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Ukraine’s Arbuzov Wants Kiev Streets Cleared by Next Week

Feb. 12 (Bloomberg) -- Ukrainian Acting Prime Minister Serhiy Arbuzov wants the country’s streets and administrative buildings clear of anti-government forces by Feb. 16 as talks continue with European Union officials.

Arbuzov, who took the reins of government after Mykola Azarov stepped down Jan. 28, said the “political situation” should be stabilizing and urged demonstrators to back down. Meanwhile, EU Enlargement Commissioner Stefan Fule met President Viktor Yanukovych today in Kiev, a day after talks with opposition leaders.

Protesters angry about Yanukovych’s November snub of an EU trade pact have blocked the main thoroughfare in the capital since November and taken control of state buildings around the former Soviet republic to force out the government. An amnesty law for protesters passed last week expires if roadways aren’t unblocked and occupied offices handed back by Feb. 17.

“The authorities have to release all hostages and to drop all criminal charges against them,” said Valeriy Patskan, a member of ex-world boxing champion Vitali Klitschko’s opposition party. “Only after that we can talk about unblocking government buildings.”

The yield on Ukraine’s government bonds due 2023 rose to 10.109 percent as of 4:52 p.m. in Kiev, the highest level since Feb 6, according to data compiled by Bloomberg. The cost of insuring the country’s debt against non-payment for five years using credit-default swaps was almost unchanged at 1,124.058 basis points from 1,124.550 basis points yesterday, CMA data showed.

EU Work

The EU has been working to help end the political crisis that began when Yanukovych opted for a $15 billion Russian aid and gas supply package over the EU’s association agreement, which includes free trade with Europe’s largest supplier of sunflower oil and corn and a key link for Russian gas to Europe.

Fule and Yanukovych “discussed ways of resolving the political crisis through broad dialogue between the authorities, the opposition and civil society, refraining from violence and extremism and ensuring respect for human rights,” according to a statement on the president’s website.

EU foreign ministers in Brussels sought a united policy on Ukraine, while foreign-policy chief Catherine Ashton met both sides last week in Kiev. She plans to meet Christine Lagarde, managing director of the International Monetary Fund, tomorrow in Washington.

EU Offer

While the EU said Feb. 10 that its association agreement is still “on the table” for Ukraine, opposition demands have turned to domestic issues, such as a new constitution that would weaken Yanukovych’s powers, a new cabinet that would be independent of his influence and a new economic program that would foster long-term growth.

“We want to hear from Yanukovych whether he is ready for that,” the opposition said on its website last night after talks with Fule.

Protesters insist that nothing will be ceded to government forces unless the authorities release all detained activists during the protest movement.

“None of the buildings, none of the streets are worth the fate of the people who are now in prisons,” activist Ihor Zhdanov said yesterday.

The opposition, split between three leaders, is waiting for a date to be set for an emergency session of parliament to return to a 2004 version of the Constitution. Seven demonstrators and three policemen have died and the hryvnia has lost as much as 6.1 percent since November.

Coalition Cabinet

Parliamentary speaker Volodymyr Rybak said that Yanukovych has agreed to the principle of a coalition cabinet and that it should be “apolitical and work only on economic issues.”

Opposition leaders have not commented on his statement.

Prosecutors closed a criminal probe against former Kiev Mayor Oleksandr Popov and former Deputy Secretary Volodymyr Sivkovych, who were suspected of ordering a police crackdown on Nov. 30, because of the amnesty law, Yana Sobolebvska, the spokeswoman for Kiev prosecutor office, said today in remarks broadcast by TV5 channel.

Protesters demand punishment for those who were to blame for the crackdown, which prompted half a million people to take to the streets the next day.

“Protesters may unblock government buildings in some regions,” Yuriy Yakymenko, head of the political department at the Razumkov Center for Economic and Political Studies in Kiev, said by phone. “But people won’t leave the square and Kiev city hall is unlikely to be freed.”

To contact the reporters on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net; Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net; Balazs Penz at bpenz@bloomberg.net

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