Ukraine PM: Russian deal helped avoid bankruptcy

Ukraine’s PM Mykola Azarov has told ministers in Kiev that the decision to suspend a deal on closer EU ties and sign a Russian aid agreement instead has helped avoid bankruptcy.

The government’s surprise U-turn on an EU association agreement last month has sparked weeks of mass demonstrations.

But Mykola Azarov said the package from Russia would provide stability.

Russia has agreed to buy $15 billion (11 billion euros) of government bonds and slash the price of gas.

Ukraine’s opposition has demanded to know what Ukraine offered Russia in return.

Thousands of pro-EU protesters have been holding rallies in Kiev – occupying the capital’s Independence Square – and other cities in western and central Ukraine.

Critics say President Viktor Yanukovych has sold out to Russia and are calling for him and his government to step down.

But Ukraine’s prime minister defended the deal with Russia in a cabinet meeting on Wednesday.

“What would have awaited Ukraine? The answer is clear – bankruptcy and social collapse,” Mykola Azarov said.

“What a present for New Year that would be for the people of Ukraine.

“The agreements between the Ukrainian and Russian presidents allow us to plan the years to come as years of development and people’s confidence about their stable lives.”

He said a pact to lower gas prices by about a third would allow for “a revival of economic growth”.

There was no way Ukraine could have signed the EU agreement as Kiev would have had to accept unfeasibly stringent IMF conditions for economic reform, he added.