Ukraine signs EU trade pact as Russia finalizes Crimea annexation

Posted at 5:47 AM, Mar 21, 2014
and last updated 2014-03-21 07:47:01-04

By Laura Smith-Spark, Nina Dos Santos and Frederik Pleitgen

BRUSSELS, Belgium (CNN) — Ukrainian Prime Minister Arseniy Yatsenyuk signed the political elements of a trade pact with the European Union on Friday, even as Russian lawmakers finalized the annexation of Ukraine’s Crimea region.

“Political provisions of EU-Ukraine Association Agreement now signed,” European Council President Herman Van Rompuy posted on his official Twitter account.

The signature of the deal in Brussels, Belgium, signals Europe’s solidarity with Ukraine — and has additional symbolic force because it was the decision of ousted Ukrainian President Victor Yanukovych in November to ditch it in favor of closer ties with Russia that triggered the protests that spiraled into the current crisis.

It comes a day after the European Union and the United States slapped sanctions on Russian lawmakers and businessmen. Russia responded with its own list of sanctions against U.S. lawmakers and officials.

In another sign of defiance, Russia’s upper house of parliament unanimously approved the ratification of a treaty Friday that formally joins the Crimea region to Russia.

Russia’s lower house of parliament, the State Duma, had overwhelmingly passed the treaty Thursday.

Russia’s moves to annex Crimea, following a contested weekend referendum in the Black Sea peninsula, have turned a confrontation with Europe and the United States into the biggest crisis in East-West relations since the Cold War.

Yatsenyuk: EU speaking in one voice

Russia has doggedly pursued its own course despite Western leaders denouncing its actions as a violation of Ukraine’s sovereignty and a breach of international law.

While Russia insists its actions are legitimate, Ukraine’s interim government has said Kiev will never stop fighting for Crimea.

Yatsenyuk will hold trilateral talks with Van Rompuy and European Commission chief Jose Manuel Barroso while in Brussels.

He told reporters that Russia’s ratification of the treaty annexing Crimea is less important than the EU trade pact he has signed with EU leaders.

“Frankly speaking, I don’t care about Russia signing this deal, I care about Ukraine, Ukrainians and our European future. This deal covers more existential and most important issues, mainly security and defense cooperation.”

He said the European Union would “speak in one single and strong voice” to protect its values and defend Ukraine’s territorial integrity.

Van Rompuy, speaking ahead of the signature of the deal, said it “shows our steadfast support for the course the people of Ukraine have courageously pursued.”

He said the European Union expected soon to complete the signature of the remaining parts of the deal, particularly the economic provisions.

Yatsenyuk is also expected to meet with U.N. Secretary General Ban Ki-moon on Friday in Kiev, a day after the U.N. chief traveled to Moscow to speak with Russian President Vladimir Putin.

Putin’s inner circle

The new U.S. sanctions announced Thursday target 20 people seen as close to Putin, as well as a bank, Rossiya, believed to serve the President and senior Russian officials.

The individuals named by the U.S. Treasury include major Putin allies, both in the Kremlin and in business. Among the 16 government officials listed are Putin’s chief of staff, Sergei Ivanov; the speaker of the State Duma, Sergey Naryshkin; and Viktor Ozerov, chairman of the Security and Defense Committee of the Russia parliament’s upper house.

Four others were named as members of the government’s inner circle. They are financier Yuri Kovalchuk, labeled Putin’s personal banker by a senior U.S. administration official; magnate Gennady Timchenko, whose activities in the energy sector have been directly linked to Putin, according to the Treasury; and businessmen Arkady and Boris Rotenberg.

U.S. President Barack Obama also signed a new executive order that authorizes possible further sanctions on what he called “key sectors” of the Russian economy if Moscow does not act to deescalate the situation.

Hours later, EU leaders also slapped 12 more people with sanctions. They include Russian Deputy Prime Minister Dmitry Rogozin, as well as the chairwoman of the Russian upper house, Valentina Matvienko, and two Putin advisers, CNN has learned.

EU member states also are threatening possible tougher targeted measures, Van Rompuy told reporters.

“We strongly condemn the unconstitutional referendum in Crimea. We will not recognize the annexation, nor will recognize it in the future,” he said. “There is no place for the use of force and coercion to change borders on the European continent in the 21st century.”

Sanctions impact Russian markets

Washington had already announced sanctions Monday on 11 individuals over the crisis in Crimea, while the European Union had imposed travel bans and asset freezes on 21 people.

Swedish Foreign Minister Carl Bildt told CNN’s Christiane Amanpour that the new round of U.S. sanctions would be “significantly more powerful than the first one.”

The latest round “hits significant economic interests that are fairly close to the ruling circles in Moscow. It will be noticed,” he said.

Markets were down Friday morning in Moscow, amid a climate of uncertainty in the business community after the sanctions. The ruble was also down in comparison with the dollar and the euro.

By contrast, the markets and ruble rose Monday when the first round of sanctions was announced and did not appear to target those in Putin’s inner circle.

The business community now appears to fear that Putin is on a collision course with the West, which could undermine its interests.

Russia’s Foreign Ministry said Friday it had asked Putin to draft some countermeasures in response to the expanded Western sanctions.

On Thursday, Moscow imposed measures against nine U.S. officials and lawmakers, including House Speaker John Boehner, Senate Majority Leader Harry Reid and Sens. John McCain, Robert Menendez, Daniel Coats and Mary Landrieu, according to a list published by the Russian Foreign Ministry.

CNN’s Frederik Pleitgen reported from Moscow and Nina Dos Santos from Brussels, while Laura Smith-Spark wrote and reported from London. CNN’s Alexander Felton and Marie-Louise Gumuchian contributed to this report.

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