AUR#696 May 11 Ukraine Best & Most Promising Country To Spend My Limited Life Time; Coalition Building; Gas, Corruption & Non-Transparency; Cheney; NATO

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                     In-Depth Ukrainian News, Analysis and Commentary

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“I believe in the people of Ukraine. It is Ukrainian people where
I find inspiration to go on working here. The vast majority of Ukrainians
are decent, hard-working people. You have world-class universities,

formidable intelligence, and enormous human potential.

I simply cannot say that enough times, your human potential. It is your
greatest national asset and, once unleashed, will bring Ukraine among the
forefront of leading countries in the world. My role in Ukraine is to help
unleash that potential. Nothing more, nothing less.

I’m here mainly as human being, by the way, not as American, but being

an American, there are certain things I can do to help that happen. Given
hundreds of other countries in the world that I could work in, I see
Ukraine as the best, most promising country to spend my limited life time.”
                                           [ARTICLE ONE]
Mr. E. Morgan Williams, Publisher and Editor  
           –——-  INDEX OF ARTICLES  ——–
         Clicking on the title of any article takes you directly to the article.               
Return to the Index by clicking on Return to Index at the end of each article
                           TO SPEND MY LIMITED LIFE TIME
                     “I consider it a gift and an honor to be here now.”
INTERVIEW: With Terry Hallman, Founder and Director
People-Centered Economic Development – Ukraine
ForUm, Kyiv, Ukraine, Thursday, May 11, 2006
                 Model for proposed “orange” coalition in Ukraine?
: By Tammy Lynch, Senior Fellow
Institute for the Study of Conflict, Ideology & Policy, Boston University,
Ukrayinska Pravda in Ukrainian; UNIAN in English,
Kyiv, Ukraine, Wednesday, May 10, 2006

3.                           KYIV: MORAL OF THE MARKET
   Populism is dangerous in politics, but it can be disastrous in economics.
EDITORIAL: Kyiv Post, Kyiv, Ukraine, Wednesday, May 10 2006

UNDER THE MICROSCOPE: By Prof William Reville
Irish Times, Dublin, Ireland, Thursday, May 11, 2006

     Ukraine saw some of World War II’s fiercest battles, was overrun by Nazis
Mara D. Bellaby, AP Worldstream, Kiev, Ukraine, Tue, May 09, 2006

Ukrainian Radio First Programme, Kiev, in Ukrainian, 6 May 06
BBC Monitoring Service, UK, in English, Saturday, May 06, 2006


Itar-Tass, Moscow, Russia, Tue, May 9, 2006

Interfax-Ukraine news agency, Kiev, in Russian 1743 gmt 10 May 06
BBC Monitoring Service, UK, in English, Wednesday, May 10, 2006

By Stefan Wagstyl, East Europe editor
Financial Times, London, UK, Thursday, May 11 2006

Polish News Bulletin, Warsaw, Poland, Wed, May 10, 2006

Lloyds List, London, United Kingdom, Wed, May 10, 2006


                            RUSSIAN LANGUAGE UNLAWFUL 
TV 5 Kanal, Kiev, in Ukrainian 1800 gmt 10 May 06
BBC Monitoring Service, UK, in English, Wed, May 10, 2006

COMMENTARY: Taras Kuzio, Kyiv Post, Kyiv, Wed, May 10 2006

                   AS A MEMBER OF THE ‘OUR UKRAINE’ BLOC
Associated Press (AP), Kiev, Ukraine, Thursday May 11, 2006

Letters to the Editor: The Wall Street Journal, NY, NY

FROM: Ken Bossong, Washington, D.C.
Action Ukraine Report (AUR) #696, Article 15
Kontrakty, Kiev, in Ukrainian 10 May 06
BBC Monitoring Service, UK, in English, Wed, May 10, 2006

                              UKRAINE WAS ‘BIG MISTAKE’
Simon Zekaria, AFX Europe, Brussels, Belgium, Wed, May 10, 2006

By Gregory L. White, The Wall Street Journal 

New York, NY, Friday, May 5, 2006; Page C1

                     Black Sea Fleet commission meets in Moscow
: By Tatiana Ivzhenko
Nezavisimaya Gazeta, Moscow, Russia, Thursday, May 4, 2006

20.                               “CHENEY’S DEMARCHE”
           US Vice President’s remarks on Russia ‘comparatively harsh’
By Askold Rodins
Diena, Riga, Latvia, in Latvian 8 May 06
BBC Monitoring Service, UK, in English, Tue, May 09, 2006

Ostap Skrypnyk, Executive Director, Ukrainian Canadian Congress (UCC)
Winnipeg, MB, Canada, Wednesday, May 10, 2006
Irish Times, Dublin, Ireland, Thursday, May 11, 2006
UNIAN news agency, Kiev, in Ukrainian 1156 gmt 4 May 06
BBC Monitoring Service, UK, in English, Thu, May 04, 2006
24.                            UKRAINE HEADED FOR NATO
Deputy Director General, Center for Political Technologies
RIA Novosti, Moscow, Russia, Friday, May 5, 2006
                         TO SPEND MY LIMITED LIFE TIME
                       I consider it a gift and an honor to be here now.

INTERVIEW: With Terry Hallman, Founder and Director
People-Centered Economic Development – Ukraine
ForUm, Kyiv, Ukraine, Thursday, May 11, 2006

Ukraine like Noah’s Ark every day, hour and minute surmounts the hard path
to the democracy. “Ukraine” means more than just a country with its glory
history, for lots of ordinary Ukrainians (those who living in Ukraine, not a
nationality) it means a hope for better future they deserve.

There are many foreigners who are with Ukraine during its hard time of
revival. One of them is Terry Hallman, the founder and director of
People-Centered Economic Development, and now P-CED Ukraine. Mr.
Hallman kindly agreed to give an interview for forUa’s readers.

[ForUm] – What is your estimation regarding the first steps of Orange
democracy and how, to your mind, the Ukrainian mentality has been

changed since the revolution?

[Hallman] -I think the first steps of democracy in Ukraine have been very

First and foremost, Ukraine now has media freedom and freedom of speech.
This is something I watched emerge with my own eyes, in Kharkiv, during the
revolution. A lot of people, particularly international observers and
commentators, see only the problems and conflicts in the Orange camp after
they finally took office in January 2005.

If any of them can point to any democracy that doesn’t have similar
conflicts and infighting, I’d love to hear about them. There aren’t any, in
fact. Democracy is tough, and messy. As Britain’s legendary Prime Minister
Winston Churchill once said, democracy is the worst possible form of
government – except for all the others.

Now what we see in Ukraine is healthy debate and at times tumultuous
disagreement among politicians. But it’s all public now. Media and
journalists can cover it and comment on it any way they want to, and the
public can pay attention or not as they prefer. In that sense, I see a
fundamental and permanent shift in Ukrainian mentality.

It’s the beginning, a good start. The most essential ingredient in democracy
is freedom of speech, media, and expression. That was severely repressed in
Ukraine as recently as two years ago. Now, it’s the opposite. Even President
Yushchenko got a hard lesson in media freedom when he slammed Ukrayinska
Pravda for their series on his son Andrei’s escapades and tried to
intimidate them.

Journalists all over Ukraine furiously demanded an apology. He apologized.
That’s a big difference from the previous regime.

Overall, Ukrainians now seem to dare believe in a good future for Ukraine.
More hope, more positive thinking, more belief in a good future, less
cynicism. More positive, less negative, overall.

[ForUm] – Do you think it was a revolution or just a political substitution
and another lie both for Ukrainians and world community?

[Hallman] – It was a revolution. It’s not finished. It began in November
2004, as a revolution. Now, it’s a movement. Like I said, the main thing is
the appearance of free media and freedom of speech and expression. Any
political opinion is tolerated; nobody gets killed for harshly criticizing

There are certainly many people still in public jobs – militia, customs,
judicial, and so on – who have old, bad habits toward corruption and less
than the best interests of Ukrainian citizens – but fewer than before. It’s
impossible to get rid of that problem in a year or two, because it’s been
going on for so long and is a deeply entrenched practice.

Corrupt officials and public servants deserve to be criticized and exposed.
That’s the only way to deal with them, pointing them out and making their
activities known to the public who pays their salaries. They are your
employees, you are their bosses. Not the other way around. If they don’t
like it and still want to practice corruption, they can think about it while

You just have to keep pressure on your chief employees in Kyiv to remove
corrupt public employees. Freedom of media makes that possible now.
Ukrainians – the majority, at least – demanded an end to corruption and the
beginning of new government responsive to ordinary citizens’ needs,
providing means for making a better, and more honest, more decent life
possible for Ukrainian people and families.

You have that now. It’s like having a bicycle for the first time. You have
to learn how to ride it. But now, at least, you finally have that
metaphorical bicycle.

[ForUm] – Do you still believe you may change common people’s life here
in Ukraine?

[Hallman] – I still believe I can provide means for common people in Ukraine
to change their own lives. I can’t do it for them, but I can help reorganize
things, marshal resources, and organize new development programs, and so
on. People can then participate as they wish. They’ll have new opportunities
that they do not have now.

