23.09.11. The EU and Ukraine - Where to next?


17.09.11. How Ukrainian oligarchs view economic integration with the EU and Russia


17.09.11. Yulia Tymoshenko's trial adjourned


17.09.11. Ukrainian-Russian gas dispute

30.08.11. Svoboda party – the new phenomenon on the Ukrainian right-wing scene

30.08.11. Towards the introduction of free land trade in Ukraine

30.08.11. Constructing the ‘party of power’ in Ukraine

30.08.11. A positive economic forecast for Ukraine

08.08.11. Reaction swift to Tymoshenko's arrest

08.08.11. The negotiations on the EU-Ukraine Association Agreement and


08.08.11. Gazprom announces a fall in gas transit via Ukraine


08.08.11. Ukrainian World Congress calls for immediate release

11.07.11. Yulia Tymoshenko goes on trial a day before Constitution Day

23.06.11. Getting closer to signing the EU Association Agreement with Ukraine

















23.06.11. The negotiations on the EU-Ukraine Association Agreement


23.06.11. Address of the People’s Committee to Defend Ukraine

23.06.11. Ukrainian politics on trial

10.06.11. Government members split on IMF borrowing















10.06.11. European Parliament urges Ukraine to lift travel ban on Tymoshenko

10.06.11. Political association and free trade with the EU is the top priority for Ukraine

18.05.11. Freedom House report on Ukraine

18.05.11. Former Ukraine PM sues gas trader in US

17.04.11. Flere millionærer i Ukraines regering (eng.)

17.04.11. Kyiv Post journalists go on strike to protest new owner’s censorship

06.04.11. U.S. Aid has supported Ukraine's recovery from Chernobyl

06.04.11. Leaked cables show U.S. was wrong on Ukraine's Yanukovych

06.04.11. Ukraine håber på frihandelsaftale med EU inden udgangen af 2011 (eng.)

06.04.11. Ukraine håber på frihandelsaftale med EU inden udgangen af 2011 (eng.)

March 29, 2011

Ukraine finds it increasingly difficult to balance its relations between the European Union and Russia, which are viewed in Kyiv as equally important trading partners. While talks on political association and free trade with the EU slowed somewhat recently, Moscow is stepping up its pressure on Ukraine to join its Customs Union with Kazakhstan and Belarus. Membership of the Customs Union and free trade with the EU are mutually exclusive. There are signs that Kyiv may opt for the Moscow-led Customs Union if the free trade talks with the EU, which started in 2008, are not completed this year as planned.

Moscow uses all methods of persuasion at its disposal to convince Ukraine to join its trade club. Russian Deputy Prime Minister, Igor Shuvalov, argued in Kyiv early this month that Ukraine would benefit from joining the union and then negotiating free trade with the EU as part of it (UNIAN, March 3). The approach of Russian Prime Minister, Vladimir Putin, is less subtle. Speaking in Minsk on March 15, Putin made it clear that Russia would use both carrots and sticks. Putin said Ukraine would benefit from joining the union, although he did not explain how. At the same time, he made a specific threat, saying that if Ukraine opted for free trade with the EU, Russia would "be constrained to build a [trade] border" in order to protect its market from EU goods (Interfax-Ukraine, March 16).

Ukraine is interested in free trade with Russia, which is the primary market for key Ukrainian exports. In particular, the local machine-building and food industries are recovering fast after the financial crisis mainly due to growing demand for their products in neighboring Russia. Ukraine also hopes for multibillion dollar loans from Russia to help it build new nuclear power units and for Russian orders for its ailing aircraft industry, which is too weak to compete on the markets outside the CIS. If Ukraine became part of the Customs Union, it could hope for cheaper Russian oil for its refineries and discounted natural gas. Kyiv wants free trade with both Russia and the EU, but Russia is reluctant to open its market to Ukrainian goods if Ukraine refuses to join the Customs Union. Ukraine's market is larger than those of Russia's current union partners Belarus and Kazakhstan taken together, consequently taking Kyiv onboard is very important for Moscow.

On March 17, the Ukrainian daily Den cited an anonymous senior Ukrainian diplomat as saying that Ukraine's position on the Customs Union could change if a free trade agreement with the EU is not signed by the end of 2011. The source added that Ukraine could extract a temporary benefit from membership of the Customs Union although it is unclear in both capitals what exactly Ukraine would lose if it opted against joining the union. For the time being, Ukraine continues to prioritise the EU but this may change, judging by the mixed signals from Ukrainian officials after Putin's statement in Minsk (Den, March 17).

On March 17, Prime Minister Mykola Azarov, told visiting European Parliament Socialist group leader, Martin Schultz, that Ukraine would continue its free trade talks with the EU, remaining optimistic about their outcome. Azarov also regretted the fact that recent discussions of free trade between his first deputy Andry Klyuyev and EU officials in Brussels did not result in a breakthrough. Azarov suggested that the EU should upgrade the format of the talks in order to strengthen their momentum (UNIAN, March 17). Azarov went further during a meeting with British businessmen the following day, saying that Ukraine would apply for EU membership in the future (UNIAN, March 18). However, during an interview with the Austrian newspaper Der Standard, on March 20, Azarov said that although Ukraine continues to hold talks with the EU, this did not necessarily mean that Kyiv should abandon the Customs Union option. He suggested that experts should determine whether membership of the Customs Union was worth considering (Ukrainska Pravda, March 21).

Foreign Minister, Kostyantyn Hryshchenko, told students in Kyiv that Ukraine wanted to cooperate with the Customs Union in such a format that the association and free trade talks with the EU would not be harmed. He noted that Ukraine was not in talks to join the union (Interfax-Ukraine, March 18). At the same time, Klyuyev told a CIS forum in Moscow that Ukraine might join the union in the future. Klyuyev said Ukraine would participate in such economic unions from which it may benefit, such as cooperating on certain trade positions, while it would be more beneficial to be part of a free trade area with the EU on some other issues, Klyuyev added (UNIAN, March 18). Klyuyev is Ukraine's chief negotiator in the talks with the EU, and his being evasive may indicate a change in Ukraine's course.

--Pavel Korduban

06.04.11. Leaked cables show U.S. was wrong on Ukraine's Yanukovych

March 31, 2011
By Taras Kuzio

The first is that the embassy believed Party of Regions leader Viktor Yanukovych had changed from what he was during the 2004 election, when he sought to come to power through election fraud. The second is that U.S. officials believed Yulia Tymoshenko was not a better option than Yanukovych in the 2010 presidential election. One cable quotes former President Leonid Kuchma as saying the 2010 election was one of "choosing between bad and very bad" -- with Tymoshenko allegedly being the latter.

Both of these positions were fundamentally wrong -- especially as seen from the hindsight of Yanukovych's first year in power.

The WikiLeaks cables critical of Tymoshenko were a reflection of her own mistakes and of lobbying by U.S. political consultants working for Yanukovych and the Party of Regions since 2005. One of the main criticisms was that Tymoshenko is a "populist," a claim that ignores widespread populism among all Ukrainian politicians. Indeed, Yanukovych was the most populist in the 2010 elections and the prize for the most populist billboard goes to former President Viktor Yushchenko, who promised to place a 20 percent tax on yachts, limousines, and villas.

The U.S. Embassy bought into the accusation that Tymoshenko was beholden to Russian Prime Minister Vladimir Putin. Tymoshenko was allegedly the biggest threat to Ukraine's sovereignty and willing to be Russia's pawn, according to a cable quoting oligarch Dmytro Firtash. Evidence to back this conclusion was her supposed concessions on Georgia during Russia's 2008 invasion and Moscow-friendly positions on the Holodomor and the Black Sea Fleet.

In reality, Yanukovych has caved in to Russia on all three issues. During the Georgian crisis, the Party of Regions and the Communist Party (KPU) supported Russia's dismemberment of Georgia. Likewise, the Party of Regions and the KPU did not support the 2006 law on the Holodomor, and Yanukovych has adopted Russia's position that it was a Soviet (not Ukrainian) famine. As president, he has extended the Black Sea Fleet base in Sevastopol until 2042-47. A January 2010 U.S. cable reports Yanukovych telling the U.S. ambassador that he was ready to extend the base in exchange for economic preferences from Russia.

Yanukovych, The Pro-Russian Candidate

All this led to the mistaken impression that Russia supported both Tymoshenko and Yanukovych in the 2010 election, as they were both "pro-Russian" and Moscow would be satisfied with either winning the election. Yushchenko made this argument during the campaign, calling for his supporters not to vote for either candidate in the second round of balloting. That decision probably cost Tymoshenko the election, since she ended up losing by just 3 percentage points.

Other cables claimed it made no difference whether Yanukovych or Tymoshenko were elected as both are authoritarian and would allegedly seek to build a "Putinist vertical power." Such analysis contradicted the reality that Tymoshenko did not have the political machine, ability to blackmail deputies, or control of television stations necessary for such a project. In addition, since 2008 Tymoshenko has consistently argued for the need to move toward a full parliamentary system. The authoritarianism of the Party of Regions is well documented among Ukrainian sociologists and has been plain to see during the transformation of parliament into a rubber-stamp institution and the return to a presidential constitution.

U.S. cables also buy into the argument of a "pragmatic" wing in the Party of Regions that supposedly desires to unify Ukraine and is pro-European, even possibly willing to compromise on NATO. Such views were intensely lobbied by U.S. political consultants working for the Party of Regions.

But the pragmatic wing of the Party of Regions was not evident in 2005-08 when the party voted with the KPU against legislation to join the WTO. Ukraine's 2008 WTO membership paves the way for the signing of a Deep Free Trade Agreement with the EU, a process the pragmatic wing of the Party of Regions allegedly supports.

These cables also ignored the anti-NATO stances of Yanukovych and the Party of Regions, arguing that this was election rhetoric to mobilize eastern Ukrainian voters that would be ignored after the voting. Again this was wrong, as President Yanukovych is the first of four post-Soviet Ukrainian presidents to not support NATO membership. The party has also adopted contradictory positions on Ukraine's participation in NATO's Program for Peace exercises, opposing them when in opposition (leading to the cancellation of the Sea Breeze exercises in 2006 and 2009) and supporting them when in power.

