December 5, 2013 - 12:58 AMT
PanARMENIAN.Net - On the eve of a meeting of the OSCE human rights body in Kiev, German Foreign Minister Guido Westerwelle met two Ukrainian opposition leaders - former economy minister Arseny Yatsenyuk and Vitaly Klitschko, a heavyweight boxing world champion turned politician - at their protest camp in Kiev on Wednesday, December 4 in a snub to President Viktor Yanukovich, who triggered mass street demonstrations by spurning a pact with the EU and seeking closer ties with Moscow, according to Reuters.
As pro-EU demonstrators packed the main square, the crisis took a further toll on Ukraine's fragile economy, with the central bank forced to support the currency and the cost of insuring the country's debt against default rising further.
The United States backed Ukrainians' right to choose their future, but Russia criticized what it called the demonstrators' aggressive actions and said outsiders should not interfere.
Tension was high in the capital as protesters confronted ranks of black-helmeted riot police in front of the main presidential offices and Prime Minister Mykola Azarov accused the opposition of trying to provoke violence.
Ukrainian officials went to Moscow in search of aid to avoid a financial meltdown, while Yanukovich is in China, also seeking economic assistance.
Ukraine faces huge problems in financing an unwieldy current account deficit, with outside funding needs estimated at $17 billion next year to meet debt repayments and the cost of imported natural gas.
Yanukovich's decision to abandon the deal with the EU at the last moment surprised European leaders, angered his critics at home and exposed Ukraine to pressure from financial markets.
Ukraine's central bank intervened again on the currency market to support the value of the hryvnia, amid concerns that its foreign reserves of $20 billion may not 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 indicate financial distress.
Adding to economic woes, severely depleted central bank reserves are putting Ukraine at risk of a balance-of-payments crunch.