Record For Operation Christmas Child

WARWICK, England -- Children who live in poverty will celebrate Christmas with a gift this year thanks to the generosity of people in Warwickshire.


Sharon Hedges
Residents have collected more shoeboxes than ever before for the Operation Christmas Child appeal.

People from Warwick, Leamington and other towns in the county donated 21,000 boxes filled with items such as hats, scarfs and crayons, beating last year's total.

The UK has set a new record by donating 1.22 million shoeboxes to this year's appeal, with gifts being sent to children in eastern Europe and Africa.

The presents collected in Warwickshire will be taken to Ukraine on Thursday, where the convoy will stop in the cities of Simferopol and Odessa, delivering gifts to underprivileged children.

The area co-ordinator for Operation Christmas Child and mother of three Sharon Hedges is pleased with the response to the appeal.

She said: "It's great. We have more this year but each box is individual and makes a child very happy."

On January 4, Mrs Hedges will be joining 12 people from throughout the UK on a trip to Ukraine to deliver the gifts, which she thinks will be challenging but rewarding.

She said: "The children don't tend to have a lot of expression or emotion on their faces and when they open the boxes you get a big smile."

Schools, churches and businesses have been busy preparing the packages, with some people knitting scarves throughout the year as extras for the children.

About 60 volunteers joined together to process 9,400 boxes in Leamington, which were then stored at a warehouse donated by the Royal Aggricultural Society at Stoneleigh Park.

The project, run by the Samaritan's Purse, brings happiness to children who have nothing. Last year's trip to Ukraine visited a group of teenage boys who live on the streets of Odessa and sleep in the sewers in the winter to keep warm.

Other help can also follow as a result of the appeal, for example revisiting and refurbishing orphanages or fitting double glazing to help children throughout the year.

Source: The Courier

Kiev Parking Lot 'Swallows' Three Cars

KIEV, Ukraine -- A massive sink hole in the Ukrainian capital Kiev swallowed three automobiles, Sehodnia newspaper reported on Friday.


The four-metre-wide pit opened up at around 4am in a parking lot on Volkova street, in a working class neighbourhood.

A Zhiguli four-door, a Volkswagen minibus, and a BMW sedan sank to depth of two metres below the pavement, and were covered by water.

"I got up in the morning and looked out at the parking lot for my car, and all I saw was its antenna," said the Zhiguli's owner, who identified himself as Vitaly.

A crane hoisted the vehicles out of the hole later in the day.

City inspectors arriving on the scene blamed the pavement failure on a broken water main.

All three vehicle owners told reporters they intended to sue the Kiev city water administration damages received by their vehicles, as a result of poor maintenance of the city water supply system.

A statement made public by the Kiev city water utility, Kievvodakanal, blamed the incident on the parking lot operator, who according to Kievvodakanal had broken a city code by running a parking lot directly over a water main.

"We issued no permit to operate a parking lot on ground directly over the water main," a Kievvodakanal official said. "The drivers can try to sue the parking lot owner, but not us."

Privately-run parking lots on questionable territory are ubiquitous in Kiev, which has seen a massive influx of automobiles in recent years, but almost no construction of parking lots.

Hapless drivers searching for a spot often park in places usually forbidden to autos elsewhere in Europe - including sidewalks, traffic circles, and "private" parking lots run by entrepreneurs controlling a bit of city pavement.

Source: DPA

A Night In Hollywood, A Day In Ukraine

LOS ANGELES, CA -- At the Palm Springs International Film Festival next week Paul Mazursky, a past master of the American film industry, will offer the American premiere of his first documentary, “Yippee,” about an annual Rosh Hashanah convocation of 25,000 Hasidic Jews in the Ukrainian town of Uman.


Paul Mazursky, second from right, in his documentary, “Yippee,” which explores an annual Rosh Hashanah convocation in Uman, Ukraine
The somewhat unlikely film does not yet have a distributor. But Mr. Mazursky — four times nominated for Oscars in his career as a writer and director, and the subject of a planned tribute at Lincoln Center next spring — is happy to have had the work.

“I sort of have a migraine headache even thinking about all my scripts that haven’t been made,” the 76-year-old Mr. Mazursky said during a recent interview that began in his Beverly Hills office and continued at a nearby Chinese restaurant.

Speaking openly of his frustration at not having made a feature film since “Faithful” in 1996, he added, “It could be ageism.”

Robert Altman, who died in November at 81, was one of the few directors who kept working up to the end of their lives. His last film, “A Prairie Home Companion,” was released in June. Other old masters — including Billy Wilder, Joseph L. Mankiewicz and David Lean — spent their last years scrambling unsuccessfully for financing.

But Mr. Mazursky, whose best-known work includes “Bob & Carol & Ted & Alice” (1969), “Harry and Tonto” (1974), “An Unmarried Woman” (1978), “Down and Out in Beverly Hills” (1986) and “Enemies: A Love Story” (1989), chose to stay in action in one way or another, even while laboring on half a dozen scripts that no studio would finance.

In recent years he has directed two movies for cable television and acted in television series like “Once and Again” and “Curb Your Enthusiasm.” That he should go as far afield as Ukraine in search of his first feature in a decade resulted from a trip to the optician.

Mr. Mazursky said he first heard about the gathering in Uman when he went to have a pair of eyeglasses made by David Miretsky. “I told him his glasses would not be ready right away because I was going on a pilgrimage,” Mr. Miretsky recalled. “He said, ‘Jews don’t go on pilgrimages.’ I told him, ‘Well, we do.’ He was skeptical at first. Jews are skeptical by nature.”

But Mr. Mazursky was itching to make a movie, and Hollywood was not cooperating. He said, “On the spur of the moment I said, ‘I’m going to Uman.’ ”

He put up about $40,000 for the movie himself. The experience was sometimes difficult for a director in his 70s. Mr. Mazursky had broken his arm before traveling to Ukraine, and filmmaking conditions were a far cry from the comforts of a Hollywood studio. Mr. Mazursky and his small crew shared a cramped apartment. And they observed traces of the anti-Semitism that had caused many Jews, including Mr. Mazursky’s grandfather, to flee Ukraine a century earlier.

“I filmed some encounters with the Ukrainians,” Mr. Mazursky said. “They’re very open about the fact that they think Jews are strange people. But they make a lot of money from the visitors, so they’re very happy to have them every Rosh Hashanah.”

Mr. Mazursky appears in the film as a genial tour guide, and he shares the screen with a diverse array of pilgrims, including Mr. Miretsky; a Hasidic rock ’n’ roll musician; a comedian known as the Jay Leno of Tel Aviv; and a neurosurgeon who offers a concise history of Jews in Ukraine.

“One of the things I learned from the movie is tolerance,” Mr. Mazursky said. “I see Hasidim walking down the streets here in Los Angeles, with outfits from the 17th or 18th century, and I think, ‘Aren’t they hot?’ But when I spent time with them, I learned they’re all individuals. They surprised me.”

Bill Megalos, the director of photography on the film, said: “I think hanging out with people like David and watching their belief moved Paul. I guess it would have been a good story if he had had a religious conversion while making the movie. But he told me that wasn’t going to happen, and it didn’t.”

Mr. Mazursky said, “I’ve always felt very Jewish but very ambivalent about being Jewish. I’m an atheist. Yet wherever I travel I always find a synagogue. I’ve been to synagogues in Spain, Morocco, China, Sweden, Germany, Cuba, Brazil. When I was making this film, I felt like a reporter who goes to report on something but finds that he’s still emotionally involved.”

Mr. Miretsky offered a different perspective: “In my personal opinion Paul is an older gentleman reaching his ripe age, and he wanted to find his roots. Uman is three hours from Kiev, where his grandfather grew up. I think the film affected him in a profound way, more than even he realizes.”

In his early films Mr. Mazursky studiously avoided Jewish subject matter, but Judaism began to come to the forefront in his 1976 autobiographical film “Next Stop, Greenwich Village,” in which Shelley Winters played a woman modeled on his own mother. A decade later he and Roger L. Simon adapted Isaac Bashevis Singer’s “Enemies: A Love Story.”

“I went to meet Singer in Miami,” Mr. Mazursky recalled. “He was 81 or 82. His wife took me out to the pool and said, ‘Isaac, this is Paul Mazursky, the boy who’s going to make a movie from “Enemies.” ’ He looks up with very powerful eyes, takes my hand very firmly and says, ‘I didn’t like what Barbra Streisand did with ‘Yentl.’ ”

It is the humorous side of Judaism that Mr. Mazursky embraces most enthusiastically. That antic spirit courses through “Yippee.”

If Mr. Mazursky has faced his career disappointments with wry humor, some who admire his work would nonetheless like to see more of it.

“The studios feel that to talk to the core audience, you have to be the same age as that audience,” said Jeff Kanew, the editor and co-producer of “Yippee,” who also directed “Revenge of the Nerds” and other films, and who acknowledges having experienced a similar shut-down as he aged. “It’s frustrating for me as an admirer of Paul’s to see the difficulties he’s faced. I’ve read his scripts, and I know that several of them could make viable movies.”

Mr. Mazursky, for his part, refused to surrender to bitterness. “You can’t have any self-pity,” he said. “When you do succeed in Hollywood, you make a great deal of money, more than anyone is worth. And I had this fabulous period from 1969 to about 1990, where I got to do whatever I wanted. I got to make a modern-day version of ‘The Tempest.’ So I have nothing to complain about.”

Source: The New York Times

Gas War Looms As Belarus, Russia Talks Falter

MOSCOW, Russia -- Belarus and Russia are set to renew last-ditch talks on resolving a gas price dispute that risks disrupting energy supplies to the European Union from New Year's day.


Intense negotiations in Moscow ended Friday without result, amid mutual accusations of blackmail.

Russia's gas monopoly Gazprom says it will cut off Belarus' natural gas supply at 0700 GMT Monday if the ex-Soviet republic refuses to accept a steep price increase, prompting fears that 2007 will start in freezing conditions for many of Belarus' 10 million people.

The government in Minsk warns that in retaliation it could refuse transit of Russian gas across its territory to western Europe, potentially causing shortfalls in EU members such as Germany, Lithuania and Poland.

Gazprom spokesman Sergei Kupriyanov said meetings with Belarussian energy officials were to restart Saturday. "Of course we'd like to reach a deal," he told AFP.

But the talks ended in bad spirit late Friday after Belarus' authoritarian President Alexander Lukashenko accused Gazprom of blackmail.

"If this blackmail continues, we will take shelter in bunkers, but we will not give in," he said, barely 60 hours ahead of the Monday deadline.

Gazprom wants to end Soviet-era subsidies to Belarus, as well as to a string of other ex-Soviet republics, and argues that more than doubling the current price for gas paid by Belarus would simply bring fees in line with market export rates.

Lukashenko repeated the argument that Belarus, which is joined to Russia in a loose economic union, should pay no more than a normal Russian region.

"We want the prices to be the same for us and for them. Whether it is 200, 300 or 500 dollars per 1,000 cubic metres, the conditions should be the same," he said, arguing that a gas price rise would make Belarussian exports to Russia uneconomic.

Currently, Belarus pays 46.68 dollars per 1,000 cubic meters of gas.

Gazprom originally demanded an increase to 200 dollars, which is closer to western European prices, unless Belarus agreed to sell 50 percent of its domestic pipeline operator Beltransgaz.

Gazprom is now offering a contract charging 105 dollars per 1,000 cubic meters -- 75 dollars per 1,000 cubic meters in cash payments, plus the equivalent of another 30 dollars in shares of Beltransgaz. Under the deal, Gazprom would become joint owner of Beltransgaz.

Belarus says it will hit back by blocking transit of Russian gas to Europe, arguing that without a contract for its own supplies, there can be no contract on transit. About five percent of gas consumed in the EU is imported via Belarus.

Gazprom vice-president Alexander Medvedev was quoted Friday in the French newspaper Le Figaro accusing Minsk of "grotesque blackmail."

The conflict echoes last years's winter price war between Russia and Ukraine over the supply and cost of gas which led to shortages in western Europe.

However, only 20 percent of Russia's gas exports transit via Belarus, compared to 80 percent through Ukraine. Demand was also higher 12 months ago when Europe was in the grip of one of the coldest winters on record, compared to the unusually mild season so far this year.

Western governments gave strong diplomatic backing to Ukraine's pro-Western president, Viktor Yushchenko, but Lukashenko is a political pariah in Europe and the United States.

The EU has limited itself to calling on the two parties to reach a deal that does not threaten European supplies, while the authorities in France and Germany say they are not worried by the prospect of shortages.

Ukraine announced on Thursday its readiness to increase the transit of Russian gas through its territory in case of possible disruptions on the Belarus route.

Source: AFP

Analysts Dub Gov’t Bond Deals As Non-Transparent

KIEV, Ukraine -- For the fifth year in a row, the government has carried out foreign bond issues to cover shortfalls in budget revenues, but some analysts and politicians question the transparency of the latest issues under Prime Minister Viktor Yanukovych.


Yanukovych’s government has increased foreign bond issues dramatically to fill budget holes in the light of pale privatization receipts.

On Dec. 15, the Cabinet approved a four-year issue for 35.1 billion Japanese yen ($297 million) with an interest rate of 3.2 percent. This was the third foreign bond issue by the government this year – all three being conducted since Yanukovych was appointed premier for the second time last summer.

December and September witnessed two tranches of a 12-year bond for 768 million Swiss Francs ($638 million) with an annual interest rate of 3.5 percent.

While in November, the government issued a 10-year $1 billion bond yielding a 6.58 percent annual interest rate.

Oleksandr Zholud, an economist for the International Centre for Policy Studies, said the government’s issuing of bonds is not unusual, but the way they were issued is.

“Issuing external bonds is not anything extraordinary. The problem is how they do it,” Zholud told the Post.

Zholud said two of the government’s bond emissions, those in Japanese yen and Swiss Francs, were conducted non-transparently. The government announced the issues just three days before they took place, he added.

“It is possible that these bonds were placed even before the issues were announced,” Zholud said.

According to Zholud, Ukraine’s National Bank does not even have enough Swiss Francs in its accounts to make payments on the bonds, so it will have to buy them at an obscure exchange rate.

“Switzerland is known for its banking secrecy. So it is possible that these bonds are being sold to Ukrainians who would prefer to remain anonymous,” he said.

Moreover, considering expected fluctuations in the yen, the interest rate on the last bond issue was too high, Zholud added.

“The rate could have been lower than 3 percent, even without a discount,” he said.

Yanukovych served as prime minister under former President Leonid Kuchma from late 2002 to 2004, before being appointed a second time by the parliament under current President Viktor Yushchenko. In 2003 and 2004, government borrowing through foreign bond issues increased dramatically from around $350 million to well over $1 billion during the following two years. This year, Ukraine raised about $2 billion.

Former Ukrainian Finance Minister Viktor Pynzenyk, a member of the Orange coalition, believes that the current government doesn’t need to borrow at all, as there is enough money in the treasury from taxes and other revenues.

“The government is consciously putting the country in debt,” Pynzenyk said.

Under Pynzenyk, the government issued only $550 million in foreign bonds. However, 2005 was also the year that Ukraine privatized the Kryvorizhstal steel mill for a record $4.8 billion.

This year’s privatization receipts have not met expectations, earning less than $20 million out of some $400 million planned, according to the State Property Fund.

Yuriy Oleksiyenko, an equity analyst at Millennium Capital, a Kyiv-based financial services provider, blamed the government’s poor privatization record for the increased foreign borrowing.

“It’s a way to finance current state programs by transferring responsibility to the next government,” he said, as most bond issues come due after 2011.

Oleksiyenko believes that the Orange government in which Pynzenyk worked was working to reduce Ukraine’s external debt and compensate the budget through privatization.

Yanukovych’s government has been accused of holding up planned state privatizations.
“We can see it in such examples as the canceled privatization of a 76 percent stake in Luhanskteplovoz and further hold-up in the sale of [state fixed-line monopoly] Ukrtelecom,” Oleksiyenko added.

Source: Kyiv Post

New Skyscraper Planned For Capital

KIEV, Ukraine -- A Russian real estate developer has launched construction of Kyiv’s next tallest building, a 44-floor office center flanked by a luxury residential annex, which will cost an estimated $300 million.


Planned Mirax Plaza
Mirax Construction, the flagship company of Mirax Group, which traces its roots to St. Petersburg, broke ground in the capital’s Podil district Dec. 22 and plans to complete all 170 meters of the office center, as part of its Mirax-Plaza by the end of 2009.

Mirax-Plaza will include a business center, a residential complex of 381 apartments, underground and ground-level parking, a recreation zone and a park. The residential annex will feature 24-hour reception service, while the sky-scraping business center will be topped off with a helicopter pad and a restaurant with a panoramic view.

Mirax Group didn’t disclose at what price it would sell space in the new center, saying only that it would return its investment five years after the real estate is commissioned.

With demand for office and living space continuing to increase in the Ukrainian capital, market specialists say the smart thing to do is build up.

“The price of land in Kyiv is growing with each day. The construction of skyscrapers, which take up less land but offer more living and working space, is profitable because of the lower price per square meter,” according to Olena Nehuliayeva, the head of the commercial real-estate department of Planeta-Obolon real estate agency.

Nehuliayeva said class-A space is particularly expensive and thus in high demand, so Mirax stands to make a nice profit building high in the relatively less expensive Podil district.

Russian companies have more experience in building skyscrapers, she added, which made it easier for Mirax to enter the Ukrainian market.

Mirax Construction, which describes itself as one of the Russian capital’s leading builders and developers, claims to have put up over 2 million square meters of business and premium class real estate.

In addition to five edifices that it has erected in Moscow, Mirax is currently building what it has billed as the tallest skyscraper in Europe: the Federation, with a planned height of 354 meters.

Having only registered its Ukrainian subsidiary, Mirax-Invest, last April, the Russian company is launching its first Ukrainian project on a three-hectare plot of land in Podil. Mirax-Plaza will total over 204 square meters of space.

Andriy Kharyv, director of Mirax’s Ukrainian subsidiary, said the time and place for the new building project were right.

“At the moment, there is a serious shortage of Class-A office space in Kyiv,” he said.

Kharyv said his company is also considering other land plots in Kyiv for the construction of residential and office space.

Mirax’s partner in Kyiv is a company called El-Invest, which will act as the project’s general contractor and co-developer, according to Kharyv.

Kyiv’s tallest skyscraper was, until recently, the 28-storey Transport and Communications Ministry, a glass tower on Peremohy Prospekt. A 33-floor business center under construction on Mechnykova Street is currently Kyiv’s loftiest building.

Heorhiy Dukhovichnyi, a vice president of the National Architects’ Union of Ukraine, has his doubts about how high Mirax will be able to build.

According to him, the tallest possible building that Podil district can accommodate is 12-13 floors due to geological conditions. In addition, Dukhovichnyi said, the skyscraper will look strange against Podil’s current low-lying skyline.

