Business leaders propose Ukraine steer course between West, Moscow

GENEVA (Reuters) - Ukraine should seek special trade deals with Russia as well as the European Union and consider military non-alignment to help stabilize its economy and secure peace, top business leaders convened by the World Economic Forum said on Monday. The group, including top executives from Ukraine, Russia, the United States and the EU, agreed at a gathering in Switzerland on Sunday on a 10-point plan to end a conflict that has cost over 3,000 lives. Arrangements could ultimately be sealed by an international summit in Geneva. "All participants recognize that the implementation of these proposals in the present context is challenging given the many complexities," said a statement on the meeting convened by Klaus Schwab, Executive Chairman of the World Economic Forum (WEF), best known for its annual convention of business and political leaders at the Swiss ski resort of Davos. The executives, all with some interests in the region, included PepsiCo chief executive Indra Nooyi, BASF chairman Kurt Bock, Sberbank chairman German Gref and Ukrainian industrialist Viktor Pinchuk, who is also son-in-law to a former Ukrainian president. The plan built on a ceasefire called early this month that is currently holding despite occasional clashes, especially around the pro-Russian rebel strongholds of Donetsk and Luhansk. "Coordinate and establish special association and trade agreements for Ukraine...with the European Union as with the Russian Federation, and later possibly with the Eurasian Economic Community, to stabilize Ukraine’s economy," the ninth point of the plan declared. RUSSIA'S ECONOMIC AMBITIONS Ukraine pitched into crisis early this year when its pro-Russian president Viktor Yanukovich renounced a trade deal with the European Union in favor of closer links with former Soviet master Russia. Yanukovich fled after mass protests, then Ukraine re-aligned with the West and turned its back on Moscow. Russia seized control of the Crimea peninsula in March and annexed it, just as a pro-Russian rebellion broke out in the Russian-speaking east. The WEF plan suggested peace could best be secured by close trade ties with both the West and with Moscow, as well as the Eurasian Economic Community President Vladimir Putin promotes with Belarus and ex-Soviet Central Asian states. Putin had always seen Ukraine as an important potential component of such a grouping. The 16 business leaders also suggested neutral military status for Ukraine, implicitly an abandonment by Kiev of its ambition to join the NATO alliance. "Recognize the right of self-determination but encourage (Kiev) to consider a policy of military non-alignment for Ukraine, comparable to the status of other European countries (i.e. Finland, Sweden, Switzerland)," read the sixth point. Other points include decentralizing power in Ukraine, with clear recognition of minority language rights, rolling back sanctions and supporting an economic recovery plan. Also participating in the business brainstorm were Andrey Kostin, the head of Russia's VTB Bank, Severstal chief executive Alexei Mordashov, Siemens president Joe Kaeser, Alcoa < AA.N> chief executive Klaus Kleinfeld, and the governor of Ukraine's Donetsk region Serhiy Taruta. (Reporting by Tom Miles; editing by Ralph Boulton)