I’m mainly aiming at the poorest people in Ukraine who have no real
opportunities to improve their lives and get out of poverty. Helping them
will provide significant economic benefit to Ukraine, not least by creating
a stronger economy and larger annual national budget – which in turn makes
possible helping improve social and economic conditions for more people.

[ForUm] – What has happened with the Crimea project now?

[Hallman] – That was a project I worked on in 2002-3, based in Simferopol.
It was designed to create up to 10,000 new small businesses over a four year
period, specifically for the poorest people in Crimea. It was proposed as a
joint Ukraine/US project, and the US side was willing to go with it.

A few politicians in Crimea’s government wanted “private payment” before
they would allow it, namely the economy minister’s and prime minister’s
offices. Never mind that nearly a third of Ukrainians in Crimea lived in
poverty. They didn’t care about anything but their own money, and were in
office mainly to grab money wherever they could. So, I paused the project
and decided to wait for a better time to try it again.

That time has arrived. But now, instead of just one region, in light of the
orange revolution and Ukraine’s clear national commitment to democracy and
market reforms, I am preparing a new proposal to include Crimea as well as
all of Ukraine. It is proposed as a joint Ukraine/US project, again, and
both sides now have more than enough money specifically allocated for such
projects to make it happen.

However, I’m also including nationwide childcare reform into the project
now, to eliminate Ukraine’s orphanages and get children into something like
a real home and family. It all goes together.

That latter part, childcare reform, will require a very substantial initial
budget outlay, and that isn’t likely to be approved unless the public knows
and understands the reality of some of Ukraine’s worst orphanages – which
I’ve talked about in your forum in the topic “Ukraine’s Death Camps for

It sounds like a fantastical, demagoguery phrase, but it’s literally true,
and it can no longer be overlooked. Right now I’m trying to simply go in and
document the 20-30 worst orphanages, to show exactly what these children are
suffering. Once that’s done, I’ll have all the research and documentation
needed to finalize the proposal and make a compelling, unquestionable case
for overall funding.

There will be people who disagree with childcare reform in particular, and
who need Ukraine’s present orphanage system to remain as it is, with little
regard to the well-being of the children. They are not only in Ukraine, but
also in the US and possibly other countries.

Many people are making very good income from Ukraine’s existing orphanage
system, and therefore will almost certainly fight and try to undermine and
sabotage any change. Unfortunately, I’m embarrassed to say, some of those
people are in the US, calling themselves “charity” organizations.

Ukraine’s orphanages supply them with a commodity they need to make money,
and quite a bit of money. It is absolutely to Yushchenko’s credit, and one
thing he has done absolutely correctly, in stopping foreign adoptions.

It isn’t because he doesn’t care about the children, in my opinion, but
because he has a very good understanding that many so-called charities are
concerned with nothing more than their own bank accounts. The children in
orphanages are their market commodity, and they want to keep it that way.
Watch for them to appear. I’m sure they will.

Based on my previous experience, and knowing very well what very honorable
people in US government care about – including the incoming US Ambassador
to Ukraine, William Taylor – I have little doubt that the US side will help
Ukraine any way possible in solidifying Ukraine’s new democracy, and in
dealing honestly and toward the best advantage of ALL of Ukraine’s citizens
toward a better life.

At that point, the new project begins, and to answer your original question,
so does the Crimea project, finally, after three years of effort and one
revolution. There’s just a little more to be done, to expand the original
Crimea project now to all of Ukraine, because now all of Ukraine clearly
deserves every honest assistance toward building your new democracy and
fulfilling the enormous potential of Ukraine.

That means the human potential of 100% of Ukrainian citizens – most
especially those that at present have no voice, no protection. Your
children. Your children are my personal boss. I will do anything for them.

[ForUm] – Regarding Ukraine’s bureaucratic legal system, I think, you had
to face some obstacles on your way to combat poverty there, did not you?

– Yes indeed. As I indicated above, the project ran straight into
corruption. I have a very simple rule about corruption and dealing with
corruption: don’t be corrupt. Rather than agree to corruption, I did the
unexpected – at a time when most Ukrainians couldn’t for fear of their
lives. I went public.

I blasted them in an op-ed piece in Kyiv Post, followed by a radio interview
on Voice of America – Ukraine. I was furious that those guys were willing to
block a development project to help desperately poor families. I was furious
that they were typical of most officials in Ukraine, starting at the top.

I was furious with Ukrainians for allowing their government to run all over
you, abuse you, reduce your lives to penury and poverty, and you just took
it. In short, I blasted everybody and everything in Ukraine, all Ukrainians,
for allowing such a sorry state of affairs to even exist. That was May 2003.
I became an Orange Revolutionary at that time, before there was either
orange or a revolution.

But I also saw enormous potential for Ukraine, for Ukrainians, for common
citizens and not just a small percentage of bosses and officials. That’s
really why I was so angry, seeing that potential and seeing exactly who and
what was blocking it, and citizens doing little or nothing about it.

The bureaucratic legal system still exists, mainly because that’s about the
only possible organizational scheme that can work in any large organization.
But it’s changed, it’s still changing and transforming, as ordinary citizens
discover their voice matters and can speak out now to demand better

[ForUm] – What forced you to come to Ukraine and to stay here?

[Hallman] – I came to Ukraine for the first time in April 2002, to work on a
possible development proposal. That became the Crimea project mentioned
above. I had already gotten a development project into Russia – Tomsk – in
1999. Work there came to a logical conclusion for me at the end of 2000,
and I always had Ukraine in mind as my next stop.

In both cases, I thought that I might be able to find ways to help our
former enemy, the former USSR. The US and USSR had been enemies for
so long, it just seemed time to try and be friends. President Clinton
usually listened to my ideas, so I felt that if I came up with a good idea
for a development project, he would help get it done. That’s how the

Tomsk project came about.

For me, it was all in the spirit of friendship, reaching out and trying to
help former enemies if possible. There just wasn’t any sense in being
enemies, particularly since ordinary citizens in the US and former USSR

have much more in common, than not, as human beings.

I realized that if US citizens and Russian or Ukrainian citizens actually
had a chance to get to know each other, as people, there would never have
been a Cold War. We, US citizens, for the most part didn’t want to hurt you.
You, USSR citizens, for the most part didn’t want to hurt us.

It was an insane battle of ideology between Washington and Moscow, which
most of us had nothing to do with. Washington convinced US citizens that all
of the USSR wanted to harm us, and Moscow did the same with USSR citizens.
For the most part, it was never true. I just wanted to get past the
nonsense, and really try to establish friendship in place of enmity.

I learned a lot in the Tomsk effort, including that I must anticipate the
possibility of corrupt people in positions of authority who do not care a
bit about ordinary people and citizens. This same principle holds true in
the US, by the way. Thus I was somewhat prepared for dealing with extreme
corruption in the Crimea project.

When I had to pause the project after corruption was attempted by government
officials, I couldn’t stop thinking about the thousands of people I’d seen,
many of whom I met personally, who were suffering terribly from poverty. I
saw children starving, some starved nearly to death, and some I’m sure
starved to death out of sight. I

I was almost able to help them, but had to stop the project because Crimea’s
government clearly hoped to loot the project and enrich themselves. I
couldn’t just stop and go do something else.

So, I’d say it was simply the spirit of friendship that compelled me to come
to Ukraine, but it was seeing so many people suffering, really needlessly
except for corrupt government, and seeing starving children and babies that
compelled me to stay here.

Now I’m here for as long as it takes to see the project through, and turn
the tide against poverty and needless suffering in Ukraine. These are
problems that can be fixed, in Ukraine, and I can’t say the same for
identical problems in other locations such as Darfur for example. But they
can be fixed in Ukraine.

[ForUm] – What’s your opinion on US hand in the Orange Revolution?

[Hallman] – US government and various US non-governmental organizations
funded civic development initiatives for years prior to the revolution. This
was totally transparent and public information, not secret, no mystery at
all about it when it was going on. Funding was available to anyone – blue,
orange, red, white, green, and so on.

Those who were serious about civic development and honest elections tended
to find a home in what became the orange faction, the opposition. That’s why
it looked like the US helped the orange side – because we did, but that was
not the point. It was simply that people who cared about honest elections,
the ones who used US money for civic development for years, found little
place or welcome in the blue camp and by default had to be opposition.

That’s the main US hand I saw in the elections and the subsequent
revolution. I think the US merely fostered free and fair elections by
helping Ukrainians to learn about civil society, over many years, prior to
the revolution. It was Ukrainians’ own personal decisions to learn, or not.
Those that learned about and wanted civil society, rule of law, and
anti-corruption were by definition opposition. Orange.

[ForUm] – How do you assess the reforms launched after the November
of 2004?

[Hallman] – On the positive side, there’s been the move to parliamentary
democracy with less authority concentrated in one office, the President’s.
There’s the successful reprivatization of Kryvorishtal, which produced a
fair price. Ukraine just had it’s fairest election ever in March
parliamentary elections. And again, freedom of media has taken root and

is getting stronger.