Mirax’s Kharyv dismissed such concerns saying “the building site is complicated, but the soil is suitable for the building of such a complicated structure.”

“The price of land in Kyiv is growing with each day. The construction of skyscrapers, which take up less land but offer more living and working space, is profitable because of the lower price per square meter,” according to Olena Nehuliayeva, the head of the commercial real estate department of Planeta-Obolon real estate agency.

Nehuliayeva said Class-A space is particularly expensive and thus in high demand, so Mirax stands to make a nice profit building high in the relatively less expensive Podil district.

Russian companies have more experience in building skyscrapers, she added, which made it easier for Mirax to enter the Ukrainian market.

Mirax Construction, which describes itself as one of the Russian capital’s leading builders and developers, claims to have put up over 2 million square meters of business and premium class real estate.

In addition to five edifices that it has erected in Moscow, Mirax is currently building what it has billed as the tallest skyscraper in Europe: the Federation, with a planned height of 354 meters.

Having only registered its Ukrainian subsidiary, Mirax-Invest, last April, the Russian company is launching its first Ukrainian project on a three-hectare plot of land in Podil. Mirax-Plaza will total over 204 square meters of space.

Andriy Kharyv, director of Mirax’s Ukrainian subsidiary, said the time and place for the new building project were right.

“At the moment, there is a serious shortage of Class-A office space in Kyiv,” he said.

Kharyv said his company is also considering other land plots in Kyiv for the construction of residential and office space. Mirax’s partner in Kyiv is a company called El-Invest, which will act as the project’s general contractor and co-developer, according to Kharyv.

Kyiv’s tallest skyscraper was, until recently, the 28-storey Transport and Communications Ministry, a glass tower on Peremohy Prospekt. A 33-floor business center still under construction on Mechnykova Street is currently Kyiv’s loftiest building.

Heorhiy Dukhovichniy, a vice president of the National Architects’ Union of Ukraine, has his doubts about how high Mirax will be able to build. According to him, the tallest possible building that Podil district can accommodate is 12-13 floors due to geological conditions. In addition, Dukhovichniy said, the skyscraper will look strange against Podil’s current low-lying skyline.

Mirax’s Kharyv dismissed such concerns, saying “the building site is complicated, but the soil is suitable for the building of such a complicated structure.”

Source: Kyiv Post

Ukraine’s President, Parliament At Odds Over Government

KIEV, Ukraine -- Ukraine’s President Viktor Yushchenko vetoed for the eighth time the law on the national government passed by parliament and offered to set up a conciliatory commission to resolve the dispute.


Viktor Yanukovych with parliament in the background
First deputy head of the presidential secretariat Arseny Yatsenyuk said 86 presidential amendments had not been taken into consideration and blamed the Supreme Rada for taking over two many presidential powers.

“There are key differences in the ideology of the variants of the president and the Supreme Rada. The law should bring stability to state authority and service in general.

A primitive re-writing of constitutional norms and appropriating powers is not an adequate approach,” he told a briefing.

The law specified, in particular, that if the president fails to nominate candidates for the posts of the defense and foreign ministers in a fixed time, the ruling coalition would do the job.

That gives parliament a possibility to appoint a new foreign minister after it sacked Boris Tarasyuk on December 1 upon a request of Prime Minister Viktor Yanukovich.

However on December 5 the president ordered Tarasyuk to stay.

Since then Tarasyuk has been twice barred from government meetings, and did not come to the third one himself.

The Justice ministry said the president abused his powers by keeping Tarasyuk in office. It said Supreme Rada enjoyed the right to dismiss the foreign minister.

However, the head of the presidential secretariat Viktor Baloga snubbed the prime minister and parliament again by saying Tarasyuk would remain the foreign minister.

“Mr. Tarasyuk is so staunchly fulfilling the instructions of the president of Ukraine that I fear Viktor Fedorovich (Yanukovich) may get tired of waiting for his resignation,” he told a briefing commenting on Yanukovich’s statement that Tarasyuk was ready to resign shortly.

Source: Itar-Tass

Yushchenko Vetoes Privatization List

KIEV, Ukraine -- Ukraine's President Viktor Yushchenko on Thursday vetoed a parliament-approved list of businesses to be privatized next year, a move reflecting the growing tension between the president and the governing coalition.


Viktor Yushchenko
Lawmakers earlier this month approved a list of more than 1,000 companies to be auctioned off, giving a green light to the long-awaited privatization of the country's largest telecommunications company, Ukrtelecom.

However, Yushchenko said in a statement Thursday that it was not up to lawmakers, but to the government, to select companies to be privatized.

He said that according to Ukrainian law, parliament could identify enterprises that are not subject to privatization, but could not decide which companies are up for sale.

Yushchenko shares power with Prime Minister Viktor Yanukovych, the pro-Russian politician who won this year's parliamentary election and formed the governing coalition and the Cabinet.

The two have frequently clashed over foreign policy, Cabinet appointments and other government business.

Source: Business Week

Ukraine – The View From The Kremlin

KIEV, Ukraine -- Vladimir Putin’s Orange nightmare is over. The Russian leader can now sleep soundly. Premier Viktor Yanukovych and the Party of Regions are clearly in charge in Ukraine and, in their own words, are cleaning house and restoring order.


Viktor Yanukovych (L) and his mentor Vladimir Putin
Putin’s Dec. 22 visit to Kyiv to meet with Ukrainian President Viktor Yushchenko was an opportunity to observe firsthand the situation on the ground, and to quietly revel in the defeat of the Orange Revolution and its once worshipped hero.

Putin’s visit to Kyiv has received increasing attention from Ukrainian and Western political observers. Prediction, in a highly dynamic political environment such as Ukraine’s, is always hazardous.

Consequently, it is not surprising that much of the available commentary offers sweeping generalizations and often idle speculation about the possible results of this meeting.

Rather than add to this growing mountain of largely trivial speculation, it may be more instructive simply to highlight several key but generally inadequately grasped facts – essential background about recent Ukrainian-Russian relations.

Doing so may shed light on Putin’s true intentions in visiting Kyiv and on his preferred vision for Ukraine.

Fact 1: President Putin has been and continues to be Viktor Yanukovych’s most loyal foreign benefactor. He has never hidden his support for the fraud-marred premier.

His public expressions of support have been deftly adjusted since Ukraine’s 2004 presidential election to meet the country’s changing political landscape, but his allegiance to Yanukovych and his Party of Regions remains unswerving.

Amazingly, after blatantly fraudulent rounds of that election, Putin, like a brash schoolboy, rushed not once but twice to prematurely congratulate Yanukovych on victory.

Learning from experience, he subsequently adopted a more circumspect but no less active role in supporting Yanukovych and his Party of Regions in the 2006 parliamentary election.

Significantly, in the short period since becoming premier, Yanukovych has already met with Putin on several occasions, in Moscow and Sochi, to discuss bilateral cooperation.

Fact 2: Yanukovych and the Regions-led majority in parliament have unabashedly rushed to demonstrate their profound gratitude to Putin for his faithful support in shaping the Ukrainian political scene.

Their conspicuous haste to deliver major political dividends to their Kremlin sponsor, although tactically imprudent because it diminishes their already low credibility at home and in the West, tellingly reflects their steely determination to quickly and steadily repay their enormous political debt to Putin.

In just over 100 days, they have begun to synchronize important Ukrainian security policies with those of their northern neighbor.

And in the words of ordinary citizens here in Ukraine: “They are firing Orange-leaning Cabinet ministers and delivering their heads on a platter to Vladimir Putin.”

Fact 3: In Brussels last September, Yanukovych did much more than close the door on a NATO Membership Action Plan in 2006.

Although only dimly perceived in the West, he also effectively placed a cross on any future Ukrainian membership in NATO.

To the great delight of the Kremlin and members of Ukraine’s so-called Anti-Crisis coalition in parliament, he rested the issue squarely on a future national referendum.

It is no secret that Yanukovych’s Regions party adamantly opposes Ukrainian membership in NATO and relishes today’s harsh realities: Ukrainian public support for NATO today is low and declining, anti-NATO activities have increased over the past year, and the Ukrainian government’s support for a NATO information campaign remains scant.

Moreover, Moscow, as in the past, stands ready to resort to active measures in Ukraine to support anti-NATO forces, should the need arise.

To believe that this decidedly negative trend line on Ukrainian membership in NATO can be easily reversed is, indeed, a pernicious myth.

Fact 4: Vladimir Putin waged economic wars – gas, meat, and dairy notably, in 2005 and 2006 with the clear intention of destabilizing Ukraine’s economy and Yushchenko’s Orange government.

These “man-made crises,” unquestionably, harmed Ukraine’s economy and measurably influenced the political scene.

With his man, Viktor Yanukovych, now in power, Putin no longer needs to wage economic wars.

Putin, strictly speaking, only seeks good partner relations with Yanukovych and other Moscow-loyal members of the Regions-led parliamentary coalition.

Putin’s aversion to color revolutions and their leaders remains categorical.

His ongoing economic war with Georgia, home of the Rose Revolution and reportedly 70 percent support for NATO membership, is compelling evidence of this fact and a stark daily reminder.

At first glance, Putin’s decision to end economic wars with Ukraine and help stabilize its economy, if only to benefit Viktor Yanukovych, is welcome news.

The crucial question, however, is at what price to the nation?

Putin’s preferred vision for Ukraine is a mirror image of what he has accomplished in Russia during his presidency.

Translated, this means total control of the “commanding heights” by a Moscow-loyal Party of Regions with the virtual monopolization of parliament by pro-Regions forces, the consignment of any democratic opposition in parliament to the political wilderness, and judicial attacks upon any uncooperative big business.

It also means that the future of Ukraine’s budding NGOs and any genuine security sector reform will be in grave jeopardy.

It must be said that in Putin’s Russia a distinction is made between acceptable (government affiliated) and unacceptable (state adversaries) NGOs, while security services unarguably function as a political instrument.

To what extent do Yanukovych and Party of Regions leaders share such a vision?

Disturbingly, in just over 100 days in government, they have provided much cogent evidence of their preference for Putin’s authoritarian style of leadership and model of government.

Furthermore, their intent to gravitate toward a Moscow-Donetsk vector in domestic and foreign policymaking is evident almost daily.

Vladimir Putin will continue to view Ukraine through the prism of velvet revolutions and their clear and present danger to Russia’s influence in the post-Soviet space.

He will struggle unceasingly to ensure the demise of the Orange Revolution and a Ukraine outside of NATO.

Moreover, Putin and Party of Regions leaders will likely remain loyal partners in this struggle.

Source: Kyiv Post

A Wary Belarus Braces For Natural Gas Cutoff

MINSK, Belarus -- Residents of Belarus's capital stocked up on warm clothes and electric heaters as fears rose yesterday that Russia is about to cut off the natural gas on which the country depends.


Belarusian Yevgenia Lukshits puts wood into a stove to warm her house in the village Gaina, 45 km (28 miles) north of Minsk, Belarus
Russia says Belarus must pay more than twice as much for gas next year -- and even more later -- and turn over a half-share in its pipeline system, a major transit route to Europe, if it wants to avoid a New Year's gas shut-off.

The dispute bears loud echoes of last year's crisis between Russia and Ukraine, which caused ripples of concern in Western Europe, whose supplies of Russian gas were briefly disrupted.

But in that case, Russia's price demand was seen as political pressure against a Western-leaning government; this time it is against a country whose longtime leader has close ties to Moscow.

Alexander Milinkevich, a Belarussian opposition leader, suggested the demands of Russia's natural gas monopoly, Gazprom, are aimed at forcing President Alexander Lukashenko to cede control over the pipeline network and other attributes of sovereignty in exchange for continued Russian support for his authoritarian regime.

"Through energy pressure, the Kremlin is trying to force Lukashenko to integrate according to the Russian scenario, which is extremely dangerous for Belarus," Milinkevich said.

Anna Kuprilko, a 48-year-old tractor factory worker whose sister lives in Ukraine, was among those shopping for a heater yesterday. "My sister told me about Ukraine's experience, and I want to keep myself secure," she said.

Talks yesterday between Belarus and Russia failed to resolve the issue, and a senior official of Gazprom said a cutoff was certain without an agreement.

"In the absence of a contract, there is not and cannot be a basis for the delivery of gas to any country or any consumer in the world," said Gazprom's export division chief, Alexander Medvedev .

Lukashenko said the talks on Russian supplies were "very difficult," and he urged energy saving. "In the conditions of pressure on Belarus one must know how to live within one's means and economize, especially on energy," he said.

Medvedev said a shut-off would not affect the 30 percent of Russian gas deliveries to Europe that go through Belarus. Russian gas provides a quarter of Europe's consumption.

Much of the Russian gas destined for Poland and Germany, among other countries, goes through a pipeline that is already owned by Gazprom but is under the day-to-day control of the Belarussian pipeline network, Beltransgaz.

"The issues of transit and supplies are not linked and will not be linked," Medvedev said. But he also raised the possibility that Belarus would seek to siphon gas meant for European customers, saying that gas "will be delivered to the Russia-Belarus border. How the Belarussians will conduct themselves I don't want to guess, but I hope it won't come to that."

The price dispute with Ukraine in early 2006 resulted in temporary supply reductions to European customers, raising doubts about Russia's reliability.

Medvedev said Gazprom had scrapped its initial demand that Belarus begin paying $200 per 1,000 cubic meters of gas in 2007. Under what he called a final offer, Belarus would pay $105 next year -- well below world market prices, but more than twice the $47 it now pays.

The increasing price would be a severe blow to Belarus's Soviet-style state-run industries, whose financial health -- and, in turn, a portion of Lukashenko's popularity -- depends on inexpensive gas.

Russia had supplied gas to former Soviet states at below-market prices for years after the 1991 Soviet collapse, but now wants to sell all its gas at world prices.

Belarus, under the authoritarian Lukashenko, has been one of Russia's closest allies in the region. The countries signed a loose union treaty in the mid-1990s, and no visas are needed for land travel between them.

Russia has supported Lukashenko in the face of severe Western criticism, but it has appeared uneasy over his heavy-handed suppression of opposition and irritated at his insistence that small and poor Belarus can be unified with Russia only on an equal basis.

Relations have been tense under Russia's president, Vladimir V. Putin, who angered Lukashenko by floating an integration plan under which Belarus would essentially become a Russian province.

Source: Boston Globe

Ukrainian Groups To Seek NATO, CES Referendums In 2007

MOSCOW, Russia -- Members of initiative groups gathering signatures in support of a Ukrainian referendum on membership in NATO and the Common Economic Space (CES) have appealed to the Organization for Security and Cooperation in Europe (OSCE) and the Parliamentary Assembly of the Council of Europe (PACE) for help in ensuring the referendums are held in 2007.


The Ukrainian Central Election Commission (CEC) registered 109 initiative groups from November 2005 to February 2006, Volodymyr Golub, a representatives of the Poltava region initiative group, said at a press conference at the Interfax press center in Kyiv on Monday.

One hundred and four of them submitted documents proving that over 4.6 million signatures in support of the NATO and CES membership referendum had been gathered by March 5, 2006, he said.

However, the CEC's official report certifying the signature count, which was due one month after the signature sheets were submitted, has not been completed, Golub said.

"This is being deliberately dragged out," he said.

Press conference participants called on Ukrainian President Viktor Yushchenko and the CEC to observe the Constitution and to guarantee the right of the people to express their will.

Members of initiative groups have sent an open letter to the OSCE and the PACE with proposals for ending the violations.

"We are convinced that the authority and influence of the OSCE and PACE will force the Ukrainian authorities to fulfill their international obligations and the demands of national law, and to hold an all-Ukrainian referendum on the aforementioned issues in 2007," the letter says.

Source: Interfax

More Foreigners Touring Ukraine

KIEV, Ukraine -- Since the beginning of this year, nearly 15 million foreigners have visited Ukraine, an 8 percent increase over 2006, the government has announced.


St. Michael's a favourite tourist attraction
For the second year in a row, the country has seen a rise in travelers from Europe, many now coming for pleasure.

Compared to 2005, Ukraine has witnessed a 50 percent hike in the number of tourists coming from Austria, while the flow of visitors from Latvia and the Czech Republic went up by 43 percent and from Lithuania by 24 percent.

There has also been a rise in the number of Western Europeans visiting Ukraine since 2005, including travelers from Great Britain (41 percent), Italy (30 percent) and France (24 percent).

The growth in the number of visitors coincides with Ukraine’s easing of visa restrictions, allowing many citizens of Europe to enter the country with just their passports for a limited period of time.

Ukraine has traditionally seen most of its tourism coming from its immediate neighbors: Russia (30 percent), Poland (28 percent) and Moldova (18 percent), according to the government’s website portal.

Countries like Germany (1 percent), the United States (0.5 percent) and Turkey (0.4 percent) have accounted for much smaller tourist inflows.

Ukrainian travel agencies have also noticed a rise in the number of foreign visitors.

“Over the past year, our department has seen an increase in business activity from abroad by about 20-25 percent,” estimates Dmytro Tantsyura, a senior manager in the incoming department of New Logic travel agency. Kyiv-based New Logic specializes in arranging travel, tours and accommodations for foreign visitors to Ukraine.

Tantsyura said that the majority of his clients come from Russia, Germany, France, Israel and Poland. The main change of late is the reason for their visits.

“I think that even one or two years ago … business was the main reason for clients to be here, but month by month I now see that the situation has changed, and now we have clients here for business and leisure in almost equal parts,” he said.

Tantsyura thinks the trend will continue in the near future, and the government appears to be helping things along.

Ukrainian Minister for Culture and Tourism Yuriy Bohutsky recently met with the President of the European Travel Commission to discuss the possibility of bringing Ukraine closer to the European tourism community.

Ukraine’s Cabinet of Ministers has been working on drafting agreements on cooperation in tourism with over 20 countries this year.

Source: Kyiv Post

More Companies Preparing For IPOs

KIEV, Ukraine -- A growing number of Ukrainian companies are planning to raise badly needed capital to fuel sustained growth by listing their stock on exchanges in Europe.


Frankfurt DAX Stock Exchange
A handful of companies have floated their stock abroad through initial public offerings, or IPOs.

About 20 small to medium-sized Ukrainian firms have raised cash by floating their shares abroad as depository receipts since the Orange Revolution slapped Ukraine onto the radar screens of investors two years ago.

Last month, several Ukrainian companies announced they were considering a stock floatation on Germany’s Frankfurt Stock Exchange through an IPO.

These include oil and petrol trader Galnaftogaz, chemical and textile producer Chernihiv Khimvolokno, TMM Real Estate, and dairy group Milkiland.

Myronivsky Khlibproduct, a Ukrainian agriculture and food holding, announced last week that it planned to tap into Western capital markets through an IPO next year.

Yuriy Kosyuk, the company’s chairman of the board, said Myronivsky Khlibproduct would place around 20 percent of its shares on the main section of the London Stock Exchange next spring.

