SIGNIFICANCE--The president has created a grand coalition
outside parliament with the "constructive" wing of the Party of
Regions with the aim of splitting the party and using the NSDC to
control the Yulia Tymoshenko government.
appointment of Bohatiorova as NSDC secretary will continue President
Yushchenko's use of the NSDC as an alternative centre of governance
to the government. In 2005, during the first Tymoshenko government,
Yushchenko appointed Petro Poroshenko as NSDC secretary whose remit
was to counter balance the government.
The use of the NSDC to attack and counter balance domestic
competitors was begun under former President Leonid Kuchma.
Following round one of the 1999 elections, Kuchma co-opted
opposition leader Yevhen Marchuk as NSDC secretary and used him
against Deputy Prime Minister Tymoshenko's reforms against energy
The Ukrainian Centre for Economic and Political Studies (known as
the Razumkov Centre) wrote that the NSDC is being used, "towards
strengthening the Presidents position in his stand-off with the
coalition majority in Parliament and creating something like a 'mini
government' rather than towards more effective provision of foreign
policy activity of the head of state".
In December 2007, the Constitutional Court began deliberations
over 14 decrees issued by Yushchenko on the NSDC. The parliamentary
deputies who placed the complaint before the court argued that the
president has infringed the constitution in expanding the remit of
Bohatiorova will join former Prime Minister Yuriy Yekhanurov as
Defence Minister who will also act as a counter weight to the
Tymoshenko government. The inexperienced Yekhanurov replaced
Anatoliy Hrytsenko who was popular in the armed forces, NATO and
Hrytsenko entered government as the President of the Razumkov
Centre and was one of a few ministers who had come from civil
society, despite high hopes during the Orange Revolution that there
would be an inflow of young NGO activists. Hrytsenko was one of few
ministers who had served in all three governments since Yushchenko's
The replacement of Hrytsenko by Yekhanurov, leader member of the
anti-Tymoshenko wing of Our Ukraine-Peoples Self Defence (NU-NS),
coupled with the demand that NU-NS control the Interior Ministry,
aims to place law enforcement fully under the presidents control.
Razumkov Centre expert Valeriy Chaly concluded that, "greater
attention is being given to political issues than maintaining
professionals in place".
Under Kuchma, the NSDC secretary went to experts in foreign and
defence policy, such as Volodymyr Horbulin and Marchuk. Under
Yushchenko, the NSDC secretary has gone to businessmen and economic
technocrats, such as Poroshenko (February-September 2005), Anatoliy
Kinakh (October 2005-May 2006), and Vitaly Hayduk (October 2006-May
2007). Ivan Pliushch (June - November 2006) was parliamentary
speaker during Yushchenko's 1999-2001 government.
Poroshenko, Kinakh and Pliushch are members of the
anti-Tymoshenko wing of NU-NS. Bohatiorova's appointment therefore
continues in the tradition of placing Tymoshenko's opponents in the
position of NSDC secretary with no experience in foreign and defence
Controlling the Tymoshenko Government. Constitutional
reforms in 2006 no longer make it possible for the president to
dismiss the government, as was undertaken against Tymoshenko in
September 2005. The new constitution places the government under the
control of the parliamentary coalition.
The president has three remaining ways to influence the
1. Using the NSDC and NU-NS control over law enforcement as a
2. Placing NU-NS Yushchenko loyalist Arseniy Yatseniuk as
parliamentary speaker. Yatseniuk was promoted by the president as an
alternative to Our Ukraine's choice for speaker, its leader
Vyacheslav Kyrylenko, who is closer to Tymoshenko.
3. If relations deteriorate, using the presidential secretariat
to pressure NU-NS to withdraw from the coalition thereby leading to
the collapse of the Tymoshenko government.
President Yushchenko has outlined six proposals that aim to
control the Tymoshenko government:
1. The government meets weekly with the president and speaker.
2. The prime minister meets the president each day for 30
3. The president would attend government meetings.
4. Bohatiorova ensures the implementation of all NSDC
resolutions. The majority of these would deal with domestic issues
that are within the governments competence, such as reforming law
enforcement, energy and coal.
5. The NSDC to become the main generator of national priorities
that would be taken on board by the government.
6. The NSDC would become a vehicle to promote dialogue between
the government and opposition and to promote national integration.
Yushchenko's aim to counter-balance Tymoshenko are unsustainable
due to constitutional reforms, internal divisions in NU-NS and
The 2006 constitution removes the government from presidential
The president's demand for NU-NS to withdraw from an orange
coalition would be sufficient for the orange coalition to collapse
as it has a slim majority of 227 deputies and upwards of a third of
NU-NS are in the anti-Tymoshenko camp. But, such a demand would
irrevocably split NU-NS ahead of the 2009 presidential elections.
The Tymoshenko bloc (BYuT) came only 3% behind the Party of
Regions in the 2007 elections and a December poll put it, for the
first time, ahead with 26.3% (compared to 25% for the Party of
Regions). The presidents NU-NS had collapsed from 14% in the
elections to 7.9%.
Another poll gave Tymoshenko 30.7% as politician of the year
compared to 14.8% for Yanukovych and only 6.6% for Yushchenko.
Planned anti-corruption programmes and social policies by the
Tymoshenko government will serve to increase her popularity ahead of
the 2009 presidential elections.
Divisions in the Party of Regions. The appointment of
Bohatiorova was opposed by the Party of Regions presidium because it
contradicted its opposition stance. The appointment repeats
Yushchenko's long-standing inability to separate the authorities
from the opposition.
During Kuchma's second term, Yushchenko and Our Ukraine wavered
between joining the opposition with Tymoshenko or being in
"constructive opposition" through a coalition with pro-Kuchma
moderates, including the party of Regions that Poroshenko assisted
in establishing in 2001. In autumn 2006, Our Ukraine was both in
opposition, with Tymoshenko, and in the Viktor Yanukovych government
and was only forced to fully join the opposition after its ministers
were forcibly removed.
Presidential strategy aims to divide the Party of Regions into
its liberal "constructive" and conservative wings. Bohatioriva is a
close ally of the leaders of the constructive wing of the Party of
Regions, Boris Kolesnikov and oligarch Renat Akhmetov who threatened
to resign from the party in December.
In the next two years ahead of presidential elections, Ukraine's
political spectrum could be re-aligned:
1. Centre-right: Tymoshenko bloc and a majority from NU-NS. A
large majority of NU-NS are exasperated by Yushchenko's arrogance
and lack of consultation with them. NU-NS was not informed of the
plan to appoint Bohatioriova and many opposed it;
2. Centrist, Pro-Business: constructive and youth wings of the
Party of Regions and the anti-Tymoshenko minority in NU-NS;
3. Conservatives: remnants of the Party of Regions under
In opposition under Kuchma and as president, Yushchenko has felt
more comfortable with the second group than with the first or third.
As NSDC secretary, Bohatiorova would be in a good position to assist
in Yushchenko's re-alignment as the candidate of the second group in
the 2009 presidential elections. The cost to Yushchenko would be the
loss of the bulk of orange support.
If the orange coalition were to collapse in the governments first
year the Tymoshenko government would remain as acting government as
new elections are only possible after September 2008. If Yushchenko
were to re-align from orange to the new centrist grouping it would
take place under a new government in 2008-2009.
Tension with the Government. The anti-corruption and
justice-seeking platform of the Tymoshenko government will, as in
2005, come into conflict with the consensus seeking president. In a
21 December speech to Inter TV, whose viewers are primarily in
eastern Ukraine, Tymoshenko said, "We are commencing the process of
purifying the country, and I will make every effort to ensure that
dirty money is no longer a defining factor in Ukrainian politics".
No senior officials have been criminally charged under Yushchenko
who has instead sought reconciliation. If corruption is to be
seriously reduced in Ukraine, criminal charges against senior
officials who have continued to remain above the law will have to
follow. Two Socialist Party members of the former Yanukovych
government, Interior Minister Vasyl Tsushko and Transport Minister
Mykola Rudkovsky, are being investigated and could be charged as the
Socialists are no longer in parliament.
If charges were laid against senior Party of Regions deputies
there would be the potential for conflict between the president and
government. In December, Yushchenko awarded a state medal to
Kolesnikov, head of the Party of Regions 2007 campaign and briefly
arrested on extortion charges in 2005. The award was ridiculed by
Tymoshenko but defended by the president in a three-hour live
marathon in December.
Yushchenko described Kolesnikov as a member of the "constructive"
wing of the Party of Regions which sought to compromise during the
spring 2007 crisis after the president had disbanded parliament.
Kolesnikov, who is close to presidential secretariat head Viktor
Baloga, agreed to early elections after being offered a grand
coalition with NU-NS after the elections. The appointment of
Bohatiorova, who shared a parliamentary office with Kolesnikov, was
an attempt at fulfilling the deal, but outside parliament.
The NSDC secretary would be in a position to defend the Party of
Regions from criminal charges and to oppose re-privatisation.
Tymoshenko has stated her plan to take back Dniproenergo privatised
in summer 2007 by Party of Regions oligarch, Renat Akhmetov, a close
ally of Kolesnikov and Bohatiorova. Tymoshenko has raised questions
as to who is responsible for corruption and negligence in permitting
Naftohaz Ukrainy to nearly go bankrupt.
Conclusion--The appointment of a senior Party of Regions
official to the NSDC continues the tradition of using this
institution not for foreign policy but as a counter-balance to the
government. Presidential strategy also seeks alternative allies in
the constructive wing of the Party of Regions ahead of presidential
elections. Attempts by an unpopular president under a new
constitution to control a popular Tymoshenko government will fail,
lead to conflict and a possible final split in the orange camp.
Lucan Way - political scientist, Professor, University of
Toronto, an expert on post-Soviet countries, shares his opinions
with NRS on the situation in Ukraine.
