Saturday, December 31, 2005

Ukraine Rejects Putin's Eleventh-Hour Natural Gas Price Offer

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko rejected Russian President Vladimir Putin's eleventh-hour proposal to delay a fivefold increase in natural gas prices, which may lead OAO Gazprom to stop supplying the fuel to the former Soviet republic tomorrow.

Ukraine's President Viktor Yushchenko looks on during a meeting with energy officials in the control centre of Ukraine's pipeline operator in Kiev December 31, 2005. Russian President Vladimir Putin offered Ukraine a three-month reprieve in a bitter gas price dispute on Saturday, but only gave Kiev until the end of the day to strike a deal.

"We can't accept a price of $230'' per thousand cubic meters, Ukrainian government spokesman Valentyn Mondrievsky said in a telephone interview from Kiev less than two hours after Putin's proposal was broadcast on Moscow-based Gazprom's NTV television network.

"We support Russia's proposal to switch gas prices to the market, but the price shouldn't look like economic pressure,'' Yushchenko said in an e-mailed statement.

State-run Gazprom, which supplies a quarter of Ukraine's gas and uses the country's pipelines to supply a quarter of western Europe's, plans to shut off supplies to Ukraine at 10 a.m. tomorrow if the nation doesn't agree to pay $230 per thousand cubic meters, up from $50 now.

Putin told a meeting of his Security Council today that "our Ukrainian brothers'' could buy gas in the first quarter of 2006 at the old rate if they signed a contract today to switch to "market prices'' in April. The meeting was attended by Gazprom Chairman Dmitry Medvedev, who is also Russia's first deputy prime minister, and Chief Executive Officer Alexei Miller.

In his statement, Yushchenko proposed that Gazprom freeze the gas price "for a period of time'' and that a committee of officials from the two nations be set up in the next 10 days to discuss the price.

Western Europe

Both sides have said Gazprom's exports to western Europe won't be affected by a cut off, which is scheduled to be shown live on various Russian state-run channels, including NTV.

Yushchenko, who Putin campaigned against in Ukraine's controversial presidential election a year ago, has said Ukraine is prepared to switch to market prices, though not as quickly as Russia wants. "What Russia expects for its gas "is completely unacceptable" and "economically groundless," he said in a televised address the nation last night.

"Why does Turkey pay $100 per thousand cubic meters, the Baltic countries pay $110, the Caucasus pays $100, and Ukraine, which is Russia's closest neighbor, must pay $230?''

Yushchenko last week rejected an offer from Putin to loan Ukraine $3.6 billion to help meet the higher price, saying his country doesn't accept "alms".

`Ready'

Dmytro Marunich, spokesman for NAK Naftogaz Ukrainy, Ukraine's national oil and gas company, said the country was ready for supplies to be cut. "We expect Gazprom to cut off the supply to Ukraine tomorrow if the Ukrainian government doesn't offer Russia anything," Marunych said via telephone earlier today. "Ukraine's ready for that.''

Russian and Gazprom officials have said they want to end Soviet-era subsidies and move toward a free market for natural gas.

Source: Bloomberg

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Putin Agrees to Ukraine Gas-Price Freeze

MOSCOW, Russia -- President Vladimir Putin ordered Russia's state-owned natural gas monopoly Saturday to supply Ukraine with natural gas at the current price for three months, if the government in Kiev immediately agreed to a big price hike to take effect later.

Russian President Vladimir Putin

Putin said in televised remarks that his offer was valid only until the end of the day. There was no immediate reaction from Ukraine, which faced a Russian threat to cut off gas supplies Sunday morning.

Putin said OAO Gazprom should continue the current price if Ukraine signed an accord Saturday accepting Gazprom's price increase starting in the second quarter. Gazprom has demanded Ukraine pay $230 per 1,000 cubic meters of gas _ more than four times the current price of $50.

Gazprom's spokesman, Sergei Kupriyanov, said Ukrainian negotiators had left Moscow Friday but the company was ready to wait for them through the end of the day to sign the contract.

Putin cast his move as a friendly gesture.

"Ukraine, above all, is a brotherly Ukrainian people, and we must think about the entire complex of relations between Russia and Ukraine," he said.

The price conflict underlined the tension between the two mostly Slavic former Soviet republics since Ukrainian President Viktor Yushchenko won a fiercely contested election against a Kremlin-backed rival a year ago. It threatened to dominate the New Year holiday, a big one in both countries.

Ukraine wanted any increase toward world-market prices to be phased in gradually, and Yushchenko said late Friday his country could now pay $80 per 1,000 cubic meters at the most.

Gazprom called the demanded price hike a long-overdue shift to free-market price mechanisms.

But Andrei Illarionov, Putin's former economic adviser, blasted it Saturday as a political move signaling the rise of neo-imperialist trends in Kremlin policy.

Illarionov said the Kremlin had asked him to help portray the price hike as a free-market measure, but he resigned this week because the move "had no relation not only to liberal economic policy, but to economic policy at all."

"Energy weapons are being used against neighbors," Illarionov said on Ekho Moskvy radio. "The move toward a policy of imperialism ... has a clear and high price that will eventually be paid by the citizens of a nation that embarks on the imperialist path."

Illarionov said that in August 2004, Gazprom signed a deal with Ukraine's gas company that envisaged five years of gas supplies at $50 per 1,000 cubic meters _ part of the Kremlin's efforts to support presidential candidate Viktor Yanukovych, who lost to the Western-leaning Yushchenko.

"When the political situation changed, they remembered about subsidies," said Illarionov, who long was a dissenter in the Kremlin, which is dominated by Putin's fellow veterans of the Soviet spy agency KGB.

Russia supplies about half of the European Union's natural gas, shipping most of it across Ukraine, and sought in advance to blame its neighbor for any disruption in supplies. It said that if it stopped deliveries intended for Ukrainian use, supplies to other countries could be restricted if Ukraine siphoned off gas meant for transit farther west.

Yushchenko's office said his Cabinet introduced measures to ensure the unhampered flow of gas to EU countries until a new contract was signed. But his prime minister said Ukraine had the right to take 15 percent of shipments through its territory as transit fees.

Source: AP

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Illarionov Blasts Ukraine Gas Price Hike

MOSCOW, Russia -- A former Kremlin adviser denounced Russia's New Year deadline for Ukraine to accept a massive gas price increase, saying Saturday the demand was a sign of resurgent Russian imperialism. Europe, meanwhile, warily watched the standoff amid warnings that its supplies could be affected.

Former Kremlin economic adviser Andrei Illarionov

Russia's state-owned gas monopoly, OAO Gazprom, has threatened to cut supplies to Ukraine Sunday morning if Kiev does not agree to pay $230 per 1,000 cubic meters of gas - more than four times the current price.

The company has said the price hike marks a long-overdue transfer to free-market price mechanisms.

However, Andrei Illarionov, a former economic adviser to Russian President Vladimir Putin, said the increase instead was a political move signaling the rise of neo-imperialist trends in Kremlin policy.

Illarionov said the Kremlin had asked him to help cast the price hike as a free-market measure, but that he resigned this week because the move "had no relation not only to liberal economic policy, but to economic policy at all."

"Energy weapons are being used against neighbors," Illarionov said on Ekho Moskvy radio. "The move toward a policy of imperialism ... has a clear and high price that will eventually be paid by the citizens of a nation that embarks on the imperialist path."

Russia supplies about half of the European Union's gas, most of which flows through Ukraine. Gazprom informed European customers that, once it stops deliveries intended for Ukrainian use, supplies to other countries could be restricted if Kiev siphons off gas meant for transit further west, company spokesman Sergei Kupriyanov said.

Ukrainian President Viktor Yushchenko's office said his Cabinet introduced measures to ensure the unhampered flow of gas into Ukraine and its transit to EU countries until a new contract was signed. But his prime minister has said Ukraine has the right to take 15 percent of shipments through its territory as transit fees.

EU Energy Commissioner Andris Piebalgs said he was concerned about the Russian threat, but was confident an agreement would be reached "and that Russia and Ukraine will honor their commitments to supply European gas markets as they have at all times in the past."

The showdown has underlined the tension boiling between the historically linked, mostly Slavic ex-Soviet republics since Yushchenko won the presidency a year ago on the wave of the "Orange Revolution" protests against election fraud. It threatens to dominate the New Year holiday, a big one in both countries.

Ukraine wants any increase toward world-market prices to be phased in gradually, and Yushchenko said late Friday that his country could now pay $80 per 1,000 cubic meters at the most.

Yushchenko was speaking during his televised New Year's address, which followed a carefully staged TV broadcast by Gazprom's head who emphasized the company's plans to shut off the valves on New Year's Day.

"The actions will be precise and resolute," said Alexei Miller, reiterating that the company would halt supplies to Ukraine at 10:00 a.m. Sunday unless a new contract was signed.

With no sign of progress toward a deal, Yushchenko proposed earlier Friday to freeze prices for the first 10 days of January to give both countries' companies extra time to negotiate a deal.

Putin's press service said the Kremlin had not received the telegram containing the proposal, and there was no reaction from the Russian leader. But Gazprom criticized the proposal, saying that accepting it could lead to indefinite delays.

Illarionov said that in August 2004, Gazprom signed a deal with Ukraine's gas company that envisaged five years of gas supplies at $50 per 1,000 cubic meters - part of the Kremlin's efforts to support presidential candidate Viktor Yanukovych, who lost a tense race last fall to the Western-leaning Yushchenko.

"When the political situation changed, they remembered about subsidies," said Illarionov, who long had been a dissenter in the Kremlin, which is dominated by Putin's fellow veterans of the Soviet spy agency KGB.

Illarionov likened Russia's price hike for Ukraine to Nazi and Soviet ultimatums issued to Eastern European nations before their annexation on the eve of the World War II, and urged the Kremlin to step away "from the brink of a precipice that we are approaching so blindly and quickly."

Source: AP

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Russia Spurns Ukraine's Pleas As Gas Shutoff Looms

KIEV, Ukraine -- Russian gas giant OAO Gazprom yesterday spurned Ukraine's plea to freeze a rise in prices as the clock ticked down to a New Year's Day deadline for a deal to keep supplies flowing to the ex-Soviet state and Moscow's European customers.

Ukrainian President Yushchenko appealed to Russian President Vladimir Putin in a telegram, asking for negotiations to be extended to January 10 with 'a moratorium on price rises' throughout the period.

Ukrainian President Viktor Yushchenko's appeal coincided with the apparent failure of last-ditch attempts, watched anxiously by consumers in snowbound Western Europe, to end a row over Russia's sudden demand for a fourfold leap in prices.

A clearly nervous European Union called a Jan. 4 meeting of energy officials from its 25 member states to discuss the issue.

"The idea is to be ready for all eventualities and to have a common approach," European Commission spokesman Amadeu Altafaj Tardio said.

Central European nations started setting up contingency plans in case there are supply disruptions.

Mr. Yushchenko's proposal, in a message to Kremlin leader Vladimir Putin, called for further talks with a contract to be signed by Jan. 10.

"Pending completion of these talks and signing of a contract, a moratorium is proposed on increased prices and rates," it read.

But Gazprom clearly had no confidence in the proposal.

"There is a danger that after having proposed to freeze the price for the first 10 days of January, the Ukrainian side will then want to freeze it for another 10 days," Gazprom spokesman Sergei Kupriyanov said in response to the appeal.

Gazprom says it will cut off all supplies to Ukraine tomorrow morning unless its neighbour agrees to pay $230 (U.S.) for 1,000 cubic metres of gas against a current rate of $50.

Russia argues it is subsidizing Ukraine by supplying gas under outdated terms -- discounting prices with the costs of using Ukraine's pipelines to send gas to European customers.

A quarter of Europe's gas needs come from Russia and nearly all of that is piped across Ukraine.

Simmering in the background is tension between the two countries after Ukraine's "Orange Revolution" protests last year which helped put in power the pro-Western Mr. Yushchenko at the expense of the Kremlin's preferred candidate.

"I simply do not want to believe that this is a result of pressure from Russia," Mr. Yushchenko said.

He also announced a deal to buy 40 billion cubic metres of gas next year from ex-Soviet Turkmenistan in Central Asia -- at $50.

Source: Reuters

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Friday, December 30, 2005

Worries of a Winter Gas Shortage in Ukraine Intensify

MOSCOW, Russia -- Worries of a winter gas shortage in Ukraine intensified today as Russia's energy giant, Gazprom, renewed its threat to cut supply lines to Ukraine on Sunday morning if the country did not accept a nearly fivefold increase in price.

Russia's natural gas giant Gazprom chief Alexei Miller speaks to press at his headquarters

The impasse showed no sign of easing. Gazprom rejected an appeal from Viktor A. Yushchenko, Ukraine's president, to freeze prices and maintain gas flow through Jan. 10 to allow for further negotiations.

The company also said that it had run technical tests and was capable of stopping flows for Ukraine, through which much of Europe's gasmoves, while meeting export obligations to countries downstream.

The European Union proposed an emergency meeting of energy officials on Jan. 4. The call reflected worries that the stalled negotiations could tighten supplies in European countries, many of which buy large portions of their gas from Gazprom but receive it after it has flowed through Ukrainian pipelines.

Ukrainian officials and industry analysts played down any immediate risk, saying gas reserves in Ukraine would ensure that its supply was maintained for at least two days and perhaps longer than two weeks. Europe's reserves would also prevent any immediate shortages there.

"I hope Gazprom will not turn off the tap," said Valery Nesterov, an energy analyst at Troika Dialog, an investment firm in Moscow. But he added that if the flow is cut, "they still have the time to negotiate."

The test of wills underscored enmities that have tainted relations between Ukraine and Russia since Mr. Yushchenko and his supporters overturned a fraudulent election last year, defeating a Kremlin-backed candidate and pledging to steer Ukraine toward a more Western foreign policy.

It also marked Russia's willingness to use its state-controlled gas monopoly as an instrument of foreign policy, even coercion, in dealing with energy-hungry neighbors.

That policy is not without risk. The Kremlin and its allies at Gazprom have seized a strong position in the short term. But their threats against Ukraine, their mocking of Ukrainian proposals and concerns, and their willingness to foster worries among other gas customers have raised fresh questions about whether Gazprom, Russia's largest company, is a reliable energy partner.

The dispute centers on Gazprom's politically influenced pricing system.

Ukraine, through a deal arranged under former President Leonid D. Kuchma, has been paying $50 for 1,000 cubic meters of gas, reflecting Russia's practice of providing discounted energy to former Soviet nations that remain within the Kremlin's orbit.

Gazprom, with President Vladimir V. Putin's approval, has proposed charging between $220 and $230 for 1,000 cubic meters, in line with prices in Europe. Mr. Putin has offered $3.6 billion loan to Ukraine to help cover the costs, a gesture variously seen as pragmatic or patronizing.

Mr. Yushchenko's government has said Ukraine is prepared to pay more, but not so much or so fast, and proposed a transition period with a much smaller hike. Mr. Yushchenko has also turned down the loan offer, saying Ukraine should pay for energy itself, albeit "at a reasonable price."

Ukraine's volatile domestic politics lie just beneath the surface.

Parliamentary elections are scheduled for Mar. 26. The elections will be accompanied by constitutional changes, negotiated near the end of the protests that ushered in a new government last year, that will weaken the Ukrainian presidency and strengthen the Parliament and prime minister.

The combination of the new Constitution and the elections means that the faces and policies of Ukraine's government could shift remarkably once again. Russia has made clear its disaffection with Mr. Yushchenko and his government, and the gas dispute is widely seen as an effort to undermine him in part to weaken his party's standing before voters.

A gas shortage during heating season could simultaneously tarnish the revolution, discredit the president and weaken his party, perhaps leading to a more pro-Russian government in Kiev, Ukraine's capital.

Ukrainian officials have acknowledged the risks. At a news conference on Thursday, Anatoly Kinakh, secretary of Ukraine's National Security and Defense Council, said that if talks break down, the effects on Ukraine's heavy industry would be severe.

"It is forecast that Ukraine's G.D.P will decline 4 to 5 percent in 2006," he said, according to a translation by the B.B.C. "Inflation will be at 27 to 30 percent. The social and economic situation in the country may worsen significantly."

He added, "There is the potential loss of hundreds of thousands of jobs."

Gazprom has been unflinching. Aleksei Miller, its chief executive, reiterated the threat today.

"If Ukraine does not sign a contract on the purchase of gas in the remaining hours before the start of the new year, on Jan. 1 at 10 a.m. Moscow time, gas supplies from the territory of the Russian Federation to Ukraine will be completely cut off," he said in televised remarks.

Gazprom officials later clarified his statement, saying gas would still be sent through Ukraine to European customers, but flow would be reduced to account for the cut to Ukraine.

Mr. Nesterov, at Troika Dialog, said it was impossible for Gazprom to meet contractual obligations to European customers without sending gas through Ukraine, because other transit options, through Turkey or Belarus, lack the capacity for those markets.

This left open the possibility that if there was no settlement, Ukraine might divert transiting gas for domestic use, which earlier in the week Prime Minister Yury I. Yekhanurov threatened to do. Gazprom said diversion would be regarded as theft. Ukraine's threat, if acted upon, could also create shortages in Europe.

Mr. Nesterov said that if there is no settlement, Gazprom's position could harm it over the long term. Gazprom is aggressively seeking new markets, but its competitors might now raise new questions about how it makes its decisions, and whether it can be trusted.

"This will not get the company international good will," he said. "The gain is tactical, but the loss would be strategic."

The company seemed undeterred. According to the RIA Novosti news service, it said it would invite Russian television stations to broadcast the reduction in gas flow live on New Year's Day.

Source: The New York Times

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Russians Stand Firm On Ukraine Gas Dispute

MOSCOW, Russia -- Russian authorities refused to ease their tough stance in a politically charged dispute with Ukraine over gas prices Friday, issuing a stern new threat to halt supplies to its neighbor on New Year's Day and criticizing Kiev's call for more time reach a deal.

Russian President Vladimir Putin dressed as a sailor. Russia has warned Ukraine that any attempt by Kiev to change the terms of Moscow's lease of a key naval base on the Black Sea would also threaten agreements on recognition of each other's territorial borders


Ukrainian leaders, meanwhile, tried to reassure the ex-Soviet republic's 48 million people they will not be left in the cold by the conflict that has underlined the political tension caused by the election of a Westward-leaning president in Ukraine last year.

The chief of Russia's natural gas monopoly, OAO Gazprom, reiterated that it will halt supplies to Ukraine on Sunday morning unless a new contract is signed with its Ukrainian counterpart.

"The actions will be precise and resolute," Alexei Miller said on Gazprom-owned NTV television. The station cut into a news broadcast to show Miller live.

Russian authorities are demanding that Ukraine pay $230 -- more than four times the current price of $50 -- per 1,000 cubic meters of gas. Ukraine wants an increase that would bring what it pays closer to world prices phased in gradually and says $75 to $80 is a fair price for now.

The price Russia wants Ukraine to pay is far higher than it is charging other former Soviet republics -- even those that are seeking, like Ukraine, to shake off Russian influence and integrate with the West.

Nadia Kazakova, an oil and gas analyst at Alfa Bank in London, said West European countries would pay an average of $240 per 1,000 cubic meters next year. Hungary is paying $240 for Russian gas, and Romania will pay about $280 starting next year, officials said.

"There is room for negotiation between $230 and (an) actual or reasonable or market price which Ukraine might be willing to pay," Kazakova said. "Ultimately I think there will be some resolution."

But with no sign of progress toward a deal, Ukrainian President Viktor Yushchenko proposed Friday that Russian President Vladimir Putin order both countries' companies to sign a contract in the first 10 days of January, freezing prices until then, Yushchenko's office said.

Putin's press service said the Kremlin had not received the telegram in which Yushchenko made the proposal, and there was no immediate reaction from the Russian leader. But Gazprom said it feared the proposal would lead to indefinite delays.

Source: AP

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Fears Of New Cold War As Russia Threatens To Switch Off The Gas

MOSCOW, Russia -- Picture the families shivering in apartments without heating, factories grinding to a halt, frozen water pipes bursting in the depths of winter. Welcome to the new Cold War.

Russian President Vladimir Putin (L), meets with Head of the Ukrainian national state gas company Naftogas Alexei Ivchenko and Ukrainian Energy Minister Ivan Plachkov (R), in the Novo-Ogaryovo residence outside Moscow

At 10am on Sunday, Russia is threatening to unleash the most powerful weapon in its post-Soviet arsenal: unless Ukraine agrees to a fourfold increase in the price it pays for gas, Russia will simply turn off the tap.

Nor is it just Ukraine under threat — the EU imports about half of its gas from Russia and 80 per cent of that comes through Ukrainian pipelines.

So when President Putin met Ivan Plachkov, the Ukrainian Energy Minister, in Moscow yesterday, there was more at stake than relations between the neighbouring states. Analysts fear the dispute could provide a foretaste of how Russia will use its massive oil and gas reserves as a foreign policy tool in future disputes with the West.

“Energy co-operation has replaced military might as the mainstay of Russia’s international credibility,” Chris Weafer, chief strategist at Alfa Bank in Moscow, said. “It is using its importance as an energy partner to pursue its geopolitical and foreign policy agenda.”

The dispute began when Russia, which supplies a third of Ukraine’s gas, demanded that Kiev agree to pay $220-$230 (£128-£133) per 1,000 cubic metres, compared with the $50 it had previously paid instead of transit fees for gas heading to Western Europe.

Gazprom, the Russian state gas monopoly, said it was simply phasing out subsidies that Ukraine no longer needed since the Orange Revolution last year set it on the path towards integration with the EU. The only possible compromise, it said, was for Ukraine to sell part of its pipeline network to Russia.

Ukraine said that it was willing to accept a smaller price increase, phased in over five years, but ruled out selling its pipelines, which it sees as a strategic asset.

Then things started to get nasty. Aleksandr Medvedev, Gazprom’s deputy head, threatened to cut off Ukraine’s gas supplies at 10am on January 1 if Kiev did not back down.

Ukrainian officials then suggested that its neighbour should pay more for rental of the Black Sea port of Sevastopol, where the Russian Southern Fleet is based. Sergei Ivanov, the Russian Defence Minister, said that would be fatal. Yuriy Yekhanurov, the Ukrainian Prime Minister, fuelled the fire this week by saying that Kiev had the right to take 15 per cent of Russian gas shipments to Europe as a transit fee. Gazprom said that would be theft.

President Putin proposed a compromise yesterday, offering to lend Ukraine up to $3.6 billion to ease the transition to the higher price. He scolded negotiators on both sides for failing to reach a deal. “You created a crisis not only in the energy sphere. It looks very much like a crisis in interstate relations,” he said. “That is very bad.”

But Ukraine rejected his offer. Its officials accuse the Kremlin of trying to punish Viktor Yushchenko, their President, for turning his back on Russia and pursuing membership of the EU and Nato. They also suspect that Moscow is helping Mr Yushchenko’s pro-Russian rival, Viktor Yanukovych, to stage a comeback in parliamentary elections in March.

Gazprom, they point out, has raised gas prices for other former Soviet republics, such as Georgia and Armenia, to $110 — and it has agreed to sell gas to Belarus, a staunch ally, for a mere $46.68.

But analysts say the reform is not just about Ukraine: it is part of the Kremlin’s broader strategy to gain control of Russia’s energy reserves and export routes and to use them to reclaim its world power status.

A year ago, the state oil company, Rosneft, swallowed up most of Russia’s biggest private oil company, Yukos. Then in October Gazprom bought the fifth-largest oil firm, Sibneft. The net result is that the Kremlin now controls 30 per cent of Russia’s oil reserves, and all of its gas supplies and pipelines.

Within the next ten years, Russia aims to be at the centre of a spider’s web of oil and gas pipelines feeding all the major world markets. That would be welcomed by countries anxious to meet the growing demand for gas and to reduce their reliance on the volatile Middle East.

But it leaves the EU dangerously dependent on a country with a history of political instability and aspirations to reclaim its superpower status.

Mr Putin has promised the EU that Russia will not use oil and gas supplies to blackmail other countries. But Mr Yushchenko says that the current dispute proves otherwise, and the EU is under pressure from several members to intervene.

Ukraine has enough gas to last the winter — when temperatures can drop as low as -20C (-4F) — if Russia does turn off the tap.

“Not one Ukrainian family will be cold in the winter,” Mr Yushchenko told NTN television yesterday. But Ukrainian officials have urged people to conserve energy, just in case.

Source: The Times

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Bitter Gas Delivery Dispute Deepens As Ukraine Rejects Russian Loan

KIEV, Ukraine -- Ukraine dug in its heels Thursday in a bitter dispute with Russia over gas deliveries, as President Viktor Yushchenko rejected President Vladimir Putin's offer of a multibillion-dollar loan to help Kyiv adjust to a huge hike in Moscow's price tag for gas.

A demonstrator holds a poster mocking Ukrainian President Yushchenko's campaign slogan 'Yes!' with a 'No' during a protest against the Ukrainian position in the Russian gas issue in front of the Ukrainian embassy in Moscow. Russia and Ukraine are in 'real crisis,' President Vladimir Putin said, as negotiations to resolve a gas price dispute went to the wire ahead of a January 1 deadline for Ukraine to accept a steep increase or see supplies cut off.

With Russia threatening to stop supplying gas to Ukraine on New Year's Day if no solution is found, Ukraine's state-run gas company said the country's 48 million people won't freeze and its factories won't go dark if Moscow follows through on the threat.

At a second day of talks in Moscow, Russian authorities stuck by their demand that Ukraine pay more than four times the current price, and no agreement was reached. The negotiations were to resume Friday.

Meanwhile, Russia tightened the screws by signing a new deal to purchase gas from Turkmenistan that analysts said would leave the Central Asian country with less to sell to Ukraine - which relies on Russia for about a third of its gas and Turkmenistan for 45 per cent.

The dispute has further damaged relations between Russia and Ukraine, two mostly Slavic, Orthodox Christian ex-Soviet republics whose common history goes back centuries but whose ties have been strained by the ascendancy of the westward-leaning Yushchenko a year ago.

Russia's state-run natural gas monopoly OAO Gazprom says it plans to halt gas deliveries to Ukraine on Jan. 1 unless Kyiv agrees to pay about $230 US per thousand cubic metres - up from the $50 it pays now.

"This is a price that Ukraine will never accept," the ITAR-Tass news agency and Russia's NTV television quoted Yushchenko as saying Thursday. According to ITAR-Tass, he added that the Russian price was "a provocation."

Ukrainian officials say they want a price increase phased in over several years and claim the sudden huge hike would cripple industry. Energy-intensive steel and heavy industries are a key component of the struggling country's economy.

Yushchenko said Ukraine wants a transition period of about three years to adjust to higher prices, and that an "objective" price for the Russian gas in Ukraine now is $75-80 US, according to his office.

Putin indicated the price was unacceptable, saying in the Moscow talks that Russia could no longer subsidize gas deliveries to Ukraine and that Kyiv must pay a market rate based on average European prices.

In comments shown repeatedly on state-controlled Russian television stations, Putin said Russia offered to loan Ukraine up to $3.6 billion to help it pay the higher price. "Even by Russian standards, this is a huge sum," he said.

Yushchenko rejected the offer, the Interfax news agency reported, saying his country was thankful for the proposal but that "Ukraine does not need these credits."

"Ukraine will rely on its own resources under a clear, correctly and objectively formed price," Interfax quoted him as saying.

Accepting a big loan from Russia would increase the Kremlin's clout in Ukraine as Yushchenko - who came to power after last year's Orange Revolution, beating a Russian-backed rival in a bitter presidential battle - seeks to move out of Moscow's shadow.

Source: AP

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US Urges Compromise In Russia-Ukraine Gas Dispute

WASHINGTON, DC -- The government has urged Moscow and Kiev to reach a compromise in their dispute over the price of Russian natural gas exports, a State Department spokesman said.

State Department spokesman Adam Ereli

'We have been in touch with both countries to express the view that we urge them to come to a compromise that meets the needs of both, underscoring the importance of security of supply and stability of prices,' spokesman Adam Ereli said.

While emphasizing that the United States sees the issue as 'a bilateral matter between Russia and Ukraine,' Ereli added that the dispute 'is a question of energy supply that we and the Europeans are all following closely because it is significant and important.'

Talks in Moscow between senior Russian and Ukrainian negotiators ended with no deal Thursday, but will resume Friday just hours ahead of a deadline for cutting off supplies to Kiev, Russian news agencies reported.

Russia has threatened to cut off gas shipments to Ukraine on January 1 if Kiev refuses to accept a quadrupling of the price.

Ukrainian President Viktor Yushchenko was quoted by Interfax news agency late Thursday as offering a much lower price increase of only 50 to 60 pct.

Western Europe is observing the crisis nervously as around a fifth of European gas supplies come from Russia via Ukraine and there are fears the row could disrupt shipments.

Source: AFX News

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EU Expects Quick Settlement of Russia-Ukraine Gas Dispute

MOSCOW, Russia -- The European Commission said Thursday it was closely monitoring a bitter dispute over gas prices between Ukraine and Russia and believes that a negotiated settlement is near.

Demonstrators in Moscow protest against Ukraine’s refusal to accept new price for natural gas

“The outcome of these talks with Ukraine are important for us and we are following this but we think it can still be solved,” the AFX news agency quoted commission spokesman Amadeu Altafaj Tardio as saying.

Russian and Ukrainian negotiators were meeting in Moscow to break the deadlock over gas prices as the clock ran down on a Jan. 1 deadline for Ukraine to agree to a steep increase or see supplies cut off — potentially disrupting the flow of gas to Europe.

Russian state-controlled energy giant Gazprom has announced a more than four-fold increase in gas prices to neighboring Ukraine and says that if Kiev does not agree by Sunday the supply will be shut down.

“It’s true that Gazprom supplies a quarter of Europe’s gas so of course everything linked to these negotiations is important to us,” Altafaj Tardio said.

“We expect that the difficulties that are appearing now can be resolved in the coming hours before the deadline,” he added.

However, the commission was “not envisaging an intervention” to help settle the dispute.

The standoff is being closely followed in Western Europe amid concerns there that any attempt by Ukraine to compensate for a cut-off in its own supplies by using those in transit to Europe could then affect EU gas imports.

Source: MosNews

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Kiev Stalls Former Nazi's Extradition

KIEV, Ukraine -- Kiev will study the US decision to extradite convicted ex-Nazi death camp guard John Demjanjuk to Ukraine before deciding whether to let him return to the United States, a process which could take years, Ukrainian officials have said.

Accused Nazi death camp guard John Demjanjuk (C), is helped out of a vehicle upon his arrival at Federal Court in Cleveland

"According to general practice" and "Ukrainian law, the US court decision must be examined by competent Ukrainian officials, such as the prosecutor general," the foreign ministry's spokesman Vasyl Filipchuk said.

Demjanjuk, 85, a convicted former Nazi concentration camp guard whose legal battles with the American and Israeli governments have dragged on for 28 years, was ordered on Wednesday to be deported to his native Ukraine.

However, a source in the Ukrainian ministry said that as Demjanjuk had no Ukrainian citizenship, "this is a 100-per cent reason to refuse accepting him."

According to this source, principal conclusions would be drawn by Ukrainian security services, who would then transmit them to the prosecutor general.

"If in those two cases the conclusion is positive, a political decision would have to be made" as to whether to accept or refuse his extradition, the source said, adding that the procedure could take "years".

Officially, Ukraine had so far received no official request from the United States on this issue, Mr Filipchuk said, adding that "we have only media reports."

If Ukraine refuses the extradition, Demjanjuk would be deported to Germany or Poland.

Demjanjuk's legal odyssey began in 1977 when the US Justice Department first accused him of being a Ukrainian prison camp guard nicknamed "Ivan the Terrible", who tortured Jewish inmates and operated gas chambers at three camps that killed 900,000 people.

A US Federal judge stripped Demjanjuk of his US citizenship in 1981 for lying about his Nazi past when he first entered the United States in 1952. The Justice Department then began proceedings to deport him to Ukraine.

Israel requested Demjanjuk's extradition in 1983 to face war crime charges. He was found guilty and sentenced to death. The conviction was overturned in 1993 when the Israeli Supreme Court heard testimony from former death camp guards and labourers that another man was actually Ivan the Terrible.

Demjanjuk, a retired autoworker, returned to his home in a Cleveland suburb and restored his citizenship in 1998.

Judge Michael Creppy stripped Demjanjuk of his citizenship for a second time last June and the Justice Department applied to have him deported.

Demanjanjuk applied for asylum and argued he would likely be tortured if he was deported to his native Ukraine.

Source: AFP

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Thursday, December 29, 2005

US Judge Orders Accused Nazi Demjanjuk Deported to Ukraine

CLEVELAND, OH -- John Demjanjuk, a retired auto worker once thought to be the sadistic Nazi death camp guard "Ivan the Terrible", can be deported back to his native Ukraine, a U.S. judge ruled on Wednesday.

John Demjanjuk

Chief U.S. Immigration Judge Michael Creppy ruled that Demjanjuk would not likely face prosecution if he were sent from the United States to Ukraine, Germany or Poland and ordered his removal.

Demjanjuk, 85, had appealed to the Immigration Court for relief from a previous ruling from Creppy that he could be deported.

Demjanjuk claimed that he could be charged, prosecuted or face torture if he were sent back to Ukraine. The U.S. government argued that Demjanjuk had not shown that any such treatment was likely.

Demjanjuk was found guilty of lying to gain entry to the United States.

Demjanjuk, whose case has been in U.S. courts for three decades, lives in the Cleveland, Ohio, area.