Some industry experts estimate the 20-percent stake at $150 million. Myronivsky Khlibproduct, best known for its Nasha Riaba poultry brand, was given a global rating of B2/Stable by Moody’s Investors service.

The company is listed as being almost 99 percent owned by Kosyuk.

Another major Ukrainian company looking for investment abroad is the Lutsk Automobile Plan (LUAZ), which assembles automobiles and buses.

LUAZ, a part of the Bohdan Corporation, which is controlled by pro-presidential parliamentarian Petro Poroshenko, plans to hold an IPO in 2009-10.

Earlier this year Bohdan President Oleg Svinarchuk said the company would offer a 10-20 percent stake to foreign investors.

The fourth biggest automobile producer in Ukraine, LUAZ reported an income of over $200 million last year.

Serhiy Oleksiyenko, vice-president of the Kyiv-based investment fund Renaissance Capital, said Ukrainian companies increasingly see foreign stock markets as the best places to satiate their growing investment appetites.

“They need an access to significant financial resources, which are lacking in Ukraine,” said Oleksiyenko.

According to him, neither Ukrainian banks, nor the country’s stock market can meet the investment needs of rapidly growing domestic companies.

“If a company wants to attract around $100 million or more, it can do so only through an IPO on a foreign stock market or a bank loan,” he added.

Still, only large industrial holdings are able to get huge loans from big foreign banks, unlike middle-sized companies, according to Oleksiyenko.

“An IPO is an alternative for midsized companies to obtain financial assets,” said Oleksiyenko.

Earlier this year, one of Ukraine’s wealthiest tycoons, Viktor Pinchuk, announced plans to do an IPO abroad for the country’s largest pipe producer, Interpipe, in 2008-2009.

Donetsk billionaire Rinat Akhmetov’s holding company, System Capital Management, has also bridged the subject publicly.

However company representatives say no firm decision has been made yet.

The planned placements follow a small flurry of activity over the last two years.

In 2005, several companies conducted IPOs on London’s Alternative Investment Market.

Ukrproduct, a milk producer, fetched more than $9 million; Hydrocarbon exploration & production company Cardinal Resources took in $20 million; and real estate firm XXI Century raised $140 million.

One of the biggest Ukrainian sugar producers, Astarta-Kyiv, attracted $30 million, placing a 20-percent stake on the Warsaw stock market.

Serhiy Oleksiyenko said foreign investors are showing more interest in Ukrainian companies than ever, but most are still hesitant to enter the country’s stock exchanges, because it doesn’t guarantee “fair rules of the game.”

“Ukrainian stock exchanges don’t demand full disclosure from listed companies as foreign ones do, providing investors with confidence,” he added.

Source: Kyiv Post

Chinese To Supply 3G Equipment To Ukrtelecom

KIEV, Ukraine -- State-owned fixed line monopoly Ukrtelecom continues to attract international interest in its plans to offer the country its first taste of third-generation mobile communications.


Chinese producer of telecommunications equipment Huawei Technologies has announced that it is about to sign a deal to supply 3G mobile technology to Ukrtelecom, which currently only offers fixed-line telephone and data communication services.

If signed, the agreement would make Huawei the second foreign firm to get a contract to help the state telecom company set up a 3G mobile network.

In October, Ukrtelecom inked a three-year deal with Finnish Nokia to supply 3G telecommunications equipment for Kyiv and Kyiv Region. Huawei hopes to facilitate the development of a network in Odessa and southern Ukraine.

Wang Chunsheng, director of Huawei Technologies’ recently opened representative office in Kyiv, announced Dec 13 that a contract with Ukrtelecom would be signed before the end of this year.

According to Ukrtelecom’s press-service, the company plans to start providing mobile communications services in March 2007 on the basis of its wholly owned long-distance subsidiary, Utel, servicing its corporate clients.

Third-generation technology allows faster and higher quality communications, including voice and high resolution video feed.

Industry insiders have said that building a 3G network in Ukraine from scratch could cost over $1 billion.

Ukrtelecom has announced plans to invest around $700 million into the 3G network by 2010. The company acknowledged to the Post that a deal with Huawei is in the works, but it has not disclosed any details.

Ukrtelecom has been equally taciturn about its arrangements with Nokia. It’s not clear, for example, whether other telecom equipment makers will also be invited to help the state-owned company set up a 3G mobile communications network.

Ukrtelecom first announced that it would hold its tender in search of support in setting up its 3G system at the beginning of this year.

Five global telecom equipment providers took part, including France’s Alcatel, Sweden’s Ericsson, Germany’s Siemens, China’s Huawei and Finland’s Nokia.

Ericsson was chosen earlier this year to provide Ukrtelecom with equipment and services for testing 3G technology free of charge, but it has yet to announce a paying contract.

Ukrtelecom is currently the only Ukrainian telecommunications company with a 15-year license to provide 3G-based mobile communications in Ukraine. The license was issued by the country’s Telecommunications Commission in December 2005.

Industry insiders and the country’s mobile services providers cried foul, accusing the state of trying to beef up Ukrtelecom’s value ahead of it’s much anticipated privatization, which has been postponed for years.

On the Dec. 6, parliament included Ukrtelecom on its privatization list for next year. The state fixed-line monopoly is 92.86 percent owned by the state.

Source: Kyiv Post

Yushchenko And Putin Signal Break With Tense Past

KIEV, Ukraine -- Russia's President Vladimir Putin assured Ukraine's President Viktor Yushchenko that Moscow wants good relations, in a meeting that both leaders presented as a break from the strained relationship of the past.


President of Ukraine Viktor Yushchenko (L) welcomes his Russian counterpart Vladimir Putin during the ceremony of a meeting in Kiev
Putin's visit on Friday to Kiev was his first since pro-Russian Prime Minister Viktor Yanukovych returned to power in August, promising to improve Ukraine's chilly relations with Moscow that had been troubled by Yushchenko's pro-Western policies.

Russia had given strong support to Yanukovych in his fraud-riddled run for the presidency in 2004, the election that set off the massive "Orange Revolution" demonstrations.

"Today, there weren't any emotional problems," Putin told reporters after his talks with Yushchenko. "We had a very constructive, good, friendly dialogue.

Everything was very pragmatic and business-like." Putin and Yushchenko oversaw the signing of numerous bilateral accords.

Power struggle

Yanukovych, who was to meet later with Putin, attended the signing, but when it came time for a champagne toast, he and Yushchenko ignored each other a further sign of the increasingly tense power struggle between the men.

Yushchenko's and Putin's meeting was in sharp contrast to relations a year ago when the two countries were engaged in a bitter dispute over gas prices.

Moscow temporarily cut off supplies to Ukraine, a shutdown that was also felt in Western Europe.

The shutoff was widely seen as punishment for Ukraine's pro-Western policies.

Source: Gulf News

Death Of Turkmen Leader Opens Era Of Uncertainty For Ukraine - Experts

KIEV, Ukraine -- Ukrainian experts believe that Death of Turkmen president Saparmurat Niyazov will have an effect on Ukraine which is hard to predict.


Viktor Yushchenko (L) with Saparmurat Niyazov (R) in 2005
“[Niyazov's death] will certainly have consequences for Ukraine, but the nature of these consequences is hard to predict,” said a source at Ukrsotsbank. “It’s no secret that large share of gas supplied to Ukraine is of Turkmen origin and the price of that gas has always been a voluntary decision of Turkmen leader.”

“If the transition of powers goes smoothly we expect more formalized relationships between Ukraine, Russian and Turkmenistan, which in longer term will have a positive effect on Ukraine,” Ukrsotsbank source said.

Meanwhile Ukrainian premier Viktor Yanukovych expressed hopes today that with Niyazov’s death relationships between Ukraine and Turkmenistan will remain stable.

"It is obvious, this issue [of Turkmen gas supplies] worries us much, but we hope that the worst is already in the past, the person, great friend of Ukraine Turkmen President Saparmurat Niyazov, who had made much for our country, is gone," Yanukovych said.

He said that the issue of Turkmen gas supplies worried not only Ukraine but also other countries receiving Turkmen gas.

The premier said that on Sunday, December 24, Ukrainian delegation headed by the president will be present at Niyazov funerals.

Turkmen president Saparmurat Niyazov died on December 21.

Source: Rynok Biz

Movie Theater Business Sees Growth Amid Rising Demand

KIEV, Ukraine -- Following a period of post-Soviet stagnation, movie theaters in Ukraine have been undergoing rapid development in response to increasing demand from a growing middle class looking to spend its disposable income on entertainment.


Lobby of Ukraina movie theater
Although many new, well-equipped movie theaters, including multiplex cinema complexes, have appeared in retail shopping and entertainment centers throughout Ukraine over the last several years, demand for new movie theaters still exceeds supply.

But the further development of multiplexes across the country looks more likely to be done by Ukrainian and Russian networks already in place, according to industry insiders.

Iryna Kostyuk, CEO and co-founder of Kyiv-based Media Resources Management (MRM), a provider of consultancy and research services for media market players, said that Ukraine’s movie theater market has entered a stage of reconstruction and rapid development following a decade or so of stagnation that began in the mid-80s, several years prior to the collapse of the Soviet Union.

“For a 10-year period, attendance at cinemas in the CIS fell 60-fold,” Kostyuk said. “In the mid-90s, the number of people spending their free time at movie theaters reached its bottom level.”

According to Kostyuk, the growth of the Ukrainian movie theater industry is the result of positive economic trends in the country.

“The population’s incomes are growing, and spending for entertainment is increasing respectively,” she said.

Kostyuk said that the improving investment climate, the arrival of more international film distributors and the current construction boom in the country are all contributing to the development of the movie theater industry in Ukraine.

“The construction of retail shopping and entertainment centers with cinemas is undergoing a real boom today … At present, most cinema networks in Ukraine prefer establishing their new premises in shopping centers,” she said.

According to Kostyuk, there were 112 well-equipped modern movie theaters with a total of 168 screens in Ukraine in 2005, an increase of 10 theaters and 14 screens compared to the year before. Kostyuk said she expects a total of 135 movie theaters with 262 screens by the end of this year.

She said that in 2005, 56 percent of all cinema screens in Ukraine belonged to movie theater networks, adding that there are around 10 such networks operating in the country that were created from Ukrainian or Russian investments.

Due to the small number of cinema screens in the country, Ukrainian movie theaters still largely avoid the niche film market, screening the more commercial movie selections meant to attract a wider audience and bring in bigger box office returns, Kostyuk said.

“There is such a practice [screening niche films] in Europe, but it has still not been adopted in Ukraine. These are so-called niche cinemas that show, for example, only art-house movies,” she said.

“But some Ukrainian movie theaters are trying to attract a narrow audience and organize thematic weeks, for example,” she added.

According to MRM’s research, around 18 million Ukrainians out of a population of around 47 million can afford going to the movies. Of these, 12.5 million live in large cities.

Ticket prices for movies currently range from Hr 10 [$2] to Hr 55 [$11].

Box office receipts in 2004 totaled around $18 million, with that figure growing to $26 million last year.

Multiplex expansion

Tetyana Smirnova, the executive director for the Association to Promote the Ukrainian Film Industry, said Ukraine’s movie theater business is currently undergoing an expansion by cinema networks.

“Following the reconstruction of the Ukrainian movie theater sector, the next step is the expansion of networks,” said Smirnova, whose association unites around 70 percent of the players on the Ukrainian movie market.

But the sector’s further development depends on overall market conditions in the country, she added.

“The services provided by the movie market are not a prime necessity,” Smirnova said. “If the entire economic level [of Ukraine] should drop, people would not stop buying food, but they would reduce their spending on leisure and entertainment.”

According to Smirnova, growth on the movie theater market is currently characterized by more multiplex theaters (which contain at least four screens) being developed within shopping and entertainment centers, following a larger, global trend.

She said that multiplexes are not only being constructed in the capital, Kyiv, but in other large Ukrainian cities with populations of over 1 million people.

Kateryna Kholomoytseva, project manager for Multiplex Holding, a Kyiv-based company that invests in the construction of high-end multi-screen movie theaters at retail trade centers throughout the country, said that multi-screen cinemas attract more visitors with their greater variety and more diverse schedule of movies, resulting in higher box-office returns.

“Multiplexes allow planning [movie] schedules in a more convenient way, so that they cover a whole repertoire of movies available for view in Ukraine,” Kholomoytseva said.

Multiplex Holding was established in 2003 by Anton Pugach, former director of one of Ukraine’s largest movie theater networks, Kinopalats.

At present, the company operates two cinemas - one in Mykolayiv in southern Ukraine and one in the eastern city of Donetsk – and is currently constructing its first movie theater complex in Kyiv, which is scheduled to open in March 2007. Another complex is under construction in Kryviy Rih.

Kholomoytseva said that Multiplex Holding also plans to implement movie theater projects in Vinnytsya, Poltava and Dnipropetrovsk.

According to Kholomoytseva, the Multiplex network attracts a largely middle class audience.

She said that moviegoers in Ukraine still lack high-level cinemas to go to, including in Kyiv, resulting in low competition on the country’s movie theater market. She believes that this will likely begin changing in about two years, when the number of cinemas in Ukraine reaches a level that will force them to fight for customers.

Kholomoytseva said she doesn’t expect any more network players to enter the market, not even from abroad. Instead, she added, the sector would more likely take place within existing networks.

“They [foreign networks] can enter Ukraine only by buying one of the existing functioning networks,” Kholomoytseva said. “It is too late to start a new large-scale cinema network. It’s almost impossible to begin from the ground up.”

She said that the Ukrainian movie theater market will likely be divided up among several larger cinema network players that will force smaller companies, which cannot provide a full range of services available at the higher-level cinemas, out of the market.

“This is what is happening in Russia and the West,” she said.

Alisa Sheremetyeva, commercial director for the Odessa Kino cinema network, said that the appearance of about five new movie theaters a year in major cities is the best indicator of the industry’s growth.

She said that with the number of cinema screens increasing, competition will also increase, while the ticket price falls. Sheremetyeva said that, at present, the number of people wanting to go to the movies is increasing faster than the number of new movie theaters being constructed to accommodate them.

According to Sheremetyeva, Odessa Kino’s first modern cinema was reconstructed from a Soviet-era movie theater in Odessa and opened its doors in 1999. She said that the company presently operates a network of six cinemas in Odessa, Dnipropetrovsk and Kyiv.

According to Sheremetyeva, the average visitor to an Odessa Kino cinema is aged 18 to 34 and earns a high income.

Among the main factors holding up the development of the movie theater industry in Ukraine, she said, is the lack of control over the proliferation of pirated movie videos before the movies premiere on the big screen, which cuts substantially into a movie’s box office draws.

Source: Kyiv Post

Making It Clear To Putin

KIEV, Ukraine -- Vladimir Putin is in Kyiv this week to meet his counterpart, Viktor Yushchenko, as part of the first session of the Russian-Ukrainian interstate commission. There should be a lot to talk about.

Vladimir Putin
Relations between the two countries have been delicate ever since the breakup of the Soviet Union, but this year has created particular strains.

It started out with price dispute over over natural gas that threatened to leave Ukrainians as well as Europeans short on fuel.

Since then, there have been the usual arguments over the rental rights of the Russian Black Sea Fleet, based in Crimea. Several Russian citizens have also been banned from entering Ukraine, even including controversial deputy speaker Vladimir Zhirinovsky – at least temporarily.

A visit to Kyiv in October by Russian Prime Minister Mikhail Fradkov should have improved relations, especially as he was met by Ukrainian counterpart Viktor Yanukovych, recently re-elected and largely seen as pro-Russian.

Indeed, the Kremlin unapologetically supported Yanukovych’s fraud-marred bid for the presidency in 2004, which led to the West-endorsed Orange Revolution.

But instead, Fradkov was lambasted for suggesting that Russia would “shield” Ukraine from outside interference.

Considering the Kremlin’s heavy-handed policy under Putin, a healthy dose of caution is in order. Hundreds of Georgian citizens were deported from Russia after the authorities in Tbilisi detained a couple of Russian citizens on spy charges.

Western-leaning Georgia has also had its wine and mineral water exports to Russia banned. But Russia’s main weapon of intimidation seems to be gas, which Ukraine and, increasingly, Europe are frightfully dependent on.

It would be naive for anyone to believe that Russia, feeling particularly vulnerable itself, will not continue to try and cow Ukraine and its other neighbors. The now distant chance of Ukraine joining NATO particularly annoys the Kremlin, as does the more likely possibility that Kyiv may join the WTO first.

Ukraine should try to have the best relations with Russia as possible, and Putin’s visit can lay the groundwork for this. But conceding on issues of strategic security (i.e. NATO) or international trade relations (i.e. WTO entry) won’t help. More importantly, the country has to come up with an intelligible foreign policy.

A good start would be to decide who’s in charge of the Foreign Ministry. Ukraine’s Constitution says the president, so Yanukovych should back off. It doesn’t matter whether pro-Western Borys Tarasyuk’s recent dismissal by the Yanukovych-controlled parliament holds or not.

If Ukraine cannot define a clear foreign policy, how can it expect to be understood internationally? The confusion just makes Russian hegemony easier.

Source: Kyiv Post

Ukrainian Lawmakers Bar Minister From Cabinet Session

KIEV, Ukraine -- Lawmakers blocked the foreign minister from a Cabinet session Wednesday for the second time in as many weeks, signaling growing tensions between Ukraine’s pro-Western president and the Kremlin-leaning prime minister.

Foreign Minister Borys Tarasyuk
The status of Foreign Minister Borys Tarasyuk has been uncertain since he was dismissed by parliament earlier this month.

President Viktor Yushchenko ordered him to stay on, arguing that firing Tarasyuk was his prerogative, since he nominated him.

But Prime Minister Viktor Yanukovych’s allies in parliament stopped Tarasyuk from entering Wednesday’s Cabinet session, and a scuffle ensued.

Last week, Cabinet members barred Tarasyuk from attending the session in a similar manner.

Tarasyuk said he would lodge a complaint with the Prosecutor General’s office.

“They are violating the law. ... I have all legal grounds to fulfill my official duties,” he said.

Tarasyuk’s dismissal was initiated by Yanukovych, who complained he was working in opposition to the Cabinet. Tarasyuk appealed the dismissal in a Kiev court and the court suspended the parliament’s decision.

Tarasyuk heads a political party that has declared itself in opposition to Yanukovych’s government, and his pro-Western views are in sharp contrast with Yanukovych’s more Russian-leaning political party.

The pro-Western Yushchenko and Yanukovych share power in an awkward arrangement that was initially billed as an effort to unite Ukraine, but instead has turned into a tug-of-war for influence.

Yanukovych later urged Yushchenko to appoint Tarasyuk’s first deputy as acting foreign minister.

“It would be better if the president decides who it will be,” Yanukovych said. “If the president does not make up his mind parliament will make this decision.”

