Ukraine to get $15-billion loan from Russia, cheaper natural gas

KIEV, Ukraine -- Ukraine’s embattled President Viktor Yanukovich reached agreement with Russia on Tuesday for a $15-billion loan from Moscow and a more than 30% cut in the price of Russian natural gas -- deals that aren’t likely to win him support from his European-leaning opposition.

Thousands of protesters who were gathered in Kiev’s Independence Square responded to the news by demanding Yanukovich’s resignation and chanting: “Down with the gang!”

Yanukovich and Russian President Vladimir Putin announced the accord between the neighboring nations after a meeting at the Kremlin in Moscow. Yanukovich enraged his political opposition recently by rejecting trade ties with the European Union, presumably to avoid alienating Russia.

“Given the problems of Ukraine’s economy, connected to a greater degree with the world financial and economic crisis, and with the purpose of supporting Ukraine’s budget, the government of the Russian Federation decided to invest $15 billion ... in Ukrainian government bonds,” Putin said at news conference after the meeting.

In addition, after years of arguments over energy, Russia agreed to reduce the price of natural gas it sells to Ukraine from the current $410 to $268.5 per thousand cubic meters, Putin said.

Yanukovich appeared visibly pleased with the results. He said the negotiations were not “simple” and gave Putin credit for their success.

“I will put things the way they are: This work wouldn’t have been accomplished with such an optimal speed but for the political will of Russia’s President Vladimir Vladimirovich Putin,” Yanukovich said at the news conference. “Today’s meeting proved that the interaction between Ukraine and Russia has a powerful base and good perspective for further development.”

Knowing Yanukovich’s dire political problems at home, Putin hastened to add that the two presidents “did not discuss at all the question of Ukraine joining the Customs Union,” a Russian-sponsored alliance of several post-Soviet states. Ukrainians who favor closer ties with Europe -- a significant but not dominant percentage of the population -- strongly oppose participation in the Customs Union and want to move away from Russia’s economic orbit.

When Yanukovich failed to sign an association and trade agreement with the EU two weeks ago, he insisted that Ukraine would need at least $20 billion to adjust to the changes such a pact would entail.

Including the gas deal, he essentially received that amount from Russia, his critics in Ukraine said.

“Putin would never give any money to anybody for nothing,” Ukrainian opposition leader Oleg Taygnibok said in an interview with The Times on Tuesday. “The deals Yanukovich struck in Moscow are the price Moscow paid him for rejecting European integration.”

As the mass protests in downtown Kiev entered the 26th day, opposition leader Arseny Yatsenyuk appealed to at least 20,000 people in Independence Square to continue their anti-government vigil day and night.

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sergei.loiko@latimes.com