Russia, Ukraine Strike Economic Deal in Face of Protests

Despite opposition protests, Ukraine accepts Russia's economic deal.

Russian President Vladimir Putin, right, and his Ukrainian counterpart, Viktor Yanukovych, smile after signing an agreement in Moscow on Tuesday, Dec. 17, 2013.
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Despite opposition protests, Ukraine accepts Russia's economic deal.

Despite widespread protests in Ukraine, Russian President Vladimir Putin and Ukrainian President Viktor Yanukovych struck an economic deal Tuesday that would offer the politically distressed nation an economic lifeline. Russia promised to buy $15 billion in Ukrainian bonds and offer a discount price on natural gas in an attempt to win Ukraine's allegiance to Russia rather than the European Union. Though Putin said the assistance was not "tied to any conditions," the offer comes at a time when Ukraine's political atmosphere is in upheaval, with many protesting citizens upset with their government's decision to withdraw from a European Union trade deal anticipated to bring the country long-term economic stability. Ukraine's acceptance of the trade proposal would have forged closer ties between the European régime and Ukraine. Russia discouraged the Ukraine from signing the deal by offering an alternative Russian-led customs union.

[READ: Ukrainian President ‘Intends to Sign’ EU Deal After All]

In addition to the multibillion dollar bond buy, Putin said Russia would slash the price of natural gas for Ukraine from $400 per 1,000 cubic meters to $268.5, in an announcement from the Kremlin early Tuesday morning. Yanukovych and Putin deliberated over an economic arrangement encompassing Ukraine's agriculture, defense, construction, industry and transport during the talks, CNN reported.

The economic assistance Russia is offering is devised to reverse Ukraine's shift away from Russia, CNN reports. The plan is said to be mutually beneficial to both economies.

"We need to continue our joint work of our governments, our working groups," Yanukovych said in a televised news conference.

Yanukovych said he had no other choice but to sign the agreement on account of Ukraine's failing economy.

[ALSO: Ukrainian President Considers Amnesty for Protesters]

"We are ready to look at the possibility of rapprochement in economic and political spheres," Putin said.

However, Putin's offer has only added insult to injury for Ukrainian protesters who are pro-EU and hoping to push Ukraine away from the influence Russia held over it in the Soviet era.

"The shift towards Moscow and away from the EU risks stoking the protests that have gripped the country over the past month and could yet plunge Ukraine into a deeper political crisis," Neil Shearing, the chief emerging markets economist at Capital Economics in London, told USA Today.

Protesters are appalled over Yanukovych's failure to comply with the wishes of the people.

"[Yanukovych] did not communicate with us, so how can he sign documents on our behalf?" a protester occupying the central Independence Square, told CNN.

Oley Tyahnybok, one of the opposition leaders told USA Today the signing of the agreement with Putin would surrender Ukrainians "to serfdom, to eternal slavery under Moscow."

"Today Yanukovych betrayed Ukrainians," Tyahnybok said.

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