Yanukovych left politics in disgrace after Ukraine’s Supreme Court threw out his presidential win in 2004.

Yushchenko, his face deeply pockmarked and bloated from a still-unsolved toxin-poisoning, took power after rallying his supporters in what came to be known as the Orange Revolution.

Yanukovych’s support base lies in the former Soviet republic’s Russian-speaking east and south, and many of the president’s allies is based in the more nationalistic west and south.

Source: AP

Telethon Raises US$50 Million For Children With Cancer In Ukraine

KIEV, Ukraine -- A telethon in Ukraine has raised nearly US$50 million for building a hospital for treatment of children with cancer, its organizers said Monday.


Sunday's four-hour show broadcast by Ukraine's 12 main TV stations featured the nation's top politicians and businessmen in an effort to help provide funds for the construction of the hospital in Kiev.

The hospital's cost is estimated at 600 million hryvna (US$118.8 million; €90.7 million).

The show, which was organized by Ukrainian President Viktor Yushchenko's wife, Kateryna, raised some 242 million hryvna (US$47.9 million; €36.7 million), the organizers said.

Many kinds of cancer cannot be treated in Ukraine and children with these diseases currently need special treatment abroad.

Source: International Herald Tribune

Ukraine's PM Criticizes Presidential Decrees

KIEV, Ukraine -- Ukraine's Prime Minister Viktor Yanukovych on Monday criticized President Viktor Yushchenko's decrees as unpredictable in a statement that signaled growing tensions between the two Orange Revolution foes.

Viktor Yanukovych
After pro-Russian Yanukovych was accused of vote-rigging in the 2004 presidential election, massive "Orange Revolution" protests helped pave the way to pro-Western Yushchenko's election victory.

But the two men now share power after Yanukovych won this year's parliamentary election and was named prime minister with broad powers.

"Regarding the president's decrees, we do not know how they are prepared. We do not expect them and we do not know what is the aim of them," Yanukovych said Monday. "A number of decrees are adopted unpredictably."

Yanukovych and Yushchenko have frequently clashed over foreign policy, Cabinet appointments and other government business.

Under constitutional reforms that took effect this year, Yushchenko cannot fire Yanukovych and Yanukovych cannot ignore the president.

The law provides little guidance over how power should be divided.

In many ways, Yanukovych already holds the upper hand. As head of government, he controls the country's finances.

His party also has allied with other political groups, effectively giving it a majority in parliament.

On Monday Yanukovych said that defining the functions of the cabinet and of the president was "very difficult and very painful."

Yanukovych also said that representatives of Yushchenko's office had failed to take part in drafting next year's budget despite an earlier agreement.

Last week, the government and the president struggled over the budget as the president vetoed it and the governing coalition failed to override the veto.

Yushchenko said last Thursday that his relations with the premier were worsening, noting it was not his fault.

A day later the two men met and pledged to solve their differences.

Source: International Herald Tribune

Stem-Cell Prober Sacked: Came Too Close To Truth?

KIEV, Ukraine -- In the midst of growing interest in reports of a gruesome stem-cell and human-organ black market that traffics in newborn babies taken from their mothers, an investigator looking into the matter has been sacked "for political reasons," she says, because she was getting too close to the truth.

Stem cells
Several reports in British papers last week told the story of a video showing a post-mortem examination of infants of Ukrainian mothers who believe their babies were stolen from them at birth.

The video was given to reporters by a charity worker representing 300 families who believe their healthy babies were falsely declared dead by staff at a maternity hospital in the Ukraine's most easterly city of Kharkiv.

Due to pressure from families, authorities agreed in 2003 to exhume the babies' bodies for examination. A senior British forensic pathologist who has viewed the video says that what he's seen does not look like standard post-mortem practice, the BBC reported.

The video shows severed limbs and torsos with organs, including brains, stripped away.

The thorough dismemberment of the bodies has led some to believe that, if the grisly evidence points to the babies having been murdered, the hospital may be supplying harvested stem cells from bone marrow to an underground market.

The Ukraine has become the destination of last resort for many sufferers of incurable diseases – as well as those seeking cosmetic rejuvenation – who come from all over the world for stem-cell injection therapy. Treatments cost as much as $24,000 in Ukraine and much more in the West.

Critics not only question the value of stem cells to treat many of these disease but also the choice of treatment regimes and even how clinics there are able to acquire sufficient material to provide a commercial service.

Officially, the cells are taken from aborted fetuses with the mothers' consent, but, given the hundreds of Ukrainian women who have complained of newborns stolen and the recently surfaced post-mortem video, the government authorized an investigation into whether a trade in babies-killed-to-order exists.

One of those investigators was Irina Bogomolova, who worked in the chief prosecutor's office in the capital, Kiev.

But, she says, she's been removed from the case after demanding that the inquiry be expanded beyond Kharkiv's maternity hospital.

"I was sacked for political reasons," Bogomolova told the London Telegraph. "I demanded an investigation into all maternity wings in hospitals across Ukraine and I was relieved of duty after making that demand."

The Council of Europe is scheduled in February to investigate allegations that newborn babies have been killed to provide stem cells and internal organs.

Officials will focus on the role, if any, played by Ukranian research centers and maternity hospitals in the international trade in stem cells.

An earlier investigation in 2004 was dropped for lack of firm evidence, but the latest charges have caused the case to be reopened.

However, the sacked Irina Bogomolova won't be taking part.

"A trade in stem cells exists here ... I suspect there is a lot of bribery going on, right up to highest levels," she charged.

"Pregnant women, especially from rural areas, are very vulnerable targets as they will obviously believe whatever the doctors tell them. It's easy to take their babies from them and tell them they died or were born dead due to complications."

Source: World Net Daily

Council Of Europe Raps Ukraine On ‘Torture’

KIEV, Ukraine -- Incidents of police “torture” of detained suspects and hate crimes continue in Ukraine despite progress in protection of human rights, the Council of Europe’s human rights commissioner said here yesterday.

Commissioner Thomas Hammarberg
Speaking to reporters, Commissioner Thomas Hammarberg said that “violence in preliminary investigation and even some cases of torture” had been documented recently in Ukraine and said corruption and other problems persisted in the country’s judicial system.

“Ukraine today is not clean from torture,” Hammarberg said. He also slammed cases of hate speech and hate crime in the country, especially that directed at people of the Roma ethnic minority in the country, who frequently receive brutal treatment at the hands of the police.

“This country is not free from xenophobia,” the Swedish diplomat stated, also citing mistreatment of members of Ukraine’s Muslim religious minority.

He called on Ukrainian political leaders to protect minority rights and to work harder on eradicating xenophobia and improving tolerance.

The Council of Europe plans to publish a report on the human rights situation in Ukraine in April of 2007.

Source: AFP

Ukraine's Leaders Battle

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko said his conflict with the prime minister over domestic and foreign policy is worsening, and accused him of seeking "revenge" for the events of the Orange Revolution in 2004.

Viktor Yushchenko
"My conflict with the premier is intensifying, but I am not to blame for this," Yushchenko said at a press conference Thursday in Kiev. "We both hold top posts in the country, our relations must correspond to this. But someone seems to think he has all the power and wants revenge."

Yushchenko defeated Prime Minister Viktor Yanukovych in disputed presidential elections two years ago that triggered street protests and became known as the Orange Revolution.

Yanukovych, who became prime minister in August after his Regions of Ukraine party won national elections in March, has clashed with Yushchenko over whether the country should move closer to the European Union and NATO or toward Russia.

In August, Yushchenko's Our Ukraine party joined with Yanukovych's party to form a government after Yushchenko's efforts to form a coalition with other parties went nowhere.

Yushchenko was allowed to nominate some cabinet posts and continue his goal of winning membership in the EU and the North Atlantic Treaty Organization.

Our Ukraine left the coalition little more than a month later after Yanukovych, who favors closer ties to Russia instead of the EU, announced on a trip to Brussels that he was shelving the NATO membership drive because of a lack of public support.

Since then, relations between Yushchenko, 52, and Yanukovych, 56, have continued to deteriorate as the parliament then voted to fire the president's cabinet ministers, including Foreign Minister Boris Tarasyuk.

"I do not accept the parliament's decision on Tarasyuk," Yushchenko said. "He is the minister, I am not going to defer to the government's pressure." Tarasyuk, who must be appointed by the president by law, supports NATO membership as soon as possible.

The Constitutional Court will rule on whether changes made to the constitution before the 2004 election are legal and whether the parliament has the right to fire the president's cabinet choices.

Yushchenko said the court ruling could lead to early elections. No date has been set for the court to rule.

"Ukraine has been living under elections for two and a half years, so I support political stability," Yushchenko said. "But it is up to the Constitutional Court to explain" whether Ukraine should have early parliamentary elections because some laws, "including the appointment and dismissal of some ministers and the budget for the next year" were broken.

After the cabinet and parliament gave final approval to the 2007 state budget, Yushchenko vetoed the spending plan on Dec. 12, saying social spending was too low. Yanukovych refused Thursday to redraft the budget, accusing the president of "undermining the current situation."

Yushchenko and Yanukovych also have battled over plans to limit grain exports to aid the domestic market.

Source: New York Daily

Spy Was Killed 'On Orders Of Kremlin Stalin'

LONDON, UK -- A feared Kremlin boss, who has been likened to Stalin, has emerged as the key suspect in the poisoning of Alexander Litvinenko, according to the murdered spy's former business partner.

Ex-KGB agent Yuri Shvets

Yuri Shvets, a fellow ex-agent, has told British detectives that he believes Mr Litvinenko was killed after compiling a dossier on the official for a British firm considering a deal in Russia.

The file led to the firm cancelling the deal, worth tens of millions of pounds, with a company thought to be linked to the official.

Mr Shvets's claims are being investigated by Scotland Yard, which has a copy of the dossier. The suspect, according to a Radio Four documentary by the journalist Tom Mangold, which was aired yesterday, is a senior figure in the Russian government and close to President Vladimir Putin.

The claims came as around 2,500 members of Russia's fragmented opposition movement, including the former world chess champion Garry Kasparov, demonstrated in Moscow against President Putin yesterday. More than 40 people were arrested and police were out in force.

The documentary did not name the man but said he was viewed in Russian political circles as "belonging more to the Stalin era".

Asked how certain he was that the dossier had cost Mr Litvinenko his life, Mr Shvets told the programme: "I cannot be 100 per cent sure, but I am pretty sure." Mr Shvets lives in the United States, vetting potential business partners for companies interested in investing in Russia.

He said that Mr Litvinenko, who did similar "due diligence" work as a sideline, became involved with him as a partner last year and was offered $100,000 to check five Russian individuals by a risk-management firm in London.

The programme said that material Mr Litvinenko gathered on one individual fell into the hands of Kremlin officials, who were outraged at its contents. Not only did it wreck the deal, it also indicated that Mr Litvinenko had access to secret files and, possibly, contacts with agencies such as MI5 and MI6.

Fearing that he might make further damaging revelations, it was decided to kill him. The poison isotope polonium-210 may have been used to ensure that his murder set an example to other ex-KGB agents tempted to sell state secrets for business purposes.

Mr Shvets said that he talked to Mr Litvinenko in hospital and was sure the poison had been administered at the Millennium Hotel, London, last month, where he met three Russians, Andrei Lugovoy, Dmitri Kovtun and Vyacheslav Sokolenko.

Mr Shvets said: "He drank tea which was not made in front of him. He was agonised by the understanding that he had failed as a professional. He was always saying, 'I can identify my enemy a mile away'. But when it came to his own life, he failed."

Mr Lugovoy, Mr Kovtun and Mr Sokolenko, who were all interviewed by Scotland Yard in Moscow last week, have all denied any involvement. Mr Lugovoy and Mr Kovtun claim that traces of polonium-210 found on them were an attempt to frame them.

Asked whether Mr Putin knew about such killings or approved of them, an unnamed Russian security expert said: "I believe he knows and understands it but he cannot do anything about it."

Russia, he claimed, was in the grip of a cabal of FSB and ex-KGB security figures, who, allied with organised crime figures, had filled the power vacuum left by the communists bureaucrats. "I see it getting worse, and I see it getting more sophisticated. These type of individuals, who 10 years ago were considered criminals, are now becoming public figures."

Last night Scotland Yard declined to comment on the claims in the documentary. However, while Russian analysts believed it had credibility, others cast doubt on whether Mr Litvinenko — who was known for making exaggerated claims about Kremlin-sponsored crime — would have been considered credible to vet businesses.

One Moscow analyst said: "Poisoning Litvinenko would have been a totally inappropriate punishment for the crime [of writing a bad due diligence report]. Secondly, this scenario presumes Litvinenko had incredible access to information — better than anyone else."

Source: Telegraph UK

Hundreds Detained Ahead of Moscow Rally

MOSCOW, Russia -- Russian authorities pulled hundreds of opposition activists off buses and trains and detained them along with scores of others on Saturday ahead of a rare anti-government rally in Moscow, organizers said.

Garry Kasparov, a former chess grandmaster turned Kremlin critic and leader of of the United Civil Front group speaks during a rally of several opposition groups in downtwon Moscow, Saturday, Dec.16, 2006. At right is former Prime Minister Mikhail Kasyanov. About 2,000 Russians on Saturday rallied in central Moscow to protest recent electoral law changes and what the demonstrators said is the Kremlin's growing authoritarianism.
The police action did not prevent more than 2,000 people from gathering in a central square, where leftist and liberal groups demanded that Russian President Vladimir Putin stop what they called Russia's retreat from democracy.

"In 15 months political power will be changed," said Mikhail Kasyanov, a former prime minister who is now an opposition leader, referring to the March 2008 presidential election.

"Next year everyone should make a personal decision about what to do with our country - whether we allow these people to continue their illegal undertakings ... or we finally make our main goal to build a democratic and socially oriented state," Kasyanov told demonstrators.

Garry Kasparov, the former chess grand master who has emerged as one of the Kremlin's most prominent critics, said the mere fact that the rally took place made it a success, given the efforts by authorities to stop it.

"We are protesting and it means that authorities are not as monolithic and powerful" as they believe, he said. "They are afraid that one day we will tell them 'enough.'"

Riot police officers ascended to roofs to detain demonstrators at the opposition rally in Moscow

The demonstrators chanted "Freedom" and held banners reading "No to Police State" and "Russia Without Putin."

Since he took office in 2000, Putin has taken steady, gradual steps to centralize power and eliminate democratic checks and balances.



He has created an obedient parliament, abolished direct gubernatorial elections, tightened restrictions on rights groups and presided over the elimination of most opposition voices from the media, especially the television networks.

The demonstration, organized by the Other Russia movement and other opposition groups, had originally planned to march down a main Moscow avenue. City authorities banned the march, allowing only the rally.

Organizers had vowed to conduct the march in defiance of the ban. But Natalya Morar, spokesman for Other Russia said police and defense troops had sealed off Triumfalnaya Square - the scene of the protest - and lined the avenue.

An AP photographer saw more than 1,000 law enforcement officers in full riot gear, some with police dogs, cordoning off the Triumfalnaya Square. Moscow residents complained the city was flooded with police and troops.

About 80 protesters, including Ivan Starikov, a senior member of the liberal Union of Right Forces, were detained in Moscow throughout the day, many of them without any explanation, Morar said.

About 320 other opposition activists were detained or taken off trains and buses on their way to Moscow, she said. Some were kept in detention cells, she said, while others were released after the rally was over.

Yevgeny Gildeyev, spokesman for the Moscow police said some 8,500 law enforcement officers were deployed in the city on Saturday. He said he did not know how many opposition activists were detained.

Russia's often fractious opposition has faced increased harassment in recent years, especially after protests led to the toppling of governments in the former Soviet states of Georgia and Ukraine.

Authorities have banned meetings on dubious legal grounds, while party congresses have been broken up or canceled for no reason.

Source: AP

Yushchenko Threatens to Call Off Reforms

KIEV, Ukraine -- The battle between the president and prime minister of Ukraine continued on Friday.

Viktor Yanukovych in front of President's office
The Ukrainian parliament, where Prime Minister Viktor Yanukovich's Party of the Regions has the majority, voted against dismissing Igor Dizhchany as head of the Ukrainian Security Service, even though he has been a appointed deputy secretary of the security council.

The president accused the parliament of contentiousness and, for the first time, spoke of the possibility of canceling the political reforms that were enacted two years ago. That move would cause a crisis in the country no less serious than the one it found itself in then.

Ukrainian President Yushchenko submitted Drizhchany's dismissal as security service head to the Rada on November 30, several days before he appointed him to the security council.

Since both personnel decisions fall within the president's competence, the vote by the Rada is mainly a formality. Nonetheless, it refused to free Drizhchany from the Ukrainian Security Service.

Leader of the Party of the Regions faction in the Rada Raisa Bogatyreva said openly that the move was revenge for Yushchenko's rejection of the 2007 federal budget.

At the traditional end of the year presidential press conference, Yushchenko showed that he was ready to take up the parliament's challenge, telling Ukrainian and foreign journalists that accession to NATO remains Ukraine's top foreign policy priority and that he does not recognize the Rada's “unlawful” dismissal of Foreign Minister Boris Tarasyuk.

Yushchenko blamed Yanukovich for the increasingly confrontational relations between the two leaders, saying that it was Yanukovich's “style.”

The greatest blow Yushchenko dealt Yanukovich was a statement on the possibility of canceling the changes made to the Constitution to expand the powers of the prime minister at the expense of presidential power.

He called those changes unfinished and “cosmetic.” “The changes have led to an unbalanced system of rule in Ukraine,” he concluded. He suggested that the reform be continued through a constitutional commission.

He warned that “if that option isn't developed, there will probably be a conflict option: first [the 2004 political reform] will have to be repealed, that is, return to what there was two years ago, and then begin a new long process of making changes.”

Thus, Yushchenko has given Yanukovich an ultimatum – either agree to serious corrections in political reform or the president will take it away.

Source: Kommersant

Ukraine's Chief Prosecutor Denies That President's Poisoning Has Been Solved

KIEV, Ukraine -- Ukraine's chief prosecutor denied Friday that the poisoning of President Viktor Yushchenko during the 2004 election campaign has been solved, one day after the president said prosecutors had enough evidence to arrest those involved.

Yushchenko before (L) and after poisoning
"This crime has not been solved ... At this moment I do not know who committed it," Oleksandr Medvedko told reporters.

Yushchenko became severely ill during the campaign, and after treatment in Austria was diagnosed as having suffered massive dioxin poisoning.

He said the symptoms began appearing after a dinner with senior security officials. The security officials who attended the dinner have denied all allegations of involvement.

The poisoning knocked Yushchenko off the campaign trail for weeks, and left his face severely pockmarked. The scars still remain.

Ukrainian authorities have concluded that it was an assassination attempt, but more than two years after the incident, no one has been charged and critics have accused prosecutors of dragging out the investigation.

