Russia Invasion Risk Is Unchanged, Ukrainian Envoy Says

The risk of Russia invading Ukraine is as high as at any time since the crisis began, with Kremlin agents stoking unrest in the east of the country preparing for elections tomorrow, according to Ukraine’s envoy to the U.S.

Russia hasn’t taken any “practical steps” to ease tensions with its neighbor, Ambassador Olexander Motsyk said in e-mailed answers to questions from Bloomberg News. Ukrainian forces are “ready to defend their country,” and the government expects a “robust and decisive” response from the international community in case of an incursion, he said.

“The chances of Russian invasion remain as high as they were a week or a month ago,” Motsyk said. “We have no reason to assume that Russia’s intentions to destabilize Ukraine have in any form shifted in favor of de-escalation.”

Ukrainians will vote in the first round of a presidential election as fighting between government forces and pro-Russian separatists persists in the eastern regions of Donetsk and Luhansk. While the Kremlin rejects the accusation it’s fomenting the turmoil, the U.S and the EU threatened to expand sanctions against Russia if the vote is disrupted.

While Russian President Vladimir Putin yesterday said he would respect the vote and was ready to work with a new president, he described the conflict in Ukraine as civil war and questioned the election’s legality.

‘Impossible’ Election

“Strictly speaking, under the current constitution, it’s impossible to hold an election” because Kremlin-backed ousted Ukrainian President Viktor Yanukovych “wasn’t removed from power using constitutional methods,” Putin said in St. Petersburg. Yanukovych fled to Russia in February after three months of street protests.

The reaction to the election from Russia, which yesterday said a pullback of its troops from the Ukrainian border started May 19 and will take about 20 days to complete, will show the Kremlin’s willingness to de-escalate tensions, Motsyk said.

“Russia’s ability to recognize the results of the upcoming election will be a major test of its further intentions,” Motsyk said. The Russian “army is still on the border with Ukraine and its intelligence operatives are still highly active in our country destabilizing it.”

Motsyk urged the U.S and its allies to widen sanctions on Russia after they penalized 98 people and 20 companies over the crisis in Ukraine. The next step would be measures to target entire industries.

Sanction Call

“These sanctions should be even stronger, both to deter Russia from further aggression and interference in Ukraine’s affairs, make it stop arming and supporting separatists in eastern Ukraine and restore the internationally recognized status-quo of Crimea being an integral part of Ukraine,” Motsyk said.

Ukraine’s new elected president will also have to resolve a dispute over gas prices, with Russia threatening to cut shipments of the fuel next month unless Ukraine pays up front. Russia, which raised gas prices by 81 percent on April 1, claims Ukraine owes $3.5 billion in unpaid bills. Ukraine calls the price increase politically motivated and wants export monopoly OAO Gazprom (GAZP) to cut it back to $268.5 per thousand cubic meters.

“Without settlement of the price, the government of Ukraine cannot consider prepayment,” Motsyk said. “Ukraine is ready to resolve disputes through arbitration as well as mediation proceedings.”

To contact the reporters on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net; Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; John Walcott at jwalcott9@bloomberg.net Andrew Langley

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