Ukraine extends Russia naval base lease for 25 years

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Ukraine extends Russia naval base lease for 25 years

ANYA TSUKANOVA

April 22, 2010 - 4:19AM

Russia and Ukraine on Wednesday announced a landmark deal to extend the lease of a Russian naval base in Crimea by 25 years in exchange for Kiev receiving a huge discount on gas imports.

The deal, announced after talks between President Viktor Yanukovych and his Russian counterpart Dmitry Medvedev, is the most substantive result yet of the warming in Kiev-Moscow ties after Yanukovych's election in February.

"The decision that has been taken is without precedent in the history of our relations," Yanukovych said after the talks in the northeastern Ukrainian city of Kharkiv, barely 50 kilometres (30 miles) from the Russian border.

The meeting saw the signing of agreements granting Ukraine a discount of around 30 percent on Russian gas imports and extending the lease of the Russian naval base for at least another quarter-century.

The Russian and Ukrainian parliaments will discuss whether to ratify the deal in simultaneous sessions next week, a Kremlin spokeswoman said Wednesday, Russian news agencies reported.

"The reading will take place simultaneously next week on Tuesday April 27," Medvedev's spokeswoman Natalya Timakova told the RIA Novosti news agency, citing an agreement reached by the two presidents.

"Russia has won again and outplayed Ukraine on gas," said analyst Volodymyr Fesenko, head of the Penta political research centre in Kiev.

"The problem is the lease is very long. Ukraine will have Russian influence for a long time."

Cash-strapped Ukraine was pushing to pay less for Russian gas to help keep down its budget deficit in line with International Monetary Fund conditions for receiving the next disbursement of a crucial loan package.

Russia meanwhile has been working hard to secure the future of its Black Sea fleet base in the Crimean port of Sevastopol in southern Ukraine -- a strategic facility for Russia's military -- when the current lease expires in 2017.

"Our Ukrainian partners will receive a discount on the gas price which will amount to 100 US dollars if the price (per 1,000 cubic metres) exceeds 330 US dollars or if the price is lower will amount to 30 percent," Medvedev said.

Yanukovych said the gas deal would be worth 40 billion US dollars to Ukraine over the next 10 years.

The gas deal was signed by the heads of the Russian and Ukrainian state gas firms, but the accord on the Black Sea fleet was personally inked by the two presidents.

"We signed an agreement which says that the period of the presence of the Russian base is extended by 25 years," said Medvedev, adding there was also the option of a further five-year extension.

"This was a step we have awaited for a long time," said Medvedev.
The clearly delighted Russian president also made clear that the two agreements on gas and the Black Sea fleet were linked.

"The gas discount will be considered as part of the rent for the presence of our military base in Sevastopol," he said.

Gas remains a hugely sensitive issue between Moscow and Kiev after a bitter row in January last year led to Russia turning off the taps to Ukraine, which in turn left many European countries short of gas.

The accords immediately aroused the ire of Ukraine's pro-Western politicians, who have repeatedly accused Yanukovych of seeking to sell out Ukrainian national interests to Moscow.

Former president Viktor Yushchenko's Our Ukraine party called for Yanukovych's impeachment.

"A president who breaches the norms of the Ukrainian constitution ... on a ban on hosting foreign military bases on Ukrainian territory, should be deposed by impeachment," the party said in a statement on its web site.

The Our Ukraine party with its allies controls 72 seats out of 450 in the Ukrainian parliament but would need a three-quarters majority to impeach the president, according to the country's constitution.

Yanukovych's defeated rival in the presidential elections, Yulia Tymoshenko, vowed to annul the agreement in the Ukrainian parliament, the Interfax-Ukraine news agency reported.

"We must show there is a threat to Ukraine's national interests, to Ukraine itself as a sovereign state," added pro-Western former parliament speaker Arseniy Yatseniuk.

Russian-Ukrainian relations plunged to a post-Soviet low under Yushchenko, Yanukovych's predecessor, whose staunchly pro-Western policies riled Moscow so much that Medvedev refused to have any dealings with him.

But the election of Yanukovych marked the defeat of the leaders of the 2004 Orange Revolution, Yushchenko and Tymoshenko, who had swept to power on promises to build a prosperous Ukraine firmly anchored in Europe and free of Russian influence.

The new president has long been seen as a strongly pro-Russia figure, but in recent months he took a number of steps which led some to conclude he was shaking off his image as a Kremlin lackey.

© 2010 AFP

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Ukraine extends lease for Russia's Black Sea Fleet

Deal with new President Viktor Yanukovych to cut Russian gas prices sees Ukraine tilt backs towards Moscow

Luke Harding in Moscow
guardian.co.uk, Wednesday 21 April 2010 19.04 BST



Russian President Dmitry Medvedev (left) and Ukrainian President Viktor Yanukovych shake on a deal to end long-term wrangling over gas prices in return for an extended lease for Russia's Black Sea Fleet in the Crimea. Photograph: Andrey Mosienko/AFP/Getty Images

Ukraine's president, Viktor Yanukovych, today agreed to extend the lease on Russia's naval base in the Crimea, in the most explicit sign yet of his new administration's tilt towards Moscow.