A federal judge previously revoked Demjanjuk's U.S. citizenship on multiple grounds, including his "willing" service in a unit "dedicated to exploiting and exterminating" Jewish civilians in Nazi-occupied Poland.

In 2002, following a trial, a federal judge in Ohio ruled that the government had proved that Demjanjuk was an armed guard at Sobibor, Majdanek and Flossenburg concentration camps.

A federal appeals court affirmed the decision and the case was then brought before the immigration judge to approve deportation.

Demjanjuk has denied he was ever a World War II death camp guard, saying he was in the Soviet Army but spent much of the war as a German prisoner.

Source: Reuters

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Ukraine, Russia Fail to Resolve Dispute

MOSCOW, Russia -- The energy ministers of Ukraine and Russia on Wednesday failed to resolve a politically charged dispute over Russia's plans to raise the price of natural gas exports to Ukraine.


The two officials left late-evening negotiations in Moscow without a deal, but talks were to resume Thursday, Ukrainian Energy Minister Ivan Plachkov said.

Russia is threatening to cut off supplies within days unless Ukraine accepts its demands to pay more than four times the current price for gas imports.

"We agreed to break until tomorrow," Plachkov said in footage shown on NTV television, adding that compromises in the nations' positions are essential.

"Of course" compromises are possible, Plachkov said in response to a reporter's question. "There is no way to do without movement and compromises."

Russia's state-controlled Gazprom natural gas monopoly says it is prepared to shut off gas to Ukraine on Jan. 1 a major holiday in both countries unless Ukraine accepts the price increase.

Hours before the talks between Plachkov and Russian Fuel and Energy Minister Viktor Khristenko, Ukrainian Prime Minister Yuriy Yekhanurov denounced the Russian demand as unacceptable pressure against his country.

About a third of Ukraine's natural gas comes from Russia, and Ukrainian officials say raising the price from the current $50 per 1,000 cubic meters could cripple Ukraine's energy-intensive heavy industry and impede the country's efforts to boost its economy.

Gazprom argues that Ukraine should pay $220 to $230 more in line with world prices and portrays the demand as a justifiable move to scrap energy subsidies enjoyed by former Soviet nations.

Kiev has asked for the increases to be phased in over five years instead of all at once.

Yekhanurov warned Tuesday that Ukraine could divert some of the Russian gas supplies going to Europe, calling it Ukraine's right to take 15 percent of those shipments passing through its territory to European markets. Gazprom said such action would amount to theft.

Source: AP

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Gang With 57 Murders On Its Record, Arrested

KIEV, Ukraine -- A gang consisting of eleven criminals who committed a total of 57 murders has been rendered harmless in the East-Ukrainian region of Donetsk, public relations department of Ukraine's Interior Ministry said.

The organized grouping was engaged in contract murders, extortions, and criminal control over the markets of metal and fuels and over gambling.

From 1990 through 2002, members of the grouping committed a series of resounding contract murders pertaining to partitioning of the criminal spheres of influence. They killings involved the use of firearms and explosives.

The gang's operations embraced the Donetsk region, other parts of Ukraine and other countries of the Commonwealth of Independent States.

The list of victims includes 25 businessmen, 19 gangsters from other criminal groupings, eight criminals from the same grouping, and five occasional witnesses.

The gangsters were selected by the grouping's mogul, Givi Nemsadze, the Interior Ministry said.

The grouping took final shape by 1995 and established corrupt relationship with public employees of different ranks, some of them working in law enforcement agencies.

Given the inter-regional and inter-state scope of the crimes the grouping committed, its activities are being investigated by the Interior Ministry and the Prosecutor General's Office.

SOurce: ITAR-Tass

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Russian-Ukrainian Naval Deal Should Remain Unchanged — Moscow

MOSCOW, Russia -- Russia has warned Ukraine that any attempt by Kiev to change the terms of Moscow’s lease of a key naval base on the Black Sea would also threaten agreements on recognition of each other’s territorial borders, AFP reported.


Russian Defense Minister Sergei Ivanov said that the leasing agreement for the naval base in the Crimea was part of a broader Russian-Ukrainian treaty on territorial integrity.

“That is why pushing for changes to this accord would seem fatal,” Ivanov said.

Officials in Ukraine, which is embroiled in a bitter dispute over gas prices with the Russian state-controlled natural gas giant Gazprom, have suggested charging Russia higher fees for use of the base on Ukraine’s southern Crimean peninsula.

Source: MosNews

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Wednesday, December 28, 2005

Dispute Between Ukraine, Russia Heats Up

KIEV, Ukraine -- A dispute between Ukraine and Gazprom, Russia's state-owned natural gas monopoly, grew more intense Tuesday as Ukraine threatened to take a portion of Russian gas exports to Europe and Gazprom called such a move theft.

Protesters holds placards reading 'Gas-the price we pay for your NATO ' during a mass rally in front of Ukraine President Viktor Yushchenko's office. Yushchenko urged compromise in a bitter dispute with Russia over natural gas prices as Russian state-controlled giant Gazprom threatened to cut off supplies to Ukraine.

The verbal sparring escalated as Gazprom insisted that it would more than quadruple the price of natural gas exports to Ukraine and the Ukrainian prime minister asserted that Ukraine had a right to take 15 percent of the gas that Gazprom exports through Ukraine to Western Europe.

Gazprom has said it will shut off gas exports to Ukraine on Sunday if the country fails to agree to the new price. Ukraine's president, Viktor Yushchenko, has said the country will accept higher prices, but only if they are phased in over two years.

The acrimony reflects a determination by Russia and Ukraine to stand firm in a dispute that could have long-term consequences for the foreign policy of both nations.

"If Ukraine holds out and manages to strike a compromise with Russia, then Russia's ambitions to restore its influence in this part of the former Soviet empire could be finished," said Bruce Jackson, president of Project on Transitional Democracies, a U.S. group that has supported former communist countries joining NATO.

"This is Russia's last chance to influence Ukraine," he said. "And it is no coincidence that it is using energy as its tool against President Yushchenko before Ukraine's parliamentary elections that take place in March."

Since the Orange Revolution in Ukraine last year, in which Yushchenko was elected president, Ukraine's foreign policy has shifted toward the European Union and NATO.

While the Kremlin has accepted its former satellites in the Baltic States and throughout Eastern and Central Europe joining those groupings, it has been reluctant to see Ukraine go in the same direction because of its size, geography and importance to Russia's foreign policy goals and economic interests.

Energy experts said Gazprom's tough statement against Ukraine reflected that struggle.

For weeks, Ukraine has said it would be willing to increase the price it pays for gas from Russia as well as place all its energy relations with Russia on a cash basis instead of a semi-barter system. But it wanted a two-year transition period, during which it was prepared to gradually raise the prices to European levels, raise domestic energy prices and introduce energy-saving changes.

Yushchenko and President Vladimir Putin agreed Tuesday that Yushchenko would send the Ukrainian energy minister, Ivan Plachkov, to Moscow today in an effort to reach a compromise with Russian energy minister Viktor Khristenko.

Their conversation came hours after Ukraine's prime minister, Yury Yekhanurov, said the country could take 15 percent of the gas Russia exports via Ukraine to Western Europe. More than 80 percent of the gas Russia exports there goes through Ukraine.

Gazprom said the price of gas and the price of shipping it were not comparable and that any siphoning by Ukraine of Russian gas destined for Europe would be considered theft.

Natural gas is one of the key commodities for Russia, whose economy heavily depends on exports of natural resources.

As the price dispute intensified, Ukrainian officials began suggesting that the country hike the rent it charges Moscow for the Russian navy's Black Sea facilities. The port in Sevastopol provides the Russian navy its only convenient access to the Mediterranean.

Source: The New York Times

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Tuesday, December 27, 2005

Ukraine’s Yushchenko Pays Unexpected Visit To Troops In Iraq

AL KUT, Iraq -- Ukrainian President Viktor Yushchenko has made an unannounced one-day visit to his country’s peacekeepers in Iraq days before the troops were to leave the war zone, Associated Press reported.


The 867 Ukrainian soldiers have served as a part of the U.S.-led coalition under Polish command in southern and central Iraq. All are due home by Dec. 30, making the former Soviet nation the latest country to wind down its presence in the coalition.

Yushchenko plans to visit troops at the Ukrainian headquarters base in the town of Al Kut, said presidential spokeswoman Irina Gerashchenko.

He will also meet top Iraqi officials to discuss Ukraine’s role in the reconstruction of the country, she said.

Ukraine initially contributed 1,650 troops to the U.S.-led force in Iraq.

The government began withdrawing the troops in March, and President Yushchenko had pledged they would be out by the year’s end. The Western-leaning Ukrainian leader, who was elected in December last year, made a pullout from Iraq one of his campaign promises.

Eighteen Ukrainian soldiers died and 32 others were wounded in Iraq.

Source: MosNews

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Monday, December 26, 2005

Russia Closes Ukraine Ex-PM Case

KIEV, Ukraine -- Russia has dropped criminal charges against former Ukrainian Prime Minister Yulia Tymoshenko. Ms Tymoshenko had been accused of bribing Russian defence officials in the 1990s - charges she denied.

The charming Yulia Tymoshenko

But Russia's prosecutor-general's office said in a statement: "The criminal case has been closed because the statute of limitation has expired."

Russia dropped the international warrant against Ms Tymoshenko after she met prosecutors in Moscow in September.

Ms Tymoshenko has had uneasy relations with Russia, dating back to the mid-1990s when she headed Ukraine's main gas distribution company.

Orange split

However, she has apparently moved to mend fences with the Kremlin, after her sacking as prime minister in September.

Ms Tymoshenko's political bloc is seen as a top contender for parliamentary elections in March.

She hopes the poll will help her regain her job as prime minister, with much wider powers because of constitutional reforms.

Ms Tymoshenko was a key player during Ukraine's so-called Orange Revolution last year - the mass street protests that swept Viktor Yushchenko to power.

President Yushchenko's decision to fire the entire Tymoshenko cabinet officially marked a split in the Orange camp.

Source: BBC News

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Ukraine Forks Out $12 Million For President’s Luxury Plane

KIEV, Ukraine -- Ukraine has raised 12 million dollars to finance the purchase of a luxury plane for President Viktor Yushchenko. Amber, mahogany and 18 carat gold were used in the interior of the presidential An-74 plane, the Ukrainian newspaper Segodnya wrote on Monday.

An-74 plane

The aircraft is currently being tested at the Kharkov aircraft plant. In designing the interior or the plane, designers took into consideration the taste of Yushchenko’s wife.

The lining is in light colors with an incrustation of rare gems. All elements made of metal, like handles or lamps, are made of gold against the initial plans were to make them of silver. However, “Katerina Yushchenko insisted on gold,” the newspaper wrote.

Earlier the president’s property manager, Ihor Tarasyuk, said there was no money in the country for the plane.

Source: ITAR-Tass

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Russia Warns Ukraine Against Siphoning Off Europe-Bound Gas

MOSCOW, Russia -- Russian natural gas giant Gazprom said on Sunday it may take Ukraine to an international court if the former Soviet republic uses gas intended for European clients from a pipeline running through its territory without permission.

Gazprom headquarters building

"Eighty percent of our gas transits through Ukraine, which was the motive behind our Ukrainian colleagues' decision to start to blackmail us ... But we are ready to go to the Swedish court in the event of Ukraine's unsanctioned use of gas," deputy chairman Alexander Medvedev told Channel One television, referring to the Stockholm International Court of Arbitration, which acts as a neutral body for resolving East-West trade disputes.

Ukraine buys Russian gas at a discounted price of 50 US dollarsper 1,000 cubic meters, but Russia has asked Ukraine to pay more than quadruple the current price and offered cash payments for gas transit.

Ukraine said it is willing to switch to market prices for Russian gas but insisted it needs a transitional period to adjust its economy.

Medvedev repeated previous warnings that the company will shut the taps for Ukraine at 10:00 a.m. (0700 GMT) on Jan. 1 if no deal is struck with Ukraine by then.

"Time is running out for Ukraine to make a decision," he said.

The feud over gas prices between the two former Soviet republics has raised fears that supplies could be suspended.

Gazprom has suggested Ukraine uses shares in its gas transport system as payment for gas supplies if it doesn't have enough cash on hand, but the head of Ukrainian national gas company, Naftogaz Ukrainy, rejected the proposal on Sunday.

"We see no need to hand over control over our gas transportation system to anybody. Ukraine is capable of managing it effectively. The status of the gas transportation system will remain unchanged," company chairman Oleksiy Ivchenko said, quoted by the Interfax news agency.

Source: China View

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Azerbaijanis Cite Control System In Crash

BAKU, Azerbaijan -- The failure of an Azerbaijani airliner's control system likely caused it to crash, killing all 23 people on board, an airline official said Saturday.

An-140 twin-engine turboprop

But Ilham Amirov, the deputy chief of Azerbaijani Airlines, said it was too early to dismiss other possible causes, including a terrorist attack, of Friday night's crash of the An-140 twin-engine turboprop.

The development of the An-140 — designed by Ukraine's Antonov company — has been troubled because of the severe funding problems that crippled the country's aviation industries after the 1991 collapse of the Soviet Union.

A plane of the same make crashed in Iran in December 2002, killing all 44 people on board. Azerbaijan was the first foreign commercial customer for the An-140, capable of carrying 50 passengers on medium-range flights.

Friday's crash killed all 18 passengers and five crew members, said Rustam Usubov, Azerbaijan's first deputy prosecutor general.

The passenger list included several foreigners — a Briton, an Australian, a Turk, a Georgian and four citizens of Kazakhstan — said Valida Aslanova, a dispatcher at the international airport in the Azerbaijani capital, Baku, where the plane took off shortly before crashing.

The plane was en route to Aktau, a city on Kazakhstan's Caspian Sea coast, when it crashed on the Caspian shoreline, about 20 miles north of Baku.

Emergency workers combed the wreckage Saturday for clues to the cause, and Usubov said they were still looking for the flight data and voice recorders. Some wreckage was in water within 10 feet of shore.

Local television stations reported that wreckage was spread over an area about a mile wide, a pattern that could indicate an explosion.

"I saw how the plane was flying away from the airport and that flames were coming from its rear part," Hamid Imamverdiyev, a 17-year-old resident in the crash area, told The Associated Press. "Then there was a roar from the plane falling onto the shore."

Another witness, who gave only his first name, Hafiz, said the plane was flying low and caught fire shortly before slamming into the ground.

"We were shocked by the terrible scene — there were body fragments scattered all over the area and one dead woman was still sitting in her chair," he said.

Azerbaijan's president, Ilham Aliev, visited the crash site and sent his condolences to the victims' families.

The plane had been in service with the state-controlled Azerbaijani Airlines for just over a year, airline spokesman Fuad Guliyev said. It has purchased four planes of the same models, two of which were delivered, including the one that crashed.

In the 2002 crash, most victims were aircraft experts from Ukraine and Russia bound for a demonstration flight of the plane's twin, the Iran-140, built under Ukrainian license in Iran.

Ukraine's president, Viktor Yushchenko, offered his condolences to Aliev and promised to send a team of experts to help investigate.

Source: AP

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Saturday, December 24, 2005

Gazprom Warns Ukraine: No Contract, No Gas

MOSCOW, Russia -- Russian energy giant Gazprom's Deputy Board Chairman Alexander Medvedev said Friday that his company would not supply Ukraine with natural gas if a contract has not been signed by 2006.

Alexander Medvedev

"No contract, no deliveries," Medvedev said at a press conference in Moscow.

Asked whether Ukraine would be able to satisfy domestic demand by using reserves in its underground storages, Medvedev said the natural gas in those reserves was meant for export and that the reserves did not contain extra amounts of gas for the domestic market.

However, he said Gazprom did not have accurate data on the amount of natural gas being kept in Ukraine's underground facilities.

"We do not have data, but we have made assessments on this score," Medvedev said.

He said Ukraine could afford to pay the price.

Asked what Ukraine would do if the contract was not signed this year, Medvedev said he hoped it would behave in a civilized manner.

Medvedev said that if Ukrainian officials' threat to tap natural gas from the transit pipeline was carried out, Kiev would be stealing gas.

Source: RIA Novosti

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Major Player Behind Ukraine’s Orange Revolution Quits As Presidential Aide

KIEV, Ukraine -- Ukrainian presidential aide Vladislav Kaskiv has resigned from his post, saying in a statement that his work was incompatible with his participation in the parliamentary elections.

Vladislav Kaskiv

Kaskiv is the leader of Pora party that rose to prominence during the so-called Orange Revolution last December when Viktor Yushchenko became president.

Yushchenko initially lost to his rival, PM Viktor Yanukovich who was supported by Russia, but after a scandal linked to the falsification of election results and mass protests in the country, Yushchenko won a repeat poll. Pora was one of the main movements behind the revolution.

Kaskiv now plans to concentrate his efforts on forming an effective parliamentary majority and the creation of a “reform government” after the elections.

He also asked to for his salary to be rescinded for the last three months because he was unable to fulfill his duties suitably during that period.

Source: MosNews

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Friday, December 23, 2005

Ukraine's Dance Of The Oligarchs

KIEV, Ukraine -- If anyone wants to make any sense of what is happening to Ukraine one year after the Orange Revolution, then a walk past the Parliament building on Hrushevskoho Street in Kiev could explain a lot.


When in session, the area resembles an open-air luxury car exhibition. All the latest four-wheel-drive models from BMW, Mercedes, Porsche and Lexus are parked on the sidewalks and in the streets. Most of the vehicles are black, with bulletproof materials installed beneath their sleek skins.

Their tinted windows are so thick and dark that no one can look inside to see the state-of-the-art GPS navigation consoles, the elaborate communications systems mounted on the dashboards and the plush leather upholstery. All have drivers, most of them dressed in black leather jackets. When asked who owned the cars, the drivers either refuse to answer or simply say, "A parliamentary deputy."

That may be surprising, in a country where salaries for members of Parliament range from 4,700 to 5,000 hryvnia, or $935 to $995, a month.

But then, this is Ukraine. Since the country won its independence in the collapse of the Soviet Union in 1991, Parliament has become dominated by the oligarchs - enormously wealthy industrial managers who have interests in steel, iron, coal, the media and soccer clubs.

They have used Parliament as a forum to protect their interests. These include campaigning for tax breaks, retaining customs fees to protect their companies against imports and ensuring a weak, poorly paid judiciary that has allowed sales of state-owned enterprises at well below market prices.

"Parliament operates under the political umbrella of the oligarchs," said Igor Burakovsky, director of the independent Institute for Economic Research and Policy Consulting. "The Parliament consists of many personal interests - particularly how the oligarchs can influence the appointment of the cabinet."

Yet only a year ago, tens of thousands of people stood in freezing temperatures outside Parliament, demanding not only free elections but an end to corruption and the power of the oligarchs over political life. They blamed the oligarchs, many of whom own television stations, for muzzling the media and not allowing objective reporting of the presidential elections.

The demonstrators held banners bearing pictures of Viktor Yushchenko and Yulia Timoshenko, leaders of the Orange Revolution, who they believed would sweep away the old guard and usher in a political system based on transparency and accountability.

Yushchenko eventually won in a democratic and free vote. He defeated Viktor Yanukovich, who was backed by Russia and hailed from the Donetsk region in eastern Ukraine, home to some very powerful oligarchs.

But a year after the Orange Revolution, the oligarchs remain in good humor.

They have started to put their energy and money into next March's parliamentary elections as they gauge which camp they will support.

"Until the elections, all reforms are on hold," said Vasily Astrov, Ukraine expert at the Vienna Institute for International Economic Studies.

The March elections are crucial because the stakes this time are higher than ever. For the first time, the president's powers will be curbed while those of Parliament will be strengthened as Ukraine moves from a presidential system to a full-fledged parliamentary democracy. This change was agreed to a year ago, with support from Yushchenko, who said it would put Ukraine firmly on the path to democracy.

But the move places Yushchenko in a tricky position. As president, he will lose the power to appoint a cabinet. So the oligarchs are jostling to influence the outcome of the election, since the largest political groupings will have the biggest say over cabinet posts.

Under the new rules, the party with a majority in Parliament will nominate a candidate for prime minister. The president, who will remain commander in chief of the armed forces and will nominate the foreign and defense ministers, will no longer have the power to dismiss Parliament without its consent.

"It will be very difficult to predict the outcome of the elections," said Elisabetta Falcetti, Ukraine analyst at the European Bank for Reconstruction and Development. "The existence of the oligarchs introduces a completely new dimension to economic analysis."

Yushchenko is lining up his allies in the hope that he will have a prime minister with whom he can work.

From interviews with his advisers, it appears that Yushchenko is still undecided about forming an alliance with Timoshenko, his former prime minister and the leader of the Motherland Party. Yushchenko dismissed her last September, partly over economic policy but also because they simply could not work together. Since then, he has had a better relationship with Yuri Yekhanurov, a leading member of Yushchenko's Our Ukraine Party.

Yushchenko's main supporter among the oligarchs is Petro Poroshenko, chairman of a large financial group called Ukrpromivest that includes shipbuilding, car assembly and confectionery businesses.

Yushchenko retains Poroshenko's support even though he fired him as secretary of the National Security and Defense Council last September after the two men clashed with each other and Timoshenko.

Two other oligarchs, David Zhvania and Yevgeny Chervonenko, are standing behind Yushchenko as well, although they were also ousted from the cabinet in September, as Yushchenko struggled to achieve a balance among the 14 political parties with seats in Parliament.

Yanukovich, who was personally endorsed by President Vladimir Putin of Russia in last year's presidential election, has started to reorganize his Party of the Regions in a bid to become prime minister after the parliamentary elections, or at least play a big role in the next government.

Yanukovich has the support of Rinat Akhmetov, the most powerful oligarch in the eastern industrial center of Donetsk, who owns System Capital Management, a diversified industrial and financial services group.

Timoshenko, a former business tycoon who made her money in the energy field, is wooing some powerful oligarchs as well, despite her promise in a recent interview to curb their powers.

"In the economic sense, some oligarchs, corrupt civil servants and business interests basically built a coalition of forces to extract money from the state," she said in an interview this month. "The less state, the better," she said, "because more state encourages corruption. It leads to an alliance between the bureaucrats and the oligarchs."

Yet Timoshenko herself depends heavily on oligarchs, including Alexander Volkov, a legislator from Donetsk. She is also negotiating an alliance with Igor Kolomoyski, a former board member of Ukraine's central bank and now head of the Dnipropetrovsk Private Group, which specializes in ferrous metals and coke. Yet only last year, Kolomoyski had supported Yanukovich.

So what made Kolomoyski switch sides? Ukraine is awash with rumors and speculation. Astrov says Kolomoyski has become Timoshenko's main financial supporter. Though her advisers become defensive when the issue of oligarchs is raised, Ukraine experts say that when Timoshenko was prime minister and pursued a relentless program of expropriating and reselling businesses, she often acted from political motives.

Timoshenko has said "some of the resales had been necessary" in trying to break the oligarchs' political power.

But according to Astrov, Timoshenko, as prime minister, campaigned hard to transfer the ownership of Nikopol Ferroalloys Plant, a lucrative steel business, to assist Kolomoyski.

Nikopol's owner was Viktor Pinchuk, son-in-law of the former president, Leonid Kuchma. Pinchuk also owned the Kryvorizhstal metallurgical enterprise, which he had bought at well below market price in 2004.

Yushchenko had Kryvorizhstal taken from Pinchuk and the business was resold last October for $4.8 billion, six times the original price. Astrov said Kolomoyski wants control of Nikopol, and it is scheduled to be resold in 2006.

Whichever oligarchs side with whichever political party in the coming weeks, Hyhoriy Nemyria, director of the Center for European and International Studies, said a Parliament with real powers was "creating a new reality."

"The real centers of power - the president and the National Security and Defense Council and cabinet - have been eliminated as a result of the constitutional reforms that will create a parliamentary democracy," said Nemyria, who is an adviser to Timoshenko.

"All the main political leaders, including Yushchenko, have yet to decide with which parties they will ally themselves before the elections and afterward in Parliament," Nemyria said, "because none of them will have an outright victory. What we are seeing now is a situation where everyone is out to make strategic compromises in order to gain power, but so far, little is being said about reforms."

Source: International Herald Tribune

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EU Officially Grants Market Status To Ukraine

KIEV, Ukraine -- Ukrainian Prime Minister Yuriy Yekhanurov said today that the EU has granted Ukraine the status of a country with market-based economy.

Ukrainian Prime Minister Yuriy Yekhanurov

Yekhanurov announced the move at the meeting with teachers and students of the Kyiv National University and said that the status was granted on 21 December.

The EU announced its decision to grant a market-economy status to Ukraine on 1 December.

The United States is still considering the possibility of granting the same status to the country.

Source: Radio Free Europe

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Moscow Center to Fight Kiev's Bid to Join NATO

MOSCOW, Russia -- A Ukrainian lawmaker on Thursday harshly criticized her nation's plan to join NATO and opened an information center in Moscow aimed at opposing the move.

Natalya Vitrenko on a poster for her radical socialist party

Natalya Vitrenko, a radical socialist who leads the New Opposition bloc running for seats in March's parliamentary elections, said the government of President Viktor Yushchenko could make a NATO bid as early as the first half of the year if it wins a majority in parliament.

"If Ukraine joins NATO, it will become an open enemy of Russia," said Vitrenko, who represents a fringe party. "Ukraine will host NATO bases presenting a direct military threat to Russia."

Yushchenko has made NATO membership a top goal.

Vitrenko, who ran in Ukraine's 1999 presidential election, spoke at the opening of the Anti-NATO Information Center, which is located on a freshly painted ground floor of a shabby apartment building at 10 Khokhlovsky Pereulok.

Sergei Markov, a Kremlin-linked political analyst who helped run the ill-starred campaign of Yushchenko's Moscow-backed rival, also attended the opening. "Our nation is being dragged into NATO behind the people's back," Vitrenko said. "We must mobilize all healthy forces of society to oppose this evil scenario."

Many Ukrainians view NATO with hostility and fear that alliance membership would worsen relations with Moscow and ruin the nation's defense industry, which has close links to Russia.

Markov sought to play on these fears Thursday, saying that "Ukrainian boys will be used as cannon fodder."

During recent weeks, Moscow and Kiev have been locked in an acrimonious dispute over Russian natural gas deliveries to Ukraine. Gazprom more than quadrupled the price for Ukraine starting next year, and Ukraine has refused to pay.

Markov claimed Thursday that Gazprom had been caught in a "trap" set by the Ukrainian authorities, who will use the conflict to fan anti-Russian sentiments.

Source: AP

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Ukraine Says It Will Not Accept Blackmail, Pressure From Moscow

KIEV, Ukraine -- Ukraine will not be blackmailed by Russia, Ukraine's foreign minister vowed Thursday, as the two countries continued their verbal clashes in an escalating dispute over natural gas supplies.

Ukraine's Foreign Minister Borys Tarasiuk

Foreign Minister Borys Tarasiuk's remarks were the latest volley in the ongoing feud over Moscow's demand that Ukraine pay more than quadruple the current price it pays for gas imports from Russia. Kiev has refused, saying such a sharp hike would harm energy-inefficient industries and poor consumers.

"We want to develop partnership, friendly and neighborly relations with Russia, but we will never accept blackmail and pressure," Tarasiuk told reporters.

Also Thursday, President Viktor Yushchenko spoke over the telephone with Turkmenistan counterpart Saparmurat Niyazov in an apparent attempt to alleviate a looming gas crisis. A statement from Yushchenko's office said the two leaders spoke about "energy issues and gas shipments."

Earlier Thursday, Fuel and Energy Minister Ivan Plachkov and the head of the state-run gas provider Naftogaz Ukrainy traveled to the Turkmen capital Ashgabat to try and agree on new prices for the next year.

Turkmenistan, which supplies Ukraine with more than half of its gas imports, has also proposed increasing prices.

Ukraine is heavily dependent on Russia for its energy supplies and Kiev has threatened it could reconsider the US$97 million (Ђ77 million) in annual rent that Russia pays to base its Black Sea fleet in the Ukrainian port of Sevastopol.

Russia's state-run gas giant Gazprom has rejected Kiev's request for a phased increase and has threatened to turn off the taps if a deal is not signed by Jan. 1.

Russia provides almost half of the EU's gas imports, and some 80 percent of that goes through Ukrainian pipelines. The feud has raised fears that these supplies could be interrupted.

Tarasiuk said he regrets that "the line of confrontation, which can be seen in the actions and statements of some Russian politicians, narrows the opportunities for a normal dialogue."

"One should bear in mind that Ukraine depends on Russia as much as Russia depends on Ukraine," he said.

The disputes highlight a growing rift in Russian-Ukrainian relations that emerged in last year's Orange Revolution which brought to power the pro-Western Yushchenko to the presidency. His administration has sought to bring the former Soviet nation away from the Kremlin's sphere of influence and closer to NATO and the European Union.

Also Thursday, in what appeared to be an attempt to soothe tensions, the top official with Ukraine's security council, Anatoly Kinakh, traveled to Russia for discussions with his Russian counterpart Igor Ivanov.

An official statement said the talks would include "conditions for strengthening bilateral cooperation."

Meanwhile, speaking Thursday to his National Security Council in Moscow, President Vladimir Putin made veiled reference to the dispute and the threat to Russia's gas exports to Europe

"Before us stands large-scale work for developing infrastructure to diversify fuel export routes," Putin was quoted as saying by the ITAR-Tass news agency. "That will reduce the potential risks and, of course, open access to promising, new markets, in particular the Asia Pacific region."

Russia is currently building a new oil pipeline that will stretch across eastern Siberia and provide a crucial outlet for oil and gas exports to China, Japan and other Asian markets, reports AP.

Source: NewsFromRussia

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Russia: West Should Not Be Scared of Russian Spies

MOSCOW, Russia -- In the run-up to the 85th anniversary of the Russian Foreign Intelligence Service [formerly known as the KGB], marked on Dec. 20, its director Sergei Lebedev told Interfax about the service’s top priorities and threats to Russia’s security.

Russia's top spook Sergei Lebedev

Lebedev refuted Western media reports that his service’s activities in the United States and the EU, including its recently admitted members, have reached Cold War levels.

“This is not so. In comparison with that period, the Russian intelligence service has curtailed its presence abroad and drastically reorganized its functioning,” he said.

Lebedev said those media reports were probably paid for by those who do not want relations with Russia to continue to develop.

“To my regret, it has become a rule to scare ordinary citizens abroad with Russian spies, who have allegedly made inroads into all of the agencies. There have been instances of local counter-intelligence services deliberately exaggerating the Russian espionage threat to show their relevancy, enhance their staff or secure more funds,” he said.

Asked what is more characteristic of relations with foreign special services today — cooperation or confrontation, Lebedev said that “the changing international situation and the expanding globalization process certainly influence the nature of the Foreign Intelligence Service’s cooperation with foreign partners. It is broadening,” he said.

“As far as confrontation is concerned, I view it as a natural element of international ties. The only question is what exactly one means by it,” Lebedev said.

“Confrontation can be intellectual, psychological, political and diplomatic. I can say that it remains in relations between intelligence agencies because they, including the Foreign Intelligence Service, primarily defend the interests of their own states. Fatherland is the first word in our service’s motto: ’Fatherland, Valor, Honor’,” he said.

Asked whether the Foreign Intelligence Service has brilliant spies abroad such as Abel or the ’Cambridge Five’, Lebedev said, that “as a rule, the public only learns about the work of such agents many years after they are active. My successor will tell your future colleagues about today’s successes of the Foreign Intelligence Service in 50 years,” he said.

Foreign military bases deployed in the vicinity of Russia’s borders pose a threat to the nation’s security and are the focus of the Foreign Intelligence Service’s attention, Lebedev said.

“Russians cannot help but be concerned about new military bases and military contingents being deployed around our country. Therefore, the main task facing the Foreign Intelligence Service is to detect military threats to Russia,” he said.

Changes that have taken place worldwide have allowed Russia to abandon the term ’main adversary’, he said.

However, there are still threats facing Russia. “New but no less serious threats and challenges facing our state’s security have replaced old threats and challenges. Today the most serious threats are from international terrorism, from religious and nationalist extremism. Hotbeds of tension along the perimeter of Russia’s borders continue to smolder,” he said.

Ensuring the security of Russia’s foreign trade and countering environmental threats feature high on the Foreign Intelligence Service’s agenda, Lebedev said.

Among other urgent issues, Lebedev mentioned the fight against the proliferation of weapons of mass destruction and measures against drug trafficking, the illegal arms trade and illegal migration.

Asked whether progress has been made over the past few years in lessening the threat from the development of weapons proliferation, Lebedev said that he cannot “give a definite answer to this question because this is a comprehensive problem and involves steps to counter the spread of both nuclear, chemical and biological arms and related technologies and materials.”

In the past few years, “such efforts have centered on preventing weapons of mass destruction and their components from falling into the hands of terrorist and extremist organizations,” he said.

“In its 1993 open report entitled The Proliferation of Weapons of Mass Destruction is a New Challenge After the Cold War, the Foreign Intelligence Service of Russia drew the attention of the Russian and international public to this problem. Today the service views it as a priority area of operations,” Lebedev said.

“We have been working in close cooperation with other Russian agencies and foreign special services. Our joint efforts have made it more difficult to acquire weapons of mass destruction and their components,” he said.

In addition, the anti-terrorist coalition has captured or killed most of the al-Qaeda international terrorist network’s leaders, he said.

“Nearly 70 percent of al-Qaeda’s highest-ranking members have been captured or killed in the international anti-terrorist campaign that has been in progress since 2001. They include Abu-Zubaid, Abu-Leits, Sheikh Halid Mohamed, and Abu Faraji al-Libi,” Lebedev said.

