Ukraine PM tells Russia to accept "reality" of EU trade deal

Ukraine's Prime Minister Mykola Azarov gestures during a session of the parliament in Kiev April 19, 2013.

Credit: Reuters/Gleb Garanich

By Richard Balmforth

KIEV | Wed Aug 28, 2013 7:54am EDT

KIEV (Reuters) - Ukraine's prime minister, seeking to ward off Russian pressure, urged Moscow on Wednesday to accept his country's drive towards a new trade relationship with the European Union as a "reality".

Clearly alluding to Kremlin threats of possible retaliatory trade moves, Mykola Azarov said: "The whole world is changing, the global system of economic relations. But to build a fence to protect yourself from changes using artificial barriers is simply pointless."

The former Soviet republic hopes to sign key agreements with the European Union in November, including one on free trade, which will mark a shift in its traditional close economic relationship with Russia, its biggest single trading partner.

The prospect of EU goods entering Ukraine, free of import duties, and then being re-exported to Russia and posing competition for Russian goods has caused alarm in the Kremlin and calls for Kiev to halt its drive towards Europe.

Firing a warning shot towards Kiev, Russia this month imposed laborious extra customs checks on Ukrainian imports over several days, causing delays at the border.

Russian President Vladimir Putin said the Russia-led Customs Union, which also includes Belarus and Kazakhstan, might take "protective measures" to defend its markets.

A Kremlin aide told Ukraine on Tuesday it would lose its "strategic partner" status if it signs association agreements with the 28-member EU bloc at Vilnius, Lithuania, in November.

The pressure has led to talk of a trade war in Kiev and injected new tension into Moscow's relationship with Ukraine, which has pleaded unsuccessfully for a lower price for strategic supplies of Russian gas to bring relief to its economy.

It comes at a time when Ukraine faces record payments to service foreign debt, including to the International Monetary Fund, and when foreign currency reserves are below the safety threshold of three months worth of imports, analysts say.

Ukraine's economy relies on exports of steel, chemicals and grain. More than 60 percent of its exports go to the former Soviet market, with Russia, Belarus and Kazakhstan the most important.

But Ukrainian big business sees greater prosperity in European markets and has resisted entreaties by Moscow to join the Customs Union - a move which would be incompatible with a free trade deal with Europe.

DIVIDING LINES

Azarov, who met Russian Prime Minister Dmitry Medvedev in Moscow on Monday to try to calm Russian concerns over trade, told his cabinet that no matter what the circumstances were, Ukraine wanted to increase the volume and quality of trade with Russia in the future.

For that reason, he said, "drawing up new dividing lines is not in the interests of our peoples."

He said a 10-year grace period after the signing of the Association Agreement with the EU would give Ukraine and Russia the chance to adjust to the new reality, according to the principles of the World Trade Organisation of which both are members.

He said Ukraine had accepted the formation of the Customs Union on its borders and the plans to upgrade it from January 2015.

"In the same way, after signing the Association Agreement with the EU, Ukraine will create a free trade zone with the EU - this also has to be inevitably accepted as a reality," he said.

It is by no means a foregone conclusion that the association and free trade agreements will be signed in Vilnius in November.

Many EU member states are disappointed at the pace of democratic reform in Ukraine since President Viktor Yanukovich was elected in February 2010 and are pressing particularly for the release from jail of former Prime Minister Yulia Tymoshenko, his fiercest political adversary.

Tymoshenko was jailed in late 2011 for seven years for abuse of office after what the EU says was a politically-motivated trial.

Speaking in Brussels on Tuesday after meeting Yanukovich's point man on European integration issues, EU enlargement commissioner Stefan Fuele indicated the Tymoshenko question had been broached as well as Ukraine's progress on democratic reform to meet specific criteria laid down by the EU.

These relate to reforming the judiciary, ending politically-motivated prosecutions and improving electoral legislation.

"I have emphasized ... the need to ensure determined action and tangible progress on all the benchmarks set out," Fuele told journalists.