U.S. cables from Ukraine also claimed that Yanukovych, if he won the 2010 election, would not be a Russian pawn and would defend Ukraine's interests, even if only in the economic sphere. Although Yanukovych defends his economic interests from Russia, he has adopted domestic, national-identity, and foreign policies that are in Russia's national interests. Russia successfully lobbied for the four candidates who became the chairman of the Security Service (SBU) and ministers of education, foreign affairs, and defense. Russian citizens illegally control the president's bodyguards and the media-analytical section of the presidential administration.

The Real Yanukovych

U.S. cables from 2005-06 were more critical of the Party of Regions, but in 2008-10 two factors changed. First, public-relations efforts by U.S. consultants persuaded many in the West, including the U.S. Embassy, that Yanukovych had changed. This ignored his unwillingness to concede the election fraud of 2004 and his continued contention that he won that election. A December 2005 cable quotes Yanukovych as complaining that a "putsch" and "Kuchma's machinations" had denied him the presidency. One cable analyzed the Party of Regions' "heavily pro-Russian campaign rhetoric" in 2006, attributing this to its co-option of Communist voters.

A second factor that changed the tone in the U.S. cables by 2008 was Western fatigue with the feuding Orange political leaders, Yushchenko and Tymoshenko. The pair had squandered the five years of opportunity given to them by the Orange Revolution.

All four elections held on Yanukovych's watch -- two as governor in Donetsk in 1999 and 2002 and two as prime minister and president in 2004 and 2010 -- have been criticized as unfree. U.S. cables from 2005-06 showed that senior members of the Kuchma government who were involved in abuse of office and election fraud were embedded in the Party of Regions, which is described as a "cover for Donetsk criminal circles and oligarchs."

These cables continued to be skeptical about the new face of the Party of Regions and express concern it would abuse state administrative resources, tamper with election laws, and seek to close media outlets they do not control. This is precisely what Yanukovych has done in his first year in office.

Taras Kuzio is an Austrian Marshall Plan Foundation visiting fellow at the Center for Trans-Atlantic Relations, School of Advanced International Studies, Johns Hopkins University. The views expressed in this commentary are the author's own and do not necessarily reflect those of RFE/RL

06.04.11. U.S. Aid has supported Ukraine's recovery from Chernobyl


Domenick DiPasquale

Washington - A quarter-century after the disaster at the Chernobyl nuclear plant, and as world attention focuses on a similar crisis in Japan, the United States continues to provide assistance to Ukraine to help that nation deal with the consequences of one of the world's worst nuclear accidents.

That aid, some completed and some still ongoing, has taken many forms: financal support for construction of a new containment structure to entomb the damaged nuclear reactor, several studies on the long-term health effects of the radiation released during the accident, developing a mobile environmental laboratory for Ukraine, helping manage forest-fire dangers within the 30-kilometer exclusion zone surrounding Chernobyl, and other assistance to prevent nuclear smuggling from that zone.

"The Chernobyl disaster continues to present Ukraine with a complex variety of challenges: health, environmental, and containment," says U.S. Ambassador to Ukraine John F. Tefft. "Our assistance is engaged in all these areas."

The April 26, 1986, disaster in the then-Soviet Union began when a power surge caused a series of explosions in reactor four at the Chernobyl Nuclear Power Plant, sparking a 10-day fire that released into the atmosphere massive amounts of radioactive material that spread over much of Europe. The most severe contamination from the accident occurred in Ukraine and parts of neighboring Belarus and Russia.

The response to the accident included construction of a temporary concrete sarcophagus to limit the further release of radioactive material and a cleanup of contaminated areas that eventually involved 600,000 workers in all, although only a small percentage of these workers were exposed to dangerous levels of radiation.

Hastily erected in just more than six months and not designed to last more than 20 or 30 years, the existing sarcophagus, now covered with holes and cracks, needs replacement.

In 1995, the Group of Seven (G7, now G8) advanced industrial nations and the European Union committed to helping Ukraine build a stronger, more permanent containment structure over the damaged reactor. While the European Union has been the largest contributor, the United States is the largest individual donor country to this effort, known as the Chernobyl Shelter Fund. The U.S. contribution of $203 million amounts to 20 percent of the $1 billion pledged so far by the international community.

Engineering design work for the project is complete and site clearance has begun. The 108 meter-high arched structure, called the New Safe Containment and standing taller than the Statue of Liberty, is being built by a French consortium and is designed to last at least 100 years. To minimize the exposure of workers to radiation, the 20,000-ton structure is being assembled near the Chernobyl reactor; when completed, it will be slid on rails over the reactor and existing sarcophagus.

A second major safety project under way at Chernobyl, the Interim Spent Storage Facility, is designed to ensure the safe, secure storage on-site of spent nuclear fuel. Although this facility is not exclusive to Chernobyl or Ukraine, it will meet critical needs resulting from the 1986 accident and the permanent shutdown of the three remaining Chernobyl nuclear reactors between 1991 and 2000. With a contribution of $34.5 million, the United States is the third-largest donor to this initiative.

The United States has also been involved with a number of studies measuring the long-term health effects of the Chernobyl disaster. With co-funding from the U.S. Department of Energy, the National Cancer Institute (NCI), a branch of the U.S. National Institutes of Health, has conducted epidemiological research focused in particular on children and Chernobyl cleanup workers.

Two separate studies, beginning in 1996 in Belarus and 1998 in Ukraine, examined the health impact on children and adolescents from exposure to the radioactive iodine isotope I-131, which concentrates in the thyroid gland. A total of 25,000 people in the two nations were regularly screened for thyroid cancer until 2007. The Research Institute of Endocrinology and Metabolism in Kyiv and the Research Center of Radiation Medicine and Human Ecology in Belarus worked with NCI on these projects.

Besides contributing to enhanced knowledge of the carcinogenic effects of I-131, the two studies have assisted officials in both nations in developing appropriate health care programs and in screening at-risk populations for early detection of thyroid disease, when treatment is most effective. The studies determined that 10 to 15 years after the Chernobyl accident, the thyroid cancer risk was significantly increased among individuals exposed to fallout as children or adolescents; an NCI report released this March found that their risk for developing this cancer has still not declined.

A third NCI study has focused on leukemia among 110,000 of the cleanup workers in Ukraine who worked in the 30 kilometer-wide Chernobyl exclusion zone between 1986 and 1991. The Ukrainian Academy of Medical Sciences has collaborated with NCI on this research. The study has benefitted Ukraine by addressing health concerns about these cleanup workers and by establishing a leukemia registry to identify all cases occurring between 1987 and 2000.

The main objective of this study, which began in 1997 and ends this year, is measuring whether a correlation exists between the amount of radiation received and an increased risk of developing leukemia. The NCI estimates that each additional gray - a standard measure of absorbed radiation - is associated with a three-fold increase in the radiation-related risk of leukemia.

Past U.S. assistance to help Ukraine deal with the aftermath of Chernobyl included the delivery to Kyiv in the late 1990s of a mobile environmental laboratory. A joint effort of the U.S. Environmental Protection Agency and the U.S. Agency for International Development, the laboratory was housed in a tractor-trailer truck and contained scientific equipment to measure and analyze radioactivity.

Specialists from the U.S. Forest Service have met their Ukrainian counterparts in recent years to assess and reduce the risk of forest fires within the 300,000 square-hectare Chernobyl exclusion zone. To lessen the risk of a catastrophic wildfire - a concern, given the density and composition of the pine-dominated forest within the zone, and the fact that trees play a major role in sequestering contaminants - U.S. and Ukrainian forestry experts have worked together to review the hazard and recommend actions to lessen it, such as active fire monitoring.

"The Ukrainians will be in the business of containment of fallout from this disaster for years to come," said Ambassador Tefft. "Chernobyl will prove to be a long-lasting legacy from the Soviet past."

17.04.11. Kyiv Post journalists go on strike to protest new owner’s censorship


April 15, 2011

The editorial office of English-language The Kyiv Post has gone on strike in protest against tough censorship policy by its new owner, the KP Apr. 15 statement runs.

“The Kyiv Post journalists and editors protest the meddling with the newspaper’s independence of publisher Muhammad Zahur in the wake of his decision to dismiss KP chief editor Brian Bonner after the latter’s refusal to edit out the interview with Agriculture Minister Mykola Prysiazhniuk,” Ukrayinska Pravda quotes the statement as saying.

The KP editorial office demands that Bonner be reinstated in his job. The editors and journalists will continue to write and edit their articles but the publication of the newspaper will be suspended, the statement runs.

The KP editors say they will soon publicize Zahur’s comments made during his Apr. 15 conversation by telephone with the journalists.

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Kyiv Post staff goes on strike following dismissal of chief editor

April 15, 2011

The editorial staff of the Ukrainian English-language newspaper Kyiv Post have gone on strike demanding the reinstatement of their chief editor Brian Bonner, who was fired by the owner of the publication, Mohammad Zahoor.

"The Kyiv Post's editorial staff has started a strike demanding that Bonner be reinstated as chief editor. We will continue to write and edit our articles, but won't publish any news item or issue," the newspaper's team wrote on the social networking site Facebook.

The Kyiv Post's staff said they were protesting against "interference in the independent activities of its editorial staff."

"We believe that publisher Mohammad Zahoor's decision to fire chief editor Brian Bonner due to his refusal to withdraw an interview with Agriculture Minister Mykola Prysiazhniuk was such interference," the editors' team said.

The Kyiv Post is Ukraine's leading English-language newspaper. It was founded in 1995 by a U.S. citizen, Jed Sunden. In 2009, it was bought by a British citizen and owner of the ISTIL Group, Mohammad Zahoor.

17.04.11. Flere million¿rer i Ukraines regering (eng.)


The Ukrainian government appears to be the richest in the world, according to details disclosed during a public event held in Brussels, organised by the European Union-Ukraine Business Council and attended by Ukrainian diplomats.

The European Union is divided on its approach towards Ukraine, a country seen as deeply European in its culture and history but also as having gravitated towards Russia since the election as president at the beginning of last year of Viktor Yanukovich, leader of the Party of the Regions.