“As for Al-Qaeda representatives who took part in terrorist activities in the North Caucasus, odious figures such as Hattab, Abu al-Walid, Abu Zait and Abu Omar have been eliminated,” he said.

“The special services of a number of European countries carried out a joint operation in November 2005 to arrest leaders and members of Al-Qaeda’s cells in Belgium, France, Italy and other states,” he said.

Terrorism can be defeated only through “joint efforts of all countries, their special services, other state bodies, and international organizations. The Foreign Intelligence Service’s cooperation with its foreign colleagues helps achieve greater results in the anti-terrorist fight. That is why we are committed to further strengthening of international cooperation in this area,” Lebedev said.

Source: MosNews

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Moscow Seeks To Use Petro-Power As Political Tool

MOSCOW, Russia -- Russia is nine days away from potentially carrying out a threat to reduce gas supplies flowing through a pipeline across Ukraine to western Europe, unless Kiev pays higher prices for gas it takes from the pipe. The result could be winter energy shortages in some European countries.


Yet on the same day, January 1, Russia assumes the rotating presidency of the Group of Eight nations, of which it has made “energy security” a central theme. Moscow is widely expected to use its presidency to promote itself as a reliable energy supplier to the world’s biggest economies.

These two positions may seem contradictory, but in fact point to the same conclusion. While it does so in a variety of ways, Russia is ever more confidently wielding its mammoth reserves of oil and natural gas as a political tool. High prices, tight supplies, and the west’s desire to reduce reliance on Middle East suppliers are increasing its leverage.

“It is not that energy is the new atomic weapon,” says Cliff Kupchan, an analyst with the Eurasia Group consultancy and former state department official in the Clinton administration, “But Russia knows petro-power, aggressively and cleverly applied, can yield diplomatic influence.”

After spending the past year bringing key oil and gas assets back under state control, a string of events have shown how Russia is using its petro-power. Gazprom, the state-controlled gas giant, is demanding that former Soviet states, which since the USSR collapsed in 1991 have enjoyed subsidised prices for Russian gas, finally move to market rates.

But it is doing so in a highly differentiated way. Ukraine, having shifted out of Moscow’s orbit since last year’s Orange Revolution, has been slapped with the biggest demand for a price increase. Prices charged to Georgia and Moldova, which have also turned their gaze westwards, have nearly doubled. Yet Belarus, loyal to Moscow, is still getting gas at the old price.

Russia is using its dominant position in oil, too, to favour Russian commercial interests. It plans to cut oil supplies to Lithuania from January 1 in what analysts see as an attempt to press the Baltic republic to favour a Russian buyer over rival Polish and Kazakh bidders for the strategically important Mazeikiu oil refinery.

The refinery is being sold off by the Lithuanian authorities to pay off a huge back tax bill owed to Moscow by Yukos, the Russian oil company whose main production asset has, in effect, already been renationalised as part of the legal assault on Mikhail Khodorkovsky, its former owner.

Russia is, moreover, squeezing potential competitors in the former Soviet Union – notably Kazakhstan – that are trying to develop their own energy industries independently of Moscow. It is for example attaching tough conditions to allowing Kazakhstan to expand a key pipeline from the vast Tengiz oilfield in the Caspian to Russia’s Black Sea port of Novorossiysk. This is crucial to plans by the field’s operator, Chevron of the US, to ramp up production.

Also this month, Russia started construction, with some fanfare, of the $5bn North European Gas Pipeline, an export route under the Baltic sea to Germany that will bypass the Baltic states, Ukraine and Poland. It attracted even more attention by naming Gerhard Schröder, the former German chancellor, project chairman.

Within days, word leaked that Russia’s president Vladimir Putin had asked Donald Evans, the former US commerce secretary and close friend of President George W. Bush, to chair Rosneft, the Russian state-owned oil company preparing for an initial public offering. Mr Evans this week politely declined, citing other commitments.

How should the outside world make sense of all these different signals? Analysts say Russia has always used energy as a lever with its former Soviet neighbours – and kept natural gas prices low partly to keep them within its fold – though it is being increasingly hard-nosed.

Political and economic interests are intertwined. With gas prices rising, increasing the effective revenue loss to Gazprom and Russia from providing cut-price gas, there seems little point continuing to subsidise states which have already shunned Moscow.

“The time when we built relations by quasi-subsidising neighbouring economies is gradually passing,” Alexei Kudrin, Russia’s finance minister, said last week. “We must think about our own interests.”

Most analysts expect Russia and Ukraine to pull back from the brink before west European gas supplies are threatened; neither would want to be blamed for shortages.

Russia has far too much at stake. It is preparing to project its energy influence to a much wider audience – and its approaches to Mr Schröder and Mr Evans may be an important part of that.

Moscow has already hinted to US officials and international energy executives that it intends to use its coming G8 presidency to assure the world it can be a pivotal energy supplier to Europe, the US and Asia.

Mr Kupchan, of Eurasia Group, believes Russia has studied Saudi Arabia, which has used its energy clout to build a close geo-political relationship with the US - and mute US criticism of its domestic policies. But he suggests Russia is aiming for a “Saudi-plus” model.

“Saudi Arabia has achieved this only with the US. The Russians are looking for something broader,” says Mr Kupchan. Moscow wants to build a wider network of influence and, unlike some petro-states, turn its oil and gas companies into international players.

He forecasts more moves to grant minority stakes to foreign oil majors in Russian companies, both state- and privately-controlled, and oil and gas projects, though with Russia always retaining control. He also foresees more invitations to prominent western executives to take jobs with Russian energy companies.

Both could help confer a sense of legitimacy and transparency on its industry, especially after the state’s asset-grab, and increase Russian companies’ sway in foreign capitals.

But with some, particularly US, politicians challenging Russia’s G8 role amid questions over its democratic record – heightened by the Yukos affair – western officials say Russia will be under intense scrutiny.

Says one person close to the White House: “The G8 is going to be a great opportunity for them to appear adult, responsible and be taken seriously by the world.”

Source: Financial Times

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Ukraine Gas Dispute With Russia Raises Supply Fear

KIEV, Ukraine -- Ukraine and Russia have had many disputes over natural gas, but have never come as close as now to reducing supplies to Europe.


Even through the break-up of the Soviet Union and crises that followed, Russia's gas exports to Europe, 80 per cent of which transit Ukraine, have always been reliable.

But unless Ukraine agrees to pay much more for the gas it takes from the pipeline for its own use – Moscow first asked for roughly a four-fold increase, but now suggests it should be more than five-fold – Russia has said it will cut out Ukraine's portion from the gas going into the pipe.

If Ukraine keeps taking gas, which Moscow says would be stealing, supplies to Europe could be cut by about 20 per cent.

Both sides have huge incentives to make a deal. Russia has no other way to get its gas to Europe, while Ukraine, which currently receives 30 per cent of its gas from Russia in a barter deal in lieu of transit fees, has no alternative source.

Yet both sides claim the other is refusing to negotiate seriously. Viktor Yushchenko, Ukraine's president, this week called Russia's position “irresponsible, unprofessional and naive”.

He accused Moscow of trying to punish Kiev for its turn towards democracy in last year's Orange Revolution and of operating “double standards” by demanding that Ukraine pay roughly twice as much for gas as the south Caucasus and Baltic states pay.

Russia in turn accuses Kiev of dragging its feet and refusing to drop the antiquated barter system. Russian officials ask how Ukraine can aim to join the European Union while refusing to pay market prices for gas.

Russia says its interests are purely economic. But Mr Yushchenko's supporters accuse Moscow of trying to damage his popularity three months before parliamentary elections. Mr Yuschenko's party is facing tough competition from Viktor Yanukovich, the pro-Russian politician who ran in last year's presidential race. The elections also give Mr Yushchenko an extra incentive to face up to Russia; his stand has been popular with voters little inclined to pay more for energy.

Mr Yushchenko says he would accept a gradual change to cash payments and market prices, but no quick increases. He has threatened to retaliate by demanding “European” rents from Russia's naval base in Crimea, which Russia says are fixed by contract until 2017.

Russia, too, could escalate the dispute, for example by cutting deliveries of the central Asian gas that Ukrainian industry relies on.

But a deal at the 11th hour or a delay by Russia of its cut-off threat as negotiations continue remain the more likely scenarios.

As Sergey Lavrov, Russian foreign minister, said this week: “I'm convinced the good tradition by which Gazprom and Russia have never once not met their obligations to European customers will not be broken.”

Source: Financial Times

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Thursday, December 22, 2005

Kodak Assvertising

KIEV, Ukraine -- Assvertising was so great you knew it would be copied. Who knew Kodak would be the one to stoop so low? That's like butterscotch-giving-grandpa hitting on your girlfriend - and stealing her (true story).


Apparently, Kodak used the derriere media placement during a photo convention in Kiev, Ukraine. At least two hot women were hired to wear ridiculously short mini skirts with Kodak logoed panties underneath and then drop things on the convention floor and pick them up.

It's so off-brand one is inclined to think its an unauthorized effort by a sub promo company. If so, someone should spank them.

Crass sexuality seems to be a particularly Russian obsession, like the company that forced its top female managers to pose in a nude calendar distributed to its clients.

Source: TheSpunker

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Ukraine Must Stand Up to Russian Blackmail

KIEV, Ukraine -- When president Yushchenko makes an appeal not to make gas supply a political issue, there is no doubt he has common sense. This is the only way to cool down and create optimal conditions for the negotiations to go ahead.


However this matter had become a political issue long ago. In August “RIA Novosti”, a Russian pro-government information agency, put a lot of effort into publicising a leak from the Foreign Office, in which the Russian minister claims that Russia is commencing to use the energy-related linchpin to regain domination in Eastern Europe.

This policy is being put into action as Russia asks a new price for gas from the 1st of January 2006 at $160 per thousand cubic metres in the form of an ultimatum, and then the sum of $230 is mentioned.

Ukraine has an agreement with Russia which sets the price for gas at $50 until 2009. Russia demanding Ukraine paying the new price immediately is an equivalent of Ukraine is demanding that the Black Sea Fleet leave Sevastopol before the 1st of January 2006 regardless of any technical obstacles related to such a move.

Certain rules apply when such an agreement becomes subject to review. For instance, Georgia demanded an immediate withdrawal of the Russian military bases from their territory, however after the protracted negotiations the parties had agreed on a 3 year term.

That is why when Russia demands Ukraine to pay twice the price it is charging the Baltic states, that is solely due to political considerations. The Baltic states are protected by NATO and EU and Russia had lost the main means of manipulating there.

Russia is provoked by the Ukrainian temporary vulnerability which enables it to subject Ukraine to various experiments as it is not a member of the clubs mentioned above.

Russian historical tendency to breach agreements represents an issue in any negotiations with this country. German Chancellor Bismarck once said that all agreements signed with Russia are not worth the paper on which they are written.

(Moscow breached the non-aggression pact with Poland dated 1936 (breached in 1939), Romania in 1934 (breached in 1940), the agreement with Lithuania, Latvia and Estonia annexed by the USSR in 1940 and the agreement with Afghanistan in 1976 (breached in 1979).

Ukrainians know as well, that the Treaty of Pereyaslav signed by Bogdan Khmelnitsky was breached two years later when Moscow established a truce with Warsaw.

Russia recognised the territorial integrity of the Ukraine according to the agreement between the two states, however in November 2003 Russia came up with a factual territorial claim, questioning Cosa Tuzla island being a Ukrainian territory.

In the view of all these historical cataclysms Russia’s unwillingness to comply with the agreements on gas prices looks a mere trifle.

Modest Colerov, who is currently responsible for the Kremlin’s policies regarding CIS states, and is fighting “orange revolutions” on post soviet territories, once said that Russia “has got no moral reservations for re-establishing control in the Baltic states by military intrusion”.

Moral reservations is something very alien for Russian politicians. Under such circumstances moral preponderance or the opponent being right are not worth a penny.

That is why in relationships with Russia, and this is not restricted to gas only, one has to hope for the best and expect the worst. The gas blackmail and Putin’s remarks about Bolivar (a horse from O. Henry’s story), on whose back 2 can’t ride, are of the same origin as the porno starring Tymochenko and Russian mass media spreading the rumours that Yushchenko’s face condition was caused by an attempt of rejuvenation.

That is why to solve the current problems only one little thing is required. The Ukraine has to stand up to the pressure. Zbignev Bzejinsky once commented aptly “Russians are very smart and they can’t stand losers”.

All reserves must be utilised: energy saving, increasing the amount of coal used by the economy, resuscitation of the old coal mines (Donetsk region will definitely approve!) and oil and gas fields, and putting the price up for gas transit for Russia.

If the Ukraine sets the price for Russian gas transit at $10 for transportation per thousand cubic meters for 100 km, Ukrainian budget receives over $7 billion as the result which constitutes one third of its total.

It is an option to get greedy and set the price at $20 dollars. Russia who is a monopolist demanding such gas prices, should face the same monopolist and pay prices set by the Ukrainian side.

Obviously in such case the Ukraine loses Turkmenian gas, and this is going to be a shock for the economy. However the Ukraine, which during past decades has survived Chernobyl and Kuchma, can cope with it. Especially with such finances.

The president and the government have taken the right political stand regarding the gas issue today. The Ukrainian position is levelled and not hysterical.

Neither president Yushchenko, nor Prime Minister Yekhanurov has made any rigid statements, as opposed to the Russian side. At the same time the Ukraine keeps on producing some trumps from the sleeve from time to time, which should help Russia to cool down.

If Moscow has more incentive not to cause any damage for Russia, than to damage the Ukraine, then in theory there is a chance it can stay in tune with the situation when the trumps keep appearing.

Amidst these trumps there is appropriating Russian gas as smuggled commodity after it crosses the Ukrainian border illegally.

And there are as well some other ones, for instance the hints that there will be no cooperation in the areas of critical importance for Russian defence, Americans possibly getting access to the missile tracking systems in Sevastopol and Mukachevo, and the increase in payment for the Black Sea Fleet stationed on the Ukrainian territories as well.

It is possible that such politics will work, and Russian government will “sabre rattle” for a little bit longer and then sign a compromise agreement.

However such developments are not guaranteed. It is not due to the negotiators who represent the Ukrainian side, but it is Russia’s willingness to punish the Ukraine because we “dared” to choose our own way and to elect our own government independently. Moscow openly admits such an attitude.

Under such circumstances it does not matter how brilliant the negotiator is, even if he can speak not only Russian with no interpreter, but hindi and urdu as well.

The main argument in relationship between the Ukraine and Russia is our present trumps. And the strength and unity the country can show.

However, there are some problems with the latter. A great number of politicians, even from the so called “orange camp”, are criticising the way the government moves in the negotiations.

The negotiations have not even reached their final stage yet, and the cause of crisis does not allow it to keep the government responsible. It will not pay to betray the country’s strategic interests just for “a tiny sniff” of gas.

However Russian politicians turned out to be much more mature than the Ukrainian ones. Even if they do submit their government foreign policies to criticism, they do it quietly, not to display the weaknesses and thus help the opponent.

In Ukraine this criticism, which is highly inappropriate under the current circumstances, causes damage to the national interests and looks as if it is ingratiating to foreigners. That is why such critics have to understand that united we stand and divided we fall and shut up.

Fortunately Ukrainian society is much more patriotic than the Ukrainian politicians. The majority of the latter is a product of long lasting anti Ukrainian selection.

Gas matters are now being discussed in the kitchens of Ukrainian households which is a great power. Prior to the Orange revolution the author wrote for Ukrainskaya Pravda, that Ukrainians, who are stubborn by nature, are not going to give in to pressure exerted by foreigners and would elect whoever they see fit.

However, the foreigners found it hard to believe. If now the general public receives the information that it was Yanukovich himself who asked Putin to stop gas supplies to the Ukraine (and the forecasts for “Big Problems” in that area were voiced by Yanukovich in the beginning of summer, when he toured Moscow suburbs and visited Kremlin), his political allies will not get even 12%.

Thus, this is the way, from crisis to crisis, Ukrainian political nation is maturing. During the Tuzla conflict, a Russian speaking local “granddad” with berdanka (9.2 calibre gun used by Russian in hunting big animals including manhunt) was running along the sea coast in Crimea ready to combat the aggressor.

During the Orange revolution there were hundreds of thousands of such “granddads”. And they grow in numbers.

Source: Ukrayinska Pravda

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Wednesday, December 21, 2005

Ukrainian Cruise Missiles Transported Via Russia to Iran

TEL AVIV, Israel -- Ukrainian cruise missiles with a range of 3,000 kilometers and capable of carrying nuclear warheads have ended up in Iranian hands after being transported via Russia, Israel’s Director of Military Intelligence Major General Aharon Ze’evi (Farkash) said on Tuesday.

Israel’s Director of Military Intelligence Major General Aharon Ze’evi

Ze’evi said that Iran had recently received 12 of the cruise missiles. 18 such missiles were transported from Ukraine to Russia, of which 12 had somehow managed to end up in Iranian hands. The other six were received by China, Haaretz.com quoted Ze’evi.

The diplomatic pressure the international community has exerted on Iran had delayed the Islamic state’s nuclear development plan by two years, Ze’evi added.

Ze’evi, who was making his last appearance before the Knesset Foreign Affairs and Defense Committee, said that Iran was, nevertheless, determined to secretly continue its bid to develop a nuclear bomb.

He also said that today Iran’s nuclear aspirations constitute a real threat to western countries.

According to the military intelligence chief, there are growing fears that Palestinian terror groups would smuggle into the Gaza Strip weapons, including anti-tank and anti-aircraft missiles as well as Katyusha rockets. The introduction of such weapons in the conflict would break the existing weapon-balance, Ze’evi said.

Terror groups are making every effort to get such weapons into the Strip, he said, that being despite the great efforts the Palestinian and Egyptian security forces are putting into preventing it.

The Israel Defense Forces must prepare for such a possibility, he said.

Source: MosNews

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Yushchenko Accuses Russians Of ‘Blackmail’

KIEV, Ukraine -- President Viktor Yushchenko on Tuesday referred to Russia's mounting pressure to immediately quadruple natural gas prices it supplies to Ukraine as "blackmail" and suggested Kiev's position was strong enough to win the dispute.

Ukrainian President Viktor Yushchenko gestures during a news conference in Kiev, December 20, 2005.

Yushchenko made comments in response to threats by Russian state gas giant Gazprom to cut off gas supplies to Ukraine completely unless the country agrees to accept the substantial price hike.

"It's blackmail," Yushchenko told reporters after a press conference. "I don't think the authorities on both sides will lower themselves to such a tone, to such ways" of resolving the dispute.

Gazprom last week announced it plans to charge Ukraine $230/1,000 cubic meters of gas it supplies to Ukraine from Jan. 1, 2006, up from $50/1,000 cu m currently. Analysts said such price hike would immediately make unprofitable most of chemical and steel companies, lead to massive layoffs and economic contraction.

Ukraine has been refusing to accept the price hike by citing a 10-year agreement signed three years ago between Gazprom and Naftogaz Ukrayiny.

A special clause in the agreement, signed last year, fixed prices of Russian gas at $50/1,000 cu m through the end of 2009, while Naftogaz fixed tariffs for shipping Russian gas to Europe for the same period.

Analysts said the clause makes Gazprom legally vulnerable in the dispute should the matter be taken to the Stockholm International Arbitration Court, the venue for resolving the dispute.

Prime Minister Yuriy Yekhanurov said Ukraine was ready to take the dispute to the court, but technically wasn't able to do so as Russia had never submitted a written notice to cancel the agreement. Russia and Gazprom have been apparently making only verbal statements, putting pressure on Ukraine to accept a new agreement.

"We have the agreement. If there are problems, they will be decided in the Stockholm court," Yekhanurov said at a press conference Tuesday. "So far we have not had any written requests to break the agreement."

The escalating dispute between Ukraine and Russia is watched across Europe amid fears that it could lead to disruptions of Russian gas supplies to European customers via Ukrainian pipelines. Ukraine ships about 85% of Russian gas exports to Europe, mostly to Germany and France.

Gazprom itself is under increasing pressure from European customers to end the uncertainty and to sign a deal with Ukraine that would guarantee deliveries of gas in 2006.

Russia on Tuesday, for the first time over the past nine months, sought to calm down those fears among European customers and pledged to keep gas supplies at volumes meeting the European demands in full.

"I am confident that a very good tradition, according to which Gazprom and Russia have never broken their obligations before European customers, will not be breached," Russian Foreign Minister Sergei Lavrov said in Moscow on Tuesday.

The comment de-facto means that Gazprom would probably stay away from cutting gas supplies to Ukraine on Jan. 1, 2006, as otherwise it would run risk that European gas supplies would be affected, analysts said.

Source: Ukrainian Journal

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President Gets Budget In Ukraine

KIEV, Ukraine -- Fending off strong opposition from a coalition of Communists, political foes and former supporters, President Viktor Yushchenko won a major battle Tuesday in the Ukrainian Parliament after mustering enough votes to push through his budget for 2006.


The budget, blocked for several weeks by political parties that have already started jockeying for position before parliamentary elections in March, was a key test for Yushchenko and Prime Minister Yuri Yekhanurov.

It was Yushchenko's first significant victory since September, when he dismissed the government led by Prime Minister Yulia Timoshenko, who wanted to adopt a radical populist economic program, and replaced her with Yekhanurov.

Yekhanurov, a leading member of Yushchenko's Our Ukraine party, told legislators that the budget deficit would be limited to 2.5 percent of gross domestic product and predicted that the economy would grow 7 percent next year, despite slow growth so far this year.

"The priorities for next year are to revive macroeconomic balances," Yekhanurov said after the vote, according to Reuters. "We will stop eating up gross domestic product and increase funds for development and investment."

With only a month left before Ukraine moves from a presidential-type system to a parliamentary democracy that will endow the new Parliament with broad powers at the expense of the presidency, Yushchenko seemed determined to undo some of the mistakes made in his tenure.

But few economists believe there will be any significant changes introduced before the elections because they would be either too unpopular or would be blocked by a fractious Parliament.

"So far, there has been no clear privatization strategy, and we do not see an acceleration of reform," said Elisabetta Falcetti, an analyst on Ukraine at the European Bank for Reconstruction and Development. "Much now depends on the outcome of the parliamentary elections."

Those opposing the budget included supporters of Timoshenko, the Communists and the powerful Party of the Regions, which based in eastern Ukraine, the country's industrial heartland.

The opposing parties wanted a looser budget deficit in order to gain popular support during the election campaign, regardless of the country's recent economic indicators.

Ukraine's economy grew by 2.5 percent for the first nine months of this year, compared to a growth of over 12 percent for the same period last year, according to the National Statistics Office.

Falcetti said last year's growth had been driven by high commodity prices, particularly Chinese demand for steel. This year, however, commodity prices have been declining, she said.

Ukrainian economists also said that investments had fallen and that the large trade surplus that Ukraine enjoyed last year had turned into a trade deficit as consumer demand soared because of a loose fiscal policy adopted by Timoshenko and the previous administration, led by Viktor Yanukovich.

Yanukovich ran against Yushchenko for president last year but, amid charges of vote-rigging and fraud, was defeated in a runoff. Just before the presidential election, Yanukovich had raised pensions and the minimum wage as a populist measure to win votes.

Ivan Poltevets, an economist at the Institute for Economic Research and Policy Consulting, which is in Kiev, said that Timoshenko had continued the populist policies of Yanukovich.

"Populist measures have driven up inflation but also imports because there is now more consumer demand," he said.

During the first eight months of 2005, real household incomes increased by 24.5 percent, largely because of higher social assistance payments.

According to the National Statistics Office, exports for the first 10 months of this year rose 6 percent but imports jumped 25 percent. The trade surplus for the first 10 months of last year had amounted to 6 percent of gross domestic product. This had been turned into a trade deficit of $1 billion over the same period for 2005.

Poltevets said that the administration had a confused policy over privatization and no clear reform program, which tended to keep create extreme caution among investors.

Timoshenko, for example, had wanted a sweeping policy of reprivatization on the ground that many enterprises had been sold below market prices to oligarchs close to the former president, Leonid Kuchma.

Her opponents accused her of starting a vendetta against any oligarchs who had supported the former government.

Source: International Herald Tribune

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Tuesday, December 20, 2005

Ukraine Raises Russia’s Black Sea Fleet Issue in Gas Row

KIEV, Ukraine -- Ukraine bared its teeth in a row with Russia over the price of its natural gas on Tuesday, making a veiled threat it might consider raising the rent on Russia’s Black Sea Fleet in Crimea, Reuters reported.

Missile launch from Russian Rocket Corvette, Sevastopol, Black Sea fleet

By introducing the Fleet issue, pro-Western President Viktor Yushchenko injected new tension into relations already strained since he came to power last year in an “Orange Revolution” of street protests defeating a pro-Kremlin candidate.

Yushchenko, critical of Russia’s demand that Ukraine pay substantially more for its gas, said it was time to apply world standards to all economic matters, including how much Russia paid to keep its Fleet in the port of Sevastopol.

The president broached the emotive issue — one that has always loomed in the background of post-Soviet relations — as Russian negotiators piled on pressure for Ukraine to pay at least four times the rate it currently pays for gas supplies.

“We are coming to an understanding that all our economic relations must be in accordance with world, European standards,” Yushchenko told a news conference, when asked about the failure to clinch a gas deal at talks in Moscow on Monday.

“Therefore, when we are talking about the economic essence of leasing Ukrainian ports and land and the temporary stationing of Russia’s Black Sea Fleet in Sevastopol, we are undoubtedly talking about a similar approach.”

Gazprom says it is time to raise the price to international levels, and it has threatened to cut supplies to Ukraine from Jan. 1 if a new deal is not signed. This could put Gazprom’s supplies to Europe at risk as most pass through Ukraine.

President Vladimir Putin says he wants to keep politics out of the row. But other officials make clear they believe former Soviet satellites now turning away from Moscow to the West should cease benefitting from perks like cheap energy.

Yushchenko denounced as irresponsible Russian gas monopoly Gazprom’s demands that Ukraine pay up to $250 for 1,000 cubic meters under what it says are European prices — compared to $50 under an existing preferential deal. Talks in Moscow on Monday between the two prime ministers failed to narrow differences.

In the mid-1990s, anguished talks on the Black Sea Fleet produced an agreement on a lease. But many Ukrainian politicians decry as too low the annual rent paid of $98 million paid by Russia for use of Sevastopol port alongside Ukraine’s navy.

Russian nationalists bristle at the very issue of Ukraine’s post-communist control of Crimea, populated by ethnic Russians but handed to Ukraine by Kremlin leader Nikita Khrushchev in 1954 when the collapse of Soviet rule was unthinkable.

Though improved in recent years, relations turned tense again after Yushchenko’s victory. He says the independence of Ukraine is linked to ensuring energy supplies and calls for all economic agreements to be based on market principles.

“All our relations — and not just with Russia — must be placed on a rational economic basis,” he told reporters. “This is a big problem and I want to resolve it honestly.”

The main issue, he said, was “not to allow a policy of double standards, not to allow a policy of reprisals about Ukraine’s democratic processes.”

And any Russian attempt to cut off supplies, as suggested by Gazprom last week, was no more than blackmail, he said.

Russian Foreign Minister Sergei Lavrov, speaking in Moscow, pledged Gazprom would meet its pledges to European consumers.

But Gazprom officials applied unrelenting pressure.

Alexander Medvedev, a Gazprom deputy head, said statements that Kiev was awaiting a Russian offer “creates the impression that there is no central mechanism for decision-making”.

“It’s not clear with whom we are to negotiate,” Medvedev said in a statement. “Our detailed proposals were sent in proper form to both the government and the Naftogaz Ukrainy company.”

Source: MosNews

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CIA Chief Pays Secret Visit to Ukraine

KIEV, Ukraine -- U.S. Central Intelligence Agency Director Porter Goss had a secret meeting with Ukrainian President Viktor Yushchenko in Kiev on Friday to discuss global terrorism and regional challenges, Yushchenko's spokeswoman confirmed Monday.

CIA Director Porter Goss (L) and President Viktor Yushchenko

The meeting was confirmed only after a local newspaper had reported on the development early Monday, citing people familiar with the situation.

"This was a short meeting," Iryna Herashchenko, Yushchenko's spokeswoman, said. "One of the main issues at the meeting was the fight against terrorism."

Meanwhile, the meeting came amid escalating tensions between Russia and Ukraine over natural gas supplies that many officials fear could trigger a major instability in the region.

Russia has been recently pushing for quadrupling prices of natural gas it supplies to Ukraine starting Jan. 1, 2006, and had even threatened to cut the supplies completely if Ukraine disagrees.

Ukraine refused to accept the new prices citing a 10-year agreement it signed with Russia three years ago and that had fixed natural gas prices in trade between the two through the end of 2009.

Some officials in Ukraine and Russia fear the dispute could lead to disruptions in Russian natural gas supplies to the European Union next year. The pressure to quadruple the prices has been apparently politically motivated as Russia had been seeking to punish Ukraine for its pro-Western course, analysts said.

Also on Friday Yushchenko had a phone conversation with Russian President Vladimir Putin as both had apparently agreed to stay away from politicizing the gas dispute.

But Saturday Yushchenko warned that Russia's pressure had been threatening the national security of Ukraine and suggested that Kiev may appeal to world's nuclear powers, such as the U.S., Britain, France and China, to fend off the pressure.

The CIA has been carefully watching Russia's expansion in the energy sector of the former Soviet Union, including aggressive acquisitions of key energy sector companies, such as power distribution firms and oil refineries over the past several years.

The CIA expected Russia's efforts to accelerate this year, especially after Yushchenko, a pro-Westerner, had defeated a pro-Kremlin candidate at the presidential election last year and had declared Ukraine's goal to join NATO and the E.U.

Goss, in a testimony before the Senate Select Committee on Intelligence in February, mentioned Russia's expansion policy as one of the key challenges to be faced in the region in 2005.

"Perceived setbacks in Ukraine are likely to lead Putin to redouble his efforts to defend Russian interests abroad while balancing cooperation with the West," Goss told the committee according to remarks released by the CIA. "We believe he is concerned about further encroachment by the U.S. and NATO into the region."

The developments come amid Western media reports that Russia's international spy activity has recently increased to levels matching a Cold War period, a charge that the Russians had denied.

"To my regret, it has become a rule to scare ordinary citizens abroad with Russian spies," Sergei Lebedev, the director of Russia's Foreign Intelligence Service, said in an interview with Interfax on Monday.

"There have been instances of local counter-intelligence services deliberately exaggerating the Russian espionage threat to show their relevancy, enhance their staff or secure more funds," Lebedev said.

Source: Ukrainian Journal

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Voting Ukrainian-Style

KIEV, Ukraine -- Slogans and promises for any taste, lists of worthies for some become the top unworthies for others, for everyone has their own conscience of the nation and their own Maidan.

Ukrainian President Viktor Yushchenko

In this pre-holiday season of endless party congresses, Ukrainian politics is reminiscent of colorful babble of the Sorochinsky market fair, with political traders shouting each other down as they hawk their wares and inspire deep doubts in their buyers/voters. As they demonstrate their adeptness at political technology, they are quiet sometimes too. Sometimes they prefer to whisper in the client's ear, disparaging the produce available at their neighbor's stall – her pork is tough, that mutton's so old, that fat is unchewable. Trust me. But my son-in-law and I have real honey and young sheep.

The competition is tough on the market. The Ukrainian voter, who has had years to evaluate the worth of promises both blue and orange, is mercurial. He doesn't rush to the polls, preferring to steer clear of the market and study the offers thoroughly but from afar. He has time too, until next March.

In spite of the fact that most of the promises from the years of Ukrainian independence have gone unkept, including the promises of the Yushchenko team, people have not become apathetic and still believe, perhaps naively, that there is no insurmountable barrier between politics and daily life. And so elections are not a formality, the joyless fulfillment of civic duty. That is why, at the foreordained hour, the notorious administrative resources come into play to stimulate the process of expressing the will of the people.

The Ukrainian voter, whose curses at and arguments over parties, blocs and platforms are heartfelt, still sees elections as a real instrument of change in his life. That is the real different between modern Ukrainian politics and Russian politics, where the citizens vote out of inertia, electing the party of power, voting for the bosses, counting on the bosses he is voting for and trusting his fate to to decide everything for him and take care of him. That's what bosses are for.

The main question in the Ukrainian parliamentary elections is not how many votes the Yulia Timoshenko Bloc or Yushchenko's Our Ukraine gets, or how many Yanukovich's Regions or the socialists or the communists get. Or who leave which party for which party or which parties form coalitions in the Rada after the elections.

That's all interesting, but not the most interesting. The main question in where Ukraine will be headed after the elections, will the path of development they chose a year ago remain the same. The question will remain open, for it cannot be answered in the Cabinet alone. Not in Yushchenko's Cabinet, nor any other Ukrainian president's. We remind you again: Ukraine isn't Russia.

Source: Kommersant

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Monday, December 19, 2005

Ukraine Reveals $32 Billion Weapons Embezzlement

KIEV, Ukraine -- From 1992 to 1997 illegal weapons traders exported arms and military property from Ukraine worth $32 billion, the LigaBusinessInform web site quoted MP Sergei Sinchenko as saying.

Ukrainian built tank

Sinchenko, who heads a parliamentary commission investigating illegal arms deals, said that about 114 companies took part in the embezzlement of $89 billion of the Soviet military legacy that was enough to supply an army of 10 million men.