(Additional reporting by Justyna Pawlak in Brussels; Writing by Richard Balmforth, editing by Elizabeth Piper)

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As Westlife's lead singer he had all the trappings of fame, then Shane Filan lost the lot. Here, he tells of his dizzying fall

By Spencer Bright

PUBLISHED: 19:01 EST, 8 August 2013 | UPDATED: 13:14 EST, 9 August 2013

Shane Filan is looking a bit dazed. He’s not quite as fresh-faced as he used to be nor as wide-eyed in that I-can’t-believe-my-luck way he had as the lead singer of Westlife. Too much has happened in between.

Last year, as a result of losing his property investments in Ireland’s economic crash, he was declared bankrupt to the tune of an eye-watering ?18?million.

The date of one of the most painful moments in that traumatic time is seared on his heart, January 11, 2013, when he handed over the keys to the family home near Sligo in the West of Ireland. He had designed the house himself and built it in 2004 for a reputed ?3.5?million.

Shane Filan and wife Gillian - they were teenage sweethearts and she has been his greatest supporter through all this

The mansion — dubbed Westfork by locals — with its sweeping staircase, five bedrooms, six bathrooms, bar and entertainment lounge set in five acres now echoes with the ghosts of the life that once inhabited it and is on the market for a knock-down ?825,000.

‘I built it, I designed it, I’d lived in it for nearly ten years,’ a sombre Shane tells me, speaking for the first time about the traumatic events.

‘The children [Nicole, eight, Patrick, five, and Shane, three] came home to it from the hospital after they were born. There were a lot of memories. I had been very proud of it, so that was like a knife through the heart. But it’s only bricks and mortar, so you’ve just got to let it go.’

His wife Gillian - they were teenage sweethearts - has been his greatest supporter through all this.

‘She was amazing, just keeping me focused. Maybe I would have got depressed without her, but she just kept me positive.

‘She said: “Look, you’ve got your voice and that’s our way forward to earn your livelihood. We have the children. What if one of them was sick? Which would you prefer, that or not having any money?”

‘When your child is looking up at you and you are putting them to bed at night and they are just lying there, you have to remind yourself that’s what it’s all about.’ 

As part of the bankruptcy proceedings, everything he owned over the value of ?500 had to be declared and surrendered to the Insolvency Service — even his platinum and diamond wedding ring, which was valued at ?33,000. He has since bought it back.

‘I didn’t want them to sell off my wedding ring. It’s not a nice thing to do to buy your wedding ring twice,’ he says. ‘I’d rather not say how much I paid to get it back. It’s personal between me and Gillian.’

Lost: Shane Filan's home at Carraroe, Sligo, dubbed Westfork by locals - with its sweeping staircase, five bedrooms, six bathrooms, bar and entertainment lounge set in five acres

When he was declared bankrupt in June 2012, it was revealed he had just over ?100 in cash and ?5,500 in the bank. It was an astonishing fall from grace.

As a member of Westlife, managed by Louis Walsh, Shane was believed to have had a fortune of more than ?8?million accumulated from a 15-year career. They were the biggest-selling album group of the Noughties, with six Number One albums, 14 Number One singles and 44 million records sold around the world.

He WAS 18 when he auditioned for the band. He’s 34 now and admits that in the good times he indulged in young men’s fancies, from Ferraris and Porsches to a four-seater helicopter.

He invested in a few apartments and as the Irish economy boomed he and his brother Finbarr, who is 11 years older, began buying greenfield sites to build homes, offices, a nursing home and a creche, unknowingly sowing the seeds of his financial destruction.    

Shane’s problems began in 2004 when Brian McFadden suddenly quit the group. It was thought for a while that the remaining members — Shane, Nicky Byrne, Kian Egan and Mark Feehily — would split up, but they went on to have six more albums and two more Number Ones.

Westlife remained together until June last year, but Shane hadn’t expected the band to last as long and wanted to secure his millions rather than just leave them in the bank.

‘When I got into property, I had just had a baby, Nicole. I genuinely wanted to invest in the future in case Westlife did fall apart, because no one knew how we were going to last after Brian went. Everyone, including us, thought maybe we had a couple of years.’

Instead, they went on to even more to success.

For the last time: Boyband Westlife performing live (Shane is standing 2nd from left)

In the meantime, Shane had got caught up in the Irish property boom, spurred on by easy loans and low interest rates. ‘People may think I was being greedy, but I’d have to disagree.’ says Shane. ‘My attitude wasn’t: “Right, let’s make loads of money and get the hell out of here.'

