Ukraine Opposition Skeptical of Yanukovych Roundtable Offer

Ukraine’s opposition, determined to keep mass demonstrations alive in Kiev, were skeptical of President Viktor Yanukovych’s offer of a roundtable meeting to settle the month-long political crisis.

The meeting, first brought up by Yanukovych yesterday, will start at 3 p.m. today in Kiev, according to a government announcement published by Interfax newswire. The roundtable will include authorities, political parties, journalists, union leaders, students and other groups to discuss ways out of the month-long crisis sparked by Yanukovych’s snub of a European Union trade pact in favor of closer ties to Russia. His office said he’s not scheduled to attend.

“Such a meeting should not turn into two-faced declarations and reports about the success of the authorities,” said former heavyweight boxing champion Vitali Klitschko, a leader of the opposition movement, on his website last night. “Such meetings should find a way out of the political crisis through early presidential and parliamentary elections. Otherwise, they don’t make any sense.”

Yanukovych, back from Moscow with a gas-price agreement and $15 billion bailout from the former Soviet partner, has rejected calls for early elections, accused his opponents of being too “ambitious” and warned the EU and the U.S. against meddling in domestic affairs. At the same time, he sought to placate opposition by pushing through an annulment of all charges against protesters caught up violence on Nov. 30 and increased salaries for state workers.

Gas Line

The country of 45 million people, a key Russian gas pipeline transit destination to the West, is struggling with its third recession since 2008 and dwindling foreign reserves.

The yield on Ukraine’s dollar denominated bonds due 2023 rose for the third day to 9.17 percent as of 12:26 p.m., the highest level since Dec. 16, in Kiev today. The cost to insure Ukraine’s debt against non-payment with five-year credit default swaps declined to 812.5 basis points, compared with 820 yesterday, according to data compiled by Bloomberg.

Opposition politicians, who have fired up demonstrators nightly at Independence Square, or Maidan, with speeches, the national anthem and anti-government songs, said they won’t back down until all three demands they gave the president in a Dec. 13 roundtable are met.

Opposition Demands

Besides freedom for jailed protesters, whom they say were illegally arrested, anti-Yanukovych forces want punishment for instigators of violence that left dozens injured and arrested and the dissolution of the current government.

“We should stay further, we should press further the authorities to achieve our other demands,” Oleh Tyahnybok, the head of the Svoboda party, told thousands of demonstrators gathered on Maidan.

In the evening, a fireworks display lit up Maidan to celebrate St. Nicholas day, while children from four to 15 sang carols on the stage that opposition leaders used to fire up demonstrators. Some celebrants sent paper lanterns illuminated by candles into the sky as temperatures hovered just above zero.

Today, protesters focused on the daily convoy carrying Yanukovych to the presidential palace. Hundreds lined up along the route with signs criticizing his commute for for causing massing traffic snarl-ups in the capital city.

Protesters also plan to picket the Interior Ministry.

Holiday Festivities

“Today these holiday festivities give freedom to us, to all our activists, who were persecuted, who were charged,” said Arseniy Yatsenyuk, the head of jailed ex-Prime Minister Yulia Tymoshenko’s party, in a speech on the Maidan stage.

As Yanukovych defended his decision to sign the accord with Russia, leaders of the 28-member EU were meeting for a second day in a summit in Brussels and the International Monetary Fund delivered its annual report on the country.

The EU remains committed to signing an Association Agreement that would drop barriers to more than 90 percent of Ukraine good and called for calm.

“The European Council calls for a peaceful solution to the political crisis in Ukraine that would meet the aspirations of the Ukrainian people,” according to a draft of a statement to be issued later today.

The IMF said that the country’s energy industry still weighs heavily on public finances and is “inefficient and opaque.” It forecast economic growth of 1 percent after a contraction this year. By contrast, Bank of America Merrill Lynch this morning released its own estimate, for growth of as fast as 3 percent, according to analyst Vladimir Osakovskiy, citing the Russian bailout money.

European Parliament President Martin Schulz yesterday said he doesn’t expect any further moves by Yanukovych toward the EU after years of promises and overtures to the West. Still, he said, EU should remain open to Ukraine, if only for the sake of the “opposition on Maidan.”

Falling Support

Yanukovych said yesterday that he would not run for re-election should he lack pre-campaign support among the population. He also said he would continue to seek office as long as there is a strong public backing.

In Warsaw last night, German Foreign Minister Walter Steinmeier said that Ukraine is shutting itself off from implementing needed reforms with the Russian deal. He said that unlike the Russian accord, an EU trade pact would be transparent.

Yanukovych would currently lose to any of the opposition candidates if a vote was held now, according to a recent poll. His worst result would be against Klitschko, who polled 46.9 percent, compared with 28.6 percent for Yanukovych, in a Nov. 28-Dec. 7 survey of 2,013 people by Perspektyva for Tyzhden magazine. It had a 2.2 percentage-point margin of error.

Bond Sale

As protesters keep up their furor against Yanukovych, the government posted on its website details of the Russian bailout. The $3 billion of bonds to be sold to Russia as part of the Dec. 16 deal in Moscow would mature on Dec. 20, 2015 and carry a coupon payable every six months, it said.

The gas-price accord, which reduces the price Russia charges Ukraine for gas by about a third, would ensure that the fuel flows to Europe uninterrupted during the winter, as in 2009, said Societe Generale analysts Paolo Coghe and Theirry Bros in a report.

Still, pro-EU opposition leaders maintain that Yanukovych’s deal with President Vladimir Putin may have hidden strings and are concerned the agreement would tie Ukraine tighter to Russia. They urged demonstrators to be patient.

“We should not leave Maidan,” said Yatsenyuk in a speech on Dec. 18. “He wants us to leave badly. Victory will not happen soon. But we will have victory because we are following the right path.”

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