PRAGUE--Seeking to cement closer ties between Moscow and Kyiv, Russian President Dmitry Medvedev today pledged his country's support to aid Ukraine's economic recovery.
At the end of the first day of a two-day visit to Kyiv, Medvedev said Russia would use its influence as a member of the G8 and G20 "to advance all issues related to Ukraine, including International Monetary Fund and World Bank support."
Medvedev's pledge came as Ukraine is seeking to secure a $19 billion credit program with the IMF to prop up its struggling economy.
Medvedev and Ukrainian President Viktor Yanukovych also signed agreements on border demarcation, inter-bank cooperation, satellite navigation, European security, and collaboration between the two country's security services. They also agreed to build civilian aircraft together.
Warmer Realtions
Ties between Russia and Ukraine have warmed markedly since the pro-Moscow Yanukovych was elected in February, after years of frosty relations under his pro-Western predecessor, former President Viktor Yushchenko.
Speaking at a joint press conference with Yanukovych, Medvedev said relations were improving because Russia "finally got a viable Ukrainian partner." It was a clear swipe at Yushchenko and the Orange Revolution leadership that was swept from power in elections earlier this year.
"It is very important in international relations when your partner can answer for his words, when your partner is guided not by short-term political interests or political gains -- which, of course, exist in any country -- but by the strategic interests of his country's development," Medvedev said. He added, "These are the kind of partners the Russian Federation has found in the Ukrainian president and his team, his government and presidential administration."
Likewise, Yanukovych said confrontation with Russia is not in Ukraine's interests.
"Has confrontation ever been an effective policy? I don't know a country that has been able to defend its national interests by pursuing such a policy. Therefore, of course, protecting our national interests will always be a part of our policy," Yanukovych said.
Yanukovych has pleased Moscow by reversing Yushchenko's policy of seeking membership in NATO -- a goal that infuriated the Kremlin. The new president has also extended the lease of the Russian Navy's Black Sea Fleet in Ukraine's port of Sevastopol until 2042 in return for cheaper gas -- a move that angered his political opponents.
Energy Merger
The Ukrainian nationalist group, Svoboda, held a small demonstration near the city center during Medvedev's visit in protest of what it said was the sell-out of the country's sovereignty to Russia.
Despite his pro-Moscow credentials, however, Yanukovych has indicated that there are limits to the thaw. He has, for example, been cool to a proposal from Moscow for a merger between Ukraine's energy holding Naftogaz and Russia's state-controlled gas giant, Gazprom.
Yanukovych has suggested the European Union should be involved in any merger talks and has insisted that Naftogaz be an equal partner of Gazprom. "Fifty-fifty -- that would be the only way," he told journalists on May 13.
In a televised interview ahead of his visit, Medvedev appeared to back off the idea of a merger -- which was first proposed by Prime Minister Vladimir Putin -- saying "it would be probably quite difficult for our Ukrainian partners and our operations in general."
Medvedev noted that the two companies' differing values is an obvious obstacle, saying a merger "would require very accurate calculations. I will remind you that Gazprom is worth between $150 billion, at the lowest estimate, and $200 billion, at the highest estimate. Naftogaz, with all due respect, costs a little less."
Medvedev nevertheless said he favored deeper cooperation between Gazprom and Naftogaz. "If we speak about joint projects, joint ventures bringing together various gas and gas transit assets -- not through a direct merger but the unification, let's say, of individual units -- I think it is quite possible, and it is possible on a mutually-beneficial basis with due account of the wishes of the parties," he said.
Yanukovych is eager to retain control of Naftogaz's pipeline network, which serves as a conduit for 80 percent of Russian gas supplies to the EU. He says he favors the creation of a consortium involving the European Union as well as Russia to modernize Ukraine's ageing pipeline network.
All Joking Aside...
When a smiling Medvedev's flight arrived at Kyiv's Borisopol Airport in the morning, young Ukrainian women in folk dress greeted him as he stepped off his plane.
Under torrential rain, Medvedev and Yanukovych paid their respects at the Tomb of the Unknown Soldier in Kyiv's Park of Glory and attended a ceremony to victims of the Great Famine of 1932-33.
Both joked about the downpour in a joint appearance prior to their talks later in the day. Yanukovych said rain always brought money, while Medvedev took another jab at Ukraine's former pro-Western leadership.
"It's very good to start things with a clean slate -- I'm referring to some difficult pages in our relationship in recent years," the Russian president said, adding, "I hope this rain washed away everything negative that was done in the previous period."