Yushchenko said Thursday prosecutors had enough evidence to detain those who were involved, but asserted it would happen only if prosecutors "have the courage to do it."

Yushchenko also accused prosecutors of politicizing the investigation, though he gave no further details.

Source: International Herald Tribune

OECD: Ukraine Must Strengthen Fight Against Corruption

KIEV, Ukraine -- Ukraine must step up its fight against corruption, the Organization for Economic Cooperation and Development said Friday, calling on the ex-Soviet republic to toughen prosecution of bribery and other graft cases.


In a report, the Paris-based business group urged Ukraine to reform its criminal legislation, to toughen prosecution of corruption and to strengthened cooperation among enforcement bodies.

Prime Minister Viktor Yanukovych said last month that the national budget had lost up to US$1.78 billion (€1.4 billion) in revenues as a result of corruption.

Watchdog group Transparency International's ranking of corrupt nations has listed Ukraine as one of the worst for several years.

After coming into power in 2004, President Viktor Yushchenko pledged to make fighting corruption a top goal for his government and to hold former officials accountable for any proven misdeeds. But there have been no successful, high-profile corruption cases under his presidency.

The OECD report analyzed the progress made by this ex-Soviet republic to put in place the recommendations made by the organization since its last review in 2004.

"The country needs to toughen punishment for abuse of office. It is very difficult to solve such cases but punishment for it is only administrative responsibility," said Konstantin Stogniy, an Interior Ministry spokesman.

He said between January and October, Ukrainian courts heard nearly 2,700 corruption cases and convicted 1,900 persons on various charges.

Comprised of 30 mainly industrialized nations, the Paris-based OECD strives to help governments achieve sustainable economic growth.

Source: International Herald Tribune

No Mystery About Ex-Spy’s Poisoning

WASHINGTON, DC -- The poisoning of Alexander Litvinenko, renegade Russian spy and fierce critic of Vladimir Putin's government, is everywhere being called a mystery.

Ex-KGB spy Alexander Litvinenko
There is dark speculation about unnamed “rogue elements'' either in the Russian secret services or among ultra-nationalists acting independently of the government. There are whispers about the indeterminacy of things in the shadowy netherworld of Russian exile politics, crime and espionage.

Well, you can believe in indeterminacy. Or you can believe the testimony delivered on the only reliable lie detector ever invented — the deathbed — by the victim himself. Litvinenko directly accused Putin of killing him.

Litvinenko knew more about his circumstances than anyone else. And on their deathbed, people don't lie. As Machiavelli said on his (some attribute this to Voltaire), after thrice refusing the entreaties of a priest to repent his sins and renounce Satan, “At a time like this, Father, one tries not to make new enemies.''

In science, there is a principle called Occam's razor. When presented with competing theories for explaining a natural phenomenon, one adopts the least elaborate. Nature prefers simplicity. Scientists do not indulge in grassy-knoll theories. You don't need a convoluted device to explain Litvinenko's demise.

Do you think Anna Politkovskaya, the journalist who was investigating the war in Chechnya, was shot dead in her elevator by rogue elements? What about Viktor Yushchenko, the presidential candidate in Ukraine and eventual winner, poisoned with dioxin during the campaign, leaving him alive but disfigured? Ultra-nationalist Russians?

Opponents of Putin have been falling like flies. Some jailed, some exiled, some killed. True, Litvinenko's murder will never be traced directly to Putin, no matter how dogged the British police investigation. State-sponsored assassinations are almost never traceable to the source. Too many cutouts. Too many layers of protection between the don and the hitman.

Moreover, Russia has a long and distinguished history of state-sponsored assassination of which the ice-pick murder of Trotsky was but the most notorious. Does anyone believe that Pope John Paul II, then shaking the foundations of the Soviet empire, was shot by a crazed Turk acting on behalf of only Bulgaria?

If we were not mourning a brave man who has just died a horrible death, one would almost have to admire the Russians, not just for audacity, but for technique in Litvinenko's polonium-210 murder.

Assassination by poisoning evokes the great classical era of raison d'etat rubouts by the Borgias and the Medicis. But the futurist twist of (to quote Peter D. Zimmerman in The Wall Street Journal) the first reported radiological assassination in history adds an element of the baroque of which a world-class thug outfit such as the KGB (now given new initials) should be proud.

Some say that the Litvinenko murder was so obvious, so bold, so messy — five airplanes contaminated, 30,000 people alerted, dozens of places in London radioactive — that it could not have possibly been the KGB.

But that's the beauty of it. Do it obvious, do it brazen, and count on those too-clever-by-half Westerners to find that exonerating. As the president of the Central Anarchist Council (in G.K. Chesterton's “The Man Who Was Thursday'') advised: “You want a safe disguise, do you? ... A dress in which no one would ever look for a bomb? Why, then, dress up as an anarchist, you fool!''

The other reason for making it obvious and brazen is to send a message. This is a warning to all the future Litvinenkos of what awaits them if they continue to go after the Russian government. They'll get you even in London where there is the rule of law. And they'll get you even if it makes negative headlines for a month.

Some people say that the KGB would not have gone to such great lengths to get so small a fry as Litvinenko. Well, he might have been a small fry but his investigations were not. He was looking into the Kremlin roots of Politkovskaya's shooting. And Litvinenko claimed that the Russian government itself blew up apartment buildings in Moscow in 1999, killing hundreds of innocent civilians, in order to blame it on the Chechens and provoke the second Chechen war. Pretty damning stuff.

But even Litvinenko's personal smallness serves the KGB's purposes precisely. If they go to such lengths and such messiness and such risk to kill someone as small as Litvinenko, then no critic of the Putin dictatorship is safe. It is the ultimate in deterrence.

The prosecution rests. We await definitive confirmation in Putin's memoirs. Working title: “If I Did It.''

Source: Statesman Journal

Ukraine's Leaders In Bitter Fight

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko yesterday placed a debilitating power struggle squarely at the feet of his bitter political rival, Viktor Yanukovych, saying he had done his best to work with the new prime minister.


"There has been a lot of discussion about peacemaking," Mr. Yushchenko told a small group of foreign journalists. But he indicated it has been increasingly hard to find "common ground" with Mr. Yanukovych.

"I am not the author of the situation that has been created," the president said. "This is not constructive."

Mr. Yanukovych defeated Mr. Yushchenko in a tainted 2004 presidential election that was overturned by the courts in the face of massive protests known as the Orange Revolution.

Mr. Yushchenko won the rematch, only to see his opponent come back as prime minister last summer after a year and a half in which the president's coalition was itself accused of ethical failures.

Since then, the two have clashed over the president's efforts to bring Ukraine into major European institutions, including the European Union and NATO.

"The course of Euro-Atlantic integration is irreversible," Mr. Yushchenko said yesterday. "We are going into the European Union to create conditions for the development of the national economy, for better standards, for a system of defense and security."

During a visit to Washington last week, Mr. Yanukovych said he and the president did not differ on whether to join the two organizations, but only on the timing. Mr. Yanukovych said he favors gradual integration, while Mr. Yushchenko favors a fast-track approach.

At home, however, Mr. Yanukovych and his Regions Party, which hold the majority in parliament, have publicly taken strong stands against European integration and NATO membership, proposing closer relations with Russia instead.

Mr. Yushchenko and Mr. Yanukovych, often dubbed the two Viktors by the press, have also fought over next year's budget, constitutional issues and the price Ukraine is paying Russia for natural gas.

Most recently, Mr. Yanukovych spearheaded parliament's sacking of the Western-oriented foreign minister, Boris Tarasiuk, who under the constitution is appointed by the president. Although a Kiev court ruled this week that the firing was illegal, Mr. Tarasiuk has been barred from entering Cabinet meetings.

Political analysts in Ukraine have seen Mr. Tarasiuk's dismissal as a direct assault by the prime minister on the president, who has so far refused to appoint a new foreign minister. "I have rejected candidacies the prime minister has submitted. This is my position," Mr. Yushchenko said.

Ukraine's political bedlam has resulted in lower poll ratings for both the president and prime minister. Numerous opinion polls show nearly half of Ukrainians distrust the country's political leadership.

Source: Washington Times

Ukraine's Parliament Refuses To Fire Security Chief, Dealing Blow To Yushchenko

KIEV, Ukraine -- Ukraine lawmakers on Thursday refused to dismiss the head of the country's state security service, dealing a blow to President Viktor Yushchenko.

Viktor Yushchenko (L) and Ihor Drizhchany (R)
The vote of 183-8 was not enough to push through the president's proposal to sack Ihor Drizhchany, parliament needing a minimum of 226 votes to adopt any decision.

Yushchenko had asked parliament to dismiss Drizhchany late last month and he appointed him the deputy head of the security and defense council without waiting for the lawmakers to act.

The governing coalition in the 450-seat parliament called Yushchenko's move illegal and refused to take part in the vote.

"The president violates the constitution too often," said Taras Chornovil, a member of the majority coalition.

Drizhchany, who has headed the security agency since September 2005, has seen his name linked to many of Ukraine's messy political battles.

The agency has been involved in investigating some of the nation's highest profile crimes, including the still unsolved 2004 dioxin poisoning of Yushchenko and the killing of investigative journalist Heorhiy Gongadze in 2000.

Source: Kyiv Post

Ukrainian President Says Relations With PM Worsening, Calls For Compromise

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko said Thursday that his relationship with PM Viktor Yanukovych, his Orange Revolution rival, is worsening and he called for compromise.

The odd couple of Ukrainian politics - Yanukovych (L) and Yushchenko (R)
He and Yanukovych opposed each other in a 2004 presidential campaign which triggered the Orange Revolution protests that propelled Yushchenko to power.

Yanukovych bounced back less than two years later to win parliamentary elections and form a governing coalition. The two have frequently clashed over foreign policy, Cabinet appointments and other government business.

"A new team has come. They have the impression that the whole world lies at their feet, that they can rule from morning to evening as they want," Yushchenko said.

Under constitutional reforms that took effect this year, Yushchenko canot fire Yanukovych and Yanukovych cannot ignore the president.

The law provides little guidance over how power should be divided.

In many ways, Yanukovych already holds the upper hand. As head of government, he controls the country's finances.

His party also heads a 246-seat majority in the 450-seat parliament, ensuring that his initiatives have support.

Even though the constitution has declared the president responsible for foreign policy, Yanukovych declared that Ukraine must put its bid for NATO membership on hold and made improving tense relations with Russia as a priority.

Earlier this month, the parliament fired the foreign minister, a Yushchenko appointee who is a strong supporter of Ukraine's pro-western course.

Yushchenko said Thursday that "Ukraine's foreign course toward the EU and NATO is inevitable" and he called the minister's dismissal illegal.

The president called on the government to join his office in elaborating a law on the Cabinet of Ministers that would clearly define the functions of the two branches of power.

"Ukraine needs a more carefully thought-out constitutional reform ... The best way will be to have a political dialogue, to hold a round table," Yushchenko said.

Meanwhile, Yushchenko praised the government's and parliament's efforts to complete the adoption of bills needed to bring Ukraine's laws into line with the requirements for membership in the World Trade Organization.

The president said that the country has a strong chance to gain membership early next year.

Source: AP

Foreign Currency Reserves At New High

KIEV, Ukraine -- Ukraine’s foreign currency reserves have reached a new high, topping the $20 billion mark last month for the first time since the country declared independence in 1991.


Although reserves have enjoyed significant steady growth for at least the last seven years, the country got a particularly large foreign-currency injection in November on the back of growing exports, intensified foreign investment and a $1 billion Eurobond placed by the government last month.

According to the National Bank of Ukraine, foreign currency reserves grew by almost 8.9 percent month-on-month in November to $21.2 billion. National reserves were at $19.5 billion in November of last year.

For comparison, Poland’s last reported foreign-currency reserves, in October 2006, totaled a little over $47 billion. Russia, flush with cash thanks to large oil and natural gas exports, has reserves in excess of $200 billion.

Oleksandr Viktorov, an analyst with Kyiv-based investment bank Concorde capital, said there were several factors that have led to the sharp increase in Ukraine’s reserves in November, apart from the Eurobond issue.

One of them, he said, was an earlier external loan made to the NBU in September for 386 million Swiss Franks (almost $320 million). In addition, since last May, Ukraine has been enjoying growth in export revenues from its metals industry, due to high global steel prices. Ukraine is ranked 7th in world steel exports.

Merger and acquisition deals starting in 2005 also played a significant role in bringing up Ukraine’s foreign currency reserves, due to a delayed effect from the process of receiving the funds, Viktorov said. Mergers and acquisitions were particularly hot in the country’s banking sector, where foreign financial groups have been buying up Ukrainian banks at a premium, he added.

In addition, the $4.8 billion in funds received from the purchase of Ukraine’s lucrative Kryvorizhstal steel mill by International steel giant Mittal Steel, the deal for which was cut last fall, had an effect on last month’s currency-reserve growth, according to Viktorov.

The net effect of the country’s larger currency reserves will be good for the cash-strapped country.

“Accumulation of international reserves is generally a positive trend, especially in emerging markets, as reserves serve as insurance against the risk of sudden outflow of foreign currency or any other risk that may lead to a balance-of-payments crisis”, said Halyna Antonenko, equity analyst with Kyiv-based investment bank Foyil Securities.

Antonenko said the NBU has enough resources to smooth out short-term fluctuations on the foreign exchange market and keep the national currency stable.

Ukraine’s current level of reserves is “comfortable,” Antonenko said, especially taking into account that that devaluation pressures on the Ukrainian currency could increase next year due to the latest gas-price hike from Russia or an expected deterioration in the trade balance.

Source: Kyiv Post

Germany Gripped By Russian Spy Drama

HAMBURG, Germany -- The Litvinenko affair has reached Germany and with every day there is another twist to this mysterious story.

Image taken from Skynews TV channel shows private security agent Dmitry Kovtun. Kovtun, linked to a probe into the radiation poisoning of ex-spy Alexander Litvinenko, said he had been contaminated by the former agent in London weeks before the latter fell fatally ill.
The German media have been gripped by the unfolding drama.

"Polonium Alarm," one newspaper headline ran. "More radiation victims" said another, as investigators continue to follow a radioactive trail around Hamburg left by the Russian businessman Dmitry Kovtun.

Four people linked to Mr Kovtun, his former wife, her two children and her partner are still in hospital suspected of being contaminated with polonium-210.

Police have found traces of the radioactive substance at a flat in Hamburg owned by Mr Kovtun's former wife.

Detectives believe the Russian businessman spent two nights in this apartment before flying to London to meet Alexander Litvinenko.

'The Third Man'

Further traces of polonium-210 were discovered in a car which picked up Mr Kovtun from Hamburg airport, on a document which was left at the immigration office in Hamburg and in the house belonging to the mother of Mr Kovtun's ex-wife in Haselau, west of Hamburg, which he also visited.

All locations have now been sealed off and radiation experts are at the scene.

"There is absolutely no risk to public health," said Andreas Schoepflin, a spokesman for Hamburg Police.

German police have set up a special taskforce aptly called "The Third Man" - a reference to the Cold War film directed by Carol Reed - and a British detective from Scotland Yard is helping with the inquiry.

Investigators have pieced together Mr Kovtun's last known movements in Hamburg in the four days prior to his trip to London on 1 November, when he met Alexander Litvinenko at the Millennium Hotel.

"We assume that Mr Kovtun arrived in Hamburg on 28 October on a flight from Moscow and that he was already contaminated with polonium-210," Martin Koehnke, Hamburg's chief prosecutor told the BBC.

It appears that as soon as Mr Kovtun stepped off the plane at Hamburg airport, he started spreading the radioactive substance.

German prosecutors have opened a criminal investigation against Mr Kovtun on suspicion of illegally handling radioactive material.

"Dmitry Kovtun may not just be a victim, but he could also be a perpetrator," said Martin Koehnke.

Prosecutors face many unanswered questions: who took part in the Litvinenko murder plot, what is the state of Mr Kovtun's health and where did the polonium-210 come from?

Tip of iceberg

According to reports, Mr Kovtun is in a clinic in Moscow, where he is being treated for radiation poisoning, but there are conflicting accounts of his health.

As the investigation widens, Hamburg prosecutors officially lodged a request for information on the Litvinenko case with the Russian authorities.

The Kremlin has denied any involvement in the death of Alexander Litvinenko, and the authorities in Moscow have insisted that they are co-operating with British investigators.

But some observers in Berlin are concerned about the long-term impact of the Litvinenko affair which transcends the Kremlin.

"The Litvinenko case shows that there are dangerous criminal elements in the former Soviet Union which are involved in the smuggling of radioactive material around the world," said Alexander Rahr from the German Council of Foreign Relations.

"This could just be the tip of the iceberg, part of a wider threat from Russian criminal groups."

Millions of Germans tune in each Sunday night to "Tatort," a police drama series on television.

Now it seems that they have a real-life thriller on home soil.

Source: BBC News

Anti-Semitism At New High In Ukraine – Poll

KIEV, Ukraine -- Over a third of Ukrainians believes that Jews should not be citizens of Ukraine, according to the results of a recent poll conducted by Kyiv International Institute of Sociology.

Chief Rabbi of Kyiv Yaakov Dov Bleich
Based on a survey of 2,000 respondents, the poll found that 37 percent of Ukrainians would not want to share their nationality with Jews.

This figure jumped to 45 percent in the 18-to-20 age bracket.

The situation has deteriorated since 1994, when just 26 percent of those asked said they would not like Jews to have Ukrainian citizenship.

The survey also asked the respondents to answer whether they were sure that Jews were completely like other citizens of Ukraine. Only 57.4 percent of respondents completely agreed with that statement.

Respondents to the poll felt even more strongly about Roma and ethnic Romanians not being citizens of Ukraine, with 71.8 percent against the former having citizenship and 61.4 percent against the latter.

The regions of Ukraine were also broken down by the degree to which they consider Jews to be the same as regular citizens of Ukraine: Western Ukraine came in last, with only 45 percent of respondents saying that there was no difference between Jews and other Ukrainian citizens.

Central Ukraine, including Kyiv, appeared to be the most tolerant, with 68 percent reporting that they considered Jews to be the same as other Ukrainian citizens.

The survey also featured questions as to who should be allowed in the country, with almost 15 percent responding that they were against Americans visiting Ukraine. Only 6.6 percent were against the country having Jewish visitors.

Questions about other nationalities were also asked. A total of 22.7 percent of respondents would consider having an ethnic Russian as a close friend, versus only 12.2 percent who would consider an ethnic Jew or 7.8 percent who would befriend an ethnic American.

The respondents said they were more comfortable with North American guests (52.2 percent being comfortable with American guests, 58.7 percent being comfortable with Canadian guests) versus 29 percent being comfortable with Jewish guests.

Almost 53 percent would be comfortable with German guests, and a whole 59.8 percent with French guests, a much better showing than for Roma, who only 31.1 percent of Ukrainian respondents would welcome as visitors.

