KHARKIV, Ukraine: Russia and Ukraine on Wednesday announced a landmark deal to extend the lease of a Russian naval base in Crimea by 25 years in exchange for Kiev receiving a huge discount on gas imports.
The deal, announced after talks between President Viktor Yanukovych and his Russian counterpart Dmitry Medvedev, is the most substantive result yet of the warming in Kiev-Moscow ties after Yanukovych's election in February.
"The decision that has been taken is without precedent in the history of our relations," Yanukovych said after the talks in the northeastern Ukrainian city of Kharkiv, barely 50 kilometres (30 miles) from the Russian border.
The meeting saw the signing of agreements granting Ukraine a discount of around 30 percent on Russian gas imports and extending the lease of the Russian naval base for at least another quarter-century.
The Russian and Ukrainian parliaments will discuss whether to ratify the deal in simultaneous sessions next week, a Kremlin spokeswoman said Wednesday, Russian news agencies reported.
"The reading will take place simultaneously next week on Tuesday April 27," Medvedev's spokeswoman Natalya Timakova told the RIA Novosti news agency, citing an agreement reached by the two presidents.
"Russia has won again and outplayed Ukraine on gas," said analyst Volodymyr Fesenko, head of the Penta political research centre in Kiev. "The problem is the lease is very long. Ukraine will have Russian influence for a long time."
Cash-strapped Ukraine was pushing to pay less for Russian gas to help keep down its budget deficit in line with International Monetary Fund conditions for receiving the next disbursement of a crucial loan package.
Russia meanwhile has been working hard to secure the future of its Black Sea fleet base in the Crimean port of Sevastopol in southern Ukraine -- a strategic facility for Russia's military -- when the current lease expires in 2017.
"Our Ukrainian partners will receive a discount on the gas price which will amount to 100 dollars if the price (per 1,000 cubic metres) exceeds 330 dollars or if the price is lower will amount to 30 percent," Medvedev said.
Yanukovych said the gas deal would be worth 40 billion dollars to Ukraine over the next 10 years.
The gas deal was signed by the heads of the Russian and Ukrainian state gas firms, but the accord on the Black Sea fleet was personally inked by the two presidents.
"We signed an agreement which says that the period of the presence of the Russian base is extended by 25 years," said Medvedev, adding there was also the option of a further five-year extension.
"This was a step we have awaited for a long time," said Medvedev.
The clearly delighted Russian president also made clear that the two agreements on gas and the Black Sea fleet were linked.
"The gas discount will be considered as part of the rent for the presence of our military base in Sevastopol," he said.
Gas remains a hugely sensitive issue between Moscow and Kiev after a bitter row in January last year led to Russia turning off the taps to Ukraine, which in turn left many European countries short of gas.
The accords immediately aroused the ire of Ukraine's pro-Western politicians, who have repeatedly accused Yanukovych of seeking to sell out Ukrainian national interests to Moscow.
Former president Viktor Yushchenko's Our Ukraine party called for Yanukovych's impeachment.
"A president who breaches the norms of the Ukrainian constitution ... on a ban on hosting foreign military bases on Ukrainian territory, should be deposed by impeachment," the party said in a statement on its web site.
The Our Ukraine party with its allies controls 72 seats out of 450 in the Ukrainian parliament but would need a three-quarters majority to impeach the president, according to the country's constitution.
Yanukovych's defeated rival in the presidential elections, Yulia Tymoshenko, vowed to annul the agreement in the Ukrainian parliament, the Interfax-Ukraine news agency reported.
"We must show there is a threat to Ukraine's national interests, to Ukraine itself as a sovereign state," added pro-Western former parliament speaker Arseniy Yatseniuk.
Russian-Ukrainian relations plunged to a post-Soviet low under Yushchenko, Yanukovych's predecessor, whose staunchly pro-Western policies riled Moscow so much that Medvedev refused to have any dealings with him.
But the election of Yanukovych marked the defeat of the leaders of the 2004 Orange Revolution, Yushchenko and Tymoshenko, who had swept to power on promises to build a prosperous Ukraine firmly anchored in Europe and free of Russian influence.
The new president has long been seen as a strongly pro-Russia figure, but in recent months he took a number of steps which led some to conclude he was shaking off his image as a Kremlin lackey.
By: DefenseTalks
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