Poll: Most Ukrainians want a unified country

[dipsydoodle]

5. The general background re. economic ties was as follows.

Russia's interest was in Ukraine becoming a member of the CIS and obviously Ukraine staying out of NATO. Russia is a close second to the US as the world's largest arms suppliers - much of that production is in east Ukraine and Putin expressed concern on that subject last year. It will take Russia 2 years to replace that production moves for which are already afoot. As a CIS member Ukraine would have had highly preferential gas supply terms as do the other members.

The EU's interest was increasing trade with Ukraine , use of Ukraine's gas tanks for storage when gas prices in the summer when prices historically have been lower and becoming a Ukraine member of NATO. The existing trade imbalance between the EU and Ukraine is c. $10billion pa. The EU's interest is in exports to Ukraine , not imports from Ukraine and hence the balance will widen. The EU does not represent a replacement market or goods previously exported to Russia. Use of the gas tanks was agreed yesterday http://www.kyivpost.com/content/ukraine/naftogaz-ukrainy-discusses-holding-reformation-pumping-to-underground-storage-facilities-with-representative-of-european-commission-346898.html I'm guessing that will be gas paid for by other EU countries and hence not open to misappropriation / non payment by Ukraine.

Joining the EU trade agreement has an adverse effect on the east of Ukraine not necessarily applicable to the west of Ukraine - easily summed up as being worsening employment levels when the markets to Russia are lost. Even the IMF has expressed concern with regard that by acknowledging that loss of those markets will considerably increase bailout costs / loan requirements.

Early days Russia suggested a triple Ukraine / EU / Russian CIS agreement. but that was dismissed.