Ukraine PM warns protesters as delegation seeks financial help in Moscow

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People gather in front of the Ukrainian cabinet of ministers building during a rally to support EU integration in Kiev December 4, 2013. Reuters People gather in front of the Ukrainian cabinet of ministers building during a rally to support EU integration in Kiev December 4, 2013. Reuters
SummaryThe crisis has again exposed a tug-of-war playing out in Ukraine.

Russian natural gas and aid to close gaping external deficits that could set off a balance of payments crisis.

"You are having quite an active political season," Medvedev told Boiko drily in the meeting at his residence outside Moscow, according to Interfax news agency. "Of course this is an internal matter, but it is very important that there be stability and order in the country."

Azarov told his cabinet in Kiev that the Boiko visit would continue a dialogue with Russia on trade and economic relations that are "very critical for maintaining and developing Ukrainian industry and economy".

Russian President Vladimir Putin had threatened financial sanctions against Kiev if it signed the trade agreement with the EU last month. Yanukovich abandoned the deal at the last moment, surprising European leaders and angering his domestic critics.

Ukraine's central bank intervened again on the currency market to support the value of the national hryvnia currency, amid concerns that its stock of foreign reserves of $20 billion will be sufficient to hold the line.

The cost of insuring Ukrainian government debt for five years rose to 1,097 basis points, near-four-year highs. Levels over 1,000 basis points are indicative of financial distress.

SUSPENDED SESSION

Opposition deputies forced parliament to suspend its session, blockading the speaker's rostrum to further their demands for Yanukovich to dismiss Azarov and his team.

Pro-Europe demonstrators have set up a large encampment on Independence Square - scene of the 2004-5 "Orange Revolution" - and monitor news events from a giant television screen.

Mobile snack bars dispense soup and hot drinks. People huddle round blazing braziers set up on the street. At Kiev's city hall, which protesters have occupied since Sunday, people dozed on the floor while others passed through the revolving doors for handouts of food and warm clothing.

The challenge for the opposition now appears to be how to sustain the momentum for change and keep people on the streets as temperatures begin to drop and the harsh Ukrainian winter sets in.

Ukraine faces huge problems to finance a big current account deficit. Cheaper Russian gas would buy time for Kiev to find ways to meet outside funding needs estimated at $17 billion next year.

Despite reports that Ukraine's Naftogaz had won deferral until spring of payments of gas bills for the last three years, Gazprom chief executive Alexei Miller said Kiev owed just over $2 billion for three months of deliveries and no agreements had yet been reached on

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