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Ukraine Offers Share of Fleet to Pay Debt to Russia


MASSANDRA, Ukraine — In a painful concession made under economic duress, President Leonid Kravchuk agreed Friday to give Russia all or part of Ukraine's share of the former Soviet navy's Black Sea Fleet in exchange for relief from the country's crushing debt to Moscow.

Russian President Boris N. Yeltsin made the surprise announcement after three hours of talks with Kravchuk in the Crimea. It overturned a deal reached in June between the former Soviet Union's two richest republics to divide the prized fleet in half.

Friday's agreement, which infuriated Ukrainian nationalists, underscored the high cost of Ukraine's ambition to build a powerful military to defend its 2-year-old independence and Russia's growing impatience with the burden of subsidizing other former Soviet republics with cheap energy and credits.

Ukraine, which gets 90% of its oil and gas from Russia, has fallen into a state of near economic collapse and owes Moscow an estimated $2.5 billion, including $850 million in energy bills. The deal reached Friday calls for further negotiations to set a value on Ukraine's 50% share of the fleet.

"We agreed that Russia is buying out the Ukrainian part of the fleet," Yeltsin told reporters. "Russian payment for its share of the fleet will be counted against Ukrainian debts to Russia. If the balance is then in Ukraine's favor, then Russia will pay."

Kravchuk, the Communist Party ideologue who became an overnight nationalist to lead his country to independence as the Soviet Union collapsed, was less categorical about giving up Ukraine's entire share.

He said Ukraine "doesn't need" its half of the 365 vessels and was "planning to sell them anyway." But later he said Ukraine might decide to keep some of the ships.

The two former Communist officials stood six feet apart during a brief press conference on the lawn of the 19th-Century Massandra Palace, where Russian czars spent their summers in the mountains two miles above the Black Sea. They dispensed with their customary public embrace and didn't even shake hands. Neither man smiled.

"The talks were very tense," a member of the Ukrainian delegation told Reuters news agency. "The Ukrainian side felt the Russians were dictating terms to them at all times."

The two countries' prime ministers signed a separate agreement obliging Ukraine to turn over to Russia some of the former Soviet nuclear warheads on its soil in exchange for delivery, a year later, of enriched uranium fuel for Ukraine's nuclear power stations.

Details of that accord were less clear and appeared to apply only to warheads on the 130 aging missiles that Ukraine had already agreed to give up--not to 46 newer missiles that it wants to keep in defiance of Moscow and Washington.

But it was another concession by Ukraine's leaders, who had previously insisted that the warheads be dismantled on its territory so they could take direct control of the uranium fuel component.

The idea of selling the fleet to Russia drew the sharpest outcry from Ukrainian nationalists, who fear that Moscow wants to reimpose direct control over this land it has ruled as an imperial power for all but a few of the last 300 years.

"Couldn't we have found other buyers?" asked Dmitry Pavlychko, chairman of the Ukrainian Parliament's foreign relations committee, who is expected to lead the opposition to the agreement's ratification.

"If this really happened, it means that Russia forced Ukraine to its knees," said Olga P. Shmyga, a teacher of Ukrainian literature who was vacationing in the Crimea. "How can you call this independence?"

Other members of Parliament said Kravchuk was too hasty in making a deal on the fleet before collecting Ukraine's share of the Soviet Union's assets abroad. That issue, along with a host of other property claims and trade issues, remained unresolved.

Founded in czarist times, the Black Sea Fleet was built up by the Soviet Union to counter the U.S. 6th Fleet in the Mediterranean. It has 45 aging warships, 20 submarines and 300 other vessels, as well as 150 naval aircraft based in Sevastopol, a graceful port on the Crimean peninsula that was historically part of Russia until Soviet leader Nikita S. Krushchev ceded it to Soviet-ruled Ukraine in 1954.

The quarrel over the fleet is the most provocative issue between Russia and Ukraine because it could affect the status of Sevastopol, which has been claimed by Russia's legislature as part of Russia. Ukraine is equally insistent that the port and the Crimea, populated mainly by ethnic Russians, should not revert to Moscow's control.

Kravchuk said the issue of whether Russia could continue to use Sevastopol as the fleet's home port would be settled by a joint commission that will work through the end of this month.

Last year the two leaders agreed to put the fleet under joint command. When nationalists in both countries protested, they decided to divide it but never agreed how.

The difficulties of doing so became apparent last spring, when most of the 70,000 sailors and officers, who are paid in Ukrainian karbovanets, began raising Russian flags to protest the plunge in that currency's value against the Russian ruble and to show their preference for Russia's navy. Since then, Ukraine's economy has worsened.

Ostroukh, a staffer in The Times' Moscow Bureau, reported from Massandra. Boudreaux, a Times staff writer, reported from Moscow. Special correspondent Mary Mycio contributed to this article from Kiev, Ukraine.

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