-- How do you assess the current situation in Ukraine, including
such outrageous excesses, as the brawling in parliament and deputies
dousing each other with water?
-- This is absolutely normal and expected chaos at the highest
level. There is a balance of power, but in general the parties and
politicians are weak. They easily bribe one another. These events
are unpredictable, on the one hand; on the other - are expected.
-- Why, do you think, it has been so difficult for the "Orange"
-- Because these politicians are not united by a common ideology,
but by personal ambitions. This always creates an unstable political
environment. Yushchenko -Tymoshenko in tandem reminds me of Kuchma
and Marchuk few years ago. Here too there was no ideology - only
personal ambitions. This always weakens the opposition coalition.
This, by the way, distinguishes Ukraine from Russia, where party
discipline is strong now.
-- Ukrainian chaos - is exclusively political. How does it affect
the daily lives of people? My girlfriend from Kyiv complains: How is
it possible to permanently live in the apartment, which is
constantly under repair.
-- I think this comparison is not entirely appropriate. Political
storms have shaken various countries. Ukrainian upheaval - is only
chaos at the top. This is of interest to political scientists, as I,
as well as for journalists. But ordinary people live their lives.
What is happening in the parliament now - is good. Opponents are
seeking a compromise - a normal democratic practice. The dangerous
situation is when a group takes power into their hands - as is now
happening in Russia.
-- Does Russia have any influence on the Ukrainian situation
-- In general, only energy prices. The rest - hardly. Only
Russia's proximity has the largest influence on Ukraine.
-- Do you think that Yulia Tymoshenko has a dictatorial streak?
-- She dangerous because she very active and effective. She is
like Trotsky and Stalin all rolled into one. Like Trotsky she has
great oratory skills, but she can be tough like Stalin
- master of back room intrigue.
-- Yulia Tymoshenko is dangerous for Ukraine?
-- Yes, very dangerous. She is a populist with no ideology, only
a need for power. If she ever becomes President, all these current
democratic Ukrainian experiments will be immediately discontinued. I
think Ukrainian democracy is still alive today only because of
laziness of Viktor Yushchenko. He, incidentally, is very similar to
Kravchuk, the first Ukrainian president. Both like to be akin to the
British monarch - always staying on top, but not involved in the day
to day matters. Yulia Tymoshenko would wield power on a daily basis.
She would concentrate power in her hands. I have known her for some
time and worked with her once. She is clever and efficient. She has
no ideology. Money in itself does not interest her. She is driven by
ambition. I am not saying that this is bad for politics, but in the
case of Yulia Tymoshenko this can be dangerous.
-- Many Ukrainians are watching on television the unfolding
political situation in Russia. Some are even begin to yearn for a
strong hand. Who is on the right political path?
-- Ukraine is on the right track - in the general sense of what
is understood by democracy. In Russia, Putin can do the most stupid
thing, and no one will stop him. The Ukrainian situation is
different - there will be discussions, douse each other with water
and criticize the decision of the President. So in that the sense,
democracy in Ukraine is ahead of Russia.
-- And what do you think of a possible union with Moscow and
-- Full delirium. Lukashenko and Putin will not be able to exist
Lucan A. Way
B.A. (Harvard), M.A., Ph.D. (California)
Research interests: regime change, hybrid regimes, weak states,
fiscal and social reform, corruption, comparative politics of
developing countries, and post-Communist politics. He has published
articles in Communist and Post-Communist Studies, Comparative
Politics, East European Politics and Societies, Journal of
Democracy, Journal of Communist Studies and Transition Politics,
Politics and Society, Post-Soviet Affairs, Studies in Comparative
and International Development, World Politics, as well as several
challenges of the Ukrainian government to manage its energy sector
January 10, .2008
A dynamic, efficient energy sector is a major prerequisite for
Ukraine`s development into a vibrant market economy that could
rapidly improve living standards for its citizens. However, Ukraine
will need to make the energy industry much more efficient because it
has the highest ratio of energy use to per capita GDP in the world.
It has the world`s most energy intensive economy.
Ukraine has extensive reserves of coal and a large nuclear power
industry. However, it relies heavily on imports of oil and
especially natural gas for its energy needs.
Natural gas is more important than oil for Ukraine. The country
consumes five times more natural gas than oil in energy equivalent
terms. Although Ukraine consumes about a quarter of its natural gas
from domestic production the other three quarters are purchased from
Russia, Kazakhstan, Turkmenistan, and Uzbekistan. Unfortunately, all
of these imports come through Russia with its imposed tariffs.
The recognized corrupt corporate system of energy imports and
sales has actively discouraged Western investment in the energy
sector, leaving Ukraine with one of the lowest levels of foreign
direct investment in energy in the region.
Ukraine is the key energy corridor bringing oil and gas shipments
to Europe from Russia and Central Asia and can play an even more
significant role in Europe`s attempt to achieve greater energy
If Ukraine were to implement progressive policies in its energy
sector including current market pricing for its products and
reducing barriers to foreign investment, it could reduce Russia`s
influence on economic policy decision making in Ukraine and it might
even induce Russia to introduce additional reforms into its own
Despite the known corporate corruption, Ukraine has had some
major accomplishments in the energy sector, including increases in
energy efficiency. As a result, the country is about 20 percent more
energy efficient today than it was in 1990. New nuclear power plants
have replaced most of the electricity previously generated by the
RBMK reactors at Chernobyl. Ukraine is set to become a net exporter
of electricity as a result of its robust nuclear industry. In spite
of continued Russian pressure, the Ukrainian government intends to
retain control of its major gas pipeline system rather than allow it
to be controlled by Gazprom, a Russian company. The World Bank has
indicated that it is anxious to help Ukraine modernize its energy
infrastructure, develop a progressive tariff system and integrate
the country`s energy sector with those of Western Europe.
There is a great awareness in Ukraine of the need to diversify
the country`s sources of oil and natural gas and to reduce its
domestic consumption through increased efficiency.
Ukraine is fortunate in that the country contains ( 1 )
significant reserves of oil and gas, both on and off shore, ( 2 )
massive coal deposits, with Europe`s best coal-bed methane
prospects, and ( 3 ) at least six functioning nuclear reactors,
backed by a sophisticated nuclear industry. With improved energy
policies and stronger rule of law to support supply contracts,
Ukraine has the capability to reduce its import dependency by 50%
over the next 15 years. Other reforms could also strengthen
Ukraine`s position when negotiating energy import prices with Russia
and the Central Asian suppliers.
Unfortunately, Ukraine has become more dependent on energy
imports. Ukraine still lags behind other European nations in
modernizing its energy sector. It requires greater business
transparency, coupled with tariff reform and energy efficiency gains
that could help reduce or eliminate the constant build up of payment
arrears to Russia and Central Asian suppliers.
What the critics recommend
The critics of the government have stated that Ukraine should
immediately repudiate its contracts with RosUkrEnergo, the Russian
subsidiary of Gazprom and negotiate gas purchase contracts directly
with Gazprom. This move would weaken the power of Ukrainian
oligarchic groups who benefit financially through their
collaboration with Russian state - controlled entities.
Further, Ukraine should implement the transit protocol of the
European Energy Charter that stipulates the creation of a “ common
carrier “ system.ConclusionsReforms in the energy market in Ukraine
can have a multiplier effect including the reduction of influence of
the corrupt business groups over the country`s political system. It
could also accelerate Ukraine`s economic and political integration
into the West.
There are a total of nine recommendations in this report.
The complete text of this article can be read at:
Holodomor receive the same status as the Holocaust?
by Josef Zisels, Halyna Kharaz
[ ... ]
Why is the issue of Holodomor so important for Ukraine? At
present the country is undergoing a process of national and historic
self-identification. It is trying to understand afresh the events of
the distant and recent past, especially those which were momentous
and tragic pivotal points in its history. Holodomor and World War II
were just such points, and they are difficult and painful subjects.
For this reason the issue around declaring Holodomor to have been an
act of genocide is a burning one for Ukraine.
When we use the word “genocide”, we mean first and foremost the
Holocaust. Yet there are other tragic examples also: Armenia,
Cambodia, Ruanda. We should also remember the mass deportation of
whole ethnic groups – the Crimean Tatars, the Chechens, Ingush
people and others carried out by Stalin’s regime and which led to
the deaths of virtually half of those deported.
The formal reason why Holodomor has still not been recognized as
genocide from the point of view of international law is a question
of terminology. According to the definition in the UN Convention,
“genocide means any of the following acts committed with intent to
destroy, in whole or in part, a national, ethnical, racial or
religious group, as such:
- Killing members of the group;
- Causing serious bodily or mental harm to members of
- Deliberately inflicting on the group conditions of
life calculated to bring about its physical destruction in whole
or in part;
- Imposing measures intended to prevent births within
- Forcibly transferring children of the group to
There is no doubt that Holodomor was organized artificially, for
political and ideological reasons, that it resulted in the deaths,
according to various estimates, of from 5 to 7 million people, the
absolute majority of whom were Ukrainian peasants, as well as rural
people in Kuban (also mainly of Ukrainian descent, Povolzhya (Volga
region) and Kazakhstan.
For Ukraine this crime perpetrated by the communist regime was a
national tragedy, a terrible attack on the gene pool of the nation.
Yet there are still now plenty of people ready to argue about
whether the destruction of the Ukrainian peasants was the direct
purpose of Holodomor, or whether their deaths were only the result
of the communist regime’s policy against the individual peasant
farmers as a class.
