Ukraine slides deeper toward war as Russia warns on vote

Bloomberg

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A billboard advertisement for Ukrainian presidential candidate Mikhail Dobkin is defaced by paint balls on May 14, 2014 in Kramatorsk.

Russia’s foreign minister said Ukraine is sliding into a civil war that will make it impossible to hold legitimate elections, as Ukrainian leaders and their international allies blamed Russia for the violence.
“When Ukrainians kill Ukrainians, I believe it’s as close to civil war as you can get,” Sergei Lavrov told Bloomberg Television in an interview in Moscow yesterday. “In the east and south of Ukraine, there is a war, a real war, with heavy weaponry used, and if this is something that is conducive to free and fair elections, then I don’t understand something about freedom.”
The Kiev government and its allies in the U.S. and the European Union say Russia is behind the unrest in Ukraine’s easternmost regions. The pro-Russian separatist groups there were excluded from the national unity talks that started in the capital yesterday, aimed at easing tensions before the May 25 presidential vote.
Rebels killed at least six paratroopers near the city of Kramatorsk on May 13, the deadliest attack on Ukrainian forces since the secession campaign began after Russia annexed Crimea in March.
“Quite a number” of the rebel fighters have also been killed, Lavrov said, as the Kiev government sent troops into the eastern regions to reassert control. Separatists in Luhansk and Donetsk, where unofficial ballots on breaking away from Kiev were held last weekend, have agreed to join forces to confront the central government.
‘Calm down’
At the roundtable talks in Kiev, Prime Minister Arseniy Yatsenyuk said ending the crisis requires an international conference in Geneva, which Ukraine, Russia, the EU and U.S. should attend. He said the election of a president on May 25 will help stabilize the situation.
Some of Ukraine’s richest men have weighed in with suggestions. At the unity talks, Vadym Novinsky, a lawmaker and owner of LLC Smart Holding, said all of Ukraine’s parties and presidential candidates should commit to the country’s neutrality, “to calm down our eastern neighbor.”
On his website, billionaire Rinat Akhmetov said constitutional change to decentralize Ukraine is the “only proper way” out of the crisis, as alternatives such as secession for the eastern regions will lead to sanctions and economic damage.
Not ‘fascist’
Another billionaire, Petro Poroshenko, is the frontrunner for Ukraine’s presidential vote. Lavrov said Poroshenko isn’t a “fascist,” a term Russia applies for some forces in Ukraine’s interim government. He said the emergence of a Ukrainian leader with broad support may help diplomacy because “it’s easier to have such an interlocutor than self-appointed people.”
Lavrov also said that Russia has no intention of sending troops into eastern Ukraine. Russian President Vladimir Putin last week promised to move soldiers back from the border.
Even though Ukraine and the U.S. say he hasn’t fulfilled the pledge, it has prompted a rally on Russian financial markets, which extended gains yesterday. The benchmark Micex (INDEXCF) Index of stocks rose for a sixth day, adding 0.3 percent, and the ruble gained 0.6 percent against the dollar. Ukraine’s hryvnia fell 0.8 percent, taking its loss this year to 31 percent.
Ukraine’s government sold $1 billion of U.S.-backed bonds yesterday to shore up its finances. It’s also seeking international arbitration in a natural gas dispute with Russia, asking a Stockholm court to help ensure Russia doesn’t cut off supplies as a payment deadline looms next month, Finance Minister Oleksandr Shlapak said yesterday.
‘Convenient position’
The European Bank for Reconstruction and Development said Ukraine’s economy may shrink 7 percent this year. The impact of the conflict, including sanctions imposed by the U.S. and EU, may push Russia into recession and cause growth across the region to “grind to a halt,” it said yesterday.
The U.S. and EU are backing Ukraine’s election plan. Preparations for the vote are “on track” and Russia “ought to support that process instead of taking steps to undermine it,” White House spokesman Jay Carney said yesterday. He described Lavrov’s warnings about the risk of civil war as “a convenient position to take when you’ve actively exacerbated and stoked tensions and instability.”
U.S. and EU leaders say the sanctions they have already imposed on Russia will be tightened if the May 25 election is disrupted. Lavrov said it’s “ridiculous” to hold Russia accountable for the vote.

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