev a day after a group of youths tore down a statue of Vladimir Lenin in the biggest rallies since the 2004 Orange Revolution yesterday. Angry over Yanukovych’s snub of an EU pact in favor of bolstering Russian ties, activists have vowed to stay until the government quits, while Russia said that joining its rival customs union could take years.

“The situation in Ukraine is too explosive right now and the president understands that,” Sergei Markov, a political adviser to Russian President Vladimir Putin’s staff and vice rector of the Plekhanov Russian University of Economics, said by phone from Moscow. “Putin believes that time is on his side and Russia will benefit in the end.”

Ukraine, which is searching for $10 billion to avoid possible default, has become a point of contention for Russia and the European Union. Yanukovych met Putin last week after rejecting EU association and free-trade accords, incensing pro-European opposition forces in Kiev, whose tent camps and barricades in Independence Square are now into a third week.

The yield on Ukrainian dollar-denominated bonds due 2023 rose for a second day to 10.502 percent earlier today, its highest since Dec. 4, before falling to 10.46 as of 3:30 p.m. in Kiev, data compiled by Bloomberg show. The hryvnia strengthened to 8.1710 per dollar from 8.2150 Dec. 6. The Kiev interbank overnight rate was fixed at 20 percent, its highest since January and a jump from 12 percent on Dec. 6.

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http://www.bloomberg.com/news/2013-12-09/russia-backs-off-ukraine-union-after-lenin-statue-falls.html