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Ukraine Blames Russia for Unrest as Protesters Seize Offices (3)

April 7 (Bloomberg) -- Pro-Russian separatists seized administration buildings in Ukraine’s east as the government in Kiev accused President Vladimir Putin of stoking unrest.

Protesters with Russian flags stormed offices in the cities of Luhansk and Donetsk, where demonstrators called for a referendum to join Russia and for the boycott of May 25 presidential elections. Ukrainian Prime Minister Arseniy Yatsenyuk said today that Russia was trying to split his nation.

The aim is to divide Ukraine and turn part into “a territory of slavery under a Russian dictatorship,” Yatsenyuk said in televised remarks from Kiev. “It’s crystal clear that an anti-Ukrainian plan” is under way, “a plan to destabilize the situation, a plan so that foreign troops cross the border.”

The scenes echo the actions of pro-Russian protesters who stormed Crimea’s assembly and paved the way for Putin to annex the Black Sea province last month. Putin, who’s massed troops on Ukraine’s border, says he has the right to defend Russian speakers from “fascists” after Russian-backed President Viktor Yanukovych’s ouster. Ukraine says Russia has sent agents to foment unrest and justify carving off more of the nation.

Markets Slide

The latest unrest prompted investors to sell Russian and Ukrainian assets. The ruble depreciated 0.9 percent to 35.6135 per dollar by 7:33 p.m. in Moscow, while the Micex stock index lost 2.4 percent. The hryvnia, this year’s worst performer against the dollar among global currencies tracked by Bloomberg with a 30 percent decline, weakened 0.9 percent.

Ukrainian government officials traveled to the eastern regions to handle the unrest, while acting President Oleksandr Turchynov canceled a trip to Lithuania and convened a special meeting of law enforcement officials, who agreed to use anti- terrorist measures against armed separatists and send more police to fortify the country’s eastern border.

Donetsk’s city council condemned the separatist protests, saying on its website that the demonstrators aren’t authorized to call meetings or decide the region’s future. It’s “unreal” to hold a referendum in Donetsk similar to the one in Crimea last month, according to Yuriy Yakymenko, an analyst at the Razumkov Center for Economic and Political Studies in Kiev.

No Control

“The separatists have no power in Donetsk -- they don’t control the whole region, they won’t be able to organize any vote,” he said by phone. “Such acts will probably be a regular source of tension in the presidential campaign but will provide more of a media show for Russia than have any real impact.”

Presidential candidate Yulia Tymoshenko said the “aggression” was aimed at annexing Ukraine’s east “following a Crimean scenario.”

“Any attempts to split Ukraine by the Kremlin and its puppets will be dismissed and will be met with decisive resistance from the Ukrainian society,” she said today in a statement on her party’s website.

About 200 people seized the governor’s office in Donetsk, Alla Konyk, a spokeswoman for the regional prosecutor’s office, said in remarks on Channel 5.

Three hundred pro-Russian activists temporarily took over the regional government office in Kharkiv, demanding the local authorities carry out a referendum on federalization, according to the Ukrainska Pravda website. The building was later freed, Interior Minister Arsen Avakov said on his Facebook Inc. page.

Weapons Risk

Three people, including a policeman, were injured in Luhansk during the storming of the regional directorate of Ukraine’s security service. Officials closed roads into Luhansk and police began investigations in each of the three cities.

The situation is more serious in Luhansk because the rebel groups have seized weapons, Tetyana Malyarenko, a law professor at Donetsk State University of Management, said by e-mail.

Russia is “closely watching” events in eastern Ukraine, the Foreign Ministry said today in a statement, reiterating its view that Ukraine must overhaul its constitution, give regions more autonomy, recognize Russian as an official language and remain politically neutral. Ukraine should stop blaming Russia for its struggles, the ministry said.

An advisory committee to the Council of Europe last week rejected Putin’s argument that Russian-speaking minorities have been victimized by Ukraine’s new government.

Even so, it called for steps “to avoid further isolation and radicalization” of the pro-Russian community and said anecdotal reports of discrimination could strengthen Russian separatist sentiment in eastern and southern Ukraine.

Invasion Plot?

Yatsenyuk has accused Putin of plotting to invade its eastern regions and has vowed military retaliation if Russian troops cross the border. Russia has as many as 40,000 soldiers stationed across the frontier, according to officials from the U.S. and the NATO. Putin says the forces are conducting military exercises and will withdraw when they end.

The U.S. and its European allies have slapped sanctions on members of Putin’s inner circle and urged his government to pull back its troops in the worst standoff since the Cold War.

In a sign of growing economic tensions, Russia’s consumer watchdog banned imports from six Ukrainian dairy producers today, saying they violated norms. Russia has also banned products made by Ukrainian chocolate maker Roshen for what it calls “deceitful practices" in trading.

Putin’s government has imposed bans on imports from Ukraine, which depends on Russia as its biggest export market, during disputes in the last decade. The U.S. and EU have said they may intensify sanctions on Russia if it tries to destabilize Ukraine by using trade and other measures.

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