Decision day for Ukrainian President Viktor Yanukovich as he heads to the Kremlin seeking a financial lifeline while demonstrators in Kiev gather again to demand he steps down.
Vladimir Putin seems set to agree a loan deal, and possibly offer Ukraine a discount on the Russian natural gas.
It seemed he was the only game in town after an EU commissioner said the bloc was suspending talks on a trade agreement with Kiev. But yesterday, European Union foreign ministers said the door remained open, which in a way makes Yanukovich’s predicament harder.
Does Russia really need this? Politically yes, but economically? Ukraine is seeking help to cover an external funding gap of $17 billion next year and is in no position to pay for its gas.
Moscow, meanwhile, has big problems of its own having admitted its failure to diversify its economy will lead to a far lower level of growth than had been expected all the way out to 2030. Putin has conceded for the first time that Russia’s economic problems are home-grown.
Ditto for Ukraine. Will it have to hand over its best assets in return for Russian help? Only a few hundred million euros of EU money is on the table so far but we know the IMF and the World Bank are quietly watching too.