Ukrainian Leader Ramps Up Rhetoric Amid Crimea Spat With Russia
Ukrainian Leader Ramps Up Rhetoric Amid Crimea Spat With Russia
(Bloomberg) -- Ukraine’s leader warned of a possible invasion by Russia, further fraying nerves that have been on edge since President Vladimir Putin last week accused his neighbor of engaging in “terror” tactics in the Crimean peninsula he annexed in 2014.
The situation in eastern Ukraine is deteriorating and the military may consider instituting a draft should hostilities worsen, President Petro Poroshenko said Thursday in the western city of Brody. Earlier in the day, the army said the worst spate of shelling in a year by Russian-backed separatists killed three soldiers.
“The probability of escalation of the conflict remains very significant,” Poroshenko said in a televised speech. “We don’t rule out a full-scale Russian invasion.”
Rising tensions in Ukraine are heightening concern that the nation’s two-year-old conflict, which has killed almost 10,000 people, is in danger of boiling over once again. While Ukraine rejects allegations it sent saboteurs to Crimea and caused the deaths of two Russian servicemen, Putin has vowed to respond with “very serious” measures. Efforts to bring peace to eastern Ukraine have stalled, with Putin saying planned talks at next month’s Group of 20 summit in China would be pointless after recent events in Crimea.
The yield on Ukraine’s bonds due 2019 rose 23 basis points Thursday to 8.416 percent, the highest level on a closing basis since June 29, data compiled by Bloomberg show. The hryvnia shed 0.5 percent against the dollar, while the ruble erased gains, trading little changed in Moscow.
With scant progress to implement the already-delayed peace accord signed in February 2015 in the Belarusian capital of Minsk, violence in eastern Ukraine has been building for several weeks. After the latest spat, Poroshenko put his army on combat alert and Putin deployed air-defense missiles to Crimea. Russia’s Foreign Ministry said Thursday that the Minsk pact, which both sides blame the other for shunning, is needed “more than ever.”
Poroshenko’s warning comes less than a week before Ukraine celebrates the anniversary of its independence from the Soviet Union, and with the nation struggling to restart a $17.5 billion Western-led bailout stalled as promised reforms fail to materialize. Putin, whose economy is still battling a recession and whose party faces elections in September, may be trying to gain the upper hand when discussions over Ukraine’s future resume.
“This escalation may be linked with the Kremlin’s desire to exit the current format of talks,” Serhiy Zgurets, head of the Defense Express military-research center in Kiev, said by phone. “It wants to return to direct negotiations with the U.S. to divide spheres of interest.”
The European Union, which along with the U.S. is among Ukraine’s staunchest backers, said Wednesday that Russia’s version of events in Crimean is “not credible.” The U.S. has said there’s insufficient evidence to confirm Russia’s accusations.
Putin may travel to Crimea Friday to talk with local officials and visit a summer camp for children, the Russian media group RBC reported Tuesday on its website, citing three people it didn’t identify.
Ukraine says it’s better prepared than in 2014 to repel any possible attack from its neighbor, which it alleges has been increasing deliveries of hardware to the region. The military has sufficient forces to resist a possible offensive, spokesman Oleksandr Motuzyanyk said Thursday. The army, which reported its deadliest month since last August in July, said the pro-Russian separatists it’s battling fired more than 800 artillery and mortar rounds at government positions during the past day.
--With assistance from Natasha Doff To contact the reporters on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net, Aliaksandr Kudrytski in Minsk, Belarus at akudrytski@bloomberg.net. To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net, Andrew Langley, Michael Winfrey