Leading Jewish authorities in the country were skeptical of the poll’s results, believing the situation for Jews in Ukraine to not be as dire as the survey suggests.

Chief Rabbi of Kyiv Yaakov Dov Bleich was among the skeptical. “I would not say that there’s no anti-Semitism [in Ukraine], I’m not saying that there’s not a problem, but to put it at that level, that’s something that we’ve never seen, have never heard before,” Bleich said, adding that he would like to see how the questions were formulated.

“Polls can never be taken at face value,” he said. “The onus is on them [Kiev International Institute of Sociology] to prove that they did a normal and true poll.”

“Anyone who says there is no anti-Semitism in Ukraine is lying,” he emphasized. “The important thing is how the government is going to react.”

Dr. Anatoly Podolsky, director of the Ukrainian Center for Holocaust Studies, a five-year-old non-governmental organization, also found anti-Semitism in Ukraine to be less than the results of the poll suggest. “I am not sure about the results of the survey, a project done by my center has other information,” he said.

“Ukraine is a multicultural society. It’s not only Ukrainians, Jews are part of Ukrainian society,” he said.

Vyacheslav Likhachev, an expert on anti-Semitism for various organizations in the country, was also dubious about the results of the survey. “The results of other research I have seen before was much better,” Likhachev said, citing a recent poll by the International Tolerance Center. In that poll, “the situation with Jews was better than with Poles, Moldovans, Hungarians and other close neighbors of Ukraine,” he said.

“The general tolerance for Jews is quite good, very good, because in general, the situation of xenophobia in Ukraine is not good, but it is better than for many other ethnic groups,” Likhachev said.

A total of 103,600 Jews were counted in Ukraine’s 2001 census, making up 0.2 percent of Ukraine’s population, according to the State Statistics Committee. National minorities account for 22.2 percent of Ukraine’s population.

Two thousand people across the country were surveyed for the poll, which was conducted in mid-October.

Source: Kyiv Post

Yushchenko Regains Control Of His Party

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko has replaced the leadership of his party, People’s Union-Our Ukraine (NSNU). The NSNU’s business wing, the “dear friends” who controlled the party since its foundation in spring 2005, have been banished from the leadership.

Viktor Baloha
Yushchenko apparently holds them responsible for the party’s defeat in the March 2006 parliamentary election. Now the party will be steered directly from Yushchenko’s office, as its new chairman, Viktor Baloha, also heads the presidential secretariat.

Many local observers believe that Yushchenko plans radical changes at the NSNU to beef it up for an early parliamentary election.

At the party’s third congress on November 11, “the dear friends” ignored Yushchenko’s call for change. Yushchenko did not attend then, and the party rejected his nomination for new party council chairman.

At the meeting of the NSNU’s 150-member council on December 7, Yushchenko, who is NSNU’s honorary chairman, chose radically different tactics, showing that he can rule with an iron fist.

It had been expected that Roman Bezsmertny’s bid for re-election as NSNU council chairman would be challenged by former prime minister Yuriy Yekhanurov and Petro Poroshenko, who is the most prominent of the “dear friends.”

Yushchenko, however, fielded Baloha, surprising many observers. Instead of an anticipated secret ballot, Yushchenko insisted on an open election for council chairman, and the knowledgeable weekly Zerkalo nedeli reported that Yushchenko had even threatened to leave the meeting if his proposal were rejected.

Nobody in the party dared to challenge the moral authority of its founder.

Baloha was elected chairman after three consecutive ballots, as internal party opposition to him was apparently quite strong, despite Yushchenko’s backing.

Yushchenko’s side eventually won: 112 members of the council voted in Baloha’s favor, with three votes against, and 24 abstained. Yushchenko said that Baloha would chair the council temporarily, until the NSNU’s next congress, scheduled for February.

In the interim, Baloha will apparently have to purge the top of the party of internal opposition and prepare it for a new leader.

Purges began the same day. Simultaneously with Baloha’s election, Bezsmertny was elected head of the party’s executive committee, which is the third-most important position after honorary chairman and council chairman.

The council also elected a new 14-member presidium. For the first time, the presidium did not include any of the dear friends. Along with Baloha and Bezsmertny, it included Yekhanurov, Baloha’s deputy at the presidential secretariat Viktor Bondar, Yushchenko aides Ivan Vasyunyk and Yuriy Pavlenko, Kyiv Region governor Vira Ulyanchenko (Yushchenko’s close aide for many years), Kharkiv Region governor Arsen Avakov, and several senior parliamentarians.

Zerkalo nedeli deplored Yushchenko’s “tough” style at the meeting. It also wondered who will finance the party now that the dear friends -- who have so far apparently been the party’s main sponsors -- have fallen out with Yushchenko and may be drifting toward the Yulia Tymoshenko Bloc.

Segodnya, a daily traditionally critical of Yushchenko, quoted its sources at the NSNU as saying that the Donetsk-based Industrial Union of Donbas (ISD) may start pumping money into the party.

The ISD is viewed a rival to Renat Akhmetov’s System Capital Management, the main force behind Prime Minister Viktor Yanukovych’s Party of Regions. The current secretary of the National Security and Defense Council, Vitaly Hayduk, is a co-founder of the ISD.

Speaking to Den, another critic of Yushchenko, analyst Volodymyr Malynkovych, warned, “The [presidential] secretariat is losing the role that it should play in a democratic state. This is the secretariat of the head of state, not of a party leader.”

Volodymyr Zastava of the Kyiv-based Gorshenin think tank opined that the NSNU is being transformed into the Ukrainian analogue of Vladimir Putin’s United Russia party.

Next year, the charismatic Yuriy Lutsenko, one of the leaders of the 2004 Orange Revolution, may replace Baloha at the helm of the NSNU. On December 1 the Yanukovych-led coalition dismissed Lutsenko from the post of interior minister.

Yanukovych did not deny that one of the reasons for the firing was Lutsenko’s intention to become the leader of a pro-Yushchenko party next spring, a move that Lutsenko had declared at the NSNU congress in October.

Ukraine’s mainstream media almost unanimously suggest that Yushchenko is strengthening the NSNU in order to win an early parliamentary election next year. According to Zerkalo nedeli, Yushchenko has started consultations with his allies, including Tymoshenko, on the possibility of calling an early election.

Yushchenko is exhausted by the continuing war with Yanukovych over his powers, a fight that he has been losing, while his loyalists have been ejected from the cabinet one by one.

He may see an early election as the easiest way to bring his team back to power. For the moment, however, there appear to be no legal grounds for Yushchenko to dissolve parliament and call an early election.

Source: Eurasia Daily Monitor

President Vetoes Ukrainian Budget, Dealing Blow To Government

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko has vetoed the 2007 budget passed by parliament last week, dealing a blow to the government headed by his rival Viktor Yanukovych, the president's office said Tuesday.

Viktor Yushchenko
Yushchenko said the monthly minimum wage and inflation rate reflected in the proposed budget were too low and should be reconsidered.

It was the first time in its history that a Ukrainian president vetoed a budget drafted by the government and approved by parliament, reflecting the high tensions between the president and the prime minister.

After Yanukovych was accused of vote rigging in the tainted 2004 presidential election, protesters rose up in what became known as the "Orange Revolution." The country's Supreme Court overturned the election and ordered a new vote, which Yanukovych lost to his pro-Western rival, Yushchenko.

But in a strange twist, both now share power after Yanukovych won this spring's parliamentary election and was named prime minister.

Earlier this week, the country's parliament approved the 2007 budget, which envisions revenues of 147.89 billion hryvna ($29.09 billion) and expenses of 161.35 billion hryvna ($31.74 billion) - an approximately 18 percent increase over this year's budget.

The budget sets the monthly minimum wage at 380 hryvna ($75) as of January, less than the 406.60 hryvna ($80.50) that was recommended by economists to help people cope with inflation, according to a statement issued by the president's office.

Social service and welfare payments, including pensions, are calculated based on the monthly minimum wage.

Yushchenko also criticized the government for reducing the monthly minimum wage increase from 40 percent in 2005 to 12.5 percent in 2007.

Parliament needs 300 votes to override a presidential veto.

Yushchenko and Yanukovych have frequently clashed over foreign policy, Cabinet appointments and other government business.

Source: AP

Ukraine Babies In Stem Cell Probe

LONDON, UK -- Healthy new-born babies may have been killed in Ukraine to feed a flourishing international trade in stem cells, evidence obtained by the BBC suggests.

There is heated debate about the ethics of using stem cells
Disturbing video footage of post-mortem examinations on dismembered tiny bodies raises serious questions about what happened to them.

Ukraine has become the self-styled stem cell capital of the world.

There is a trade in stem cells from aborted foetuses, amid unproven claims they can help fight many diseases.

But now there are claims that stem cells are also being harvested from live babies.

Wall of silence

The BBC has spoken to mothers from the city of Kharkiv who say they gave birth to healthy babies, only to have them taken by maternity staff.

In 2003 the authorities agreed to exhume around 30 bodies of foetuses and full-term babies from a cemetery used by maternity hospital number six.

One campaigner was allowed into the autopsy to gather video evidence. She has given that footage to the BBC and Council of Europe.

In its report, the Council describes a general culture of trafficking of children snatched at birth, and a wall of silence from hospital staff upwards over their fate.

The pictures show organs, including brains, have been stripped - and some bodies dismembered.

A senior British forensic pathologist says he is very concerned to see bodies in pieces - as that is not standard post-mortem practice.

It could possibly be a result of harvesting stem cells from bone marrow.

Hospital number six denies the allegations.

Source: BBC

Mobile Biz Braces For New Rules

KIEV, Ukraine -- As it stands today in Ukraine, if you leave one mobile carrier for another, you also lose your phone number – a huge inconvenience in this digital world.

Number portability is a feature available to mobile phone subscribers worldwide
But number portability, a feature available to mobile phone subscribers worldwide, may be in store for tens of millions of Ukrainian mobile phone users as well if Ukrainian lawmakers can get past tough resistance from the country’s two mobile communications giants.

Consumers, as well as small mobile operators, could come out ahead, if a recently introduced draft law allowing subscribers to transfer their telephone numbers from one provider to another comes into force.

Last month, the bill got through its first reading in parliament, receiving a whopping 412 out of 450 votes. Parliament must read the bill at least one more time before it goes to the president to sign into law.

If signed, the law would go into effect six months later, a point of contention for the country’s Big Two telecoms, which say it would be technically impossible to implement changes envisioned by the bill that quickly.

Kyivstar and Ukrainian Mobile Communications (UMC) control about 85 percent of the country’s mobile communications market of about 40 million subscribers.

UMC spokesman Vitaliy Mukhin told the Post that in other countries telecoms were given up to three years to make necessary adjustments to implement a portable mobile number system.

Mukhin wouldn’t say, however, whether he thought the proposed changes would erode his company’s subscriber base, which currently exceeds 16 million people.

But Oleksiy Kostusev, the chairman of Ukraine’s Anti-Monopoly Committee (AMC), said this is exactly what would happen.

“Kyivstar and UMC are not interested in this, as they will likely lose many of their clients, who would immediately switch to the ones whose services are cheaper,” reads a statement sent by Kostusev to the Post.

“Currently, many of their unhappy clients don’t do that in order to retain the number.”

Smaller Ukrainian providers are already more attractive to mobile phone subscribers because they offer no connection fee, Kostusev said. UMC and Kyivstar charge Hr 0.27 for most non-contract packages.

The AMC has already introduced its recommendations to the Communications and Transportation Ministry and the National Communications Regulation Commission.

Two options are being floated: either providers will be allowed to retain their exclusive use of the three-digit code that precedes the mobile phone numbers they service in Ukraine, or subscribers will keep them.

Currently, unlike in the United States, for example, each Ukrainian mobile provider uses its own three-digit prefix.

According to Kostusev, the new legislation would lead to increased competition and thus improved service and lower rates for consumers.

Serhiy Tovstenko-Zabelin, senior spokesman at Kyivstar, said that the provision of portable numbers is not prohibited in Ukraine; therefore, it’s better to leave it to the operators to offer this service to their subscribers rather than forcing them to do so legislatively.

In addition, Tovstenko-Zabelin thinks that the innovation will make mobile communication more expensive.

However, smaller Ukrainian providers, such as Ukrainian Radiosystems (URS), which works under the Beeline brand, are in favor of the new bill. Currently at 1.2 million subscribers, the company is intent on getting a larger piece of the market, URS deputy general director for commercial issues Yevhen Malynovsky told the Post.

Allowing subscribers to hold on to their mobile phone numbers would make changing one’s mobile phone carrier less “extreme,” he added.

Source: Kyiv Post

Tymoshchuk Pips Sheva To Ukraine Gong

KIEV, Ukraine -- Andriy Shevchenko has lost out to Shakhtar Donetsk captain Anatoliy Tymoshchuk for the Ukrainian player of the year award.

Anatoliy Tymoshchuk
Last year's winner Shevchenko did come second, however, 12 votes ahead of former Dynamo Kiev team-mate Sergiy Rebrov.

The award is voted for by pundits, journalists and supporters groups, and each representative names a top three, the results of which are published in Ukrainian Football magazine.

This year 44 experts, 100 journalists and 100 supporters took part in the referendum.

Tymoshchuk registered 379 votes and wins the award for the second time in his career, the first having been in 2002.

Chelsea'a summer signing Shevchenko (239) has failed to set Stamford Bridge alight since his multi-million pound arrival from Milan, while Rebrov has come back from the footballing graveyard after his career stalled following leaving Kiev for Spurs in 2000.

Source: Eurosport

Upscale Hotels On Way Up In Kyiv

KIEV, Ukraine -- Several upscale hotels are scheduled to open in Kyiv within the next couple of years to satisfy the demand created by the increasing numbers of business travelers and tourists coming to the Ukrainian capital.

The Opera Hotel is one of several upscale hotels set to open in Kyiv this year to meet growing demand for quality services from the increasing number of business travelers and tourists coming to the capital.
The market is ripening not only for Ukrainian operators, but international chains, such as Hyatt and Hilton, who have plans to set up shop in the city.

The Opera, a five-star hotel belonging to the Donetsk-based financial and industrial holding System Capital Management (SCM), announced its opening for Dec. 20. At least eight other mostly four and five star hotels are expected to open their doors by 2009, according to Kyiv’s Municipal Economy Department.

Changes in the country’s political and social climate brought about by the Orange Revolution in 2004 are largely responsible for the favorable developments on the Ukrainian hotel market, said Oleg Bolotov, vice president of Premier International, the firm that operates Premier Palace, which calls itself Kyiv’s first five-star hotel.

In addition to Premier Palace, Premier International operates another five hotels in Ukraine, all described as four-star. “The image of the country has changed. It has become more open and attractive to foreigners. Hence, the number of business travelers and tourists has increased,” Bolotov told the Post.

“So have the requirements toward the quantity and quality of hotel services,” he added.

Bolotov said that international hotel operators bank on their brand names and global corporate agreements more than on the quality of their services to ensure their success on the market.

“In order to stay competitive, we plan to launch a new central reservation system, the same as international chains have, to establish cooperation with corporate clients,” Bolotov said.

The arrival of international chains may give upscale customers the greater quality and choice that they seek in hotels in Ukraine, but more doesn’t necessarily mean cheaper, according to Bolotov.

“Prices may be reduced, but I don’t think there will be a price war [between operators],” he said.

“Within the next few years, the growing number of corporate clients will keep the hotels occupied,” he added.

Suite prices in Premier Palace range from $400 to $3,000 a night, and the hotel was filled to about 65 percent of its capacity in 2006, Bolotov said.

SCM is staking its bets on luxury VIP hotel services in Ukraine with the opening of its 140-room Opera hotel in Kyiv, according to Clinton Ribbon, the hotel’s general director.

SCM would not disclose the amount invested into Opera hotel.

According to Kyiv’s Municipal Economy Department, SCM is investing $30 million into the project.

Described by SCM as five-star, the company’s first hotel, the Donbass Palace in Donetsk, was finished in 2004 for $26 million.

SCM is owned by Donetsk multi-billionaire and pro-government lawmaker Rinat Akhmetov.

Opera’s Ribbon said that the success of SCM’s Opera hotel would be an indicator for future investments in Ukraine’s hospitality business.

Ribbon said the country’s luxury hospitality market is still underdeveloped, leaving room for local operators as well as international hotel networks to expand their business.

“Local operators have an opportunity to establish themselves on the same level as big chains, since they can combine international standards with specific domestic experience,” Ribbon said.

According to Ribbon, the main target of five-star hotels is corporate clients, and the Opera considers any hotel offering accommodations to business travelers its competitor.

The first international hotel chain in Kyiv was Radisson SAS, which opened in 2005.

Hyatt Regency Saint Sophia, an investment project of the Donbass Industrial Union, one of Ukraine’s largest business holdings, is scheduled to open in Kyiv in March 2007.

Hilton plans to open a $70 million five-star luxury hotel in Kyiv in 2008.

Source: Kyiv Post

Sri Lanka To Buy MiG Aircraft From Ukraine

COLOMBO, Sri Lanka -- Sri Lanka is to bolster its air force by buying four Mig-27s from Ukraine as its battle with the Tamil Tiger rebels intensifies, a government minister said.

MIG-27 aircraft
Policy Planning Minister Keheliya Rambukwella said Ukraine would also overhaul four identical ground attack aircraft already with the island's airforce.

The four new planes will be delivered shortly to the airforce, which carries out regular air raids against Tamil rebels in the island's north and east.

The deal is worth 9.8 million dollars, according to press reports.

Rambukwella said he did not have price details for the second-hand, swing-wing MiGs, which will boost the airforce fleet of a handful of Israeli-built Kfir and Chinese-made F-7 ground attack aircraft.

"What we are paying to buy four used planes is less than what a friendly country quoted for the refurbishment of four (existing) planes," Rambukwella said on Friday.

Sri Lanka's airforce resumed air attacks against the Liberation Tigers of Tamil Eelam in April after the guerrillas were blamed for a suicide assassination attempt on army chief Sarath Fonseka.

Kfir and MiG-27 aircraft have been bombing suspected Tiger positions despite a truce that has been in place since February 2002. The military maintains that the attacks were pre-emptive strikes.

Sri Lanka bought MiG-27 ground attack planes in 2000, shortly after rebels overran the key Elephant Pass garrison that controls land access to the northern Jaffna peninsula in April 2000.

In August 2000, a Ukranian pilot was killed when a MiG-27 crashed near the international airport.

A second MiG-27 was lost when the Tigers destroyed aircraft parked at an airforce base adjoining the international airport in July 2001. Another MiG-27 crashed into a lagoon near the airport in June 2004.

Sri Lanka's airforce had also lost 19 aircraft between April 1995 and April 1997. Some were shot down by rebels who have at least two micro-light aircraft, according to the government, as well astheir own airfield.

Colombo Lanka has raised the defence budget by 45 percent to 139 billion rupees (1.28 billion dollars) for calendar 2007.