‘I was investing in a place I care about with projects I thought would benefit people. Of course, if you make an investment you want to make a profit. That’s just common sense. It’s not greed trying to make a living, which is what I was trying to do.

‘We had been looking at a couple of nursing home sites because there was a shortage of beds in the West of Ireland. We were encouraged by the council planners who were loving the idea. Every adviser said we were going after exactly the right stuff.

‘In the beginning, it was all very simple. A phone call to a bank, a quick meeting and you get two million to buy a field. I put in half a million and would  get the rest off the banks. But then it would take years to get all the planning permission.’

And then came the credit crunch of 2007/8 and the banks were not only not lending any more, they wanted their money back. By then the value of the land had plummeted.

One site alone, near his home in Carraroe, Co. Sligo, shows how he over-extended himself. Shane planned to build a community centre, offices, a private clinic, gym, creche and 68 homes.

One of the banks told him he didn’t have the money to build them and that they didn’t have the money either.

‘So where does that leave me?’ he asked. One of them said: ‘You can sing, can’t you?’

Shane adds: ‘I didn’t think that was part of the deal, but technically, legally, fair enough, I had personally guaranteed it.’ The finances started spinning out of control. In 2009, Shane and Finbarr’s company Shafin Developments Ltd lost ?2.4?million. The following year, it lost ?2.6?million.

‘The couple of years before I was declared bankrupt were the roughest. The bank letters, the pressure, the stress was awful.

‘You’re in this twilight zone of not knowing where your life is going and yet you’re in Westlife. Everything was great with the band. I was earning money and it looked good.

Moving on: Shane starts again as a solo artist with his debut single Everything To Me

‘But then at the same time you’re giving it back to the bank. You’re paying out crazy money, up to ?70,000 a month on interest payments. It wasn’t even as if I was paying off the loans. It was not fixing any problems. They were getting their tick on the box for that month and calling for the next.

‘A lot of people go through it whether it’s a credit card debt or it’s 60 grand a month. It’s not a nice way to live.’

It didn’t help that Shane kept the crisis to himself, telling neither the band nor their manager Louis Walsh.

‘I didn’t want them to know. I am a private person. The lads hadn’t a clue. They knew I had some property, but they didn’t know how bad it was.

‘And then they decided we were finishing as a band. I went out of the room thinking: “Oh my God, if they only knew.” ‘That was probably the scariest time of my life. My job was finishing, my financial security was ending and I knew I still had the bills coming in every month.’

Though he knew there was a chance of a record deal in the future, he needed to do something in the meantime.

'That’s when I realised I needed to get the lawyers involved. It was a scary time, especially when your three little children don’t know anything: they just think Daddy’s a superstar.

'But my wife Gillian was brilliant. It would have been a very dark place without her.’ He finally confided in the band in February last year during their farewell tour of China.

'Nicky was saying: "What’s happened to all the stuff you’re building?" I said it was tough, it was a lot of pressure, but I still didn’t say I was on my hands and knees.

‘I thought I’d be able to fix it privately. I’d be able to sit down and make some sort of agreement, but it wasn’t to be.’

A dizzying fall: Shane Filan pictured last month - he has lost everything, even his wedding ring

He finally came clean while they were still in China, and their jaws dropped. 'They said: "You know we’re family." I said yes, of course, I did. There was nothing they could do, but I just wanted them to know.'

When they got back to Dublin, the heads of the six banks he’d been dealing with flew in from London for a crisis meeting. ‘It was pretty intense, but we agreed we were all partly to blame. Then I had to go straight from all that into rehearsals with the band!

‘I was told the worst-case scenario was that I’d end up bankrupt. I thought: "Whoah, well that can’t happen. That’s never going to happen. No way, not a chance." I said it can’t be that bad.’

But it was.

‘When you know the worst that can happen, it’s not as scary,’ says Shane.

‘But the thought of all that getting out into the public domain made me anxious. What if everyone finds out about all this mess, all the papers, everyone? How embarrassing would that be? I made this money and lost it all. What an idiot. You feel all of that.’