The mixed message of a recent European parliament resolution is that members of European Parliament back Ukraine's EU membership aspirations but warn of "worrying signs of the erosion of democracy and pluralism".

Plutocracy is rule by the wealthy. Oligarchy, which is present in Russia and in some Eastern countries, refers to the control of the state by a few prominent wealthy families. The combination of plutocracy and oligarchy is also known as plutarchy.

Speaking on behalf of online medialb.ua, which enjoys a fast-growing readership, Sonia Koshkina, considered one of Ukraine's best journalists, pointed to the wealth of individual cabinet members, but also to the tricks used by other cabinet members to avoid publicly disclosing their millions.

The lb.ua website is part of the Gorshenin Group, which consists of an analytical centre, a consultancy and a media network.

At least five of the 16 cabinet members are multi-millionaires, and one is a billionaire. According to Ukrainian magazine Fokus, First Deputy Prime Minister Andriy Klyuyev possesses - together with his brother Serhiy, who is an member of parliament from the ruling Party of the Regions - $900.8 million, through one of the largest industrial-investment corporations in Ukraine, Ukrpidshypnyk.

Deputy Prime Minister and Infrastructure Minister Borys Kolesnikov's fortune is estimated at $254 million in 2010 and at $292.5 million in 2011, after he became minister. His business interests range from confectionery to football, and he is in charge of preparations for the 2012 European Football Championships.

Deputy Prime Minister and Social Minister Serhiy Tyhypko has an estimated fortune of $795.5 million in 2011, increasing from $223.6 million the previous year. His business is mainly steel and rail-car building.

Emergencies Minister Viktor Baloha's fortune is estimated at $550 million. But his major assests are declared to belong to his wife Oksana, a co-founder of 14 companies, mostly in the field of trade.

Energy and Coal Minister Yuriy Boyko's fortune is estimated by the Ukrainian press at $3.2 billion. An expert in the oil and gas sector, Boyko has only declared $1.76 million in bank accounts.

Ecology Minister Mykola Zlochevskyy appears to be an interesting case. He declared only 30,780 dollars of income in 2009. However, he also acknowledges ownership of a 1,000 square-metre house, a Rolls-Royce and a Bentley. But this did not prevent him from taking $4,271 of financial assistance from the state.

Several ministers, including Prime Minister Mykola Azarov, reportedly have considerable wealth registered with their sons or closer relatives. Often ministers have business interests in the same field as their official activities. Mykhaylo Tabachnyk, brother of Sports Minister Dmytro Tabachnyk, is reportedly one of the owners of the Intersport company, which owns the land earmarked for the construction of a sport complex needed for the 2012 football championships.

According to a wire range of sources, Intersport leases the land to the ministry, although the value of the lease has not been disclosed.

Sonia Koshkina (which is her pen name; her real name is Ksenia Vasilenko) said that despite the complexity of their spheres of influence, the ministers seeminglymanaged to coexist and avoid conflicting with one another. Should arbitration be required then the arbiter is President Viktor Yanukovich, and not the prime minister, who has much less power, she explained.

There are also important power players outside the government, Koshkina said, citing as an example the head of the country's secret services, Valeriy Khoroshkovsky.

He does not hide the fact that he is a millionaire and that he in fact controls the TV channel with the biggest audience, she explained.

Despite media revelations, conflicts of interest in Ukraine do not appear to bother anyone, Koshkina said.

The Western audience present at the event seemed surprised both by the revelations and the fact that Ukrainian diplomats present in no way attempted to counter or challenge the facts presented.

18.05.11. Former Ukraine PM sues gas trader in US

April 27 2011

By Roman Olearchyk in Kiev

Yulia Tymoshenko, Ukraine’s former prime minister, has filed a lawsuit in a US court accusing companies and affiliated business backers close to Viktor Yanukovich, the country’s president, of defrauding the nation of billions of dollars worth of natural gas, “racketeering” and political persecution.

In filing the tort lawsuit on Tuesday with the US District Court in Manhattan, Ms Tymoshenko upped the ante in her stand-off with Mr Yanukovich, who narrowly beat her in the 2010 presidential election. The suit also continues a longstanding domestic political battle over lucrative gas deals between Ukraine and Russia.

Ms Tymoshenko, prime minister from 2007 to 2010, brought the suit against Ukrainian billionaire Dmytro Firtash and Swiss-registered gas company RosUkrEnergo. The gas trader is jointly owned by Russian gas giant Gazprom and Mr Firtash.

In court papers Ms Tymoshenko accused Mr Firtash, affiliated companies and 100 individuals, of defrauding Ukraine’s citizens by manipulating a Swedish arbitration court ruling from last year. As part of the ruling, which she claims Ukrainian officials deliberately lost, state energy company Naftogaz was ordered to transfer 12bn cubic meters of gas to RosUkrEnergo.

According to the suit, the ruling was “widely perceived as a means of generating huge sums of cash with which Firtash and his associates could continue to illegally fund” corruption while “suppressing political dissent through intimidation, racketeering and other violations of fundamental human and political rights.”

Mr Firtash and RosUkrEnergo did not immediately respond to inquiries about the suit. They have previously denied any wrongdoing.

The suit was filed as a class action on behalf of the Ukrainian people under the Racketeering Influenced and Corrupt Practices Act, as well as the Alien Torts Statute. The latter sanctions US courts to uphold international law.

Joining Ms Tymoshenko in the suit are 10 individuals who claim to have been politically persecuted.

The suit seeks unspecified damages. It alleges that Mr Firtash is a close associate of president Yanukovich, whose administration has “launched a wave of arrests and investigations aimed at ... Tymoshenko and her political allies in ... a concerted campaign to intimidate, suppress and ultimately eliminate any and all political opposition in Ukraine.”

The accusations come amid rising international concerns that Mr Yanukovich has – one year into his rule – strengthened his grip on power by trampling on media, democracy and opponents.

The suit was filed as Ukrainian prosecutors prepare to file a criminal case against Ms Tymoshenko. She is accused of illegally brokering a gas agreement while prime minister in 2009 with her Russian counterpart, Vladimir Putin. Prosecutors claim the Putin-Tymoshenko agreement hurt Ukraine, whose ailing economy relies heavily on Russian fuel imports, by introducing above market prices for Russian gas imports.

Ms Tymoshenko has hailed her agreement for bringing transparency by removing RosUkrEnergo as a middlemen and monopoly gas supplier to Ukraine. The company’s role has also been questioned by US and European Union officials.

Ms Tymoshenko herself earned a fortune in the 1990s in the region’s murky gas trading business while her political ally, Pavlo Lazarenko, was prime minister. He has since been convicted in the US on corruption charges.

Ms Tymoshenko insists her gas business from the 1990s was legal and claims political opponents destroyed it. She later broke into politics branding herself as a champion of democracy and anti-corruption. She rose to international prominence as one of the leaders of Ukraine’s 2004 Orange Revolution.

18.05.11. Freedom House report on Ukraine

28 April 2011

Mark Rachkevych

Ukraine is backsliding on democracy and on a path towards authoritarianism under President Viktor Yanukovych, according to a U.S. democracy watchdog report released on April 27.

Titled “Sounding the Alarm: Protecting Democracy in Ukraine,” the Freedom House report warns that Ukraine has one year under Yanukovych’s rule already become less democratic.

“Indeed, if left unchecked, the trends set by Ukraine’s current leadership will move the country toward greater centralization and consolidation of power—that is, toward authoritarianism,” the report stated.

The report comes months after Freedom House downgraded Ukraine from a “free” to “partly free” country in its annual assessment of the global state of democracy, which was released on Jan. 13. It also follows recent downgrading on the state of democracy, media and economic freedoms by other organizations, including Reporters Without Borders, the Heritage Foundation’s Index of Economic Freedoms and Transparency International.

According to the most recent Freedom House report, citizens and intelligentsia alike are increasingly “disillusioned…about their country’s and their own personal futures.”

The report stated that the nation is not on a path to achieve Yanukovych’s repeated goal of having a democratic Ukraine within Europe and that the nation’s gravest threat comes from within.

It cited the following concerns as the most disturbing democratic shortcomings in the past year: Concentration of power, selective prosecutions of political opponents, a more intrusive state security apparatus, the absence of checks and balances, and politicization of the judicial process.

The report also stated the need for the U.S. and the European Union to deepen engagement with Ukraine “both with the Yanukovych government and with Ukrainian society by encouraging and rewarding good performance and pushing aggressively against backsliding democracy.”

“The EU and the United States seem to have disengaged from Ukraine or narrowed the bilateral agenda to a few issues of strategic importance, such as nonproliferation. This is the wrong approach,” the Freedom House report said.

The assessment did, however, praise Yanukovych for streamlining government and for taking up 21 different reform initiatives and for launching anti-corruption investigations. It welcomed Ukraine’s progress in the past year in holding negotiations with the EU and for “resolving more long-standing bilateral issues with the U.S. than it did during several years under the Orange leaders.”

But it urged the U.S. not to give Ukraine a “free pass” on democratic issues despite these achievements.

And it reiterated that “regardless of the government’s motivations, the process under way in Ukraine today is eroding its democracy.”

The three main conclusions made by Freedom House are:

1) Ukraine under Yanukovych has become less democratic and, if current trends are left unchecked, may head down a path toward autocracy and kleptocracy;

2) Yanukovych and his government value their domestic standing and international reputation, and remain responsive to outside pressure. Therefore, domestic actors as well as the West retain a capability (and have a responsibility) to check antidemocratic tendencies and support constructive initiatives both inside and outside the government; and

3) Ukraine’s political and cultural diversity is a bulwark against any one force dominating political space throughout the country.


Freedom House downgrading Ukraine from “free” to “partly free” in January.

Ukraine’s ranking sunk to 164 out of 183 countries in The Heritage Foundation and Wall Street Journal’s 2011 of Economic Freedom Index released in Januay. The report says “Corruption pervades all levels of society and government and all spheres of economic activity and is a major obstacle to foreign investment.”

The January report by financial watchdog ‘Global Financial Integrity’ lists Ukraine as the 3rd worst in Europe and 17th worst in the world for illegal international money transfers.