Source: AFP

Ukraine's Restored PM Makes First US Visit

WASHINGTON, DC -- Viktor Yanukovich, cast as the villain in Ukraine's Orange revolution, this week tried to portray himself as a statesman on his first visit to Washington since making a remarkable return as prime minister this ­summer.

Ukrainian Prime Minister Viktor Yanukovych (L), meets with U.S. Secretary of State Condoleezza Rice, on Capitol Hill in Washington
However, his visit was overshadowed by an escalating power struggle with Viktor Yushchenko, the increasingly marginalised pro-western president. Their tussle over foreign and domestic policy has left many diplomats unsure as to which Viktor is in charge.

Mr Yanukovich, who, in spite of backing from Moscow, suffered a humiliating loss in the 2004 presidential elections, met Dick Cheney, US vice-president, and Condoleezza Rice, secretary of state. He unsuccessfully sought a meeting with President George W. Bush – a signal that Washington prefers to keep its distance from the prime minister and recognises Mr Yushchenko as Kiev's top statesman.

In the first days of the trip, Mr Yanukovich played down the wrestling match over authority with Mr Yushchenko, who was received with highest honours in Washington during a post-Orange revolution visit.

Despite his support for ties with Moscow, Mr Yanukovich in Washington pledged support for European integration. He also hinted that many of the differences with his arch-rival are simply a matter of timing.

"I don't consider there to be, practically, any differences with the president with regards to the strategic goals for the next 25 years. All questions lie in tactics," he said. "Our actions in the international arena should be based on pragmatism. We should not promise more than we can do."

Following his talks in Washington, he said Russia and Ukraine would not be friends against Europe and the US, but neither should the US and Ukraine be friends against Russia.

"No one will try to push anyone, anywhere," he said, rejecting pressure on Ukraine to accept early membership of Nato.

The prime minister also said his coalition was close to passing the last of two legislative bills required to allow Ukraine to join the World Trade Organisation.

However, Mr Yanukovich's words cannot conceal the deepening rift with Mr Yushchenko over control of foreign and domestic policy. Last week, his governing coalition in parliament fired Borys Tarasyuk and Igor Lutsenko, Ukraine's pro-western foreign and interior ministers respectively and both Yushchenko allies.

A bill registered this week by Mr Yanukovich's camp called for the ousting of Anatoly Hrytsenko, the defence minister and Mr Yushchenko's last ally in the government. Meanwhile, prosecutors launched a criminal probe into alleged corruption by Oleksiy Ivchenko, a close associate of Mr Yushchenko who chaired the state energy group.

This week, a Kiev court and a presidential decree reinstated Mr Tarasyuk. Mr Yushchenko's team believes the constitution gives him authority on foreign policy but Mr Yanukovich last week said parliament formulated foreign policy.

Mr Tarasyuk was fired after nearly spoiling Mr Yanukovich's Washington visit. Just days before the trip, the ministry informed US officials that the premier's visit would be postponed after he refused to seek presidential approval on the trip's foreign policy initiatives. Mr Yanukovich conceded to presidential approval for the trip at the last minute but fired Mr Tarasyuk in retaliation.

In a further indication of how petty the power struggle has become, Mr Yanukovich's government on Wednesday refused to admit Mr Tarasyuk to a cabinet meeting, saying it did not recognise him as foreign minister.

Mr Yanukovich has gradually taken away authority from Mr Yushchenko since forming a coalition government. He has also tried to revamp his image. In Washington, he pledged to support democracy, dubbing allegations linking his camp to fraud during the 2004 presidential vote as spin.

The deepening rift between Ukraine's two leaders could set Kiev on a path for repeat parliamentary elections and a constitutional stand-off. Mr Yushchenko's allies have accused Mr Yanukovich of backing out of promises to support speedy western integration and liberal economic reforms and hope to return Ukraine to stronger presidential rule.

Ukraine's parliament on Wednesday approved the long-awaited privatisation of ­Ukr-telekom, the country's largest telecommunications company, which officials hope will repeat last year's highly profitable sale of Kryvorizhstal, a flagship steel mill.

Source: Financial Times

Putin’s Visit To Help Strengthen Military, Security Ties: Yushchenko

KIEV, Ukraine -- Russian President Vladimir Putin’s visit to Ukraine will help strengthen relations between the two states in the security and military spheres, Ukrainian President Viktor Yushchenko said on Thursday.


“We consider the upcoming visit to Kiev by Vladimir Vladimirovich Putin as an important stage, which will help strengthen our relations, including in the sphere of security and in the military sphere,” the Ukrainian president said at talks with visiting Russian Deputy Prime Minister and Defence Minister Sergei Ivanov.

The Ukrainian leader stressed the importance of two strategic documents to be signed. One of them is on cooperation in the security sphere, while the second one is a program of cooperation between the two states for 2007-2008.

These documents will incorporate all projects on which the sub-commissions functioning within the framework of the Putin-Yushchenko inter-state commission work, the president said.

The president also came out in favour of a boost in joint steps by the two states to promote weapons and military hardware on the armament markets of third countries.

Yushchenko also focused on the upcoming in 2007 firing practice of Ukrainian Air Force units on the Russian firing range Telemba outside Chita and Ashuluk near Astrakhan.

Russia’s deputy prime minister, for his part, informed the Ukrainian president about the results of the first session of the sub-committee for security within the framework of the Russian-Ukrainian inter-state commission.

He also said Russia was ready to offer assistance in Ukraine’s joining the NATO anti-terrorist Operation Active Endeavour in the Mediterranean.

Source: Itar-Tass

Ukraine's Parliament Approves Long-Awaited Privatization Of Telecom Giant Ukrtelekom

KIEV, Ukraine -- Ukraine's parliament on Wednesday approved the long-awaited privatization of the country's largest telecommunications company, which officials hope will repeat last year's highly profitable sale of a flagship steel mill.


The 450-seat parliament approved the sale in a 226-6 vote, with many lawmakers not voting in protest.

The privatization of telecoms monopoly Ukrtelekom, in which the government currently holds a 92.86 percent stake, has been repeatedly postponed. But both President Viktor Yushchenko and Prime Minister Viktor Yanukovych support selling shares next year.

After the profitable sale of Kryvorizhstal last year, the government hopes to repeat the success by selling Ukrtelekom at a similarly open, public auction.

This year, the Transport and Communications Industry predicted that a 50 percent stake in Ukrtelekom could go for between US$3 billion-US$4 billion (€2.5 billion-€3.3 billion) in an auction.

But analyst Vadym Karasyov predicted that Ukrtelecom would fetch far less, only about 4 billion hryvna (US$790 million, €630 million).

He said foreign investors would probably not be as interested because of Ukraine's current political instability and predicted the government would try to keep the price low to favor Ukrainian investors.

"The right moment to sell Ukrtelecom was missed. It is unlikely that the government will manage to repeat the success of the Kryvorizhstal sale now ," said Karasyov, head of the Kiev-based Institute on Global Strategies. He said much of Ukrtelecom's equipment is outdated, making the telecoms giant not as attractive to investors.

Yushchenko's ally, lawmaker Borys Bespaliy, agreed, noting that "the price of the giant does not increase as time passes." He also expressed concern over how Yanukovych's government would conduct the sale.

Kryvorizhstal was snapped up by Mittal Steel last year for 24.2 billion hryvnas (US$4.8 billion, €4.1 billion) in Ukraine's biggest and most profitable privatization auction ever.

The price was nearly six times what it initially was sold for under former president Leonid Kuchma and Premier Yanukovych in a deal later canceled as illegal. The buyers had been Kuchma's son-in-law and a magnate close to Yanukovych.

Source: AP

Ukraine's NATO Membership To Affect Ties With Moscow: Russian DM

KIEV, Ukraine -- Russia warned on Thursday that Ukraine's NATO membership would affect relations with Moscow "one way or another."

Russian Defense Minister Sergei Ivanov
"Regardless of whether we want this or not, it will have an inevitable impact one way or another on our relations, particularly on cooperation in the military-industrial sector and some other spheres," Russian Defense Minister Sergei Ivanov told a news conference with his Ukrainian counterpart Anatoliy Hrytsenko.

Russia, Ukraine's biggest trade partner, has expressed strong opposition to the country's efforts to join NATO, while admitting that it was the country's sovereign right to do that.

The issue even remains a controversial one in Ukraine with President Viktor Yushchenko making NATO membership a priority and Premier Viktor Yanukovych trying to put the bid on hold.

Ivanov, who arrived in Kiev on Wednesday for a two-day visit, met later with Yushchenko to discuss Russian President Vladimir Putin's upcoming visit. Putin plans to travel to Kiev on Dec. 22.

Source: Xinhua

Thousands Protest Outside Kiev Mayor's Office Against Sharp Increase In Utilities Rates

KIEV, Ukraine -- Thousands of residents of the Ukrainian capital rallied Thursday outside city hall to protest against a threefold increase in maintenance and utilities rates, calling for the mayor's ouster.

Mayor Leonid Chernovetsky
The city council, meanwhile, met inside to debate the rate hikes. As of Dec. 1, many Kiev residents saw their monthly payments for maintenance, electricity, gas, heat and other services skyrocket — with some facing increases of more than 340 percent.

Mayor Leonid Chernovetsky has defended the increase, blaming the previous administration for creating the problem by not hiking rates since 1999.

In a bid to calm tension, Chernovetsky proposed creating a special commission to verify the need for the hikes, his office said Thursday.

His political opponents — President Viktor Yushchenko's bloc and the bloc of former premier Yulia Tymoshenko — argue, however, that their goal is to rollback the increase.

They argue it must be phased in more gradually, and are trying to initiate a public referendum of no-confidence on Chernovetsky. The dispute has escalated into a brutal political battle, with all sides accusing one another of misleading the public.

On Thursday, protesters erected numerous cardboard cutouts of the mayor, a former banking magnate, outside city hall and called on passer-by to write their opinion of the mayor and deposit it in a box. "If you don't have words, then spit on it," a sign read.

Hundreds of police stood watch, as protesters waved party flags and listened to speeches condemning the mayor. The protest snarled traffic on one of Kiev's main streets.

"He's not capable of being mayor," complained Lidiya Rulok, 60, who said the city services bill for her apartment grew to 500 hryvna (US$100, €75) this month — 100 hryvna (US$20, €15) more than her monthly pension. "Where does he think I'm going to get that kind of money?"

Source: AP

Ukrainian Cabinet Bars Newly Reappointed Foreign Minister From Session, Minister Says

KIEV, Ukraine -- Prime Minister Viktor Yanukovych's allies on Wednesday barred the newly reappointed foreign minister from a Cabinet session, a move that was likely to further raise tension between the premier and the president.

Foreign Minister Borys Tarasyuk
President Viktor Yushchenko on Tuesday ordered his political ally Borys Tarasyuk to stay on as foreign minister, defying a parliamentary vote last week to sack the pro-Western minister.

Yushchenko acted after a local Kiev court upheld Tarasyuk's appeal against his firing.

But when Tarasyuk tried to enter Wednesday's Cabinet session, he said he was stopped by Anatoliy Tolstoukhov, a minister in charge of the Cabinet's work.

Yanukovych, who is currently on an official visit to the United States, was not present at the session.

"They said I wasn't on the list," Tarasyuk said in remarks broadcast on TV5, adding that he would file a lawsuit against the Cabinet for refusing him entry. "I will seek to secure my rights as a member of the Cabinet."

The Cabinet of Ministers press office refused to comment.

Yanukovych had initiated Tarasyuk's dismissal, complaining that he was working in opposition to the Cabinet. Tarasyuk heads a political party that has declared itself in opposition to Yanukovych's government, and his pro-Western views were in sharp contrast with Yanukovych's more Russian-leaning political party.

The pro-Western Yushchenko and Yanukovych share power in an awkward arrangement that was initially billed as an effort to unite Ukraine, but instead has turned into a tug-of-war for influence.

Source: AP

Ukraine's Yushchenko Reinstates Sacked Foreign Minister

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko on Tuesday reinstated a sacked foreign minister back into office - a move likely to spark yet another constitutional wrangle in the former Soviet republic.


Borys Tarasyuk
Yushchenko by executive order returned to office political ally Borys Tarasiuk, whom parliament had thrown out of the foreign minister job last week.

The Ukrainian president, a supporter of closer relations with NATO and the European Union, cited a Kiev court decision cancelling the parliament vote on grounds it was potentially unconstitutional.

Ukraine's recently-amended constitution reserves the right of hiring and firing foreign ministers to the president.

Controlled by an anti-Yushchenko and pro-Russia majority, the parliament voted against Tarasiuk's continuing in job on December 1, citing a worsening of relations between Russia and Ukraine.

MPs at the time argued the constitution did not specifically forbid parliament from firing a foreign minister in case of incompetence.

Tarasiuk ran afoul of parliament, according to most analysts, not for lack of professional skill, but rather his outspoken support of Ukrainian access to NATO and the European Union, and a decidedly hostile attitude towards Ukraine's giant northern neighbour Russia.

The reinstatement of Tarasiuk by Yushchenko is certain to be embarrassing for the country's Prime Minister Viktor Yanukovich, a powerful pro-Russia politician currently in the US on a state visit.

The reappearance of Tarasiuk in the cabinet will undermine Yanukovich's assertions in Washington that he, rather than Yushchenko, makes the decisions in Ukrainian foreign policy.

Yanukovich and Yushchenko have been at open odds since late 2005, when the two politicians found themselves on opposite sides of the barricades during Ukraine's Orange Revolution.

Yanukovich defeated Yushchenko in an October 2005 Presidential election badly marred by vote-rigging. The Supreme Court eventually cancelled the result in the wake of massive street protests against election fraud.

Conflict between the pro-Europe wing of Ukrainian politics led by Yushchenko, and the pro-Russia wing led by Yanukovich, has paralysed much of Ukrainian government for months.

Source: dpa German Press Agency

Ukraine's Still Cuddling The Bear

KIEV, Ukraine -- Driving in from the airport, the sign reads “Welcome to Kyiv” — a variation in the familiar spelling that speaks volumes about this ambivalent land. Kyiv reflects the Ukrainian, rather than Russian version of the city's name in Latin script.


Long under the political control of Moscow, Ukraine is now self-consciously independent for the first time since 1654 (except for three years after 1917). But, of course, Ukraine remains at Russia's doorstep, sharing an often tortured history and economy, and immersed in Russia's language and cultural values.

As Ukraine's history over the past decade has shown, the country is independent within a continuing embrace, vibrant in its Ukrainian identity but beholden still to its Russian character and minority population.

Somehow, in the coming years, Ukraine will find the recipe to reconcile its location and history with its dominant nationalism and aspirations for Europe — or it could split along the east/west line that divides its population on religious and cultural grounds.

So far, the dance is working, albeit with moments of drama and risk. The defining point was the Orange Revolution that, two years ago, drew a line in the process by which Ukraine is governed.

The fact President Viktor Yushchenko's party subsequently split and effectively lost the last election is less significant than the fact he prevailed through the corruption and manipulations of the earlier presidential contest.

A minimum standard was set and ultimately observed for the rule of law, as fragile as that standard may still be.

Now, Mr. Yushchenko shares power and constitutional responsibilities with Premier Viktor Yanukovich, his political nemesis, who is representative of the Russian gene in the Ukrainian body politic. As tense as the relationship is, this “cohabitation” reflects Ukraine's persisting ambivalence, both in circumstance and inclinations.

Mr. Yanukovich steadies the relationship with Moscow as the Russian-oriented business class sweeps back into Kiev from eastern Ukraine and the economy powers ahead with growth of 6.5 per cent this year.

Now that Russia is on track to join the World Trade Organization, Ukraine can pick up on its own agenda and do the same. The culture of corruption in both countries' business communities will hopefully weaken as the desire for legitimacy prevails.Meanwhile, Kiev emerges from a Communist shroud as a handsome, even inspiring landscape.

Renovation illuminates Kiev's fine inheritance of classic apartments and public buildings, while large, expressive condominiums emerge from suburban fields. The legacy of Russia recedes as the regime asserts Ukrainian culture and memory in the pores of daily life.

In his beautiful suite on a promontory overlooking the city, Mr. Yushchenko shows every sign of recovering from the brutal attempt at poisoning him during the election campaign two years ago — a handsome, eloquent martyr.

Limited as he may be by his relationship with his powerful premier, and unpopular in the polls for the collapse of his own coalition, he is fiercely determined to see Ukraine through to modernity, with closer ties to Europe.

At his dacha in the countryside just outside the city, the President has created an affecting centre of traditional Ukrainian culture, restoring old houses, collecting the artifacts of daily life from rural landscapes, amassing art, planting trees, protecting birds and favouring music.

Here, one witnesses the passion he brings with his American-born wife, Katya, to the revival of Ukrainian history so often and criminally repressed by Moscow. Mr. Yushchenko's decisive role in the rebirth of Ukraine is incontestable, whatever follows when his term ends in 2009.

In The Clash of Civilizations, Samuel Huntington mused about Ukraine's risky path out of the Soviet Union and predicted that “Ukraine will remain united, remain cleft, remain independent, and generally co-operate closely with Russia.”

This seems a properly nuanced view for now, which sustains the conditions for democracy, supports this phase of prosperity and, ultimately, generates much more discretion for Ukraine as a distinctive presence in the world.

Source: Globe and Mail

U.S. Seeks Assurances On Ukraine Democracy

WASHINGTON, DC -- U.S. officials praised Ukraine's fledgling democracy when Viktor Yanukovych was blocked from becoming president after flawed elections two years ago.

Ukraine's Prime Minister Viktor Yanukovych
Now he's visiting Washington as Ukraine's duly elected prime minister, coming with the burden of convincing Americans he's committed to keeping democracy alive.

Yanukovych's meetings Monday and Tuesday with Vice President Dick Cheney, Secretary of State Condoleezza Rice and members of Congress were designed in part to discuss Ukraine's economy and its possible entry into the World Trade Organization and NATO.

But more was at stake than that.

"The main goal that Yanukovych is coming with is to establish some credibility with the administration," said Steven Pifer, a former U.S. ambassador to Ukraine and now a senior adviser at the Center for Strategic and International Studies. Yanukovych was to speak to the group.

In 2004, Yanukovych was seen as a foe of democracy. Western officials expressed outrage at stolen votes that initially helped him win the presidential election.

The country's Supreme Court threw out that result and ordered a new vote, which he lost to his pro-Western rival, Viktor Yushchenko.

Yanukovych was widely discredited, while Yushchenko was praised in the West and given a standing ovation when he addressed the U.S. Congress last year.

But Yanukovych became prime minister after parliamentary elections in March that were declared Ukraine's freest and fairest ever. He now shares power with Yushchenko.

Yanukovych's trip comes after the Ukrainian parliament ousted Friday the country's foreign and interior ministers, two key allies of Yushchenko.

