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. Last Updated: 07/27/2016

Ukraine to Plug Into UES Power Grid

DNIPROPETROVSK, Ukraine — President Vladimir Putin gave support to embattled Ukrainian President Leonid Kuchma on Monday with deals to cut energy costs and create jobs — but also stoked some Ukrainians' fears that they are slipping back into Russia's fold.

Putin and Kuchma agreed to rejoin their country's electricity grids, which should ease Ukraine's chronic energy crisis, and reached 14 other agreements securing Russian orders for struggling Ukrainian factories.

The deals were expected to offer Kuchma some relief from a spiraling political crisis that has seen thousands of Ukrainians stage protest after protest in recent weeks.

The unrest was sparked by allegations that Kuchma was linked to the disappearance of opposition journalist Georgy Gongadze, but has spread to include broader grievances about Kuchma's failure to improve the economy.

Putin, however, shrugged off the demonstrations as Ukraine's domestic affair.

"We did not discuss politics," Kuchma curtly told reporters after the talks.

The meeting with Putin at the Yuzhmash rocket plant, which Kuchma headed in 1986-92, in the industrial city of Dnipropetrovsk gave the Ukrainian president a welcome respite from the opposition pressure in Kiev.

"I was happy to have an opportunity to receive my high guest here, at my home factory," Kuchma told reporters.

"And we were really pleased by the warm welcome workers at the plant gave us. They behaved like that because they saw that we signed agreements giving them a future."

As Putin and Kuchma walked past rockets and spacecraft sitting in Yuzhmash's giant hangars, workers shouted out calls for stronger ties.

"We love Russia! If we stay together, everything will be fine," some workers shouted.

"We have come exactly for that and reached important agreements," Putin answered.

The electricity agreement will "significantly cut the energy costs in the Ukrainian economy," Putin said later at a news conference.

Analysts said the agreements signed Monday signaled a shift in Kuchma's policies toward Russia.

Kuchma hailed the agreement as a "huge step forward."

Anatoly Chubais, chief of Russia's power monopoly Unified Energy Systems, said the deal would also help stabilize power supplies in Russian regions that border Ukraine.

Chubais also said that the deal would lower energy costs for Ukraine, where electricity costs 1.5 times more than in Russia.

The two countries' electricity grids were initially built under the unitary Soviet system, divided after the 1991 Soviet collapse, merged, and again severed over Ukraine's debts in 1999.

The other agreements signed Monday, on cooperation in the aerospace sector and other industries, appeared to reflect Putin's drive to rebuild Russia's Soviet-era political and economic primacy in the region.

"Restoration of economic ties answers the vital interests of both Ukraine and Russia," Putin said.

Analysts said the agreements signaled a shift of Kuchma's policies toward Russia, after years of trying to cultivate ties with the West — efforts that won Ukraine huge amounts of U.S. and other Western aid in the 1990s.

"Politically, it means first of all that Kuchma is re-orienting himself toward Russia," said Sergei Markov, a pro-Kremlin analyst who heads the independent Politika think tank in Moscow.

While the agreements were hailed by Communist lawmakers in Ukraine's parliament and many Ukrainians whose living standards have plummeted since the Soviet Union's collapse, they were seen as more ominous by others.

"Ukraine should be an independent state, should solve everything by itself," said an engineer in downtown Kiev who wouldn't give his name. "If we don't learn how to solve this problem by ourselves, we'll never be independent."

The two presidents' meeting at Yuzhmash was tinged with Soviet nostalgia. Yuzhmash was the world's largest rocket factory during Soviet times, "making rockets like sausages," as Soviet leader Nikita Khrushchev once said.

After the Soviet collapse, the plant switched to making civilian boosters, which are being used in the Sea Launch program with Boeing Co. in which Russia and Norway also participate.

Putin denied suggestions that the two countries might again cooperate in making ballistic missiles.

"Ukraine has become a nuclear-free nation and all Russian nuclear and missile programs are based entirely on our own components," he said.