Ukraine dropped a dramatic 42 places in the media watchdog Reporters Without Borders’ Press Freedom Index released in October 2010.

In 2010 Ukraine ranked 134 among 178 countries in Transparency International’s Corruption Perception Index. Transparency International said Ukraine has the most corruption judiciary in the world

10.06.11. Political association and free trade with the EU is the top priority for Ukraine


Walter Derzko

The previous week in Ukrainian politics was full of surprises, contradictions and missed opportunities.

First, the spat between EU integration and the Russian-proposed Customs Union was conclusively settled. The Ukrainian Parliament passed legislation "on the current state and prospects of development of economic relations with the EU and the customs union," which states that the completion of the political association and free trade talks with the EU is the top, short-term priority for Ukraine. As for the Customs Union, the document only advises the government to develop "cooperation" with the organization and its member states according to World Trade Organization (WTO) guidelines (www.rada.gov.uaMay 19), Surprisingly, the Party of Regions and the opposition united, and both voted in favour of the EU vector, sending a clear signal back to Russia on what Ukrainian legislators (read oligarchs) wish - 289 out of 385 deputies voted in favour of the EU. This included all caucus fractions except the Communist Party, whose deputies abstained from voting. (EurAsia Daily Monitor, May 25). Clearly, self-interest trumps pro-Russian interests here.

Also, the Ukrainian General Prosecutor’s Office indicated that it is ready to drop all charges against Leonid Kuchma. Not a surprise – I predicted this in April…too many skeletons in various people's closets.


It is difficult to understand in these energy negotiations, why Ukraine needs to make concessions at all. In fact, Ukraine has more trump cards on the table than Russia does, but yet, it curiously refuses for some reason to use them. Besides, Ukraine has several months of gas stored in reserves (Ukraine can store 35 Billion cubic meters of gas or 6-7 months supply) and Gazprom can’t withhold gas indefinitely - it will go bankrupt. But, if Russia insists on blackmailing Ukraine and Europe with threats of future gas embargos, then Ukraine has the equal right to withhold its technology, intellectual property, or services, to Russia's gas transit industry. Ukraine has a number of "hard to replace" technologies that Russia desperately needs.


The Ivano-Frankivsk National Technical University of Oil and Gas was one of the best university-level educational institutions in the oil and gas sector in the former USSR. It continues to train operational specialists from numerous countries,including India, Pakistan, Jordan, Mongolia, Bulgaria, Vietnam, Israel, Poland, Russia, Belarus, Turkmenistan, Moldova and Lithuania. (Seehttp://www.nung.edu.ua/about/index.html).

In the beginning of the 1990s, a Ukrainian newspaper outlined the "early days" of the Ukrainian gas industry in Western Ukraine - Drohobych, Dashava etc. This was before the Soviet Union depleted traditional fields and sent many Ukrainian oil and gas experts to Siberia to develop Russia's gas sector and start Gazprom. To this day, Ukrainians continue to service Russian gas production in Western Siberia. Upstream in the production cycle, all Russian pipelines are designed by Yuzhniigiprogaz (see http://www.ungg.org/eng/index.html) (formerly Yuzh Trub Proekt), which has a controlling stake owned by Gazprom, but it's located in Donetsk. Ukraine could start to repatriate this expertise to develop its own internal gas industry, if it wanted to. A reverse brain drain, just as Russia plans to do with its intellectual ex-patriots.

Ukraine is making slow progress in diversifying away from dependence on Russian oil and gas. In November 2010, the Ministry of Environment and Natural Resources stated that Ukraine "enjoys the biggest supply of shale gas deposits in the world." However, the exact reserves were not specified. And, according to Energy Minister Yuriy Boyko, over the next 2 years, Ukraine plans to invest about $300 million into its existing gas fields to modernize and improve its own gas extraction efficiency. This will boost extraction by 1.2 billion cubic metres of natural gas, annually. However, very little is currently being done in Ukraine to develop new gas fields. (Den, May 26).

Complete article [ here ]

10.06.11. European Parliament urges Ukraine to lift travel ban on Tymoshenko

June 9, 2011

The European Parliament is calling on Ukrainian authorities to lift the travel ban, both domestically and internationally, imposed on Yulia Tymoshenko, former prime-minister, leader of the All-Ukrainian Union Batkivschyna, the resolution made in the European Parliament session in Strasbourg (France) declares.

"Ongoing investigations of prominent Ukrainian political leaders should not preclude them from actively participating in the political life of the country, meeting voters and travelling to international meetings. Therefore, the European Parliament urges the Ukrainian authorities to lift the travel ban, both domestically and internationally, on Yulia Tymoshenko and other key political figures," the resolution proclaims.

Moreover, European deputies are concerned over the increase in selective prosecution of figures from the political opposition in Ukraine.

They express support for the Ukrainian Human Rights Commissioner, Nina Karpachova, who has asked the Ukrainian Prosecutor to consider the possibility of applying preventive measures for Yurii Lutsenko, former minister of internal affairs, that do not involve detention.

The European Parliament also calls on the European Commission to assist the reform of the judiciary in Ukraine.

The resolution calls for considering the creation of a High Level EU Advisory Group to Ukraine to assist the country in its efforts to come into line with EU legislation, including as regards the judiciary.

The European Parliament warns against any use of criminal law as a tool to achieve political goals.

The resolution was proposed by the Greens/European Free Alliance in the European Parliament, the Alliance of Liberals and Democrats for Europe and the European People's Party.

As Ukrainian News reported, Tymoshenko gave a written undertaking not to leave the country in mid December 2010.

10.06.11. Government members split on IMF borrowing

KYIV, June 3, 2011

The government split sharply on whether Ukraine needs to immediately resume borrowing from the International Monetary Fund, adding a new line of confrontation to already existing disagreement with the National Bank of Ukraine.

Prime Minister Mykola Azarov said Ukraine does not need an immediate resumption of borrowing from the IMF, and that’s why it has time to negotiate a slower hike in natural gas tariffs.

But Deputy Prime Minister Serhiy Tyhypko said the failure to resume the borrowing would have catastrophic consequences, including the possibility of default.

Tyhypko’s warning echoes the recent warning made by Serhiy Arbuzov, the governor of the NBU, who had urged Azarov and the government to speed up reforms to secure the IMF lending.

The IMF suspended its $15 billion lending program for Ukraine since March delaying its installments after the government had refused to hike gas prices for households by 50% on April 1 and also postponed the pension reform that increases retirement age for women.

Tyhypko said the failure to resume the borrowing would increase the costs of commercial borrowing for both, the government and businesses, making it harder to repay their earlier debts.

“I can tell you that in one of two such [commercial] borrowing we can come to a point that we will be facing a pre-default situation,” Tyhypko said in an interview with Inter television on Friday.

“And then we may see a situation that happened with Greece,” Tyhypko said. “We really would not want this to happen in Ukraine.”

Greece may require up to 100 billion euros in financial assistance package from the IMF, the European Union and other organizations to resolve its mounting debts problems, industry analysts said.

President Viktor Yanukovych last week also compared Ukraine with Greece when he had urged the government to accelerate economic reforms.

Meanwhile, Azarov continues to insist that Ukraine will be fine even without money from the IMF, a position that complicates talks with the Washington-based lender.

“We do not have any need to immediately receive loans from the IMF,” Azarov said Friday. “We have enough resources to be able to pay our foreign debt obligations.”

Arbuzov, in the letter to Azarov, said Ukraine may fail to receive an estimated $9 billion this year, including $6.2 billion from the IMF and $850 million from the World Bank, but added that final implications may be far greater, potentially leading to economic disaster.

“In conditions of continued current account deficit, this may lead to a considerable reduction of the foreign exchange reserves,” Arbuzov said.

The NBU’s foreign exchange reserves are currently estimated at about $35 billion, but may be soon start shrinking as Ukraine is due to repay debts, both state and corporate, by the end of the year.

The failure to resume cooperation with the IMF would “worsen Ukraine’s sovereign credit rating, increase foreign borrowing costs, reduce foreign direct investments, and increase demand for the hard currency,” Arbuzov said outlining the negative scenario.

Walter Derzko
Smart Economy
Skype: Scenarioman1

23.06.11. Ukrainian politics on trial

14 June 2011

Natalia Sedletska

Ahead of parliamentary elections in 2012, Ukrainian President Yanukovych has initiated a number of high-profile corruption investigations against opposition leaders. While few Ukrainians consider the defendants to be angels, most understand the clear signs of hypocrisy and political motivation behind the trials, says Natalia Sedletska

Since President Yanukovych came to power almost 16 months ago, the opposition has been virtually wiped out. Criminal cases are being brought against members of the Yushchenko government, but is this Yanukovych’s fight against corruption? Or are these cases politically motivated? This question is no longer debated inside Ukraine, but an examination of the various cases highlights some basic common factors and gives pretty clear indications how the question should be answered.

Czech asylum for Bohdan Danylyshyn

The current most high profile case, which represents a stinging slap in the face for the Ukrainian authorities and the law enforcement system, is, of course, that of the former Minister of the Economy, Bohdan Danylyshyn. The day criminal charges were brought against him he fled the country to Europe. Six months later he was granted political asylum in Prague. The Czech Republic officially argued its decision by saying "the criminal case against the applicant was politically motivated by revenge for his previous activities."

In his campaign against the opposition, President Yanukovych can rely on Prosecutor General Viktor Pshonka. He is said to be godfather to Pshonka's son.

In granting asylum to a member of the Ukrainian opposition, the Czech Republic has effectively demonstrated that, in its opinion, the "anti-corruption activity" instigated by the Office of the Prosecutor General amounts to political persecution. Interestingly, there are reports in the media that President Yanukovych is godfather to the son of the Prosecutor General, Viktor Pshonka.

The reaction of the Ukrainian authorities to Danylyshyn being granted asylum deserves special attention. Firstly, the speakers of the pro-government Party of the Regions declared that this was clear evidence of Tymoshenko’s corrupt connections with European officials. Then it got worse. In May the Ministry of Foreign Affairs of Ukraine expelled two Czech diplomats from the country, accusing them of espionage! A small number of people consider this is simply revenge for the granting of political asylum to Danylyshyn.