Kyiv has made clear to Moscow that Ukraine will not be pushed around any
more. The US and Ukraine now have normalized trade relations, and the EU is
slowly warming to improving trade with Ukraine.

On the negative side, Yushchenko is widely viewed as having not lived up to
many of his most crucial campaign pledges: bandits to prison, getting the
Gongadze murder case fully and transparently resolved, aggressively cleaning
up corruption, for examples.

His performance has been lackluster at best, and much of the time he doesn’t
seem to get what’s going on around him. He praised the RosUkrEnergo deal,
for example, without even knowing who was involved or all the details of the
deal. He seemed to just be relieved to have some sort of solution to
Russia’s energy blackmail, even a bogus solution.

The energy problem was clearly visible a year ago, and in fact I wrote quite
a bit about it on Maydan last year, stating emphatically that Russia was
going to blackmail Ukraine over energy supplies. I’m not your president,
it’s not my job to see glaring threats like that, but even to me it was
obvious even then what Moscow was up to on the energy front with Ukraine.

Apparently nobody in government did much of anything until Russia cut off
gas supplies, and then they seemed shocked. I was shocked that they were
shocked. How hard is it to figure these things out? What were they thinking?
Were they thinking?


Which gets to the main problem that remains to be reformed and hasn’t yet
been touched? When you get down to it. no one in Rada has to pay a bit of
attention to Ukrainian citizens. They’re in office, they have full immunity
while in office, and they can steal Ukraine blind if they want to.

The checks and balances that might stop them are the president and prime
minister, but the president doesn’t seem to be paying attention, is gone
half the time, and the prime minister at present is basically his yes man.
At the least, immunity for parliament deputies is going to have to be

Otherwise, you’ve got 450 people in Rada whose only check and balance is
he president’s office and prime minister’s office. Citizens can’t touch
them, so they don’t have to listen to a word you say. That one factor –

immunity for parliament – can easily prove fatal for Ukraine’s new

Parliament can trash everything if they want to, and there’s nothing really
to stop that except for their consciences. These guys didn’t get into office
on the basis of conscience or even being directly elected. They got there by
paying millions of dollars for positions on a party ticket, and you can be
sure they’re going to be looking to recover that investment while in office.

That’s why they’re in office. That means making a ton of money for
themselves, and once again leaving the rest of Ukraine wanting. Money is

not an infinite commodity.

Which gets to the greatest reform failure: not separating business and
political office. If that isn’t fixed, your democracy is at grave risk. That
is the great unreformed problem, and it hasn’t even been touched despite
Yushchenko’s promises to the contrary. In fact, instead of separating
business and political office, they are at this time one and the same thing.

[ForUm] – Did you believe in Ukraine? Post-Soviet country is not a good
climate for the son of democracy, where do you find inspiration to go on
working here?

[Hallman] – I believe in the people of Ukraine. It is Ukrainian people where
I find inspiration to go on working here. The vast majority of Ukrainians
are decent, hard-working people. You have world-class universities,

formidable intelligence, and enormous human potential.

I simply cannot say that enough times, your human potential. It is your
greatest national asset and, once unleashed, will bring Ukraine among the
forefront of leading countries in the world. My role in Ukraine is to help
unleash that potential. Nothing more, nothing less.

I’m here mainly as human being, by the way, not as American, but being an
American, there are certain things I can do to help that happen. Given
hundreds of other countries in the world that I could work in, I see Ukraine
as the best, most promising country to spend my limited life time.

Ukrainians also tend to be modest, gentle people, maybe a bit shy, making it
rather easy for ruthless people to try and control you. However, and by that
same token, I’m convinced that Ukrainians have a certain genius for being
able to resolve crucial national problems peacefully and making your voices
as citizens heard and respected by government – even if government has other

It’s that particular genius, which shined brilliantly in the Orange
Revolution and struck the whole world that inspires me profoundly. I
consider it a gift and an honor to be here now.    -30-
FOOTNOTE:  Link to People-Centered Economic Development

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
                   Model for proposed “orange” coalition in Ukraine?

ANALYSIS & COMMENTARY: By Tammy Lynch, Senior Fellow
Institute for the Study of Conflict, Ideology & Policy, Boston University,
Ukrayinska Pravda in Ukrainian; UNIAN in English,
Kyiv, Ukraine, Wednesday, May 10, 2006

In recent weeks, the “German example” of parliamentary coalition building
repeatedly has been suggested as a model for the creation of the proposed
“orange” coalition involving President Viktor Yushchenko’s Our Ukraine,
The Yulia Tymoshenko Bloc and The Socialist Party.

The suggestions have come largely from members of Our Ukraine, who would
like to put off discussions on naming a prime minister and believe that
Germany’s example supports their position.  The President in particular has
pointed to Germany as providing potentially useful lessons for political
leaders now attempting to form a government.

In fact, it is useful to examine the negotiating process that led to the
current Merkel government and a stable ruling coalition in Germany.
However, a close examination of this process reveals that it differs
significantly from the way in which some political leaders have portrayed

1) Before beginning formal coalition talks, personnel decisions

were made and announced publicly.

In Germany, after the 18 September elections, Angela Merkel’s Christian
Democratic Union (CDU) and then-Chancellor Gerhard Schroeder’s Social
Democratic Party (SPD) finished within one point of each other, providing
the CDU with just four seats more than the SPD.

Despite the slim plurality, however, Merkel immediately claimed the right to
lead the country.  “It is up to us to build a government,” she said.   It
soon became clear that Schroeder’s Social Democrats would be the most
natural ideological union with Merkel’s party, in spite of differences over
economic policy.  But Merkel’s party had one condition.   “There will be no
coalition talks if it is not clear that Ms Merkel will be chancellor,” CDU
General Secretary Volker Kauder said.

General exploratory discussions dragged on for two weeks, as Schroeder
refused to give in on the choice of Chancellor.  On 5 October, Juergen
Ruettgers, the CDU leader of the powerful state of North Rhine-Westphalia
reiterated, “We will not start coalition talks until they accept the
democratic principle that the biggest party nominates the head of

Kauder agreed.  “There will be no negotiations on the issues if the Social
Democrats do not accept that our candidate will be chancellor,” he said.

In response, the Social Democrat’s Franz Muentefering said, “Only when we
enter serious negotiations can we discuss such issues. Beforehand it is
simply not possible.”

But Merkel’s party did not back down.  “Either we have a woman chancellor
or the talks fail,” Guenther Beckstein, the interior minister of the
conservative-run state of Bavaria, said on 7 October.

On 11 October, three weeks after the election, Merkel finally announced,
“”We have decided that I will be chancellor.”  In return, her party had
agreed to give 8 of 14 cabinet posts to Schroeder’s Social Democratic Party.

In response, The Financial Times wrote, “Yesterday`s announcement that
Angela Merkel would become chancellor removed the biggest question mark
hanging over the political future of Germany.

Beginning next Monday, Ms Merkel`s Christian Democratic Union and its
rival, the Social Democratic party, will start to draft a detailed programme
covering all aspects of government work – fiscal, labour market, economic
and foreign policies. An agreement is expected on November 12.”

So, the suggestion by Our Ukraine that the program came before the naming
of the Chancellor in Germany does not correspond to the facts.  In reality,
Chancellor Merkel insisted on her position and refused to discuss the issues
of the program until after her demand was met.

Eventually, even though his party finished within one point of Merkel’s,
Schroeder was forced to concede to the “bigger” party.  Today in Ukraine,
over a month after the election, Our Ukraine still fights for the
premiership, despite finishing over eight points behind what would be the
biggest party in the coalition.

2)  A coalition was built on ideological grounds and, in the end,

was the only option.

There is no question that the CDU and the SPD have sharp differences over
economic reform.  Merkel’s CDU favors more radical reform while the SPD
favors a gradual, far smaller level of reform in areas like the tax code,
the banking industry and the labor market.

However, the two parties were unable to come to terms with other, smaller
German parties, most of which have a more defined ideological focus.
Almost immediately following the election, the New Left Party, which won
almost nine percent of the vote and includes former East German Communists,
ruled out joining any coalition.

So, too, the environmental Green Party, which won eight percent, and the
conservative Free Democrats with 10 percent.   Merkel and Schroeder’s
parties won roughly 35% and 34%, respectively.  Therefore, the only choice
for the two major parties was to join together.

Even more, in exploratory talks the two blocs discovered that their views on
how a country should be governed overlapped, allowing them to come to terms
on specific issues after significant bargaining.

3) The coalition was built on a detailed program of action.

Following the announcement of the Chancellor, the Christian Democratic
Union, The Social Democratic Party and CDU ally the Christian Social Union,
drafted a detailed program that Merkel and her ministers must follow.  It is
over 100 pages and was developed over a month of daily, often grueling

It was the result of significant compromises on both sides, and commits the
partners to specific policies on everything from nuclear power to taxes to
the labor code.

