Putin spells out why he offered $15b aid package to Ukraine

Russian President Vladimir Putin said on Thursday that Moscow had offered Ukraine a multi-billion-dollar bailout package to steer the neighboring "brotherly country" out of economic trouble, not to stem pro-EU protests in the country.

Russia's economic assistance has infuriated the Ukrainian opposition spearheading mass street protests against President Viktor Yanukovych, whom they have accused of selling out to Moscow.

But using highly emotional language to describe Russia's relationship with the ex-Soviet state, Putin insisted that Moscow's latest offer was aimed only at helping a fellow Slav country.

"Why did we take this decision? We often use the term 'brotherly nation', 'brotherly people'. And today we see that Ukraine is in a difficult situation, economically, socially and politically," Putin said at his annual news conference.

"If we really say that this is a brotherly people and a brotherly country, then we must act like close relatives and help the Ukrainian people in this difficult situation."

Putin denied that the assistance package had anything to do with the massive protests in Kiev or the Ukrainian government's aborted move late last month to sign an agreement of association with the European Union.

Protesters continued to occupy Independence Square in Kiev, known locally as the Maidan, in a bid to persuade the government to sign the EU trade and partnership pact, which would mark a major break with the Kremlin.

"It is not linked to the Maidan or the negotiations with Ukraine and the EU," Putin said.

"There is no need to think anything up. No one is trying to strangle anyone," he added. "We are not trying to drag Ukraine anywhere."

Yanukovych said he had no choice but to accept the $15 billion aid package from Russia because of high gas prices and debt repayments to the IMF, but he said the package did not rule out integration with Europe.

"There are no contradictions in the course of Ukraine for any integration," he said, adding that Ukraine should maintain good economic relations with all its strategic partners, including the EU and Russia.

During talks with Yanukovych on Tuesday, Putin agreed to buy $15 billion of Ukraine's debt in eurobonds and slash its gas bill by a third, a move economists said would stave off the risk of a Ukrainian default for now.

Putin described the new gas agreement as "temporary" and said a long-term solution needed to be found that would allow Ukraine to keep the new lower price.

It has remained unclear what Russia is getting in return. Putin stressed that he and Yanukovych did not discuss Kiev joining the Kremlin-led Customs Union of ex-Soviet States, which includes Belarus and Kazakhstan.

The ongoing protests in Ukraine are the biggest in the country since the 2004 "Orange Revolution", which forced the annulment of an election initially claimed by Yanukovych.

Ukrainian Prime Minister Mykola Azarov said a day earlier that Kiev had avoided bankruptcy and social collapse thanks to the "historic" bailout from Russia.

But the deal left the opposition fuming and European diplomats complaining that it was nothing more than a temporary stop gap to plug a hole in the Ukrainian economy.

Lithuania, which chairs the EU, warned that Ukraine had only delayed a looming crisis. "If money is given to plug a hole, it only postpones the crisis," said Lithuanian Foreign Minister Linas Linkevicius.

Opposition leader and boxer Vitali Klitschko accused Yanukovych of "pawning" Ukraine to Russia by giving Moscow key Ukrainian assets as collateral. This has not been confirmed.

The government wanted to bring the budget for 2014 before parliament on Thursday, but the opposition vowed to physically block the session to prevent the budget being passed.

"We have clearly told the speaker that until the state crisis is resolved it is impossible to solve any questions in parliament. It is absolutely unacceptable to pass the budget on Thursday," said nationalist leader Oleg Tyagnybok.

AFP-Reuters