U.S. Presses Ukraine to Hold Vote as Russian Seeks Delay

Arm and Torso of Person in Brown Sweater Placing Paper Ballot into Ballot Box

(Bloomberg – bloomberg.com – May 7, 2014 – Daryna Krasnolutska, Terry Atlas and Ilya Arkhipov) The U.S. and its European allies urged Ukraine to proceed with its May 25 presidential election, rejecting Russia’s calls to postpone the vote as an offensive against separatists in the country’s east and south continued.

Russia hasn’t lived up to its commitments in an accord signed in Geneva last month aimed at calming the crisis, European Union President Herman Van Rompuy said today. He echoed comments from U.S. Secretary of State John Kerry yesterday that the U.S. was poised to deepen sanctions against its former Cold War foe “if Russian elements continue to sabotage the democratic process.”

“The immediate goal is to support free and fair presidential elections,” Van Rompuy said at a news conference in Brussels. “We agreed in the European Council that further steps by Russia to destabilize the situation in Ukraine would lead to additional, far-reaching consequences.”

In their worst standoff with Russia since the fall of the Iron Curtain, the U.S. and EU states have joined Ukraine’s government in accusing President Vladimir Putin of fomenting unrest in eastern Ukraine after his government annexed Crimea in March. They’ve slapped sanctions on people and companies close to Putin and are threatening to widen the scope to entire industries, potentially including banking, energy, and defense.

Van Rompuy and Kerry spoke after Russian Foreign Minister Sergei Lavrov said that it would be “more logical and fair” for Ukraine to amend its constitution in the autumn and then hold elections by year-end.

Secession Referendum

Russia is pushing for Ukraine to devolve more power to its regions and give official status to the Russian language. About 17 percent of the country’s 45 million people identified themselves as Russian in a 2001 census.

Rebels in the eastern Donetsk region, the focus of the government’s anti-separatist operation, want to hold a referendum on whether or not to declare independence from Ukraine on May 11.

The region’s official Kiev-backed government opposes the vote, which would resemble one held in Crimea before its annexation, while the pro-Russian organizers don’t have access to the electoral register.

Ukrainian Offensive

Russia’s Micex Index (INDEXCF) of stocks rose 1.8 percent at 3:51 p.m. in Moscow. The ruble gained 0.1 percent against the central bank’s euro-dollar basket. It has lost about 7 percent this year against the dollar, the third-biggest drop among 24 emerging market currencies tracked by Bloomberg.

Ukraine received a first $3.2 billion tranche of a $17 billion International Monetary Fund bailout yesterday, the central bank’s media service said by phone. It can use the funds to repay gas debt to Russia, the Washingto n-based lender’s head of office in Kiev, Jerome Vacher, said today. The yield on the government’s dollar bonds due in April 2023 fell six basis points to 10.58 percent at 1:52 p.m. in Kiev.

Ukraine has limited the operations of 17 banks that are helping finance the unrest, Valentyn Nalyvaychenko, the head of the SBU security service, told reporters today in Kiev.

Ukrainian government troops began an assault against pro-Russian rebels in the Donetsk region on April 13 to retake buildings seized by gunmen who have taken dozens of captives.

Sabotage, Terrorism

About 30 rebels died in fighting two days ago, he said, while the SBU security service said 14 Ukrainian soldiers had died and 66 were injured, news service Interfax reported.

“Ukraine is meeting a new type of war that combines sabotage, terrorism, an information war and criminal actions,” Vasyl Krutov, the head of the country’s Anti-Terrorist Center, told reporters in Kiev. R ussia’s intelligence service is playing the main role in Ukraine’s unrest, he said.

In the town of Slovyansk, the site of some of the worst fighting, separatists control the main roads into the city and are threatening to blow up government buildings that they’ve seized, the Defense Ministry said in a statement on its website.

“People are scared, schools, kindergartens, and shops are closed,” the ministry said.

Russia has about 40,000 troops along the Ukrainian border, according to the North Atlantic Treaty Organization. Less than 60 kilometers (37 miles) from the frontier in Mariupol, a city of 464,000 people, police freed the city council and captured some separatists, the Interior Ministry said in a statement on its website.

‘Pure Fascism’

Armed men in the Luhansk region abducted two members of the local election committee, telling them to resign, according to Alexei Svetikov, head of the Luhansk office of the non-governmental Ukrainian Voters’ Committee. The separatists, who later released the hostages, said they’re seeking to prevent the May 25 presidential vote from going ahead, Svetikov said by phone.

The ministry also asked the country’s football federation to relocate games scheduled in Donetsk, Luhansk, Kharkiv and Odessa, it said. A clash between fans and pro-separatist activists in Odessa killed 46 people on May 2 when a building sheltering Russian sympathizers was engulfed in flames.

Russian Foreign Minister Sergei Lavrov condemned the deaths as “pure Fascism” and accused Ukrainian authorities of trying to obscure facts about the violence by closing the investigation to the public, according to a statement on his ministry’s website today.

Election Advisers

In response to a request this week from Ukrainian Prime Minister Arseniy Yatsenyuk, the U.S. plans to send advisers with experience in conducting elections in conflict areas, such as Iraq and Afghani stan, Victoria Nuland, the State Department’s assistant secretary for European and Eurasian affairs, told the Senate Foreign Relations Committee yesterday.

While President Barack Obama’s administration has blocked access to markets for 45 individuals and 19 entities, including OAO Rosneft (ROSN) Chief Executive Officer Igor Sechin, it has yet to target the financial, energy or mining industries. The U.S. is negotiating with EU officials on a third round of penalties, two Treasury Department officials told Congress yesterday.

“It’s moving forward in a way that should worry Russia in the long term,” U.K. Foreign Secretary William Hague said today on BBC Radio 4’s Today program. He added that EU states wanted to reach an agreement to defuse the crisis.

“But that requires a willingness to reach an accommodation on the other side. Russia took not a single action, not one action, that we can identify to support that agreement.”[re turn to Contents]

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Map of Ukraine, Including Crimea, and Neighbors, Including Russia

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