The program limits Merkel’s room to maneuver in many instances, but also
blunts the ability of the SPD to criticize her actions if she stays within
the program.  Both parties are equally responsible for the successes – and
the failures – of the program.

The Tymoshenko Bloc so far has rejected this type of detailed program.  But
just as the lessons of Germany suggest that there can be little progress in
coalition talks until the head of government is named, they suggest that a
detailed well thought-out program can provide stability and protect all
partners from accusations of grand-standing.

This assumes, of course, that all members of all coalition political parties
agree to support both the chosen head of government and the president.  They
must also do their best to implement the agreed-upon program.  In the German
scenario, competing centers of power within the government and unclear
distribution of authority do not exist.

So the “German example” does have much to teach Ukraine’s politicians.

The question now is whether these politicians are interested in learning the
true lessons provided.                            -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
3.                          KYIV: MORAL OF THE MARKET
  Populism is dangerous in politics, but it can be disastrous in economics.

EDITORIAL: Kyiv Post, Kyiv, Ukraine, Wednesday, May 10 2006

Kyiv has a new mayor and that’s nice for a change. Leonid Chernovetsky

said he was chosen by the citizens of the capital because of his extensive
charity work.

Despite accusations by his political opponents that he bribed elderly voters
with free bundles of food during the election campaign, concern for the
vulnerable elements of society is also nice for a change.

Chernovetsky is not shy about promoting his assistance to the poor,
attributing his goods deeds to Christian fervor. As a leading member of an
evangelical church, the new mayor bucks the status quo. Even as a member

of the outgoing parliament, Chernovetsky developed a reputation for

But like many of his fellow lawmakers, Chernovetsky is also a serious
businessman, controlling a major Ukrainian bank.

That’s why it seems more than just odd that a man of such practical
experience would initiate the creation of a network of government-supported,
low-cost food stores in the capital of a country just starting to get on its
feet economically.

Speaking on Kyiv television station late last week, Chernovetsky announced:
“We will start introducing a system of government shops in which products
will be [sold] at prices that are significantly lower.”

Not only does the new mayor want to provide the needier elements of his
electorate with cheap eatables, he also wants these subsidized products to
be near to residential dwellings. “It will probably be necessary to buy some
first-floor apartments and convert them into bread shops,” he said.

We smiled when Chernovetsky suggested lie detector tests for city employees
and smirked when he ordered that alcoholic beverages be banned from
municipal cafeterias, but this latest measure takes city policy from
conservative public morality to neo-Communist populism.

It’s one thing for the authorities to regulate commerce, even in a
moralistic way for the common good, but quite another when state bodies,
democratically elected or not, turn into market players. Wasn’t it bad
enough when Prime Minister Yulia Tymoshenko tried to regulate prices for
petroleum products last year – for the good of her countrymen?

The best price is that set by the market, whose players must not hold state
offices. Populism is dangerous in politics, but it can be disastrous in
economics.                                       -30-
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UNDER THE MICROSCOPE: By Prof William Reville
Irish Times, Dublin, Ireland, Thursday, May 11, 2006

The worst nuclear fission power accident in history occurred in 1986 at
Chernobyl and it seemed to sound the death-knell of the nuclear industry.

However, nuclear energy has tip-toed back onto centre stage because our
conventional generation of power by burning fossil fuel is dangerously
warming the world by releasing huge amounts of carbon dioxide.

Unless we stop these releases right away we will precipitate marked global
climate change, probably with disastrous consequences for mankind. A
widespread changeover to nuclear fission power may be our only hope of
avoiding disaster.

We may have gone too far already. The British scientist James Lovelock
formulated the powerful Gaia model of the earth in 1972. Gaia theory
proposes that living organisms on earth, of which mankind is but a small
component, together with the earth’s surface and atmosphere, unconsciously
regulates the earth’s temperature for the benefit of life.

In his latest book, “The Revenge of Gaia” (Allen Lane 2006), Lovelock argues
powerfully that we are at imminent risk of kicking the Gaia mechanism into a
new equilibrium that will be entirely hostile to mankind.

Sweltering heat and global flooding of coastal areas would mutilate
civilisation, dumping us back to pre-modern conditions. He recommends that
our only hope of helping ourselves is to immediately stop pumping warming
gases into the atmosphere.

We can stop releasing carbon dioxide by using renewable energy such as sun,
wave and wind, or by using nuclear energy. However, the expert consensus is
that renewable energy can provide only a fraction of our energy needs over
the medium term.

Lovelock concludes we must massively switch over to fission nuclear energy
in order to tide us over the next 50 years until safe, clean nuclear fusion
energy is available, supplemented by the best we can squeeze out of sun,
wind and wave.

I have always opposed nuclear fission power because of the possibility of a
disastrous accident and also the highly radioactive waste that it generates.
But these problems are not as intractable as they once seemed. Chernobyl
excepted, the nuclear industry has a good safety record.

The Chernobyl reactor had design flaws and the exercise that caused the
explosion was improper and illegal. Western nuclear power stations have been
very safe and, since Chernobyl, improvements in design have made reactors
safer still.

High-level nuclear waste is undoubtedly problematic. However, it can be
stored in deep geological repositories and research promises to find ways of
transforming this waste into a form that needs to be stored for only 1,000
years, as opposed to the 100,000 years presently necessary.

In summary, if the only way to avoid disastrous climate change is to switch
over to nuclear fission power for a while, then we must take the nuclear
option and we can easily live with it.

The Chernobyl Forum recently reported (April 2006) on the health,
environmental and economic effects of the accident, generating much public
commentary. The report details the findings of more than 100 expert
scientists, the collaboration of eight UN agencies (including the World
Health Organisation) and the governments of Russia, Belarus and Ukraine.

The Forum Report estimates that of the 6.8 million people most exposed to
radiation, up to 9,000 people may die sooner than they otherwise would, due
to radioactive releases from the accident. It is also estimated that, of the
570 million people in Europe exposed at the time of the accident, up to
16,000 people will ultimately die over the next 70 years as a result of

However, as of mid-2005, fewer than 60 deaths can be directly attributed to
Chernobyl radiation, mostly highly-exposed rescue workers who died within
months of the accident. About 4,000 cases of childhood and adolescent
thyroid cancer are attributed to radiation exposure.

Ninety nine per cent of thyroid cancers were treated successfully, but at
least nine children died. Otherwise the experts found little evidence of
increased cancer incidence amongst affected residents.

The report attributes a modest increase in reported newborn congenital
deformities to better reporting of these deformities after the accident and
not to radiation. The reported increases are seen both in
radiation-contaminated areas and in areas that received no fallout.

The congenitally deformed Chernobyl children taken abroad by the Chernobyl
charities are not radiation victims, but representatives of the 1.5 per cent
of births everywhere that display congenital deformities.

The report concludes that the largest public health problem resulting from
the accident is “the mental health impact”. Most people in contaminated
areas received low radiation doses, comparable to natural background
radiation levels, which could have little or no effect on health.
Nevertheless, they continue to suffer grave anxiety which has prevented them
from restarting their lives.

A “paralysing fatalism” has led to drug and alcohol abuse, unprotected sex
and unemployment. The report recommends that the first priority should be to
encourage these people to normalise their lives by educating them about the
minimal risks they face.

Prior to the Chernobyl Forum Report, many assumed that hundreds of thousands
of people died as a result of the accident. Some amateur groups are now
contradicting the report, citing anecdotal evidence and reports commissioned
by the Greens.

On the other hand, the Chernobyl Forum Report represents many years
intensive study by mainline science and it has the imprimatur of the WHO.
Any notion that such a huge undertaking was put together to “whitewash” the
nuclear industry is incredible, not to mention insulting to the many decent
professionals involved in the study.
NOTE: William Reville is associate professor of biochemistry and public
awareness of science officer at UCC –

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     Ukraine saw some of World War II’s fiercest battles, was overrun by Nazis

Mara D. Bellaby, AP Worldstream, Kiev, Ukraine, Tue, May 09, 2006

KIEV – Chanting “Glory” and “Welcome,” a young crowd of Ukrainians lined

the capital’s main street on Tuesday to honor the country’s aging World War II
veterans and reassure them that their sacrifices will not be forgotten.

The annual Victory Day parade featured dwindling ranks of the mostly
octogenarian veterans, their chests heavy with shining medals. Many leaned
on canes and each other, and smiled broadly as young Ukrainian girls darted
shyly through their ranks to offer flowers.

The crowd was dotted with young people – many born in the dying days of the
Soviet Union for which the veterans fought.

“It’s a show of respect. They offered their lives so we would have freedom
and independence,” said Yana Sheremeta, 17, one of thousands of young people
who joined the crowd to cheer on the veterans as they marched past. “It’s
important that we be here.”

Ukraine saw some of World War II’s fiercest battles and was overrun by the
Nazis before the Red Army forced the Germans into retreat. An estimated 7
million Ukrainians died in the fighting.

“We bow our heads before you,” said President Viktor Yushchenko, who
participated in the march and later spoke to veterans gathered for
festivities at Ukraine’s memorial park. “We must know by name our heroes and
their losses.”

