17 December 2013 Russian–Ukrainian action plan
Type | Action plan |
---|---|
Signed | December 17, 2013 |
Location | Moscow, Russia |
Signatories | Vladimir Putin Viktor Yanukovych |
Languages | Russian and Ukrainian |
The 17 December 2013 Russian–Ukrainian action plan was a
The proposed agreement is de facto defunct since Russia has halted its purchase of the never issued Eurobonds since the
Since December 2015, Ukraine has defaulted on the $3 billion debt payment to Russia that was part of the action plan.[7]
Background
In mid-August 2013, Russia changed its customs regulations on imports from Ukraine.
Whatever the reason might have been; the economy of Ukraine was approaching a bad state by late 2013.[17][18] and had poor solvency.[19]
On 21 November 2013, a
The reason given for the (stop preparations for signing EU-agreement) decree was that the previous months Ukraine had experienced "a drop in industrial production and our relations with
The decision to put off signing the EU Association Agreement led to massive, ongoing protests in Ukraine (for closer ties between Ukraine and the EU) that began in the night of 21 November 2013 when up to 2,000 protesters gathered at Kyiv's Maidan Nezalezhnosti.[5][21][22][33] And that had risen to 400,000–800,000 protesters demonstrating in Kyiv on the weekends of 1 December[34] and 8 December 2013.[35]
Negotiation
Russian President
The next day Prime Minister
On 19 December 2013, Russian President Putin stated about the (which he described as an "act of brotherly love"[nb 3]) 17 December deal between Russia and Ukraine "This is not at all linked to (protests at) Maidan, nor with the EU-talks that Ukraine leads... We're just seeing that Ukraine is in dire straits and we should support her".[51]
On 25 September 2014, Ukraine opened a criminal probe against (in December 2013)
The agreement
The "joint action plan" consisted of the
Ratification and criticism
Voting
In response to the agreement, the opposition parties
Criticism
On 17 December, opposition leader
On 18 December 2013,
De facto collapse of the agreement
Russian President Putin told his
On 17 February, Russian Finance Minister
Since the
On 1 April 2014, Gazprom cancelled the Russian natural gas discount as agreed in the treaty because Ukraine's debt to the company had risen to $1.7 billion since 2013.[2][69]
After trilateral months of talks between the European Union, Ukraine and Russia, a deal was reached on 30 October 2014 in which Ukraine agreed to pay (in advance) $378 per 1,000 cubic metres to the end of 2014, and $365 in the first quarter (ending on 31 March) of 2015.[70]
Since December 2015, Ukraine refuses to and hence de facto defaults on the $3 billion debt payment to Russia that was part of the action plan.
Effects
On 23 December 2013, Russia transferred $3 billion in payment for the Eurobonds to Ukraine.[57][68] But so far trade between Ukraine and Russia has not been normalized.[63]
Economic effect
According to the plan, "protective measures" of both countries should be lifted so that "normalized trade" can resume.[72][73]
The days after the 17 December 2013 agreement (Ukraine's natural gas importer)
On 9 January 2014, Ukrainian Prime Minister Mykola Azarov stated "at full capacity the program of industrial cooperation with Russia that will give us in the coming years hundreds of thousands of jobs and guarantees for budgets of all levels, which will be a financial base for the development of our domestic market".[80]
On 29 January, in response to the resignation of the
Political effects
The
On 20 December, high-ranking EU-officials stated that the EU is still ready to sign the Association Agreement with Ukraine "as soon as Ukraine is ready for it", that this agreement was also beneficial for Russia and that the EU "is totally not concerned about the fact that Ukraine is signing agreements with Russia".[85] The day before Polish Foreign Minister Radosław Sikorski stated "I do not know any formal facts that should say that it is impossible to sign the association agreement between Ukraine and the European Union".[86]
On 19 December, Ukrainian President
On 29 January and just after the resignation of the
April 2014 end of discount price for Ukraine
Mid-June 2014 the price Ukraine paid to Russia for natural gas was $485.50 per 1,000 cubic metres, the highest in Europe.[2]
After trilateral months of talks between the European Union, Ukraine and Russia, a deal was reached on 30 October 2014 in which Ukraine agreed to pay (in advance) $378 per 1,000 cubic metres to the end of 2014, and $365 in the first quarter (ending on 31 March) of 2015.[70]
Expert analysis
- Swedish economist Anders Åslund criticized the agreement, saying "Details will continue to emerge, perhaps pulling the bigger picture into focus, but right now it appears that this deal is heavily one-sided and greatly favors Russia."[56]
- James Sherr, a fellow at the Russian and Eurasian program at London-based think tank Chatham House, and key Western expert on Ukraine and Russia described the deal: "the conditions that Yanukovych has accepted from Moscow perpetuate weakness and subservience. Nothing in the Moscow accords even addresses the causes of Ukraine's economic disaster."[27]
"While Ukraine has every right to alter its course, Russia has no right to force Ukraine to alter it. The December 1994 Budapest Memorandum obliges all parties to 'refrain from economic coercion.' Coercion does not show respect for sovereignty. It is a violation of sovereignty. A number of European leaders are as persuaded as I am that Russia employed economic coercion."
"The Customs Union is yesterday's story. The new framework will be built on interlocking, inter-sectoral integration, in other words Russian co-ownership and co-management of key sectors of Ukraine's economy. In 2010, Medvedev presented Yanukovych with precisely such a model, embracing shipbuilding, chemicals, and of course, aerospace, the defense complex and energy, which every Ukrainian president has regarded as a mainstay of national independence. All of this was very public at the time. In 2010, Yanukovych rejected it. Now he has accepted it. There are still questions about details and bigger questions about how much can and will be implemented. But the Russians are very happy. Their conclusion is that 'Ukraine is now ours'. Azarov can still insist that Ukraine won't join the Customs Union. But that is now irrelevant. The story has moved on."[27]
Notes
- ^ On 20 December 2013, Ukrainian Prime Minister Mykola Azarov stated that this should be seen as "Russia was trying to defend its interests".[9]
- Joseph Biden, who told me that the issue of the IMF loan has almost been solved, but I told him that if the conditions remained... we did not need such loans".[32]
- ^ On 20 December 2013, Chairman of the Verkhovna Rada Volodymyr Rybak commented on this statement ""If we are brothers, then I take the money and give it to you as a brother, but when they issue a loan at an interest rate that must be repaid these are economic relations between the two states".[50]
- ^ According to The Financial Times, this is a short period; the newspaper literally wrote "The bonds will mature in just two years,"[54] and that "International Monetary Fund loans are much cheaper and last longer" [56]
- Prime Minister Mykola Azarov stated "We currently buy gas from RWE and pump it through Poland, Slovakia and Hungary. This gas costs us less than the Russian gas that we buy on the border with Russia, and RWE sells us the same gas that it buys from Russia".[79] He also stated that Ukraine annually overpaid Russia $7 billion for natural gas.[79]
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{{cite web}}
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- ^ "Россия приготовила новую торговую войну с Украиной".