Regions

Russia extends $15B bailout package to Ukraine

December 17
4:48 PM 2013

According to a report by Reuters on Tuesday, the state of Russia agreed to hand out a $15 billion bailout to Ukraine. On the other hand, the financial package have spurred protests in Kiev and also saddled the Russian President Vladimir Putin's administration to cough up the massive amount. Moreover, despite the bailout plan, the report said Putin failed to lure Ukraine to jump in to Russia's customs union with the rest of other ex-Soviet republics.

Within hours of the agreement, Reuters said in the report that protesters in tens of thousands have have convened just hours after the agreement and charged Ukrainian President Viktor Yanukovich for faiiling to uphold the interests of his country. Also, the protesters have accused Yanukovich as a political sellout for offering Ukarine to the highest bidder after rejecting a trade deal with the European Union.

Protest leader and heavyweight boxing champion Vitaly Klitschko had told crowds on Kiev's Independence Square, "He has given up Ukraine's national interests, given up independence and prospects for a better life for every Ukrainian."

The deal, which was reportedly started on frosty exchanges, ended up amicably. Russian Finance Minister Anton Siluanov said the country will be tapping the rainy day fund of Moscow, the National Welfare Fund, to acquire $15 billion worth of Ukrainian Eurobonds. As a result, the report said the bond purchase increased the price of the dollar debt of Ukraine, which was a sign of investors' confidence in the country. Interfax news agency quoted Siluanov, who said that Russia will be purchasing the two-year Ukrainian bonds as early as next week.

Moreover, the deal also involves Moscow slashing its export prices, therefore allowing Ukraine's Naftogaz energy company to pay Russia's Gazprom only $268.5 per a thousand cubic meters of natural gas from the previous $400 per thousand cubic.

After the talks, Putin addressed the public at the Kremlin, who said, "Ukraine is our strategic partner and ally in every sense of the word. This (assistance) is not tied to any conditions. I want to calm you down - we have not discussed the issue of Ukraine's accession to the customs union at all."

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