Volodymyr Taldykin, an 81-year-old veteran, clutched flowers in his hand as
he mingled with other veterans ahead of Tuesday’s parade. “This is our most
important holiday,” said Taldykin, who fought on the front in southwest
Ukraine. “Had we not achieved victory in this fight, there would be nothing
left to celebrate.”

Yushchenko, whose father was a Soviet Red Army soldier, renewed his call on
Tuesday for Red Army veterans and Ukrainian partisans who fought the Soviets
to forgive each other for the sake of the national unity. The call is
sensitive because the partisans were considered traitors during the Soviet
Union since many initially sought support from the Nazis in their struggle
for independence.

“My nation, my people found the courage to forgive the Germans … to
forgive the Japanese,” Yushchenko said, adding that it was time to find the
courage to embrace each other.

“Perhaps you see the future differently, but I’m convinced that every one of
you sees a free and sovereign Ukraine,” Yushchenko said. “The time has come
for Ukraine’s veterans to shake hands in the name of Ukraine’s future.”

The government’s efforts to win recognition for the 100,000 anti-communist
partisans has faced strong opposition, and many veterans said Tuesday that
Victory Day wasn’t the time to consider rapprochement. “Today is our day – a
day for those who liquidated fascism,” said Ivan Malenchuk, 81.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Ukrainian Radio First Programme, Kiev, in Ukrainian, 6 May 06
BBC Monitoring Service, UK, in English, Saturday, May 06, 2006

KYIV – Ukrainian President Viktor Yushchenko has called on World War II
veterans to reconcile on 9 May, the day of the former USSR’s victory over
the Nazis.

Speaking in his regular Saturday address to the nation on 6 May ahead of
Victory Day, Yushchenko said that Soviet army veterans and former soldiers
of the anti-Soviet guerrilla movement UPA (Ukrainian Insurgent Army) need to
reconcile for the sake of their children and grandchildren.

“We cannot rewrite controversial pages of our history. But we can and must
unite for the sake of the future. Victory Day is a good occasion for a
reconciliation of this kind. I call on veterans of the Soviet and Ukrainian
insurgent armies to extend their hands to one another on that day and to
find a way towards understanding,” Yushchenko said.

He went on to say: “We cannot accept that our children and grandchildren
watch the confrontation for the right to be called a true veteran. We will
find no truth in this confrontation. In our hearts, we forgave the Germans,
Japanese and Poles long ago. We forgave all those who were probably on the
other side of the trenches. It is now time to forgive ourselves.”

Yushchenko called on the newly elected parliament to pass a bill granting
former UPA soldiers the status of World War II veterans.

“It is a shame that the state has not recognized on the official level all
those who fought for Ukraine’s freedom and independence. In this matter, I
am pinning big hopes on the new parliament. I hope that it will be able to
deal with the status for all those who fought.

The Supreme Council [parliament] should pay tribute to all those who
defended their fatherland and should pass a bill recognizing UPA soldiers as
war veterans. This is our debt to the generation of our parents,” Yushchenko
said. Yushchenko said that the victory over fascism helped Ukraine achieve
its own statehood.

“Ukraine’s sacrifices and losses in the Great Patriotic War [in 1941-45]
were not futile. The borders of our state were set as a result of the
victory over fascism. For the fist time in many centuries, Ukrainians found
themselves within the boundaries of one country which, regrettably, failed
to gain independence at the time.

Ukraine became a co-founder of the United Nations. Ukraine has achieved all
this thanks to Ukraine’s victory in the Second World War. For that reason,
Victory Day is a great national holiday for Ukrainians, which they mark
along with the whole world.”

The president said that Ukrainians have contributed to Europe’s freedom and
that it is time for Ukrainians to learn to forgive and reconcile, as Europe
has done.

“A deadly threat to the European civilization has disappeared with the
destruction of fascism. Having overcome the totalitarian temptations that
divided it, Europe has returned to the traditional Christian values of
freedom, human dignity, equality and solidarity that are based on democracy
and the rule of law.

The generation of our parents made a big contribution to this. The
democratic world values freedom. It is aware that understanding and
reconciliation come through forgiveness. Ukraine is still to learn this
lesson,” Yushchenko said. Yushchenko said that war veterans would be

given more aid this year.                         -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Itar-Tass, Moscow, Russia, Tue, May 9, 2006

DONETSK – The leaders of several political parties have negatively
responded to an appeal by Ukrainian President Viktor Yushchenko
for the reconciliation of Soviet Army veterans and nationalists from the
Ukrainian Insurgent Army (UPA), which fought on the side of the Nazi.

“This is a very painful matter,” which cannot be part of the coalition
agreement, Party of Regions leader Viktor Yanukovich said. The party
gained the majority of votes in the March 26 parliamentary elections.

A new attempt of reconciliation between Soviet soldiers and the
Ukrainian Insurgent Army guerrillas may deepen split in the society, said
Alexander Moroz, the leader of the Socialist Party that also won the
parliamentary elections.

He called against speculations “about the status of members of the
Ukrainian Insurgent Army but resolve the problem without haste.” “May
9 is the day of victory in the Great Patriotic War [of 1941-1945], while
members of the Ukrainian Insurgent Army is a different question,” Moroz

WW2 veterans, especially those who fought against the Nazi in western
Ukraine, are strongly against the reconciliation with the Ukrainian
Insurgent Army. “We remember well what new order and independence of

Ukraine were advocated by the insurgents, who fired at our backs,” Sofia
Vovk, a participant in the Stalingrad battle and the Berlin storm, told Itar-Tass.

“Reconciliation with those, who still hate us, means betrayal of the
memory of our comrades-in-arms, who died fighting against fascists and
their accomplices of various nationalities,” she said.

Yushchenko called on Soviet Army veterans and members of the
Ukrainian Insurgent Army to shake hands for the sake of the Ukrainian
future in his Tuesday appeal to the nation.                -30-

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Interfax-Ukraine news agency, Kiev, in Russian 1743 gmt 10 May 06
BBC Monitoring Service, UK, in English, Wednesday, May 10, 2006

KIEV – Ukrainian President Viktor Yushchenko has invited Russian President
Vladimir Putin and US President George Bush to take part in an international
forum commemorating the victims of Babyn Yar [place in Kiev where German
Nazis shot thousands of Jews during World War II].

Yushchenko made the invitations in letters addressed to them, the
presidential press service today reported. The forum is expected to be held
in Kiev in September as part of events to mark the 65th anniversary of the

“We have a common opportunity to once again remind the world, and especially
the younger generation, of the importance of remembering history lessons
today and preventing any instances of intolerance in interethnic relations,”
read Yushchenko’s letters addressed to the Russian and US presidents.

Yushchenko also recalled that the mass executions at Babyn Yar were among
the first tragic pages of the genocide of the Jewish people elevated by
Nazis to the level of state policy.

“To the people of Ukraine, this is also a memory of the death of tens of
thousands of Soviet prisoners of war of various nationalities, who bore the
brunt of the aggressor’s strike during the first days of the war. Their
memory should be honoured in order for the truth about World War II to be
preserved,” the Ukrainian president stressed in the letters.

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By Stefan Wagstyl, East Europe editor
Financial Times, London, UK, Thursday, May 11 2006

The European Bank for Reconstruction and Development, the multilateral bank
for the former Communist bloc, is planning to stop doing new business in
central Europe and concentrate on the less developed states of the Balkans
and the former Soviet Union.

The proposals, which were backed by the EBRD board last night, are expected
to be approved at the annual meeting in London later this month when
governors consider the bank’s 2006-2010 five-year plan.

The move follows years of arguments between the US and European states led
by France over the speed and timing of winding down the central European

The US has pressed for an early withdrawal, arguing that the accession of
Poland and eight other ex-Communist states to the European Union in 2004
showed they no longer required EBRD finance.

But west European countries wanted the EBRD to remain active to help finance
accession. Jean Lemierre, EBRD president, yesterday told the FT the
“graduation” of countries out of the EBRD’s orbit would mark a milestone in
their successful development. “We will see the end of transition, as we
define it,” he said.

Poland and other central European countries still faced economic challenges,
he said, but these were the normal challenges of more mature economies.

The bank, established in 1991 to support the former Communist states, has
already been reducing its activities in the more advanced economies as these
countries have expanded their access to private sources of finance. Now, the
EBRD will press on to the point at which it will close its books to new
business in central Europe.

Central Europe’s share of new business has fallen from 45 per cent of the
total in 2001 to a planned 15 per cent this year. Under the bank’s five-year
plan, it will decline further in 2010 to just 6 per cent, the bulk of it
going to Croatia, the only non-EU member in the group.

Russia’s share, which has risen from 22 per cent in 2001 to 31 per cent this
year, is to increase to 41 per cent in 2010. The share of the remaining
territories (south-east Europe, Ukraine, the Caucasus and central Asia) will
stay roughly unchanged at 53-54 per cent, following a big increase since
2001 when it was 33 per cent.

