Ukraine Scraps Plan to Sign EU Deal

Ukraine on Thursday ordered the halt of preparations to sign a trade and political agreement with the European Union this month, effectively ending the chance of clinching the historic deal in the near future.

The decree issued by the government came after lawmakers again failed to agree legislation that would free jailed former prime minister Yulia Tymoshenko and was a key condition set by EU leaders for the signing of the Association Agreement.

Inking the deal with the EU at a Vilnius summit next week would have marked a break from historic master Moscow, who had warned of trade retaliation if it was signed.

The decree, issued by Prime Minister Mykola Azarov's government, ordered the "halt of the process of preparing the Association Agreement between Ukraine and the European Union."

The Association Agreement is a political and trade agreement considered the first step to eventual membership.

The decree said that the decision was taken in order to "ensure the national security of Ukraine" after taking into account the effects on trade with Russia.

It spoke of the need to "restore lost trade volumes with the Russian Federation".

Window closed for several years?

The dramatic volte-face came after the Ukrainian parliament voted earlier Thursday against legislation that would allow Tymoshenko to leave Ukraine for medical treatment in Germany.

This prompted European Enlargement Commissioner Stefan Fuele -- who just returned from a three-day mission to Ukraine on Wednesday -- to announce his return to the country later Thursday.

Government then announced its dramatic pullout from the process, in stark contradiction to comments made by Ukrainian President Viktor Yanukovych, who was in Austria on an official visit Thursday.

Speaking through a translator, Yanukovych said Ukraine "will work further on this path, this path to EU integration."

EU leaders have repeatedly warned that Ukraine may not have another chance of signing that agreement for several years, with the EU Commission due to change in 2014 and Ukraine set for presidential elections in 2015.

The opposition has accused Yanukovych of having no interest in seeing Tymoshenko released ahead of 2015 polls and deliberately trying to stymie the inking of the deal with the EU.

Putin, whose government piled huge pressure on Ukraine in the run-up to the summit, on Thursday said Moscow was not against Ukraine signing the Association Agreement.

"We are not against Ukraine's sovereign choice whatever it may be," he said, reiterating however the threat of protective measures should Ukraine join forces with Europe.

He also noted Russia was not against trilateral trade talks with Europe he said were proposed by Yanukovych.

"We are in favor but only until the decision is made (on Ukraine's EU integration)."

'Moment of truth'

Watched by special EU envoys Aleksander Kwasniewski and Pat Cox, the Ukrainian parliament rejected all six bills that had been put forward on the treatment of convicts abroad after they failed to gain the support of Yanukovych's ruling party.

The six bills failed to earn the 226 votes necessary to pass, with fewer than 200 lawmakers supporting the legislation in the 450-seat Verkhovna Rada.

Tymoshenko ally and opposition leader Arseniy Yatsenyuk called the voting "a moment of truth for Yanukovych."

"Is he ready to sign the agreement with the EU or has he been lying for the past two years to secure himself a place in 2015," he said before the vote, referring to elections.

Opposition leaders have called for a mass rally in Kiev on Sunday to protect Ukraine's European choice.

Tymoshenko was one of the co-leaders of the 2004 Orange Revolution that forced the annulment of presidential elections initially claimed by Yanukovych.

However Yanukovych bounced back to win presidential elections in 2010 and just one-and-a-half years later Tymoshenko was arrested and jailed for seven years on charges of abuse of power while in office.

Tymoshenko, who suffers back problems, is receiving treatment in a hospital outside her prison in the northeastern city of Kharkiv.