Such discussions strike us as being at very least unethical. What
Stalin and his people planned we will one day find out from archival
documents. However what it led to is absolutely clear and we must
judge the terrible events of those years specifically on the
results. These were such that they fall under the definition of
genocide. Now, when a number of countries, including European
states, have recognized Holodomor as genocide, it would be senseless
to become bogged down in a dispute over terminology. We are talking
after all of a symbolic act, once again strengthening our bipolar
Unfortunately Russia’s position in this seems highly ambiguous
with it on principle refusing to accept Holodomor as genocide,
saying that not only people from Ukraine, but in other places
suffered as a result of it. In actual fact, Russia is worried that
it, as successor to the USSR, could face claims and even demands for
compensation. These fears are only warranted if Russia indeed
considers itself to be not only the successor, but to also be
continuing the Soviet state. Then it will indeed have to not only
make use of Soviet achievements, but also take upon itself
responsibility for the crimes of the Soviet regime.
As for other countries, in the first instance democratic and
civilized states, we hope that they will recognize Holodomor as
genocide, in awareness of the historic justice of this step. This
recognition would be enormously important for Ukraine in its
aspiration to become a part of the democratic world. It is possible
that Russia will also realize that Ukraine’s tragedy is its own
tragedy. After all we are not talking about one people’s grievances
against another, but of the crime of a totalitarian regime and the
implementation of plans by those from different ethnic groups
blinded by hatred and hiding behind a particular ideology.
In the case of Israel, we can see three reasons at least why it
cannot at the present time recognize Holodomor as genocide.
1. Stereotypical thinking in relation to Ukraine weighed down by
memories of dark pages in Ukrainian-Jewish relations in the past;
2. The fixed idea that the Holocaust was unique and lack of
willingness to officially recognize that in the history of other
people there were tragic events no less painful for them, than the
Holocaust is for Jews. We would note that such an attitude meets
with no understanding from many peoples not only having experienced
their tragedies, but having successfully escaped them.
3. “Tactical” considerations – reluctance to have any conflict
One would like to believe that sooner or later other reasons will
dominate with both Israel’s official position and Israeli public
1 Empathy from one people who experienced tragedy for others who
have experienced theirs;
2 Solidarity from the democratic world against the remnants of
imperialist, authoritarian and totalitarian regimes;
3 The good prospects for relations between Ukraine and Israel,
unlike, in our view, the lack of such prospects for relations
between Israel and Russia.
We believe that Israel will sooner or later recognize the
Armenian tragedy and Holodomor to have been acts of genocide, as
well as Stalin’s deportations. And for the moment we hope that
Israel will receive the calls from Ukraine to recognize Holodomor as
genocide with understanding, and will put the question forward for
consideration and discussion.
If it had not been for those very “tactical” considerations which
have often made it impossible to stop the criminal actions of
totalitarian empires in time, the world would today look quite
different. If after the genocide of the Armenians the world
community had understood the danger of such crimes for all humanity
and had found an antidote, then perhaps there would not have been
Holodomor or the Holocaust or other crimes on a mass scale.
There can be no other but moral criteria. The pain of each people
must become the pain of all mankind – there is no other way to a
By Roman Serbyn
At a recent international conference in Toronto devoted to the
study of the Holodomor (Ukrainian famine of 1932), an American
scholar remarked on how difficult it is to keep up with new
publications of secret Soviet documents uncovered in Russian and
Ukrainian archives. A Ukrainian archivist drew attention to the
wealth of material, which is now available to researchers, but still
has to be published.
The truth of these remarks is borne out by Daniel Stone's article
(No Smoking Gun, Free Press, Dec. 2), which is a striking example of
historical interpretation based on insufficient mastery of old and
Stone looks for a "smoking gun" to the Ukrainian genocide, but finds
none, and calls to his aid Michael Ellman who came up with the
verdict "Not Proven." The quoted British scholar is a masterful
polemicist, but he has never researched the famine in Soviet or
post-Soviet archives, and the subject is not really his field of
Stone could have done better by quoting the Italian scholar
Andreas Graziosi or the French expert Nicolas Werth, both of whom
have worked in the archives, know the documentation very well and
have come to a different conclusion. Nicolas Werth, remembered for
his contribution on the U.S.S.R. in the Black Book of Communism, has
come to the following conclusion: "On the basis of these elements
(documents and their analysis), it seems legitimate from now on to
qualify as genocide the totality of actions carried out by the
Stalinist regime to punish by hunger and terror the Ukrainian
Werth is well aware of the famine in Russia and in Kazakhstan,
but recent documents have convinced him of "the strong specificity
of the Ukrainian famine."
Among these documents, two will suffice to illustrate the two
elements of the UN definition of genocide: a) the "intent to destroy
in whole or in part" b) "a national or ethnic... group, as such."
On Dec. 14, 1932, the Communist Party and state authorities in
the Kremlin blamed the national revival among Ukrainians, both in
Ukraine proper and Russia (which had a population of eight million
Ukrainians), for difficulties in grain deliveries to the state and
banned the Ukrainian language in schools, administration and mass
media in Russia, and introduced a more gradual Russification in the
Ukrainian republic itself.
On Jan. 22, 1933, a secret directive signed by Soviet dictator
Josef Stalin and his foreign minister, Vyacheslav Molotov, closed
the borders between the Ukrainian republic and the rest of the
Soviet Union to peasants who were fleeing Ukraine in search of food
in Russia where it was more readily available.
The same directive isolated the Northern Caucasus Territory,
mentioning especially the Kuban region (over two-thirds Ukrainian)
from the rest of the Russian republic (of which it was a part) and
the Ukrainian republic. As a result of the directive, during the
next six weeks 225,000 Ukrainians were arrested. About 85 per cent
were sent back to their villages to starve to death and the rest
disposed of in various other ways. Both these orders targeted not
peasants but Ukrainians.
All serious scholars recognize the human loss in Ukraine was at
least four million; furthermore, the loss of life in the Russian
republic was mainly in the ethnically mixed regions of Northern
Caucasus, Middle and Lower Volga. The 1926 census pegged the
Ukrainian population for the U.S.S.R. (outside the Ukraine) at eight
million; by 1937, the number of Ukrainians in the same regions
declined to four million.
A large part of the loss of half the Ukrainian population in
Russia was due to the famine, but probably a greater part was due to
registration of the survivors as Russians.
The UN convention recognizes as one form of genocide the transfer
of children from one group to another. Such a transfer affected
whole Ukrainian families.
There are other inconsistencies in Prof. Stone's article, but
those mentioned should be sufficient to show that the article does
not have the scholarly candour expected from an expert in his field.
When an author signs his name with his academic credentials he
claims professional authority, and such authority carries
responsibility towards his discipline and his readers.
Roman Serbyn is a professor of history (retired) at the
Université du Québec -- Montréal.
Tymoshenko & Yushchenko clash over battling corruption
EURASIA DAILY MONITOR
Volume 5 , Issue 11
January 21, 2008
By Taras Kuzio
Ukrainian Prime Minister Yulia Tymoshenko has made combating
corruption and strengthening the rule of law central elements in her
government’s policy. She is apparently starting at the highest
levels of the government.
The issue of the lack of action against corruption led to a
physical showdown on January 18 in the presidential secretariat.
Interior Minister Yuriy Lutsenko struck Kyiv Mayor Leonid
Chernovetsky over his alleged involvement in corrupt land schemes.
Lutsenko said afterward, “I have no regrets for this incident and
believe that it was a manly hit that should be undertaken by
everybody who wants to live in an honest state.”
On December 7, 2007, Lutsenko and Tymoshenko bloc (BYuT) deputy
Svyatoslav Oliynyk introduced a parliamentary resolution to remove
General Prosecutor Oleksandr Medvedko. The Rada was set to debate
the resolution on January 18, but that was postponed when Medvedko
conveniently checked into a clinic earlier in the week.
While Tymoshenko has backed the call for Medvedko’s replacement,
President Viktor Yushchenko has passed responsibility for the
decision to parliament. According to the constitution, the president
puts forward a candidate for general prosecutor while parliament has
the right to demand a performance report and to follow this with a
vote of no confidence.
The draft motion collected 180 signatures out of the 227 members
of the pro-democratic orange coalition, consisting of BYuT and Our
Ukraine-Peoples' Self Defense (NUNS). While all BYuT deputies signed
the resolution, NUNS – specifically its pro-grand coalition wing,
loyal to the president – is divided.
Medvedko’s job is politically linked to that of Raisa
Bohatyryova, the former Party of Regions parliamentary faction
leader appointed secretary of the National Security and Defense
Council (NSDC) on December 24. Both Medvedko and Bohatyryova are
from Donetsk, the Party of Region’s stronghold. Stepan Havrysh,
legal adviser to the 2004 Yanukovych election campaign, was also
appointed deputy head of the NSDC on January 18.
Having the trio in high posts reassures the Party of Regions that
they have protection from the Tymoshenko government. Their
appointments also conclude the deal cut between Yushchenko and the
Party of Regions to end the spring 2007 political crisis. The grand
coalition between Yushchenko and the Party of Regions that existed
in early 2007 has de facto been recreated outside parliament.
Medvedko became general prosecutor in November 2005 and has
remained in that position except for a brief period in April 2007.
That month he was replaced by Sviatoslav Piskun, who had served as
general prosecutor from December 2004 through October 2005, as well
as earlier under President Leonid Kuchma in July 2002-October 2003.
Herein lies the dilemma. Yushchenko claims to support a break
with the Kuchma era and a battle against corruption, but his choice
of general prosecutors has been inconsistent with this statement.
Maintaining Piskun in place for the first ten months of his
presidency reassured the Kuchma-era elites of their immunity from
prosecution, which had been negotiated during the Orange
Revolution’s roundtables in late 2004.
The anti-Medvedko resolution is highly critical of his record as
general prosecutor. It calls for a vote of no confidence because of
Medvedko’s failure to resolve any of Ukraine’s sensational crimes,
such as the murder of journalist Georgy Gongadze in 2000,
Yushchenko’s poisoning during the 2004 presidential election, and
high-level involvement in election fraud that same year.
