The European Union has suspended a proposed trade agreement with Ukraine. An EU official wrote on Twitter, quote: "Work on hold." The timing of this message is worth noting. It comes on the eve of a meeting between Ukrainian President Viktor Yanukovych and Russian President Vladimir Putin who is trying to persuade the Ukraine to join a Russia-led economic bloc instead of the EU.
It's a high stakes poker game and no one here in the Ukrainian capital can figure out if President Viktor Yanukovych is bluffing.
While his flip-flop on European Union membership has provoked mass demonstrations, it could be a ploy to extract as much as 20 billion euros, or 27 billion U.S. dollars in aid from the EU. That's what Kiev says it'll need to offset the costs of implement a trade agreement with the EU.
In tilting toward Moscow, the Yanukovych government also hopes to get discounted prices on Russian gas exports.
Whether it's salesmanship, or something else, Yanukovych needs a winning hand to reduce Ukraine's 140 billion dollars in foreign debt, which is around 42 percent of the country's annual economic output.
"Our debt is a great sum, its 40% of our total debt, so we can't live without borrowing," economist Yuri Korolchouck says.
This month, Yanukovych didn't just tilt east to Moscow. He tilted almost as far east as he could go, heading to Beijing where he secured eight billion in Chinese investment.
But Kiev has been biding its time as President Yanukovych considers joining an eastern customs union headed by Russia, with benefits of its own.
Moscow has also offered cheap credit to help Ukraine’s battered economy.
This hasn't pacified the pro-European protesters that came out in their thousands over the weekend.
"It wasn't signing the agreement or not, the Ukrainians want to live in a European type of country, where they have the same values. They want liberty, freedom and dignity," protester Markian Andriyenko says.
And Yanukovych may have to act fast. The demonstrations, now into their fourth week, are putting more pressure on the economy, leading to the closure of some banks.
"As you well see now the politics is very unstable. All banks are afraid and starting to freeze their accounts so not to lose their market share," Kiev resident Andre says.
Making matters worse, the Ukrainian currency, the Hryvnia, has shrunk to its lowest value in four years.
Tens of thousands continue to gather here in Independence Square, despite the latest news out of Brussels. This does not shut the door for the Ukraine, but could be seen as an attempt by the EU to get some sort of reaction some sort of commitment by Yanukovich before he heads to Moscow on Tuesday to meet with his Russian counterpart Vladimir Putin.
Source: CCTV
