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Ukraine PM says $15 bln Russian aid will revive economic growth

Protesters voiced their anger over the 'sell out' to Russia

Ukraine’s Prime Minister Mykola Azarov on Wednesday described a $15 billion aid package from Russia as a historic deal to allow the ex-Soviet republic return to economic growth, as protesters in Kiev voiced anger over a “sell-out” to Moscow.

Ukraine’s President Viktor Yanukovich and Russia’s Vladimir Putin announced the bailout for Kiev on Tuesday after talks in Moscow. The deal also includes lowering the price for Russian gas deliveries to Ukraine pays by about a third.

“The head of state managed to agree lower gas prices as of January 1st and until the contract ends,” Azarov told his government, referring to a ten-year gas contract that expires in January 2019. “This allows a revival of economic growth.”

“Yesterday, a historic development occurred.

“The president reached agreement on exceptionally beneficial conditions for crediting Ukraine’s economy, which allows us to carry out wide-ranging plans for economic modernisation,” Azarov said.

Bids on Ukraine’s national hryvnia currency briefly rose 0.5 percent in early Wednesday trade to 8.25 against the U.S. dollar – versus 8.29 per unit on Tuesday close – before easing back to 8.28.

Azarov also said he would propose lowering corporate tax in 2014 by one percentage point from the current level of 19 percent as well as continue raising social spending.

The deal clinched with Moscow, Kiev’s Soviet-era overlord, gives the Ukrainian government and Yanukovich some immediate breathing space in handling the troubled economy.

But it infuriated protesters who have been camping out in Kiev’s main square for four weeks now, demanding the president resign after his last-minute U-turn away from a trade deal with the European Union and towards closer ties with Moscow.

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