Yanukovych said the lease on Russia's Black Sea fleet that was due to expire in 2017 will be prolonged for 25 years, until 2042 at least. His announcement follows a meeting with Russia's president Dmitry Medvedev in Kharkiv, in eastern Ukraine. In return, Medvedev said Russia would offer Ukraine a discount on its gas bills: he said Moscow would slash the price Kiev pays for 1,000 cubic metres of Siberian gas by $100 (£65) from its current rate of $330, with a 30% discount if the price falls.

The deal is the most concrete sign yet that Ukraine is now back under Russia's influence following Yanukovych's victory in February's presidential elections. It appears to mark the final nail in the coffin of the Orange Revolution of 2004.

Yanukovych's predecessor, Viktor Yushchenko, had vowed to eject Russia's Black Sea fleet from the port of Sevastopol, arguing that its presence was an affront to Ukraine's sovereignty and a destabilising factor in Crimea, a majority ethnic Russian region with a strong pro-Soviet mood.

Today, Ukrainian officials insisted Ukraine still plans to join the EU, and to integrate with transatlantic institutions. "We want to move towards the west. But the best way of doing this is to get gas from the east," a foreign ministry spokesman said. "The Black Sea fleet isn't any threat to Ukraine's independence."

The agreement is a boost for Yanukovych as he tries to lever Ukraine's economy out of severe recession, and to clinch a $12bn bailout loan from the IMF. Russia currently pays $90m per year for the base. It was not clear if the rent has now gone up. But the lease extension is likely to increase opposition to Yanukovych in Ukraine's western provinces.

Ukraine's split between the Russian-speaking east and Ukrainian-speaking west also is predominantly a political division, and leaders have always been forced to play a delicate balancing act for fear of upsetting either camp.

Russian gas company Gazprom said in a statement today that it has lifted all penalties for the failure to buy as much gas as contracted and said that the discounts for Ukraine "will not harm Gazprom's financials."

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Moscow, Kiev agree on gas-for-fleet trade-off


© RIA Novosti.

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22:5721/04/2010

In a dramatic sign of improving ties, Moscow and Kiev on Wednesday agreed to extend the lease on a Russian naval base in the Crimea in exchange for a 30% cut in gas prices for Ukraine.

The documents were signed following negotiations between Russian President Dmitry Medvedev and his Ukrainian counterpart Viktor Yanukovych.

The lease agreement extends Russian naval presence in the port of Sevastopol for 25 years after the current lease expires in 2017, and may be further extended by another five years.

Medvedev stressed the importance of the base as key to regional security and vowed assistance in developing Sevastopol's socio-economic infrastructure in an effort to promote public relations and improve the Russian Navy's image.

"I will instruct the defense minister and the Black Sea Fleet commander to draft an agreement on the participation of our base in the socio-economic development of Sevastopol," Medvedev said.

Yanukovych has pledged to move Ukraine away from the pro-Western stance of former President Viktor Yushchenko, who vowed that Russia would have to look for a new main base for its Black Sea Fleet once the current deal expires in 2017.

The Ukrainian opposition, however, earlier said any prolongation of Russian military presence would require amendments to the Constitution as well as a national referendum.

Yushchenko's party said Yanukovych should be impeached for signing an agreement extending Russian naval presence in the Crimea because it contradicts the Ukrainian Constitution.

"A president, who has violated the norms of the Ukrainian Constitution...should be impeached," a statement published by Yushchenko's Our Ukraine party said on Wednesday.

Mykola Tomenko, deputy speaker of parliament and a leader of the Yulia Tymoshenko Bloc (YTB), said last Wednesday Article 17 of the Constitution forbids foreign military bases on Ukrainian soil.

Tymoshenko said on Wednesday that her political bloc would try to initiate an extraordinary parliamentary session on Saturday. The Signatures of 150 parliament members are needed to start an extraordinary session.

"I want to draw attention to the fact that an article of the Ukrainian Constitution strictly forbids the creation and operation of any [foreign] military bases on Ukrainian territory not envisaged by law," she said.

In other developments, Boris Gryzlov, the speaker for the Russian parliament's lower house, the State Duma, said that the agreement on the Naval base might be simultaneously ratified by the Russian and Ukrainian parliaments next Tuesday.

He said that considering the importance of the issue, he immediately spoke with his Ukrainian counterpart Volodymyr Lytvyn.

"We have agreed that the Russian and Ukrainian members of parliament will use all efforts to ratify the agreement simultaneously. I believe that it might be on Tuesday. As for us [Russia] we are ready to consider this issue at tomorrow's session of the State Duma," Gryzlov said.

NATO spokesman James Apparthurai said Russia and Ukraine are both partners of the Western military alliance and the signing of the agreement on the base is an affair of bilateral nature.

On gas, Ukraine will get a discount of $100 per 1,000 cu m on the price of $330 and a 30% discount on other prices.

"Discounts for Ukraine will come into effect from April this year," Yanukovych said.

