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European Union Steps Up Efforts to End Ukrainian Vote Deadlock

By Halia Pavliva and Julian Nundy

Dec. 1 (Bloomberg) -- The European Union intensified its efforts to resolve the crisis over Ukraine's disputed presidential election, with missions to Kiev by the presidents of Poland and Lithuania and EU foreign policy envoy Javier Solana.

Solana arrived yesterday for talks with outgoing President Leonid Kuchma. Polish President Aleksander Kwasniewski and Lithuania's Valdas Adamkus are due today. All three are on their second mission to the Ukrainian capital in less than a week.

Supporters of opposition candidate Viktor Yushchenko yesterday made an unsuccessful attempt to break into the Verkhovna Rada, or parliament. Yushchenko, 50, says Prime Minister Viktor Yanukovych, 53, took the lead in the Nov. 21 second round of voting only by massive electoral fraud.

``There is a crisis forming, and it's now only a matter of time before it explodes,'' Yushchenko said. Yushchenko has rallied hundreds of thousands of supporters, who have blocked off the center of Kiev to demand that the election be annulled.

The Russian-speaking industrial east of the country, where most of the voting fraud is said to have taken place, largely backs Yanukovych and the Ukrainian-speaking west favors Yushchenko. The dispute has prompted moves toward autonomy or even secession in the east and tensions with Russian President Vladimir Putin who backed Yanukovych.

Moscow Talks

Solana said on Tonis television as he met Kuchma late yesterday he will head for talks with Russian government officials in Moscow today.

German Chancellor Gerhard Schroeder and Putin agreed in a telephone call yesterday that the result of any rerun of Ukraine's election must be ``strictly respected,'' Schroeder's spokesman said.

The Yushchenko backers who tried to break into parliament did so as lawmakers debated the possibility of a no-confidence vote in Yanukovych. The debate is due to resume today; so is a session of the Ukrainian Supreme Court, which is to decide whether to call a new vote.

Ukrainians from the provinces continue to arrive in Kiev to take part in the nine-day-old rallies on the city's Independence Square. EU and other international leaders have advised all sides to stay calm.

Demonstrators from the provinces sleep in hundreds of tents erected along the Khreshchatyk, Kiev's main street, or in dozens of buses parked in the city center. With temperatures below freezing, wood fires provide the main heating.

Campaign Colors

The thousands who pack the square almost all wear something orange, the color of the Yushchenko campaign, even just a ribbon. Even dogs in Kiev now commonly carry an orange ribbon in their collars.

Waving orange banners and national flags, sometimes interspersed with flags of other countries, including, on one night this week, those of Norway, Romania and the U.S., the crowds are at their largest in the early evening when Yushchenko speaks. When the occasional blue banner turns up, in the color of the Yanukovych campaign, this prompts a lively, though a so far non-violent reaction among the Yushchenko backers.

``You've got to understand,'' shouted one young man from the Donbass coal-mining region in the east who arrived with a blue flag. ``We in the Donbass have been much better off since Yanukovych has been prime minister.''

Several in the small crowd that quickly formed around the man and his three companions shouted that their candidate was a ``bandit,'' and stewards from among the Yushchenko supporters formed a circle to protect the Yanukovych fans.

Appeal for Calm

U.S. President George W. Bush, on a visit to Canada, said Poland's president will urge Ukrainians ``to reject violence.''

Standing with Bush at a press conference in Ottawa, Canadian Prime Minister Paul Martin said Ukraine's elections must be ``free from outside influence, and that includes Russia.''

Ukraine's benchmark bond maturing in 2013 rose amid optimism that an agreement may be reached that would cede the presidency to Yushchenko, a former central banker who promotes closer ties with the West.

The 7.65 percent bond rose 50 cents on the dollar yesterday to 100.25, cutting the yield 81 basis points to 7.609 percent.

Russia's 5 percent bond maturing in 2030 fell 30 cents on the dollar to 99.50, lifting the yield 37 basis points to 6.898 percent, its highest in more than a month. The bond is headed for its fourth consecutive loss.

The Russian drop reflects concern that political turmoil in Ukraine may disrupt sales of Russian oil and gas to Europe, said Dmitri Shemetilo, an emerging markets strategist at Commerzbank AG in London.

The Supreme Court will today hear testimony from witnesses who allege fraud occurred at polling places. The Central Election Committee said that Yanukovych won the election by 49 percent to Yushchenko's 47 percent.

To contact the reporters on this story: Halia Pavliva in Kiev at hpavliva@bloomberg.net Julian Nundy in Kiev at jnundy@bloomberg.net

Last Updated: November 30, 2004 19:49 EST