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Divisions in Ukraine over whether country’s rulers will shift toward trade and political alliance with imperialist powers of Europe and U.S. or remain in clutches of rising capitalist layers in Russia were reflected in opposing demonstrations in Kiev over Dec. 14-15 weekend.

Moscow won the last round when Ukrainian President Viktor Yanukovich signed a deal with Russia Dec. 17 lowering prices for gas imports from $400 to $268.50 per 1,000 cubic meters and a $15-billion bailout to stave off a government default. Tens of thousands gathered in Kiev, accusing Yanukovich of selling Ukraine out to the highest bidder.

Protests in Kiev’s Independence Square began in response to Yanukovich’s Nov. 21 announcement that he would not sign agreements to move toward integration into the European Union trade bloc and instead maintain its close economic and political relationship with Russia. After a police attack on a small group of students Dec. 1, the anti-government rallies swelled to tens of thousands and over the weekends to hundreds of thousands. Participants are mainly young and come from the western part of the country.

Over the past few weeks, thousands have camped in the square, fortifying their positions with barricades and roadblocks. On Dec. 14, the government organized a one-time counterrally to support Yanukovich, numbering in the tens of thousands.

The unfolding events in Ukraine have historical roots in the anti-working-class course of the Soviet Union and Eastern bloc governments following the usurpation of political power by privileged bureaucratic social layers in the 1920s — a course which led to their collapse in the early 1990s. Since then, the remnants of the ruling bureaucracies in Ukraine and the rest of the Soviet bloc have moved to reimpose capitalist exploitation on the working class. The social crisis resulting from this course is today exacerbated by the deepening crisis of capitalism on a world scale..

With roots in different industries and other sources of capital, some emerging capitalists have gravitated toward traditional ties with Moscow, while others look to new opportunities in closer economic integration with western Europe.

Conflicts between different factions of the new capitalist layers exploded around the 2004 presidential election. Yanukovich, who emerged from the government-run eastern coal industry and had strong ties to Russia, claimed victory. His opponent, Viktor Yushchenko, came out of the state banking apparatus and oriented towards Washington and capitalist governments in Europe. Hundreds of thousands of people took to the streets, backing Yushchenko and a break with Russia. But his rule ended six years later amid growing disdain for the thievery and corruption of his government, laying the basis for Yanukovich and his clique to take the elections.

The forces leading the opposition are capitalist parties with seats in Ukraine’s parliament. One of the main groups organizing the protests is the Fatherland party of jailed opposition leader Yulia Tymoshenko, prime minister in Yushchenko’s cabinet, representing oligarchs on the outs.

UDAR — punch in Ukrainian — is led by Vitali Klitschko, a former heavyweight world boxing champion who gained his wealth outside of any ties to Ukrainian politics and presents himself as a savior, a fighter against corruption.

The third party in Independence Square is Svoboda. The party was founded in the early 1990s, but traces its roots to the Ukrainian partisan army in World War II, which was loosely allied with Nazi Germany. Party leader Oleg Tyagnibok says “Nationalism is love of the land” and has come out against a supposed “Jewish-Russian mafia” running Ukraine. Members of Svoboda make up a large part of the muscle defending the square against the cops.

The oligarchs competing allegiances with either side are based on pragmatic interests, not ideological views on “democracy,” as is often presented in the big-business press of Europe and the U.S.

The Eastern Partnership, which Yanukovich said no to Nov. 21, was set up in 2007, aiming to integrate Moldova, Georgia, Armenia and Ukraine into the EU with removal of tariffs on imports and exports.

Yanukovich said he couldn’t sign the deal because of steep cuts to government expenditures and state enterprises demanded by the International Monetary Fund to grant a loan on one hand and threats of trade sanctions from Moscow on the other. On Dec. 15, the European Union suspended talks with Ukraine, saying that Yanukovich’s words and deeds were increasingly diverging.

Ukraine, like many other countries in the region, is going through an acute economic and financial crisis. The government needs $18 billion by March 2014 to roll over debt and pay Russia for outstanding bills of oil and gas. In addition to the bailout and lower gas prices, Moscow has also pledged to resume oil supplies to a refinery after a three-year break.

Ukraine relies on Russia for about 60 percent of its gas consumption and the Russian government has turned the gas off twice in the last seven years. Since July Moscow had imposed trade restrictions that cost Ukraine $2 billion.

Russian President Vladimir Putin said the deal “is not tied to any conditions” and the issue of Ukraine joining the 2010 customs and trade agreement between Russia, Belarus and Kazakhstan “was not discussed.”

Ukraine is Russia’s traditional breadbasket and a key source of steel, coal and access to warm-water ports on the Black Sea.

The entire eastern industrialized part of the country — Yanukovich’s traditional support base — has seen very little participation in the demonstrations. The eastern Donbass region accounts for one-fifth of Ukraine’s industrial production and export revenues. Russia imports machinery and manufactured goods. EU imports metals and light industrial products.

The cultural ties are also stronger. Speakers of the Russian language make up 17 percent of Ukraine’s population, in Donbass it’s nearly 40 percent.

Local industries are hugely dependent on Russian supplies and markets. The prospect of joining the EU is not very popular here. “Before joining any international organizations, Ukraine should first develop our own economy,” a housewife in Donetsk told BBC Dec. 3. “Look at our poor pensioners surviving on the breadline. I am against joining the EU.”