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Yanukovich announces early Ukraine poll, mediators say protesters back deal

Source: Reuters - Fri, 21 Feb 2014 13:40 GMT
Author: Reuters
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* President makes announcement before any deal with opposition

* EU sources say opponents seek changes but expected to sign

* Lawmakers trade punches in parliament

* Death toll in two days of violence reaches 77

* Ratings agency S&P downgrades Ukraine again (Adds markets)

By Sabine Siebold and Natalia Zinets

KIEV, Feb 21 (Reuters) - Ukraine's President Viktor Yanukovich announced plans on Friday for early elections aimed at ending violence that has left dozens dead, a major element of an EU-mediated peace deal which Poland said protesters occupying a Kiev square had accepted.

Russian-backed Yanukovich - under pressure to quit from the mass demonstrations in the capital - offered a series of concessions to his pro-European opponents, including a national unity government and constitutional change to reduce his powers, as well as the presidential polls.

He made the announcement in a statement on the presidential website without waiting for a signed agreement with opposition leaders after at least 77 people were killed in the worst violence since Ukraine became independent 22 years ago.

"There are no steps that we should not take to restore peace in Ukraine," he said. "I announce that I am initiating early elections."

Yanukovich said Ukraine, which emerged from the wreckage of the Soviet Union in 1991, would revert to a previous constitution under which parliament had greater control over the make-up of the government, including the prime minister.

"I am also starting the process of a return to the 2004 constitution with a rebalancing of powers towards a parliamentary republic," he said. "I call for the start of procedures for forming a government of national unity."

He also set no date for the presidential election, which had been due in March, 2015.

One of the opposition leaders, world boxing champion-turned-politician Vitaly Klitschko, told German newspaper Bild on Friday that the opposition would sign the EU-brokered deal, but first further talks were needed with the protesters on Independence Square, which is also known as the Maidan.

However, a Polish foreign ministry spokesman said that a Maidan protesters' council had voted in favour of the deal.

The civic council "has voted in favour of the three opposition leaders signing the agreement with President Yanukovich concerning resolving the conflict", the ministry's spokesman, Marcin Wojciechowski, said on Twitter.

Russia's Interfax news agency quoted Oleh Tyahnibok, a far-right leader, as saying the deal should stand only if there were guarantees that the present interior minister and prosecutor-general were not included in any interim government.

The EU mediators had earlier said the opposition was seeking last minute changes, but they still expected a deal to be signed on Friday. There were fist fights in parliament as the political tension mounted.

The sprawling nation of 46 million with a shattered economy and endemic corruption is at the centre of a geopolitical tug-of-war between Russia and the European Union.

STAND-OFF

The German and Polish foreign ministers were in Kiev to promote the political compromise to end the bloodshed amid a stand-off between riot police and anti-government protesters who have occupied a central square for nearly three months.

A table was set up for a signing ceremony in the presidency building with nameplates for three opposition leaders.

Some grassroots activists who want Yanukovich out were sceptical about such a gradual transition. "This is just another piece of paper. We will not leave the barricades until Yanukovich steps down. That's all people want," said Anton Solovyov, 28, an IT worker protesting in the central Independence Square.

Earlier, police said in a statement that anti-government militants fired on security forces near the square, scene of a three-month-old protest vigil. However, there was no confirmation of such an incident and no report of casualties.

The square appeared peaceful, with thousands of demonstrators chanting anti-government slogans interspersed with patriotic singing.

SCUFFLES IN PARLIAMENT

Armed police briefly entered the parliament building while lawmakers were holding an emergency session but they were quickly ejected, opposition leader Arseny Yatsenyuk said.

Ukraine faces the risk of civil war or even a break-up, and rage has spread even into the parliamentary chamber. Members exchanged punches when speaker Volodymyr Rybak tried to adjourn proceedings.

Opposition deputies were angered because it would mean delaying a possible vote on a resolution pressing for constitutional changes to restrict the president's powers. The speaker left the chamber and debate continued.

If signed and implemented, the deal would be a setback for Russian President Vladimir Putin, who has made tying Ukraine into a Moscow-led Eurasian Union a cornerstone of his efforts to reunite as much as possible of the former Soviet Union.

Putin appointed his own envoy to the talks at Yanukovich's request on Thursday but it was not clear what role, if any, Russian officials had in the negotiations.

YANUKOVICH SUPPORT EBBS

After 48 hours in which the fate of Ukraine was fought out in the square, Yanukovich was rapidly losing support.

The deputy chief of the armed forces resigned and opposition deputies in parliament voted to overturn severe anti-terrorist laws enacted by Yanukovich's government this month and ordered security forces back to barracks.

In another sign of the severity of the crisis, ratings agency Standard & Poor's cut Ukraine's credit rating for the second time in three weeks on Friday, citing the increased risk of default.

S&P said latest developments in the crisis made it less likely that Ukraine would receive desperately needed Russian aid. Ukraine cancelled a planned issue of 5-year Eurobonds worth $2 billion, it told the Irish Stock Exchange where the debt would have been listed. Kiev had hoped Russia would buy the bonds to help it stave off bankruptcy.

Russia's economy minister said Moscow was still undecided on the next $2 billion instalment and was awaiting clarity on the government in Ukraine.

On financial markets, Ukraine's dollar bonds and the hryvnia currency firmed against the dollar from record lows hit this week on hopes for a deal.

However, RBS analyst Tatyana Orlova noted the country was still in dire financial straits. "This is not the end of the story. What I am reading is there is a deal but the devil is in the detail ... The urgent need is for a technocratic cabinet that could take steps to avert default," Orlova said.

The health ministry said 77 people had been killed since Tuesday afternoon, which meant at least 47 died in Thursday's clashes.

On Thursday, EU foreign ministers meeting in Brussels imposed targeted sanctions on Ukraine and threatened more if the authorities failed to restore calm. (Additional reporting by Richard Balmforth, Alessandra Prentice, Vasily Fedosenko and Pavel Polityuk in Kiev, John Irish in Paris, Marcin Goettig and Adrian Krajewski in Warsaw, Alexandra Hudson in Berlin and Francesco Guarascio and Adrian Croft in Brussels; Writing by Paul Taylor and David Stamp; Editing by Giles Elgood)

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