Once he accepted the inevitability of bankruptcy, a huge burden was lifted. 'I never got depressed. I got anxious, I got nervous, I got scared. I didn’t know what it was going to be like the next week or how bad it was going to get. Was it going to get worse?’

He had been selling off possessions, including his 1964 Aston Martin DB5, similar to the James Bond classic, which fetched ?348,000 at auction.

‘I knew I was going to lose my house in Ireland and all the other properties. It’s all gone. But my house was the one material thing that was very important to me.

‘I went there for Christmas. It was pretty tough. It took nearly a month to pack up all the possessions, all the memories that were there. It’s a big house and it took quite a while to get out of it. Then you just hand over the keys.

'I was in tears a lot of times. I wrote about that in All You Need To Know, probably my favourite song on my new album. There’s a line: "it takes a teardrop to set you free."

‘In another song I wrote: "When you hit  the ground there is only one way to go and that is up."'

Clearly the experience provided a rich seam of material for his first venture into song writing. He was surprised to find the lyrics coming easily.

Supportive: Shane and his Westlife bandmates split last year

‘There is a feeling of getting things off my chest, but I don’t want to be preachy. Yes, bad things happen, but a lot of these songs are positive.’

Most of them are also inspired by his love for Gillian. He is hoping the solo career he is embarking on - with the release of his first single, Everything To Me, a tribute to her support through the tough times - will help ease the situation and provide for the future.

He says the easy thing would have been to record a solo album that included covers and sounded like Westlife, 'but I definitely didn’t want to do a solo Westlife album'.

He teamed up with different writers and has come up with a more stripped back pop sound and is looking forward to playing smaller venues than the arenas of his Westlife days.

In an industry not noted for loyalty, he has been able to rely on the continued support of Louis Walsh. When he confided his money troubles, he got some blunt advice. 'He told me: "You’ve got no money, but you’ve got your voice. We’re going to fix this."'

And if Louis can make it work for Shane, it will surely be one of the most remarkable comebacks ever.

Everything To Me is released on August 25. The album will be released later in the year.
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As Westlife's lead singer he had all the trappings of fame, then Shane Filan lost the lot. Here, he tells of his dizzying fall

By Spencer Bright

PUBLISHED: 00:01 GMT, 9 August 2013 | UPDATED: 18:14 GMT, 9 August 2013

Shane Filan is looking a bit dazed. He’s not quite as fresh-faced as he used to be nor as wide-eyed in that I-can’t-believe-my-luck way he had as the lead singer of Westlife. Too much has happened in between.

Last year, as a result of losing his property investments in Ireland’s economic crash, he was declared bankrupt to the tune of an eye-watering ?18?million.

The date of one of the most painful moments in that traumatic time is seared on his heart, January 11, 2013, when he handed over the keys to the family home near Sligo in the West of Ireland. He had designed the house himself and built it in 2004 for a reputed ?3.5?million.

Shane Filan and wife Gillian - they were teenage sweethearts and she has been his greatest supporter through all this

The mansion — dubbed Westfork by locals — with its sweeping staircase, five bedrooms, six bathrooms, bar and entertainment lounge set in five acres now echoes with the ghosts of the life that once inhabited it and is on the market for a knock-down ?825,000.

‘I built it, I designed it, I’d lived in it for nearly ten years,’ a sombre Shane tells me, speaking for the first time about the traumatic events.

‘The children [Nicole, eight, Patrick, five, and Shane, three] came home to it from the hospital after they were born. There were a lot of memories. I had been very proud of it, so that was like a knife through the heart. But it’s only bricks and mortar, so you’ve just got to let it go.’

His wife Gillian - they were teenage sweethearts - has been his greatest supporter through all this.

‘She was amazing, just keeping me focused. Maybe I would have got depressed without her, but she just kept me positive.

‘She said: “Look, you’ve got your voice and that’s our way forward to earn your livelihood. We have the children. What if one of them was sick? Which would you prefer, that or not having any money?”

‘When your child is looking up at you and you are putting them to bed at night and they are just lying there, you have to remind yourself that’s what it’s all about.’ 