Mr Lemierre said no dates had been set for the EBRD to end new business in
specific countries. But the five-year plan envisaged closing most of the
bank’s offices in the region, leaving one or two regional hubs mainly to
manage existing portfolios.

The bank’s total new business would rise slightly from a planned Euro3.7bn
this year to Euro3.9bn in 2010. Its priorities would include expanding in
Russia’s regions, where new offices would open, finance for infrastructure
and energy, and support for small and medium-sized business, said Mr
Lemierre.                                             -30-
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Polish News Bulletin, Warsaw, Poland, Wed, May 10, 2006

WARSAW – Polish meat exporters will be able to sell their products on the
Ukrainian market as of 20 May, following a 60-day ban, the Puls Biznesu (PB)
daily reports. To begin with only 19 companies will be allowed to resume
exports, while others will have until the end of May to file for permits.

The 19 companies are listed on page 8 of today’s PB issue, but it does not
include many firms that have undergone scrutiny by the Ukrainian veterinary
services. According to Cezary Bogusz, the deputy chief vet, the former
exporters who have been vetted by the Ukrainians will be placed on a
separate list while debutants in meat exports to Ukraine will be added to a
different list.

The exports will be conducted under much stricter supervision than before.
The meat will cross the border at two posts: in Dorohusk and Kortchova, and
a third one in Hrebenne will be opened in the autumn.           -30-
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Lloyds List, London, United Kingdom, Wed, May 10, 2006

LONDON – CSAV Norasia, the Hong Kong-headquartered container line

controlled by Chile’s Compania Sud-Americana de Vapores, has added
Odessa in the Ukraine to its Asia Black Sea service, writes Keith Wallis
in Hong Kong.

The new call was inaugurated by the 2002-built 4,400 teu boxship Norasia
Bellatrix, which arrived on May 5. The 58,814 dwt vessel was the largest
containership to call at Odessa.

CSAV Norasia previously served the port by feeders. Adding Odessa to its
main line service will offer CSAV Norasia customers a direct link from China
and southeast Asia to the Ukraine with a transit time of just 21 days from
Chiwan to Odessa.

The revised port rotation is: Shanghai, Ningbo, Keelung, Chiwan, Port Klang,
Jeddah, Port Said, Constantza, Odessa, Istanbul, Port Said, Colombo, Port
Klang and Shanghai.

CSAV Norasia operates two loops to the Black Sea region, ABS and the
Asia-Mediterranean Pacific service, which was widened on April 26 to include
the Black Sea with a call at Constantza. The first vessel to launch the
enlarged service sailed from Pusan in South Korea on April 27.

The revised rotation of the AMP service is Pusan, Shanghai, Xiamen, Shekou,
Hong Kong, Singapore, Haifa, Piraeus, Istanbul, Constantza, Haifa, Colombo,
Singapore, Shekou, Hong Kong, Shanghai, Pusan, Vancouver, Portland and
Pusan.                                                   -30-

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                       RUSSIAN LANGUAGE UNLAWFUL 
TV 5 Kanal, Kiev, in Ukrainian 1800 gmt 10 May 06
BBC Monitoring Service, UK, in English, Wed, May 10, 2006

KIEV – Ukrainian Justice Minister Serhiy Holovatyy has said that the
decisions by the Luhansk Region council, Kharkiv city council and

Sevastopol city council to give Russian the status of a regional language
are unlawful. The decisions to this effect were adopted in Luhansk on 25
April, in Sevastopol on 26 April and in Kharkiv on 6 March.

“These decisions are unlawful because they run counter to the Ukrainian
constitution and laws,” Holovatyy said in a live interview on Ukrainian TV
on 10 May.

“The Ukrainian constitution and laws allow neither city nor regional
councils to decide the issues dealing with the status of languages. The
articles 10 and 92 of the constitution say that language issues are settled
exclusively by the laws of Ukraine,” Holovatyy said.

“Article 10 of the constitution clearly says that the Ukrainian language has
the status of the state language in Ukraine and that the Russian language
belongs to ethnic minority languages and has the legal status of an ethnic
minority language. Therefore, neither a law nor any city council can change
this status. So these councils overstepped their powers. In addition, there
is no notion of a regional language in our legislation,” Holovatyy added.

Holovatyy also said that the European Charter for Regional and Minority
Languages, to which the aforementioned councils referred to when adopting
the decisions on the Russian language, had been developed to protect the
languages which are facing extinction. “Please tell me in which Ukrainian
town or in which region the Russian language is facing extinction,”
Holovatyy asked.

“I am prepared to appear on radio or TV to explain that Ukraine and the
Ukrainian people need active and, I would say, aggressive protection of
their language rights,” Holovatyy concluded.               -30-
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COMMENTARY: Taras Kuzio, Kyiv Post, Kyiv, Ukraine, Wed, May 10 2006

The Ukrainian owners of the shady gas intermediary that was established to
supply Turkmen gas to Ukraine and Europe have been revealed.

The Russian newspaper Izvestia reported that Dmytro Firtash and Ivan Fursin
together control 50 percent of RosUkrEnergo (RUE). Their shares are held
through Centragas Holding and administered by Austria’s Raiffeisen banking
group. The other 50 percent share in RUE, owned by Russian gas giant
Gazprom, is held through Arosgas, which along with Centragas is registered
in Austria.

In July 2004, RUE replaced Hungarian-registered Eural Trans Gas (ETG), which
had handled gas imports to Ukraine in 2003-2004. ETG had itself succeeded a
company called Itera, another foreign-registered gas trader.

On April 26, Izvestia cited an audit of RUE by PricewaterhouseCoopers.
Another top-four international auditing firm, KPMG, had refused the job for
fear of its reputation.

The Russian newspaper article’s timing was no coincidence, nor was the
choice of Izvestia, which is owned by Gazprom. The leak came days after the
U.S. Justice Department had revealed it was investigating links between RUE
and organized crime. The Izvestia leak was coordinated with Firtash going
public to the Financial Times and The Wall Street Journal.

Both Gazprom and the Ukrainian authorities had long claimed that they did
not know who the 50 percent Ukrainian shareholders in RUE were. State-
owned Gazprom was being deceptive, as RUE had been established, like its
predecessor ETG, with the personal support of Russian President Vladimir
Putin and then-Ukrainian President Leonid Kuchma.

On March 1, 2005, Ukrainian President Viktor Yushchenko said he still hadn’t
received information about RUE’s owners. This is curious, as on Jan. 31,
Ukraine’s Antimonopoly Committee announced that RUE had provided it with
information about its owners. But, the AMC claimed this information was

On Feb. 1 this year, Yushchenko said that, based on information supplied to
him by the AMC and the State Security Service, “there is no Ukrainian
structure behind the enterprise.” This sounds like Yushchenko knew who the
owners were, even though he denied it a month later.

The Ukrainian authorities could have demanded to know the Ukrainian
shareholders at the gas talks held with Moscow in January, but they didn’t,
or at least said they didn’t. How could Ukrainian negotiators fail to notice
Firtash’s involvement in the gas deal struck with Moscow this past January,
which resulted in gas imports to Ukraine doubling in price?

Since then, the Ukrainian authorities have been disinclined to find out
who’s behind RUE, lest the names reveal continuing tolerance of corruption in
Ukraine’s energy sector. Herbert Stepic, head of Raiffeisen International,
said on April 24 that the Ukrainian and Russian governments “have always
known who the owners are.”

RUE predecessor ETG was reportedly run by top Kuchma advisor Serhiy
Levochkin. Levochkin and Fursin were both in parliamentary speaker Volodymyr
Lytvyn’s election bloc, which failed to make it into parliament in the March
elections. Lytvyn had been head of the presidential administration until
becoming parliamentary speaker in 2004.

According to a report by the Internet site Ukrayinska Pravda, part of
Fursin’s 5 percent share in RosUkrEnergo goes to Kuchma. During Yushchenko’s
presidency, Kuchma has not been questioned for abuse of office or other
crimes in which he was allegedly involved.

Widespread suspicion points to Kuchma being given immunity during
negotiations in December 2004, possibly at the insistence of the EU. If
true, Kuchma’s immunity also came with a large unofficial ‘pension’ from

According to Ukrayinska Pravda, Firtash is the link between RUE and ETG.
Firtash’s main business offices (High Rock Holdings) are in Moscow and
offshore Cyprus, meaning most of Ukraine’s 50 percent share in RUE is run by
a businessman from Moscow.

Firtash’s business partner, according to Ukrayinska Pravda, is deputy head
of Ukraine’s state oil and gas company, Naftogaz Ukrainy, Ihor Voronin, who
also played a role in the January gas agreement. Voronin, according to this
same report, has ties to the Russian FSB and was the go-between in the
Kuchma era between Russia and Ukraine in energy talks.

Voronin, one of the founders of RUE, was removed as deputy head of Naftohaz
Ukrainy by the government of former Prime Minister Yulia Tymoshenko, only to
be reinstated with the support of top Yushchenko advisor Oleksandr
Tretyakov, his longtime friend. Voronin is also acting head of the newly
established UkrGaz-Energo, a joint venture between RUE and Naftohaz Ukrainy.