The discount will apply to 30 billion cubic meters of Russian natural gas to be supplied to Ukraine in 2010 and 40 billion cubic meters in subsequent years.

Yanukovych, who was inaugurated in February, vowed during his campaign to improve relations with Russia and renegotiate the January 2009 deal on gas supplies, which increased the price Ukraine paid for Russian gas, straining the country's troubled finances.

Ukraine asked Russia to lower the gas price to $250 or at least $260 per 1,000 cu m, Russian business papers reported on Monday.

The ex-Soviet republic currently purchases Russian natural gas at the average annual price of $337 per 1,000 cu m.

The gas price equaled $305 per 1,000 cu m in the first quarter, and increased to $330 per 1,000 cu m in the second quarter of this year.

KHARKOV/MOSCOW, April 21 (RIA Novosti)

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Ukraine and Russia Agree on Base


Vladimir Rodionov/Presidential Press Service
President Dmitry A. Medvedev of Russia, left, and President Viktor F.

Yanukovych of Ukraine at a news conference in Kharkiv, Ukraine, on Wednesday.

By CLIFFORD J. LEVY

Published: April 21, 2010

MOSCOW — Swiftly carrying out his pledge to improve strained ties with neighboring Russia, the new Ukrainian president agreed to a landmark deal on Wednesday to extend the lease on a Russian naval base on Ukrainian territory.

The decision by the Ukrainian president, Viktor F. Yanukovich, represented a sharp reversal in policy and a victory for the Kremlin, which had feared that its military readiness would be undermined if the base were closed.

“We have opened a new page in relations,” Mr. Yanukovich said at a news conference in Kharkiv, in Russian-speaking eastern Ukraine, where the agreement was signed.

But the lease extension drew criticism from Ukrainian opposition leaders, who view the facility as a symbol of Russian interference in Ukrainian affairs and want their country to have a closer alliance with the West.

The base is located on the Crimean Peninsula on the Black Sea, a place of historic resonance for Russia, which has headquartered its fleet there since czarist times. Mr. Yanukovich’s predecessor, Viktor A. Yushchenko, who left office in February, was hostile to the Kremlin and had vowed that the lease would not be renewed after it expired in 2017.

The accord reached on Wednesday, which Mr. Yanukovich negotiated with Russia’s president, Dmitri A. Medvedev, will add 25 years to the lease on the base, which is in the city of Sevastopol. In return, Russia said it would cut the price of natural gas that it sells to Ukraine by roughly 30 percent, helping to bolster Ukraine’s shaky finances.

Ukraine has been under pressure from the International Monetary Fund to reduce subsidies to domestic gas consumers to pare its budget and qualify for a bailout package. To raise money, Mr. Yanukovich had considered selling part of Ukraine’s gas pipeline network to Russia, but he appears to have shelved that idea.

Russia has been paying roughly $100 million a year in rent on the base for its Black Sea Fleet, but it was not immediately clear from the announcement on Wednesday whether that price would change.

Mr. Yanukovich has long had a strong rapport with the Kremlin, and during the presidential campaign declared that Mr. Yushchenko had recklessly alienated Moscow by seeking NATO membership for Ukraine and putting pressure on the Russian military over the fate of the Crimea naval base.

Mr. Yanukovich has said Ukraine should not join any military pacts and should instead act as a bridge between Russia and the West.
The meeting on Wednesday reflected how the formerly icy relations between Kiev and Moscow have changed under Mr. Yanukovich. Mr. Medvedev flew to Ukraine for the talks, having all but boycotted Mr. Yushchenko toward the end of his tenure.

“People in Ukraine and in Russia want us to build warm, neighborly, traditional relations, which have always led our nations to success,” Mr. Yanukovich said.

The agreement on the naval base and gas supplies is expected to calm tensions that flared in recent years and had ramifications across Europe. Disputes over gas pricing grew so acrimonious that supplies of Russian gas that were supposed to be transported through Ukraine to Europe were halted in winter, leaving homes without heat.

Residents of Crimea hailed the base agreement as well, pleased that it promised to solidify the Russian presence there. The peninsula was once part of Russia, but was transferred to Ukraine in 1954 when both were part of the Soviet Union. The local population is more loyal to Moscow than Kiev, and under Mr. Yushchenko Crimea was seen as a potential flashpoint for a military conflict between the two countries.

By contrast, opposition parties in Kiev and the Western parts of the country said the lease extension was a betrayal of Ukrainian sovereignty.

Arseniy Yatsenyuk, a former Ukrainian foreign minister, said Mr. Yanukovich had no right under Ukraine’s Constitution to extend the lease. “For now, it’s just paper,” Mr. Yatsenyuk said of the deal. “The fact of its signing has no legal significance.”

The Russian side, though, seemed relieved to have a friend in the Ukrainian president. After the meeting, Mr. Medvedev and Mr. Yanukovich strolled together through the civic center in Kharkiv and greeted passersby.

“I haven’t been a guest here for a long time,” Mr. Medvedev told them. “It’s nice that it has taken place at last. We have just signed documents that are very important for both Ukraine and Russia. They will strengthen our friendship and our brotherhood for a long time to come.”