Kiev enforces economic blockade on E.Ukraine as pensioners storm banks, sue president

© AFP Photo/Eric Feferberg

People wait in front of a closed bank on November 26, 2014 in the eastern Ukrainian city of Donetsk.

Kiev is enforcing an economic blockade on eastern Ukraine, where banks are closed and cash machines and credit cards aren't working. Disrupted social payments to the elderly have become the most acute issue.

Only a handful of cash machines are still functional in the breakaway parts of the Donetsk and the Lugansk regions, after local banks received an order from Ukraine's central bank earlier this week to "suspend" operations.

This follows a controversial decree signed by Ukrainian President Petro Porishenko on November 16 that is now coming into effect. Kiev is cutting economic ties with rebel-held areas by freezing bank accounts and stopping social payments, including pensions.

"As soon as we regain control [over E. Ukraine], all of the payments will be carried out," Ukraine's PM, Arseny Yastenyuk, said on Wednesday. "We would have liked people in the Lugansk and the Donetsk regions to be able to get their payments now, but we can't send money there, because it gets stolen in banks and in cash delivery vehicles."

Those willing to withdraw whatever's left on their accounts have to spend hours standing in queues. And what's left is not much.

"I was getting my pension via Oshchadbank," a woman from Makeevka told RIA Novosti. "I have 3,000 hryvnas (around $200) left on my account. But I can't get them. There has been no money in the banking machine for a week already. How am I supposed to live? I don't even have money for my medicines"

The only option left for many in the breakaway areas is to go to nearby towns under Kiev's control and try to withdraw cash there. Many are trying to reissue their bank accounts in government-held areas, so as not to lose money. Queues at bus stations are huge.

Some pensioners are complaining they haven't received their social payments for months.

"Ukraine says Donbass is a territory of Ukraine. But it came here with tanks and weapons instead of paying us pensions," Anatoly Visly from the city of Donetsk told Russia's Channel One. "I'm a war veteran and I have not received my pension for three months".

A 72 year-old pensioner from Donetsk, Vladimir Steshchenko has decided that complaining over disrupted payments is not enough and is taking the Ukrainian president to court.

"Our lawsuit has been accepted and registered," Steschenko's lawyer, Tatiana Volkova, told the Ukrainski Noviny news agency. "The defendant is Ukrainian President Petro Poroshenko, whose decree approved the illegal decision by the National Security and Defense Council of Ukraine."

Volkova believes there will be more similar lawsuits, as the presidential decree "differentiates between Ukrainians living in different territories," which is contrary to the country's constitution.

© AFP Photo/Eric Feferberg

The leaders of the self-proclaimed republics of Donetsk and Lugansk have slammed the economic isolation decision, saying it was contrary to the September Minsk peace agreements, brokered by the OSCE.

Vladimir Putin reacted to the decree on the economic blockade of eastern Ukraine by saying that the Kiev authorities were "cutting off those territories with their own hands."

The Russian president compared Kiev's confrontation with the Donetsk and Lugansk regions to Russia's own armed conflict in the Chechen Republic, which officially ended five years ago. He said that even at the worst moments, Moscow did not stop paying pensions and other social benefits to the Chechen people.

Leaders of the self-proclaimed republics of Donetsk and Lugansk have meanwhile launched their own social payments.

"Some of the social payments are done with the help of aid sent over from Russia," the Donetsk People's Republic Security Council secretary, Aleksandr Khodakovsky said on Wednesday, according to RIA Novosti.

Payments to single mothers, large families, orphans, disabled children were launched in November, Khodaskovsky said. Pensions are, he says, high on the agenda, with plans to organize payments within a month.