Due to the imperfect nature of the former Soviet republic’s new legislation, a considerable amount of the weapons were sold abroad. Remarkably, only 20 percent of the deals were carried out by companies that were officially authorized by the government; the rest of the firms were so-called shadow structures.

Sinchenko also reported that the investigation has revealed that 250 items of nuclear equipment had somehow been lost while being transported to Russia. The former government said the nuclear weapons handed over to Russia cost $450 million, while his commission named a sum of $1.5 billion.

Sincehnko concluded that there was only man in Ukraine who was aware of all the post-Soviet arms deals — ex-chairman of National Security and Defense Council Vladimir Gorbulin. However, he did not accuse the former official of any criminal activities.

Source: MosNews

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Ukraine Sees First Brut Champagne Launched

ODESSA, Ukraine -- The first batch of Brut champagne-style wines has been launched in Ukraine as rising incomes begin to open up a market for more premium drinks.

Odessa Brut champagne

The Odessa factory of champagne and sparkling wines, a subsidiary of Overline and a well-established producer on the Ukrainian market, created the new range.

"This is a logical step in the further development of champagne under the Odessa trademark, in order to satisfy the needs of a growing number of admirers of the noble champagne drink,” said Vladimir Belokonev, wine direction manager at Overline.

The originality of this offer on the Ukrainian market lies in manufacturing brut from specific grape varieties. The collection is made from Pinot, Chardonnay, Riesling and Traminer.

Odessa's Brut is made in a non-traditional way for the Ukrainian market, thus stressing its originality and its plan to attract mainly appreciative connoisseurs.

And the group hopes that rising disposable incomes in the Ukraine, particularly since country joined the EU, will benefit the Brut range.

"Frankly speaking, Brut is an image project,” said Belokonev. “We consider that in the near future, consumers will become more interested in this category of champagne, although today, just like 20 years ago, the sales leader is semi-sweet champagne. But, increasing incomes will benefit Brut.”

The Odessa factory increased champagne manufacture by 67 per cent, or 2.88m litres, in 2004.

And the firm was 31,000 litres up after the first nine months of 2005 compared to the same period last year. Odessa champagne and sparkling wines occupy about 14 per cent of the Ukraine market.

Overline was created in 1994, and by 2001 it dealt with buying and selling grains (including for distilleries).

The assortment of the products it makes includes: different sorts of vodka – Myagkov and Shturman; low-alcoholic cocktails and wines. Myagkov vodka makes up about half of Overline's total sales volume, thanks to Ukraine's $1bn vodka market.

Source: CEE Food Industry

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Sunday, December 18, 2005

British Experts Confirm H5N1 Bird Flu In Crimea

KIEV, Ukraine -- British specialists have confirmed a bird flu strain, known as H5N1, in the Crimea, the Ministry for Agrarian Policy said on Saturday. “We have received a telephone message from England, saying that the selected samples of dead birds from the Crimea showed the presence of the H5N1 bird flu strain,” ministry spokesman Alexander Gorobets said.

Ukrainian workers collect poultry for extermination in Omelyanivka. A British lab considered a foremost authority on bird flu has confirmed the presence of the deadly H5N1 strain in Ukraine's Crimea.

Earlier, Russian experts in Vladimir had confirmed the H5N1 strain in the Crimea.

The head of the regional commission of the International Epizootic Bureau for Europe, Nikolai Belev, who visited Ukraine this week, said the Russian findings needed no confirmation.

Since December 3, when a state of emergency was imposed in the Crimea, over 60,000 domestic fowls have been confiscated and destroyed at 6,300 households in the Crimea. Authorities have paid about 250,000 U.S. dollars in compensation to owners. Over 29,000 people have been vaccinated, including 5,000 children. No people with avian flu symptoms have been registered.

The ban on fowl trade remains in effect.

Seventy-two poultry and meat processing facilities in the Donetsk, Zaporozhye, Nikolayev, Odessa, and Kherson regions have been inspected over the past 24 hours. Forty-six violations were reported, and administrative proceedings were instituted against 40 people.

However Agricultural Policy Minister Alexander Baranivsky said earlier that the situation at poultry farms raised no concerns. “We see no threat there,” he said.

The minister also assured the population that “there is no threat to people”.

He said the virus dies at the temperature of 70 degrees Celsius above zero, and there is no risk of getting infected through food. However he urged people in the Crimea to minimise contact with fowl.

Some countries may ban poultry imports from Ukraine. However Baranivsky believes these measures will not affect the Ukrainian market of poultry that is supplied mainly to domestic consumers.

He said fowl consumption in Ukraine is growing. In the first 10 months of 2005, poultry production increased by 80,000 tonnes from the same period of last year.

The minister announced a ban on fowl hunting in the Crimea.

Meanwhile authorities have imposed quarantine in the affected Crimean villages.

Avian flu was detected in the domestic fowl in four more villages on December 16, thus bringing the total number of infected settlements to 15.

Experts of the World Health Organisation arrived in Ukraine on Monday to study the bird flu situation in the Crimea where a state of emergency remains in effect.

It was imposed on December 3 by President Viktor Yushchenko after a special meeting he had summoned to discuss how to prevent the spread of avian flu in the Crimea.

He also ordered the creation of an emergency response team that will determine the boundaries of the affected area. The team will be headed by deputy ministers of interior affairs, health, agriculture, environment, and finance, as well as the Crimean prime minister.

The president ordered the interior minister to establish a three-kilometre quarantine zone and a 10-kilometre observation zone around the affected settlements.

Yushchenko ordered authorities to compensate the owners of slain fowl at market prices.

He said authorities “are taking all measures to normalise life in the Crimean villages”.

He urged activists and mass media to join ranks against the disease and step up explanatory work among the population.

At the end of September, ornithologists warned about a possible outbreak of avian flu in the Crimea. Poultry farms started taking precautions after the warning.

The Crimea has always been a transit point for migrant birds on their way to the Mediterranean, Africa, and America in the autumn, and back in the spring. Each time, up to half a million ducks, geese, and swans make stopovers on Lake Sivash.

Specialists blame the spread of the virus on contacts between domestic fowl and migrant birds.

Source: ITAR-Tass

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Ukrainian Family Welcomes Baby No. 17

SACRAMENTO, CA -- As a young newlywed in Ukraine, Vladimir Chernenko feared he and his wife, Zynaida, would not be able to have children after six months of fruitless attempts. Now he knows those fears were unfounded, to say the least.

The Chernenkos of the Rancho Cordova, Calif., immigrated to the United States seven years ago. They have not ruled out having more children, as they believe the size of their family is God's will.

Zynaida Chernenko has given birth to David -- the Rancho Cordova, Calif., couple's ninth son and 17th child.

"I never thought I would have such a big family," said the father at the Bethany Slavic Missionary Church. "But I sincerely believe in God, and I believe my children are a gift from the Lord," he said through a translator.

The Chernenkos have not ruled out having more children, as they believe the size of their family is ultimately God's will. They are undaunted by the prospect of another child.

"When a person casts his fears up to the Lord, then he helps with everything," Vladimir said.

In the Sacramento region, the average family has 3.19 members, according to statistics from the U.S. Census Bureau. The census stops counting once households reach seven or more, and those represent about 2 percent of the population in the four surrounding counties.

Families as large as the Chernenkos are a rarity, especially as women wait until later in life to get married and have children.

The Chernenkos' church, which as the nation's largest Slavic Pentecostal congregation draws 5,000 worshippers each Sunday, holds them up as an example for their familial devotion and unwavering faith in God.

"This is a wonderful occasion," said head pastor Adam Bondaruk, after blessing the family and presenting Zynaida with a large flower arrangement. "From God, you have more gifts than anybody."

The Chernenkos are among the nation's largest families with biological children, but it is unknown who has the most in the country. The Duggar family of Arkansas, with 16 children, has received much media attention in recent months, the result of a Discovery Channel documentary and a slick Web site.

Unlike the Duggars, the Chernenko couple, who don't speak English, are unlikely to become media darlings.

They live a simple, if sometimes noisy life at their home in Rancho Cordova. Each child has a bed in the seven-room house, and the family tools around in a 15-passenger bus. They eat dinner together every night and attend church faithfully.

Vladimir Chernenko works as a security guard and maintenance man at a charter school. Zynaida cares for the children and keeps the household humming along, with significant help from the older children, who pitch in on cooking, cleaning and child-care duties.

"I'm very grateful for my grown-up children, who can substitute and help us out," Zynaida said.

The family, who immigrated to the United States seven years ago to escape religious persecution, receives public assistance.

"We are grateful for this wonderful country, for medical care, for education, for everything that America has given to us," Zynaida said. "As a family, we try to contribute to this country, too."

"It's good," said 18-year-old Dmitry of life with so many siblings. "I like it. Some of my friends say they're bored because their families only have one or two children. We are never, never bored. We always have something to do."

Sister Lyudmila, 16, said she rarely craves time alone. "I usually like to be around everybody," she said. "I think my life is more interesting and busier. It's always fun, and there's always someone to talk to."

Source: Sacramento Bee

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Mudslinging Likely To Mar Ukrainian Election Campaign

KIEV, Ukraine -- The coming parliamentary election campaign in Ukraine is set to become one of the "dirtiest" on record with almost all parties likely to be the target of "mudslinging" from their opponents, a Ukrainian daily paper has said.


The orange parties and the Yuliya Tymoshenko Bloc will be accused of being nationalists, and the issue of her ties with a former Ukrainian prime minister, Pavlo Lazarenko, will also be used. Opposition figure Viktor Yanukovych will be reminded of his prison record and attempts will be made to tie speaker Lytvyn's name to the murder of a journalist, the paper said.

So, the parliamentary election is just around the corner. The political parties and blocs, without any doubt, have already stocked up on the compromising material which they will be pouring out on their rivals and competitors during the course of the campaign. The masters of "mudslinging" have already been going with "X-ray eyes" through the childhood, adolescence and the time when the future MPs "built up their original capital". And we shall probably soon know a great many interesting details about the lives of our politicians. For its part, Segodnya has tried to focus on what "shady" sides of the various political parties their opponents might dwell, putting the question to leading experts and political commentators.

Yushchenko's Our Ukraine bloc

1. The same as in 2004, with accusations of nationalism and of being "banderites" [term used by supporters of Stepan Bandera, a wartime nationalist leader], which will be used to discredit the bloc in the east of the country.

2. The unprofessionalism of Yushchenko's team, whose actions have led to a fall in the rate of growth of the Ukrainian economy and brought it to the brink of a crisis, and made the lives of ordinary people worse. In particular, the breakdown of the talks with Russia on gas, responsibility for which many place on one of the bloc's
leaders Oleksiy Ivchenko (head of the state-owned Naftohaz Ukrayiny company), will be produced "as evidence".

3. Unfulfilled promises ("the year of the Maydan was a year of deceit").

4. [Tycoon] "Boris Berezovskiy's money" in Viktor Yushchenko's 2004 election campaign. It will be recalled that Mr Berezovskiy is planning in the near future to bring an action for libel and fraud at a London court against [former Emergencies Minister] Davyd Zhvaniya and [former presidential first aide] Oleksandr Tretyakov, and to invite Yushchenko and the official head of PUOU [People's Union Our Ukraine] party Roman Bessmertnyy as witnesses. Information about all the proceedings from the trial will come out by the time of the election campaign. (All political forces, apart from the SPU [Socialist Party of Ukraine] and the [Ukrainian speaker Volodymyr] Lytvyn bloc will be using this matter).

5. "Yushchenko's poisoning by dioxin". It has still not been established in legal terms whether this occurred or not. Yushchenko's opponents are focusing on the fact that despite the president's statements that the administration must be moral, Mr Yushchenko lied to the public about his poisoning, which did not in fact happen. This is borne out by the strange situation with the analysis of the president's blood (it was established in western laboratories that the blood contained dioxin, but it is still not known which officials were present when it was taken, which suggests that the dioxin was simply added into the blood later and then sent to the laboratory).

6. The "dominating influence" of the president's relatives and favourites, for example, the fact that Viktor Yushchenko's elder brother Petro and his nephew, the deputy governor of Kharkiv Region, Yaroslav Yushchenko, are included in the electoral list.

7. The "corrupters" - the presence in the list of [former Secretary of National Security and Defence Council] Petro Poroshenko, Oleksandr Tretyakov, [head of Our Ukraine faction in parliament] Mykola Martynenko, Davyd Zhvaniya and [former Transport Minister] Yevhen Chervonenko. This subject will be used first and foremost by [former Prime Minister] Yuliya Tymoshenko's bloc, because it was precisely Tymoshenko's comrades who started this in September 2005. Naturally, the Regions of Ukraine will be added to it, since, in all probability, its no 95 [former Prosecutor-General] Svyatoslav Piskun has something to say on this subject.

8. The "sale of seats" in the election lists of the bloc by oligarchs and businessmen.

9.The "amalgamation in the future parliament with [opposition leader and former Prime Minister Viktor] Yanukovych's party". For example, Tymoshenko might intimidate the "orange" voter by the fact that the "ideals of the Maydan" are under threat, starting with the signing of a memorandum with Yanukovych in autumn 2005, everything will certainly end with the creation of a parliamentary coalition between the Party of Regions and Our Ukraine in the new parliament.

10. The use of administrative resources of power at the election (Yushchenko's bloc will be accused by everyone of this).

The Yuliya Tymoshenko Bloc

1. See Point 1 under Yushchenko.

2. See Point 2 under Yushchenko. Here the stress will be laid on Tymoshenko's populist measures at the time she ran the cabinet (Yushchenko's bloc will also "have a go" at her about this.

3. The worn-out subject of Tymoshenko the "thief" and her relations with Pavlo Lazarenko in the 1990s.

4. "Oleksandr Tymoshenko's business". It is possible that some members of the public would really like to know more details about what kind of business Lady Yu's husband dealt in, how he got it, on what money is it being developed, is everything in order tax-wise, and so on.

5. The "writing off of debts owed to the United Energy Systems" company to the budget at the begining of 2005. Opponents will continue to ask themselves the question why they were written off as soon as Yuliya Tymoshenko, a former head of this corporation, became prime minister.

6. The"dominant influence in the party list of Kuchmists [supporters of previous president, Leonid Kuchma], oligarchs and bankers". Any radical "anti-Kuchmists" might ask themselves how come businessmen like Vasyl Khmelnytskyy, Oleksandr Abdullin, Bohdan Hubskyy, and Mykola Bahrayev, who in the past actively supported Leonid Kuchma, have now found themselves in the Tymoshenko bloc list? Our Ukraine
will also be asking this question.

7. Tymoshenko's nationality. It is well known that her father's name is Volodymyr Abramovych Grigyan. Lady Yu herself says that her father is Latvian (she says he changed his surname to an Armenian one as he feared repressions from the Soviet authorities, but his real name is Grigas). At the same time Yevhen Chervonenko, who comes from the same area as Tymoshenko, has claimed that Lady Yu's mother is a Jew and her father an Armenian.

Yanukovych's Party of Regions

1. The party of "regionals" will not reinvent the wheel and will certainly again remind the public about Yanukovych's two previous convictions (they will also gain by hyping up the case of alleged falsifications of court decisions on quashing the convictions).

2. The "revenge" of the Kuchmists will be actively used by all "orange" forces to mobilize their own voters with the aim of inducing them to go to the polls.

3. [Tycoon] Rinat Akhmatov. In the opinion of political commentators, it will be the main "novelty" in discrediting the "regionals". Opponents will talk about the alleged criminal past of the Donetsk businssman, and about the fact that he brought his own people into the list of "regionals" ("he turned the party into a branch of his own corporation, pursuing his own business interests") and it is precisely Akhmetov and not Yanukovych who is the real leader of the party and who is also laying claim to the post of prime minister after the elections.

4, The "selling of places in the lists" to various dubious elements like Svyatoslav Piskun.

5. "Yanukovych's relatives in the party list", in this case the son of the party leader, Viktor Yanukovych junior. First of all, they will say that "Viktor Feyodorovych follows Viktor Andriyovych in bringing relatives to the list". Second, they will dig into his personal life and Viktor Yanukovych junior's habits with the purpose of making something like another Andriy Yushchenko-II out of him.

6. The "deal" between the "regionals" and Yushchenko and the "orange team" (this will be used by [Natalya] Vitrenko, the communists and [USDPU faction leader Leonid] Kravchuk's bloc).

7. "Yanukovych is a Russian spy". Accusations against the Party of Regions of betraying Ukraine's national interests to Moscow's advantage (criticism of points in the party's programme about duplicity, federalism, EES [European Economic Space]and so on), as well as of separatism ("remember Severodonetsk!") and working to split the country.

Moroz's Socialist Party

1. The "cassette scandal". Lytvyn's supporters will insist that [Socialist leader] Oleksandr Moroz and his supporters could have had something to do with assembling the "Melnychenko tapes" (for example, Mykola Rudkovskyy), that Moroz was lying when he claimed that he did not know Melnychenko before [journalist] Heorhiy Gongadze's death and knew that the major had been making his recordings in February 2000. They will say that the cassette scandal led to the discreditation of Ukraine (the "Kolchuha scandal"). And they will also hint at a link between the organizers of the cassette scandal (read Moroz) and Gongadze's murderers.

2. The "dominant influence in the party list of Kuchmists and oligarchs"; for example, the presence in the list of Volodymyr Boyko (a friend of Kuchma's), the head of the Mariupol Ilyych Steel Plant and Mykola Rudkovskyy, who drives around in flashy foreign cars, which is not in keeping with the image of a communist.

3. The "mercenariness of Oleksandr Moroz", and the fact that he took money from the USDP(U), and that he is friends with "Ukraine's enemies" - in particular the SPU is cooperating with Dmytro Rogozin's Russian Rodina party.

4. Moroz's "orangeness" and his deal with the Ukrainian nationalists. It will be actively used to discredit this politician in the south-east of the country.

Lytvyn's People's Bloc

1. "Volodymyr Lytvyn instigated the murder of Heorhyy Gongadze". Even now this idea is being actively developed with the help of Major Melnychenko and his recordings, on which there is a voice similar to that of Lytvyn, and "sets" Kuchma against Gongadze.

2. "Lytvyn is the last hope of Kuchmism", with emphasis on the fact that Lytvyn is a close colleague of Kuchma's and will now work on restoring his influence in the country. This is being actively developed with the same socialists. Lytvyn's list, which is expected to include a number of big businessmen and members of the former regime, will probably be used to back up this thesis.

Others

We have named the parties and blocs which will be the main target of "mudslinging" by their opponents. However, of course, they will be throwing mud at others as well. For example, from all accounts, the newly-created "[Vitaliy] Klitschko - Pora - Reforms and Order Party bloc can expect some brutal "mud-slinging" from its former allies in the "orange" camp. Everyone will remember the "Klitschkists", and [Finance Minister Viktor] Pynzenyk's experiments with the Ukrainian economy at the beginning of the 90s, and the "suitcases of money from western funds" together with the "stolen millions of the Maydan" for "Pora" and the lack of political experience of Vitaliy Klitschko, whom, they say, certain adventurists dragged into a dangerous game in order to finally "split the Maydan" and behind his back used his name to cover up their dirty deeds and all sorts of other things.

Natalya Vitrenko and the Communist Party will not escape the attention of the "mudslingers", either, reminding them about their "treachery" and their "work for the Kremlin". Yes, and "Kravchuk's bloc" will also be reminded at every step of the deeds of Viktor Medvedchuk in his post as head of the president's administration [under Kuchma].

In short, the current election really risks being one of the dirtiest in Ukrainian history. Not just because the stakes are so high, but also because the rule "where there are two Ukrainians there are three hetmans [leaders]" has never been so prevalent. Former allies will beat hell out of each other and become evil enemies. And the intraspecific struggle, of course, will be the ugliest. There is one reassuring thing - when the parties come to parliament, whether they like it or not, they will have to get together and create a majority, otherwise the president will simply dissolve parliament. And that means that soon after the election everyone will quickly forget about one another's "dirty deeds" , and relative peace and quiet will reign for a time.

Source: Segodnya

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Saturday, December 17, 2005

Russia, Ukraine Quarrel Over Gas

MOSCOW, Russia -- Relations between Russia and Ukraine, tense since the election of pro-Western President Viktor Yushchenko last year, are facing a potentially major rupture over the price of natural gas. Russia's state-controlled energy giant Gazprom is moving to raise Ukraine's annual bill by more than $1 billion by ending below-market prices that were part of an effort to maintain the Kremlin's influence with its neighbor.

Threat of big gas price hike seen as a Kremlin lesson for Kiev

The dispute comes as Gazprom is set to raise gas prices for a number of other former Soviet republics, including Georgia and Moldova, which have turned away from Russia in favor of the West, and the three Baltic states, now members of NATO and the European Union.

"The time when we built relations by quasi-subsidizing neighboring economies is gradually passing," Russian Finance Minister Alexei Kudrin was quoted as saying by the RIA Novosti news agency this week. "We must think about our own interests."

During negotiations with Ukraine, Gazprom first proposed that the price of natural gas should jump from $50 to $160 per 1,000 cubic meters, which would add nearly $1 billion to Ukraine's annual bill for heating homes and powering factories.

This week, Gazprom said it was tired of what it called Ukrainian foot-dragging in the talks. It said that if no deal was reached, starting Jan. 1 it would unilaterally charge $200 to $230, the price it obtains in Western Europe. That would push the extra cost to Ukraine well over $1 billion a year.

"Ukraine has wasted time in these talks, and now there can be no talk of $160," Alexander Medvedev, deputy chairman of Gazprom, said on Russian television. "The market situation has changed, and it's continuing to change."

"This is 90 percent political," said Volodimir Polokhalo, head of the Center of Political Thought in Kiev, the Ukrainian capital. The Kremlin is unhappy with the street revolution that brought Yushchenko to power last year, he said, and Russian President Vladimir Putin wants "to show other former Soviet republics that Ukraine is in trouble because it didn't behave."

Gazprom is not proposing to raise prices for Belarus, which it charges $47 per 1,000 cubic meters. Russian officials say this price is kept low because Belarus has allowed Gazprom to own a gas pipeline there and to lease the land it uses long-term. Many political analysts, however, attribute the price to the country's firm political alignment with Moscow.

Putin spoke to Yushchenko by phone Friday and said later that they had agreed that the gas dispute should not be politicized, the Russian news agency Interfax reported. "Business and economics is one thing and politics another," Putin said. "Russia was and will be Ukraine's ally."

Ukraine pays much of its natural gas bill in barter by allowing Gazprom to use Ukrainian-controlled pipelines to transport gas across its territory -- about 80 percent of Gazprom's exports to Western Europe flow that way. This gives Ukraine potential leverage in the negotiations, but Yushchenko has ruled out any curtailing of gas to Europe.

Some Ukrainian politicians and analysts have suggested pressuring Russia by renegotiating a lease for Ukrainian bases used by Russia's Black Sea naval fleet and removing Russian early-warning radar systems from Ukrainian territory. Analysts say either move, which might not be possible legally, would be radical and therefore unlikely.

Yushchenko, who said he remains confident of a deal before Jan. 1, has said he would accept a phased transition to market prices but not the kind of sudden, steep increase Gazprom is proposing.

The proposed price increase would severely strain Ukraine's budget and economy, which has been growing relatively slowly in the last year. The country's chemical and metal industries, which are heavily dependent on natural gas, would be particularly hit. In addition, any popular anger over higher home heating bills could have an impact on parliamentary elections in Ukraine in March.

Source: Washington Post

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Ukraine Victors 'Underestimating Risk'

KIEV, Ukraine -- Three months before tough parliamentary elections, Yulia Tymoshenko is convinced of her need to patch up differences with Viktor Yushchenko, the other hard-charging leader of last year's Orange Revolution in Ukraine.

Yulia Tymoshenko addressing her party

"We're tied together like mountain climbers on the same rope," she says in an interview with the Financial Times.

The perilous image is apt. Popular support for Mr Yushchenko, the country's pro-western, reformist president, has fallen steadily since he took power, as a result of a sluggish economy, cautious reforms, continuing corruption and worries about worsening relations with Russia.

Mr Yushchenko's party, Our Ukraine, is struggling, with 16 per cent support. The conservative, pro-Russian Regions party, led by Viktor Yanukovich, a former prime minister who lost to Mr Yushchenko in last year's presidential election, is well in the lead with 28 per cent support.

Our Ukraine's and Mr Yushchenko's hopes of victory depend largely on his potential coalition partners - most notably Ms Tymoshenko, whom he sacked just three months ago, and Vitali Klitschko, the recently retired champion boxer who is heading one of five "Orange" groups in the elections.

Ms Tymoshenko says she worries that Mr Yushchenko may be waking up to his predicament too late.

"After our victory [last year], everyone thought the war was won. All the political battalions that took part deflated like balloons, be-came apathetic, weak, less effective. It scares me," she says.

"It seems to me our whole Orange team, including the president, underestimates the colossal risk of a revanche."

During the past three months Mr Yushchenko had flirted with the idea of forming a coalition with the centrist speaker of parliament, Volodymyr Lytvyn, or even with Mr Yanukovich. But such talk only further dismayed the president's supporters.

Now Mr Yushchenko has returned to his old base, hoping that after the March vote he can cobble back together roughly the same coalition of parties that backed him last year.

Nevertheless, there is an intense rivalry between the Yulia Tymoshenko Bloc, which has 15 per cent of voter support, and Mr Yushchenko's Our Ukraine.

Delicate issues - such as who would be prime minister in their coalition - are being put off until after the vote.

Ms Tymoshenko continually criticises Yuri Yekhanurov, her successor as prime minister, who is far less outspoken and far more cautious about economic and bureaucratic reforms than she was.

Mr Yushchenko has said he would like to keep Mr Yekhanurov as premier after the elections on March 26 but Ms Tymoshenko wants the job back if her bloc beats Our Ukraine at the polls.

Meanwhile, Mr Klitschko, a former world heavyweight champion who is one of the country's most popular athletes, has come to the president's aid.

The boxer will lead the electoral list of candidates for a bloc of two parties aligned with Our Ukraine. Mr Klitschko has hinted he will also run for mayor of Kiev in simultaneous local elections.

Should Mr Yushchenko manage to hold on to power, however, his influence will be curtailed. Changes to the country's constitution, hammered out in a compromise with the preceding, pro-Russian government, will weaken presidential powers and strengthen those of parliament.

Source: Financial Times

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As Gongadze Proceedings Start, CPJ Says Much Work Remains

NEW YORK, NY -- As court proceedings are about to begin against three defendants in the 2000 murder of Internet journalist Georgy Gongadze, the Committee to Protect Journalists (CPJ) urges Ukrainian authorities to identify and prosecute all those responsible for plotting the brutal slaying.

Slain journalist Georgy Gongadze

Preliminary hearings are set to begin on Monday in Kyiv against former police officers Valery Kostenko, Nikolai Protasov, and Aleksandr Popovych, according to international news reports. A fourth suspect, Gen. Aleksandr Pukach, former head of the Interior Ministry's criminal investigation department, is being sought on an arrest warrant, the news agency Interfax reported.

"This is a very important step in bringing to justice those responsible for the murder of our colleague Georgy Gongadze," CPJ Executive Director Ann Cooper said. "Yet much work remains. We urge Ukrainian authorities not to shy away from an aggressive pursuit of every lead—no matter how high a level it may reach."

The defendants are charged with premeditated murder and abuse of power in office in the killing of Gongadze, editor of the independent news Web site Ukrainska Pravda, Interfax said. The prosecutor general's office said it is continuing to investigate those who may have ordered the killing.

Gongadze's murder was among the catalysts for the popular uprising in late 2004 that ousted former President Leonid Kuchma's corrupt government and propelled reformist President Viktor Yushchenko to power. Allegations of high-level government involvement in the Gongadze murder had dogged Kuchma throughout his final term.

On audiotapes made secretly by a former presidential bodyguard, Kuchma is allegedly heard to instruct Kravchenko to "drive out" Gongadze and "give him to the Chechens," according to transcripts obtained by news agencies. Also in March, the Interior Ministry acknowledged that its officers had conducted surveillance of Gongadze shortly before he was abducted.

In September, a parliamentary commission investigating the case accused Kuchma, the late Interior Minister Yuri Kravchenko, Parliament Speaker Vladimir Litvin, and former Ukrainian Security Services chief Leonid Derkach of plotting the journalist's murder. The commission recommended that the prosecutor general open criminal cases against Kuchma, Litvin, and Derkach. But the commission, which dissolved after its sensational September 20 announcement, had no judicial authority, and prosecutors are not bound to act upon its findings.

The presidential bodyguard, Mykola Melnychenko, returned to Ukraine on November 30 after a five-year absence. He is expected to be among the prosecution witnesses. Melnychenko told reporters he was "back for justice to triumph and Kuchma to be held responsible," The Associated Press reported.

Gongadze's family has repeatedly complained about the slow progress of the investigation, particularly the efforts to identify and prosecute the masterminds.

Source: CPJ

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Friday, December 16, 2005

Crimeans Refuse To Give Up Birds, Frustrating Efforts To Fight Bird Flu

UROZHAYNOE, Ukraine -- Impoverished villagers in southern Ukraine are putting up strong resistance to authorities who want to kill their domestic fowl in an attempt to prevent the spread of bird flu.

Veterinary workers disinfect a farm in the settlement of Lastochkino near the eastern Ukrainian city of Donetsk. Bird flu, including the H5N1 strain dangerous to humans, has spread to new villages in Ukraine's Crimea peninsula, officials said

Some residents of this village in Ukraine's Crimean peninsula on Dec. 15 even chased off emergency workers with pitchforks. Others hid their birds in sheds.

With the government destroying thousands of birds, some of Ukraine's poor are refusing to give up the chickens, ducks, turkeys and other fowl they depend on for eggs and meat to make it through the former Soviet nation's long, cold winters.

Many say they are willing instead to take their chances in the fight against a strain of bird flu that has killed humans in Asia and decimated flocks of birds there.

On Dec. 14, the Health Ministry confirmed the outbreak was the deadly Asian strain H5N1, which has been recorded in at least 11 Crimean villages. Birds are dying in another 14 on the peninsula.

In Urozhaynoe, Lena Sidorova refused to hand over her 20 ducks and hens. She says she fears for her children's health, but she's also desperate to feed her family.

"All my family has are these 20 birds and my mother's Hr 330 ($65, 55 euro) pension," she said, crying.

An old, decrepit bus with the word "quarantine" written in red across it stood on the outskirts of the Urozhaynoe region Dec. 15. Inside villages, emergency workers - some in special suits, others in military camouflage - went door-to-door, asking residents if they had any birds.

But not all are cooperating.

"People are hiding birds, refusing to give them to us," said Andriy Tkachenko, an emergency official. "Some even take pitchforks and chase us out."

The Emergency Situations Ministry said it had culled 56,322 birds as of Dec. 15, nearly two weeks after the country recorded its first case of bird flu when about 2,500 birds died in marsh lands on this Black Sea peninsula.

Tkachenko said villagers have the right to not relinquish their fowl; all they have to do is sign a form acknowledging that they have been warned.

The rules were not consistent, however; in the village of Nekrasovka, one of the first hit by the outbreak, authorities were enforcing a mandatory cull, residents said. On Dec. 15, about a week after the cull began, bird feathers still covered a part of a village road.

Sergey Mirokhin, pushing a cart filled with firewood through Nekrasovka, said the measures were excessive and worried that the 300 hryvnas ($60, 50 euros) he received for his 15 hens and two geese will not be enough to buy new birds in the spring.

"My birds were not dying, but they took them without asking me," he said.

Some villagers complained that the government acted too slowly. They noticed birds dying months ago.

"My son came to me desperate as all his ducks died in a day," said Antonina Tonlikh, 78, her voice trembling. "Initially we thought that they were poisoned."

In Urozhaynoe, villagers insisted that their birds were healthy, and accused the government of mixing up test results in the laboratory, something denied by officials.

Veterinary experts have said the virus was brought by migratory birds, and they fear it will spread in the spring when birds fly north.

International experts fear the H5N1 strain of bird flu could trigger a human flu pandemic if it mutates into a form that is easily spread between people. Since 2003, the virus has killed at least 71 people in Asia - most of them farm workers who came into close contact with infected birds.

No cases of human infection have been recorded in Ukraine, health and emergency officials said.

Source: AP

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France Hid Extent Of Chernobyl Contamination: Report

PARIS, France -- French authorities deliberately suppressed information about the spread of radioactive fallout from the May 1986 Chernobyl disaster over France, according to details of an experts’ report leaked on Thursday.

Radioactive cloud from Chernobyl explosion

Two independent physicists say in the report that the state-run Central Service for Protection against Radioactive Rays (SCPRI) knew of high levels of contamination in Corsica and southeastern France but kept the details under wraps.

The study was commissioned by magistrate Marie-Odile Bertella-Geffroy, who since 2001 has been examining allegations that the atomic cloud from Chernobyl caused a surge in cases of thyroid cancer in parts of France.

This week Bertella-Geffroy handed over the report -- originally completed in March -- to civil plaintiffs in the case, who passed details to AFP.

“Now we have proof that there was a breakdown in the system. So now the judicial case will succeed -- I can’t see how it can do otherwise,” said Chantal Hoir, president of the French Association of Victims of Thyroid Cancer.

Source: AFP

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Don’t Trust The IAEA On Chornobyl

KIEV, Ukraine -- The Kyiv Post’s recent article about author Mary Mycio (“U.S. author pens ‘natural history’ of Chornobyl,” Dec. 1) and her op-ed column about the Chornobyl aftermath (“Questions from the alienation zone,” Nov. 3), raise a number of important issues, and deserve elaboration.

