(Updates with comments from Carney, State Department, starting in first paragraph. For more on Ukraine, see EXT2.)
May 29 (Bloomberg) -- Pro-Russian rebels downed a military helicopter in eastern Ukraine, killing a general and 13 troops, as a spokesman for U.S. President Barack Obama blamed “outside” assistance in providing weapons.
Insurgents shot down a Mi-8 transport chopper with a shoulder-fired missile amid heavy fighting in Slovyansk, 100 miles (160 kilometers) from the Russian border, Speaker Oleksandr Turchynov told Ukraine’s parliament today. The insurgents also attacked a military base near Luhansk, according to the National Guard.
Russia demanded Ukraine halt its “fratricidal war” and withdraw troops from the mainly Russian-speaking region of the east after separatists, in other fighting, suffered the heaviest casualties of their campaign. Western countries should use their influence to stop Ukraine from “sliding into a national catastrophe,” the Foreign Ministry in Moscow said on its website.
Ukraine stepped up air patrols over Donetsk yesterday as a convoy of pro-Russian rebels moved through the eastern city with an anti-aircraft gun in tow, regrouping after dozens were killed as the government moved to retake the main airport.
Ukrainian President-elect Petro Poroshenko has vowed to wipe out the insurgents and re-establish order after winning office on May 25 with 54.7 percent of the vote. He’s faced with trying to stabilize an economy that the European Bank for Reconstruction and Development expects to shrink 7 percent this year while reclaiming swaths of territory captured by pro- Russian militias.
Sergei Glazyev, an economic adviser to Russian President Vladimir Putin, said the U.S. controls the new Ukrainian government and is seeking to use the conflict to start a “third world war.”
“This can’t be called anything but madness -- the bombing of cities, airports, escalation of unmotivated violence against their own people,” Glazyev told reporters today in the Kazakh capital Astana.
White House spokesman Jay Carney said the attack on the Ukraine chopper was evidence that outsiders were aiding the rebels.
“We are concerned that this indicates separatists continue to have access to advanced weaponry and other assistance from the outside,” Carney told reporters in Washington today.
U.S. Secretary of State John Kerry, in a phone call with Russian Foreign Minister Sergei Lavrov, raised concerns about foreign fighters crossing the border from Russia, particularly reports of involvement of Chechens. Kerry pressed Lavrov to “end all support for separatists, denounce their actions, and call on them to lay down their arms,” State Department spokeswoman Jen Psaki said.
Putin flew to Astana to sign a treaty today with his counterparts from Kazakhstan and Belarus creating a trading bloc of more than 170 million people to challenge the U.S. and the European Union. Two other former Soviet states, Kyrgyzstan and Armenia, plan to join the Eurasian Economic Union this year.
Russia has reduced the number of soldiers stationed on its border with Ukraine to about 20,000 from about 50,000, the press service of Ukraine’s border guards said yesterday. The Russian troops are leaving behind military assets, suggesting they may return, the service said, without being more specific.
The RBC news service reported that the troop withdrawal had been halted, and that a significant amount of equipment remains near border. The news service cited an unidentified person in the army’s General Staff.
“Russia’s goal was and is to keep Ukraine so unstable that we accept everything that the Russians want,” Poroshenko said in an interview with German paper Bild. “I have no doubt that Putin can end the fighting with his direct influence.”
Ukrainian forces used aviation and artillery assets to “destroy” the rebel unit that downed the helicopter today, the Interior Ministry’s National Guard unit said in a statement, without elaborating.
As the violence continues, Ukraine is reluctant to accept an EU proposal to reach a debt and price deal for natural gas from Russia and avert a threatened shutoff as soon as June 3. Russia, the world’s largest supplier of the fuel, has twice cut gas flows to Ukraine since Putin came to power in 2000, leading to shortages throughout Europe.
Under the EU plan, Ukraine’s state energy company, NAK Naftogaz Ukrainy, would pay Russian gas exporter OAO Gazprom $2 billion by May 30 and a further $500 million by June 7. That would partially cover Ukraine’s outstanding debt, which Gazprom Chief Executive Officer Alexey Miller said yesterday will reach $5.2 billion by June 7.
Ukraine’s government is “ready to clean the bill” and “pay the arrears,” Prime Minister Arseniy Yatsenyuk said in Berlin yesterday. The country is seeking a market-based price of $250-$350 per 1,000 cubic meters as a precondition, he said.
Gazprom raised the price it charges Ukraine, which relies on the Russian exporter for half of its gas, by 81 percent to $485 per 1,000 cubic meters after Kremlin-backed President Viktor Yanukovych fled the country in February.
About 15 percent of Europe’s gas supply flows from Russia through Ukraine, which is counting on $17 billion from the International Monetary Fund to avoid bankruptcy. Talks will resume in Berlin tomorrow, though a breakthrough is unlikely, according to Ukraine’s Energy Ministry.
“Russia is now our enemy,” First Deputy Minister Yuri Zyukov told reporters in Kiev. “It dictates and speaks in ultimatums we can’t accept.”
The standoff is threatening to escalate into a full-blown crisis, “undermining the sustainability of Russian gas transit to the EU through Ukraine,” Alexander Kornilov, an energy analyst at Alfa Bank in Moscow, said in an e-mailed note.
“Ukraine’s position indicates that the light at the end of the tunnel in Russia-Ukraine-EU gas discussions is still very far away,” Kornilov said.
EU leaders meeting in Brussels this week decided to put off further sanctions on Russia after Putin said he’ll work with Ukraine’s new president and pulled back some troops.
“The possibility of de-escalation is here, finally,” French President Francois Hollande told reporters after the summit ended. “But we still need this strict reminder.”
In their final statement, the leaders said the EU was working on “possible targeted measures” and agreed “to continue preparations” in case further steps are needed.
Since Putin annexed Ukraine’s southern Crimea region in March, the EU has blacklisted 83 Russian and Ukrainian officials and two companies. Obama has imposed U.S. sanctions on people close to Putin, including Glazyev, the economic adviser.
Obama plans to meet with Poroshenko during a trip to Europe next week, the U.S. leader told NPR News in an interview scheduled to air today. Obama told the radio network he expects to discuss Crimea with Poroshenko during their meeting.
Poroshenko said after his victory that government forces won’t quit until separatists are completely defeated.
“They won’t last two or three months,” the president- elect said. “They’ll last a few hours.”
--With assistance from Kateryna Choursina, Ryan Chilcote and Elizabeth Konstantinova in Kiev, Olga Tanas, Scott Rose and Elena Mazneva in Moscow, Terry Atlas and Angela Greiling Keane in Washington, Ewa Krukowska and James G. Neuger in Brussels, Ott Ummelas in Tallinn, Leon Mangasarian and Brian Parkin in Berlin and Jake Rudnitsky in Donetsk, Ukraine.