'Eurasian Union': Ukraine chooses to strengthen ties with Russia and reject historic trade deal with EU

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The Ukrainian government has stunned the European Union by announcing it was stepping back from a trade deal with the bloc and would instead pursue greater ties with Russia, hours after refusing to meet EU demands to free jailed former prime minister Yulia Tymoshenko.

With eight days to go until a summit in Lithuania which was meant to mark Ukraine’s historic shift away from its former Soviet ruler and towards the West, lawmakers in Kiev rejected draft legislation which would have allowed Ms Tymoshenko to go to Germany for medical treatment.

As Stefan Fule, the EU Enlargement Commissioner, was preparing to get on a plane to Kiev to try to salvage the deal, the Ukrainian government announced it was suspending preparations for the signing ceremony in Vilnius. Instead, the country would “renew active dialogue” with Russia, which has been pressuring Kiev to join its own trading bloc and help to form a “Eurasian Union”.

The Ukrainian energy minister, Yuri Boiko, said the decision was based on the best economic interests of his country, but Sweden’s Foreign Minister, Carl Bildt, blamed Kremlin tactics. “Politics of brutal pressure evidently works,” he tweeted. Mr Fule cancelled his trip, and an EU official said they regretted the decision of the Ukrainian government.

The sudden U-turn was a serious blow to the bloc, which had been hoping to expand its influence eastwards and launch agreements on closer trade and political ties with Ukraine, Moldova, Georgia and Armenia next week.

Russia – desperate to keep the former Soviet states within its political orbit – responded with retaliatory trade measures. Moscow banned imports of some Moldovan and Georgian wines and Ukrainian chocolates. Fear of disruption of gas supplies also hung over Russia’s neighbours. Armenia was the first to bow to the pressure, announcing in August that it would instead be joining a Russian free trade area know as the Customs Union, which consists of Moscow allies Belarus and Kazakhstan.

While some polls show that the majority of Ukrainians support greater integration with the European Union, it appeared that the bloc’s condition that President Viktor Yanukovych reach a compromise which would allow his bitter political rival to go free was also a demand too far.

The former face of Ukraine’s 2004 “Orange Revolution” was jailed for seven years in 2011 for abuse of office during her stint as prime minister. The EU had made clear that it saw the sentence as “selective justice” and had been working with the Ukrainian government on a face-saving solution which would involve her being transferred to Germany.

Russia was making no such demands, and President Vladimir Putin’s spokesperson put out a statement welcoming Kiev’s “desire to improve and develop trade and economic co-operation”.

Opposition leader Arseny Yatsenyuk warned that abandoning the deal was “treason” and could be grounds for impeachment. The opposition plans a pro-European demonstration in Kiev on Sunday.