April 24 (Bloomberg) -- Ukraine restarted an offensive against separatists in eastern cities, prompting Russia to call the move a crime and warn that it would protect its citizens in Ukrainian territory.
Operations to clear militants from Kramatorsk, Slovyansk and other cities were under way yesterday, Ukraine’s First Deputy Prime Minister Vitali Yarema said. Russian Foreign Minister Sergei Lavrov said yesterday his country would respond if its “legitimate interests” are “attacked directly.”
“Russian citizens being attacked is an attack against the Russian Federation,” Lavrov said in an interview with the state-run television broadcaster RT. “If we are attacked, we would certainly respond.”
Tensions between the two sides risk derailing an accord to disarm rebels signed last week in Geneva by Ukraine, Russia, the European Union and the U.S., as Ukrainian and Russian officials accuse each other of violating the agreement. Amid the crisis, the U.S. began deploying hundreds of troops for exercises in four countries bordering Russia, days after NATO increased the defense of member states in eastern Europe.
The U.S. said it hasn’t seen any indication Russia is carrying out the April 17 accord and reiterated that failure to do so would trigger penalties on top of the visa bans and asset freezes already in place. It joined the EU in imposing sanctions as Russia annexed Crimea from Ukraine last month.
“I don’t want to put a deadline on it, but we’re talking days,” Daniel Baer, the U.S. representative to the Organization for Security and Cooperation in Europe, said yesterday in Brussels. Russia’s non-compliance is “regrettable, particularly given that Russia committed to this plan” just a few days ago.
Russian and Ukrainian assets suffered yesterday. Russia failed to sell local-currency bonds due August 2023 at an auction and the Micex Index lost 0.5 percent. Ukrainian bonds tumbled, lifting yields on the government’s dollar-denominated notes due 2023 by 0.08 percentage point to 10.05 percent, the highest in a month, data compiled by Bloomberg show.
Since Russia’s intervention in Crimea started on March 1, the Micex has lost 8.1 percent, while the Market Vectors Russia exchange-traded fund has slipped 6.2 percent.
Ukraine’s shrinking economy may get a boost from an International Monetary Fund loan. The Washington-based lender’s staff endorsed a $17 billion bailout that may get board approval next week, according to government officials who’ve seen the recommendations and spoke on condition of anonymity.
In Ukraine, the town of Sviatogirsk was freed yesterday without casualties as part of the government’s “anti-terrorist” operation, the Interior Ministry said in a statement on its website. Ukraine’s SBU State Security Service pledged to use “all means” to restore order in the east.
As many as 1,300 separatists are involved in securing control over government buildings in the Donetsk region, according to the SBU. Twenty-one Russian agents, including three intelligence officers, have been arrested or detained, SBU chief Valentyn Nalyvaychenko said during an online discussion sponsored by the Washington-based Atlantic Council.
The Ukrainian effort to uproot pro-Russian separatists from eastern cities was put on hold over the Easter holiday. With the Geneva deal near collapse, acting Ukrainian President Oleksandr Turchynov urged security forces on April 22 to move against the militants after the discovery of two bodies near Slovyansk, saying “terrorists” backed by Russia had “crossed the line.”
The government in Kiev accuses Russian President Vladimir Putin of instigating turmoil to possibly lay the groundwork for an invasion. The separatists who took over buildings in eastern Ukrainian cities say they’re not subject to the Geneva accord.
Ukraine hasn’t fulfilled a single clause of the April 17 pact, Lavrov told RT, accusing the U.S of “running the show.”
Russia’s Foreign Ministry said Ukraine and the U.S. have a distorted interpretation of the Geneva accord and are ignoring provocations by right-wing extremists. The government in Kiev should pull its military back from Ukraine’s southeast, the ministry said.
Lavrov called Turchynov’s order for the operation in Ukraine’s eastern region “criminal.”
Putin has parliamentary approval to deploy troops in Ukraine to protect Russian speakers and those of Russian heritage. He has about 40,000 troops massed on the border with Ukraine, according to the North Atlantic Treaty Organization.
There are signs Ukraine is implementing the Geneva pact, according to Michael Mann, spokesman for EU foreign-policy chief Catherine Ashton. The bloc is calling on Russia “to use its leverage to ensure an immediate end to what is going on in eastern Ukraine,” he told reporters in Brussels yesterday.
A week after NATO Secretary General Anders Fogh Rasmussen said the alliance will upgrade contingency plans, hold more military drills in eastern Europe and step up air and naval policing on its flanks, the U.S. began sending airborne infantry to four member nations bordering Russia.
A contingent of 150 troops from the U.S. Army’s 173rd Airborne Brigade Combat Team arrived in Poland yesterday for a month of training, according to Colonel Steve Warren, a Pentagon spokesman. Similar-sized units will be sent to Lithuania, Latvia, and Estonia by next week, Warren said.
NATO jets have succeeded in stopping Russian incursions into the Baltic region, Douglas Lute, the U.S. ambassador to NATO, told a German Marshall Fund conference yesterday in Brussels.
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