Under Yushchenko, no general prosecutor has done much to advance
the rule of law or to combat high-level corruption and abuse of
office among Ukraine’s elites. As Zerkalo nedeli (December 15-21,
2007) wrote, “Fortunately, groundless political repressions are no
longer an element of public policy. Unfortunately, deserved
punishments are not, either.”
Other parties have poor records as well. Two senior Socialists,
(former interior and transport ministers Vasyl Tsushko and Mykola
Rudkovsky), from the previous government of Party of Regions prime
minister Viktor Yanukovych, are under investigation, but, based on
past experience, they are unlikely to be prosecuted. As a recent
Atlantic Council of the United States report pointed out, the Party
of Regions has never expressed much interest in battling corruption.
Ukrainians give very low marks to the second Yanukovych government
(2006-2007) for failing to battle corruption.
Although most political parties claim they are in favor of
combating corruption, especially at election time, Ukrainians remain
skeptical. The 2007 Transparency International survey found that the
majority of Ukrainians believe that the judiciary is the most
corrupt institution in Ukraine, followed by political parties,
parliament, and the Interior Ministry. When asked if there would be
a breakthrough in overcoming corruption over the next three years,
44% of Ukrainians said “No,” while 38% said corruption would
increase. Only 18% of Ukrainians believed that corruption would
decline by the end of Yushchenko’s first term in office in 2010.
Some 70% of Ukrainians do not believe that the authorities are
effective in their struggle against corruption. Another 22% saw no
results from the campaign, while only 8% believed any campaign was
Ukrainians are particularly disappointed with the president who,
they believe, has continued Kuchma’s virtual campaign against
corruption. The Atlantic Council wrote, “While there are many
reasons for the persistence of corruption in Ukraine, polling
suggests that public disappointment is particularly strong in the
case of President Yushchenko, as many voters believe he is one of
the few top politicians who is not tainted by corruption. Yet,
Ukrainians believe he has done too little to fight it.” Only 21% of
Ukrainians believe the president has shown the political will to
NUNS deputy and deputy head of the parliamentary Committee on Law
Enforcement Volodymyr Stretovych said, “He [Yushchenko] has outlined
a campaign against corruption that he repeated many times. But
without cardinal cadre changes in the procuracy, nothing will
change. In the current situation the procuracy is corrupt from
bottom to top, from the raion to the general prosecutor.”
The Tymoshenko government is committed to battling corruption and
reforming law enforcement, including in the procuracy. Tymoshenko
has stated that she will not run in the 2009 presidential elections
if her government’s reforms and campaign against corruption are
successful; she believes they were blocked by the president in 2005
during her first government.
Yushchenko is caught between having to choose to protect the
Party of Regions and further inaction against elite abuse of office
or supporting the Tymoshenko government. The two are in direct
(acus.org; transparency.org; president.gov.ua;
rada.kiev.ua; Ukrayinska pravda, January 8-12; Zerkalo nedeli,
December 15-21, 2007)
[Nezavavysimaya Gazeta] reports of Tymoshenko's "catching cold"
situation, explaining her inability to go through with the planned
Moscow visit this Sunday. The news, however, was preceded by
Yushchenko's expressions of purposelessness of the visit, so adds
Moscow pundits conclude on this basis that Yushchenko is holding
Tymoshenko "in the shadow", fearing her getting first cut at
dealing with the Russian officials. The situation becomes more
controversial upon considering the thrice announced and thrice
called off visit by Yushchenko to Moscow the previous year. As
soon as the Tymoshenko's visit plans became known this time
around, Yushchenko rushed to inform the respective associates of
the need to start organizing his impending visit to Moscow. It
is officially known now that Ukraine's President is to meet with
Russia's Preident this coming Feb.12 within the framework of the
second session of Ukraine-Russia Commission on International
Relations [URCIR]. President Yushchenko's sources are
categorically denying any collusion between the two episodes,
Tymoshenko's retraction of her Moscow visit and Yushchenko's
initiation of one.
Russian Ambassador Chernomyrdin tends to
believe otherwise, and is on the record cautioning Ukraine's
leaders from indulging in the inter-personal competition for the
glory of primacy which, according to him, in the end becomes
conducive to the governance crises.
Jusjtenko forlanger, at regeringen afskediger formanden for
Sparebanken, som står for udbetaling af indefrosne opsparinger
fra før Sovjetuniionens opløsning, mens Tymoshenko forsøger at
fjerne olie- og gasselskabet RosUkrEnerho fra markedet. Det er
velkendt , at RosUkrEnerho er kontrolleret af Jusjtjenkos
bror. Jusjtjenko forbyder Tymoshenko at privatisere de regionale
energiselskaber, mens Tymoshenko undlader at efterkomme
præsidentens NATO-direktiver. Jusjtjenko lader den siddende
rigsadvokat blive på posten, og Tymoshenko er chokeret over
denne beslutning. Hver eneste dag dukker nye konflikttemaer op i
forholdet mellem Viktor Jusjtjenko og Julia Tymoshenko. Det
seneste nye skyldes situationen omkring den statslige
ejendomsfond, som står for privatiseringen af statens ejendomme.
I onsdags meddelte Tymoshenko, at hun har afskediget den
nuværende chef for den statslige ejendomsfond, Valentyna
Semenyuk-Samsonenko, som har siddet på posten i tre år. Det
skete angiveligt i forbindelse med en efterforskning af
Dagen efter meddelte præsidenten, at han har genindsat
Valentyna Semenyuk-Samsonenko i hendes embede.
Ifølge den ukrainske lov om regeringen har premierministeren
mere at skulle have sagt end præsidenten i forhold til chefen
for den statslige ejendomsfond. Ifølge § 45 er det netop
premierministeren der "indstiller en kandidat til posten som
chef for den statslige ejendomsfond i parlamentet. Ganske vist
står der ikke noget om, at premierministeren har ret til at
afskedige chefen for den statslige ejendomsfond. Så her er alle
forudsætningerne for en forfatningsmæssig konflikt mellem
premierministeren og præsidenten.
Udover den åbenlyse uenighed mellem regeringen og
præsidentens sekretariat, er forholdet mellem premierministeren
og præsidenten også belastet af andre omstændigheder.
I præsidentens sekretariat er man lettere rystet over, at
Tymoshenko har udpeget Oleksandr Zadorozhnij til sin rådgiver.
Zadorozhnij var i de sene Kutjma-år præsident Kutjmas
repræsentant i parlamentet og en af lederne af det
Kutjma-venlige Regionernes parti. I præsidentens sekretariat
tolkede man straks denne udnævnelse som, at Kutjmas tidligere
sekretariatschef Medvedtjuk er ved at tilnærme sig Tymoshenko.
Spændingerne i relationen mellem premierministeren og
præsidenten stiger dag for dag og mange har på fornemmelsen, at
det snart ender med et brud.
Situationen forværres af den krise, som Verkhovna Rada er
At dømme ud fra de seneste begivenheder er tilliden bristet
ikke alene i forholdet mellem de orange partier (Vores Ukraine
og Julia Tymoshenkos Blok) og de blå (Regionernes parti), men
også internt i den demokratiske orange koalition.
Lederen af Regionernes parti, den tidligere premierminister
Viktor Janukovytj, sagde forleden, at "valget kan komme når som
Ifølge "UP"s kilder havde der forleden dag været resultatløse
forhandlinger mellem parlamentsformand Arsenij Jatsenjuk og den
tidligere premierminister Viktor Janukovytj om fjernelsen af
blokaden af parlamentets talerstol og præsidium.
Da Janukovytj nægtede at give sig på de ultimative krav
omkring NATO og afskedigelsen af indenrigsministeren Lutsenko,
skal Jatsenjuk have sagt følgende: "hvis deres standpunkt er
uændret, så har vi kun én udvej - et nyvalg". Hertil skal
Janukovytj have svaret: "Skal der være nyvalg, så lad der være
Det er tydeligt, at Regionernes parti har behov for at
markere sig, fordi de ikke er parate til at være i opposition,
mens deres vælgere nemt kan lade sig lokke af Tymoshenkos løfter
om en stigning i overførselsindkomsterne. Tymoshenko fortsætter
med at æde sig ind på de traditionelle østukrainske vælgere.
Forleden dag blev en snæver kreds af indviede orienteret om
resultatet af en hemmelig meningsmåling, der viser, at
Tymoshenko er favorit til at vinde præsidentvalget til næste år.
Ifølge meningsmålingen ville Tymoshenko blive nummer et, tæt
forfulgt af Janukovytj med Jusjtjenko på 3. pladsen. I anden
valgrunde ville Tymoshenko stå tilbage som den endelige vinder.
By Steven Pifer
International Herald Tribune
January 24, 2008
At NATO headquarters last Friday, the Ukrainian foreign
minister presented a request from his government for a
membership action plan for Ukraine, which Kyiv hopes will be
approved when the alliance's 26 leaders meet in Bucharest in
NATO should say yes.
The goal of NATO enlargement since the mid-1990s has been to
achieve a broader, more secure Europe. This has driven alliance
decisions to take in Poland, the Czech Republic and Hungary in
1999, and seven additional Baltic and Central European states in
2004. Those decisions have produced a more stable and integrated
Europe, and underpin the dramatic democratic and economic
transformations made by the new member states.
The "open door" policy adopted by NATO in 1997 allows that
any European country that meets alliance standards and can
contribute to Euro-Atlantic security can be considered for
membership. A membership action plan - or MAP - offers no
guarantee of membership, but it would provide a guide for
Ukraine's further integration in Europe and internal reform
efforts. A MAP is not a request for membership; Ukrainian
leaders have said their electorate will have a chance to express
its view on NATO membership in a referendum before Kyiv formally
decides to make such a request.