As part of the bankruptcy proceedings, everything he owned over the value of ?500 had to be declared and surrendered to the Insolvency Service — even his platinum and diamond wedding ring, which was valued at ?33,000. He has since bought it back.

‘I didn’t want them to sell off my wedding ring. It’s not a nice thing to do to buy your wedding ring twice,’ he says. ‘I’d rather not say how much I paid to get it back. It’s personal between me and Gillian.’

Lost: Shane Filan's home at Carraroe, Sligo, dubbed Westfork by locals - with its sweeping staircase, five bedrooms, six bathrooms, bar and entertainment lounge set in five acres

When he was declared bankrupt in June 2012, it was revealed he had just over ?100 in cash and ?5,500 in the bank. It was an astonishing fall from grace.

As a member of Westlife, managed by Louis Walsh, Shane was believed to have had a fortune of more than ?8?million accumulated from a 15-year career. They were the biggest-selling album group of the Noughties, with six Number One albums, 14 Number One singles and 44 million records sold around the world.

He WAS 18 when he auditioned for the band. He’s 34 now and admits that in the good times he indulged in young men’s fancies, from Ferraris and Porsches to a four-seater helicopter.

He invested in a few apartments and as the Irish economy boomed he and his brother Finbarr, who is 11 years older, began buying greenfield sites to build homes, offices, a nursing home and a creche, unknowingly sowing the seeds of his financial destruction.    

Shane’s problems began in 2004 when Brian McFadden suddenly quit the group. It was thought for a while that the remaining members — Shane, Nicky Byrne, Kian Egan and Mark Feehily — would split up, but they went on to have six more albums and two more Number Ones.

Westlife remained together until June last year, but Shane hadn’t expected the band to last as long and wanted to secure his millions rather than just leave them in the bank.

‘When I got into property, I had just had a baby, Nicole. I genuinely wanted to invest in the future in case Westlife did fall apart, because no one knew how we were going to last after Brian went. Everyone, including us, thought maybe we had a couple of years.’

Instead, they went on to even more to success.

For the last time: Boyband Westlife performing live (Shane is standing 2nd from left)

In the meantime, Shane had got caught up in the Irish property boom, spurred on by easy loans and low interest rates. ‘People may think I was being greedy, but I’d have to disagree.’ says Shane. ‘My attitude wasn’t: “Right, let’s make loads of money and get the hell out of here.'

‘I was investing in a place I care about with projects I thought would benefit people. Of course, if you make an investment you want to make a profit. That’s just common sense. It’s not greed trying to make a living, which is what I was trying to do.

‘We had been looking at a couple of nursing home sites because there was a shortage of beds in the West of Ireland. We were encouraged by the council planners who were loving the idea. Every adviser said we were going after exactly the right stuff.

‘In the beginning, it was all very simple. A phone call to a bank, a quick meeting and you get two million to buy a field. I put in half a million and would  get the rest off the banks. But then it would take years to get all the planning permission.’

And then came the credit crunch of 2007/8 and the banks were not only not lending any more, they wanted their money back. By then the value of the land had plummeted.

One site alone, near his home in Carraroe, Co. Sligo, shows how he over-extended himself. Shane planned to build a community centre, offices, a private clinic, gym, creche and 68 homes.

One of the banks told him he didn’t have the money to build them and that they didn’t have the money either.

‘So where does that leave me?’ he asked. One of them said: ‘You can sing, can’t you?’

Shane adds: ‘I didn’t think that was part of the deal, but technically, legally, fair enough, I had personally guaranteed it.’ The finances started spinning out of control. In 2009, Shane and Finbarr’s company Shafin Developments Ltd lost ?2.4?million. The following year, it lost ?2.6?million.

‘The couple of years before I was declared bankrupt were the roughest. The bank letters, the pressure, the stress was awful.

‘You’re in this twilight zone of not knowing where your life is going and yet you’re in Westlife. Everything was great with the band. I was earning money and it looked good.

Moving on: Shane starts again as a solo artist with his debut single Everything To Me

‘But then at the same time you’re giving it back to the bank. You’re paying out crazy money, up to ?70,000 a month on interest payments. It wasn’t even as if I was paying off the loans. It was not fixing any problems. They were getting their tick on the box for that month and calling for the next.