The former Minister of Economy had, it’s true, been charged with inflicting damage on the national budget to the tune of more than $2 million. He was accused of twice giving the go-ahead for public procurement contracts using the “procurement from one participant” procedure i.e. without holding a tender. The investigation decided that the Minister had acted in his own interests and violated the law.

But the new government itself is involved in widespread abuse of the “procurement from one participant” rule. For example, absolutely all infrastructure products and services for Ukraine’s part of the "Euro 2012" football championship are being purchased using state funds without holding a single tender! Twenty billion hryvnias ($2.5 billion) have been specifically allocated to the “procurement from one participant” procedure. Numerous investigative reports indicate massive abuse and corruption in the Euro-2012 procurement. These reports lead directly to the inner circle of the President, but no one has yet been punished. This, of course, constitutes the selective application of justice.

The wave of political migration to the West did not stop with Danylyshyn. Other members of Tymoshenko’s government too are on the run. The former Head of the State Committee for Material Reserves, Mikhail Pozhivanov, has surfaced in Austria. He is accused of being involved in the embezzlement of $4.5 million’s worth of state property (grain). Taking a leaf from the book of his companion in distress, Pozhivanov has already asked Austria for political asylum. This procedure can take years in Austria; in the meantime Pozhivanov is living and working in Vienna.

The position of Tymoshenko’s other associates, who made ​​no attempt to escape and are now behind bars, is much less enviable.

Unlike her Interior Minister Yuriy Lutsenko, the former Prime Minister Yulia Tymoshenko still hopes to avoid arrest. Political opinion is divided as to whether Yanukovych will dare such a move.

The following members of the opposition are currently in jail (and this is an incomplete list): Anatoly Makarenko, former Head of the Customs Service, Igor Dydenko, former Deputy Head of NJSC “Naftogaz Ukraine”, Yuri Lutsenko, former Interior Minister and Anatoly Ivashchenko, former interim Minister of Defence.

All are accused of abuse of office and embezzlement of state funds. However, some details of the case of former Internal Affairs Minister, Yuriy Lutsenko, serve to show the extent to which these persecutions are really politically motivated.

Expensive medals for Police Day

Lutsenko is accused of illegally granting privileges to his driver and purchasing expensive medals for the Police Day celebrations at an alleged charge to the budget of 100,000 USD. Lutsenko is one of the most vociferous members of the opposition and has already spent five months behind bars awaiting trial. The former Minister went on hunger strike in protest against his detention, which he considers unlawful, as his legal right to give a written undertaking not to leave the city or the country was ignored. After a month without food, Lutsenko was admitted to hospital with complex medical problems. At the hospital he was kept under multi-level surveillance more suitable for a serial killer or a fanatical terrorist. The money spent on paying the people to guard Lutsenko day and night is hardly less than the amount the government is accusing him of spending.

Government officials most definitely should be punished for their abuse of office. Massive criminal cases against those who stole public property are certainly supposed to instil fear into those who are in control of spending public money. However, the current government is only putting its political enemies behind bars!

One simple example. Just recently Ukrainian journalists discovered that Energy Minister, Yuriy Boyko, had overpaid 150 million (!) USD on the purchase of an oil and gas drilling platform for the Black Sea. In order to achieve this, a “dummy” was created – an intermediary company (registered in Cardiff, Wales), which concluded the 150 million mark-up deal. It bought the rig in Singapore for 250 million USD and sold it to Ukraine for 400 million USD! The company is registered offshore, and there is ample evidence that someone from Ukraine was involved in its creation (the website of the intermediary company has a Ukrainian hosting domain, for instance).

With this one deal the management of Ukraine’s fuel and energy complex has inflicted damage on the state budget of not 100 thousand USD, nor even two or five million, but 150 million USD! One might wonder if a criminal case was instituted, but the answer is no! Minister Boyko continues going to work and managing the budget as he used to before. And the saddest part is that he will continue doing so.

Viktor Yanukovych’s strategy

President Yanukovych chairing an anti-corruption meeting of his Administration. So far the only cases that have been instituted are against his political opponents.

In this light the prosecution of opposition leader Yulia Tymoshenko looks even more unconvincing. We will not examine the charges brought against her (the most serious of the four criminal cases concerns her abuse of office during the signing of a gas deal with Russia in 2009). Suffice it to say that six months ago all the experts agreed that imprisoning Tymoshenko would only increase her popularity rating, so no one would dare touch her​​; today the arrest of the opposition leader seems not only quite possible, but imminent. The leader of the Yulia Tymoshenko Bloc attends the Prosecutor General’s Office for interrogation almost every other day. She has given a written undertaking not to leave Ukraine: she is not permitted to visit Brussels or Strasbourg, as the authorities are trying to pin something on her for her work on the European scene.

The arrest of the Ukrainian opposition leader will, of course, provoke a wave of resentment from European institutions. Nevertheless, the President and his Party of the Regions are now concerned with a more pragmatic task, the parliamentary elections to be held in Ukraine in autumn 2012.

Everyone understands Viktor Yanukovych’s main strategy is absolute power: he wishes to have an absolute parliamentary majority, so at least 226 seats out of 450 have to go to the members of his Party of the Regions. This is the stated aim of all Yanukovych’s cronies. The Prosecutor General’s Office has been chosen as the main tool for achieving this goal. Convicts cannot stand for election, which explains the avalanche-like campaign of persecution against the opposition in Yanukovych’s first year in office. All investigations against members of Tymoshenko’s team must be concluded before the start of the pre-election campaign is announced.

Could the persecution of the opposition, Tymoshenko's arrest and selective justice bring people out on to the streets? Maybe. However, there will most probably be no revolution, no protests. Not just because society has caught the lingering germ of political apathy, but largely because it knows nothing. Yanukovych’s team has stitched up the mass media channels that are under their control and all the cutting edge truth has been removed from the screens of the central TV channels. It has gone back to the internet, where it was before the Orange Revolution.

Viktor Yanukovych has such tight control over all information that he has every chance of not only getting his majority in Parliament, but also staying for a second presidential term.

Natalia Sedletska is Kyiv based TV and print investigative journalist.

23.06.11.Address of the People’s Committee to Defend Ukraine on Political Persecutions in the Country

Kyiv, 14 June, 2011

During more than a year and a half of being in power, the Yanukovych regime has focused on establishing an authoritarian, corrupt model of power in Ukraine. Herewith it has intensively rolled-back all democratic gains. As a result of legislative changes, the judicial system has been fully subordinated to the head of the state; freedom of speech has been virtually destroyed and political persecutions are taking place. For the first time since the Soviet era, modern political prisoners have emerged in Ukraine.

Today, the authorities have brought far-fetched criminal cases against the leader of the opposition, former Prime Minister Yulia Tymoshenko, former Minister of the Interior Yuriy Lutsenko, and other former members of the government. Participants in the Maidan tax protests, activists, representatives of students’ and public organizations, journalists and bloggers are being persecuted. Each month, this list of enemies is expanded by the authorities.

Human rights and monitoring organizations have repeatedly made statements regarding selective justice, the unlawful detention of political and public figures, and political motives behind the persecutions. The granting of political asylum to Bohdan Danylyshyn, the former Minister of the Economy, is recognition of political repression against dissidents in Ukraine.

Unfortunately, protest actions and other measures of pressure upon the authorities to comply with Constitutional principles are being prohibited and made impossible in Ukraine by decisions from the courts, which are fully subordinated to the Presidential Administration.

Therefore, supporting the initiative of human rights activists, and on the basis of the above mentioned, we appeal to the heads of democratic countries to apply the mechanism of banning visa issues, of freezing financial assets and to use other sanctions against state officials of Ukraine who are involved in political persecution and who are violating human rights. We would like to ask you to apply the same measures against Ukraine’s judges who are delivering knowingly unjust sentences, guided only by the will of those who are in power, as well as by the will of prosecutors who do not hide that the desires of the country’s president are more important that the Law.

Convinced that the world must support Ukraine’s young democracy and force Ukraine’s government to regard the rights and freedoms of its citizens.

On behalf of People’s Committee to Defend Ukraine

Dmytro Pavlychko

Coordinator of the People’s Committee to Defend Ukraine

2011-04-13 | Wojciech Konoñczuk and Sùawomir Matuszak

The negotiations between Ukraine and the EU on the Association Agreement (AA) and a Deep and Comprehensive Free Trade Area (DCFTA) have reached the final stage. Between 4 and 8 April negotiating rounds regarding both the AA and the DCFTA were held. In the part devoted to the free trade area, significant progress was made and the likelihood of completing the talks this year is increasing. A new factor is the strong pressure from Moscow who is trying to persuade the Ukrainian authorities to join the customs union of Russia, Belarus and Kazakhstan, established under the auspices of Russia. This would mean bringing an end to the negotiations with the EU. Russia is using the carrot and stick approach as it resorts to threats of introducing export limitations while it also declares its willingness to lower the prices of the natural resources it sells. Presenting the benefits of Ukraine's entry into the customs union was the main objective of Vladimir Putin's visit to Kyiv on 12 April.
Ukraine sees the signing of the Association Agreement with the EU as its priority and for this reason it has agreed to certain concessions to the EU's advantage; this has enabled the advancement of the negotiations. Ukraine treats offers of the customs union with a visible reserve. Nevertheless, if Russia comes up with a very advantageous offer (e.g. a large cut in the price of gas) for Ukraine, it could not be ruled out that Ukraine would decide to find a pretext for obstructing negotiations with the EU.