Granting Ukraine a MAP at the Bucharest summit meeting would
be fully consistent with alliance policy. It would enhance
European security and stability. It would encourage the large
and growing number of Ukrainians who want greater integration
with Europe. Moreover, none of the arguments against the measure
stand up to scrutiny.
Some might assert that Kyiv is not ready to prepare for NATO
membership. Not true. Ukraine has made as much progress on
democratic, economic and military reform as Romania, Bulgaria,
Slovakia and Albania when they received MAPs in 1999. Moreover,
in late 2005, in the aftermath of the Orange Revolution, many in
NATO considered a MAP for Ukraine a strong possibility ahead of
an Alliance summit meeting in November 2006. But the Ukrainian
prime minister at the time, Viktor Yanukovych, derailed that
prospect. Today, however, a unified Ukrainian executive branch,
backed by a majority coalition in Parliament, desires a MAP.
And, over the past two years, Ukraine has further burnished its
democratic credentials, deepening military reform and conducting
two free parliamentary elections and a peaceful changeover of
Others might argue that Ukraine's population does not support
NATO membership. Perhaps. While polls show that only about
one-third of Ukrainians currently favor membership, popular
support for joining NATO in countries such as Slovakia and
Slovenia was likewise weak in 1999. Those two countries, use
their MAPs to broaden popular support. Ukraine's leaders have
indicated that they will do the same.
Skeptics might assert that Ukraine would bring little to the
alliance other than an additional security burden. Wrong. Kyiv
has demonstrated that it has serious military capabilities and
the political will to use them. In recent years, the Ukrainian
military has provided the alliance with strategic airlifts;
participated, often side-by-side with NATO troops, in
peacekeeping operations in the Balkans and elsewhere; and made a
significant contribution to coalition ground forces in Iraq
during 2004-05. Ukraine would be a net contributor to
Finally, some might fear that preparing Ukraine for NATO
membership would provoke new difficulties with Russia. Let's be
clear. The Kremlin would not welcome the move, now or at any
time in the foreseeable future. But there is nothing to suggest
that holding off would prompt Moscow to take more accommodating
positions on other issues, such as Kosovo.
Indeed, allowing the Russia factor to block a MAP would only
reward Russia's petulant behavior. In the past year Moscow has
suspended the Conventional Forces in Europe Treaty, threatened
to recognize the breakaway states of South Ossetia and Abkhazia
and blustered about targeting nuclear missiles on Central Europe.
NATO poses no threat to Russia. Unfortunately, the Russian
foreign policy elite choose to regard it as an adversary. While
NATO should engage Moscow by offering new, cooperative programs,
it is up to the Russians themselves to decide not to portray
NATO as a threat.
NATO leaders should thus welcome Ukraine's request and give a
positive answer in Bucharest. Anything less would be a reversal
of 10 years of alliance policy, would discourage those in Kyiv
who want to modernize Ukraine, and would waste an opportunity to
advance the process of shaping a broader, more secure Europe.
Steve Pifer is a senior adviser with the
Center for Strategic and International Studies. A retired
foreign service officer, he served as U.S. ambassador to Ukraine
1998 to 2000.
February 11, 2008
Hverken Ukraine eller
Georgien skal forvente at få et NATO-medlemskab
stillet i udsigt foreløbig. De to lande er ikke
politisk modne nok, vurderes det i NATO.
NATOs forsvarsministre mødtes i går i skyggen af
det fjernsynstårn i Litauens hovedstad, Vilnius, der
i 1990 var stedet for den største demonstration, da
de baltiske lande kæmpede for deres frihed og
selvstændighed fra det smuldrende Sovjetunionen.
Men det står klart, at NATO er tilbageholdende
over for at optage flere af de tidligere sovjetiske
republikker, efter at Litauen, Estland og Letland i
2002 fik det begærede NATO-medlemskab.
Ukraine har overrasket alliancen ved på ny at
søge om medlemskab, efter at ukrainerne tidligere
havde lagt spørgsmålet på is i forbindelse med det
politiske opgør i landet mellem det russiske
mindretal og ukrainerne.
»Det her er et vigtigt skridt for landets
fremtid, som den næste generation vil nyde godt af,«
siger Ukraines forsvarsminister, Jurij Jekarunov, om
Ukraines forsøg på i første omgang at få en såkaldt
MAP-status – en »Membership Action Plan« – som er
første skridt mod fuldt medlemskab.
Men internt i NATO-kredsen er der kun få
tilhængere af at give Ukraine MAP-status på
alliancens næste topmøde i Bukarest i april. For
sagen er politisk betændt i Ukraine, hvor den
Moskva-orienterede oppositionsleder Viktor
Janukovitj er gået i clinch med regeringen ledet af
den Vest-orienterede Julia Timosjenko om
»Det er svært at se, hvordan NATO kan optage et
medlemsland, hvor der er stor folkelig modstand mod
alliancen,« siger en NATO-diplomat.
I en meningsmåling gennemført for nylig sagde et
flertal nej til NATO-medlemskab, og 52 procent af de
adspurgte betegnede NATO som »en imperalistisk
blok«, som vil drage Ukraine med ind i militære
Polen og en række andre af de »nye« medlemslande
er parat til at åbne for Ukraine, men stort set alle
de »gamle« europæiske medlemslande – herunder
Tyskland, Storbritannien og Frankrig – er imod at
give Ukraine MAP-status, mens USA også er tøvende.
Georgiens muligheder for at blive stilet op i
rækken til et NATO-medlemskab er også svundet
drastisk efter den politiske uro i landet i de
seneste måneder, og især en række af de europæiske
medlemslande er imod at lade Kaukasus-republikken få
medlemskab. Rusland ventes at ville reagere
voldsomt, hvis Georgien får NATO-medlemskab stillet
i udsigt, og europæiske diplomater tvivler også på,
at georgierne er politisk modne til medlemskab. Til
gengæld står det fast, at Kroatien vil få tilbudt
medlemskab på topmødet i Bukarest. Albanien og
Makedonien håber også at få grønt lys, men
Grækenland volder problemer for makedonerne på den
gamle strid om Makedoniens navn. Grækenland vil ikke
acceptere betegnelsen Makedonien og beskylder
makedonerne for at have territoriale ambitioner på
den nordlige græske provins af samme navn.
Washington, DC (UNIS) - On January 11, 2008, President
Yushchenko, Prime Minister Tymoshenko, and Parliament Speaker
Yatsenyuk signed a letter directed to NATO’s Secretary General
Jaap de Hoop Scheffer requesting that a Membership Action Plan
be extended to Ukraine at the NATO summit in Bucharest in April
of this year. The letter stated in part that Ukraine, “Fully
shares the European democratic values and identifies itself as
part of the Euro-Atlantic security area and is willing, together
with NATO and partners thereof, to counteract common threats to
security under equal conditions. It is for this reason that
Ukraine will deepen and broaden this trend of its cooperation
with the Alliance ensuring continued participation in
peacemaking and anti-terrorist operations conducted under the
NATO aegis.” The letter also emphasized: “The Euro-Atlantic
integration policy is specified in the Ukrainian legislation; it
is not directed against third countries, and it is aimed at
Ukraine’s prospective membership in NATO to be deliberated with
the Ukrainian people.”
Senator Richard Lugar (R-IN), the Ranking Member of the
Senate Foreign Relations met with President Yushchenko on
January 15. During his visit to Ukraine, Senator Lugar expressed
his support for Ukraine’s initiative during the meeting.
Following his return, on January 31st, Sen. Lugar and Foreign
Relations Committee Chairman Joseph Biden (D-DE) proposed a S.
Res.439 urging the U.S. Administration to encourage NATO to
extend a Membership Action Plan (MAP) to Ukraine and Georgia.
In an introductory statement on the senate floor, Senator
Lugar eloquently stated: “Mr. President, I rise today to
introduce the “NATO Membership Action Plan Endorsement Act of
2008.” This resolution is intended to express strong Senate
support for Administration leadership in ensuring that NATO
extends Membership Action Plan (MAP) status to Georgia and
Ukraine as soon as possible. NATO has a long track record of
support for continued enlargement of NATO to democracies that
are able and willing to meet the responsibilities of membership.
Three years ago, the United States Senate unanimously voted to
invite seven countries to join NATO. Today, Bulgaria, Estonia,
Latvia, Lithuania, Romania, Slovakia, and Slovenia are making
significant contributions to NATO and are among our closest
allies in the global war on terrorism. It is time again for the
United States to take the lead in urging its allies to recognize
the important efforts underway in Georgia and Ukraine, and to
offer MAP to both countries this spring.”
The resolution introduced in the Senate reads in part as
follows: “Whereas, at the NATO-Ukraine Commission Foreign
Ministers meeting in Vilnius in April 2005, NATO and Ukraine
launched an ‘Intensified Dialogue’ on membership between the
Alliance and Ukraine; […] Now, therefore, be it resolved that
the Senate reaffirms its previous expressions of support for
continued enlargement of NATO to include qualified candidates;
Georgia and Ukraine are strong allies that have made important
progress in the areas of defense, democracy, and human rights;
the United States should take the lead in supporting the
awarding of a Membership Action Plan to Georgia and Ukraine as
soon as possible.”