Chornobyl reactor 4 after explosion

Ms. Mycio has good reason to question the latest pronouncements of the International Atomic Energy Agency (IAEA). The UN report issued in September is not the first time the IAEA has tried to present itself as the ultimate authority on Chornobyl’s impact and to downplay the disaster’s health effects.

The lead author of the IAEA report, Dr. Fred Mettler, testified in July 1992 before a U.S. Senate Subcommittee chaired by Sens. Joseph Lieberman and Alan Simpson. At that time, Mettler claimed that his agency had carried out the most extensive studies available, and found no discernible increase in thyroid cancer in children. Lieberman pressed Mettler on this issue because other witnesses reported alarming increases downwind from the disaster site, but Mettler held firm in his denials.

Five weeks after that hearing, the World Health Organization (WHO) and the prestigious British scientific journal Nature shattered Mettler’s credibility with a detailed analysis that showed an 80-fold increase in thyroid cancer, especially in children living in or near contaminated villages in Belarus. By 1992 there was ample evidence of a major increase in thyroid cancer in Ukraine as well, especially in the regional children’s hospitals in Chernihiv and Zhytomyr, which served children from the most contaminated regions. If Mettler and his collaborators were in the least bit interested in comparing the incidence of thyroid cancer before and after Chornobyl, they could have easily reviewed the data from the central Institutes of Endocrinology in Minsk and Kyiv, where most thyroid operations were performed.

Support mobilized

The WHO report was crucial because it mobilized the international community and local activists in Ukraine and Belarus to conduct effective thyroid screenings and physician training programs to improve the treatment of this otherwise very rare form of cancer in children. Thanks to this effective international response, very few of these children died, but nearly all will have to take thyroid replacement hormone for the rest of their lives, and thousands now bear the so-called “Chornobyl necklace,” a prominent scar across their lower throat where their thyroid gland was extracted. The spike in thyroid cancers has resulted in many personal tragedies and smaller heartbreaks that are never reflected in the cold statistics of public health research. I’m reminded of a teenage girl from the Svyatoshyn district in Kyiv, an aspiring opera singer, whose thyroid surgery permanently damaged her vocal cords and bloated her once youthful figure.

One would think that the IAEA and Dr. Mettler would have been humbled by the WHO findings. A reasonable scientist genuinely interested in public health and the advancement of knowledge concerning radiation effects would have considered the possibility, if not the likelihood, that other types of cancer might also have been caused by exposure to radioactive particles and that these cancers deserved a closer look.

But as Ms. Mycio points out, there have been no serious studies of other forms of cancer and the IAEA completely ignored 400,000 nuclear cleanup workers who were among the highest risk groups when arriving at their rosy estimate that only 4,000 excess cancer deaths would ever be traced to the disaster.

When they could no longer refute the many follow-up studies that corroborated an explosion in thyroid cancer, the IAEA pursued a policy of damage control and tried to limit the scope of further research by claiming that any other health effects were purely anecdotal and unrelated to the Chornobyl disaster. It was a strangely circular but distinctly unscientific approach: If not thyroid, then not Chornobyl. In a perversion of Christ’s adage “seek and ye shall find,” the IAEA adopted a policy of “seek not or ye may regret your findings.” What’s worse, the IAEA has consistently carried out a virtual smear campaign against Chornobyl victims and their health workers, accusing those who presented evidence of health effects of suffering from hysteria and “radiophobia.” It is a familiar slur. Environmental activists and independent scientists who raised public awareness of the effects of DDT and asbestos and coal dust faced the same sneers from industry apologists until research proved them dead right.

Carrying the torch

Today, the scope of Chornobyl research needs to expand to the next generation. A joint Israeli-Ukrainian study published in the Journal of the Royal Society of Medicine in the United Kingdom found that children born to Chornobyl liquidators had suffered a seven-fold increase in chromosome damage as compared to their siblings born prior to the disaster. Not all this damage will manifest itself in birth defects in the first generation. But despite the nuclear lobby’s vehement denials that this has anything to do with Chornobyl, widespread evidence of an environmental tragedy is being gathered.

I would invite Dr. Mettler and Ms. Mycio to visit the orphanages in the remote towns of Tsyuropinsk, Zaluchya and Znamyanka where children with severe birth defects are packed into crowded dormitories and kept out of sight and out of mind. Many of these birth defects have been documented in a Japanese study in Belarus in 1994 and in the Oscar-winning documentary “Chernobyl Heart.” In my last visit to one of our partner hospitals in Rivne, I learned that in the previous month there were nine children born in that facility with bizarre birth defects that should occur very rarely: Babies born without ears, with missing critical organs, with deformed arms, with multiple digits. Prior to Chornobyl, there might have been one isolated incident once every few years, but maternity hospitals and neonatal wards across Ukraine are reporting a noticeable increase in clusters of these defects. One can bend over backwards and insist that these deformities can happen naturally in the absence of some environmental insult, but at some point, this begins to strain credibility.

The glowing media reports of the so-called “magisterial” report offered by the IAEA never reported on the fervent dissents and contradictory evidence offered by respected scientists from Ukraine, Belarus and Russia who are working most closely with the relevant patient population.

We forget that for many years, physicians were prohibited from listing radiation-related illnesses as a cause of death, and public health researchers were intimidated and urged to eliminate references to Chornobyl fallout as a factor in the rapid decline of health of adults and children between 1991 and 2001. In Belarus, several researchers have been jailed for challenging the prevailing wisdom on Chornobyl’s negligible impact.

Worst is yet to come

The IAEA is fond of proclaiming that there has been no increase in leukemia incidence since Chornobyl. Perhaps, but studies by Swedish and Greek scientists have traced an increase in leukemia in children in their countries to radiation exposure from Chornobyl, and it is hard to imagine that more pronounced increases would not occur closer to the epicenter of the disaster. It is well known that the latency period for many forms of cancer can be 20 years or more, and the half-life of the most widespread cancer-causing isotope dispersed by Chornobyl, cesium 137, is 30 years. So the greatest increase in cancer and leukemia could still occur in the next 10 years, or beyond. The international community needs to stay vigilant, and continue to strengthen Ukraine’s capacity for combating a second wave of cancers. Just as the IAEA was caught off guard by an early emergence of thyroid cancers, it may again have to re-evaluate all of its models and calculations should leukemia rates start to climb later than expected.

Beyond cancer, there are many other health effects that deserve closer study. Peer-reviewed studies by Dr. Anna Petrova from the Robert Wood Johnson Health Network and Dr. Olesya Hulchiy from the Kyiv Medical University have found a higher rate of pregnancy complications and stillbirths among women living in areas contaminated by fallout.

Before the IAEA can close the book on Chornobyl, the world community would do well to demand some answers to the glaring omissions and errors that have riddled the Agency’s post-Chornobyl track record.

Source: Kyiv Post

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Thursday, December 15, 2005

Gas Fuels Hotter Russian-Ukrainian Spat

KIEV, Ukraine -- What began as a gas dispute between Ukraine and Russia has ballooned into a diplomatic crisis as the neighbours launch a barrage of threats and counter-threats, insults and allegations of blackmail at each other.

Yushchenko (L) and Putin (R) are in a diplomatic war over gas prices

Since the beginning of December, in addition to constant sparring over gas prices, Kyiv and Moscow have bickered over Ukraine's ambitions to join NATO and the Russian navy's use of a Ukrainian port.

The acrimony — magnified by President Viktor Yushchenko's victory last year over a Kremlin-backed candidate — comes as Ukraine celebrates a string of small successes in its hopes to forge closer ties with the West.

This month, Kyiv won European Union recognition as a market economy, played host to U.S. Secretary of State Condoleezza Rice and presided over a pro-democracy forum involving heads of state that was widely perceived as a challenge to Moscow's regional domination.

Ukraine also declared that it would be ready to join NATO in three years — an idea that clearly worries Moscow.

"What we are seeing is Russia playing the spoiler for Ukraine because this administration is not very interested in any form of integration with Russia," said Ivan Lozowy, president of the Kyiv-based Institute of Statehood and Democracy. "It's an emotional, knee-jerk reaction — Russia feels obliged to show its strength and power when it is not getting its way.''

Moscow has warned Kyiv that it will no longer receive some of the cut-rate deals on commodities from gas to enriched uranium that the Kremlin has doled out in the past to friendly neighbours.

"Considering Ukraine's unfriendly attitude, her strivings toward NATO ... delivering gas at those old prices no longer makes sense," said Russian analyst Sergei Markov.

Russian President Vladimir Putin said last week that high economic growth and privatization revenue made Ukraine perfectly capable of paying world market prices.

Kyiv had been paying $50 (figures U.S.) per 1,000 cubic meters and had balked at Russian gas monopoly Gazprom's proposal to triple that price. On Wednesday, Gazprom warned Ukraine that because Kyiv had dragged its feet in negotiations, it now faced a sharply higher price of $220 to $230.

Ukraine has countered that it has a contract through 2013 for the lower price, and would consent to only a gradual increase through 2010.

In apparent effort to sweeten Ukraine's request for more time, Fuel and Energy Minister Ivan Plachkov on Thursday proposed creating an evenly split Ukrainian-Russian enterprise that would oversee the sale of Russian gas on Ukraine's internal market. A spokeswoman for the fuel and energy ministry could not immediately provide further details.

Ukrainian officials have accused Russia of applying pressure in a bid to force Ukraine to hand over management control of its revenue-generating pipelines, a proposal the Ukrainians have rejected. Gazprom threatened on Tuesday to cut off gas supplies to Ukraine if a deal isn't reached by Jan. 1.

The dispute is tricky for this gas-dependent country. Ukraine's energy-inefficient chemical factories will cease being profitable if the price rises above $95 per 1,000 cubic meters, and the country's giant metal works will struggle at prices above $103, Security Council chief Anatoliy Kinakh said. Those industries account for 30 percent of Ukraine's gross domestic product and 45 percent of its export earnings.

The gas dispute comes as Ukraine embarks on a parliamentary election campaign in which Yushchenko is looking very vulnerable. Disappointment at the slow pace of change could bring significant votes to those who opposed last year's Orange Revolution, giving them enough power to alter Ukraine's course.

"The energy factor will be used extensively both to illustrate the performance of the government, which is not satisfactory in that sense, but also to claim that if Ukraine were closer to Russia, there wouldn't be such hardships," said Ukrainian political analyst Inna Pidluska.

Moscow also has demanded that other Western-oriented former Soviet nations of Georgia and Moldova pay higher gas rates. Meanwhile, Belarus, whose autocratic President Alexander Lukashenko is on good terms with Moscow, enjoys subsidized gas rates — $47 per 1,000 cubic meters next year — which are not being renegotiated.

"Russia has interfered, is interfering and will interfere,'' said lawmaker Borys Bespaliy, a Yushchenko ally. "The main problem is that Russia still considers itself an older brother in relation to neighboring countries.''

Moscow has sought to use the gas dispute to blacken Ukraine's name in Europe, warning of possible supply cutoffs. The European Union gets almost half of its gas imports from Russia, mostly piped through Ukraine.

Plachkov promised that Russia's European customers would receive their gas shipments via Ukraine "in full volume," Ukraine's Unian news agency reported. "Ukraine, however, can't transport gas for free," Plachkov was quoted as saying.

"No one is asking them to work free of charge, we are ready to pay the transit charges at the European level," Gazprom spokesman Sergei Kuprianov was quoted by the Interfax agency as saying. Gazprom's $220 to $230 proposed fee factors in those transit charges.

Plachkov said that the next round of Ukrainian-Russian talks were expected to be held next week.

Yushchenko's government is giving as good as it gets. A senior administration official suggested that if Moscow demands "world prices" for oil, it might consider jacking up the $93 million per year that Russia pays to keep its Black Sea Fleet based in the Ukrainian port of Sevastopol.

Russian media, meanwhile, have reported that Ukraine is threatening to open up Soviet-era military installations to the United States and scuttle military cooperation with the Kremlin. Ukrainian officials said they were not aware of the reports.

Even the outbreak of bird flu in Ukraine became a point of disagreement when a Russian veterinary official broke the news that Ukraine had the deadly Asian strain; Ukraine refused to confirm it, countering that Kyiv is putting its trust in a British laboratory.

"Our government is just being provocative," said opposition lawmaker Taras Chornovil. "They intentionally drove our relations into a dead end.''

Source: AP

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NATO Rents Giant Transport Planes From Russia, Ukraine

KIEV, Ukraine -- Ukraine’s Antonov Airlines and Russian company Volga-Dnepr have signed a three-year agreement with NATO on strategic airlifting by An-124-100 Ruslan planes, National Radio Company of Ukraine reported.

An-124-100 Ruslan aircraft

According to acting designer general of O.K. Antonov Aircraft Design — Manufacturing Complex, Dmytro Kiva, the flights are to start in early 2006.

At a June 12, 2003 NATO Summit in Brussels participants in the SALIS (Strategic Airlift Interim Solution) and the ECAP (European Capability Airlift Programme) came to a conclusion on the expediency of using Antonov AN-124-100 Ruslan planes and the renting of five or six of the models for seven to nine years.

For a time the massive An-124 (Condor in NATO classification) held the mantle of the world’s largest aircraft before the arrival of the An-225, a stretched six engine derivative. It is commonly used for oversize freight charters.

Developed primarily as a strategic military freighter (in which role it can carry missile units and battle tanks), the first prototype An-124 flew on Dec. 26, 1982. A second prototype, named Ruslan (after a Russian folk hero), made the type’s first western public appearance at the Paris Airshow in June 1985, preceding the first commercial operations in January 1986.

Since that time the An-124 has set a wide range of payload records, one achievement being the heaviest single load ever transported by air — a 124-ton powerplant generator and its associated weight spreading cradle, a total payload weight of 132.4 tons, set in late 1993.

Notable features include nose and tail cargo doors, 24 wheel undercarriage allowing operations from semi prepared strips, the ability to kneel to allow easier front loading, and a flybywire control system.

Source: MosNews

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Boxer As Politician

KIEV, Ukraine -- We’ve been wondering for awhile how long it would take one of the boxing Klitschko brothers to get involved in politics. In the event, it happened a lot sooner than we expected, as this weekend saw heavyweight champion Vitali Klitschko announce that he would run for parliament on the list of a bloc comprised of the Reforms and Order and Pora parties.

Heavyweight champion Vitali Klitschko

Klitschko, an Orange Revolution supporter who abruptly abandoned boxing this fall after suffering a serious knee injury, should be commended for entering politics, which could use him. Politics in this country is too much the business of self-interested hacks and of Eastern European provincials with narrow worldviews.

Klitschko, a worldly guy who speaks German and English and has spent vast amounts of time in Hamburg and Los Angeles, is the exact opposite of them. Not incidentally, he’s also extremely – and honorably – rich. It’s not to make money or to protect himself from prosecution that he’s looking for a Rada seat. If he wins, he’ll bring brains – yes, he seems smart, and not only by boxing standards – and sophistication to a chamber that can use it. He’s witnessed how life is lived in countries where the level of democratic culture is more developed than it is here. That’s something shockingly few Rada deputies can claim.

At the same time, Klitschko is one democratic, West-friendly Ukrainian who can win votes in places like Donetsk and Crimea, where he’s just as much a hero as he is in Lviv. It will be hard to smear him as a sissified tool of the West.

Klitschko has some work to do, of course. As was evident at the Nov. 22 rally on Independence Square, he’s not a great public speaker. Also, we’ve never heard him speak a word of Ukrainian. But public speaking and Ukrainian are things that he can learn.

Klitschko is only in his mid thirties. We’re not sure if we’ll always agree with his positions, but we are pretty sure that, if he chooses to stick with it, he’ll exercise a good influence on Ukrainian political culture for decades to come.

Source: Kyiv Post Editorial

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Wednesday, December 14, 2005

Orange Crushed

KIEV, Ukraine -- The revolution is not over. At least that’s the sense one gets hanging around the offices of Pora (“It’s time”), the youth movement that helped topple Ukraine’s pro-Russia government last November. Its offices are in a bunker at the base of Andrievsky Uzviz, a cobblestone street that wends its way up to Kiev’s famed St. Sofia’s Cathedral.

Feeling blue: Yulia Tymoshenko, the "Goddess" of last year's Orange Revolution, was dropped as Prime Minister in September

The headquarters has the untidy feel of a high school art room—yellow and blue streamers dangle from high ceilings and photos of last year’s revolution plaster the walls. A dozen or so twentysomethings with bags under their eyes toil late into the night. Cell phones chirp incessantly.

The movement is now busy campaigning against a bill endorsed by President Viktor Yushchenko, the hero of last year’s electoral standoff. The bill grants immunity to politicians for alleged crimes committed in the past, and Pora’s true believers see it as a sellout to the former regime and yet another sign of Yushchenko’s unwillingness to fight corruption.

One year after more than a million Ukrainians spilled into Maidan, Kiev’s version of Times Square, to protest a presidential election hijacked by pro-Kremlin forces, disillusionment has set in. Dubbed the Orange Revolution, the revolt swept into power Yushchenko’s pro-reform government.

Yet the majority of Ukrainians, according to a recent poll, say Yushchenko has failed to deliver on his promises to clean up corruption and improve the economy. “They feel like pawns that were offered a lot of promises, but many of them haven’t been realized,” says Andrei Yusov, a Pora leader.

Many Ukrainians now believe that Yushchenko’s mild personality may not match Ukraine’s rough-edged politics. “He’s a soft politician,” says Yuri Temech, a 39-year-old Ukrainian. “His entourage is who’s making the rules and dictating the weather.”

Seventy-three-year-old Maria Yusenko agrees. “He has to become more hardened, because he has a warm soul,” she says. She participated in last year’s protests and now sees a leader under siege. “He is surrounded by his enemies, who limit his actions. His past friends betrayed him.”

She is referring to the so-called orange coalition—a collection of reform-minded politicians from various opposition parties who were given important government posts after the revolution. It was, from the beginning, an awkward marriage. Many of the coalition members agreed with the goals of the orange revolution—more democracy, rule of law, openness—but held opposing views on how best to carry out these reforms.

Too many strong personalities led to political infighting and charges of corruption. Refereeing their competing egos turned out to be a hopeless task. Fed up, Yushchenko sacked his cabinet in early September.

Goddess in Exile

Among those let go was Yulia V. Tymoshenko, an oil tycoon turned populist politician. Her fiery speeches during the Orange Revolution made her a media darling; the Associated Press dubbed her the “Goddess of the Revolution.” As prime minister, she pushed to reexamine thousands of privatization sales, which the former regime often offered at fire-sale prices. A more cautious Yushchenko wanted to review only a handful of the privatization deals. In the end, Tymoshenko was fired.

Charismatic and attractive, Tymoshenko enjoys cult status among many Ukrainians, even when she’s on the sidelines. Her supporters say she represents the true “spirit of Maidan.” William Green Miller, the former U.S. ambassador to Ukraine, describes her as “goal-oriented, extremely intelligent, [and] courageous.”

Her charms aren’t universal, however. Some see her as power-hungry and believe that her attempt to investigate privatization deals was about settling old scores (Tymoshenko, herself a former oligarch, was jailed briefly in 2001 on charges of bribery, money-laundering, and abuse of power).

Then there are those who question her motivations and temperament. “Tymoshenko has always said the right words, but she’s too cocky and loves power too much,” says Natalia Tipko, 44, a former bank clerk from Kiev who supported Tymoshenko briefly before the revolution but then switched to support Yushchenko.

“Tymoshenko’s too emotional,” says Svetlana Grobko, a 20-year-old university student from Chernivtsi. “You can’t be as emotional as she is and be in politics.” Tymoshenko did break down in tears on stage at last month’s celebrations in Maidan marking the Orange Revolution’s one-year anniversary after Yushchenko criticized her policies.

If Tymoshenko is seen as too unstable to lead Ukraine, Yushchenko often appears too rigid. His speeches are long, uninspiring, and sprinkled with clichés. At the rally marking the first anniversary of the revolution, when he could have used the stage to rally Ukrainians behind him, he instead rattled off economic statistics for more than 90 minutes as he lectured the crowd gathered in subzero temperatures on the advances Ukraine has made. Tired and cold, many of those in the crowd left early.

The Corruption Constant

There’s a common complaint that Yushchenko has replaced Ukraine’s former government, which was notoriously secretive, corrupt, and nepotistic, with a new set of unsavory characters. His promise last year of “putting the bandits in jail” has gone unfulfilled.

Specifically, Yushchenko has failed to find the killers who beheaded muckraking journalist Georgy Gongadze in 2000, let alone those responsible for poisoning him last year, an assassination attempt that left his face badly disfigured. The cases remain the most potent reminders of Ukraine’s recent ties to Soviet-style politics.

Corruption remains endemic in Ukrainian politics. Ukraine is ranked 113th out of 159 countries in Transparency International’s 2005 Corruption Perceptions Index, well behind neighbors Belarus and Moldova. “When two oligarchs meet each other in parliament,” Tymoshenko told the crowds at a rally in Maidan last month on the anniversary of the revolution.

“Instead of saying, ‘Hello,’ they say, ‘Together we are many and cannot be defeated’”—a play off of last year’s revolutionary slogan. But Tipko, the former bank clerk, says that corruption begins at home, not in parliament. “People have to learn not to sell their vote for 100 hryvnas [$20],” she says. “This is a small detail, but this is what builds corruption.”

Yushchenko admits he has not done enough on this front. “We could have done some things better with reprivatization,” he apologetically told the masses at the recent rally. “To be on Maidan and be the opposition is much different from being in power.” But he urged patience, insisting a year was not enough time to finish his reforms. Tymoshenko seconded this notion.

“It is not a short process. You can’t do everything in an hour. It’s also not easy overseeing 18,000 people in an administration,” she said in her speech. “After the revolution, the orange team thought they’d go into their offices and not talk to the people for another four years, until they’d need their help again.”

There have been other, less profound, mistakes. Yushchenko’s popularity suffered this summer when it was reported that his 19-year-old son Andrey was seen driving around Kiev in a $100,000 BMW. Yushchenko, who earns an annual salary of $60,000, could have let the mini-scandal fade away. Instead, he overreacted, calling the journalist who broke the story an “information killer.” He later apologized for the remark.

Given these missteps, it is not surprising that Yushchenko’s party has fallen behind in recent polls. The political party of his rival in last year’s election, Victor Yanukovich, is now more popular in most polls. But these numbers may say less about Ukraine’s political desires than they do about the country’s stubborn ethnic, linguistic, and geographical divides.

Between 20 and 30 percent of the population, particularly those from the east and south, will always support the pro-Russia party that stands for Ukraine’s old way of doing things, says Alexander Verbylo, a 43-year-old manager of a paper firm in Lviv. “Before Yushchenko, there really only were big businesses. Now you see the emergence of small businesses,” he says. “The election last year was not between Viktor Yushchenko and Viktor Yanukovich. It was between Russia and Europe. And Europe won.”

Yushchenko’s supporters aren’t willing to concede that the victory has become hollow. One year is not enough time, they say, to reform a country of 47 million people that has been mismanaged since tsarist times and has few natural resources. And to his credit, Yushchenko’s government has made significant progress in areas such as press freedoms, civil society, and judicial reform, according to a recent report by Freedom House.

Yushchenko inherited a body of federal judges appointed by his predecessor, Leonid Kuchma, who had little understanding of Western legal norms. The president’s decision last month to sack the country’s chief prosecutor, Svyatoslav Piskun, a Kuchma appointee, was a step in the right direction (Piskun was widely criticized for failing to bring to justice those responsible for killing Gongadze). Ukraine only recently developed a civil code to protect property rights and patents, among other things. “No one even knew what this was a few years ago,” says Yuri Evgenovich, director of the Kiev-based Ukrainian Legal Foundation, which was instrumental in drafting the code.

Yushchenko has also had some success steering Ukraine’s economy toward the European Union and the World Trade Organization, despite a dip in economic growth from 12 percent last year to less than 4 percent this year. An advocate of free markets, Yushchenko deserves credit for last month's $4.8 billion sale in a televised auction of the Kryvorizhstal mill to Mittal Steel, the world’s largest steel company ($4 billion more than Kuchma’s son-in-law paid for the same mill over a year ago).

Plans are finally under way to privatize Ukrtelekom, the country’s largest telecom. He has nixed more than 4,000 regulations that restricted business registration and also helped balance the budget and pay off Ukraine’s deficit by clamping down on tax evasion and collecting more tax revenue.

Of course, Pora’s reform-minded youths aren’t as impressed. They worry less about economic indicators than about Ukrainians returning to their prerevolution torpor. “Pora’s trying to stir them up,” says Irina Chupryna, head of the organization’s international department. “It’s not that Ukrainians are not interested—they read newspapers, watch the news, complain actively—but it’s difficult to bring them to do something and instill in them [the fact] that they’re the owners of their country.”

For all his recent troubles, Yushchenko still may be Ukraine’s best hope for that kind of deep and lasting democratic reform. There is a continuing reverence for the president. In a busy pub one evening in Kiev, Yushchenko’s visage, still pockmarked from the poison, flickered on televisions. The bar’s boisterous patrons suddenly went silent. The president remains a magnetic—almost mystical—figure for many Ukrainians.

Source: Foreign Policy

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Ukraine May Host US Radars

MOSCOW, Russia -- Russian defense experts warned this week that Ukraine could retaliate against a major price hike on their Russian gas imports by letting the United States use its early warning radar bases for ballistic missile defense.

A mobile Russian Topol-M intercontinental ballistic missile launcher maneuvers at a military base in the Arkhangelsk region of Russia

The Russian military establishment is taking very seriously the possibility that strongly pro-American Ukrainian President Viktor Yushchenko could dramatically tilt the balance of global strategic power by giving the United States an advance radar base in the historic former Russian naval fortress of Sevastopol on the Black Sea.

An article published in the Moscow newspaper Nezavisimaya Gazeta Monday cited several military sources indicating that Ukraine was willing to give U.S. experts access to its early-warning radar facilities in Sevastopol and Mukachevo in western Ukraine. Since the collapse of the Soviet Union, Ukraine has permitted Russia the sole use of the old Soviet facilities in both centers.

Several Ukrainian sources told the official RIA Novosti news agency that Secretary of State Condoleezza Rice and Yushchenko already discussed this issue during their meeting in Kiev Dec. 6.

Col. Gen. Volter Kraskovsky, commander of Russia`s missile defense troops from 1986 to 1991, told RIA Novosti that the Ukrainian-based radars could certainly be used as part of extended U.S. ABM warning systems.

Kraskovsky said U.S. access to the Sevastopol and Mukachevo radars could significantly damage Russia`s missile defenses in the direction of central and southern Europe, and towards the Mediterranean.

Russia is raising the price of its natural gas exports to Ukraine from the current level of $50 per 1,000 cubic meters to the price it charges European Union nations, $160 per 1,000 cubic meters.

RIA Novosti said Yushchenko could also retaliate against the gas price hike by refusing to sign a recently negotiated agreement with Russia to extend the operation of its 15P118M missile launchers for Russia`s old but still formidable RS-20 heavy ballistic missiles, known in the West as the SS-18 Satan. Under the agreement, Ukraine agreed to assist Russia in maintaining the systems that have been on combat duty for the past 15 years, for another 10-15 years.

Without that agreement, Russia will have to decommission its existing SS-18s and replace them with new but much more expensive Topol-M ICBMs at an estimated cost of $3 billion-$4 billion, RIA Novosti said.

Source: UPI

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Tymoshenko Comes Up With Election Strategy

KIEV, Ukraine -- Former Ukrainian prime minister Yulia Tymoshenko has formed an electoral bloc on the basis of her Fatherland party for next year's parliamentary polls.


Tymoshenko apparently believes that her own high popularity should be enough for a good performance in the election -- there are no big parties in the Yulia Tymoshenko Bloc (BYuT), and there are no big names among the top 10 on the BYuT's list, apart from Tymoshenko's own.

She makes no secret of her intention to return to the prime minister's seat after the March 26 election, as the leader of a broad coalition, but not as broad as to include Viktor Yanukovych's Party of Regions (PRU). Tymoshenko's slogans remain populist.

BYuT's pre-election congress on December 7 showed that, along with Fatherland, the BYuT will include the Social Democratic Party of Vasyl Onopenko (not to be confused with the United Social Democrats of former presidential administration chief Viktor Medvedchuk); United Ukraine of Bohdan Hubsky, formerly an ally and a business partner of Medvedchuk; and Levko Lukyanenko's wing of the nationalist Republican Party Sobor (the core of the party with its leader, Anatoly Matvienko, has joined President Viktor Yushchenko's Our Ukraine bloc).

Tymoshenko did not take under her wing the groups that swapped sides in her favor in the September quarrel with Yushchenko, when her allies accused top figures from Yushchenko's entourage of corruption, and Yushchenko fired Tymoshenko's cabinet. The liberal Reforms and Order party (RiP) refused to join Tymoshenko on her terms.

Instead, RiP on December 10 established a bloc with the youth party Pora, which played a crucial role in the Orange Revolution by mobilizing young intellectuals in big cities to back Yushchenko. The December 7 BYuT's congress did not see the participation of Yushchenko's former administration chief Oleksandr Zinchenko either.

Zinchenko triggered the September scandal with his accusations of corruption against the then-security supremo Petro Poroshenko, Yushchenko's first aide Oleksandr Tretyakov, and influential MP Mykola Martynenko. Zinchenko said he would not join Tymoshenko in protest over the presence of certain controversial businessmen in her bloc.

Oleksandr Volkov, formerly a close aide to Kuchma, was one of the businessmen named by Zinchenko. Along with Hubsky and Volkov, the list of big businessmen who were in Kuchma's camp before the Orange Revolution and who are now with Tymoshenko reportedly includes the Buryak brothers who are owners of Brokbiznes Bank; tycoon Vasyl Khmelnytsky; Kuchma's former representative in parliament Oleksandr Zadorozhny; and oil businessmen Oleksandr Abdullin and Petro Dyminsky. Most of them attended the December 7 congress.

Yet no single businessman was included in the BYuT's top 10. As a populist leader, Tymoshenko draws support mostly from ordinary voters, whom she cannot afford to disappoint by making nouveaux riches the face of her bloc.

The BYuT's top 10, apart from Tymoshenko and Oleksandr Turchynov, her right-hand man since the mid-1990s and former security chief, include a defector from RiP, former deputy prime minister Mykola Tomenko; Onopenko; Lukyanenko; seasoned corruption fighter MP Hryhory Omelchenko; a journalist (Andry Shevchenko); an academic (Luhansk University rector Vitaly Kurylo); a soldier (Ground Troops Commander Mykola Petruk); and a young leader (24-year-old Skvir mayor Yevhen Suslov).

Addressing a rally in Lviv on December 3, Tymoshenko explained why her bloc is running in the election separately from Yushchenko -- to give the Orange Revolution forces more seats in parliament, she said, quoting sociologists -- and what the BYuT will do after the vote. According to Tymoshenko, the parliamentary polls will be essentially the election of the prime minister, as the constitutional amendments coming into force in 2006 limit the president's power, and a parliament-elected primer minister will come to the fore.

After the election, she said, the BYuT will form a coalition with Our Ukraine, so as to outplay Yanukovych's PRU in a fight for the prime minister's post. Tymoshenko wants to take that post back from Yuriy Yekhanurov.

On December 7, Tymoshenko presented the BYuT's "Ideal Ukraine" action plan, which calls for high social spending, frequent referendums ("Referendums should be as matter-of-fact as breathing fresh air," Ukrayinska pravda quoted her as saying), integration into the EU, and the continuation of the reprivatization policy -- for which the Tymoshenko cabinet was especially criticized by the business community.

Tymoshenko's populism, however, does not increase her popularity as the election campaign goes on. Opinion polls show that the BYuT reached the peak of its popularity in September-October, immediately after Tymoshenko's dismissal from the government.

The BYuT was then slightly more popular than Our Ukraine. Now Our Ukraine is slightly ahead of the BYuT, and the two trail behind the PRU, according to recent polls by the Razumkov Center and the Ukrainian Sociology Service (USS). Among the three leaders of the race, only the BYuT lost several percentage points over the past several months, according to the USS.

Source: Jamestown Foundation

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PORA Getting Ready For 2006 Elections

KIEV, Ukraine -- The youth group Pora (Its Time), which played an important role in Ukraine's Orange Revolution in November-December 2004, is set to contest the March 2006 parliamentary elections in an alliance with the Reforms and Order (RiP) party. Both political parties held their congresses over the weekend.

Pora meeting in Kiev

The once united Orange coalition is therefore set to contest the elections in five blocs and parties. These include President Viktor Yushchenko's Peoples Union-Our Ukraine (NS-NU), the Yulia Tymoshenko bloc, Pora-RiP, the Yuriy Kostenko bloc and the Socialist Party (SPU). It remains to be seen whether contesting the elections through five political forces will bring additional votes or divide Orange voters.

The hard-line opposition are primarily united around defeated presidential candidate Viktor Yanukovych's Regions of Ukraine, which is leading in opinion polls. The only other hard-line opposition force set to enter parliament will be the Communist Party (KPU) which is, for the first time, set to have a similar number of seats as the SPU in the 2006 parliament.

The Orange coalition entering the 2006 election in five blocs and parties is undoubtedly a failure for President Yushchenko's attempts at maintaining Orange unity through a strong pro-presidential party. Only two small parties, Solidarity and the Youth Party, opted to merge with NS-NU. One wing of Rukh joined the NS-NU bloc while another created its own bloc.