The negotiations with the EU

On 4–8 April the rounds of negotiations on both the political part of the AA and the DCFTA took place. As opposed to what was the case with previous rounds, the Ukrainian government adopted a negotiating position aimed at reaching a compromise with the EU and a swift signing of the free trade agreement.
The contents of the AA had largely been determined. However, during the last round Ukraine returned to the demand to include in the agreement a provision about prospective EU membership. This most likely is a negotiating tactic aimed at gaining concessions in other areas since there is no chance that the EU will agree on a similar provision.
Up to now it was the part on the free trade zone that had caused most trouble. Statements made by Ukrainian representatives prove that important progress in the talks has been made. Initially agreement was reached in the area of agriculture (this area has caused the most controversy up to now). Ukraine agreed on the low cereal export quotas offered by the EU in exchange for larger preferences in meat exports. The two parties also reached agreement regarding the system of naming regional products produced in Ukraine as they decided on long transition periods and financial aid for entrepreneurs so they can change the names of the manufactured products. The two remaining contentious issues concern export customs (Ukraine will sustain losses after they are lifted) and energy. Another round of negotiations is scheduled for mid-June but the two questions require decisions on a political level and a related meeting is planned for the middle of May. When the involvement of the representatives of the highest-ranking officials in Ukraine (including the first deputy prime minister, Andriy Kluiev) is taken into consideration, reaching a compromise appears quite likely and this could lead to a swift conclusion to the negotiations and the signing of the Association Agreement by the end of this year, under the Polish presidency.

The Russian factor

Russia until recently has not publicly opposed Ukraine's EU aspirations (in contrast to Ukraine's potential membership in NATO) as it believed the admission of Ukraine to the EU was unrealistic in the foreseeable future. The Kremlin was however taken by surprise in the association negotiations between Ukraine and the EU and the announcement that the Association Agreement would be signed by the end of this year.
In recent weeks Russia has begun a media campaign aimed at persuading Ukraine to join the customs union of Russia, Belarus and Kazakhstan, which would mean a breach of negotiations on the Association Agreement. Furthermore, on 12 April Prime Minister Vladimir Putin came on an ad hoc visit to Kyiv, where he met Prime Minister Mykola Azarov and President Viktor Yanukovych. The head of the Russian government put forward the benefits of Ukraine's membership in the customs union (increasing the state's revenues by US$ 6.5 – 9 billion, which would translate into a rise in GDP by 1.5 – 2%) and also warned against the possibility of additional customs barriers if Ukraine established a free trade zone with the EU. The majority of the talks were held behind closed doors and no details on Russian offers were made public.
Earlier Russian politicians mentioned, among other issues, a possible reduction in the gas price (the current gas price of US$ 264 for 1000 m3is relatively high and Kyiv has repeatedly sought to have it reduced) and a decrease in the oil price. Russian statements, both the positive (promises) and the negative ones (threats) are aimed not only at the Ukrainian government but also at Ukrainian oligarchs. Russia is hoping the oligarchs, anxious to maintain exports from the companies they own in Russia, will put effective pressure on the Ukrainian government.
Nor can it be ruled out that the objective of Putin's visit to Kyiv was to negotiate a certain “concession” for Russia's agreement on the free trade zone deal between Ukraine and the EU. Russia is the most interested in gaining some control over the network of Ukrainian export gas pipelines. The Ukrainian government considers the South Stream gas pipeline project a threat to Ukraine's status as the key transit state for Russian gas, therefore they may be inclined to seek a compromise with Russia in this area. Reaching agreement between Russia and Ukraine and Russia's guarantee of stable transit through Ukraine would also benefit Brussels. In the light of the former gas crises, the EU asked Ukraine about clear guarantees (including the introduction of an early warming mechanism that would monitor the stability of gas supplies to the EU into the Association Agreement) that Russian gas would be delivered through its territory.

Ukraine's position

So far the position taken by the Ukrainian government has been unequivocal. Signing the Association Agreement this year has been a priority; membership in the customs union was ruled out although declarations about the willingness to strengthen cooperation with Moscow have been made. However, recently statements made by lower-ranking representatives about the necessity of Ukraine joining Russia's integration projects have been heard. These voices are the most likely to reflect the opinion of this Ukrainian business elite which find it beneficial to strengthen cooperation with Russia (the chemical industry, manufacturers of electric machines, the steel industry).
Only recently has Viktor Yanukovych taken part in this discussion. On 7 April in an official speech in the Supreme Council the president talked about relations with the customs union in the “3+1” formula (three member states of the customs union plus Ukraine). The president's offer clearly shows that the Ukrainian government would like to avoid the necessity of making a clear-cut geopolitical choice. Ukraine would like to sign the Association Agreement with the EU and then conclude a cooperation agreement with the customs union that would not be contrary to WTO rules and the provisions of the DCFTA.


Ukraine's formal membership in the customs union established around Russia is not incompatible with Ukraine's WTO commitments (Russia, Belarus and Kazakhstan are not WTO members). It seems however that now Russia's priority is not Ukraine's membership in the customs union but rather to break or at least prolong negotiations about the AA so that the EU becomes discouraged about this idea.
The Ukrainian government seems to prefer a closer institutional cooperation with the EU. However, it cannot be ruled out that if Russia puts forward a highly favourable offer (e.g. an important reduction in the gas price) Kyiv will lead to the obstruction of the negotiations with the EU on any given pretext and try to shift responsibility for it onto Brussels. Decreasing the gas price and guaranteeing the transit of Russian gas through Ukraine, which would bring several billion dollars of savings to the country, may be sufficient temptation for the Ukrainian government who are under heavy pressure from the gas lobby in Ukraine. On the other hand, given Ukraine's far better economic situation, high prices of energy resources are not such an urgent issue for Kyiv as they were in April 2010 when Ukraine agreed on the extended period of deployment of the Black Sea Fleet in exchange for a lower gas price.

Sùawomir Matuszak, Wojciech Konoñczuk, cooperation: Marta Jaroszewicz



On 31 May, the first Deputy Prime Minister of Ukraine Andriy Kluyev visited Brussels, during which a compromise was reached on one of the final disagreements (concerning the energy sector) on a deep and comprehensive free trade area (FTA+). Ukraine will not be obliged to pay compensation for any interruptions in gas transit, as the EU had previously demanded. This compromise increases the likelihood that the Association Agreement will be signed during Poland’s presidency of the EU.

The visit took place before the next round of FTA+ negotiations, which are scheduled for June. Kluyev met the EU Commissioners for Enlargement, Stefan Fule, and for Trade, Karel De Gucht. At a press conference, the Ukrainian Deputy Prime Minister said that the EU had decided not to include contractual penalties if gas supplies were halted (which was unacceptable for Ukraine); he announced that he was satisfied with the procedure implemented to resolve such disputes. Minister Kluyev’s statement has not been confirmed by the EU as of 1 June. Currently there is only one significant point of contention in the negotiations, namely export duties, the elimination of which would mean losses for Ukraine of around €300 million a year.
The high-level agreement before the June round of negotiations on energy issues brings the end of talks on the FTA+ much closer. It seems that it will be easier to find a compromise on the customs duties. Everything indicates that, in accordance with the declarations, an Association Agreement will be signed later this year. <smat>

11.07.11. Yulia Tymoshenko goes on trial a day before Constitution Day

June 30, 2011

Taras Kuzio

Opposition leader Yulia Tymoshenko’s trial began on June 27, a day before Ukraine celebrated constitution day, an irony that has not bypassed Ukrainians. In a new Razumkov Center for Economic and Political Studies survey, Ukrainians pointed to President Viktor Yanukovych as the main infringer of human rights in Ukraine (criminal structures came second). Nearly three quarters of Ukrainians believe their human rights are infringed upon, and that this situation is deteriorating (www.uceps.com.ua, June 27).

In an earlier survey the Razumkov Center found nearly half of Ukrainians believe political repression exists in Ukraine, while 60 percent feel the security forces are tougher toward the opposition than towards pro-regime forces (Ukrayinska Pravda, 7 June). With Tymoshenko and 12 members of her government, nine leaders of the fall 2010 anti-tax code protests and approximately a similar number of nationalist activists under investigation, on trial, or in jail, the number of Ukrainians who are politically persecuted stands at over 30 – growing to a number similar to Belarus.

Roman Besmertnyi, Ukrainian Ambassador to Belarus in 2009-2011, lambasted the Tymoshenko trial as “98 percent of that which is taking place in Belarus” on the Shuster Live television program (June 24). Our Ukraine-People’s Self Defense bloc issued a similar statement earlier this month.

The petty nature of the criminal charges leads Ukrainians to believe that political persecution has returned and international organizations and Western governments to complain about “selective justice.” Tymoshenko is charged with mis-spending Kyoto credits on pensions, over-paying for ambulances in a rigged tender and abuse of office for signing the 2009 gas contract. A fourth case could be opened on the alleged over-payment for anti-flu vaccines (see critical analysis in Ukrayinsky Tyzhden, May 31).

As Ukraine’s energy sector is the biggest source of corruption in the country, the very idea that only one of countless gas contracts signed with Russia was bad is not to be taken seriously (EDM, April 25). The Party of Regions, then led by Yanukovych, voted together with the Bloc of Yulia Tymoshenko (BYuT) against the January 2006 gas contract, but neither the Prime Minister as well as Our Ukraine leader Yuriy Yekhanurov nor Yushchenko, who fully supported it, was criminally charged.

Former Interior Minister, Yuriy Lutsenko, is charged with spending government funds for a police holiday and authorizing a pension to his driver who was past retirement age. The anti-tax code protestors are charged with damaging floor tiles on the Maidan (Independence Square).

Moreover, 16 employees of the Lviv museum dedicated to repression in the Soviet era were interrogated this month. In September 2010, the museum Director Ruslan Zabilyi was detained by the Ukrainian Security Service (SBU) for “divulging state secrets” which are in fact KGB archives declassified in the Viktor Yushchenko presidency pertaining to Stalinist repression in the 1930’s and 1940’s.

Against this background even pro-regime Parliamentary Chairman Volodymyr Lytvyn was forced to admit, “If one looks at that which is transpiring in the public part (of the court process) it is an amortization of the judicial system, it is its discrediting” (Ukrayinska Pravda, June 29). Ukrayinska Pravda (June 25) journalists present in court wrote “On that side of the Schengen zone they do not treat animals as they treat people in Ukraine who came to court to the Tymosheko trial.” EU Ambassador Jose Manuel Pinto Teixeira, present in court, described the conditions as “in-human” (Ukrayinska Pravda, June 24).