On February 5, U.S. Senator George V. Voinovich (R-OH)
announced his support for the sponsors of the “NATO Membership
Action Plan (MAP) Endorsement Act of 2008.” Senator Voinovich
also sent a letter to Secretary of State Condoleezza Rice, to
work with the allies in order to persuade them to offer MAP
status to Ukraine and Georgia. Sen. Voinovich stated in his
letter to Secretary Rice, “Since my time as Mayor and throughout
my career in the Senate, I have fought for NATO enlargement as a
way to advance our own national security, and the security and
stability of the world… If Ukraine and Georgia are ready to work
toward membership, then I believe NATO should act now to put
them on the track for membership…. these countries know the
meaning of oppression and the importance of democracy, and I
believe they can make an important contribution to our
On the same day as Sen. Voinovich’s statement, Bruce Jackson,
the president of the Project on Transitional Democracies,
published an article in The Washington Post, which stated: “Over
time, Ukraine and Georgia would become more stable and
undoubtedly more prosperous. Invariably, countries in the
process of building closer relations with NATO find that they
can safely demilitarize […]. Ultimately, closer relations
between Europe and Ukraine and Georgia would bring Russia closer
to Europe and would make the needed dialogues with Russia on
democracy and energy that much easier.”
In similar vein, many prominent U.S. politicians spoke up in
support of NATO MAP for Ukraine. During their meeting in Davos,
Switzerland on January 23, U.S. Secretary of State Condoleezza
Rice expressed her support of Ukraine’s move toward NATO to
President Yushchenko. "The secretary reiterated the U.S. view
that NATO should leave the door open to those European,
democratic states who meet membership requirements," said her
spokesperson after the meeting.
Presidential Candidate John McCain (R-AZ), on February 8th,
issued a statement regarding NATO’s expansion in Europe. While
highlighting the importance of the Bucharest summit, McCain
called for “global order of peace built on a ‘foundation of
freedom.’” The Bucharest summit, according to McCain, will
provide an opportunity to anchor democracy and stability to
countries in Europe, through the additional annexation of
Albania, Croatia, and Macedonia. These three Balkan states have
demonstrated, through extensive reforms, their readiness for
accession. In addition, to McCain’s insight on NATO’s upcoming
expansion, a statement was issued on Georgia and Ukraine’s
aspiration for a NATO Membership Action Plan. McCain furthered
his comment by stating, “We should offer it to them at the
summit. These two nations have every right to aspire to
democracy and security as other states closer to the heart of
Europe. Ukraine and Georgia have difficult neighbors and
domestic challenges; they are young democracies and their road
ahead will be difficult. But they should know that we will
support them every step of the way, and we can show them this by
supporting their aspirations at Bucharest.”
Similarly, other U.S. presidential candidates have offered their
statements or remarks regarding NATO’s enlargement and the
prospects of having Ukraine enter into a Membership Action Plan.
Presidential candidates Senator Hillary Clinton (D-NY) and
Senator Barak Obama (D-IL) published their respective statements
on this issue in late January 2008. Senator Clinton, in
particular mentioned: “I enthusiastically welcome the January 11
letter […] to NATO Secretary General Jaap de Hoop Scheffer,
which outlines Ukraine's desire for a closer relationship with
NATO, including a Membership Action Plan. … I hope that
important steps toward reaching these goals will be made at the
NATO summit in Bucharest in early April. I applaud the fact that
Ukraine aspires to anchor itself firmly in the trans-Atlantic
community through membership in NATO and look forward to working
with Ukrainians and Ukrainian-Americans to reach that goal.”
Senator Obama praised the Ukrainian government’s dedication
to self-improvement and democratic dialogue. His statement reads
in part: “I welcome the decision […] to declare Ukraine's
readiness to advance a Membership Action Plan (MAP) with NATO.
The extension of NATO membership to new democracies in Europe
has helped create a zone of peace and prosperity across Europe
and enhanced NATO's military capability by facilitating
contributions from new members. I therefore applaud the
Ukrainian leaders' commitment to deepening the democratic
reforms required of all NATO members and to undertaking new
responsibilities in their relationship with the Alliance. The
Ukrainian leadership's determination to foster national unity
and consult the Ukrainian people on the question of Ukraine's
future in NATO demonstrates the importance they place on
national unity and open, democratic debate.”
President raises stakes in bid to halt defence
Shackling Russia, not Iran, is Bush's real aim, he says
President Vladimir Putin threatened to point Russia's nuclear
weapons at Ukraine yesterday if Kyiv agreed to host the
controversial US missile defence shield.
Moscow would regrettably be forced to redirect its missiles
at its post-Soviet neighbour, he said, if Ukraine went ahead
with its plan to join Nato and allowed US infrastructure on its
Speaking after talks in Moscow with Ukraine's president,
Viktor Yushshenko, Putin said the real target of the Bush
administration's shield in central Europe was Russia - not a
rogue missile fired by Iran or North Korea.
The true purpose was "the neutralisation of our nuclear missile
potential, which prompts Russia to take retaliatory action",
[ ... ]
Russia has already said it would take "asymmetrical action"
should the US deploy radar stations and missile interceptors in
former eastern Europe. It has threatened to target both Poland
and the Czech Republic with short-range missiles fired from the
Russian Baltic enclave of Kaliningrad.
The latest comments
suggest Russia will target any former Warsaw pact country that
agrees to the Bush administration's plan. The Kremlin has
repeatedly complained of Nato's "encroachment" into its back
The US has not yet asked Ukraine to play any role in its
Both Yushchenko and Ukraine's new pro-western government, led
by Yulia Tymoshenko, have described Nato membership as a
strategic goal. But years of anti-Nato Soviet propaganda have
left most Ukrainians sceptical and any attempt to join would be
start to Ukraine's new government
There is a cautious optimism in Ukraine today. The Ukrainian
economy is in good shape with a growth rate of 7.3 percent in
2007, when the stock market surged by 120 percent. However, the
greatest economic concern is the high and rising inflation rate
, as consumer prices rose by 16.6 percent last year.
The new government's next big achievement will be to ratify
the World Trade Organization (WTO) agreement presented on 5
February 2008. One month after the Ukrainian parliament ratifies
the accession, which is due by 4 July 2008, Ukraine will become
a full-fledged member of the WTO. This could boost the country's
economic growth by one percentage point a year.
Ukraine's WTO accession is a joint accomplishment of the four
last governments. The very last obstacle was a European Union
complaint about the country's export tariffs, primarily on steel
As in all democratic post-communist countries, corruption was
the biggest concern during the 2007 election campaign.
- The most obnoxious and conspicuous corruption was the
previous government's practice of selling value-added tax
refunds for exporters at a "commission" of 20 percent to 30
- Customs has again become a point of corruption.
- The most intricate corruption is persistently in the gas
trade. The intermediary RosUkrEnergo does not appear to have
any reason to exist. Nor does its half-owned Ukrainian
subsidiary, UkrGazEnergo. The apparent purpose of these two
nontransparent joint ventures is to siphon off money to a
number of prominent Russians and Ukrainians. The costs of
this boondoggle are so large that the Ukrainian state oil
and gas corporation, Naftogaz Ukrainy, is on the verge of
On 18 January 2008, the new Ukrainian government published a
list of 19 state-owned companies slated for privatization this
year. The total value of the stakes to be sold is assessed at
some $5 billion.
Several of the wealthiest Ukrainian businessmen have
voluntarily abandoned started to pay taxes in full. They are
also devoting large resources to charitable donations, mainly in
education and health.
Ukraine has long suffered from constitutional disorder.
Although the constitution has not changed, improved practices
are apparent. The dominant opposition party, the Party of the
Regions, has set up a shadow government. The two coalition
partners, Prime Minister Yulia Tymoshenko’s Bloc and President
Victor Yushchenko's Our Ukraine, have divided the Cabinet posts
so that Ms. Tymoshenko controls all of the economic appointments
while Our Ukraine controls foreign policy, security and culture.
An orderly balance of power between the President and the Prime
Minister seem to be emerging out of their persistent power
The full letter to the editor of the Moscow Times by Anders
Aslund can be read at:
Anders Aslund, a senior fellow of the
Peterson Institute for International Economics, is the author of
"Russia's Capitalist Revolution: Why Market Reform Succeeded and
Opposition uses ukraine-NATO issue when politically expedient
By Taras Kuzio
February 22, 2008
For over a month, the Ukrainian parliament has been in a
forced recess as the opposition blocked the legislature to
protest a joint letter to NATO signed by President Viktor
Yushchenko, Prime Minister Yulia Tymoshenko, and Parliamentary
Speaker Arseny Yatsenyuk. The January 15 letter asked NATO to
consider offering Ukraine a Membership Action Plan (MAP) at its
April summit in Bucharest.
Under the 2006 constitution, Yushchenko can dissolve
parliament if it does not function for 30 working days. However,
he exercised that power in April 2007 and doing so again in less
than a year would be an unpopular move with unknown consequences.
Of parliament’s three largest factions, only the Tymoshenko
bloc (BYuT) would likely gain from pre-term elections. Based on
current polls, the Party of Regions and the president’s Our
Ukraine-People’s Self Defense (NUNS) bloc would poll even less
than they did last year. In the September 2007 elections, BYuT
increased its support by 8% over the 2006 election, finishing
only 3% behind Regions. BYuT would likely become the largest
parliamentary faction after a 2008 vote, because of a
combination of declining support for Regions and NUNS and the
rising popularity of the Tymoshenko government following the
re-payment of lost Soviet savings to Ukrainian citizens.
In addition, NUNS’s relationship with the president is
increasingly tenuous. Presidential chief of staff Viktor Baloha
resigned from NUNS on February 15, after its nine disparate
parties failed to unite as a pro-presidential party of power (see
EDM, February 20).
Given these factors, odds are that political leaders will
find a way to compromise and avoid early elections. Yushchenko
and Baloha would not want to head into the 2009 presidential
elections with an even larger BYuT parliamentary faction, which
already is double the size of NUNS.
Yatsenyuk has proposed a compromise to unblock parliament;
specifically, asking all factions to refrain from using this
tactic in the future. Yatsenyuk has also called upon all
factions to recognize the legality of legislation on NATO that
was adopted under former president Leonid Kuchma and that
Regions and other pro-Kuchma centrist forces endorsed.
