* Arbuzov has stepped in as interim PM
* Ukraine has already received $3 billion from Russian aid
* Ukraine hit by street unrest for more than two months
By Natalia Zinets
KIEV, Jan 29 Ukraine's interim prime minister
pledged on Wednesday to work to limit damage to the economy from
more than two months of turmoil and said he expected Russia to
disburse a further $2 billion of aid "very soon".
The former Soviet republic has been gripped by mass street
unrest since President Viktor Yanukovich walked away from a
trade pact with the European Union last November, opting for
closer economic ties with Russia which has brought it a $15
billion bailout package.
With Yanukovich and loyalist deputies in parliament now
making concessions to defuse the crisis and with the resignation
of Prime Minister Mykola Azarov, there had been speculation that
Russia might slow or even halt the stream of aid.
But, following a pledge on Tuesday by Russian President
Vladimir Putin that Moscow would honour its promise to extend
$15 billion in credits and cheaper gas, Ukraine's acting prime
minister Serhiy Arbuzov expressed confidence a second tranche of
$2 billion would be released soon.
"We have already received the first tranche of $3 billion
and expect to receive the second tranche of $2 billion very
soon," said Arbuzov, chairing his first cabinet meeting as
interim premier. The Russian credits are coming on stream via
Ukrainian government-issued bonds.
Though the unrest began because of Yanukovich's U-turn on
policy towards Europe, it has since turned into a mass
demonstration, punctuated by violent clashes between radical
protesters and police, against perceived misrule and corruption
under Yanukovich's leadership.
Several hundred people camp round-the-clock on Kiev's
Independence Square and along an adjoining thoroughfare, while
more radical activists confront police lines at Dynamo football
stadium less than half a kilometre away.
Anti-Yanukovich activists have also stormed into municipal
buildings in many other cities across the sprawling country of
46 million. Hundreds of protesters in Kiev have occupied City
Hall and the main agricultural ministry building.
In a big concession to the opposition and the protest
movement, pro-Yanukovich deputies on Tuesday back-tracked and
voted to repeal a series of sweeping anti-protest laws which
they brought in hastily on Jan. 16 in response to increasingly
But opposition leaders, who include boxer-turned-politician
Vitaly Klitschko, have won a mandate from protesters on the
streets to continue to press for further gains from Yanukovich.
Opposition deputies and his loyalists at a crisis session of
parliament were locked in back-room talks on Wednesday over the
wording of a draft law under which protesters detained so far by
police would be amnestied.
The opposition also wants a return to the previous
constitution which would represent another significant
concession since it would reduce Yanukovich's powers.
Speculation that Russia might cut the financial lifeline it
has offered caused ratings agency Standard & Poors to downpeg
Ukraine to CCC+ on Tuesday.
Arbuzov said the central bank was ensuring stability on the
financial markets and he made no mention of any changes to his
predecessor's policy of keeping the hryvnia pegged close to the
dollar and maintaining subsidies for domestic gas - both
criticised by the International Monetary Fund.
Referring to concessions made on Tuesday by Yanukovich and
his loyalists in parliament, Arbuzov said: "During this search
for a compromise and solution in society, the most important
thing is to minimise the negative impact of this situation on
"We must shun aggression ... the only path is dialogue," he
said referring to talks between opposition leaders and the
The tense situation and talk by some of Yanukovich ministers
of a possible state of emergency being declared has sparked
alarm in the West and Western governments have urged Yanukovich
to take all measures to de-escalate the situation.
The EU's foreign policy chief, Catherine Ashton, was in Kiev
on Wednesday and was scheduled to meet Yanukovich and opposition
U.S. Vice President Joe Biden, in a telephone conversation
with Yanukovich on Tuesday night, welcomed concessions made so
far and encouraged him to look for more ways to compromise with
the opposition, the White House said.