Ukraine Troops Killed in Slovyansk as Rebels Down Chopper

Photographer: Vasily Maximov/AFP via Getty Images

Cartridges are seen on the ground near the eastern Ukrainian city of Slavyansk, on May 3, 2014. Close

Cartridges are seen on the ground near the eastern Ukrainian city of Slavyansk, on May 3, 2014.

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Photographer: Vasily Maximov/AFP via Getty Images

Cartridges are seen on the ground near the eastern Ukrainian city of Slavyansk, on May 3, 2014.

Pro-Russian separatists killed four Ukrainian troops, wounded 30 and shot down a military helicopter while suffering multiple casualties in the eastern city of Slovyansk as the unrest gripping the nation turned more deadly.

The pilots survived after the chopper was hit with machine-gun fire and crashed into a river near the city in the Donetsk region, the Defense Ministry said on its website. Government forces killed 20 insurgents, and dozens of civilians were also wounded in the fighting today, Interfax reported, citing an unidentified representative of separatists.

The campaign to drive out insurgents from the easternmost regions is in danger of stalling as a growing death toll threatens the government’s efforts to retake positions from Russian sympathizers in the run-up to May 25 presidential elections. With violence spiraling in Ukraine after dozens died in Odessa three days ago, the authorities moved to erect roadblocks around the capital Kiev to prevent provocations.

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“The slow pace of the anti-terrorist operation is due to the fact that we are trying to ensure the safety of citizens and prevent civilian casualties,” acting President Oleksandr Turchynov told German Chancellor Angela Merkel during a phone conversation today, according to a statement published on the Ukrainian parliament’s website.

Helicopters Down

The insurgents have now shot down three helicopters since May 2, with another damaged in an attack. Seven military servicemen, excluding members of the National Guard, have died since the start of the government’s offensive on April 13, Bohdan Senik, a spokesman at the Defense Ministry, said by phone yesterday.

Turchynov said yesterday that the authorities are setting up checkpoints around Kiev to guard against “provocations” on May 9, when Ukraine celebrates the victory over Nazi Germany in World War II. Ten such roadblocks were installed on the main roadway leading into the capital as of today, according to the Interior Ministry.

Ukraine sent special forces from Kiev to Odessa after dismissing the local police following a deadly fire, acting Interior Minister Arsen Avakov said on his Facebook account.

Odessa Violence

Fighting in the city of 1 million, where Interfax said two people were injured yesterday, is taking place about 160 kilometers (100 miles) from the European Union’s southeastern frontier in Romania. It’s also Ukraine’s most important conduit to the Black Sea after Russia took control of Crimea last month.

Standoff in Ukraine

Four EU and NATO members share a border with Ukraine: Hungary, Poland, Romania and Slovakia.

A “humanitarian catastrophe” is looming in Ukrainian cities blockaded by the military as people are beginning to suffer from shortages of food and medicine, the Russian Foreign Ministry said in a statement today. The authorities in Kiev are “continuing to wage war against their own people,” it said.

The conflict is turning into a “real war” and that’s “due to Russian aggression and due to Russian-led protesters,” Ukrainian Prime Minister Arseniy Yatsenyuk said in a BBC interview broadcast yesterday.

More than 30 administration buildings, police stations, security-services offices and other installations are currently blocked by rebels in the eastern Donetsk and Luhansk regions, the Interior Ministry said today.

‘Unconventional Attack’

“Russia is launching an unconventional attack on its neighbor,” Joerg Forbrig, senior program officer for central and eastern Europe at the Berlin bureau of the German Marshall Fund of the U.S., said in a phone interview. “It’s multi-layered with unmarked soldiers, cyber-warfare and a huge propaganda campaign. Locals involved aren’t the driving force.”

The turmoil drove the yield on Ukrainian government debt due in 2023 up three basis points, or 0.03 percentage point, to 10.818 percent today, the highest since March 17, data compiled by Bloomberg show. The yield on the 10-year Russian government bond rose six basis points to 9.55 percent, according to generic data compiled by Bloomberg.

Wheat surged to the highest price in more than a year as violence in Ukraine intensified concerns of supply disruption. Russia and Ukraine are expected to rank fifth and sixth among the world’s biggest wheat exporters in the 2013-14 season, according to the International Grains Council.

Biggest Operation

The assault in the Donetsk region marked the biggest operation yet by the Ukrainian government to retake ground from armed gunmen who’ve seized buildings in more than 10 towns and taken several dozen captives. Interfax cited Avakov as saying that about 800 rebels armed with large-caliber guns, mortars and heavy vehicles were in the region.

In Odessa, 42 people were killed and 125 injured May 2 after Russian sympathizers took refuge in a building that was later engulfed by fire. They were seeking to escape fighting between soccer fans and supporters of the Kiev government on one side and Russia backers on the other. Seventy-eight people remain hospitalized in the city, RIA Novosti reported today.

Ukrainian prosecutors started a probe into the incident and will “investigate everyone,” Yatsenyuk told the BBC.

Four others also died in recent clashes in Odessa, Turchynov said on television yesterday without specifying the causes of death.

Russian citizens took part in provocations before the bloodshed in Odessa, the Ukrainian Foreign Ministry said in a website statement. Their aim was to destabilize the region, the ministry said.

Human Rights

Russia’s Foreign Ministry submitted a report to President Vladimir Putin summarizing human-rights violations in Ukraine since end-November, the Kremlin said on its website today. The facts presented in the report suggest that abuses in Ukraine have become widespread, according to the statement.

German Foreign Minister Frank-Walter Steinmeier called for a return to direct Russia-Ukraine talks to resolve the conflict. He told Germany’s ARD television that he’s been trying to win support for a second set of Geneva talks after an accord negotiated in the Swiss city on April 17 unraveled. His Russian counterpart, Sergei Lavrov, will attend a Council of Europe meeting tomorrow in Vienna, the Foreign Ministry in Moscow said in a statement on its website.

History shows that the Ukraine crisis can’t be solved with military force, Merkel said today in speech in the Bavarian city of Ingolstadt.

Open Door

Merkel, who joined U.S. President Barack Obama on May 2 in threatening broader economic sanctions against Russia if it disrupts the scheduled May 25 presidential elections in Ukraine, sought to calm tensions by suggesting a negotiated outcome remains imperative.

“In certain circumstances we have to withstand certain controversies with Russia,” Merkel said. “But the door to diplomatic solutions -- to talks -- will always remain open. That’s the policy that I pursue and that the government pursues.”

Economic sanctions imposed on Russia by the U.S. and EU have so far targeted officials, individuals and companies tied to Putin’s inner circle. The next step would be action against Russian industries, including banking and energy.

An estimated $100 billion in investment may exit Russia this year, a U.S. Treasury Department official said today on a conference call. Capital outflow was $50.6 billion in the first quarter of 2014, compared with $63 billion in all of last year.

The U.S. is ready to do more should Russia not stop its illegal actions in Ukraine, and those steps could include freezing assets of companies in energy, mining and finance, the official said. The U.S. wants to coordinate its actions with European counterparts as well as countries from the Group of Seven and beyond, the official said.

To contact the reporters on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net; Volodymyr Verbyany in Kiev at vverbyany1@bloomberg.net; Daria Marchak in Kiev at dmarchak@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net Paul Abelsky

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