Pro-Western Foreign Minister Borys Tarasyuk was fired after criticizing Yanukovych's Washington trip and grappling with Parliament about the president's constitutional primacy over foreign policy.

U.S. officials have played down the moves by Yanukovych's party against the ministers as an internal Ukrainian matter. But they have cautioned that Ukraine's democratic development is their primary concern.

"With respect to Ukraine, as with respect to any other country, we certainly want to see those that are elected democratically, govern democratically," said State Department deputy spokesman Tom Casey at a briefing Friday.

Despite setbacks for Yushchenko, he has argued that the wrangling between two directly elected power centers - the parliament and the presidency - are indeed signs of democracy.

Source: AP

Modern Ukrainians Prefer Marriage, Premarital Sex

KIEV, Ukraine -- Ukrainians prefer living in a nuclear family more than a decade ago, but their old-style values stop when it comes to premarital sex, according to the results of a national poll made public Friday.

Ukrainian students near Shevchenko University
A whopping 68 per cent of modern Ukrainians said the proper way for people to live is in a traditional husband-and-wife relationship, as opposed to a mere 14 per cent believing marriage is a social custom that had outlived its usefulness, an official for the Kiev International Institute of Sociology (KIIS) said.

The numbers for Ukrainian society in 1991 were 57 per cent and 25 per cent, respectively, according to KIIS statistics.

The demographic shift to family values has not, however, had much effect on Ukrainian enthusiasm for premarital sex, which has increased substantially over the last fifteen years, pollsters found.

More than 45 per cent of modern Ukrainians said they felt premarital sex was acceptable for everyone, while only 27 per cent told pollsters they opposed the idea in all cases.

Ukrainians were almost exactly evenly divided on premarital sex in 1991, with 38 per cent for and 36 per cent against, the survey showed.

Ukrainian men were somewhat more supportive of premarital sex than women, with 69 per cent nationwide in favour of sexual relations before marriage, as opposed to 55 per cent of women.

A clear division in attitudes on the issue also was visible between the country's cities and villages, with 36 per cent in urban areas absolutely opposed to premarital sex, and 44 per cent of rural region inhabitants against the idea.

The most conservative region in the country proved to be the ethic Ukrainian and traditionally Catholic western provinces, with a strong 54 per cent of respondents opposing premarital sex.

The most sexually-liberated region was Ukraine's traditionally laid-back and ethnically Russian Black Sea shore, where a mere 31 per cent of people there said they thought there was no good reason for premarital sex.

The poll was conducted in 100 villages, towns, and cities including all Ukrainian provinces. Its margin of error is 0.95 per cent, according to the KIIS report.

Source: dpa German Press Agency

Ukraine Revolution A Boon To A Figure Protesters Scorned

KIEV, Ukraine -— The Orange Revolution, strangely, has been kindest to the man who played the villain to the waves of protesters who rolled onto the streets of this capital two years ago.

Viktor Yanukovych
Viktor Yanukovych, once cast as the bluff hack who tried to steal Ukraine's presidential election, is back in power as prime minister thanks to free and fair parliamentary elections in March made possible only by the street protests of late 2004.

As he prepares for his first official trip to Washington, a four-day visit beginning today, Yanukovych is suddenly projecting himself as the voice of democratic reform.

He also appears eager to assure his White House hosts his popular image as a pro-Russian straw man is a gross distortion.

Now, he suggests that he, too, was a catalyst in the transformation of this once stagnating country into the most politically competitive of all the post-Soviet states, a nation where debate is dynamic and where power, ultimately, resides with the people.

"There were many mistakes made by the previous authorities and many injustices," he said in an interview here last week. "The authorities lost trust. One should recognize that there is more democracy, that there is freedom of speech — and that is an achievement of these historic events, although I don't call it a revolution."

Yanukovych bears little resemblance to the figure who provoked tens of thousands of Ukrainians to demonstrate against electoral fraud in 2004, eventually sweeping his opponent, Viktor Yushchenko, into the presidency.

Some question what they see as his self-serving rhetoric.

"He talks like he was part of it," said David Zhvania, a member of parliament and financier of Yushchenko's campaign, about the protests in Independence Square.

"It's a game. We showed Ukrainians why he was scary, but we also explained to Yanukovych why he was scary, and from his first day in power we saw that he was listening," Zhvania said.

For others, however, the fundamental legacy of the Orange Revolution, named for the color those advocating democratic change adopted, is that Yanukovych must now bow to the electorate and that his nation of 47 million cannot return to autocratic rule.

"He is forced to play within the rules of a new political culture," said Vadim Karasev, director of the Institute for Global Strategies in Kiev. "He understands that a dictatorial style is no longer permissible in Ukraine.

"The Orange Revolution made him a politician."

"My goal, first, is to develop a strategic relationship between Ukraine and the United States that is predictable, effective and has a good perspective," Yanukovych said of his visit, during which he will meet with Vice President Dick Cheney and Secretary of State Condoleezza Rice.

His aides are still hoping for a meeting with President Bush, however brief.

By protocol, Yanukovych should meet only with the vice president, since he is not the head of state, but a presidential handshake would imply some acceptance of his new political incarnation.

Source: Washington Post

Alpha Bank Eyeing Two Lenders In Ukraine

ATHENS, Greece -- Alpha Bank, Greece's second-largest lender, is looking at two buyout opportunities in Ukraine as part of its expansion strategy, its chief financial officer said on Thursday.


"We are pursuing opportunities in Ukraine, looking at two mid-sized banks with networks of about 100 to 150 branches," Alpha's Chief Financial Officer Marinos Yannopoulos told analysts in a conference call.

He did not name the acquisition targets but said the potential acquisition value, if deals go through, are in the area of 400 million to 500 million euros ($527.8 million to $659.8 million).

Yannopoulos said Alpha would be interested in acquiring majority stakes -- 60 to 85 percent.

Alpha was the third Greek bank to venture into Turkey after a deal earlier this month to team up with Anadolu Bank and acquire a 50 percent stake in Alternatifbank.

Already present in Romania, Bulgaria, Serbia, Cyprus and Albania, Alpha is targeting a network of 100 branches in Turkey's large cities.

Greek banks have been steadily expanding in the underbanked markets of southeast Europe to secure new areas of growth.

National Bank and EFG Eurobank have also established a presence in Turkey, buying local banks.

Source: Turkish Daily News

Ukraine’s Premier Arrives In Washington To Mend Fences

KIEV, Ukraine -- He was cast by critics as the Russian-backed bad guy during Ukraine’s Orange Revolution two years ago, the burly politician who almost stole the presidential election from the pro-Western leader Viktor Yushchenko.

Prime Minister Viktor Yanukovych
But Prime Minister Viktor Yanukovych, scheduled to arrive in Washington Sunday for a four-day visit, says he hopes to renovate his image in the West during his meetings with U.S. officials.

According to his Web site, Yanukovych will meet Vice President Dick Cheney, Secretary of State Condoleezza Rice and Energy Secretary Samuel W. Bodman. He also plans to meet with business leaders in New York.

As for all the news reports that portray him as a tool of the Kremlin, a foe of reform? Spin, Yanukovych said. “As for my party and my myself, we adhere and will adhere to policies that are pro-Ukrainian, and will always defend the national interests of Ukraine,” he said.

The Orange Revolution began hours after polls closed in the Nov. 21, 2004, presidential election between Yanukovych, the Kremlin’s favorite, and Yushchenko, who called for closer ties to the West.

As the Central Election Commission began churning out fraudulent vote counts in favor of Yanukovych, Yushchenko summoned his supporters to Independence Square for night after night of protests.

Twelve days later, the Supreme Court declared the vote count fraudulent and ordered a rerun, which Yushchenko won.

Yanukovych and his supporters complained bitterly that the mass protests, supported by many political leaders in Europe and the U.S., robbed him of the presidency.

But now Yanukovych praises the demonstrators. “On the question of democracy and freedom of speech, no one can deny the country changed for the better,” he said. “There is more freedom of speech, more democracy, more freedom.”

His political resurrection began in March, when he was the top vote-getter in a parliamentary vote described as Ukraine’s freest and fairest. It climaxed in August, when he was named prime minister in a political deal with his former foes.

Yushchenko and Yanukovych share power in the awkward arrangement that was initially billed as an effort to unite Ukraine but instead has turned into a tug-of-war for influence, with the president largely on the losing end.

In the latest battle, lawmakers on Friday fired a key ally of the president, the pro-Western Foreign Minister Borys Tarasyuk, along with Interior Minister Yuriy Lutsenko, one of the leaders of the Orange Revolution. Yushchenko said Tarasyuk’s dismissal will be challenged before the nation’s Constitutional Court.

Yanukovych is still regarded as the Kremlin’s friend in Ukraine - and it has paid off for him. He helped strike a deal on gas prices for next year that, while still a significant increase for the ex-Soviet republic, is lower than what Russia proposed to neighboring states.

Of late, Yanukovych has tried not to overtly antagonize the West. For instance, while delaying Ukraine’s membership bid into NATO, he does support continuing cooperation with the alliance. On Tuesday, he called the U.S. “a strategic partner of Ukraine.”

The prime minister is trying to improve his soft powers along with his hard-nosed political moves. Before the Orange Revolution, he came across as stiff and grumpy when he met journalists, and when interviews ended, he simply stood up and left.

Now, he smiles and mingles. Meeting with reporters on Tuesday, he loitered long enough to autograph copies of a book celebrating his first 100 days in office. Heading out the door, Yanukovych stopped suddenly, as if remembering something, and spun around to say goodbye.

Political analyst Mykhailo Pohrebinsky said that Yanukovych clearly had changed his presentation.

“We see that he says democratic things and poses himself as a protector of the freedom of speech,” Pohrebinsky said. “Whether this is sincere, I can’t say.”

Source: AP

Troubling Silence Over Gongadze

KIEV, Ukraine -- The court ordered monetary compensation of 100,000 euros to Myroslava Gongadze and her two children. The family fled Ukraine in 2001.


Murdered reporter Georgiy Gongadze
In separate reports, the Council of Europe urged the Yushchenko administration to follow up on the findings of this case by investigating the alleged “cover up” that occurred prior to his term of office.

However, in a terse letter to Myroslava Gongadze sent one month ago, Ukraine’s Justice Department officially stated that the case surrounding the European Court ruling had been closed. Compensation was paid, but the department did not respond to allegations of investigatory misconduct.

At the same time, Myroslava Gongadze’s attorney and at least one witness in the Gongadze trial have been victims of curious criminal activity. In September, attorney Valentina Telychenko saw her car vandalized three times. First, her tires were slashed.

Then, the grill was removed from the front of her car. And finally, her car alarm was disabled. Although no one has been charged for these incidents, Telychenko believes that they are connected to her work in the trial. Her car was known, she said, and parked directly in front of the court house. She believes someone was trying to make her “unstable” and “afraid.”

One month later, a former coworker of Georgiy Gongadze returned home to find her bedroom ransacked. Nothing was stolen, and the only room disturbed was hers. Earlier, the coworker had testified that she possessed phone records possibly showing who had made threats against Gongadze in the days before his murder. She can no longer locate those records.

As these incidents occurred, the Prosecutor-General’s Office completely replaced the members of the “investigative group” examining the case – which now includes 40 huge files of witness statements and documents – significantly disrupting continuity. The new investigators are just now beginning to examine the case, according to Telychenko.

But perhaps most disturbingly, several politicians are privately questioning the identification of Gongadze’s body, suggesting that remains recently found in Slovakia may be the journalist.
Georgiy’s wife and coworkers have no doubt about the identity of the body, pointing out that it was confirmed through several different DNA tests – including one by the United States FBI. They also note that X-Rays showing several pre-existing bone injuries to Gongadze matched those of the body recovered in September 2000.

If doubt can be thrown on the identification, however, the authorities will have the right to close the current trial and open a brand new investigation. The prospect is chilling. And yet, there has been little comment from politicians who previously led protests in Gongadze’s name.

In fact, despite years of protest, the confession of two murderers, and numerous international inquiries, the investigation into those who ordered Georgiy Gongadze’s execution appears stalled. The journalist whose death ignited the first protests against Ukraine’s repressive government continues to wait for justice.

Source: Kyiv Post

Klitschko Brothers: UNESCO Champions

PARIS, France -- Former two-time heavyweight champion Vitali Klitschko and current IBF and IBO heavyweight champion Wladimir Klitschko will be named UNESCO Champions by Koïchiro Matsuura, Director-General of the organization, on Monday, Dec. 4. Many celebrities, politicians and athletes are expected to attend the event.


Wladimir (L) and Vitali Klitschko
The designation of the Klitschko brothers is a tribute to their exceptional success in boxing, their long-term commitment on behalf of the less-privileged, their exemplary efforts to promote and support UNESCO’s “Education For Children In Need’’ program and their valuable contribution to furthering the organization’s ideals and objectives.

In August 2006, the Klitschko brothers traveled to Namibia to promote educational activities for the children of the San community, who are among the most isolated and underprivileged in the north and west of the country.

In 2004 and 2005, the brothers lent support to a UNESCO project in Romania. In 2002, they helped a project in Brazil. In addition, they have created several foundations in Ukraine that benefit children and sport.

Before successfully defending his heavyweight titles against previously unbeaten Calvin Brock Nov. 11, 2006, Wladimir announced he would donate part of the revenue of ticket sales from that fight to UNESCO’s “Education For Children in Need."

During the Dec. 4 ceremony, he will present a check for $285,000 to the Director-General.

Other UNESCO Champions for Sport include Ukrainian pole-vaulter Sergei Bubka, Russian hockey player Viatcheslav Fetisov and German Formula One racer Michael Schumacher. Brazilian soccer player, Pelé, has been UNESCO Goodwill Ambassador since 1994.

These athletes spread UNESCO’s message the world over. In this way, they focus media attention on UNESCO’s goal to promote the values of physical education and sport to build a better future for young people.

Source: East Side Boxing

Ukrainian Lawmakers Fire Foreign And Interior Ministers, Setting Stage For Battle In Government

KIEV, Ukraine -- Ukrainian lawmakers on Friday fired the foreign minister and interior minister, setting the stage for a legal battle between the president and the premier.


Foreign Minister Borys Tarasyuk (L) and Interior Minister Yuriy Lutsenko
The pro-Western President Viktor Yushchenko and the more Russian-leaning Prime Minister Viktor Yanukovych share power in an awkward arrangement that was initially billed as an effort to unite Ukraine but instead has turned into a tug-of-war for influence, with the president largely on the losing end.

Lawmakers voted 247-57 to sack Foreign Minister Borys Tarasyuk, one of Ukraine's most pro-Western officials and a key ally of Yushchenko. The president's office has said the decision will be challenged in Ukraine's Constitutional Court to determine whether parliament has the right to fire a presidential appointee.

"We will act according to the law," said Yushchenko's chief-of-staff, Viktor Baloha. "But at the same time, there is a hole in our law ... as of today, we have a decision by parliament to fire Tarasyuk. He will fulfill that decision, but at the same time, we will wait for the decision of the Constitutional Court."

Baloha also insisted that Yushchenko could simply propose Tarasyuk again, as appointing the foreign minister falls under the president's powers.

Tarasyuk was not in parliament for the vote, which was supported by the governing coalition made up of Yanukovych's party, the Socialists and the Communists. But later he told journalists that the Constitutional Court would have to give its verdict, and predicted his firing would affect Yanukovych's upcoming visit to the United States.

Tarasyuk "is a master of conflicts," said lawmaker Ivan Bondarchuk, a Yanukovych ally, before the vote. "He is a member of the Cabinet but he does not act like a member of this team."

Vyacheslav Kyrylenko, a Yushchenko-allied deputy, accused the parliamentary majority of trying to force through "a full revision of the foreign policy course of our state."

Minutes after firing Tarasyuk, the lawmakers also ousted Interior Minister Yuriy Lutsenko in a 248-22 vote, overcoming the objections of the Socialists by agreeing to name another Socialist party member, Vasyl Tsushko, as his replacement.

Lutsenko, a former Socialist, had narrowly survived an attempt to oust him on Thursday.

Lutsenko, immensely popular, was one of the organizers of the 2004 Orange Revolution, and opinion polls show his popularity continues to climb.

Baloha said that Yushchenko's office was pleased with the choice to replace Lutsenko with another Socialist.

The constitutional changes that came into effect this year contain many contradictions, and before the vote, lawmakers argued over whether parliament had the right to fire a presidential appointee.

Yanukovych had repeatedly feuded with Tarasyuk, including over the premier's upcoming visit to the United States, which is due to begin Sunday. While Tarasyuk had lobbied for Ukraine to begin membership talks with NATO, Yanukovych put membership on hold and has made improving Ukraine's frayed ties with Russia a priority.

The premier's party also strongly opposed Lutsenko, who as interior minister had spearheaded numerous corruption probes against some of Yanukovych's closest allies.

Asked if Yanukovych's majority was usurping power, Yanukovych insisted that they were working within the constitution.

"If you want to call it usurping, let it be usurping," Yanukovych said during a visit to eastern Ukraine, according to Ukraine's Pravda web site. "But it is all done to benefit society."

Source: AP

Ukrainian Lawmakers Probe Gov't Spending

KIEV, Ukraine -- Ukrainian lawmakers voted Thursday to set up a special committee to investigate how the government spent the billions of dollars it got from last year's privatization sale of a giant steel mill.


The move comes amid allegations that some of the 24.2 billion hryvna ($4.8 billion) received from the sale of Kryvorizhstal could not be accounted for.

The vote caused an uproar in parliament, and forced Parliament Speaker Oleksandr Moroz to call a temporary break as lawmakers swarmed the speaker's tribunal. When lawmakers returned, a revote was held to overcome objections raised by former Prime Minister Yulia Tymoshenko's bloc, which has spearheaded the accusations that funds were diverted and which was unhappy with changes in setting up the committee.

Lawmakers in the 450-seat parliament approved the proposal in the second ballot with a vote of 348-0. President Viktor Yushchenko's party, which was in charge of the government when the privatization was held, refused to vote, as did the Socialists, who objected to the decision to hold a revote.

Mittal Steel Co. bought Kryvorizhstal last year in what was billed as Ukraine's biggest and most profitable privatization ever.

The sale price was nearly six times what the mill had fetched under former President Leonid Kuchma, who had sold it to a consortium made up of his son-in-law and another Ukrainian tycoon. That sale was later declared illegal by a Ukrainian court and canceled, and the mill was re-auctioned.

Tymoshenko, who was sacked by President Viktor Yushchenko before the sale took place, has accused the government that replaced her of diverting some of the windfall funds. Officials had pledged to direct some of the funds to the eastern Ukrainian region where the mill is located, to address some ecological and social-economic problems and top up the country's pension fund.

Parliament had initially proposed putting a Communist lawmaker in charge of the commission, but the Communists later withdrew their candidate. The commission will now be headed by a member of Tymoshenko's faction.

Source: AP