Ukraine to Freeze Payments in Separatist Areas
Ukraine’s prime minister said Wednesday that the government would freeze payments it had been sending to parts of eastern Ukraine even after the areas had fallen under the control of pro-Russian separatists.
The move threatens to worsen already dire conditions in the east while thrusting the economic burden of governing on the rebel leaders and on Russia, itself teetering on the edge of recession.
Arseniy P. Yatsenyuk, the prime minister, said payments totaling $2.6 billion, mostly for public sector wages and pensions, would be withheld from separatist-controlled areas of Donetsk and Luhansk Provinces.
“So long as the territories are controlled by those who appointed themselves, the government will not provide subsidies,” Mr. Yatsenyuk said
Before the war, about 4.5 million people lived in territory now controlled by separatists. It is unclear how many remain.
Russia, having a population of 143 million and already sustaining the two million people living on the annexed Crimean Peninsula, has for now made no formal commitment to do so.
A paradox of the six-month war in the east has been that Russia and Ukraine are fighting for a region reliant on subsidies. Mr. Yatsenyuk’s announcement forces Russia to confront the problem of what to do with eastern Ukraine, a rust belt of outmoded, inefficient and noncompetitive industries like coal mines, steel mills and rail car manufacturers that had survived the post-Soviet period on a patchwork of subsidies from Russia and Ukraine.
Mr. Poroshenko foreshadowed the funding cutoff and electricity squeeze at a national security council meeting Tuesday, outlining Kiev’s response to the rebel elections: “economic pressure,” tighter control of checkpoints, a suggestion that Parliament repeal a law granting greater autonomy to the separatist regions, and deployment of military reinforcements to the east.
On Wednesday, explosions near the airport rattled windows throughout the city, which is under the rebels’ control and claimed as their capital even though the airport remains under Ukrainian control. The Donetsk city hall said that two teenagers were killed and three others wounded in a school sports field near the airport that was hit by a rocket.
Source: NYT – Ukraine to Freeze Payments in Separatist Areas
