Ukraine Orders Evacuation Route as Peace Talks Progress

Mikhail Zurabov, Russia's ambassador to Ukraine. Peace talks took place between Zurabov, Ukrainian Ambassador to Germany, Pavlo Klimkin and Heidi Tagliavini, a special representative from the Organization for Security and Cooperation in Europe. AFP/Getty Imabe

#Ukraine’s president ordered the creation of an evacuation corridor so civilians can flee fighting in the country’s battle-torn east after his Foreign Ministry said peace talks with #Russia were yielding progress.

Petro Poroshenko, sworn in June 7 after a landslide May election victory, ordered other Ukrainian regions to take in refugees from where government forces are fighting separatist rebels who want to leave Ukraine and join Russia. Ukrainian troops repelled attacks on airfields in the Luhansk and Donetsk regions last night, killing about 40 rebels, anti-terror operation spokesman Vladyslav Seleznyov said by phone.

The fighting raged after three-way meetings between Russia, Ukraine and the Organization for Security and Cooperation in Europe in Kiev reached agreement on implementing a peace plan drawn up by Poroshenko and on priorities for de-escalation in Donetsk and Luhansk, the Foreign Ministry said in a statement. The former Soviet republic blames Russian President Vladimir Putin for fomenting the unrest.

“The president has ordered the creation of a rescue corridor for peaceful people willing to leave the territory where the anti-terrorist operation is being carried out,” Poroshenko’s office said in a statement on its website.

Talks Continue

Ukraine’s U.S. and European allies have imposed sanctions on Russia and threatened to tighten them unless Putin acts to ease tensions. Russia says Ukraine must stop using armed force against its own citizens in the mostly Russian-speaking east.

In separate talks, Ukraine and Russia failed to reach an agreement on natural gas deliveries during overnight negotiations hosted by the European Union as OAO Gazprom (GAZP) insisted on receiving a debt payment before a deadline today.

Gazprom will not delay today’s deadline, under which Ukraine must make prepayments for gas supplies, spokesman Sergei Kupriyanov said by phone.

“All parties are engaged to avoid any wrong development,” Oettinger said. “We have some open questions and some different positions, but we agreed to continue negotiations.”

Talks may resume today at 9 p.m. central European time or tomorrow morning, EU Energy Commissioner Guenther Oettinger told reporters in Brussels after the meeting, which lasted more than seven hours. The EU, reliant on Russian gas piped through Ukraine for about 15 percent of its supplies, is trying to broker a deal to avert a cutoff.

Slovyansk Siege

The ministry said the Kiev talks will continue in the same format. They took place between Ukrainian Ambassador to Germany Pavlo Klimkin, the Russian envoy to Ukraine, Mikhail Zurabov, and Heidi Tagliavini, a special representative from the OSCE.

Billionaire Poroshenko, 48, said at his inauguration that he would draft plans to decentralize power and proposed a partial amnesty and free passage for Russian “mercenaries.”

Clashes have persisted since the speech between rebels and Ukrainian army units seeking to reassert Kiev’s control over the eastern regions. Two government troops were wounded when they beat back attacks by insurgents trying to break out of Slovyansk, a separatist stronghold now surrounded by Ukraine’s anti-terror operation.

“Near the city of Slovyansk, insurgents are continuing attempts to break the siege,” Seleznyov said.

Government forces repelled a separatist strike on an airfield in the Luhansk region as well as another attack on the Kramatorsk airport in Donetsk, where they killed about 40 rebels last night, he said.

Micex Slips

Russia’s financial markets ended two days of gains after rallying in recent weeks on expectations the tension is easing. The Micex stock index weakened 0.5 percent to 1,477.66 at 11:26 a.m. in Moscow after earlier posting a 20 percent jump since mid-March. The ruble lost 0.1 percent against the central bank’s basket of dollars and euros.

Ukraine’s bonds joined the rally last month, after approval of a $17 billion International Monetary Fund loan, and have surged since Poroshenko and Putin held their first presidential meeting last week. The yield on dollar debt due in July 2017 fell 2 basis points to 8.56 percent today at 10:28 a.m. in Kiev. It plunged 40 basis points yesterday, down from 14.7 percent five weeks ago.

In his inaugural speech, Poroshenko switched between languages to address Russian speakers in their mother tongue, pledging to “preserve and strengthen Ukrainian unity and ensure lasting peace.” He said he’d steer the nation toward closer ties with the EU, create jobs and stamp out graft.
Source: Bloomberg