Friday, April 18, 2014

Ukraine Separatists Refuse to Heed Geneva Deal on Easing Tension - Businessweek


Pro-Russian protesters in eastern Ukraine refused to give up buildings and disarm as demanded in a four-nation deal agreed in Geneva yesterday, while the U.S. and its European allies pushed Russia to help calm the crisis.


A leader of the separatist self-proclaimed Donetsk People’s Republic, Denis Pushilin, dismissed the accord’s call to disarm, leave seized property and free occupied public places. He said his group sees the Geneva talks as aimed at all parties, including acting President Oleksandr Turchynov, who assumed his role after the February ouster of Viktor Yanukovych.


“We’ll leave the building only if the Kiev government that came to power after an armed and illicit takeover will leave the building,” Pushilin, whose group has seized buildings in the eastern city of Donetsk, said by phone today.


The refusal adds to skepticism over yesterday’s deal sealed by top diplomats from Ukraine, the U.S., the European Union. U.S. and EU officials expressed readiness to deepen sanctions against Russia, which they say has massed 40,000 troops on Ukraine’s border and is fomenting unrest after its annexation of Crimea last month.


President Vladimir Putin has said his government isn’t responsible for home-grown dissatisfaction among Russian-speaking residents of eastern Ukraine while maintaining he has the right to send in troops. Activists have seized buildings in at least 10 cities in Ukraine’s south and east.


Few Expectations


In line with the pact, the Kiev-based cabinet prepared an amnesty law for pro-Russian protesters while also voicing skepticism that the agreement will solve the crisis.


“Ukraine does not have any extraordinary expectations,” Ukrainian Prime Minister Arseniy Yatsenyuk said in Kiev today.


The officials also agreed that a mission from the Organization for Security and Cooperation in Europe will help oversee events in eastern Ukraine and a new constitutional process will aim to establish “a broad national dialogue” in the former Soviet republic of 45 million people.


Putin yesterday rejected as “nonsense” accusations from the U.S. and Ukraine that he’d already deployed forces in the east of the country and said that Russia had taken over Ukraine’s Black Sea peninsula of Crimea last month because Russian speakers there were facing “real threats.”


Putin’s Warning


“We definitely know that we should do everything to help these people defend their rights and define their destiny,” Putin said in a televised question-and-answer session in Moscow. “We will fight for this. The Federation Council gave the president the right to use military force in Ukraine. I hope very much that I don’t have to use this right.”


Russia’s Micex Index (INDEXCF) of equities advanced for a third day, while the ruble jumped the most among 31 global currencies tracked by Bloomberg and Ukraine’s hryvnia posted the longest rally since August. U.S. stocks rose and Treasuries fell, pushing 10-year yields up the most in a month.


U.S. President Barack Obama said he remained skeptical about yesterday’s agreement producing concrete results.


“I don’t think we can be sure of anything at this point,” Obama said at a White House news conference. “We’re not going to know whether, in fact, there’s follow-through on these statements for several days.”


Obama held out the prospect of sanctions against Putin’s government that he said would be crippling, although he added: “We have no desire to see further deterioration of the Russian economy.”


More Sanctions


Officials from the Treasury Department and the National Security Council told mutual-fund and hedge-fund managers last week in Washington that they were planning additional sanctions against Russia over the conflict in Ukraine, according to a person who attended and asked not to be identified because the discussions weren’t public.


“If we’re not able to see progress on the immediate efforts, to be able to implement the principles of this agreement this weekend, then we will have no choice but to impose further costs on Russia,” U.S. Secretary of State John Kerry said in Geneva yesterday.


It’s now “necessary to prove that the Geneva agreements will change politics rather than just remain on paper,” German Foreign Minister Frank-Walter Steinmeier said in a statement late yesterday.


Well-Planned Operation


U.K. Prime Minister David Cameron and EU President Herman Van Rompuy agreed in a phone conversation that the EU “should continue preparatory work on potential additional sanctions” so “the EU was ready if the agreement was not implemented and the situation on the ground in Ukraine deteriorated,” according to an e-mailed statement from Cameron’s office.


The Russian campaign in eastern Ukraine has been almost entirely covert, a mixture of infiltrating special operations forces, arming protesters, spreading propaganda and bribing local officials for support, said two U.S. officials who requested anonymity to discuss internal policy deliberations.


U.S. Air Force General Philip Breedlove, the commander of NATO forces, wrote in a blog post yesterday that “what is happening in eastern Ukraine is a military operation that is well-planned and organized and we assess that it is being carried out at the direction of Russia.”


“The pro-Russian ‘activists’ in eastern Ukraine exhibit tell-tale military training and equipment and work together in a way that is consistent with troops who are part of a long-standing unit, not spontaneously stood up from a local militia,” he wrote.


The Geneva agreement was announced after talks among Kerry, Russian Foreign Minister Sergei Lavrov and their counterparts, Andriy Deshchytsia of Ukraine and Catherine Ashton, the European Union’s foreign-policy chief.


Deshchytsia told reporters that “the next couple of days will be crucial” and “will be a test for Russia if Russia wants to really show it’s willing to have stability.”


To contact the reporters on this story: Henry Meyer in Geneva at hmeyer4@bloomberg.net; Sangwon Yoon in Washington at syoon32@bloomberg.net; Kateryna Choursina in Kiev at kchoursina@bloomberg.net


To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net; Balazs Penz at bpenz@bloomberg.net; John Walcott at jwalcott9@bloomberg.net Michael Winfrey, Paul Abelsky









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