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Putin says Moscow will buy $15B worth of Ukrainian government bonds Russia says it will sharply cut the price of natural gas for Ukraine Putin opened his wallet in the battle with the European Union over Ukraines future

MOSCOW (AP) — Russian President Vladimir Putin on Tuesday opened his wallet in the battle with the European Union over Ukraine’s future, saying Moscow will buy $15 billion worth of Ukrainian government bonds and sharply cut the price of natural gas for its economically struggling neighbor.

The announcements came after Putin held talks in Moscow with Ukrainian President Viktor Yanukovych, who is facing massive protests at home for his decision to shelve a pact with the EU in favor of closer ties with Moscow. Russia’s bailout package angered protesters, who immediately accused Yanukovych of selling the country out to the Kremlin and pressed demands for his ouster.

Putin’s move came as Ukraine said it desperately needs to get at least $10 billion in the coming months to avoid bankruptcy. The Fitch ratings agency has given Ukraine’s bonds a B-minus rating, which puts them in junk bond territory.

While Putin sought to calm protesters in Kiev by saying he and Yanukovych didn’t discuss the prospect of Ukraine joining the Russian-dominated Customs Union, the sweeping Kremlin agreements vexed demonstrators who want Ukraine to break from Russia’s orbit and integrate with the 28-nation EU.

Russian Finance Minister Anton Siluanov said after the Kremlin talks that Russia would purchase $15 billion in Ukraine’s Eurobonds starting this month. The money would come from Russia’s National Welfare Fund that accumulates oil and gas revenues.

Putin emphasized that Russia’s decision to buy the Ukrainian securities wasn’t contingent on Kiev freezing social payments to its citizens — a clear jab at the International Monetary Fund, which has pushed Ukraine to reduce spending as a condition for providing a bailout loan.

Putin said the Russian state-controlled gas monopoly, Gazprom, will cut the price that Ukraine must pay for Russian gas deliveries by about one-third from the current $400 per 1,000 to $268.5 per 1,000 cubic meters.

Ukraine serves as a key conduit for Russian natural gas exports to Europe, and fierce gas pricing disputes between the neighbors have repeatedly resulted in supply cuts to EU customers.

Yanukovych explained his decision to spike a landmark association agreement and free trade pact with the EU last month as necessary to improve ties with Russia, which has banned or halted imports of some Ukrainian goods and threatened more sanctions if Ukraine signs the EU pact.

At the same time, Russia also has sought to cajole Yanukovych to join a Moscow-dominated bloc with a mix of promised credits, investment pledges and a discount on energy prices, particularly natural gas. The EU has been cool about Ukraine’s pleas for a bailout.

Putin and Yanukovych both pledged Tuesday to boost economic and trade ties to expand the strategic partnership between the two neighbors.