In The Wall Street Journal, Firtash admitted that a company he had
controlled once had as a shareholder Semyon Mogilevich’s wife, whose shares
he took over. Mogilevich is an organized crime fugitive from the FBI living
in Moscow, where he has official protection.

Speaking in London, Firtash further admitted: “I have met Mogilevich a few
times. But I have never been in any partnership with him and have never done
any business with him.”

Yushchenko expressed surprise at the Izvestia article and asked to see a
copy of the PricewaterhouseCoopers audit. Why was Yushchenko surprised
if the consistently defended the inclusion of RUE in the January gas

Why should one side of RUE be controlled by the Russian state (through
Gazprom), while two little-known businessmen control the Ukrainian side?
Ukraine has claimed that Russia forced RUE upon them while the Russian
side said that Ukrainians proposed RUE.

Firtash, like many Ukrainian businessmen in 2004, supported both Yushchenko
and his electoral opponent, Viktor Yanukovych, to ensure they came out on
top, whoever succeeded Kuchma as president.

These early ties to Yushchenko were confirmed when Firtash allegedly
chartered a plane for first lady Katya Yushchenko’s American-Ukrainian
family to attend Yushchenko’s Jan. 23 inauguration. The flight was arranged
by Tretyakov, and the cost ($270,000) was paid for by Firtash.

Many in Ukraine and abroad are dismayed at Yushchenko’s lack of political
will to clean up the energy sector as part of his promise to combat

Some see Yushchenko’s former political ally Yulia Tymoshenko, widely
regarded as a populist and an advocate of state capitalism in the West, as
the only Ukrainian politician up to the challenge. Yushchenko appears
reluctant to appoint Tymoshenko prime minister in an Orange parliamentary
coalition, despite her bloc winning more votes than Our Ukraine.

But if Yushchenko is committed to taking Ukraine into NATO and the EU,
this requires battling corruption. The most corrupt sector of the economy is
energy – an area that Yushchenko has been ironically unwilling to touch.

We can only reach the conclusion that Yushchenko has not found the political
will to reform the energy sector and has left in place the same corrupt
schemes in existence under Kuchma.

The only Ukrainian politician willing to take this problem on is Tymoshenko.
Perhaps it’s time for the West to reevaluate its views toward her?   -30-
Taras Kuzio is a visiting professor at George Washington University.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Associated Press (AP), Kiev, Ukraine, Thursday May 11, 2006

KIEV, Ukraine – The beleaguered head of Ukraine’s state-owned oil and gas
company resigned his post to take up a parliamentary seat, a government
spokesman said Thursday.

Oleksiy Ivchenko asked the government to relieve him of the top job at
Naftogaz to take up the parliamentary seat he won in the March 26
parliamentary election, said Valentyn Mondriyevskiy. The government accepted
his resignation on Thursday.

Ivchenko, who was elected as a member of President Viktor Yushchenko’s

bloc, has come under constant fire for a controversial January deal with Russia
that nearly doubled the price Ukraine pays for natural gas and involves a
murky intermediary firm. The strong criticism directed at Ivchenko could
have made his position vulnerable after the new parliament takes office and
a government is formed.

Under the hard-fought gas deal with Russia, Ukraine will receive all of its
imported natural gas from a little-known intermediary company, RosUkrEnergo,
that is owned jointly by Russia’s OAO Gazprom and another company whose
owners were not identified until last month.

Former Prime Minister Yulia Tymoshenko, who hopes to return to the premier’s
job based on her party’s second-place showing in the elections — ahead of
Yushchenko’s bloc — has vowed to undo the deal.

Last month, Yushchenko criticized Ivchenko for purchasing a luxury car with
state funds. Ivchenko was ordered to sell the US$215,000 (euro179,000)
Mercedes Benz, which he did.                -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Letters to the Editor: The Wall Street Journal, NY, NY

FROM: Ken Bossong, Washington, D.C.
Action Ukraine Report (AUR) #696, Article 15
Washington, D.C., Thursday, May 11, 2006
Re. “Fat Target – Hopes Rise for Energy Savings As East Europe Tackles
Waste;  Ukraine, Spurred by Price Jolt On Gas From Russia, Aims For
Broad Efficiency Gains, A Better Way to Heat a City” by Mark Champion
(May 8, 2006; Page A1)

Dear Editor:

The massive potential for cost-effective energy efficiency investments
in Ukraine becomes even more obvious when one considers that Ukraine
now uses over 2.6 times more energy for every unit of Gross Domestic
Product produced than the world average.  The ratio is even worse when
Ukraine is compared to the United States, the European Union, or Japan.

To put this in perspective, Ukraine now imports 50% of its energy needs
and produces another 17% from nuclear power.  Thus, if Ukraine brought
its energy intensity down to just the world average, it could curb its
energy use by 62% thereby eliminating most of its need for both energy
imports and nuclear power.  The savings could further bolster the
carbon credits Ukraine would have for sale under the Kyoto Protocol,
already estimated by the World Bank to be worth $9 – $17 billion.

Ken Bossong, co-director
Ukrainian-American Environmental Association, Washington, D.C.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]


Kontrakty, Kiev, in Ukrainian 10 May 06
BBC Monitoring Service, UK, in English, Wed, May 10, 2006

Ukrainian President Viktor Yushchenko has said in an exclusive interview
with Kontrakty that he is almost prepared to accept Yuliya Tymoshenko as a
prime minister and that he does not deem realistic [Russian state gas
monopoly] Gazprom’s threats to increase gas price [for Ukraine from 95
dollars for 1,000 cu.m of gas] to 230 dollars.

[Passage omitted: Yushchenko says he regrets that infighting and the lack of
team spirit led to the Orange team brake up in 2005.]

[Correspondent] Are you prepared to accept Yuliya Tymoshenko as a
new team leader?

[Yushchenko] I am prepared to set up principles not names. If we agree on
basic principles, then it is not that important who will lead the cabinet –
Tymoshenko, [current Prime Minister Yuriy] Yekhanurov or someone else.
Politicians should have a clear understanding that without team work a
cabinet will be incapable of performing its functions and no-one will
benefit from this.

[Passage omitted: Yushchenko stresses the importance of team spirit, recalls
the days of the Orange Revolution.]

[Correspondent] Gazprom is going to initiate the increase in gas prices for
Ukraine starting 1 July. Are your prepared to deal with this?

[Yushchenko] Ukraine is enjoying the lowest gas prices in Europe. In the
domestic market, [state oil and gas company] Naftohaz Ukrayiny sells gas to
the population for 37 dollars per 1,000 cu.m. At the same time, the Russian
government is seeking to increase the gas price for Russian consumers to 50
dollars per 1,000 cu.m.

The price for gas that we are getting now is 95 dollars at the border, while
Ukrainians cover only 40 per cent of it. But there will be no miracle. If we
pay Russian 95 dollars, the price in the domestic market cannot be 37

This is why, while considering the liberalization of gas prices, the
government sought to keep them at the same level until the heating season is
over. Now we have no other option but to gradually increase gas price by the
beginning of a new heating season.

[Correspondent] Ukrainians buy gas extracted within the country. Gazprom is
going to increase the price for gas supplied by [Swiss-registered
intermediary company] RosUkrEnergo to 230 dollars per 1,000 cu.m.

[Yushchenko] This price is not realistic. We have an agreement under which
gas price for Ukraine at the border with Russia is fixed for five years – 95
dollars per 1,000 cu.m.                               -30-

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
                                 UKRAINE WAS ‘BIG MISTAKE’

Simon Zekaria, AFX Europe, Brussels, Belgium, Wed, May 10, 2006

BRUSSELS – Former prime minister of Russia Mikhail Kasyanov said that
Moscow’s standoff in January over gas prices that cut off supplies to
Ukraine by state-owned Gazprom, which also affected deliveries to western
Europe, was a “big mistake”.

Speaking in Brussels, Kasyanov — prime minister between 2000-2004 and
tipped to be a candidate in Russia’s 2008 presidential election — said:
“This was a big political mistake. It must never happen again.”

He said the dispute raised questions over the “reliability of supplies” and
added that is was wrong that gas was used as a “political weapon” over the

Late last month, the European Commission called on Gazprom to stick to its
contractual commitments and warned it against threatening crucial European
energy supplies.

The commission reacted after Gazprom warned the EU not to “politicise” terms
for Russian gas supplies, implicitly threatening to sell its product

Gazprom has threatened to route gas supplies away from Europe towards Asia
if its plans to expand are blocked by EU member states. Russia is the
biggest provider of gas to the EU, supplying over 20 pct of the bloc’s

Kasyanov called for the reform of the company’s monopolistic position in the
Russian energy market. “Right now, Gazprom is eating everything (in its)
way. It is a negative development, what we have now. Gazprom must be
reformed,” he said.