The Ukrainian media has recently published Kuchma-era
official documents that outline Ukraine’s goal of NATO
membership. In 2002-2004 Kuchma and then-prime minister Viktor
Yanukovych, head of Regions, initiated and fully supported
Ukraine’s drive to NATO membership. In November 2002 NATO
initiated annual NATO-Ukraine “Action Plans,” and the 2002-2004
Yanukovych government fulfilled the first two.
Former U.S. ambassador to Ukraine Steven Pifer, now a senior
adviser at the Center for Strategic and International Studies,
told Jamestown that the Ukrainian leadership and NATO understood
that there was little difference between “Action Plans” and
“Membership Action Plans.” Both require Ukraine to undertake a
wide range of military, political, and economic reforms.
According to Minister of Foreign Affairs Volodymyr Ohryzko, Kyiv
is now seeking a MAP because Ukraine’s cooperation with NATO has
outgrown the five Action Plans.
In 2004 the Yanukovych government signed on to a strategy for
Ukraine’s drive to NATO drawn up by the president’s think tank,
the National Institute for Strategic Studies. The plan has four
2002-2003: prepare the legislative basis for Ukraine’s NATO
2004: Ukraine enters into a MAP;
2007: NATO invites Ukraine to join the alliance;
2008: Ukraine joins NATO.
This month Prime Minister Tymoshenko publicly apologized for
not succeeding in reaching the Yanukovych government’s 2008 NATO
Importantly, the four-stage strategy never included a
referendum on NATO membership. This demand emerged during the
latter stages of the bitter 2004 president election, together
with elevating Russian to a state language. Both issues were
introduced by Russian political advisers working for the
Regions has raised the demand for a referendum on NATO
whenever it has been in the opposition – in 2005-2006 and again
since the 2007 elections. This duplicitous strategy of being
radically opposed to NATO only when in opposition could be seen
further in documents adopted by Yanukovych governments on July
17, 2003, and October 5, 2006, that gave Ukraine’s wholehearted
support to NATO military operations in peacetime, during crises,
and in military conflicts.
Yushchenko and Yatsenyuk see no need for a referendum ahead
of a MAP, and the president has described the call for a
referendum as “political adventurism.” While acknowledging the
need for an eventual referendum, Yushchenko has promised this
would be many years away, only when Ukraine was on the verge of
joining NATO, as occurred with other NATO candidates.
Regions seeks to hold a referendum in April. In a February 12
statement, Yanukovych said, “We are against any steps that would
take our state to the North Atlantic Alliance without the
agreement of the Ukrainian people.”
NATO is publicly receptive to Ukrainian membership, but some
large Western European members, such as Germany, oppose a
Ukrainian MAP. Such opposition within NATO can only be overcome
if the Ukrainian leadership is united on the question of seeking
a MAP. Herein lies the crux of the problem.
Following the Orange Revolution NATO was more receptive
toward Ukraine joining, and a MAP for Kyiv was a serious
prospect at the November 2006 Riga summit. However, this step
depended on Ukraine creating an orange coalition after the 2006
elections, a strategy that failed because of Yushchenko’s
unwillingness to see Tymoshenko return as prime minister.
However, Tymoshenko did just that after the 2007 elections.
But her approach to NATO membership, as seen during her January
28-29 visit to Brussels and her cancellation of a presentation
to the February 8-10 Munich security conference, is more
lukewarm than that of Yushchenko and NUNS.
partyofregions.org.ua, Pravda.com.ua, January 15-February 18,
Zerkalo nedeli, February 2-8, International Herald Tribune,
Out the Middleman in Ukraine
14 February 2008
[ ... ]
The Kremlin is clearly, and deplorably, trying to intimidate
Ukraine into dropping its newly revived ambitions to join NATO,
and into quashing any thoughts that it might host American
missile-defence installations. Vladimir Putin’s loose talk about
nuclear targeting is particularly alarming. But the real point
of the story is bad government and corruption.
It is a huge indictment of Ukraine’s post-independence rulers
that their incompetence, crookedness and ruthlessness has after
17 years left the country with no independent source of gas
imports and such wasteful patterns of consumption. That was not
As Georgia has shown, necessity is the mother of both thrift
and invention. When mysterious explosions inside Russia cut the
gas supply to Georgia in 2006, the economy there did not
collapse: instead the authorities quickly restored a decrepit
Soviet-era pipeline from Azerbaijan, and industry started using
energy a lot more efficiently. Economic growth has rocketed.
Ukraine should take the same medicine—and better voluntarily
now, than being force-fed it by the Kremlin at some point in
future. The proposed White Stream pipeline, bringing gas to
Ukraine across a corner of the Black Sea, is an ingenious plan
that deserves top-level political support.
As the planned Nabucco pipeline through Turkey and the
Balkans seems finally to have been stymied by Russian
machinations, White Stream may now be the best hope not only for
Ukraine, but also for Europe, of securing an independent supply
of gas from the Caspian, the Caucasus and Central Asia.
[ ... ]
Ukraine’s prime minister, Yulia Tymoshenko, is no stranger to
this world: in her earlier career as a businesswoman, she worked
closely with Itera, a predecessor of RosUkrEnergo. But she is
right to insist that her country’s gas imports should be
transparent now rather than later, and it is troubling that
Viktor Yushchenko, Ukraine’s president, has been dithering on
the issue. The working group that he has agreed to set up with
Russia needs to ask some simple but tough questions (for example:
who exactly owns RosUkrEnergo?) and then draw the obvious
Yushchenko, Putin Blunt Tymoshenko's Push To Alter Gas
Open Source Center] Analysis (20 February 2008)
Johnson’s Russia List (JRL), 21 February 2008
A 12 February meeting between Russian President Vladimir
Putin and Ukrainian President Viktor Yushchenko to discuss the
escalating Russian-Ukrainian gas crisis brought agreement but
only a slight change in the gas arrangements, appearing to
frustrate Ukrainian Premier Yuliya Tymoshenko's drive to
drastically change the gas contracts and drop RosUkrEnergo as
middleman. The two presidents and Gazprom agreed to dump
RosUkrEnergo sometime this year, but Russia insisted on
replacing the company with a new intermediary, rather than
switching to direct sales as Tymoshenko demanded, and the
Ukrainian side went along with this arrangement. Though
appearing to lose, Tymoshenko's aggressive actions boosted her
popularity; public opinion polls showed her now as the leading
candidate for president for the first time.
Tymoshenko had started the current crisis in January by
demanding the removal of middlemen RosUkrEnergo, which has a
monopoly on delivering gas to Ukraine, and its subsidiary
UkrGazEnergo, which sells gas directly to part of Ukraine’s
domestic market. She threatened to drastically boost the transit
fee Gazprom pays for transporting gas across Ukraine to Europe,
(1) and as premier on 6 February, she revoked the government's
2006 decree agreeing to the creation of UkrGazEnergo as a
company jointly owned by RosUkrEnergo and Ukraine's state gas
company Naftohaz (Podrobnosti.ua, 8 February).
The previous Ukrainian cabinet, under
the more pro-Russian Premier Viktor Yanukovych, had
allowed UkrGazEnergo to vastly expand its domestic sales
at the expense of the Ukrainian Government's Naftohaz,
driving Naftohaz to near bankruptcy.
Gazprom escalated the dispute to a crisis on 7 February by
presenting Ukraine with an unexpected huge bill for gas
deliveries and threatening to cut off deliveries if not paid by
11 February (Interfax, 7 February). Yushchenko publicly
cautioned that overturning the present deal would lead to higher
gas prices (Inter TV, 20 January; 1+1, 7 February) and flew to
Moscow on 12 February for talks with Putin, which averted the
After three hours of talks on various subjects, Putin and
Yushchenko announced a settlement to the Russian-Ukrainian gas
dispute, saying Ukraine would start paying its billion dollar
debt to Gazprom, while Russia would keep the $179 per 1,000
cubic meters gas price for 2008 agreed upon with the Ukrainian
Government in December. In addition, they said RosUkrEnergo and
its subsidiary, UkrGazEnergo, would remain as middlemen (Podrobnosti.ua,
12 February). Responding to questions at a news conference,
however, the two presidents did not lay out all the points on
which they had agreed, and Yushchenko vaguely suggested they had
agreed to consider some changes in the present middlemen system
in the near future.
At the news conference, Yushchenko added: "We also agreed that
Naftohaz and Gazprom set up a working group which in the next
few days should find an option for simpler, more direct, and
transparent relations, both in terms of organization of the
market and in terms of supplies themselves" (Vesti TV, 12
February). Later, in a 13 February Vesti TV interview,
Yushchenko said he and Putin had agreed on both long-term "strategy"
and short-term "tactics" on gas arrangements but "we agreed not
to disclose the strategy" (Vesti TV, Interfax, 13 February).
Plan for New Middlemen
While the terms announced by the two presidents initially
appeared to be a rejection of Tymoshenko's demands for change,
the heads of Gazprom and Naftohaz soon declared that both sides
in fact had consented to drop RosUkrEnergo and UkrGazEnergo,
although not immediately and only with new middlemen substituted
Two hours after the presidents' statements, Naftohaz head Oleh
Dubyna, who had been negotiating with Gazprom CEO Aleksey
Miller, contradicted the presidents by declaring that both sides
had agreed to drop the middlemen and change to direct purchases
from Gazprom. He said a Naftohaz-Gazprom group would work out
direct purchases during 2008: "There will be no middlemen
starting this year; a working group of Naftohaz Ukrayiny and
Gazprom is being created now. I hope that during the course of
the year, we will resolve all questions. Gas will go from
Gazprom to Naftohaz" (Podrobnosti.ua, 12 February). Miller then
announced RosUkrEnergo and UkrGazEnergo would be dropped; but,
in contrast to Dubyna's statement, he said that they would be
replaced by new middlemen: "We are forming a new structure of
Ukrainian gas imports, which includes the establishment of a new
gas importing company on 50/50 terms. Fifty percent will belong
to Gazprom, and another 50% to Naftohaz Ukrayiny." He indicated
a successor to UkrGazEnergo would be set up on similar terms: "Besides,
we will form a company to sell gas on the Ukrainian domestic
market, again on a 50/50 basis" (ITAR-TASS, 12 February). (2)
Dubyna quickly reversed himself and confirmed Miller's
statement, saying RosUkrEnergo would continue to supply Ukraine
until Naftohaz and Gazprom set up two new intermediaries (Kanal
5, 12 February).
