Normal relations with Russia is No. 1 issue for Ukrainian economy, says prime minister

The decline of exports to Russia by a quarter is an occurrence fraught with the closure of Ukrainian enterprises, massive layoffs, a drop in budget revenues, and lower living standards, Ukrainian Prime Minister Mykola Azarov said.

"Normalization of relations with Russia is issue number one for the national economy," Azarov said when opening a government meeting in Kyiv on Wednesday.

Nobody has offered nor will offer any compensation to Ukraine for the loss of this market, Azarov said. "Appealing to the WTO for mediation may not help," he added.

Ukrainian President Viktor Yanukovych reached an understanding at the recent meetings with Russian President Vladimir Putin that the situation does not meet the two countries' long-term interests, and the two agreed to develop a set of measures to foster the relationship, he said.

At the same time, Azarov did not make it clear whether such reconsideration of relations with Russia means Ukraine's decision not to sign an association agreement with the European Union, preparations for which have truly created some tension between Kyiv and Moscow since mid-2013.