Opinion polls consistently show that only six blocs will definitely enter the 2006 parliament: NS-NO, Tymoshenko, SPU, CUP, Regions and the Volodymyr Lytvyn bloc. Two potential outsiders that could make it over the low 3% threshold are the newly created Pora-Rip bloc and the Natalia Vitrenko bloc (composed of the extreme left Progressive Socialist Party and the Soyuz party).

Pora-Rip will target two groups of voters. First, Pora-Rip will compete with the Tymoshenko bloc for disgruntled Orange voters. Second, young people who were especially active and came of age during the 2004 elections and the Orange Revolution. Nevertheless, a word of caution is in order.

In the 1998 elections the Green Party successfully targeted young people and entered parliament with 5.43%, even though it was financed by oligarchs who are now backing the Tymoshenko bloc in the 2006 elections. In the 2002 elections the Winter Crop Generation party (KOP), modelled on Russia's Union of Right Forces, failed to enter parliament after obtaining only 2.02%.

Pora-Rip could obtain support in the same region as the Greens in 1998 or the Lytvyn bloc next year, that is 5-7%. Pora has a well established network based on its NGO during the 2004 elections.

Rip is a long established party that grew out of Rukh in the 1990s. Its leader, Viktor Pynzenyk, is the well known and respected Finance Minister. Pynzenyk refused to resign from the Yuriy Yekhanurov government in exchange for Rip being permitted to join the Tymoshenko bloc. By joining Pora in an election bloc, Rip has not followed the Republican Party 'Sobor' which is divided between NS-NO and the Tymoshenko bloc.

The Pora-Rip bloc has a number of well known and respected individuals in its top ten that should ensure its popularity.

Volodymyr Filenko and Taras Stetskiv were the intermediaries between Yushchenko's election headquarters and the organizers of the street protests and tent city on the Maidan. Popular Interior Minister Yuriy Lutsenko, another NS-NO-Maidan intermediary, was tempted to join the Pora-Rip bloc but has opted to remain on the SPU ticket.

Serhiy Tartan, head of the Reporters without Frontiers Kyiv office, Pora leaders Vladyslav Kaki and Yevhen Solitaries are other well known leaders. These Pora leaders belong to the wing of Pora commonly referred to as 'yellow' because of their symbols.

The 'black' Pora NGO condemned the creation of a Pora political party by the 'yellow' wing. They pointed to Serbia's Outpour (Resistance) which, after it established a party, failed to enter the Serbian parliament.

The head of the Pora-Rip list is the internationally known boxer Vitaliy Kleczka. Kleczka outlined his motives as assisting young people to enter parliament, 'who never figured in corruption scandals' (Ukrayinska Pravda, December 13). This was a clear reference to the September accusations against Yushchenko's entourage. 'It is pleasant to stand together with people who have clean hands', Kleczka said.

In the 2004 Ukrainian elections, as in earlier democratic revolutions, youth grouped in Outpour, Kara and Pora sought to pressure their elders to unite the opposition in order to successfully oppose the regime. The Pora-Rip bloc also seeks to be a force to re-unite the Orange coalition into a new pro-Yushchenko parliamentary majority in the 2006 parliament.

This arises out of two fears.

First, as Filenko warned, 'Our aim is also to slap on the wrists those who are thinking about blocking with Yanukovych, and these thoughts exist in the minds of some' (Ukrayinska Pravda, December 12). This threat arises from the September memorandum signed by Yushchenko with Yanukovych as well as opposition within the Yushchenko camp to Tymoshenko becoming again prime
minister.

Second, the threat posed by the 'revenge' of the Kuchma regime through a victory by Regions of Ukraine. The threat of 'revenge' was outlined in alarmist tones by Ihor Zhao, first deputy head of the central executive committee of NS-NO.

Zhao called for unity of the Orange camp to fight off the threat posed by Regions of Ukraine. What Zhao fails to admit is that the threat exists because Yushchenko has failed to honor his repeated pledge made during the 2004 elections and Orange Revolution that 'bandits would sit in prison'.

A Pora leaflet distributed at its weekend congress pointedly asked, 'Why are they not sitting (in prison)?' with portraits of Yanukovych and other senior Kuchma officials. The Tymoshenko bloc will therefore not have a monopoly on drawing support from the radical wing of the Orange camp.

All of the senior Leonid Kuchma era officials who participated in abuse of office and election fraud are included in the Regions of Ukraine 2006 list as none of them have been charged. This means they will obtain immunity after Regions of Ukraine enters next years parliament.

As Zhao pointed out, the 2006 elections should, in reality, be seen as the fourth round of the 2004 elections. The Orange Revolution will succeed or fail depending on its outcome. Pora is called upon again to play a central role.

Source: Jamestown Foundation

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Kremlin Back In A Big Way After Ukraine Crisis

KIEV, Ukraine -- Following the miserable defeat of the candidate it backed at the Ukrainian presidential election last year, the Kremlin appears to have weathered the first shock and is now poised to come back in style.

The Kremlin

A recent political crisis, which culminated with the sacking of Prime Minister Yulia Tymoshenko on Sept. 8, created ample opportunities for Moscow to re-establish its influence in Ukraine.

The Kremlin threw all its political muscle into the election of former Prime Minister Viktor Yanukovych, a pro-Russian candidate, at the presidential vote last year, but failed. A pro-Western, Viktor Yushchenko, swept to power following a rerun vote in December 2004 and pledged to work hard for Ukraine to quickly join NATO, Russia's worst nightmare, and to seek joining the European Union within a decade.

Russia scrambled for a response by adjusting its foreign policy to new realities, seeking to economically punish countries like Ukraine and Georgia for their closer cooperation with the West.

But the answer to the challenge came from where few had actually expected: From within the ruling coalition in Ukraine.

As the Yushchenko and Tymoshenko teams bitterly split following the government dismissal, both had apparently sent messages to Moscow that may eventually produce a greater-than-expected cooperation between the two biggest states of the former Soviet Union.

Yushchenko appointed Yuriy Yekhanurov, a Russia-born ally of the president, to the post of prime minister. This is a contrast to Tymoshenko, who has been using populist anti-Russian rhetoric, such as pushing for the building of a natural gas pipeline bypassing Russia, and irritating Moscow for the past seven months. To push Yekhanurov through Parliament, Yushchenko struck an unprecedented agreement with Yanukovych, the Russian favorite, whose party had overwhelmingly backed the choice.

But the latest development in Ukraine’s political reshuffling appears to be even more surprising than anything. Tymoshenko traveled to Moscow on Sept. 24 apparently for a secret meeting with Kremlin strategists to outline her vision of a future cooperation.

The Russian authorities appeared to be so pleased with Tymoshenko's turnaround that they had immediately cancelled an international arrest warrant for her. Several Kremlin-controlled media outlets have followed with a favorable coverage of Tymoshenko in broadcasts that are widely viewed in Ukraine.

So, 10 months after Russia's fiasco at the presidential election in Ukraine, Moscow now appears to have much closer cooperation with all three major political groups that are expected to score well as the upcoming election in March 2006. The winner will become prime minister, a job that will have extended powers to shape the country's policy with amendments to the constitution coming into force on Jan. 1, 2006.

No matter who wins the election, Yekhanurov, Tymoshenko or Yanukovych, Russia seems to have already secured a favorable outcome.

Source: Ukrainian Journal

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Czech Employment Offices Might Appear In Ukraine

PRAGUE, Czech Republic -- The Czech Interior Ministry is planning to open employment offices in Ukraine in the future that would recruit workers for Czech companies, according to a series of its proposals, as reported by the daily Hospodarske noviny that has these proposals at its disposal.

Prague, Czech Republic

The paper writes today that the proposals are designed to radically change the approach to foreign workers. They testify that the authorities' attitude to foreigners who work in the Czech Republic illegally is changing, it says. .

While foreign workers were labelled as criminals in the past, authorities are beginning to view them as exploited victims of people trafficking, it adds.

The very first proposal would radically change the current practice that allows criminal elements and the "clients" labour agencies offering illegal refugees as cheap workforce to Czech firms, to make profits on their ill fate.

The Interior Ministry intends to introduce "the Portuguese model," under which the Czech Interior Ministry would try to establish Czech employment offices, for instance at its embassy in Ukraine. These offices would not only recruit employees for work in the Czech Republic, but would also ensure their transportation and accommodation.

Thousands of the current illegal foreign workers would thus surfaced from the grey economy and the "clients," who take away most of the money they earn in the Czech Republic for similar services, would be pushed out of the running.

"Illegal employment of foreigners is on such a wide-scale in the country that mere repressive measures will not help eliminate it," Jakub Svec from the Interior Ministry says regarding the ministry's new strategy.

The government will discuss the new proposals next year.

According to estimates, more than 100,000 Ukrainians work either legally or illegally in the 10-million Czech Republic at present.

The most resourceful Ukrainians who fled Ukraine due to its poverty and low salaries have established "client" agencies in the Czech Republic in the past years to exploit their compatriots who came later and have no chance of getting work there without their help.

Source: Prague Daily Monitor

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Tuesday, December 13, 2005

Russia Threatens Ukraine Gas Cut

KIEV, Ukraine -- Russia's gas giant, Gazprom, has threatened to cut off gas supplies to Ukraine if a new contract is not in place by the beginning of next year. Ukraine receives heavily discounted gas from Russia, offsetting the price against fees levied for transporting Russian gas through its pipelines.


Gazprom says it will not compromise over its demand that Ukraine pays what it says are appropriate market rates.

The company says a three-fold increase is both overdue and justified.

Bitter winter

Ukraine's economy is in a much better condition than five years ago, when the current contract was signed.

Ukraine has proposed paying market rates - but in phased increases over a period of time, rather than all at once, in the depths of Eastern Europe's bitter winter.

Gazprom has rejected this offer, and has received political backing from the very top. President Vladimir Putin intervened late last week to say that Russia would no longer subsidise Ukraine.

That led a top Ukrainian official to accuse Russia of economic blackmail.

Some Ukrainians believe their country is to be punished for the Orange Revolution, which brought a pro-Western government to power.

But most Western analysts believe that Gazprom is steadily increasing pressure on Ukraine in order to mount an attempt to take physical control of its vital pipeline network.

Eighty percent of Russia's gas exports pass through Ukraine, a crucial weak point in what is acknowledged to be a powerful lever of Russian foreign policy. Cutting off direct gas supplies to Ukraine could bring the country's steel industry to its knees - potentially forcing Ukraine to divert the gas flowing from Russia to Western, Central and South-Eastern Europe.

By upping the ante so dramatically now, Gazprom appears to be trying to get foreign governments on side.

Source: BBC News

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Ukraine`s Orange Revolution

WASHINGTON, DC -- Almost a year after Viktor Yushchenko became president of Ukraine last January -- following his election as a pro-reform, pro-Western candidate -- the nation faces tough new challenges as it moves closer to its goal of integrating into the Euro-Atlantic community.

First Anniversary of Orange Revolution

Yushchenko came to power after losing a first presidential election that was riddled with fraud. The reformist Orange Revolution sparked street demonstrations by hundreds of thousands of Ukrainians in favor of Yushchenko, leading to a second election that he won.

But the president`s problems today won`t be solved by demonstrations, rallies and speeches. He must govern while grappling with challenges greater than any Ukraine has faced since it won independence from the Soviet Union in 1991. To solve these problems, eloquent words and cheering crowds are no substitute for the eloquence of action.

The Orange Revolution and Yushchenko`s election enabled Ukraine to resume its transition to democracy and a market economy, an effort that stalled under the semi-authoritarian and corrupt former President Leonid Kuchma. Now greater effort needs to be undertaken in this area.

To show the Ukrainian people that the revolution has changed their lives and not just their government, Yushchenko and his government need to institutionalize freedom of the press, democratize the state and build on the rebirth of civil society. A key step in this direction will take place in January, when Ukraine will change from a Soviet-type presidential system to a parliamentary system commonly found in much of Europe.

Once the parliamentary system is in place, Ukraine needs to ensure it holds a free and fair parliamentary election in 2006. This would prove to the watching world that the nation is fully committed to a democratic path.

As Ukraine implements the rule of law, it also needs to speed up the campaign against corruption and organized crime. This should include holding accountable those high-ranking Kuchma officials implicated in abuse of office, election fraud and the killing of journalist Georgy Gongadze.

The Parliamentary Assembly of the Council of Europe issued a sharp reprimand to Ukraine for failing to bring high-ranking officials from the Kuchma regime to justice. This was followed by a European Court of Human Rights ruling that said Ukrainian authorities failed to protect the life of Gongadze and mishandled the investigation into his kidnapping and murder five years ago. The ability of the Ukrainian courts to bring those responsible for Gongadze`s murder to justice will be closely monitored.

With the election of Yushchenko, Ukraine has a chance to join NATO and eventually the European Union. After the latest NATO-Ukraine Commission meeting in Vilnius in late October, Ukrainian leaders now have five months in which to encourage the United States and NATO to invite Ukraine into NATO`s accession process -- known as MAP (Membership Action Plan) -- in mid 2006. If the invitation is extended, Ukraine would join current MAP members Croatia, Albania and Macedonia.

A particularly bright spot for Ukraine is the positive and proactive relationship of the Ukranian armed forces with the the U.S. Department of Defense. In this regard, the United States has been working to help Ukraine to achieve its defense reform, military professionalization, and capacity-building goals. Much of this activity is focused on eventually bringing Ukraine in line with the NATO membership criteria.

U.S. Defense Secretary Donald Rumsfeld is now an advocate of Ukrainian NATO membership. Such membership would serve a step toward European Union membership, which could realistically come during a second term for President Yushchenko after 2010 if he wins re-election.

Under former President Kuchma, relations between Ukraine and the European Union were unproductive. This was mostly because the Ukrainian government was unwilling to implement the necessary political and economic reforms required to entice the EU into offering Ukraine an associate agreement, which is a half-step to full EU membership. Under the current regime, which is more committed to Euro-Atlantic integration, real progress is likely.

Ukraine`s democratic revolution followed Georgia`s a year earlier and Serbia`s in 2000. Yet, of all three revolutions, it is Ukraine`s that has the best chance to succeed in building on these democratic breakthroughs and consolidating a democratic market economy.

The outcome of the 2006 elections is as important as the process. An invitation to join NATO and eventual integration into the European Union is not likely to occur if pro-reform forces fail to win a parliamentary majority.

To win NATO and eventually EU membership, the Orange Revolution coalition will have to unite under a common goal -- Euro-Atlantic integration by way of staunch political and economic reforms in Ukraine.

Source: UPI

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Analysis: Ukraine's Political Math

MOSCOW, Russia -- Ukraine's March 2006 parliamentary election campaign is underway with the orange camp divided and the political party leading in the polls, headed by ex-prime minister and former presidential candidate Viktor Yanukovych, positioned to become the country's political powerbroker.

Yanukovych (L) and Yushchenko

Polls report that Yanukovych's Party of Regions enjoys the support of around 25 percent of the electorate, which would translate into 165 mandates in the 450-seat Verkhovna Rada (federal parliament). The pro-presidential Our Ukraine People's Union (NSNU) is in the process of creating an election coalition called the Our Ukraine Yushchenko Bloc with five other parties.

NSNU's current standing in the polls has the support of 13 percent of voters -- possibly winning 93 parliamentary mandates. The Yulia Tymoshenko Bloc, headed by the former prime minister and Yushchenko's orange revolutionary-in-arms, has 12 percent support and could win 88 seats.

Watching the poll numbers has never been as important in Ukrainian politics. As part of the compromise to resolve the political upheaval after repeated vote fraud in the 2004 presidential election, then candidate Viktor Yushchenko agreed to political reforms -- to come into effect at the start of next year -- that will transform Ukraine from a presidential republic to parliamentary republic.

At the time, this compromise did not foresee that the leading personalities of the Orange Revolution would soon become political rivals. This same compromise could possibly see Yanukovych become prime minister with powers, in many ways, greater than the president's.

Yanukovych has good reason to feel confident. Not only has the Orange Revolution turned against itself after Yushchenko fired Tymoshenko's government in September, but the issue the "orangists" won with last year is no longer theirs -- the crusade to end corruption. The public's perception of Yanukovych has not really changed since his ill-fated presidential bid, nor has Yanukovych's campaign platform -- pro-business and pro-Russia.

What Yanukovych is banking on is the continued political change on the ground and rivalry among his two main competitors. Both of whom, it would appear, will eventually see his party garner the most votes and make the Party of Regions the center partner to build a coalition with either Yushchenko or Tymoshenko.

Yanukovych's political math, at this point, adds up to electoral victory. During the contested presidential election last year, Yanukovych's negatives exceeded his positives -- and he still won almost half the votes.

Approaching the March parliamentary election, Yanukovych's appeal is virtually unchanged. To his advantage, his chief rivals are in the same situation. Both Yushchenko and Tymoshenko, to be sure, remain popular with their respective core supporters, but both cores have shrunk significantly since the Orange Revolution.

Public opinion polls also suggest the average Ukrainian is disillusioned with elections, but still values some of the benefits of the Orange Revolution such as greater media freedom. Based on historical data, voters believe that the March vote will be unfair and no different from past elections.

This could be explained as political attitudes and belief in state institutions change slowly in every political culture, but the lack of significant economic and political successes since the Orange Revolution also appears to be in play.

A review of each party's electoral list may explain mainstream disillusionment with the political elite. Yanukovych's party list includes, beside himself, Ukraine's richest oligarch, Rynat Akhmetov, twelve managers of companies united in Akhmetov's corporation, Capital System Management, four candidates associated with the Shakhtar Donetsk soccer club owned by Akhmetov, Yanukovych's son, his lawyer and press secretary.

The pro-Yushchenko NSNU party list also raises some eyebrows. A month ago, Yushchenko asked the NSNU to remove from the electoral list some of his Orange Revolution companions who have been accused of corruption and then fired from government posts in September.

This party, which hopes to have Yushchenko head its list, ignored the president's plea. When the party list was finalized on Dec. 3, some of those same individuals, with opaque links to big business like Petro Poroshenko, were placed on the NSNU election list in positions guaranteeing their election.

The Yulia Tymoshenko Bloc has yet to finalize its electoral list. This is not surprising. Tymoshenko can count the support of some of the biggest names in Ukrainian politics and the contentious infighting as to who will be slated to occupy the top positions continues behind closed doors.

Tymoshenko's cadre includes long time ally and former Security Services head Oleksandr Turchinov, Mykola Tomenko, the former Vice Prime Minister and current deputy head of the Reforms and Order party, and Oleksandr Zinchenko, Yushchenko's former chief of staff and the person who first publicly accused Yushchenko's closest advisors of corruption, which precipitated the sacking of Tymoshenko government.

All have big names, but are also ambitious and have the reputation of being staunchly independent. This bloc will be difficult to manage, even for the amazingly resourceful Tymoshenko.

For the average voter, the three major parties are set to appeal to the hearts and minds of the electorate as if it were business as usual. This is what disappoints voters most. After a people's revolution, politics should not be about business as usual. It is not surprising that many Ukrainians have lost faith in the Orange Revolution: President Yushchenko is perceived as incapable and indecisive, Tymoshenko was deemed an incompetent economic manager while prime minister and quick to play the nationalist card, and Yanukovych treads water as his opponents undercut each other.

Even more disappointing is the sad fact that all three electoral blocs cannot shake continued allegations of corruption. Yushchenko is unwilling or unable to separate himself from individuals close to him who have dubious business reputations, Tymoshenko has never explained why her personal net worth could be in the billions of American dollars when serving as a public servant, and Yanukovych, just as tainted as his opponents, has no problem with having the country's wealthiest on his party list.

It is ironic that Yanukovych has probably understood Ukraine's electorate much better than his Orange rivals. His message is quite clear -- Remember me? Of course you do. I haven't changed and remember how the economy grew when I was prime minister? During Tymoshenko's time in office, Ukraine's GDP growth dropped to 4 percent after being 12 percent under my watch.

He can easily claim that he isn't any worse than his opponents when it comes to business as usual. Yanukovych has the added advantage of asking the question -- Who are Yushchenko and Tymoshenko? Are they the people you thought they were a year ago?

Yanukovych is angling that the electorate will do the political math and will conclude that he may have not been right a year ago, but in the present he is.

Source: UPI

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Ukraine Fears Bird Flu Outbreak As Fowl Found Dead In 21 Locations

KIEV, Ukraine - Ukraine's bird flu outbreak appeared to have escalated Monday as health officials reported new cases of domestic foul found dead in two cities and 19 villages on the Crimean peninsula.

Ukrainian Emergency Ministry workers take domestic fowl away from a farm in the village of Yemelyanovka some 800 km (500 miles) south of the capital Kiev

The bird flu virus had been confirmed only in nine of the villages, said Irina Shakhno, spokeswoman for the Emergency Situations Ministry's Crimean office.

The Health Ministry said in a statement that reports were coming in about domestic birds found dead in 10 other villages, the regional capital, Simferopol, and another city, Feodosiya. It was not immediately clear how many birds had died.

The Agriculture Ministry's Veterinary Department reported birds had been found dead in unusually high numbers in 17 locations, but did not explain the discrepancy between its figures and those of the Health Ministry.

A special laboratory was set up in Simferopol to test the new samples.

The reports of new bird deaths first surfaced on Saturday. If tests confirm the birds died of bird flu, it would mean a spread of the virus on the Crimea beyond the marsh lands near the Azov Sea.

Ukraine announced its first case of bird flu on Dec. 4, revealing that some 2,500 domestic fowl had died suddenly in a marsh area on the peninsula. Some 37,405 domestic fowl have been slaughtered as part of a mandatory cull.

More than 11,000 people have been vaccinated against flu in the affected villages, the Emergency Situations Ministry said.

On Friday, a Russian laboratory said it had confirmed the virus was the same strain that decimated flocks in Asia, but Ukrainian officials said they waited for findings from Britain.

Experts fear the strain H5N1 could trigger a human flu pandemic if it mutates into a form that is easily spread between people. Since 2003, the virus has killed at least 69 people in Asia - most of them farm workers who came into close contact with infected birds.

No cases of human infection have been recorded in Ukraine, officials said. Medical examinations have been conducted on 61,778 people.

President Viktor Yushchenko imposed a state of emergency and quarantine in three Crimean regions after last week's outbreak.

Source: AP

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Monday, December 12, 2005

President Confirms Withdrawal Of Ukrainian Contingent From Iraq

NEW YORK, NY -- Ukrainian President Viktor Yushchenko has confirmed that the Ukrainian peacekeeping contingent will be withdrawn from Iraq before December 31.

Ukrainian soldiers in Iraq

Iraq is a zone of Ukraine’s interests, the president stated in the Newsweek magazine. He stressed that the stationing of Ukrainian peacekeepers in Iraq had demonstrated Ukraine’s commitment to its obligations.

Now, Ukraine pulls out its troops and begins a second phase of cooperation, Yushchenko said. He said gendarmes as well as specialists in military training and security would stay in Iraq.

The president also confirmed that his country was ready to participate in reconstruction projects in Iraq in cooperation with business partners from other states.

Earlier, Defense Minister Anatoly Gritsenko said 30 army officers, ten specialists from the border service and ten representatives from the Interior Ministry would stay in Iraq. They will work at headquarters and command facilities in Iraq.

Source: Itar-Tass

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Sunday, December 11, 2005

Dioxin In Yushchenko's Blood Samples

KIEV, Ukraine -- Ukrainian prosecutors said that new tests on blood samples taken from President Viktor Yushchenko confirm a high level of dioxin poisoning. The tests, carried out in laboratories in Belgium, Britain and Germany, were needed to justify Ukrainian legal requirements in the case of any prosecution.

Viktor Yushchenko before (L) and after dioxin poisoning

The latest tests confirm the dioxin level in Yushchenko's blood is 1,000 times what is considered acceptable, said Oleksiy Bebel, spokesman for the General Prosecutor's Office.

Yushchenko fell severely ill last year during the presidential election campaign, and after treatment in Austria was diagnosed as having suffered massive dioxin poisoning. It knocked him off the campaign trail for weeks, and left his face severely pockmarked. The scars still remain more than a year later.

Ukrainian authorities have called it an assassination attempt. No one has been charged, although Yushchenko says the investigation is continuing.

In September, former Security Service head Oleksandr Turchinov charged that Yushchenko's poisoning had not been proven because the president kept putting off tests in Ukraine.

Under Ukrainian law, tests must be conducted in Ukraine, or be overseen by Ukrainian investigators to be considered valid, making necessary the new analyses. Local laboratories were incapable of conducting the examinations, so investigators asked foreign laboratories for help.

Source: AP

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The Last Word: Viktor Yushchenko

KIEV, Ukraine -- With new elections only four months away, Ukrainian President Viktor Yushchenko's political problems are beginning to mount. The Ukrainian economy is tanking, the Orange coalition has fallen apart and a bitter dispute with Russia over natural-gas supplies has Europe worried. While touring a Ukrainian armored tank brigade's base in Bila Tserkva last week, just before a visit from U.S. Secretary of State Condoleezza Rice, Yushchenko spoke with NEWSWEEK's Rod Nordland.

Viktor Yushchenko

Will Iraq and the allegations of secret U.S. prisons in Europe be topics in your talks with Condi Rice?

Our agenda is mainly economic. Iraq is a zone of Ukrainian interest, and the presence of the Ukrainian peacekeeping contingent the last year signified our adherence to our commitments. We're now removing our contingent, and we are offering a... second phase of our cooperation, gendarmes, specialist military training, security training... And we are ready to participate in our reconstruction projects in solidarity with business interests from other countries.

Is there any possibility you'd agree to keep troops beyond the Dec. 31 date for their final withdrawal?

No, we're not going to keep them longer.

The Russians are fearful of Ukraine's drive to join the accession process to the European Union and NATO. What do you say to them about this?

These fears upset me. Where else can we go? Russia itself is economically entwined with Europe much more than Ukraine is. I don't recall the exact figure, but more than 50 percent of its exports are to Western Europe. The Russian business elite and its practices are even more Europeanized than we are. Our fates are there. We will be in Europe one way or another—it's inevitable.

Moscow is asking Ukraine to pay more for its imported natural gas. Ukraine has retaliated by threatening to cut Russian gas exports to Western Europe, 80 percent of which transits through Ukrainian pipelines. Are you at an impasse?

No, not at all. I believe we will have a resolution to this issue by the end of December.

Your polls are slipping, and some even suggest that your opponent, Viktor Yanukovic, whom you defeated less than a year ago, is now more popular than you are. Is the Orange Revolution over?

I think you have a bit of distorted data there, but nonetheless, 12 months ago, 34 percent voted for Yanukovic. Today his rating is 20 to 25 percent. The Orange camp [has] 50 percent, easy, which is what the Orange team enjoyed a year ago. But what has disillusioned and disappointed our people has been the differences within the Orange camp, which were received fairly traumatically by our citizens.

In retrospect, do you regret firing your prime minister, Yulia Tymoshenko, and her cabinet in September? Particularly now that you will depend on Tymoshenko as a political ally against Yanukovic in elections this March?

When we look back at that period, some people are saying we did it too late. We should have done it earlier, when the first economic crises appeared—back in June. I'm an economist and I know how to manage this economy, but I had hoped that the [ministerial] team would work and talk as a team. Unfortunately, even in that unpleasant economic crisis, personal conflicts and personal egos got in the way. And on top of these egos there was economic adventurism. There is nothing to feel sorry about in my decision.

How has your disfigurement from dioxin poisoning on the eve of the Orange Revolution affected you as a person and as a leader?

On the one hand, I witnessed—when I was in the intensive-care unit and didn't even know what world I was in—that there were people who were ready to give up everything for me, starting with my wife and finishing with my friends. Physically, I suffered through things I don't even want to imagine anyone else suffering through. This is a very painful illness, bodily pain and otherwise. But I was doing a campaign when most people in my situation would just lay in bed a year and a half and maybe end up dead. By the fifth week I was running the electoral campaign, presenting myself at rallies. Sometime in the future I'll tell you what I had in my briefcase and in my pocket at those public appearances. I was convinced this country should free itself of the previous regime and do it in a beautiful way, not go from one extreme to the other. Most importantly, I survived. I won. I turned back these forces. And I have regained most of the vitality that I lost.

Source: Newsweek International

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Putin Talks Tough Over Ukraine Gas

NOVO-OGARYOVO, Russia -- President Vladimir Putin struck a hard line Thursday in a dispute with Ukraine over natural gas supplies, saying that the country could afford to pay the market price for Russian gas.

Russian President Vladimir Putin

Cabinet officials reported to Putin that Russia and Ukraine had failed to strike a deal on Russian natural gas supplies to Ukraine next year. "Difficult work is under way and no solution has been found yet," Industry and Energy Minister Viktor Khristenko said.

Putin said that Ukraine's economy had seen fast growth this year and added that the Ukrainian government had received substantial privatization revenues and Western loans.

The loans "total billions of dollars, and this is quite sufficient for buying the necessary amount of gas from Russia at the market price," Putin said during a Cabinet meeting at his Novo-Ogaryovo residence.

Ukraine has rejected Moscow's attempts to more than triple the price of gas from the current $50 per 1,000 cubic meters to $160 per 1,000 cubic meters.

Prime Minister Mikhail Fradkov, having returned from a trip to Brussels, told Putin that the European Union, which gets almost half of its gas imports from Russia, was following the issue "very attentively, with great interest."

European Energy Commissioner Andris Piebalgs said Thursday that he did not expect the gas row between Russia and Ukraine to affect gas supplies to the EU. There will be "no difficulty with gas transit from Russia to the EU. ... I don't know of any case where Ukraine hasn't fulfilled its obligations," Piebalgs told reporters after a meeting with Ukrainian Energy Minister Ivan Plachkov.

Plachkov said a deal with Russia could be negotiated in the next several days, Interfax reported.

Belarussian Prime Minister Sergei Sidorsky said Thursday that his nation would be getting Russian gas for $47 per 1,000 cubic meters next year.

Source: AP

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Yushchenko Sacks Ukrainian State Oil And Gas Company Chief

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko has dismissed the head of the state-owned Naftogaz oil and gas company, Olexi Ivchenko, his office said, amid a row over gas supplies with Russia.

Sacked head of Naftogaz, Olexi Ivchenko

Officially Ivchenko, in office since March, is going because his job no longer exists, but he has come under fire recently for his management of negotiations with Moscow.

Tension has increased between the neighbours over Russia's plans to phase out subsidized gas prices for Ukraine and bring them in line with world market rates.

Under a 10-year contract that entered into force in 2003, Russia provides Ukraine with gas at a base price of 50 dollars per 1,000 cubic metres (35,316 cubic feet), to take into account payment for transit of Russian gas exports through Ukraine to Europe.

Kiev pays the bill in kind under a barter system.

Moscow wants to switch to cash payments and to hike the price to 160 dollars (136 euros) per 1,000 cubic metres of gas.

Ukraine has a near monopoly on transit of Russian gas to European countries to the west, a situation that is expected to end after the planned construction of a gas pipeline from Russia through the Baltic Sea to Germany.

Pundits in Kiev link the dispute to Ukraine's parliamentary election next March, which Yushchenko will need his supporters to win to continue with pro-Western policies.

Source: AFP

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Saturday, December 10, 2005

Klitschko Steps Into Political Ring

KIEV, Ukraine — Newly retired heavyweight boxing champion Vitali Klitschko said Saturday he would run in Ukraine's parliamentary elections in March.

Retired heavyweight boxing champion Vitali Klitschko

Klitschko, who has been wooed by numerous political factions since his surprise retirement last month, is to top the party list of a newly formed bloc that includes a party headed by the country's finance minister and the Pora youth movement, which helped organize last year's Orange Revolution mass protests.

Klitschko also refused to rule out a bid for Kiev's mayoral post.

The 34-year-old is hugely popular in Ukraine and was a prominent supporter of the Orange Revolution, which propelled Viktor Yushchenko to the presidency. Yushchenko's political party also tried to persuade Klitschko to join its party ranks.

Under election law, Ukrainian voters cast ballots for a political party, which then distributes seats based on its party list. Parties try to put high-profile names on their list to attract voters, even though the person might give up the seat to someone else lower down the list.

Klitschko retired after a knee injury forced him to pull out of a long-delayed title defence against Hasim Rahman in Las Vegas, Nevada.

Source: AP

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Eastern European NATO Countries Want To Help Ukraine Join Alliance

MOSCOW, Russia -- Eastern European members of NATO are looking for specific ways to help Ukraine's efforts to join the military alliance, officials said Saturday.


While Ukraine's pro-Western President Viktor Yushchenko has made NATO membership a key goal, and the alliance in principle has supported that aspiration, it says Ukraine must first firm up its democracy, fight corruption and reform its bloated, post-Soviet military.

"The main issue is not just to support Ukraine in general terms ... we are trying to specialize our assistance," said Andras Havril, chief of staff of Hungary's armed forces.

Havril spoke at the start of a meeting between military leaders of the Visegrad Four _ a group that also includes Poland, the Czech Republic and Slovakia.

NATO has also been wary of over-expanding, after admitting seven new members from eastern Europe last year, and of irritating Russia, which is unhappy with the prospect of its former satellite countries joining the alliance.

Havril said four military chiefs also would discuss setting up a joint battalion for peacekeeping missions, the commanders for which each country could supply on a rotating basis.

The meeting also would deal with military aspects of the struggle against terrorism, Havril said.

"Each country is developing its own capabilities, but no individual country can develop and sustain all the abilities needed in the fight against terrorism," Havril said. "So we are looking to coordinate our skills and, what is more important, to develop and strengthen mutual trust in these matters."

