Ukraine Receives First Tranche of Russian Bailout

MOSCOW —  Russia told Ukraine on Tuesday it had transferred the first $3 billion tranche of a $15 billion bailout, part of plans to keep Kyiv firmly within Moscow's orbit and out of the European Union's embrace.

President Vladimir Putin offered Ukraine the lifeline last week, along with a big cut in the price Kiev pays for vital Russian gas supplies, as he tries to persuade Russia's Slavic neighbor to join a customs union of ex-Soviet republics.

“Yesterday... the first tranche of Ukrainian sovereign debt was acquired for $3 billion,” Russian Prime Minister Dmitry Medvedev told his Ukrainian counterpart Mykola Azarov at a meeting in Moscow, according to Interfax news agency.

“The money went to the central bank of Ukraine yesterday.”

President Viktor Yanukovych's pivot back towards Moscow and away from an offer of closer trade ties with the EU has sparked huge protests in Ukraine, sometimes swelling to hundreds of thousands, and the creation of a tent camp in central Kyiv.

The protesters accuse Yanukovich of selling out to Ukraine's Soviet-era overlord with the deal on debt and gas prices.

The Kremlin said it had invited Azarov to join Putin and other leaders for a meeting of former Soviet republics taking part in trade alliances Russia is building, part of Moscow's drive to restore its influence in its former empire.

Ukraine has so far resisted joining a Russia-led customs union that includes Belarus and Kazakhstan - a big step because membership would scupper any lingering possibility that Kiev might reverse course and sign a free trade deal with the EU.

Any signal that Ukraine might join the customs union would re-invigorate protests in Ukraine, which have started to show signs of flagging despite a constant crowd of a few thousand people at the tent camp in Kyiv's Independence Square.

About 100,000 people gathered at the square on Sunday to demonstrate for the fifth weekend in a row, but the number was the lowest this month, and around half the previous weekend's turnout.

Putin has made closer integration among ex-Soviet states a priority of his third term after 14 years in power. He is using the customs union as a foundation for a Eurasian Economic Union, due to come into existence in 2015.

Putin has won victories with decisions by Kyrgyzstan and Armenia to move toward joining the customs union, but the leader of oil-producing Kazakhstan on Tuesday repeated a warning that Putin's post-Soviet integration plans must not go too far.

“I don't want to repeat myself, but the politicization of the union that is being created is inadmissible,” Kazakh President Nursultan Nazarbayev said at a meeting with Putin before the broader gathering.