The issue of “selective justice” has damaged the reputation of the Yanukovych administration the greatest in Europe and the US, reinforcing Ukraine fatigue. Tymoshenko’s pre-trial hearing was held three days after Yanukovych promised to defend democratic values in a speech in Strasbourg to the Parliamentary Assembly Council of Europe (PACE) (www.president.gov.ua, June 21).

In June alone, PACE, the European Parliament, and the US Helsinki Commission Congressional Record released statements on democratic regression and political persecution in Ukraine (http://assembly.coe.int/; www.europarl.europa.eu; www.csce.gov). The US State Department issued a statement on the day of Tymoshenko’s pre-trial hearing: “The United States is aware of the opening of the trial against former Prime Minister Yulia Tymoshenko and reiterates its concern about the appearance of politically-motivated prosecutions of opposition figures in Ukraine. When the senior leadership of an opposition party is the focus of prosecutions, out of proportion with other political figures, this creates the appearance of a political motive” (http://www.state.gov/r/pa/prs/ps/2011/06/167064.htm). The EU Commissioner for Enlargement, Štefan Füle, stated the EU’s concern about politically motivated charges.

On June 22, two days before the hearing, Tymoshenko appealed that her case is politically motivated to the European Court of Human Rights (Ukrainians often jokingly state that the only free court in Ukraine is the ECHR). The Ukrainian authorities are legally obliged to implement the ECHR ruling.

US lawyers have also been hired on both sides of the Tymoshenko case, including undertaking an October 2010 “audit” of her 2007-2010 government. Covington and Burling held a press conference in Washington on June 17, where their report refuted the “audit” and subsequent charges dealing with Kyoto credits and ambulances describing them as “politically motivated” (the report did not analyze the gas contract) (http://www.pravda.com.ua/articles/2011/06/18/6308683/).

What is the West to do and does it have leverage?

If Tymoshenko is imprisoned in the summer, rather than given a suspended sentence, this will be seen as crossing a red line. A sign of tough Western reaction came when Tymoshenko was briefly detained on May 24, leading to the June 9 European Parliament resolution.

Demand for targeted visa denials is growing in Ukraine while being quietly discussed as an option in some Western quarters. The Ukrainian Human Rights Helsinki Union called on EU member states, the United States and Canada to introduce sanctions against Ukrainian officials involved in human rights violations. The appeal has been signed by nearly 500 Ukrainian civil society activists and journalists, and the list is growing (http://www.helsinki.org.ua/index.php?id=1307592518).

If the red line is crossed with Tymoshenko’s imprisonment, two questions would follow: is it possible for Washington and Brussels to coordinate a policy of selective visa denials and, if it is, who should be on the list? If Tymoshenko is given a suspended sentence, the West might choose to ignore it and continue its virtual dialogue with Kyiv at the expense of double standards, ignoring growing similarities with Belarus. The prosecutor has said that the criminal article, under which Tymoshenko is charged with abuse of office for the gas contract, provides for up to 10 years in prison and does not allow a suspended sentence (Ukrayinska Pravda, June 29).

08.08.11. Ukrainian World Congress calls for immediate release of Yulia Tymoshenko

August 5, 2011

Earlier today, former Ukrainian Prime Minister Yulia Tymoshenko was arrested in court and subsequently transported to Lukyanivska prison for detention. Ms. Tymoshenko is defending herself against allegations which have been widely perceived as politically motivated by the international community.

Ms. Tymoshenko was arrested after the presiding judge denied the former Prime Minister’s motions to question key witneses and to adjourn the hearings to give the defense additional time to prepare for the hearings.

“Today’s arrest of Ukraine’s former Prime Minister and main opposition leader, Yulia Tymoshenko, during her trial, which is widely viewed as politically motivated, is a major step backwards for the government of Ukraine. Given that Ukraine is representing Europe as Chair of the Committee of Ministers of the Council of Europe until November 2011, co-host of EURO 2012, and Chair of the Organization for Security and Co-operation in Europe in 2013, it is critical for Ukraine’s government to release Ms. Tymoshenko immediately, to comply with its international commitments, and to refrain from using criminal proceedings as a means to achieving political ends,”stated Ukrainian World Congress President Eugene Czolij.

08.08.11. Reaction swift to Tymoshenko's arrest

August 5, 2011

Editor’s Note: The following statements came in response to the Aug. 5 arrest and jailing of ex-Prime Minister Yulia Tymoshenko on contempt-of-court charges in her trial. Tymoshenko is charged with exceeding her authority as prime minister in reaching a 2009 gas deal with Russia to end a three-week shutoff in January. Tymoshenko, in a view shared by many Ukrainians and many in the West, calls the charges politically motivated to win a conviction that makes her ineligible to run against Yanukovych in the 2015 presidential election or stand in the 2012 parliamentary eletion. Yanukovych denies he has anything to do with the charges.

David J. Kramer, executive director of U.S.-based Freedom House

"The decision will make it harder and harder for Ukraine and the European Union to go about business as usual. This is a very serious matter. It is making a mockery of the judicial system in Ukraine and is moving the country away from the values and principles of the United States and Europe. Ukraine had approached the line with the farce that is the trial. It has definitely crossed the line now."

Polish Foreign Ministry calls for Tymoshenko’s freedom

“We express concern over the decision of the Pechersk District Court in Kyiv to detain [ex-Prime Minister] Yulia Tymoshenko. We believe that this is a too hasty and drastic measure of restraint applied to the former prime minister for failing to follow court procedures, and thus hindering the investigation. We hope that Tymoshenko will be released from custody soon, and the court proceedings against the former prime minister will follow the European standards of behavior. Poland as the European Union president, will take up this conversation, both with the EU partners (High Representative Catherine Ashton), as well as representatives of the highest authorities of Ukraine (President Viktor Yanukovych, Foreign Minister Kostyantyn Gryshchenko. (Statement by Marcin Bosacki, Foreign Ministry spokesman)

UCCA calls for immediate release of Tymoshenko

The Ukrainian Congress Committee of America, the umbrella organization of the over one million Americans of Ukrainian descent, is deeply concerned about the condition of Ukraine’s former prime minister, Yulia Tymoshenko. As reported in the press, Kyiv’s Pechersky District court ordered her arrest and detention today. The UCCA calls upon Ukrainian authorities to immediately release her from prison. Furthermore, as the representative body of Ukrainian-Americans, the UCCA urges the United States government to publicly condemn her political imprisonment and utilize all diplomatic efforts to ensure the safety of her life and her release. The Yanukovych regime’s selective use of law enforcement, which has resulted in probes of political opposition leaders and the arrest of Yulia Tymoshenko and others, is one in a series of anti-democratic policies of political persecution. The world’s democracies cannot remain silent while basic human rights are being violated and the rule of law is nothing more than a command system.

Darya Chepak, President Viktor Yanukovych's press secretary:"The president has said many times that his administration has nothing to do with [the court process against Tymoshenko], and cannot intervene in the activity of the judiciary according to the constitution."

Carl Bildt, foreign minister of Sweden:

"The trial against Yulia Tymoshenko in Ukraine an embarrassing spectacle. Does great damage to a great country."

Jerzy Buzek, president of the European Parliament:

"I am disturbed by the news about court's decision to detain former Prime Minister Tymoshenko. The context and conditions raise concern about the politically motivated nature of this decision, and about the application of the rule of law in Ukraine. I urge Ukraine to uphold the principles and common values that define our relationship and that form the core of the Eastern partnership."

Hryhoriy Nemyria, former vice prime minister of Ukraine in Yulia Tymoshenko government:

"Yulia Tymoshenko was detained for her attempts to implement her rights in a politically-motivated case. If, before today, somebody doubted that this process is not politically motivated, the last doubts must have vanished today. In the nearest time, we expect very clear and concrete reaction from European countries and US. Yanukovych and everyone else behind the current escalation have made a big mistake. They have the time to fix it. If this is not done, the biggest political victim will be not Tymoshenko, but [President Viktor] Yanukovych."

Russian Foreign Ministry:

“Former Ukraine [Prime Minister] Tymoshenko’s trial should be impartial, with proper defense guaranteed and basic humanitarian standards observed."

Svoboda All-Ukrainian Union:

"We see what happened today in the following way: the authorities are simply bored with the formal demonstration of justice. They simply applied stricter and more repressive actions. This case reduces the [public's] trust in the authorities, reduces the rating of support of society for the authorities, and increases the level of distrust in the authorities."

Mykola Martynenko, member of parliament, leader of the Our-Ukraine – People's Self-Defense faction:

“The authorities have started following a Belarus-style scenario. It's obvious that the criminal cases against opposition figures are too thin and are falling to pieces. The authorities have thrown aside the last formal procedures in the political trial of the opposition. As a result, Ukraine is facing the threat of complete suspension of any rapprochement with Europe and international isolation from the civilized world."

Oles Doniy, member of parliament, Our-Ukraine – People's Self-Defense faction:

"If someone did not understand after the unjustified arrest of Yuriy Lutsenko that it was only the beginning of the dismantling of freedom and democracy and the launch of political reprisals, now they should look the truth in the eyes. And the truth is that this government will not settle before the entire political opposition is either behind the bars or in exile."

Former Verkhovna Rada speaker Arseniy Yatsenyuk:

"Democracy is over. There is not one regime that has won a war against its own people."

The President of the European People's Party (EPP) Wilfried Martens:

"With the arrest of former Ukrainian Premier Yulia Tymoshenko, Ukraine moved one step closer to "returning to Soviet-style authoritarianism. I'm not surprised that today the court ordered Yulia Tymoshenko to be placed under arrest. For months now, it has been blatantly obvious that the Yanukovych regime is running a politically motivated court case. The motive is clear: the removal of the main obstacle for a return to Soviet-style authoritarianism. Today Ukraine has moved one step closer. I call on [President] Viktor Yanukovych to put an immediate end to this sham."

Influential European politician, member of the European Parliament and the European People's Party Vice President Mario David:

"The trial of former Ukrainian Prime Minister Yulia Tymoshenko will show the European Union whether the rule of law exists in Ukraine. Tymoshenko behavior in the courtroom could have been prompted by the situation surrounding her. The European Union will closely watch the proceedings, which should demonstrate how the judicial branch works in Ukraine. Tymoshenko's trial should help the European Union understand whether there is an independent judicial system and rule of law in Ukraine. This is what the European Union expects from Ukraine, otherwise an agreement on association with the EU could be called into question."

