Ukraine leans closer toward Russia-led customs bloc

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Ukraine agreed on Wednesday to take a closer look at joining a customs union led by Russia after getting snubbed by the EU over its jailing of opposition leader Yulia Tymoshenko.

The sudden announcement came a day after Russia's Vladimir Putin unveiled the creation of a new free trade zone for the former communist bloc -- a major step toward his dream to group ex-Soviet nations into a so-called Eurasian Union.

Russia's current prime minister and likely future president met in his native city of Saint Petersburg with his counterpart from Ukraine as ties between Kiev and Brussels unravelled, threatening its EU membership aspirations.

The EU postponed a scheduled summit with Ukrainian President Viktor Yanukovych on Tuesday over the jailing of his top foe Tymoshenko.

Ukraine said it was joining a free trade zone for the 11 Commonwealth of Independent States (CIS) a few hours later and on Wednesday added it would take a closer look at the possible benefits of joining the Russia-led Custom Union that already groups Kazakhstan and Belarus.

"I have given an order to the economics ministry to look at the technical regulations from the point of view of us possibly joining them," Ukrainian Prime Minister Mykola Azarov said.

Putin immediately hailed the decision as "a very important step" and wished Ukraine "the best of luck." The Central Asian republic of Kyrgyzstan -- rocked by bloody ethnic riots last year -- said Wednesday it had also decided to join the customs bloc.

Azarov had earlier said it was only "a matter of days" before Moscow and Kiev resolved their disagreement over energy prices -- one of the main sticking points in their current ties.

Their rapprochement comes after Putin made a surprise announcement Tuesday that Ukraine and other ex-Soviet republics in the CIS had agreed to set up a free trade zone.

That plan would bring the former KGB agent closer to his dream of an "Eurasian Union" -- the first foreign policy initiative he offered since announcing plans to take President Dmitry Medvedev's job after March presidential polls.

Putin stressed that countries were joining the free trade zone "on their own volition" and said it "significantly changes the configuration of economic and trade relations in the post-Soviet space."

He has also backed the idea of reducing global dependence on the dollar and on Tuesday night discussed setting up ruble-denominated trade during talks with Azarov.

Ukraine had been pushing for closer EU integration until the two sides' relations stalled over the jailing of former prime minister Tymoshenko.

The EU on Tuesday postponed its meeting with Yanukovych and the CIS trade agreement was signed in Russia only hours later.

A government source in Kiev was quoted as saying Wednesday that Yanukovych was "irritated by how he was being treated in Brussels" and was now slowly starting to drift closer to Russia.

"Europe will not help us, and we need points of agreement with Russia right away," the official in Kiev told the Russian broadsheet Nezavisimaya Gazeta.

The respected Kommersant daily for its part said news of the EU cancelling Yanukovych's visit was greeted with excitement on the Russian government plane flying into Saint Petersburg on Tuesday.

"Yanukovych will not release Tymoshenko because he knows that his supporters will jump ship at that point," the daily quoted a senior Russian diplomat as saying.

"And the EU will not compromise on its principles. So, Yanukovych will come to us," the unidentified Russian official was quoted as saying.

© 2011 AFP

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