Emerging Europe

Ukraine seeks $27.5 billion in aid from EU, PM says

Georges Gobet | AFP/Getty Images

Ukraine wants 20 billion euros ($27.54 billion) in aid from the European Union in return for signing an agreement on trade and cooperation, Prime Minister Mykola Azarov said on Wednesday.

In remarks made at a cabinet meeting, while thousands protested in the capital Kiev at Ukraine's decision to scrap plans to sign the agreement, Azarov urged the EU to understand the position of the country's industry.

He said the 28-country bloc should join in mutually profitable projects in Ukraine, a former Soviet state of 46 million people reliant on Soviet-era steel and chemical production.

Instead of signing agreements last month that would marked a symbolic move away from former Soviet master Moscow, Ukraine decided to rebuild economic ties with Russia, prompting protests by demonstrators who want President Viktor Yanukovich to quit.

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"We suggest that the European Union invest in mutually profitable projects such as the modernization and development of European transport corridors, and the creation of a new corridor to the Caucasus," he said.

"Now European officials look at the protests in Maidan (in central Kiev) and are not rushing to consider such projects and questions about the size of aid. And who will benefit from these protests: European officials or the Ukrainian people, who urgently need economic and financial help?"

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The political crisis has added to the financial hardship of a country on the brink of bankruptcy. But Urkaine also says it has not agreed to join a Moscow-led customs union which Russia is trying to persuade it to join.

Ukraine owes just under $4 billion in gas bills and debt repayments in the first three months of 2014, and after that may struggle to pay rising sums from dwindling reserves.

He said 20 billion euros would help Ukraine's economy adapt to closer integration with the European Union and be compensation for potentially losing its large Russian market.

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Yanukovich has said his country needs $20 billion a year until 2017, and a total amount of $160 billion.

The EU has set aside 610 million euros of what it calls macro-financial assistance for Ukraine once it has signed a stand-by agreement with the International Monetary Fund, which stopped providing credit in 2011 after Kiev failed to implement necessary reforms.

In comments to local television last month, Yanukovich called that sum "humiliating".

"We are not waiting and not asking that they give us a present or compensate us, we are not talking about the European Union giving us the necessary technical support to bring our industry in line with European standards," he said.

"We are talking about the involvement in big mutually profitable projects, which have created new jobs in our enterprises over recent years."