User Registration
or Cancel

Ukraine suspends talks on EU trade pact as Putin wins tug of war

A European Union summit focused on the fate of Ukraine looks likely to become a debacle after President Viktor Yanukovych ordered the suspension of preparations for a historic pact between Kiev and Brussels aimed at shifting the country out of the Kremlin's orbit.

The announcement signalled that the tug-of-war between Europe and Russia for the future of Ukraine has swung in favour of Moscow. Following talks between the Russian and Ukrainian prime ministers, a government decree abruptly suspended preparations for the signing of a trade pact and political association agreement between Ukraine and the EU at a summit next week in Lithuania.

Vladimir Putin's spokesman said Russia welcomed the move. "We welcome the desire to improve and develop trade and economic co-operation," Dmitry Peskov told reporters. He called Ukraine a "close partner" and said Russia would respect any decision it made about the EU deal.

Earlier in the day, the parliament in Kiev rejected six pieces of legislation aimed at meeting the EU's terms for integration, mainly the release of the former prime minister Yulia Tymoshenko from prison and permission for her to move to Germany.

Yanukovych's Party of the Regions did not vote on any of the six bills, condemning them to failure, amid calls of "shame", "scandal" and "treason" from the pro-European opposition, which is planning a big demonstration in Kiev this weekend in favour of Ukraine's "European option".

Yanukovych's brinkmanship came as a humiliation for Stefan Füle, the EU commissioner for enlargement, who went to Kiev for talks with the president before the vote. "I am encouraged to see the determination of the president in co-operation with all parliamentary factions to adopt key legislation on 21 November," said Füle before the fiasco in parliament.

According to reports in Kiev, Yanukovych told Füle that he was not prepared to sign the pact with the EU in Vilnius, potentially setting back by years the country's prospects of quicker integration with the EU.

At stake is a trade agreement and a political association deal stemming from 2005 when the EU launched its eastern neighbourhood policy, which offered trade and political benefits to post-Soviet states traditionally falling within Moscow's orbit. The policy falls short of offering eventual membership of the EU or negotiations to join.

Moldova and Georgia are expected to sign agreements with the EU in Vilnius. Armenia, under strong Russian pressure, has already dropped its European ambitions in favour of joining the Kremlin's Eurasian customs bloc. But of the four countries, Ukraine is the main prize because of its size, geography and history.

Putin, who appears to view the contest for Ukraine as a zero-sum game between Russia and the west, has been tightening Russia's trade screws on Ukraine and the other countries, and the Moscow media are issuing daily warnings of the bleak future facing Ukraine should it risk turning westwards.

The main terms for a breakthrough concern what the EU calls an end to "selective justice" in Ukraine, meaning that the courts and the judiciary are no longer manipulated for political and business reasons.

The touchstone for these criteria is the fate of Tymoshenko, with Germany insisting she be allowed to leave the country. Others such as France and Poland argue that the prospects for such a geostrategic shift in Russia's backyard should not be tied to the fate of a single individual.

"The future of EU-Ukraine relations remains very unclear," said Hannes Swoboda, leader of the social democrats in the European parliament, before Ukraine announced it was freezing preparations for the pact with the EU.

"The parliamentary decision raises profound doubts about how serious Ukraine's commitment to the EU really is. We deplore the pressure and blackmailing tactics that Russia has used against Ukraine and other countries. It is equally deplorable that Ukraine seems to have given in to this pressure."

Business News

BBC, ITV and Sky get green kick up the arts with new sustainability mark

Making television programmes is a curious thing. It’s a creative, dynamic and potentially volatile cocktail with any number of ingredients, consumers and critics. A production could be made in the UK or abroad, on location or in the studio, or with a crew of two or more than 200. To make matters stranger still, these decisions are often made late in the day and sometimes after the production… Read More

Lloyds plans move towards digital high-street bank

What does a digital high-street bank look like? According to Alison Brittain, who runs the 2,249-strong network for Lloyds Banking Group, it involves branches where tellers are no longer protected by huge glass screens and are instead able to walk the floor to discuss issues with customers. More self-service tills will be installed and video conferencing in the digital branch will allow customers… Read More

Ryanair faces 8.3m penalty for breaching French labour laws

Ryanair faces an €8.3m (£6.5m) penalty after losing an appeal against a ruling that it breached French labour laws by employing 127 local staff on Irish contracts. The airline was fined €200,000 and must pay €8.1m in damages to trade unions, France’s social security system and pilots among others. The airline argued that as the employees operating planes in and out of Marseille worked on Irish… Read More

Shop Directs profits double, helped by surge in sales via mobile devices

The rising popularity of shopping via mobile phones and tablet computers helped online retailer Shop Direct more than double its profits last year. The group, which owns the brand as well as Littlewoods and Isme, said underlying pre-tax profits rose to £64.6m in the year to 30 June as the company cut costs, improved management of stock, reduced fraud and saw its strongest sales rise in… Read More

Ed Balls told to take clearer line on budget deficit

Shadow cabinet members are privately expressing concern that Ed Balls needs to adopt a more clearly defined position on the budget deficit after recent statements that have left many of them confused. The debate has been given greater force by a shadow cabinet meeting a fortnight ago in which the shadow chancellor bluntly warned colleagues that even under a Labour government there would have to… Read More

Interest rates can stay low for longer, says Bank of England deputy chief

The Bank of England can afford to keep interest rates low for longer than previously thought, deputy governor Jon Cunliffe has said, in comments that will reinforce the market view that rates will remain at 0.5% until at least the middle of next year. In a speech to mark his first year on the monetary policy committee, Cunliffe echoed recent dovish remarks by his policymaking colleagues who have… Read More

Lloyds job cuts show the technology axe still swings for white collar workers

Lloyds Banking Group wants to strip out 9,000 jobs that are no longer needed. Technology is the swinging axe. It is the same across so many white collar industries, where either digital messages can replicate the processes previously carried out by a member of staff, or the person minding the computer is following a software programme that does most of work. In the case of Lloyds, the cuts come… Read More

AT&T 'baffled' by charges it misled customers over 'unlimited' data plans

The Federal Trade Commission (FTC) has charged AT&T with misleading millions of its smartphone customers, claiming the telecoms giant charged them for “unlimited” data plans while reducing their data speeds, in some cases by nearly 90%. The FTC’s federal court complaint alleges that the company failed to adequately disclose to its unlimited data customers it would “throttle” their data speeds… Read More

Facebook share price falters after warning on costs

Facebook’s surprised then disappointed investors on Tuesday, sending its shares on a seesaw ride in after-hours trading. The social media firm announced its revenues had topped $3.2bn (£2bn) in the past three months as it increased its share of the mobile advertising market. The figure was a 59% increase on the same period last year and came as the percentage of advertising it takes from mobile… Read More

This Christmas, shop tills will be jingling to the sound of dad rock

They are the bands that form the core of most dusty vinyl collections, the soundtrack to many a lost or fading youth. But this Christmas record labels are pinning many of their hopes on rock’s back catalogue to bring in sales, with forthcoming releases by everyone from the Who and Pink Floyd to Neil Young and Bruce Springsteen. As music companies begin their push for Christmas – their most… Read More

Business Broker Spain

Web Design Spain