Also attending the meeting were Poland's Gen. Czeslaw Piatas, Czech Lt. Gen. Pavel Stefka and Slovakia's Lt. Gen. Lubomir Bulik.

All Visegrad Four countries have stationed military personnel in Iraq, though Hungary pulled its troops out a year ago.

Poland's new government has yet to decide whether to keep its 1,400 troops in central Iraq, where they have been providing security and training Iraqi soldiers, or to bring them home at the year's end as planned by the previous government.

"By the end of this year, we can hand over full responsibility in security issues to the Iraqis," Piatas said, adding that Poland's future presence in Iraq should be determined by Poland's politicians. "This international contingent has completed its main mission, to give Iraq back to the Iraqis," reports AP.

Source: Pravda

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Chernobyl May Become Nuclear Burial Ground

CHERNOBYL, Ukraine -- Ukrainian President Viktor Yushchenko is ready to consider the issue of burying spent nuclear fuel from other countries in the Chernobyl region and make a political decision, subject to approval by experts and scientists, and after debating the problem publicly, he said at a news conference in Chernobyl.

An engineer stands with Ukranian President Viktor Yushchenko (L) in front of a monitor showing the unloading of nuclear fuel from the third unit of the Chernobyl nuclear power station in the plant's control room

Yushchenko said such proposals could be discussed after a thorough examination of all stages of the project, his press service told RBC. “This is a long-term project, and it must be approved by the public,” the Ukrainian head-of-state said, stressing that he would never make such decisions without public approval, however economically feasible they might be.

The second spent nuclear storage facility of the Chernobyl nuclear power plant would come on stream in 2010, Yushchenko said. The construction project is being examined by international experts. The European Bank for Reconstruction and Development (EBRD) pointed to the effective performance of a Swiss auditing firm, the Ukrainian President said.

He expressed hope that the auditors would finish their work by the end of this year, and funds would be allocated for the final stage of the construction of the storage facility.

The technologically complicated construction problem was being solved consistently, Yushchenko added.

The second spent nuclear storage facility of the Chernobyl power plant is designed to provide a long-term safe storage of the whole of the power plant’s spent nuclear fuel. It was supposed to be put into use back in 2003, but the construction was suspended by the Chernobyl plant in April 2003 due to significant defects.

The contractor, the French company Framatome ANP, says it would take it about four years and a half to complete construction, which is financed by the EBRD.

An estimated 600,000 people were exposed to large doses of radiation as a result of the Chernobyl nuclear disaster. 4,000, most of them children, were diagnosed with thyroid cancer.

Ukraine and Belarus lost 784,320 hectares of agricultural lands and 694,200 hectares of forest lands after the Chernobyl catastrophe. Re-cultivation of those territories requires significant spending on fertilizers, supplement feeds and special cultivation techniques.

Source: RosBusinessConsulting

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Ukraine Hope To Put On Good Show

LEIPZIG, Germany -- World Cup debutants Ukraine will be eager to prove themselves next June in Germany after reaching a major championship finals for the first time in their history.

Spanish national soccer team coach Luis Aragones (C), looks on as Tunisia's coach RogerLemerre (L), and Ukraine's coach Oleg Blokhin (R) shake hands after they were drawn in group H after the final draw for the 2006 World Cup in Leipzig, Germany, Friday Dec. 9, 2005

After suffering bitter playoff defeats in their last three championship campaigns, Ukraine finally succeeded, becoming the first European nation to qualify for the 2006 finals at the beginning of September.

The former Soviet state won a tough European Group Two, also containing continental champions Greece, 2002 World Cup semi-finalists Turkey and former European winners Denmark, who all failed to make it.

Now Ukraine, led by a pair of European Footballers of the Year in coach Oleg Blokhin, who won the Golden Ball award in 1975, and striker Andriy Shevchenko, last year's winner, want to follow up their recent good form with a fine showing in Germany.

Some experts, such as former Belgium goalkeeper Jean-Marie Pfaff, who played in the 1982 and 1986 World Cups, think Ukraine are capable of making the semi-finals.

"It's quite possible as they have a player of Shevchenko's calibre in their side," Pfaff, who helped Belgium to reach the semi-finals at the 1986 World Cup in Mexico, told Sport-Express newspaper.

Blokhin is more cautious.

"It'll be our first major championship, so it's hard to predict the outcome but certainly we want to make a good account of ourselves there," said the former Soviet striker.

Blokhin knows his team's strengths and shortcomings and the fact that they are ranked 40th in FIFA's world rankings for November shows that although they qualified for the finals with relative ease, they still have some way to go to catch the top sides.

Ukraine are largely dependent on one player and if Shevchenko is struggling for form or injured their chances even to make it out of the first-round group are slim. Most of the Ukraine players are also lacking big-match experience.

Shevchenko, however, remains optimistic.

"We have a young team, capable of causing upsets," the AC Milan striker has told Ukrainian media.

Source: Reuters

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Ukrainians Were Never Lucky With Their Ruling Powers

KIEV, Ukraine -- Throughout the more than thousand-year history of Ukrainian statehood, the ruling powers never voluntarily served their people or the country, but selflessly and eagerly served foreign invaders starting from the Varangians of Sweden, the Tatar-Mongolians, to Poles and Lithuanians and finally the Muscovites.

2004 Orange Revolution

The ruling powers in Ukraine could never independently protect their people or land from foreign invaders such as the Tatar-Mongolians, Poles, the Muscovites, Bolsheviks or Fascists.

There was not a single time that the government would apologize to its people for the lack of talent, for the burning of Kyiv (several times), the destruction of Chyhyryn, the Brody tragedy, the famine and the endless number of ruined lives and lost fortunes of the Ukrainian people.

Harmony and prosperity in Ukraine occurred only during those short periods in history when the people took power into their own hands and appointed their own ruling authorities. Such was the period of the early Kyiv Rus, when the people got tired of their own dukes’ quarrels and discords, and invited Swedish Varagians to Kyiv.

The Cossack times were another period, when Cossacks elected their own officers and protected their territories. There was also a short period of Ukrainian National Republic and Western Ukrainian National Republic, when the people of Ukraine gave a chance to their politicians to establish a new state on the ruins of the Russian Empire.

However, as soon as the government pushed the people away from state management, it caused the destruction of the state. Time and again, the government was drowning in discord, squabbling, corruption and empty promises.

Generally speaking, Ukrainians never really needed a ruling authority over them because the nation has a remarkable ability to self-regulate and develop (think of how many Ukrainian towns received the Magdeburg Right during the time when the central government was practically non-existent in the country).

The best government for a Ukrainian is the one that does not prevent him to live his life, zealously work, zealously play, and peacefully die.

A Ukrainian will tolerate and eagerly defend this kind of government (by the way, this is contrary to the way things are with a brotherly northern neighbor, where historically the more the powers mistreat and oppress the people - the more they love that power).

The recent history of Ukraine generally only demonstrates the same manner in which the people and the government coexisted over the last thousand years.

At the 1991 referendum, the people of Ukraine expressed their strong will to become an independent state, and the management of the new country was immediately taken over by the mediocre former servants of the colonial communist regime led by Kravchuk.

The total mediocrity of that government led to the “revolution on the granite”. As a result, in 1994 the people won the right to change their elected representatives and members of the government.

No matter how wretched the new government led by Kuchma was, the people tolerated it only because it did not interfere with their lives.

Once again, Ukrainians display miracles of self regulation: there is no work – they find it abroad; there is no merchandise in the stores – they import it from Turkey and Poland and sell it at the outdoor markets; no food – farmers markets blossom; the credit system does not function – they develop barter relations and a dollar-based economy.

At that time, Ukraine had the most democratic tax system in the world: an entrepreneur himself decided how much tax should be paid to the government. The tax system existed de jure, but the people created an effective system of avoiding taxes, and tax inspectors did not yet become a tool of oppression.

If this situation remained unchanged for another several years, Ukraine would have quickly turned into the most developed and democratic European country and we would have been in the European Union together with our lame government leaders. If only they had not interfered.

Unfortunately, at the end of the 1990s the government decided to exercise some power. The government officials started to grow appetites: each had to have an acre of land with a three-storey house, a small factory, a few luxury automobiles, a small plane or a yacht. In addition, they had children and an endless number of relatives and friends.

Hence, the ruling authorities became greedy and cynical. Government officials were receiving land, forests, factories, production plants and ports as gifts, or paid next to nothing for them. Not only did they pay no taxes on the so-called “privatized” businesses, but they also sent all the profit into offshore bank accounts.

The bulk of the tax burden was put on the small and medium size enterprises run by ordinary Ukrainians.

Apparently that was not enough, so government officials created a system of embezzlement of taxes already paid to the state by means of returning VAT on fictitious exports. In 2004 alone the amount of this returned (or rather stolen from the people) VAT reached 5 billion hryvnia.

The growing demands of government officials and the need to satisfy them led to the creation of a deeply hierarchal system of corruption throughout the whole country. Giant and tiny pyramids of corruption penetrated into every segment of society, from the maternity wards, kindergartens, educational system, healthcare and police to the army and ritual establishments.

The tax and permit issuing authorities basically became the tools of oppression, systems of bribery and institutionalized theft.

Ukraine became one of the most corrupt countries of the world.

In order to stay in power, regardless of the will of the people, Kuchma and his allies used a system of manipulation during the elections of 1999, 2002 and 2004.

Those were elections bereft of choice. In 1999 Ukrainians had to choose the lesser of two evils – Symonenko or Kuchma. In 2002, the representatives of the opposition were eliminated from the electoral process in major electoral districts and did not have access to mass media.

It was clear that those means would not suffice to rig the presidential elections of 2004, so the government officials created a new system of election manipulation unprecedented in scale and cynicism.

And it was at this historic moment that the Ukrainian people took power into their own hands, which even the government could not foresee. In fact, starting November 2004 through January 2005, the country was ruled by a new democratic institution – the Maidan.

The President, Verkhovna Rada, the Supreme Court as well as the country’s security forces were forced to bow to the will of the Maidan as a consolidated institution of a new Ukrainian democracy.

Conclusions and Forecasts

Back in 1946 in his famous Fulton speech, Winston Churchill defined the three main components of democracy as the freedom of speech, free unfettered elections and independent courts.

As history proves, these democratic institutions are very acceptable for Ukrainians as they feed into the historic and mental abilities of Ukrainians to self-organize and self-govern. Only effective democratic institutions can secure the constitutional right of the people to power.

As a result of the Orange Revolution in Ukraine we have, more or less active, two out of the three necessary democratic institutions: freedom of speech and democratic elections.

As for the courts – unfortunately, they were reorganized into a system that could be easily manipulated by the government. Victor Medvedchuk, a professional manager and “the Grey Cardinal” of the former government was working tirelessly to create this system.

At first, this judicial system suited the new government, since some of the “friends” of the new President were hoping to take control of the courts.

But things did not work out the way they expected. The judicial system continues to work for its patrons and “founding fathers”.

We hope that the new government will begin judicial reform soon; especially after a couple of disgraceful slaps in the face it received from apologists of the old regime (Piskun, who has Medvedchuk’s ears sticking from behind his head, is simply mocking the President).

If, on the other hand, the new government will not be able to reorganize the court system, then the people or their representatives will do the job (Vlasenko and Reznikov already expressed their willingness to help).

Whatever the case may be, any ruling power, especially still budding Ukrainian democracy, will try to avoid being controlled by its people or will try to shift its responsibilities to the people.

Yekhanurov’s persistent appeals to entrepreneurs to declare actual salaries sound like so much hot air. The same appeal was heard from the President during the forum “Challenges brought by freedom”.

The new government still has not reformed the crumbling healthcare system, which is free of charge only in theory, just like the corrupted system of education, where parents have to “feed” the teachers or hire tutors.

The new government will have to reform the permit issuing system. The bribes have gone up because of the extra risk of taking them (try buying a space in Kyiv to open a pharmacy or a hair salon; it will cost you minimum of $25,000 to $30,000 and a year and a half of going through purgatory).

The government only asks right now that we give the state 60 kopecks out of every gryvnia earned in the form of taxes.

This is probably because they need the money to pay the 18,000 gryvnia pensions to former government officials and people’s deputies like our beloved Kuchma and Bilokon’.

And where are the tax reform and the 20% unified social tax promised by the President?

Don’t the President and the Prime Minister understand that a tax burden of more than 60% (38% various deductions from the salary, 13% income tax, 20% VAT which we pay every time we make purchase or sale) is simply unrealistic!

The population will never pay such high taxes unless the people receive guarantees that the government will provide effective social services (healthcare, education, police, court system, social protection services and insurance).

So far, the government has not fulfilled these obligations. That is why Ukrainians, through democratic institutions, should keep a tight grip on the government authorities and not to loosen that grip for even a minute.

This is the only way to ensure peace and prosperity in Ukraine. Otherwise, as before, the promises of the politicians will remain promises, and the risk of Ukraine losing its statehood will become real again.

Source: Ukrayinska Pravda

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Friday, December 09, 2005

H5N1 Detected in Ukraine

KIEV, Ukraine -- Ukraine said today it had detected the highly pathogenic type of bird flu that is dangerous to humans, the strain known as H5N1, quoting preliminary Russian data.

A Ukrainian emergency rescue service worker disinfects a farm in the village of Nekrasovka in Crimea, about 800 kms south of Kiev. The presence of the H5N1 strain of the bird flu virus, potentially deadly to humans, has been confirmed in Ukraine's Crimea peninsula on the Black Sea, the country's agriculture minister said

The outbreak was located in several villages in the Crimean peninsula where about 2500 birds died within hours. Local residents said signs of the illness were detected in September and no action had been taken.

"We have information that the strain H5N1 was detected," Vyacheslav German, deputy director of the state institute for biotechnology, told a news conference.

Ukraine had sent suspect tissue from birds for laboratory tests to an institute in Russia.

Petro Verbitsky, sacked as Ukraine's chief veterinarian earlier this week, stressed the data was preliminary, but he said that confirmation was expected from Russia tomorrow.

"Preliminarily, it is H5N1," Mr Verbitsky said.

Officials said the strain was the same recently found in neighbouring Romania and in Russia.

President Viktor Yushchenko has announced a state of emergency in affected areas, a measure that the Emergency Ministry said was key to stopping the spread of the disease to other parts of the country.

The Emergency Ministry, which is overseeing measures to contain the outbreak, is carrying out a cull of domestic poultry in the affected areas on the Crimean peninsular in the Black Sea.

So far its staff has seized more than 29,000 birds in house-to-house checks in villages sealed off by an exclusion zone.

H5N1 is endemic in poultry in parts of Asia where it has killed almost 70 people.

Experts fear the virus could mutate into a form which can be transmitted easily from person to person, risking a pandemic in which millions could die.

Source: Reuters

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Interview: Tymoshenko Says She Was 'Radical' As Prime Minister

KIEV, Ukraine -- Former Prime Minister Yulia Tymoshenko acknowledged Dec. 8 that she acted too radically while in office, but defended her rush to annul some state privatizations as the justice that voters demanded.

Yulia Tymoshenko at a press conference

"Yes, undoubtedly, I was radical," Tymoshenko told The Associated Press. "Probably my mistake was that I wanted to do everything quickly, as people expected."

Tymoshenko has been plotting her return to the country's No. 2 job since her former Orange Revolution ally, President Viktor Yushchenko, fired her in September, complaining that her economic policies drove the country to the brink of collapse.

Far from removing her from the political scene, Tymoshenko's ouster set her up as a strong competitor to Yushchenko. Tymoshenko is banking on a good showing by her party in March parliamentary elections, when the new government will be formed by the parliamentary majority instead of by the president. A strong win could propel the charismatic Tymoshenko back into the prime minister's seat, a job that will become even more powerful after the election reforms.

Tymoshenko had called for the annulment of dozens of suspicious privatization deals made under former President Leonid Kuchma. She defended those actions Dec. 8, saying "either there is justice or there isn't, there can't be just a little justice."

But she noted that she also pushed for a law that would have made clear which companies would have their deals reconsidered; every other business would have been granted an amnesty.

"The door would have been closed" to further reversals of privatization deals, she said.

During Tymoshenko's time in office, foreign direct investment in Ukraine plummeted and GDP growth fell from double-digits to below 4 percent. She also was criticized for intervening in the marketplace, triggering crises in the gas, sugar and meat sectors.

Tymoshenko said she ran into trouble because "all the other team members agreed on something else behind my back. In that case, my actions were groundlessly radical."

"I am sure that in some months, the people of Ukraine will understand that I was taken away not for low-quality work, not for ineffective work, but just for what I did fulfilling the requests of the voters," she said.

Opinion polls indicate that her party is neck-and-neck with Yushchenko's bloc, and the Orange Revolution's main enemy, Viktor Yanukovych, is ahead. None of the three parties, however, are poised to win enough votes to form a government on their own, making a coalition necessary. Tymoshenko has repeatedly said that she hopes to reunite with Yushchenko's team at that point.

Otherwise, she warned that she fears a return of Yanukovych, Kuchma's former prime minister and last year's losing presidential candidate.

The chances "are so high that people who represent our Orange Team need to think not about themselves but about what's at stake so that all we did was not done in vain," she said.

Many Ukrainians are disappointed with the slow pace of change, and were shocked by the abrupt and nasty break-up of the Orange Revolution duo, who ended up accusing each other of corruption. Yushchenko has complained that Tymoshenko wasn't a team player, and has seemed reluctant to consider her as a possible prime minister again.

Tymoshenko said the Orange Revolution taught Ukraine that the people's will matters. Earlier, she said five factors influenced elections in this nation of 47 million people: the United States, Russia, the use of administrative resources to pressure voters, pressure on the media and money.

"This has radically changed," she said from her office, which bustled with activity the day after her party held a big convention to kick off its campaign.

"I feel a big responsibility not to allow these changes to stop, not to allow it to stop half way," she said. "I feel a big responsibility to complete these reforms and to return faith to a large number of disappointed people."

Source: AP

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Ukraine Revisits Its Somber Past

KIEV, Ukraine -- Outside the walls of Kiev's stunning Mikhailov cathedral and monastery, history is being revisited through an exhibition of large black-and-white photographs.

Monument to the Great Famine in Kiev

They show dead animals and corpses rotting in the fields and people, barely able to stand, dressed in ragged clothes. The pictures are from 1932-1933.

In Ukraine's collective memory, those years are known as the "Great Famine" when the Soviet Communist Party under Stalin forced Ukrainian peasants to give up their land and join collectivized farms by confiscating all food. Anyone caught saving food or taking even a grain of corn was sent to Siberia or shot.

Historians estimate that 7 million to 10 million Ukrainians died as a result of Stalin's policies, which were implemented with the help of the Ukrainian Communist Party.

Ukraine quietly started commemorating the famine a few years ago. But the authorities refrained from criticizing the former Soviet Communists, or Ukraine's Communists, for executing such policies. Igor Plaschkin, a political analyst at the Kiev offices of the conservative Konrad Adenauer Foundation, said it had been impossible to do so because Communists still dominated the Parliament and other state institutions.

Since it gained its independence from Moscow in the early 1990s, Ukraine has been slow to deal with its past. This is in contrast to other former Communist countries, particularly in Eastern Europe, where several governments - after a first rush of historical re-evaluation in the 1990s - have recently started taking bolder steps to understand how the Soviet Union ruled its satellites.

The new conservative government in Poland started opening Warsaw Pact files last month. Radek Sikorski, the defense minister, showed how in 1979 the Kremlin was prepared to use Poland as its own cordon sanitaire in the event of a nuclear war with Western Europe.

Relations were tense at the time because of the election of a Polish pope, a standoff between Moscow and Washington over deploying nuclear missiles in Germany and the increasing influence of the Polish underground trade union movement.

In Prague, Czech senators last week proposed a bill establishing a National Memory Institute that would examine and disclose crimes of the former Communist regime, including its security forces and functionaries. The senators said the new institute should give access to documents from 1948, when the Communists seized power, to 1989, when Communist rule collapsed.

Hungary has already opened its archives as historians in these countries try to understand how the Kremlin exercised power throughout the Communist bloc.

But it was only two weeks ago that the Ukrainian president, Viktor Yushchenko, adopted a completely different tone toward the famine, and Ukraine's past.

In a ceremony at Mikhailov Square, he said the famine had been "a crime against humanity that had perpetrators." But, he added, "From the legal standpoint, no guilty parties have been found."

Yushchenko, catapulted into power after the Orange Revolution last year in which hundreds of thousands of demonstrators called for a free press, an end to corruption and fair elections, continued in this open manner.

"A murderer may be found responsible for killing one person, but for the destruction of millions no one is held responsible. Perhaps this is why we in Ukraine have such difficulty today restoring the rule of law, good and social justice."

Unlike previous commemorations, which never pinpointed blame for the famine, Yushchenko directly criticized the Communists for not apologizing, saying that such a failure explained further misfortunes.

"Perhaps this is why we encourage such difficulty in changing our consciousness, haunted by fear and ideological slavery," he said.

Yushchenko added that it was time to "immortalize a memorial on the victims of repression and famine in Ukraine." He said that the government would also establish a Ukrainian Institute of National Memory.

The point of the commemoration, Foreign Minister Borys Tarasyuk said, was to allow Ukraine to deal with its history and identity. "So many Ukrainians suffered," he said in an interview. "Only 6 of the 13 children in the family of my father survived."

Tarasyuk said it was hardly surprising that the Communists in Ukraine had protested the style of the commemorations. "They understand rightly that it is their own crime, their own ideology," he said. "That is why they are the only political force in Ukraine who are refusing to recognize this very fact. The Communist tyrants did it.

"Today," he continued, "the official Russian version is that Russia had nothing to do with the famine in Ukraine, that it was the policy of the Bolshevik authorities."

In Russia, foreign policy experts are critical over how Ukraine and other former Communist countries have been dealing with history, saying that this is feeding anti-Russian sentiment.

The Russian Foreign Ministry, responding to the Ukraine commemorations, issued a sharply worded statement. "Attempts to use the tragic facts of our common history in present-day Russian-Ukrainian relations are counterproductive, politically motivated and even harmful," it said, adding: "One can hardly say who suffered more from the totalitarian regime or who suffered less. Everyone suffered."

Other Russians say the past is increasingly being used by nationalists in Ukraine and Eastern Europe to criticize today's Russia.

"All the troubles and bloody events in the past are considered through the lens of anti-Russian intentions," said Nikolai Petrov, an expert on Russian domestic policy at the Carnegie Moscow Center. "There are a lot of very complicated things in the Soviet past. But they were not ethnically based. There was starvation in other regions.

"Besides," he continued, "it was Georgians and Ukrainians who were leading the country, not Russians." Stalin was from Georgia.

Petrov says he can understand why former Soviet-bloc countries use the past to promote national consolidation.

"But it becomes very difficult to create a national identity because it is sometimes 'us' versus 'them,"' he said. "There is a temptation among East Europeans in particular and other post-Soviet states to look at all bad things of their past as coming from outside. Russia is blamed for all of this."

Hryhoriy Nemyria, director of the Center for European and International Studies in Ukraine, denies that the commemorations have been motivated by anti-Russian sentiment. "The commemorations are linked to Ukraine's national identity," he said. "It is very important for the nation's identity. It is about saying goodbye to the Soviet Union."

Source: International Herald Tribune

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Thursday, December 08, 2005

After One Year, Hope of 'Orange Revolution' Is Fading

WASHINGTON, DC -- A year has passed since 1.2 million Ukrainians took to the streets to defend democracy and won. Sleeping in tents in freezing temperatures and ringed by heavily armed security forces, they refused to leave Kiev's central square, the Maydan, until the results of the stolen presidential election were nullified and a second, honest election could be held.

President Viktor Yushchenko

They departed only after President Viktor Yushchenko, his face scarred by a botched assassination attempt, took office with the dynamic Prime Minister Yulia Tymoshenko at his side. In a corner of the world where repression had been the rule, corruption all-pervasive and the rule of law only a long-term project, that courageous public act spawned a modern nation.

The hope that came alive last November has now faded. The economy, which as the Orange Revolution took place was growing in double digits, began to shrink by summer 2005. A long list of reforms was deferred or had no effect. The Parliament behaved more like a disorganized rabble than a representative body. Leading politicians and their robber-baron allies continued to treat the state as their private property. Businessmen large and small faced extortion from Mafiosi and bureaucrats. Half of the economy remained off the books. Foreign investment stopped.

With per capita incomes at 50 percent of those in Russia, the country remained desperately poor. And, amid mutual accusations of corruption and incompetence, the Yushchenko-Tymoshenko partnership came apart.

With national elections in view, Yushchenko unleashed the September Massacre. He sacked Tymoshenko as prime minister and dismissed the members of his own entourage who faced corruption charges. He also made a pact with Viktor Yanukovich — his erstwhile opponent in the presidential election. Ukraine was sliding down a slippery slope.

The window of opportunity opened by the Orange Revolution resembles the eye of a needle. To pass through it will require dismantling the post-Soviet bureaucracy, eradicating the robber barons who emerged from the communist party and who now constitute Ukraine's all-powerful oligarchy, and opening the marketplace to competition. It requires, moreover, both maintaining a lifeline to the European Union, which is now fraying as a result of the failure of the proposed EU Constitution, and arriving at a new understanding with a Russia, now flush with oil and gas revenues and moving toward authoritarianism.

The central problem facing all post-Soviet societies is to eliminate the inherited state economic sector. The Central and Eastern European countries, especially Estonia, which have gone furthest toward economic liberalism, have also had the most economic growth.

For example, the national gas pipeline is Ukraine's central engine of corruption and control of it is therefore the central issue in Ukrainian politics. That situation did not come about accidentally. The Russian state-controlled natural gas giant, Gazprom, supplies Ukraine with gas at less than a third of the world price. The difference in price is the currency with which Russia buys political influence in Ukraine. Competition is the only solution for that sticky situation.

Ukrainian politics tend to be non-ideological and President Yushchenko is the only leading political figure who possesses an identifiable profile. He is a market liberal who believes in keeping government small, local and transparent. He also believes in the efficacy of competition, the indispensability of private property rights and contract law. Such notions are consistent with the membership requirements of international organizations such as the World Trade Organization, the EU, and NATO.

They are not necessarily those of Moscow, but perhaps they could be — if Ukraine becomes an attractive model for its big Slavic brother. That will depend not only on the success of President Yushchenko's economic reforms but also on the outcome of the March elections.

Yushchenko and those sharing his views cannot win it alone and must make painful compromises in order to become a part of any coalition government. If Yushchenko fails, there will be no economic follow-up to the events of last November. There will be no second Orange Revolution that Ukraine so desperately needs. The spirit of the Maydan will then have to be revived.

Source: Cato Institute

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Zbigniew Brzezinski: “Europe from Cabo Da Roca to Kamchatka”

KIEV, Ukraine -- I may be wrong, but my impression is that the only purpose that brought Zbigniew Brzezinski, National Security Adviser to President Carter and professor of political science, to Kyiv was to contribute to the reconciliation between Yushchenko and Tymoshenko.

Zbigniew Brzezinski (R) meeting with Viktor Yushchenko

I do not think he is going to persuade, reproach, or frighten the two parts of the orange team with a potential loss of power. He seems willing to explain to them the historic importance of a democratic Ukraine’s success, its geopolitical impact, and implications of its failure. He could be planning to remind the divided Maidan leaders about their responsibility, both to their country and to the civilization at large. What arguments will the prominent political scientist be driving home? The following is what Zbigniew Brzezinski said in his interview to ZN.

- Mr. Brzezinski, George Bush and Condoleezza Rice have repeatedly stated their satisfaction with the expansion of the zone of democracy by nations where democratic revolutions have been won. They have both spoken of the “key role” that Ukraine has to play in the process. A year has elapsed since Maidan. Do countries that have not yet undergone democratic transformations view our country today as a positive or a discouraging example?

- In general, it is a positive example. Only utopians could have expected that everything would be perfect and a cardinal aim like this could be achieved within a year. There is a perception that something fundamental happened in Ukraine. It made clear its intention to be a democratic and an independent state. I emphasize that it is both today.

Of course, Ukraine has not been too successful in combating corruption. Nor has the country addressed all of its social issues. There is deep disappointment inside Ukraine. To some extent, this disappointment can be traced to the rip in the Yushchenko-Tymoshenko’s team. Besides, there seems to be a lot of opportunism at the top. However, the basic reality is that Ukraine is both independent and democratic, which is decisive for the post-Soviet countries, in historical terms. First of all, it is critical for Russia as Ukraine’s example is more pertinent to it than the Polish one.

- Yet democratic and undemocratic societies alike attach great importance not only to the situation with human rights and freedom of expression, but also to living standards and economic development. Ukraine is now facing numerous internal economic challenges, and on top of it Russia will probably send its gas prices soaring. Why has the USA, recognizing Ukraine’s symbolic meaning and potential as a success story, rendered practically no assistance to it over the year? There have been neither substantial loans nor serious investments. Even the Jackson-Vanick amendment has not been abrogated.

- In my opinion, the Jackson-Vanick amendment is a silly rudiment of the Cold War. It survived due to the effort of some veto-wielding congressmen. Yet one should not overestimate the impact of this amendment.

Speaking of loans and investments, they will come once the country creates favorable conditions. It takes years to ensure an enabling investment climate. And nobody is going to do that for Ukraine. Poland got serious investments, but it paved the way for them by becoming attractive for foreign capitals. Ukrainian elite should realize this and work towards that end.

- Don’t you think the present Ukrainian political elite has had its day? For the most part, it seems to have exhausted its potential. It is incapable of communicating with the civilized world, generating “breakthrough” ideas, and putting them into action. The new generation has not emerged yet. The outdated elite, having stood its ground at the 2004 presidential elections, will further enhance its power after the 2006 parliamentary elections. Do you see a problem in Ukraine’s having to live with this elite for another five years?

- Yes, I think this problem exists and, unfortunately, it makes the difference between Ukraine and Poland more evident. Of course, Poland got its independence much earlier than Ukraine. And people there have idealized memories of the way in which this independence was gained. Besides they had Solidarity, which established an alternative elite. Yushchenko and, to a certain degree, Tymoshenko have not done enough to mobilize the new, young elite and infuse its energy into the government and public administration. The new elite is surfacing in Ukraine, but the state leaders have not raised it to, say, an operational level. Therefore, your main revolution is still ahead - it is a bloodless revolution of the generation change. This is where Yushchenko and Tymoshenko could have achieved more than they have to date.

A leader’s personality, temperament has a role to play, too. Yushchenko is a democratic leader with a strong and holistic vision of democracy. Yet he is also prone to compromises. From a democratic standpoint, compromises are good but only in so far as they do not require people to sacrifice their principles. Tymoshenko is impulsive, bright, inspired. Only these two politicians’ concerted effort can provide conditions for an effective generation change. Yushchenko is averse to rocking the boat, while Tymoshenko is not. The key question is whether the Orange Revolution leaders can cooperate productively. In my judgment, the Orange Revolution marked an awakening of truly independent and democratic Ukrainians, not the former Soviet types but young and new ones.

- I agree. Nevertheless, there is very little hope that the Yushchenko and Tymoshenko blocs will put many new names on their respective election lists. The same applies to other blocs and parties, ranging from the “Regions of Ukraine” to the Socialists. The elections will hardly bring fresh blood into the legislature supposed to be the most influential branch of power following the political reform next year.

- What I see astonishes and disappoints me. Since the political crisis of several months ago, the Orange Revolution leaders have not taken any steps to mobilize the new generation’s energy. I do not mean university students. I mean those who are 40-45 years old today.

- Speaking at a conference on the Ukrainian situation in Washington, you argued that “too many compromises can cause indigestion.” Neither Yushchenko’s team nor that of Akhmetov-Yanukovych rules out a possibility for them to form a coalition in the next Parliament: “President Yushchenko - Premier Yanukovych.” Do you think it will be a viable partnership?

- It depends on which of them is going to give up or sacrifice more. A person with principles always surrenders less than the one with no principles.

- How will this situation be perceived in the West? Will it be interpreted as a revival of “Kuchmaism”?

- Things get more complicated here. This decision could result in the continuation of the “Ukrainian game” as I call it. This game is about acquiescence and evasion. Over the years of independence, I have often visited Ukraine as I have always taken an interest in your country. So I often met and talked with Ukrainian leaders, on some occasions on behalf of the U.S. government and American people. Ukrainian leaders always agreed with what I said. They assured me they understood how critical and useful the suggested steps were and promised to follow all recommendations. And they never kept their promises! It has always been characteristic of the Ukrainian authorities’ behavior. It could be an influence of the political culture formed over the last 400 years: we have always heard “yes” and saw nothing happening.

- In your opinion, on what platform could Yushchenko and Tymoshenko unite?

- Only on the platform of the Orange Revolution ideas and ideals. In other words, on accelerating the processes of building up a truly democratic Ukraine that will become part and parcel of a larger Europe. I always insist on it because I am sentimentally and strategically committed to Ukraine. And I am positive that as soon as Ukraine turns into a truly democratic and truly European nation, Russia will have to follow suit. Therefore, from the European perspective, Ukraine’s mission transcends Ukraine per se. Ukraine, successful in democratic and European terms, is a prerequisite for the formation of a transcontinental Europe.

Ukraine a la Yanukovych, Ukraine of the bandit oblast type, will eventually reinforce negative residual trends in Russia. In this case, Russia will establish itself as a quasi transnational state with a dominating nationalist or, more accurately, “nashist” ideology, snowballing controversies and a host of mini-Chechnyas. In the long run, this Russia will lose the Far East and Siberia to China.

