Rebels kill 14 downing Ukraine chopper as Russia sees war

Bloomberg

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Black smoke rises from a shot down Ukrainian Army helicopter outside Slovyansk, Ukraine, on May 29, 2014. Black smoke rises from a shot down Ukrainian Army helicopter outside Slovyansk, Ukraine, on May 29, 2014.
Pro-Russian rebels downed a military helicopter in eastern Ukraine, killing 13 troops and a general, as an adviser to President Vladimir Putin accused the U.S. of pushing the world toward war through proxies in Kiev.
Insurgents shot down an Mi-8 transport chopper with a shoulder-fired missile amid heavy fighting in Slovyansk, 100 miles (160 kilometers) from the Russian border, Speaker Oleksandr Turchynov told parliament today.
Russia demanded Ukraine halt its “fratricidal war” and withdraw troops from the mainly Russian-speaking regions of the east after separatists suffered the heaviest casualties of their campaign. Western countries should use their influence to stop Ukraine from “sliding into a national catastrophe,” the Foreign Ministry in Moscow said on its website.
Ukraine stepped up air patrols over Donetsk yesterday as a convoy of pro-Russian rebels moved through the eastern city with an anti-aircraft gun in tow, regrouping after dozens were killed in a government operation to retake the main airport.
President-elect Petro Poroshenko has vowed to wipe out the insurgents and re-establish order after winning office on May 25 with 54.7 percent of the vote. He’s faced with trying to stabilize an economy that the European Bank for Reconstruction and Development expects to shrink 7 percent this year while reclaiming swaths of territory captured by pro-Russian militias.
‘World War’
An economic adviser to Putin, Sergei Glazyev, said the U.S. controls the new Ukrainian government and is seeking to use the conflict to start a “third world war.”
“This can’t be called anything but madness -- the bombing of cities, airports, escalation of unmotivated violence against their own people,” Glazyev told reporters today in the Kazakh capital Astana, where he’s traveling with the Russian president.
Russia has reduced the number of soldiers stationed on its border with Ukraine to about 20,000 from about 50,000, the press service of Ukraine’s border guards said yesterday. The Russian troops are leaving behind military assets, suggesting they may return, the service said, without being more specific.
Even so, a “threatening, capable” Russian force remains “poised along the Ukrainian border,” Colonel Steve Warren, a spokesman for the Pentagon, told reporters yesterday.
“Russia’s goal was and is to keep Ukraine so unstable that we accept everything that the Russians want,” Poroshenko said in an interview with German paper Bild. “I have no doubt that Putin can end the fighting with his direct influence.”
Gas dispute
Ukrainian forces used aviation and artillery assets to “destroy” the rebel unit that downed the helicopter today, the Interior Ministry’s National Guard unit said in a statement, without elaborating.
As the violence continues, Ukraine is reluctant to accept an EU proposal to reach a debt and price deal for natural gas from Russia and avert a threatened shutoff as soon as June 3. Russia, the world’s largest supplier of the fuel, has twice cut gas flows to Ukraine since Putin came to power in 2000, leading to shortages throughout Europe.
Under the EU plan, Ukraine’s state energy company, NAK Naftogaz Ukrainy, would pay Russian gas exporter OAO Gazprom (GAZP) $2 billion by May 30 and a further $500 million by June 7. That would partially cover Ukraine’s outstanding debt, which Gazprom Chief Executive Officer Alexey Miller said yesterday will reach $5.2 billion by June 7.
‘Our enemy’
Ukraine’s government is “ready to clean the bill” and “pay the arrears,” Prime Minister Arseniy Yatsenyuk said in Berlin yesterday. The country is seeking a market-based price of $250-$350 per 1,000 cubic meters as a precondition, he said.
Gazprom raised the price it charges Ukraine, which relies on the Russian exporter for half of its gas, by 81 percent to $485 per 1,000 cubic meters after Kremlin-backed President Viktor Yanukovych fled the country in February.
About 15 percent of Europe’s gas supply flows from Russia through Ukraine, which is counting on $17 billion from the International Monetary Fund to avoid bankruptcy.
Talks to break the deadlock will resume in Berlin tomorrow, though a breakthrough is unlikely, according to Ukraine’s Energy Ministry.
“Russia is now our enemy,” First Deputy Minister Yuri Zyukov told reporters in Kiev. “It dictates and speaks in ultimatums we can’t accept.”
The standoff is threatening to escalate into a full-blown crisis, “undermining the sustainability of Russian gas transit to the EU through Ukraine,” Alexander Kornilov, an energy analyst at Alfa Bank in Moscow, said in an e-mailed note.
Sanctions ‘eeminder’
“Ukraine’s position indicates that the light at the end of the tunnel in Russia-Ukraine-EU gas discussions is still very far away,” Kornilov said.
EU leaders meeting in Brussels this week decided to put off further sanctions on Russia after Putin said he’ll work with Ukraine’s new leader and pulled back some troops.
“The possibility of de-escalation is here, finally,” French President Francois Hollande told reporters after the summit ended. “But we still need this strict reminder.”
In their final statement, the leaders said the EU was working on “possible targeted measures” and agreed “to continue preparations” in case further steps are needed.
Since Putin annexed Ukraine’s southern Crimea region in March, the EU has blacklisted 83 Russian and Ukrainian officials and two companies.
President Barack Obama, who has imposed U.S. sanctions on people close to Putin, including Glazyev, the economic adviser, called Poroshenko May 27 to congratulate him on his victory and offer “the full support of the United States,” according to a White House statement.
The U.S. leader plans to meet with Poroshenko during his trip to Europe next week, Obama told NPR News in an interview scheduled to air today. Obama told the radio network he expects to discuss Crimea with Poroshenko during their meeting.
Poroshenko said after his victory that government forces won’t quit until separatists are completely defeated.
“They won’t last two or three months,” the president-elect said. “They’ll last a few hours.”

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