European expert from the Carnegie Foundation in Brussels Olga Shumylo-Tapiola:

"Brussels and the European Union countries will have a negatively reaction to the arrest of former Ukrainian Prime Minister Yulia Tymoshenko. A reaction will follow. Brussels and all other member-states are most likely to express a negative reaction, as they have many times called on the Ukrainian side to put an end to selective justice, and ensure honest and open justice."

Statement by Senator John McCain regarding the detention ,of former Ukrainian Prime Minister Yulia Tymoshenko

August 5, 2011

Washington, D.C. - "I am deeply concerned about the detention today of former Prime Minister Yulia Tymoshenko in Ukraine. This action is clearly a violation of the basic rights that should be protected for every citizen in a democracy. The implications of this detention go far beyond the fate of one person. Ultimately, what is at stake is the future of freedom and democracy in Ukraine. Unfortunately, today's action by the Ukrainian government calls into question its commitment to the fundamentals of democracy, and as such, will make Ukraine's path toward a future in the Euro-Atlantic community harder to achieve. I urge the leadership in Kyiv to release Prime Minister Tymoshenko immediately and guarantee the rights of all Ukrainians, regardless of their political beliefs."

EPP President: 'Tymoshenko arrest brings Ukraine one step closer to Soviet-style authoritarianism'

5 August 2011

The President of the European People's Party (EPP),Wilfried Martens, after learning that the Ukrainian court has ordered former Prime MinisterYulia Tymoshenkoto be placed under arrest in the framework of an on-going court case, made the following statement:

"I am not surprised that today the court ordered Yulia Tymoshenko to be placed under arrest. For months now, it has been blatantly obvious that the Yanukovych regime is running a politically motivated court case. The motive is clear: the removal of the main obstacle for returning to Soviet-style authoritarianism. Today Ukraine has moved one step closer," the EPP President emphasized.

"I call on Viktor Yanukovych to put an immediate end to this sham – Europe's patience has reached its limit," President Martens added.

Former Ukrainian Prime Minister Yulia Tymoshenko is the leader of Batkivshchyna, an observer member party of the EPP.

The EPP is the largest and most influential European-level political party of the centre right, which currently includes 75 member-parties from 39 countries, the Presidents of the European Commission, European Council, and European Parliament, 17 EU and 6 non-EU heads of state and government, 13 members of the European Commission and the largest Group in the European Parliament.

Taras Kuzio

Ukraine’s poor relations with Russia are nothing new as they also existed under the “pro-Russian” Leonid Kuchma. Nevertheless, Kuchma had to deal with the more democratic Russian President Boris Yeltsin, whereas the certainty of Vladimir Putin returning as Russian President in March 2012 means that Moscow will continue to present a hard line toward Kyiv.

During the last two decades of Ukrainian independence, Kyiv’s relations with Moscow have followed predictable patterns. Moscow has always favored presidents elected by eastern Ukrainian, Russian-speaking voters, whether Kuchma or Yanukovych, but the promise of better relations has never appeared. With Ukrainian “nationalist” presidents, poor relations were inevitable. Leonid Kravchuk, elected in 1991 by Russophone voters, was quickly perceived by Moscow as a “nationalist” because he relied upon national democratic support and quarreled with Russia over the CIS, Black Sea Fleet (BSF), nuclear weapons and many other issues.

Yushchenko, elected in 2004, was always going to be even more suspicious in Putin’s eyes as the Russian leader had been personally humiliated by the Orange Revolution, an event viewed in Moscow and by Yanukovych as a US-backed conspiracy. Putin twice visited Ukraine in October-November 2004 to give support to Yanukovych and congratulated him on his election a day before the Central Election Commission announced the official results. Yushchenko was easy to portray as a “nationalist” villain because of his national identity and foreign policy orientation. Relations with Russia (and Poland) became especially strained over Yushchenko’s honoring of 1940s nationalist leaders and his support for Georgia during Russia’s August 2008 invasion.

In reality, Kuchma was as much of a “nationalist.” Kuchma “Ukrainianized” the country’s education system, and initiated the international campaign to designate the 1933 artificial famine (holodomor) as “genocide.” Kuchma twice requested NATO to offer Ukraine a Membership Action Plan (MAP) in 2002 and 2004 – the same number of attempts as Yushchenko in 2006 and 2008. Kuchma and Yanukovych had strained relations with Moscow for the same reason: namely, their eastern Ukrainian naivety about Russia and Slavic brotherhood. Eastern Ukrainian naivety has come face to face with Russian imperial-chauvinism, which does not accept the permanency or existence of Ukraine’s statehood. This is clearly revealed in private conversations with Western diplomats in Kyiv who are unfazed by Russian heavy handiness that they themselves have witnessed during previous tours of duty in Moscow. Putin told the NATO-Russia Council at the April 2008 Bucharest summit: “Well, you understand, George (Bush), Ukraine is not even a state,” adding “What is Ukraine? One part of its territory is in Eastern Europe, and the other part, the significant portion, was a gift from us” (UNIAN, April 18, 2008).

Putin mistakenly believes that “seventeen million are Russians,” mixing up Russophones with “Russians.” In Putin’s eyes, Ukraine is an artificial state where “one third is ethnic Russian,” which would disintegrate if tensions rose as in 2008-2009 when Russian espionage and subversion grew in the Crimea (see November 2010 Jamestown report: The Crimea: Europe’s Next Flashpoint?).

Moscow’s contempt for Ukrainian statehood has not abated despite Yanukovych’s far more pro-Russian position than Kuchma’s. Yanukovych extended the Sevastopol BSF base to 2047, dropped the pursuit of NATO membership and adopted the Russian position that the 1933 famine was Soviet-wide, denouncing the claim that the holodomor is a “genocide” or Ukrainian famine. Two years earlier, Yanukovych was the only CIS politician to support the independence of South Ossetia and Abkhazia.

A senior official in the Ukrainian government commented on the state of Russian-Ukrainian relations: “We had the illusion that everything would work out if we removed from our relations with the Russian Federation key irritants like recognition of the Holodomor [1930s famine] as genocide, plans to join NATO and the reluctance to extend the stationing of the Black Sea Fleet. But this has not happened” (Kommersant-Ukraina, June 21).

The Yanukovych administration, like every Ukrainian leadership, became exasperated by the inability of Russia to treat Ukraine on an equal footing. A senior Ukrainian official explained: “It is not we who are moving away from Russia, but the latter that pushes us off.” Yanukovych gave away so much, so quickly, for nothing – including the mythical 30 percent gas “discount.”

Yanukovych is faced by a more assertive, wealthier and aggressive Russia, which will again be led by Putin who has never hidden his disdain for Yanukovych. A January 2009 US cable from Kyiv leaked by WikiLeaks cites the then Ukrainian Ambassador to Russia, Kostyantyn Gryshchenko (now Foreign Minister), as stating that Putin hates Yushchenko and has a low personal regard for Yanukovych (Kyiv Post, March 11). Gryshchenko bemoaned to US Ambassador William Taylor that Moscow seeks a “regency” in Ukraine totally subservient to Moscow (Kyiv Post, March 11).

Putin’s hard-line policies toward Yanukovych escalated after Yulia Tymoshenko was accused of abuse of office for her signing of the January 2009 gas contract with Putin. One year earlier, the Kharkiv accords extending the BSF base had recognized the same contract. Yanukovych claimed that the Ukrainian government had taken this step because Russia had agreed to review the contract. Since then, Russia, in Yanukovych’s view, had betrayed them even though the terms of the 2009 contract “were written it seems for an enemy” (Kommersant-Ukraina, September 6).

Yanukovych complained during the Dushanbe CIS summit: “We are not poor relations…We are an independent state,” adding “At first they pushed us into a corner and then they began to dictate terms. This demeans not only myself personally but it demeans the state and I cannot permit this” (Kommersant-Ukraina, September 6).

Ukrainian officials have condemned the “information war” against Yanukovych and his economic nationalist oligarch allies (Ukrayinska Pravda, September 1). Party of Regions deputy Sviatoslav Oliynyk revealed the “mass ideological and technological parachutists” sent into eastern and southern Ukraine to turn the population against Yanukovych. “This ‘geopolitical process’ amounts to support for separatism,” he warned (Ukrayinska Pravda, September 9).

The deterioration in relations could be seen at the September 15-18 Yalta European Strategy (YES) summit, boycotted by Russia (http://yes-ukraine.org/ua/Yalta-annual-meeting/2011). In last year’s YES summit, Russia sent numerous senior figures in the firm belief that “their” man had been elected earlier that year (see analysis of this year’s YES summit by Serhiy Leshchenko in Ukrayinska Pravda, September 19, 23).

Kyiv’s strained relations with Moscow point to three conclusions. Firstly, Russia does not accept, or respect, Ukrainian sovereignty. Secondly, Yanukovych has received nothing in return for naive pro-Russian policies introduced after he was elected. These policies have given him less leverage than Kuchma possessed in the 1990s, when he used US support and cooperation with NATO to persuade Russia to moderate its position. Thirdly, by extending the Sevastopol base de facto indefinitely, Yanukovych has given Russia the ability to intervene and subvert the Crimea (Ukrayinsky Tyzhden, August 23). Tension is again growing with Ukraine, blocking the passage of Russian vessels in the Kerch straits (Ukrayinska Pravda, September 8).

Yanukovych’s inept attempts to pursue Kuchma-style multi-vector foreign policies have led to poor relations with Moscow and Brussels-Washington that have given him two potential pitfalls. Either Yanukovych can agree to join the CIS Customs Union, turning Ukraine into a Russian protectorate and in the process provoking widespread domestic instability through protests at the loss of Ukrainian independence. Or Yanukovych can mend relations with the West by releasing Tymoshenko from imprisonment leading to a Deep Comprehensive Free Trade Agreement with the EU, but risking the possibility that she may defeat him in the 2015 presidential elections.