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Russia's Putin faces tough choices over Ukraine

Source: Reuters - Sun, 23 Feb 2014 17:02 GMT
Author: Reuters
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* Putin could lose face and geopolitical battle in Ukraine

* Yanukovich's loss of power deprives Russia of ally

* Ukrainian protesters vow not to let Ukraine split

By Timothy Heritage

KIEV, Feb 23 (Reuters) - President Vladimir Putin faces a decision over Ukraine that is likely to shape his political legacy as well as the future of Russia's western neighbour, trapped in an East-West battle that has echoes of the Cold War.

President Viktor Yanukovich's loss of power deprives Putin of an ally vital to his hopes of keeping Ukraine, the cradle of Russian civilisation, in what he sees as Russia's orbit.

His hopes of building a huge trading bloc, grouping as many former Soviet republics as possible to challenge the economic might of China and the United States, could be in tatters.

But making a stand over Ukraine, or getting drawn into a new bidding war with the European Union to win sway over the cash-strapped country, would be risky.

Moscow can ill-afford to improve the $15 billion financial bailout package it offered in December. But more forceful measures, such as taking over mainly Russian-speaking areas of eastern Ukraine, would risk triggering a more serious conflict.

Putin is saying nothing for now in public, although he has spoken by phone to U.S. President Barack Obama and German Chancellor Angela Merkel. He was especially keen to stay silent before the end of the Winter Olympics in Sochi.

But the protesters on Independence Square in central Kiev are waiting anxiously to see what he does.

"We all know Putin likes to meddle," said Alexei Tsitulski, a 25-year-old protester from the Crimea. The region used to be Russian territory and was given to Ukraine in 1953 by Soviet leader Nikita Khrushchev, who was from Ukraine.

"If he decides to try to take over regions like Crimea or anywhere else in the east, we'll go there to fight. We're not going to let Ukraine be split."

Such comments, echoed by other protesters, underline how high the stakes are as Putin looks for ways to save face in the geopolitical struggle over Ukraine that had appeared to be going his way until the past week.

The United States also said on Sunday that sending forces to Ukraine would be a "grave mistake".

PYRRHIC VICTORY?

Putin won what seemed a decisive victory last November when Yanukovich spurned deals that would have forged closer trade and political ties with the European Union. He opted to rebuild economic relations with former Soviet master Moscow instead.

The cost was high. Russia agreed a $15 billion bailout package with heavily indebted Ukraine and promised a reduction in the price Kiev pays for Russian gas.

But Yanukovich was central to the deal and his fall from grace puts it in doubt. Opposition leaders and many of the Kiev protesters favour closer ties with Europe and fear getting sucked back towards Russia.

Withholding the money is a possible lever to keep Ukraine at Russia's side and Moscow has signalled increasingly openly in the last few days that it will use this lever. Another would be to raise new barriers to imports from Ukraine.

Russian Finance Minister Anton Siluanov said on Sunday Moscow would release the $2 billion second tranche of the bailout only when a new government is formed in Kiev.

The EU responded in kind. Economic and Monetary Affairs Commissioner Ollie Rehn promised "substantial aid" if the next Ukrainian government looks west instead of east, and British Foreign Minister William Hague sounding a warning.

"If there's an economic package, it will be important that Russia doesn't do anything to undermine that economic package," he told BBC TV.

Moscow also sent a signal of intent on another front by dispatching Alexei Pushkov, a Putin loyalist and senior member of parliament, to a meeting of regional leaders from mainly Russian-speaking areas of eastern Ukraine on Saturday.

The leaders, meeting in the city of Kharkiv, said they no longer recognised decisions taken by the national parliament, a challenge that could play into Moscow's hands if it has any plan to annex such regions.

But the threat to the political centre in Kiev receded when a crowd of anti-Yanukovich protesters opposed it.

In an apparent sign of frustration with events in Ukraine, Pushkov later wrote on Twitter: "Let them (the Ukrainian authorities) turn to their Western patrons."

His comment may be intended to taunt the emerging Ukrainian leadership - the withdrawal of Russian financial aid would be a huge blow for Kiev and higher gas prices would go down badly among the population.

Pushkov must be aware that, just as the EU portrayed Russia as winning a Pyrrhic victory in November, stumping up enough EU cash to make Ukraine change its mind again over Europe might also be a Pyrrhic victory for Brussels.

DANGERS FOR PUTIN

Could Putin, however, accept such a humiliating defeat in a tussle he appeared until a few days ago to have won?

It would be a particularly heavy blow at a time when his other big foreign policy success of 2013 - securing an agreement from Damascus to hand over chemical weapons that averted the danger of U.S. military strikes - is advancing only slowly.

Russia's joint initiative with the United States to bring the warring sides in Syria at peace talks in Switzerland has also made little progress.

If Ukraine does another U-turn and moves towards the EU, Putin will be looking at a foreign policy setback that could go down particularly badly at home.

The involvement of Ukraine, with its large market and mineral resources, is vital to the success of Putin's planned Eurasian Union, intended to regroup like-minded states and recoup the potential lost when the Soviet empire collapsed.

Losing influence in Ukraine would be hard to accept for Russians who consider the country little more than a Russian vassal with close cultural and religious ties.

The protesters' success in toppling Yanukovich in Ukraine is also being watched closely by Putin's opponents, who failed to end his grip on power by staging big street protests in the winter of 2011-12.

Warning that those protesters might return to the streets, opposition leader Boris Nemtsov wrote: "Putin has more money (than Yanukovich) and the people here are patient. But their patience is not endless."

(Reporting By Timothy Heritage; Editing by Larry King)

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