Do you remember de Gaul’s famous words about Europe up to the Urals? Most probably, it was a poetic image, but the general must have meant that Russia belonged to Europe. The historical irony is that the Urals could be the edge of Europe if Russia lost or handed over to China all its territories beyond those mountains. I think a real hope and a historical prospect for Europe is the Europe reaching from its western-most point in Portugal - Carbo da Roca - to Kamchatka. In this arrangement, Ukraine is a core on which the strength of Europe’s meaningful enlargement will hinge. The existence of a democratic European Ukraine will encourage “Russia up to Kamchatka” to become part of Europe. That is why the Orange Revolution has a global, worldwide significance.

I think Ukraine has a higher level of political culture than Russia. Ukrainians have a much clearer national self-identification. Political culture in Russia is still retrograde, for the most part. There is still havoc in opinions as to what Russia is: is it a nation, an idea, a universal revolution or a great state? If the propagated ideology of “nashism,” akin to Nazism, prevails in Russia, it will be suicidal for that country. That is why Ukraine’s positive example and advancement are so important.

- Today Ukraine still relies heavily on Russian natural gas for economic survival. So far the gas price negotiations have yielded no results. Under the circumstances, should Ukraine “needle” Russia by initiating the creation of a democratic belt along its border? Earlier this week, Kyiv hosted the summit of the Community of Democratic Choice attended by eight presidents. The Kremlin regards the new project as entirely and explicitly anti-Russian. Should Ukraine have initiated it given its economically vulnerable position?

- I do not think the idea of promoting democracy is anti-Russian. After all, one cannot develop policy looking back at the third parties’ likely reaction to or interpretation of this policy. But one should pursue this policy cautiously. A lot of people in Russia want to see their country a democratic state. I think it is vital that nobody substitute democratic policy with anti-Russian one. It is particularly important in the context of a larger Europe embracing both a democratic Ukraine and a democratic Russia.

As for the energy policy and its tactical dimensions, Russia is in no position to dictate its will to Ukraine as the major part of its oil and gas go via your territory. Besides, by trying to blackmail Ukraine, Russia will, de facto, be blackmailing Europe. I do not think it is to Russia’s best interest.

- Russia’s international role is intensifying in view of its plentiful natural resources, such as oil and gas. Half of European countries are their consumers. The U.S. leadership can fully appreciate the strategic importance of oil. Strategic power of the energy-supplying states will be growing every year. The trend is observed towards greater European dependence on Russian power supplies and a deeper penetration of Russian public and private capital into the European economy. Won’t Ukraine become a bargaining chip in strategic relations between Washington and Moscow or Brussels and Moscow?

- I do not think it will happen. You are speaking of obvious things. Yet there are factors at work, which are less obvious. For example, look at a growing interdependence: Russia gets some influence in the West as the latter partially hinges on its hydrocarbons; but Russia also gets increasingly dependent on the West for markets and investments in its economy. Today, any further growth in oil and gas production and energy generation is impossible without Western investments, technology, and know-how. Therefore, I optimistically believe in long-standing relations between Russia and Europe. I do not see any serious and objective grounds for the manifestation of Russian imperial ambitions. We could observe some of those in Chechnya and, to some extent, in Belarus but that would be it. If Russia pays attention to China and India, it will notice that 35 million of its citizens live in the Far East and Siberia, while the territory of an equal size to its south is a home to 3.5 billion people. Both China and India are enhancing their economic and military might. In order to survive as a state, Russia has to become part of Europe. And for Russia to become part of Europe, Ukraine has to turn up there first.

- You know, very few people in the EU seem to regard Russia and Ukraine as close to them, in Christian, societal, and cultural terms. Europe should think of its expansion as a civilization. For that, it should attract Russia and Ukraine, pull them towards itself. Yet this understanding requires broader horizons…

- You are right, few people think of anything but themselves, their own life today or tomorrow, at the longest. Thinking and discussing long-time prospects are the responsibilities of persons with a geo-strategic vision. When 45 years ago de Gaul spoke of Europe stretching up to the Urals, he sounded unrealistic. What I am saying today can sound equally unrealistic. Yet some of your readers will still be alive in 2050, and they will be able to judge if I was realistic or unrealistic in my forecast.

- And the other readers will probably recollect your predictions as to the USSR collapse and will pay closer attention to your today’s words.

- We will see.

- Sir, do you think it wise of the West to impose such an austere blockade against Belarus? Shouldn’t it engage in a more active dialogue with Lukashenko?

- It is a sensitive issue. On the one hand, I support the blockade. On the other, I advocate enticing. My policy towards the former Soviet bloc was based on these two methods. I knew that, on the one hand, the Soviet Union would not let the West have an upper hand in their struggle for leadership but, on the other, the Soviet elite was very susceptible to Western temptations. That elite was internally vulnerable. They wanted to have contacts with the West, to be invited to the White House, etc, etc, etc.

I met with younger Belarussians. I think the young generation is increasingly identifying itself with the Belarussian nation, with the whole country. Moreover, some of the Belarusian officials with whom I met felt uncomfortable about the Russian-Belarusian confederation. For example, Belarusian ambassadors do not want to be consuls in the Russian diplomatic service.

- Please, answer as candidly as you can: has Georgia become a more democratic state over the two years since their Rose Revolution”?

- Democratization is a process, even in the US. Two hundred years ago, we adopted a democratic constitution, but as recently as 80 years ago our women could not vote. Forty years ago most black Americans, de-facto, had no suffrage.

Looking at democracy as a process, one can state honestly: there is much more democracy in Georgia today than there was two years ago. Yet it is still not a fully sustainable democracy. It is still dominated by personified impulses. Saakashvili is a very charismatic person. He is more like Tymoshenko than Yushchenko.

- Mr. Brzezinski, is Yushchenko a politician that the post-revolutionary Ukraine needs? Or isn’t he?

- Yes and no. Maidan and Ukraine in general needed a leader who could bring them together, unite them. Yushchenko had this opportunity because he is a genuinely democratic person. On the other hand, one should be very careful not to cross the line of conciliation beyond which there is a territory of opportunism. This line is very subtle. Maidan was not the beginning of something apt to grow into a bloody revolution. Had blood been shed, the country would have had a different leader, a more passionate one, perhaps…

- Ukraine can benefit a lot from economic cooperation with Iran. However, the U.S. stance over Iran often impedes the development of these relations. The state’s maturity can be gauged by its leaders’ capacity to strike a balance between promoting universal human values, on the one hand, and fostering useful economic relations, on the other. What is the right way to reach maturity without running to extremes?

- There are no boundaries that could not be drawn on the map. And there is always a balance of interests. I think some sort of agreement between the West and Iran should be achieved. I do not support Iran’s complete isolation. It could bring about a unification of Iranian nationalism and Islamic fundamentalism. The more contacts exist between the West and Iran, the sooner and the more readily Iranian nationalism will divorce with Iranian fundamentalism.

- We have discussed Russia’s prospects 50 years from now. Looking at the near future, how do you visualize Russia after Putin?

- I think the overall tendency will be negative. Russia will strive to adopt a more authoritarian and chauvinistic style of political self-identification. Nostalgia will be fueled by many people’s Soviet mindset and understanding of the “great state” or “great Russia.” However, I think it will be the last sigh, the last gasp of the Soviet Union. As soon as the KGB generation leaves the political arena in 10-15 years, we will see real and drastic political reforms in Russia. There is a large gap behind the KGB generation, but it will, in due course, be filled in by a new Russian leadership that would evolve in a different political environment expediting different values. It will be a generation much more open to the outer world. Within this time, hundreds of thousands of people will graduate from Western universities. I won’t be surprised if in 2015 or 2020 we see a Russian president who is a product the Harvard School of Business, rather than of the KGB school.

- Kaddafi graduated from an American military academy, didn’t he?

- Well, he is a military officer… The Russian elite’s psychology is undergoing profound qualitative transformations. The people who, ascending to the top of government, will know that they are going to be the elite of a super power, will feel and look different. A generation will surface that will realize Russia can be successful only if its neighbors respect it, instead of hating it as is often the case today; when its largest neighbors such as Europe, America, or China have good relations with it and if Russia becomes ever more included in Europe, which will enable it to preserve its territorial integrity. This is a fundamental geo-strategic reality for Russia.

- How should Ukraine live through these 10-15 years?

- It is easy for an outsider to give advice. First of all, the Orange Revolution goals should be realized as soon as possible. You cannot let anybody divide yourselves; you should not accept compromises that could jeopardize the country’s future.

But frankly speaking, only Ukrainians can save Ukraine. A country relying on rescue efforts from abroad usually fails to survive. Your country’s future is in Ukrainians’ hands. For the first time ever! For the first time in Ukraine’s long history! It is the first generation of Ukrainians who, despite certain weaknesses and dependencies, have assumed responsibility for their homeland. Do not look at Moscow, do not look at Washington: just do everything to become a European state.

- But we have “two Ukraines.”

- Maybe, and maybe not. My impression is that people in the east of Ukraine feel something like this: “Decisions for my country should be made in Kyiv rather than in any other northern city.” I hope I am right, and if I am not - it is neither my mistake nor my fault. Still, I believe that something fundamental happened here last year, for the first time. There appeared a feeling of Ukrainian national predestination. Now you need leaders able to mobilize the people’s new energy and implement your plans. I won’t give you the names. Ukraine knows them.

Source: Zerkalo Nedeli

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Wednesday, December 07, 2005

Rice, In Ukraine, Criticizes Russia

KIEV, Ukraine -- Secretary of State Condoleezza Rice criticized Russia today, saying she had serious concerns about a proposed law that could shut down private groups, including some funded by the United States, that promote democracy, human rights and related issues.

U.S. Secretary of State Condoleezza Rice (L) looks at Ukrainian President Viktor Yushchenko as he speaks to journalists in Kiev December 7, 2005

She made her remarks during a news conference here with Viktor Yushchenko, the Ukrainian president who came to power a year ago after a popular uprising, many of whose leaders received instruction and advice from the very nongovernment organizations that Russia is proposing to ban or seriously restrict.

"We have concerns, and the United States government has expressed these concerns at all levels," she said "We would hope that the importance of nongovernmental organizations would be understood by Russia."

Her statement was the first public criticism of Russia's plans since the lower house of Russia's Parliament voted preliminary approval of the draft bill last month. Before now, administration officials had been noncommittal on the issue. But a senior State Department official traveling with Ms. Rice said that was because the department had hoped to convince the Russian government privately that the proposed new law was a bad idea.

"With the Russians, it is important that we discuss it discretely," he said. Two senior State Department officials, Assistant Secretary of State Daniel Fried and Under Secretary Nicholas Burns, were in Moscow last week talking to the Russian government about the proposed law, the official said. At that time, he added, Russian officials professed an interest in changing the proposed law so it would not seem so onerous, though he said he did not know how seriously to take the statement.

In the face of internal and international criticism, the Parliament has delayed a second - and critical - vote on the legislation until at least Dec. 16.

The proposed law would force 450,000 private organizations to register under tighter rules next year. The draft bill would force foreign organizations to close their offices and try to re-register as purely Russian organizations, which would give the government greater control over their activities.

Representatives of several nongovernment groups said Russia is trying to convince several of the former Soviet states in Central Asia to pass similar laws.

Ms. Rice's statement about the law came amid a 24-hour visit to Ukraine, where she and her aides said they wanted to encourage Mr. Yushchenko to move on with instituting political and economic change. The Ukranian government is riddled with corruption left over from the old, Soviet-backed government that lost power last year, aides say.

Partly as a result of that, Mr. Yushchenko fired his entire cabinet, including his popular premier, Yulia Tymoshenko, in September. Ms. Rice met briefly with her on her way out of town today.

Along with the corruption and infighting in government, Ukraine's economy is stagnating; economic growth slid from 12 percent last year to 4 percent so far this year. Asked about that, Mr. Yushchenko cited a dizzying list of economic figures that he said showed that Ukraine's economy was healthy especially given strong exports of "cattle skins" and "nonferrous and ferrous scrap metals."

He blamed the former government for much of his problems, adding, "We managed to correct all those mistakes rather promptly and speedily."

Ms. Rice ended her visit to Ukraine with a visit to Shevchenko Univeristy, where aides said she hoped to learn what was on the mind of young people.

Instead, one student asked her how she could become "rich and famous" like Ms. Rice.

Another posed the question "How did you get the nickname 'warrior princess?' " Ms. Rice laughed and said she was not sure.

Source: The New York Times

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Bird Flu Likely Behind Mass Poultry Deaths In Ukraine

KIEV, Ukraine -- Mass poultry die-offs hit four more Ukrainian villages today, sparking fears the government effort to limit the extent of a bird flu epidemic had failed.

A worker of Ukrainian Emergency Ministry burns culled domestic fowl which were confiscated in the village of Yemelyanovka on the Crimean peninsula on the Black Sea

All the villages were located near the east coast of Ukraine's Crimea peninsula, only kilometres from another eight villages with widespread bird flu infections confirmed over the weekend.

Household chicken, ducks, and geese in the villages Akimovka, Krasnoflotnoe, Dmitrovka, and Chernozemnoe were the main victims of the outbreak, and suffered symptoms similar to bird flu, Sehodnia newspaper reported.

The overnight death rate was, as in previous cases of bird flu, over ninety per cent, the Interfax news agency reported.

The most likely cause of the new deaths was the spread of bird flu into previously unaffected areas, despite a government quarantine on infected villages in place since Monday, said Mykola Patsiuk, director of Ukraine's department of veterinary medicine.

Poultry carcasses were being tested for the presence of bird flu, and if confirmed the quarantine would be expanded to the four villages, Patsiuk said.

Ukraine health authorities since the beginning of the outbreak have destroyed more than 28,000 domestic birds in the Crimea province, in an effort to limit the area infected by the disease.

Local media are blaming the government for a sluggish response to the movement of the bird flu virus, which had been identified in neighbouring Romania, Turkey and Russia up to two months previously.

Crimean health officials ignored warning signs migrating birds had infected domestic poultry as long ago as October, and waited only until late November before admitting bird flu had arrived in Ukraine, Inter television reported.

Ukraine President Viktor Yushchenko sacked the country's top veterinary officer in the wake of the scandal.

Source: DPA

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US's Rice Urges Ukraine To Deliver On Democracy

KIEV, Ukraine -- US Secretary of State Condoleezza Rice will today urge the pro-West leaders of Ukraine who swept to power in an ''Orange Revolution'' last year to show disillusioned voters the benefits of democracy.

US Secretary of State Condoleezza Rice

Rice, a Soviet expert, arrived on her first trip to the former Soviet republic as the top U.S. diplomat with American officials expressing concern the euphoria witnessed at the start of the year by her predecessor, Colin Powell had evaporated.

Since winning election on a wave of protests against poll fraud, President Viktor Yushchenko has kept his focus on integrating with Western institutions like the EU and NATO. But his first year has been turbulent with few economic successes.

Yushchenko sacked another hero of the revolution, Prime Minister Yulia Tymoshenko, in September after clashes over privatisation and state regulation of the economy. Ukraine's World Trade Organization membership bid fell short after parliament failed to pass key bills and negotiations on a trade deal with Washington and other countries remain incomplete.

''The people who launched the Orange Revolution now need to deliver on that revolution,'' Rice said in Berlin hours before her arrival in Ukraine during a five-day tour of Europe.

She pledged more US involvement with Ukraine and sought to enlist European allies to support a country that Russia saw as part of its sphere of influence until a people power revolt where protesters wore orange last year.

Yushchenko has been unable to meet the high expectations of voters who seemed to believe the revolution, openly backed by the United States, was a panacea for their economic problems.

Voters have also been put off by his bickering with Tymoshenko. Opinion polls show the party of the man the two of them faced down last year, Viktor Yanukovich, leading before a March parliamentary vote.

Ukraine had been a positive symbol of America's support for the spread of freedoms around the world and part of Rice's message is to warn against any backsliding on democracy in the run up to a vote that threatens to reopen rifts in the country.

Stakes in March's parliamentary election have been raised by constitutional changes handing many of the president's powers to the prime minister and parliament.

Yesterday, Yushchenko said he would stay out of the election to prevent a split in the vote.

The visit's focus on democracy may be a welcome relief for Rice, who has been dogged on previous stops on her four-nation European tour by questions over alleged illegal practices against detainees in the U.S. war on terrorism.

It also offers Yushchenko an opportunity to display his foreign policy credentials at a time when an emergency over birdflu has added to his domestic woes.

Source: Reuters

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Tuesday, December 06, 2005

U.S. And Allies Must Shut Down Weapons 'Black Market'

DONETSK, Ukraine -- At a sprawling, run-down industrial complex in Donetsk, Ukraine, weeds grow along a rusty rail spur that winds among World War II-era warehouses and factories. Little security is evident, and the facility looks like a giant junkyard.

In a way, it is — except the ''junk'' consists of thousands of tons of live military munitions. When we went there last summer, we saw mortar rounds, land mines and artillery shells of all sizes stacked in huge piles and strewn carelessly about. Sold on the black market, these weapons could end up in the hands of terrorists or militant extremists anywhere in the world. Donetsk is only one of several ill-secured stockpiles of conventional weapons in Ukraine, a major dumping ground for weapons, and there are perhaps scores more in dozens of countries around the world.

These unused conventional weapons, particularly shoulder-fired antiaircraft missiles, pose a major security risk to America and democracies everywhere. That's why we have introduced legislation to destroy surplus and unguarded stocks of conventional arms in Asia, Europe, Latin America, Africa and the Middle East.

Our bill would launch a major nonproliferation initiative by addressing the growing threat from unsecured conventional weapons and by bolstering a key line of defense against weapons of mass destruction. Modeled after the successful Nunn-Lugar program to dismantle former Soviet nuclear weapons, the Lugar-Obama bill would seek to build cooperative relationships with willing countries.

One part of our initiative would strengthen and energize the U.S. program against unsecured lightweight antiaircraft missiles and other conventional weapons, a program that has for years been woefully underfunded. There may be as many as 750,000 missiles in arsenals worldwide. The State Department estimates that more than 40 civilian aircraft have been hit by such weapons since the 1970s.

Loose stocks of small arms and other weapons also help fuel civil wars in Africa and elsewhere and provide ammunition for those who attack peacekeepers and aid workers. The Lugar-Obama measure would also seek to get rid of artillery shells like those used in the improvised roadside bombs that have proved so deadly to U.S. forces in Iraq.

Some foreign governments have already sought U.S. help in eliminating their stocks of weapons and ammunition. But low budgets and insufficient leadership have hampered destruction. Our legislation would require the administration to develop a response commensurate with the threat, consolidating scattered programs at the State Department into a single Office of Conventional Weapons Threat Reduction. It also calls for a fivefold increase in spending in this area, to $25 million — a relatively modest sum that would offer large benefits to U.S. security.

The other part of the legislation would strengthen the ability of America's friends and allies to detect and intercept illegal shipments of weapons of mass destruction or material that could be used in a nuclear, chemical or biological weapon. Stopping weapons of mass destruction in transit is an important complement to our first line of defense, the Nunn-Lugar program, which aims to eliminate weapons of mass destruction at their source.

We cannot do this alone. We need the vigilance of like-minded nations, and the existing Proliferation Security Initiative can enlist their help. But while the Proliferation Security Initiative has been successful in creating cooperative arrangements, many of our partners lack the capability to detect hidden weapons and interdict shipments. Our bill would address that gap.

The legislation would create an office at the State Department to support detection and intervention. It would set aside $110 million to start the program and proposes an innovative use of assistance to other nations: The president would ensure that countries receiving foreign military financing to purchase U.S. equipment use 25 percent of the funds on interdicting weapons of mass destruction, a potent but flexible tool for detecting and interdicting weapons of mass destruction.

A thorough, multifaceted nonproliferation strategy is essential to fully defend the American people. The Nunn-Lugar program has provided a solid foundation, valuable experience and measurable results. With the Lugar-Obama legislation, we could take the next critical step forward to reshape, refocus and reinvigorate our country's nonproliferation mission.

Source: Washington Post

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Ukraine Fears Bird Flu May Spread From Crimea

KIEV, Ukraine -- Avian flu which has been killing birds in the Crimean peninsula could spread to other parts of Ukraine, a minister said on Tuesday, as parliament backed special measures to control the disease.

Health workers spray disinfectant onto a patch of sand at the border of a quarantine zone near the Crimean village of Emelyanovka in the south of Ukraine

"Danger exists for other regions," Emergency Minister Viktor Baloga told parliament during a debate on endorsing a state of emergency imposed by President Viktor Yushchenko in five villages in Crimea. More than 2,500 birds died at the weekend.

"It is better to adopt tougher measures now rather than tomorrow. Otherwise, we will have problems throughout Ukraine."

Ukraine reported its first outbreak of the disease at the weekend. But residents said signs of the illness had been detected since September, with no measures taken.

Outbreaks of a deadly form of avian flu have been detected in birds in Romania on Ukraine's western border and in Russia to the east.

Baloga said Emergency Ministry troops would complete a cull of domestic poultry in affected areas by Wednesday night. The ministry said its staff had seized more than 22,000 birds in house-to-house checks of villages sealed off by exclusion zones.

Authorities have sent samples of bird tissue to specialized laboratories in Britain and elsewhere to determine whether the strain is the deadly H5N1 detected in Romania and Russia.

H5N1 is endemic in poultry in parts of Asia where it has killed almost 70 people. Experts fear the virus could mutate into a form which can be transmitted easily from person to person, risking a pandemic in which millions could die.

EMERGENCY RULE

As required by the constitution, parliament approved the president's decree on emergency rule, invoked for the first time since Ukraine split from the Soviet Union 14 years ago.

But a motion approved by 291 members in the 450-seat house also demanded the president submit details of the measures, how long they would remain in place and to what extent they would affect Ukrainians' rights.

Some opposition members had argued that Yushchenko's weekend decree, which set no time limit on the measures, could disrupt a March 2006 parliamentary election as campaigning gets under way.

The president toured affected areas on Monday and expressed frustration at lack of action. He ordered the dismissal of Ukraine's chief veterinarian.

Officials from the emergency, agriculture and health ministries declared the situation under control, with no new cases. But they said the state of emergency was vital to contain the disease.

While workers incinerated domestic fowl in napalm left over from the Soviet era, Interior Ministry troops stood guard at checkpoints 3 km (two miles) outside the villages, restricting movement and barring any transport of meat.

Residents received compensation for each head of confiscated fowl, payments starting at $3 for a chicken and ranging to about $18 for a turkey. Doctors proceeded with mass vaccinations for residents against seasonal flu.

Ukraine's Health Ministry urged consumers not to panic and said it was safe to eat poultry produced by industrial farms.

Source: Reuters

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Is Change Coming Too Slowly to Ukraine?

KIEV, Ukraine -- A year ago, we could only dream of this kind of EU-Ukraine summit. Eight previous summits were held in entirely different political conditions and in an entirely different atmosphere.

British Prime Minister Tony Blair, center right, representing the European Union, and President of Ukraine Viktor Yushchenko, center left, leave an EU-Ukraine summit in Kiev, Ukraine

Looking at a resentful and uneasy Kuchma, we could hardly imagine a president of Ukraine who felt free and natural in the company of European leaders and even enthusiastically spoke to them about Ukrainian traditions. We could hardly think that important European guests would ask to include a visit to the Maidan into the program. We never heard so many praises and optimistic assessments from the representatives of the European Union.

Then why aren’t we extremely happy now, when all of the above have come true? Of course, nobody expected that the rush attack at Brussels would be successful; however we hoped that the relations between Ukraine and the EU would have progressed further than they have.

It certainly wouldn’t be right to insist that we haven’t made any progress at all. Much has been done during this year. The overall atmosphere of our relations has changed. Even former pessimists, who are well aware of the Brussels bureaucratic machine and who insisted that it would never turn toward Ukraine, show optimism. Now they agree with the first deputy to Foreign Minister Anton Buteiko, who told journalists that many issues, which used to be solved through lengthy diplomatic notes over a long time period, are now settled in several minutes through phone calls to Brussels.

It is pleasing that the European Commission has finally decided that Ukraine has fulfilled all the requirements and met the technical criteria for the granting of Market Economy Status (MES). MES will be awarded immediately after the completion of all formalities in a month or so.

Three important documents have been signed during the EU-Ukraine summit. A Memorandum of Understanding on co-operation in the field of energy was signed by Viktor Yushchenko and British Prime Minister Tony Blair, whose country currently holds the rotating presidency in the EU. This document was signed within the framework of a high-level dialogue in the energy field and was positively assessed by experts.

Moreover, experts believe that the integration of the energy infrastructure is a precondition for further economic integration of Ukraine into the EU. They also expect that the transition of Ukraine-EU relations in the energy sphere to a higher stage could slacken the tense oil and gas dialogue between Ukraine and Russia.

The agreement between Ukraine and the EU on certain aspects of air conveyance was signed by Ukrainian Prime Minister Yuriy Yekhanurov and the president of the European Commission, Jose Manuel Durao Barroso. This document acknowledges the existence of a single market of air conveyance between Ukraine and the EU countries and is viewed as a first step toward cooperation in the aviation field.

Let us remind you that, in September, the European Commission proposed to negotiate a comprehensive agreement in the civil aviation field for gradual integration of Ukrainian aviation into the European structures. It is very likely that the EC will receive a mandate for this negotiation early next year.

Yekhanurov and Barroso have also signed the agreement on cooperation in civil satellite navigation between the European community, its member states, and Ukraine. The system, called Galileo, will be launched in 2008. According to the European experts, in a few years the size of this market will exceed 230 billion euro and will enclose all social spheres.

According to Ukrainian experts, signing of this agreement creates conditions for Ukraine’s direct involvement in the joint Galileo project, its involvement in the implementation of the EU’s first space program, and its membership in the European space agency.

However, this is not the end of the list of Ukraine’s results in the negotiations. Let us remind you that the agreement on the trade of steel products for 2005-2006 was signed early this year, according to which Ukraine’s quota for 2006 will make up 1004.5 thousand tons.

An agreement on trade of textile products was also signed, ensuring a quota-free regime for Ukrainian textile exporters. The European investment bank and Ukraine signed an agreement enabling Ukraine to receive about 250 million euro in loans. And we could continue with this list.

The beginning of negotiations on easing the visa regime has become an important milestone in EU-Ukraine relations. The first round of negotiations was held late in November. Although the Europeans are cautious as usual and try to avoid specific dates, Ukrainian Foreign Minister Boris Tarasyuk made an assumption last week that the European Union could sign the agreement on easing the visa regime for Ukrainians as early as the first half of the next year.

Europeans appreciate the cooperation of Ukraine and EU in the fields of external and security policies, in particular on the issues of regional stability and crisis management. An EU mission was ceremonially set up in Odessa on the eve of the summit to provide assistance at the Ukrainian-Moldavian border.

It is staffed with 69 employees from 13 EU countries and 50 local specialists. The goal of the mission is to facilitate the improvement of customs and frontier services. Special attention will be given to the border guard and customs control at the Transdnister section of the borderline.

Unlike last year’s summit, when the Europeans were hardly talked into releasing a joint press release, this year’s summit produced a lengthy joint statement with which both parities are satisfied. In particular, it emphasizes “a significant progress” in the implementation of the EU-Ukraine action plan, welcomes the “strong commitment of Ukraine to general values of democracy, rule of law, and respect for human rights,” as well as recognizes progress in economic reforms.

It is significant that the EU leaders, as before, hope and are “confident” that the future parliamentary elections “will be carried out in compliance with the international standards.”

In this statement, the EU leaders confirmed their intention to begin consultations on the new intensified agreement between Ukraine and the EU intended to substitute for the current agreement on partnership and cooperation as soon as the political priorities of the Action Plan are met.

The Europeans confirm their readiness for an early start to negotiation with Ukraine concerning a Free Trade Area (FTA) once Ukraine has joined the WTO. The document noted “good progress made on the feasibility study on a Free Trade Area between the EU and Ukraine.”

In conclusion, Ukraine reconfirmed its strategic goal of compete integration into the European Union, whereas the EU leaders “welcome[d] the European choice of Ukraine,” emphasizing that its adherence to democracy and reforms opens new prospect for a significant increase of the level and quality of EU-Ukraine relationship.

So What’s the Problem?

One can see Ukraine’s achievements in the European direction. So why aren’t we satisfied with that? Why do local experts make rather reserved assessments? Stupid blunders, serious faults, and shortcomings are the major reason for dissatisfaction. It is great that our president easily finds common language with European leaders, yet is it worth spending so much precious time away from negotiations for tales about embroidery?

We can be proud of our aviation and space technologies and be happy since our country has a real chance of getting to the European high-tech markets. But aren’t we ashamed of the simultaneous translation equipment in this country’s chief office---due to which failures cost precious minutes of a crucial summit?

Perhaps we should be happy about the market economy status. Yet if it was “the main, what was achieved at the summit” as our president has put it, we are not happy but sad. First, the fact that the Europeans have reached a positive conclusion for Ukraine was known long before the summit, and Barroso officially announced the EC decision a day before the summit.

Second, if the Ukrainian government were indeed obsessed with the Euro-integration idea and made a little more effort, Ukraine would have been granted the long-awaited status much earlier since the fundament work was completed under Yanukovych.

Third, this event is not significant enough to mark the “new stage of the relationship,” as even the Europeans have repeatedly stressed that market economy status is a purely technical issue. But since the old Ukrainian government and now the new one would like to lift it to the level of an ultimate goal (maybe because it was much more difficult to receive the other EU bonuses), the Europeans decided to play into their hands and presented this technical status as a big prize.

Thus it is not worth rejoicing over, since the market economy status is important chiefly to Ukrainian exporters to the European market (which are unfortunately very few in Ukraine), because it will mitigate the conditions of possible anti-dumping investigations.

The beginning of the visa dialogue with the EU may make the life and work of a wide circle of Ukrainians much easier in the future. Yet we don’t feel much joy over the thought that soon we will save time, nerves, and money while receiving Schengen visas, remembering that negotiations with Ukraine---that, according to Barroso, is a strong partner of Europe---are only at their start.

Meanwhile Russia, which refused to participate in the European neighborhood policy and which has much more illegal immigrants than Ukraine does (as well as long and almost transparent borders with several Asian states), has already prepared and initialed the agreement on the simplification of visa regime with Europe.

Europe’s high assessment of the implementation of the Action Plan was pleasantly surprising. Ukrainian experts were much more skeptical about it. At the roundtable discussion organized by the Razumkov Center in mid-autumn, Ukrainian experts assessed the implementation of the Action Plan lower than four points on a five-point scale.

The “political dialogue and reform section” was given the highest grade of 3.5 points, while “economic and social reforms and development” were given the lowest grade. The Europeans also assessed our progress in the political sphere higher then in that of economics. Thus, according to our source, they gave us “very good” for the preparation for elections, but in the sphere of business development and improvement of the investment climate they noted only a “limited progress.’

If Ukraine manages to keep up with this assessment of the Action Plan implementation until next summer, it can expect that the political priorities of the document will be recognized as implemented and can begin negotiations with the EU on a new reinforced agreement, which can be the document of the association with the EU. Moreover, having implemented the political priorities of the Action Plan, Ukraine will near the fulfillment of the first Copenhagen criterion. This will be sufficient grounds for filing an official application for EU membership.

Yet, all of the above could once again prove to be in our dreams since the European Union is scared of this and is still unable to give a clear definition of the “reinforced agreement.” A poll conducted by TNS-Sofres at the request of the international organization Yalta European Strategy in six EU countries, whose residents account for 75 percent of the total EU population, proved that more than half of the polled support the idea of Ukraine’s EU membership. However, the EU political elite still don’t see Ukraine in a “common European house.”

And finally, our biggest disappointment, something that could have been a major event of the year, is the might-have-been WTO accession. If Ukraine were accepted to the WTO this month, it could have started negotiations with the EU for a free trade area. Unlike a token market economy status, this event could have been a milestone event and the beginning of a new stage in EU-Ukraine relationship.

Of course, the Verkhovna Rada could be and should be blamed for that since it failed to adopt the laws essential for the WTO admission. But parliament bears only part of the guilt for this. The primary responsibility lies with the top leadership of Ukraine who failed (or did not want to) make WTO accession a real priory and mobilize all the resources for the attainment of this goal.

European integration is yet to become a major idea and direction for Ukrainian leadership. Now, the president, who named EU membership as a strategic goal of Ukraine at the EU summit, two days before told the nation about the need to give up part of its sovereignty within the framework of the Single Economic Space.

The Cabinet of Ministers members venture to ignore the meetings of the governmental committee on the European and Euro-Atlantic integration; ministries and departments failed to create Euro-integration divisions, the position of the vice prime minister for the European integration was liquidated, while the idea of creating special Euro-integration ministry seems to die another time.

Experts pinned certain hopes concerning the coordination of Euro-integration policy on the reanimation of the State Council for the European and Euro-Atlantic integration headed by the president. However, last the president liquidated this institution. Passing the coordinating functions to the Foreign Affairs Ministry does not solve the problem since the ministry and its heads lack the authority.

After all, it was repeatedly emphasized that European integration is mostly a system of internal political measures, rather then external goals and objectives. As before, there is not enough money for Euro integration. As before, lack of qualified specialists in this sphere is at issue.

In general, this list of the old problems could be extremely long. It could make anyone pessimistic. So, we’d better listen to Tony Blair, who encouraged the Ukrainians with the following words: “Change is a difficult process; it is always difficult to respond to the rising hopes. But I am sure that Ukraine does not doubt that there is a huge difference between what Ukraine was last year and what it is now.” Indeed, if we look back, we will see that we have come a long way, but if we look forward it is obvious that we are moving toward our goal too slowly.

Source: Zerkalo Nedeli

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