Ukraine suspends talks with EU on landmark agreement

Ukraine has suspended negotiations with the European Union on a landmark political and trade agreement, dashing hopes that an association agreement between Europe and the former Soviet state will be signed at next week's Eastern Partnership summit in Vilnius.

Confirmation by the Ukrainian government that it would halt negotiations and renew "active dialogue" with Russia, followed Parliament's rejection earlier in the day of legislation that would have permitted jailed Opposition leader Yulia Tymoshenko to leave the country for medical treatment, a key demand of EU negotiators.

MPs voted against six drafts of the Bill which all fell short of the 226 votes needed. The parliamentary leader of Tymoshenko's opposition party Fatherland blamed President Viktor Yanukovych for the outcome, holding him personally responsible for "blocking Ukraine's movement towards the European Union."

Mr Yanukovych said the decision to halt talks was a matter of “national security” adding that the country would pursue the possibility of three-way trade discussions between Ukraine, the European Union and Russia.

A spokesman for Russian president Vladimir Putin said Russia "welcomed the desire to improve and develop trade and economic cooperation," adding that Ukraine was a "close partner."

EU foreign affairs chief Catherine Ashton said Ukraine's decision was a disappointment not just for the EU but for the people of Ukraine. Describing the agreement as a "unique opportunity" the association agreement with Ukraine was "one of the most ambitious agreements the EU had ever offered to a partner country", she said.

[It] would have further enhanced the reform course of Ukraine and sent a clear signal to investors worldwide as well as to international financial institutions that Ukraine is serious about its modernisation pledge and becoming a predictable and reliable interlocutor for international markets.”

The fate of Ms Tymoshenko, a longstanding political rival of President Yankovych, has emerged as the key battle ground between Brussels and Kiev over the last few weeks as negotiations have intensified ahead of next week's Eastern Partnership Summit, though the European Union had also demanded changes to Ukraine's parliamentary and courts system.

Ukraine’s decision to withdraw from the talks is largely seen as a response to pressure from Russia who had warned of sanctions should Ukraine intensify relations with the European Union. While the association agreement would have deepened Ukraine’s access to the European market, fears about the impact of a deal on the country’s political and economic relationship with Russia- still its largest single trading partner - weighed on the decision.

An agreement with Ukraine at next week's Eastern Partnership Summit in Vilnius is now seen as unlikely. "I am not very optimistic, I will not deny it. But it is not the end of the game," Linas Linkevicius, the foreign minister of Lithuania which currently holds the presidency of the Council of the European Union said yesterday.

EU Commissioner Stefan Fuele who had been expected to fly to Kiev today for the second time this week, did not travel to Ukraine this evening.

British foreign secretary William Hague said Ukraine's decision to suspend talks was "a missed opportunity," but stressed that "the door remains open" and the signature "in Ukraine's hands."

Ukraine is the largest of the six countries that make up the 'Eastern Partnership' group of countries nestled between the European Union's eastern border and Russia. While the signing of an association agreement with Ukraine was the corner stone of next week's summit, Moldova and Georgia are expected to "initial" an agreement - an early stage in the process of developing ties. Earlier this year, Armenia withdrew from negotiations with Europe, instead pledging allegiance to a Russian-led customs union.