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Published On: Sat, Dec 21st, 2013

Russia bribes Ukraine

Russian president Viktor Yanukovych is giving $15 billion of Russian financial aid and a one-third discount on energy imports to help support Ukraine.

Russia aids UkraineIn the deal Russia will be cutting the price it charges Ukraine for natural gas to just $268.50 from $400 per 1,000 cubic meters, President Vladimir Putin stated after the meeting with Yanukovych in Moscow. Russia has also agreed to buy $15bn (£9.2bn, 11bn euros) worth of government bonds in the deal.

Putin emphasized his good faith towards Ukraine by expressly stating that the aid isn’t tied to any austerity measures, as often happens with International Monetary Fund’s agreements or aid by the EU. Ukraine relies to a large extent on imports of Russian gas and almost 75% of Ukraine’s engineering exports end up in Russia. The money will help the country avoid bankruptcy and potential social collapse.

Russia's President Putin (right) met his Ukrainian counterpart Viktor Yanukovych at the Kremlin on Tuesday

Russia’s President Putin (right) met his Ukrainian counterpart Viktor Yanukovych at the Kremlin on Tuesday

In the last few weeks many thousands of people have been occupying the the capital’s Independence Square and protesting against any Russian intervention. The protesters are still not content with this agreement because there is no transparency as to what exactly Ukraine will be offer in exchange for this ‘free money’. Meanwhile, Prime Minister Mykola Azarov has suspended negotiations with the EU on a closer relationship…

Is Ukraine preparing to enter the Russian Customs Union?

What do YOU think Russia will get in return for signing this treaty?

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About the Author

- Robert is a private trader with over 15 years experience trading the financial markets.

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