President Vladimir Putin faces a decision over Ukraine that is likely to shape his political legacy as well as the future of Russia’s western neighbour, trapped in an East-West battle that has echoes of the Cold War.
President Viktor Yanukovych’s loss of power deprives Putin of an ally vital to his hopes of keeping Ukraine, the cradle of Russian civilisation, in what he sees as Russia’s orbit.
His hopes of building a huge trading bloc, grouping as many former Soviet republics as possible to challenge the economic might of China and the United States, could be in tatters.
But making a stand over Ukraine, or getting drawn into a new bidding war with the European Union to win sway over the cash-strapped country, would be risky.
Moscow can ill-afford to improve the $15 billion financial bailout package it offered in December. But forceful measures, such as taking over mainly Russian-speaking areas of eastern Ukraine, would risk triggering a more serious conflict.
Putin is saying nothing for now in public, although he has spoken over the phone with US President Barack Obama and German Chancellor Angela Merkel. He was especially keen to stay silent before the end of the Winter Olympics in Sochi.
But the protesters on Independence Square in central Kiev are waiting anxiously to see what he does.
“We all know Putin likes to meddle,” said Alexei Tsitulski, a 25-year-old protester from the Crimea. The region used to be Russian territory and was given to Ukraine in 1953. “We’re not going to let Ukraine be split.”
Such comments, echoed by other protesters, underline how high the stakes are as Putin looks for ways to save face in the geopolitical struggle that had appeared to be going his way until the past week.
Putin won what seemed a decisive victory last November when Yanukovych spurned deals that would have forged closer trade and political ties with the European Union. He opted to rebuild economic relations with former Soviet master Moscow instead.
Russia agreed to a $15 billion bailout package for heavily indebted Ukraine and promised a reduction in the price Kiev pays for Russian gas.
But Yanukovych was central to the deal and his fall from grace puts it in doubt. Opposition leaders and many of the Kiev protesters favour closer ties with Europe and fear getting sucked back towards Russia.
Moscow also sent a signal of intent by dispatching Alexei Pushkov, a Putin loyalist and senior member of parliament, to a meeting of regional leaders of eastern Ukraine on Saturday.
Withholding the money is a possible lever to keep Ukraine at Russia’s side. Another would be to raise new barriers to imports from Ukraine.
Russian Finance Minister Anton Siluanov said on Sunday Moscow would release the $2 billion second tranche of the bailout only continued…