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Ukraine ends one pro-Russia occupation but armed protesters hold out

Source: Reuters - Tue, 8 Apr 2014 14:28 GMT
Author: Reuters
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(Adds IMF forecast cut, Putin meeting on economic ties, capital outflow,)

* 70 separatists detained in "anti-terrorist" operation

* Lavrov says Kiev must consider Russian-speaking regions

* Putin to discuss economic ties with Kiev

* Ukraine misses deadline to cut gas debt to Russia

* EU discusses reducing reliance on Russian gas

By Thomas Grove and Lina Kuschch

LUHANSK/DONETSK, Ukraine, April 8 (Reuters) - Ukrainian police cleared pro-Moscow protesters from a regional administration building in a lightning night-time operation, but others held out in two more eastern cities on Tuesday in what Kiev says is a Russian-led plan to dismember the country.

Shots were fired, a grenade thrown and 70 people detained as officers ended the occupation in the city of Kharkiv during an 18 minute "anti-terrorism" action, the interior ministry said.

But elsewhere in Ukraine's mainly Russian-speaking industrial heartland, activists armed with Kalashnikov rifles and protected by barbed wire barricades vowed there was no going back on their demand - a vote on returning to Moscow rule.

In the city of Luhansk, a man dressed in camouflage told a crowd outside an occupied state security building: "We want a referendum on the status of Luhansk and we want Russian returned as an official language."

"We will not let fascism pass," he shouted, leading the crowd in chants of "Russia! Russia!".

Ukraine says the seizure of public buildings in eastern regions on Sunday night is a replay of events in Crimea, the Black Sea peninsula Moscow annexed last month after a referendum staged when Russian troops were already in control.

The Kremlin's standoff with the West has knocked investors' confidence in the Russian economy, and the International Monetary Fund on Tuesday cut its forecast of growth this year to just 1.3 percent, less than half the 3 percent it had originally projected.

Russian Foreign Minister Sergei Lavrov dismissed Western accusations that Moscow was destabilising Ukraine, saying the situation could improve only if Kiev took into account the interests of Russian-speaking regions.

But Britain expressed fears that Russia wanted to disrupt the run-up to presidential elections next month in Ukraine, which has been ruled by an interim government since the overthrow of Moscow-backed president Viktor Yanukovich in February.

Ukraine, which was controlled by Moscow until the Soviet Union collapsed more than two decades ago, has been in turmoil since late last year when Yanukovich rejected closer relations with the European Union and tilted the country back towards Russia. That provoked mass protests in which more than 100 people were killed by police and which drove Yanukovich from office, leading to Kiev's loss of control in Crimea.

In Kiev, Interior Minister Arsen Avakov partly pinned responsibility for the Kharkiv occupation on Russian President Vladimir Putin. "All this was inspired and financed by the Putin-Yanukovich group," he said.

An aide said police went in when the protesters failed to give themselves up and surrender their arms. Officers did not open fire, despite shooting and the grenade attack from the other side, he said. One police officer was badly wounded and some others less seriously hurt.

NO TURNING BACK

In Luhansk, a city of around 450,000 people, protesters have blocked streets leading to the state security building with barbed wire, tyres, wooden crates, metal police barriers and sandbags. Protesters at the entrance to the building blocked the entrance with metal shields.

Andrei, who said he had stormed the building on Sunday but would not give his family name, said the protesters had 200-300 Kalashnikovs and some stun grenades, but there had been no shooting so far.

"I'll stay here until the end, until victory. Once you've taken up arms, there's no turning back. We will stay until the authorities agree to hold a referendum on the status of Luhansk," he said.

Andrei said he had sent his family to Russia after Yanukovich fled. "They couldn't stay here. I knew what would happen after the bandits took over, I knew it would only lead to war. And war is what we're getting," he said.

A standoff also continued in the mining centre of Donetsk, Yanukovich's home base, where a group of pro-Russian deputies inside the main regional authority building on Monday declared a separatist republic.

Unlike in Kharkiv, there was no clear sign that further police operations were imminent in the other two cities. "We hope the buildings occupied in Donetsk and Luhansk will soon be freed," acting president Oleksander Turchinov said.

Russia has warned Kiev against using force to end the occupations but authorities may anyway have decided not to give Moscow an excuse to intervene, holding back in the hope that the protests will fizzle out.

MASS DISORDER

In London, Foreign Secretary William Hague said the occupations bore "all the hallmarks of a Russian strategy to destabilise Ukraine".

The West has expressed concern about what it says has been a buildup of Russian forces along the border with Ukraine. Moscow has said the troops are merely taking part in exercises but NATO Secretary-General Anders Fogh Rasmussen urged caution.

"If Russia were to intervene further in Ukraine it would be a historic mistake," he told a news conference in Paris. "It would have grave consequences for our relationship with Russia and would further isolate Russia internationally."

Lavrov denied responsibility for the trouble in Russian-speaking areas of Ukraine. "One should not seek to put the blame on someone else," he told a new conference in Moscow.

Turchinov said on Monday that Moscow was attempting to repeat "the Crimea scenario" in which pro-Russian forces seized the local parliament and bulldozed through the referendum, clearing the way for Russia to annex the peninsula.

Unlike in Crimea, where ethnic Russians form a majority, most people in the east and south are ethnically Ukrainian, although they speak Russian as a first language.

Putin will meet his senior officials on Wednesday to discuss economic ties with Ukraine, including on energy, his spokesman said. He gave no details but the Crimea dispute has raised fears that Russia might cut off gas supplies to Ukraine's crippled economy, having nearly doubled the price it charges Kiev.

Kiev missed a midnight deadline to reduce its $2.2 billion gas debt to Russia, although producer Gazprom did not say whether it would take any action against Kiev.

In Brussels, Ukraine's energy minister, EU officials and industry representatives discussed how to reduce reliance on Russian gas.

Gazprom cut off supplies to Kiev mid-winter during price disputes in 2006 and 2009, disrupting the flow of Russian gas to the EU that is carried via Ukraine. Gazprom said gas transit via Ukraine to Europe remained stable on Tuesday.

So far the United States and EU have imposed only mild economic sanctions over the Crimean annexation but some investors are pulling money out of the country. Companies and banks took a net $50.6 billion out of Russia in the first three months of this year, the central bank reported.

First Deputy Prime Minister Igor Shuvalov said Russian companies listed on foreign stock exchanges should consider re-listing in Moscow. "This is a question of economic security for them," Interfax news agency quoted him as telling reporters.

(Additional reporting by Gabriela Baczynska, Jason Bush, Lidia Kelly, Vladimir Soldatkin and Denis Pinchuk in Moscow; William James and Kylie MacLellan in London, Barbara Lewis in Brussels and John Irish in Paris; Writing by Richard Balmforth and David Stamp; Editing by Giles Elgood)

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