Ukraine -- Yanukovych at the Table with Opposition

January 23, 2014 08:05 AM

Ukrainian President Viktor Yanukovych has agreed to engage in talks with opposition leaders in an effort to slow the escalation of violence between police and pro-E.U. demonstrators. Yanokovych raised the ire of his constituents when in November he refused to sign a much anticipated Association Agreement with the European Union. That was taken as a nod away from western-style progressivism and an affirmation of Ukraine's ties with Russia.

Demonstrators have had Kiev's Independence Square barricaded in peaceful protest since November, and the movement quieted some after the end of the holiday season, when Ukrainians had to go back to work.

But allegations of police torture and the fatal shootings of two demonstrators this week have re-ignited the fire, and even as Yanukovych declared protests illegal in Ukraine, the pro-EU movement is spreading throughout the countryside. Protesters across the sympathetic Western regions of Ukraine have stormed more than one government administration building in a number of different towns, demanding the resignation of Russo-leaning officials.

Fueling the fire is Moscow's support of the Yanukovych regime which has resulted in a $15 billion purchase of Ukrainian government bonds by Russia and a price break on natural gas. The current state is called a 'fragile truce', but demonstrators have vowed to answer violence with violence if today's talks produce no fruit toward a resolution.

If Ukraine erupts into all-out civil war, the industrial manufacturing complex could be impacted. That would mean a key swing nitrogen producer would leave a hole in the market that would threaten to elevate global UAN, urea and ammonia prices. In addition, remembering the whole mess started because the Ukrainian public supports closer ties with the European Union at the expense of ties with Russia, Moscow would likely step in as the big brother on the playground to clean house.

As Yanukovych and opposition leaders come together, the current state of the Ukrainian crisis suggests that, rather than resolution, the table may actually be set for war. A possibility neither side is willing to dismiss.



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