Ukraine to extend Russia naval base lease, pay less for natural gas

Russian President Dmitry Medvedev, left, and Ukrainian President Viktor Yanukovych at a news conference in Kharkiv, Ukraine.
Russian President Dmitry Medvedev, left, and Ukrainian President Viktor Yanukovych at a news conference in Kharkiv, Ukraine. (Vladimir Rodionov/associated Press)
By Philip P. Pan
Washington Post Foreign Service
Thursday, April 22, 2010

MOSCOW -- Ukraine's new president signed a deal Wednesday that allows Russia's Black Sea Fleet to stay in the country another 25 years, moving to ease a long-standing source of tension and giving Moscow its second foreign policy victory in the former Soviet Union this month.

Viktor Yanukovych and his Russian counterpart, Dmitry Medvedev, announced the breakthrough after a hastily scheduled summit in Kharkiv, Ukraine, saying that Ukraine will extend the lease on the Russian naval base in Sevastopol to 2042 in exchange for a steep discount on purchases of Russian natural gas.

"These issues are directly and unequivocally combined in the agreement," Medvedev said, describing the pact as "one of the first projects on the path of restoring good, neighborly relations between our countries."

Yanukovych's decision reverses the policy of his predecessor, who had vowed to expel the Russian fleet in 2017, when its current lease expires, and is the strongest sign yet that he will bring Ukraine closer to Russia after a five-year tilt toward the West.

Speaking by phone from Kiev, a senior Ukrainian diplomat sought to address any concerns in Washington about the move.

"We would like to assure our partners in the United States and other Western countries that the prolongation of the stay of the Black Sea Fleet on Ukrainian soil doesn't pose any threat to Ukraine's sovereignty, its independence or its European integration course," said Oleh Voloshin, director of information policy in the Foreign Ministry.

But the opposition in Ukraine denounced the deal as an act of treason and began mobilizing to defeat it. A parliamentary majority must ratify the pact, and the vote, scheduled for Tuesday, will be the first major test of Yanukovych's ruling coalition.

"The authorities have surrendered strategic national interests in order to get cheaper gas," said Boris Tarasyuk, an opposition party leader.

Speaking at a ceremony with Medvedev, Yanukovych said the discount in gas prices would boost Ukraine's fragile economy as his government drafts a budget and presses the International Monetary Fund to release $12 billion in emergency aid.

"The spoon is dear when lunchtime is near," he said, according to the Interfax news agency, adding that the discount would amount to $40 billion in much-needed funds over the next decade. He defended the Russian fleet as "a guarantor of security" in the Black Sea.

Other Ukrainian officials described the deal as an effort to undo the contract negotiated with Russia last year after a price dispute led the Kremlin to suspend gas supplies to much of Europe. In ending that standoff, Ukraine agreed to pay much more for gas.

"We are ceding part of our interests to Russia in order to get rid of this burden," said one senior official, speaking on the condition of anonymity to discuss the talks. The official said the deal would allow Ukraine to buy gas at a discount of about 30 percent until 2019.

The deal comes two weeks after protesters toppled the president of Kyrgyzstan, whom Russian officials had sought to punish for breaking a promise to close a U.S. air base.

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