Ukraine Accord Doubts Grow as Protesters Refuse to Disarm

Pro-Russian protesters in eastern Ukraine defied pleas to disarm as officials in Kiev pledged to honor an accord reached in Geneva and an international group began expanding its presence to help defuse the crisis.

Prime Minister Arseniy Yatsenyuk’s government suspended anti-terrorist operations in eastern Ukraine and said it was ready to pursue constitutional revisions. A protest leader in Donetsk refused to disarm and vacate seized property until Yatsenyuk’s administration steps down.

Russia’s foreign ministry blamed the Ukrainian nationalist group Pravyi Sektor for an overnight clash in the eastern region of Slovyansk that left one person dead -- a charge that Pravyi Sektor quickly denied in a statement. Viktoria Syumar, first deputy head of the National Security and Defense Council in Kiev, said on her Facebook account Russia’s accusation and statements show it is preparing grounds to invade Ukraine.

The discord adds to skepticism about whether Ukraine, the U.S., and the European Union will be able to use the Geneva accord to hold Vladimir Putin accountable for easing tensions the Russian president says he’s had no role in creating.

Yatsenyuk said yesterday Ukraine would act against extremists after anti-Semitic fliers were distributed in Donetsk this week by ordering the military and police to respond.

The forces were told “to find these bastards and bring them to justice,” Yatsenyuk told NBC’s “Meet the Press” broadcast in an interview recorded yesterday.

Mykhaylo Dobkin, the presidential candidate from ousted President Viktor Yanukovych’s Party of Regions, yesterday criticized the government’s approach to the demonstrations.

‘Won’t Accept’

“The current authorities see some protesters as legitimate, and others as separatists who must be disarmed,” Dobkin said in an interview in Kharkiv. Protesters in the southeast “won’t accept that. They won’t put down their weapons unilaterally,” he said.

One international effort to defuse the crisis is expanding its ranks in Ukraine. The Organization for Security and Cooperation in Europe, a 57-nation group that includes Russia and Ukraine, will increase its monitors to 300, up from 100 now, with a goal to soon have 500, Michael Borciurkiw, a spokesman for the Ukrainian special monitoring mission, told the Wall Street Journal.

U.S. and EU officials have emphasized their readiness to deepen sanctions against Russia, which they say has massed troops near Ukraine’s border and is fomenting unrest after annexing Crimea last month.

The developments don’t mean Russia is “necessarily reneging on the deal, as it is more of an effort for them to test the deal” and see how they can “avoid sanctions without trying to change the situation on the ground,” John Herbst, a former U.S. ambassador to Ukraine, said April 18.

Talks With Tymoshenko

“Realistically, no one is going to claim the deal is going to fall apart within 18 to 20 hours of conclusion,” Herbst said by phone, adding that he expected no decision on further sanctions until April 21 or 22 “at the earliest.”

Some 77 percent of people in eight eastern and southern Ukrainian regions are against armed protesters taking over local administrative buildings, Kiev-based weekly Zerkalo Nedeli reported, citing a poll it commissioned from the Kiev International Institute of Sociology.

Only 7 percent of those surveyed said they would definitely support their region joining Russia, while 54 percent were definitely opposed, according to the survey.

Denis Pushilin, a leader of the self-proclaimed Donetsk People’s Republic, which has seized buildings in the east Ukrainian city, reiterated yesterday that he refused to leave.

Talks with Ukrainian presidential candidate Yulia Tymoshenko, who traveled to the region for talks with the protesters, yielded no agreement beyond plans to meet again, he said yesterday by text message.

Watching Closely

The group, which is seeking greater autonomy from the central government in Kiev, doesn’t recognize the current leaders after the ouster of Yanukovych in February.

U.S. National Security Adviser Susan Rice said the administration of U.S. President Barack Obama expects Russia to use its influence over militias in Ukraine. The U.S. and its allies “remain ready to impose additional costs” if terms of the agreement aren’t followed, she said.

“It’s not the words, it’s the actions, so we will be watching very closely over the coming days,” Rice said April 18 in Washington.

Russia is “disappointed” by the U.S. assessments of the talks, while threats of new sanctions are “completely unacceptable,” the Foreign Ministry in Moscow said.

Deadline Set

Putin called on European leaders and other governments interested in helping Ukraine’s economy to make sure the country is able to pay for its gas. He set a one-month deadline for payments to resume on April 17.

“We don’t want to undermine the Ukrainian economy or raise any questions about the reliability of transit supplies to Europe,” Putin said in an interview with Sergey Brilev shown yesterday on Russian state-run television.

The EU relies on Russia for about 35 percent of its crude oil needs and 30 percent of its gas, according to European Commission data. In addition to the prospect that Russia might curb gas supplies to nations that support tougher sanctions, there’s the prospect of lost business if the crisis escalates.

Royal Dutch Shell Plc, based in The Hague, said April 18 that it planned to expand an oil and natural gas project in Russia’s Far East after Chief Executive Office Ben van Beurden won a promise of support from Putin at a meeting near Moscow.

Russian Stocks

Russian stocks in the five days ended April 18 rose the most in more than three weeks in Moscow, paring this year’s decline to 9.8 percent. The ruble weakened as investors have been selling Russian securities, causing the currency to depreciate 7.6 percent against the dollar this year.

Officials from the U.S. Treasury Department and the National Security Council told money managers this month in Washington that the administration was planning more sanctions against Russia, according to a person who attended and asked not to be identified because the discussions weren’t public.

If the Geneva deal fails and the crisis worsens, a key factor for eastern EU leaders will be how fast Putin moves in Ukraine and other Russian-speaking regions, such as the breakaway Moldovan territory of Transnistria, according to a person present at a recent EU summit.

Despite the tough talk and NATO moves to bolster its military presence in central and eastern Europe, Putin may be betting that the U.S. and EU are too divided to agree on significant sanctions unless Russia begins an outright invasion of Ukraine, two U.S. officials said April 18. Both requested anonymity to discuss internal policy deliberations.

“Putin’s big advantage is that he is facing an opponent that has completely split views,” Michael Romancov, a political scientist at Charles University in Prague, said by phone. “The hard-line attitude from a few countries like Poland won’t achieve anything, unless there’s a united front.”

Before it's here, it's on the Bloomberg Terminal.