Some media offered a more sinister
motivation for Gazprom's and Medvedev's insistence on
The independent Moscow daily Nezavisimaya Gazeta argued
that Gazprom "desperately clings" to middlemen because
it enables "shady" money to go to political leaders and
Although UkrGazEnergo was temporarily retained, Yushchenko told
Russian TV on 13 February they had agreed to limit UkrGazEnergo
to only sell 5 billion cubic meters of gas to Ukrainian
consumers, allowing Naftohaz to sell the rest (Vesti TV, 13
February), about 50 billion cubic meters (Ukrayinska Pravda, 14
February). The previous Ukrainian cabinet, under the more
pro-Russian Premier Viktor Yanukovych, had allowed UkrGazEnergo
to vastly expand its domestic sales at the expense of the
Ukrainian Government's Naftohaz, driving Naftohaz to near
Gazprom board chairman and Putin's designated successor Dmitriy
Medvedev also stressed the agreement's retention of middlemen.
He argued that intermediaries between Gazprom and Ukraine have
to be retained because Ukraine can only afford the cheaper
Central Asian gas, not Gazprom's more expensive Russian gas: "It
was necessary to preserve an intermediary, and it will have to
be preserved for the future because Ukraine cannot afford prices
other than those for Central Asian gas" (ITAR-TASS, 13
Some media offered a more sinister motivation for Gazprom's and
Medvedev's insistence on middlemen.
The independent Moscow daily Nezavisimaya Gazeta argued that
Gazprom "desperately clings" to middlemen because it enables
"shady" money to go to political leaders and Gazprom managers.
It noted that RosUkrEnergo earned $800 million in 2006 and
suggested certain leaders profit through RosUkrEnergo co-owner
Firtash (13 February).
Anti-government Russian commentator Stanislav Belkovskiy alleged
that Medvedev wants to retain an intermediary because he and
other Gazprom managers make money from the intermediary's
activity. Belkovskiy noted that Medvedev's close friend
Konstantin Chuychenko is director of RosUkrEnergo and alleged
that Medvedev himself is on RosUkrEnergo's coordination
committee (Gazeta Po-Kiyevski, 13 February). Media reported that
insiders say those who ran RosUkrEnergo, like Chuychenko, are
slated to run the new intermediary (Kommersant.com, 13
On 12 February, Tymoshenko, appearing to back down, told
diplomats Ukraine had agreed to keep RosUkrEnergo at least for a
transitional period until direct contracts can be signed
(Kommersant.ru, 12 February), but she contended they had agreed
to drop at least one of the middlemen, UkrGazEnergo. She said:
"We propose from 1 January 2008 to change at least to just one
middleman -- RosUkrEnergo -- only getting rid of UkrGazEnergo,
which does nothing, only shuffles papers and makes extra
publications, takes additional money from Ukraine"
(Korrespondent.net, 12 February). She stressed that Ukraine
intends to change to direct contracts "in stages, in an
evolutionary way, without stresses, but steadily"
(Korrespondent.net, 12 February).
Tymoshenko's top deputy, First Deputy Premier Oleksandr
Turchynov, while praising the Putin-Yushchenko agreements as
quite an accomplishment "for one round of talks"
(Korrespondent.net, 13 February), acknowledged that RosUkrEnergo
would stay, at least for a while. He said that "naturally,
contracts cannot be broken without the agreement of the Russian
side" (Podrobnosti.ua, 13 February) and that it was Gazprom's
decision when to replace RosUkrEnergo with another company. He
said it could be March or the end of the year (Podrobnosti.ua,
13 February). "It will be their choice" (Interfax, 13 Febuary).
Gains, Losses for Tymoshenko
In making the 12 February deal, Yushchenko usurped Tymoshenko's
desired role as leader on energy policy, settling the dispute
before her scheduled 21 February visit to Moscow. Tymoshenko had
used an 11 February press conference to announce she intended to
play the key role in settling the gas questions during her
In making the 12 February deal,
Yushchenko usurped Tymoshenko's desired role as leader
on energy policy, settling the dispute before her
scheduled 21 February visit to Moscow.
Nevertheless, her aggressive drive
on gas, as well as other steps, already appeared to have
boosted her popularity, as polls showed most citizens
approving her actions and rated her as the leading
candidate for president.
She said the Ukrainian delegation presently in Moscow had been
instructed not to raise the question of direct contracts,
because "I will personally conduct these negotiations on 21
February during my visit to Moscow" (Ukrayinska Pravda,
Obkom.net.ua, 11 February).
Tymoshenko said Ukraine would continue the present arrangements
"until I, as head of government, can visit the Russian
Federation and discuss the conditions for delivering gas to
Ukraine" (Korrespondent.net, 11 February).
In the wake of the 12 February agreement, media noted
Tymoshenko's loss of control over the resolution of the gas
Moscow daily Vremya Novostey said: "As is well known, she
directed all her policy toward breaking up the present system of
gas delivery to Ukraine," but Putin and Yushchenko now joined
together to break up the system and replace it with a new system
without consulting her (13 February).
Kyiv website Glavred said that Putin and Yushchenko took away
Tymoshenko's "main lever of influence" -- gas policy -- and
promised to settle everything before Tymoshenko visited Moscow
on 21 February so that "by that time everything will be decided
without her" (13 February).
Despite the apparent setbacks, Tymoshenko at a 13 February
cabinet session claimed the 12 February agreement "to get rid of
all intermediaries" (sic) was "a great victory" and that there
now would be direct gas supply between Naftohaz and Gazprom (UNIAN,
13 February). Independent Ukrainian website Ukrayinska Pravda,
however, reported that in announcing the victory, she had the
most "despondent-irritated-gloomy look" since becoming premier
Nevertheless, her aggressive drive on gas, as well as other
steps, already appeared to have boosted her popularity, as polls
showed most citizens approving her actions and rated her as the
leading candidate for president.
A 25 January-2 February FOM (Moscow's Public Opinion Foundation)
poll found that 52.7% of Ukrainians approved of her policies and
only 33.6% disapproved (Interfax, 11 February) and that 64% were
positive about her work as premier (Uatoday.net, 11 February).
The FOM poll found that 24.8% of respondents would now vote for
her for president, as against only 20% for former Premier
Yanukovych and 13.1% for Yushchenko (Korrespondent.net,
Uatoday.net, 11 February). This appears to be the first time she
has outpolled Yanukovych in popularity. For example, a November
FOM poll showed 25.7% would vote for Yanukovych, and only 18.4%
for Tymoshenko (Interfax, 13 December).
Gazprom's decision to go along with demands to drop RosUkrEnergo
did not come as a complete surprise. Media had reported
conflicts between Gazprom and RosUkrEnergo co-owner Firtash in
recent months (Tatyana Stanovaya, Politkom.ru, 13 February), and
already in October, Gazprom board chairman Medvedev said Gazprom
would be willing to drop RosUkrEnergo (Interfax, 15 October).
Moreover, if UkrGazEnergo is replaced by a new
Ukrainian gas trader Yuriy Korovin
argued that "the main reason" Gazprom agreed to drop
RosUkrEnergo was that Gazprom was offered 50% of the
income from sales to the Ukrainian public.
Gazprom-Naftohaz company, Gazprom will actually profit since it
will now become direct co-owner of the middleman which sells gas
to the Ukrainian public and will no longer have to share
UkrGazEnergo's profits with RosUkrEnergo.
Ukrainian gas trader Yuriy Korovin argued that "the main reason"
Gazprom agreed to drop RosUkrEnergo was that Gazprom was offered
50% of the income from sales to the Ukrainian public. He said
UkrGazEnergo earned $183 million last year and Gazprom got only
$45 million of this via RosUkrEnergo but under the new system
Gazprom should get at least $90 million (Kommersant.com, 13
February). Kommersant Ukrainy argued: "Gazprom formally even
gains since its share of Ukraine's internal market and
consequently of profits from
this doubles" (Kommersant.ua, 13 February).
Meanwhile, Gazprom reportedly has persuaded RosUkrEnergo
co-owner Firtash to go along with the dropping of RosUkrEnergo
by authorizing him to sell between 3 and 8 billion cubic meters
of Central Asian gas to East Europe, where the price is 85 times
more profitable than Ukraine. This is viewed as "compensation"
for not contesting the change (Kommersant.ru, 14 February).
(1) See the 29 January OSC Analysis,
Yushchenko Blocks Tymoshenko Move To Challenge Russian-Ukrainian
Gas Deal (CEF20080129514001 ).
(2) Thus the main difference in the new arrangement would be
that the two new companies would be co-owned directly by the
Russian and Ukrainian Governments through Gazprom and Naftohaz,
whereas the previous intermediaries included non-government
shareholders. RosUkrEnergo was co-owned by Gazprom and, on the
Ukrainian side, by businessmen Dmytro Firtash and Ivan Fursin.
UkrGazEnergo was co-owned by RosUkrEnergo and Naftohaz.
(3) See the 15 January OSC Analysis, Ukraine President
Yushchenko Reins in Premier Tymoshenko's Populist Drive