‘A lot of people go through it whether it’s a credit card debt or it’s 60 grand a month. It’s not a nice way to live.’

It didn’t help that Shane kept the crisis to himself, telling neither the band nor their manager Louis Walsh.

‘I didn’t want them to know. I am a private person. The lads hadn’t a clue. They knew I had some property, but they didn’t know how bad it was.

‘And then they decided we were finishing as a band. I went out of the room thinking: “Oh my God, if they only knew.” ‘That was probably the scariest time of my life. My job was finishing, my financial security was ending and I knew I still had the bills coming in every month.’

Though he knew there was a chance of a record deal in the future, he needed to do something in the meantime.

'That’s when I realised I needed to get the lawyers involved. It was a scary time, especially when your three little children don’t know anything: they just think Daddy’s a superstar.

'But my wife Gillian was brilliant. It would have been a very dark place without her.’ He finally confided in the band in February last year during their farewell tour of China.

'Nicky was saying: "What’s happened to all the stuff you’re building?" I said it was tough, it was a lot of pressure, but I still didn’t say I was on my hands and knees.

‘I thought I’d be able to fix it privately. I’d be able to sit down and make some sort of agreement, but it wasn’t to be.’

A dizzying fall: Shane Filan pictured last month - he has lost everything, even his wedding ring

He finally came clean while they were still in China, and their jaws dropped. 'They said: "You know we’re family." I said yes, of course, I did. There was nothing they could do, but I just wanted them to know.'

When they got back to Dublin, the heads of the six banks he’d been dealing with flew in from London for a crisis meeting. ‘It was pretty intense, but we agreed we were all partly to blame. Then I had to go straight from all that into rehearsals with the band!

‘I was told the worst-case scenario was that I’d end up bankrupt. I thought: "Whoah, well that can’t happen. That’s never going to happen. No way, not a chance." I said it can’t be that bad.’

But it was.

‘When you know the worst that can happen, it’s not as scary,’ says Shane.

‘But the thought of all that getting out into the public domain made me anxious. What if everyone finds out about all this mess, all the papers, everyone? How embarrassing would that be? I made this money and lost it all. What an idiot. You feel all of that.’

Once he accepted the inevitability of bankruptcy, a huge burden was lifted. 'I never got depressed. I got anxious, I got nervous, I got scared. I didn’t know what it was going to be like the next week or how bad it was going to get. Was it going to get worse?’

He had been selling off possessions, including his 1964 Aston Martin DB5, similar to the James Bond classic, which fetched ?348,000 at auction.

‘I knew I was going to lose my house in Ireland and all the other properties. It’s all gone. But my house was the one material thing that was very important to me.

‘I went there for Christmas. It was pretty tough. It took nearly a month to pack up all the possessions, all the memories that were there. It’s a big house and it took quite a while to get out of it. Then you just hand over the keys.

'I was in tears a lot of times. I wrote about that in All You Need To Know, probably my favourite song on my new album. There’s a line: "it takes a teardrop to set you free."

‘In another song I wrote: "When you hit  the ground there is only one way to go and that is up."'

Clearly the experience provided a rich seam of material for his first venture into song writing. He was surprised to find the lyrics coming easily.

Supportive: Shane and his Westlife bandmates split last year

‘There is a feeling of getting things off my chest, but I don’t want to be preachy. Yes, bad things happen, but a lot of these songs are positive.’

Most of them are also inspired by his love for Gillian. He is hoping the solo career he is embarking on - with the release of his first single, Everything To Me, a tribute to her support through the tough times - will help ease the situation and provide for the future.

He says the easy thing would have been to record a solo album that included covers and sounded like Westlife, 'but I definitely didn’t want to do a solo Westlife album'.

He teamed up with different writers and has come up with a more stripped back pop sound and is looking forward to playing smaller venues than the arenas of his Westlife days.

In an industry not noted for loyalty, he has been able to rely on the continued support of Louis Walsh. When he confided his money troubles, he got some blunt advice. 'He told me: "You’ve got no money, but you’ve got your voice. We’re going to fix this."'

And if Louis can make it work for Shane, it will surely be one of the most remarkable comebacks ever.

Everything To Me is released on August 25. The album will be released later in the year.
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