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Putin with president of Ukraine Viktor Yanukovych
Putin with president of Ukraine Viktor Yanukovych
Andrei Kolesnikov

MOSCOW - As they met in the Green Room at the Kremlin, Vladimir Putin and Viktor Yanukovych were sitting comfortably in armchairs, sharing each other's worries about the drop in trade between their countries.

Now, the Russian and Ukranian presidents told each other, is the time for decisive action, time to open up a new free-trade zone. But while protests back in Kiev were clamoring for just such an accord between Ukraine and the European Union, the conversation in Moscow didn't include even a passing mention, no matter how remote, of the European Union.

The meeting was, as Putin said, planned ahead of time, and the partners met face-to-face to discuss the details of the two countries’ bilateral partnership. In other words, they wanted to make it clear: the European Union is not on their minds at all, they are only thinking about Ukrainian-Russian joint projects. They talked about metallurgy, shipbuilding and machinery.

As Putin and Yanukovych talked, their delegations - which seemed to include just about every cabinet minister from both countries - waited outside. Not a single Ukrainian minister approached a Russian minister to chat. That is unusual - it used to be that they always mingled because Ukrainian and Russian minister tend to have a lot of common acquaintances.

Despite the number of participants, the full-delegation discussions lasted only 15 minutes. Everything had already been decided. According to Kommersant’s sources, the private meeting between Putin and Yanukovych on Tuesday was just a formality the agreement was sealed during their meeting in Sochi earlier this month.

At that time, Yanukovych was talking about establishing a road map for reducing barriers to trade between Russia and Ukraine. There was a feeling that the only reason they weren’t saying “Customs Union” was out of superstition - so as not to jinx the process.

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Ukranian demonstrators direct a hose at riot police outside Kiev City Hall on Dec. 11, 2013 — Photo: David Conway

Victory for both? Impossible

Before Putin and Yanukovych held their press conference in Sochi, the heads of Gazprom and Naftogaz were already busy amending the 2009 agreement between Russia and Ukraine on the sale of gas - the agreement that Yulia Tymoshenko is doing prison time for having negotiated. It was immediately clear that the price of gas for Ukraine would change.

It turned out that the change would be major indeed. Last year, Ukraine got a discount on gas worth $10 billion, and now the discounts in 2014 will be even bigger.

“We consider this a temporary decision,” Putin announced during the meeting Tuesday. “We also need to make a long-term agreement.” He then went on to announce that Russia would be giving Ukraine $15 billion - although that money appears to be a loan.

Applause broke out in the room after Putin’s announcement, from all of the Ukrainian delegation as well a couple of the Ukrainian journalists. “There are no strings attached,” added the Russian President. “I want to calm everyone down: We did not even discuss the issue of whether or not Ukraine would join the Customs Union."

Some might say that it would have been more important to discuss Ukraine not joining the EU.

Russia is paying a high price for Ukraine’s loyalty, and the loyalty it is buying might be temporary. When I spoke to the Ukrainian Minister of Energy, he clarified that the agreement was only good for 2014. I asked if he considered this a victory.

“Of course!” he said.

I asked a member of the Russian delegation the same question.

“Of course. What else could it be? They’re ours now.”

Unfortunately, when both sides of a negotiation think that they have won, it usually turns out that they both lost.

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