Kasyanov also called on the EU and Russia to reinvigorate talks on closer
relations in the energy sector. “We need to start a real technical and
political energy dialogue,” he said.

In early March, the commission launched a green paper on energy issues,
focused on threats to the security of supply and market competition, that
included the need for the EU to secure a long-term pact with Russia.

However, at the end of the month, the commission said that it believes
Russia will not ratify the Energy Charter Treaty — which sets the rules for
the international energy trade — despite the EU’s desire to persuade it to
do so.

Kasyanov said that it is unlikely a full energy deal on the issues could be
struck in the “near future”. “I don’t think that during this year or next
year something revolutionary in energy relations will happen”.

The commission says that 70 pct of EU energy needs could be covered by
imports by 2030. It also said energy demand in the bloc would grow by 20 pct
by 2030 from 2010 levels. It said that for the same period, demand for
natural gas could rise by 60 pct.
Simon Zekaria:    sz/cmr
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By Gregory L. White, The Wall Street Journal 

New York, NY, Friday, May 5, 2006; Page C1

MOSCOW — Tarred as a tool in the Kremlin’s drive for international
influence, OAO Gazprom has politicians in Europe and the U.S. seeing red.
But for many foreign investors, the Russian natural-gas giant brings to mind
an altogether different color: green.

Gazprom stock is up about 70% this year after the Kremlin in January lifted
restrictions that had prevented many foreigners from buying the 49% of the
company that isn’t government-owned.

Gazprom’s market value has overtaken Royal Dutch Shell PLC and BP PLC and,
at $289 billion, is second only to Exxon Mobil Corp.’s among international
energy companies. (It is the third-largest company in the world, behind
Exxon and General Electric Co.)

Money has poured in despite Gazprom’s increasingly rough behavior with some
of its biggest customers.

In January, the company cut off shipments to Ukraine in a price dispute,
briefly reducing exports to Europe, where governments began to question
Gazprom’s reliability as a supplier for the first time in more than 30

In recent weeks, Gazprom officials, backed by Russian President Vladimir
Putin, have publicly threatened to push into Asia, complaining that Europe,
which gets a quarter of its gas from Russia, is trying to block Gazprom’s
efforts to expand.

The tough talk isn’t scaring investors. Even after the surge so far this
year, many are betting that things are just getting going.
“I think we’re about to begin a new ride,” says Peter Halloran, who runs
Pharos Financial, a Moscow fund manager that is a big Gazprom holder. “Over
the next year or two, 50% upside isn’t unreasonable just based on
fundamentals alone.”

Gazprom bulls say it will take several more months before the company is
found in more global stock portfolios. Gazprom’s shares trade in Russia, as
well as over the counter (not listed on any exchange) in the U.S. in the
form of American depositary receipts, and in Europe. The ADR programs are
still being expanded to make it easier for big institutions to hold the

In trading Thursday in Moscow, Gazprom’s shares, traded in dollars, rallied
to $12.20, up 3%, ahead of the stock’s increased weighting in Morgan Stanley
Capital International’s emerging-markets index.

Mr. Halloran and other Gazprom bulls insist that all the negative press over
the past few months masks the company’s true appeal: It has more gas in the
ground than anyone else, just when the world is turning increasingly to the
clean-burning fuel.

Unlike other international majors, which are scrambling around the world to
find new reserves to replace the oil and gas they pump every year, Gazprom
has enough gas in the ground to last for decades. It also has a portfolio of
big new projects to bring more of that fuel to market, say backers.

With Gazprom, “you have this growth story you cannot support in Exxon and
BP,” says Sergei Glaser, director of Vostok Nafta, a Stockholm-based
investment group with about 90% of its $4 billion in assets in Gazprom.

The government influence on the company — Mr. Putin is regularly involved
in major decisions and the board is packed with government officials — is a
positive, fans say, since maximizing the share price seems to be a Kremlin

When Gazprom last week overtook BP for the No. 2 slot among international
energy companies, Mr. Putin himself touted the news to a visiting delegation
of German officials. Gazprom’s deputy chief executive, meanwhile, said the
company’s market value could hit $300 billion soon and predicted $1 trillion
“wouldn’t be unimaginable.”

Critics of the stock say that kind of gigantism is typical of a company that
started out as the Soviet Ministry of Gas and has struggled since to adapt
to the ways of the market.

They say the market discounts Gazprom’s vast reserves because two-thirds of
its production is sold on the domestic market and to other former Soviet
countries at prices that barely cover Gazprom’s bloated production costs.
Combined with rising needs for capital spending to make up for falling
output at aging fields and its huge pipeline network, that depresses

Valued on an earnings basis, Gazprom is actually trading at a premium to
majors like Exxon. Gazprom trades at about 14 times expected 2006 per-share
earnings, slightly richer than the 11 times for Exxon.

“If you’re a fundamentalist, then it’s screamingly expensive against all
global peers,” says Martin Taylor, a fund manager at Thames River in London
who says he’s “neutral” on the stock. “Gazprom isn’t being run for
shareholders; it’s being run for the government.”

Even Gazprom advocates admit that restructuring at the company — which saw
the management team Mr. Putin installed in 2001 repair major holes in the
company’s balance sheet and cost performance — could slow now.

“The major difference now is that the stock is pricing in some good news for
the first time in its history, and the management will have to deliver,”
says William Browder, president of Hermitage Capital Management, which has
assets of about $4 billion, with Gazprom its largest holding.

Some analysts question how committed the Kremlin is to further corporate
improvement. Mr. Browder, who became one of Russia’s best-known foreign
investors by crusading against mismanagement and waste at companies
including Gazprom, had his visa revoked in November and hasn’t been able to
get into Russia since, despite intervention by Western and Russian
officials. Critics also worry that this year’s rally could mean that the
Russian stock market is ripe for a pullback.

Gazprom also has little incentive to radically cut costs as long as domestic
prices are regulated far below world-market levels, since that would
undermine its efforts to lobby for higher rates, analysts say.

But bulls on the stock note that the conflict with Ukraine, while it
generated criticism for Gazprom, could actually help its financial
performance since it was part of a broader drive by the company, backed by
the Kremlin, to end the practice of selling gas at a discount to Russia’s
former Soviet neighbors. Mr. Browder calculates that bringing those prices
to world levels could add nearly $6 billion a year to Gazprom’s net income.
Write to Gregory L. White at

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
                      Black Sea Fleet commission meets in Moscow

Nezavisimaya Gazeta, Moscow, Russia, Thursday, May 4, 2006

Although the Ukrainian government assures Russia that the Black
Sea Fleet will be based at Sevastopol until 2017, as planned, its
temporary presence there is now being restricted to a framework
that would enable Ukraine to join NATO within the next couple of

Ukraine is imposing stricter terms for the Black Sea Fleet’s
presence in the Crimea. Although the Ukrainian government assures
Russia that the Black Sea Fleet will be based at Sevastopol until
2017, as planned, its temporary presence there is now being
restricted to a framework that would enable Ukraine to join NATO
within the next couple of years. Revealingly, NATO doesn’t
consider the Russian Navy’s presence on Ukrainian territory to be
an obstacle – as long as the Russian base is turned into something
like a reservation.

The Ukrainian-Russian commission on basing the Black Sea
Fleet in the Crimea will meet in Moscow today. According to
official information, participants will report on a survey, done
in March and April, of the Russian Navy’s property relations and
political relations with the Ukrainian authorities. Experts spent
two months studying the military-political and legal aspects of
the naval base, along with navigation, hydrography, and the
environmental situation. The report has been kept secret so far.

At the same time, Ukraine is known to have launched a
comprehensive unilateral inventory of property leased to the Black
Sea Fleet. Valentina Semenyuk, head of the Ukrainian State
Property Fund, told us that “political questions remain to be
decided.” She went on to explain: “Ukraine has a special
relationship with Russia, on issues that include the Black Sea
Fleet. Step by step, however, we are moving toward carrying out an

Back in January, this move by the Ukrainian government
led to a series of public disputes over who owns light-houses in
the Crimea. The Ukrainian State Property Fund maintains that
“restoring order” will lead to further Ukrainian-Russian disputes,
but Kiev considers this stage to be necessary and inevitable.

By early autumn, Ukraine intends to submit an application to
join the NATO membership action plan. This is the first step on
the way to full-fledged NATO membership. The Ukrainian government
believes that the application will be approved at the NATO summit
in Latvia in November.

President Viktor Yushchenko said recently: “I don’t rule out the
possibility that by the autumn summit, Ukraine may receive a political
invitation to join the NATO membership action plan.” Yushchenko
included a hint for Ukraine’s Russian partners: “When we speak of
our state’s European or Euro-Atlantic aspirations, that’s the policy that
is in Ukraine’s national interests.”

Latvia and Poland, the leading European lobbyists for
Ukraine’s interests in the West, maintain that full-fledged NATO
membership for Ukraine could be possible as soon as 2008. The
Polish Ambassador in Ukraine said back in March that in technical
terms, Ukraine is practically ready for NATO membership.
According to him, Kiev only needs to formalize the political and
organizational aspects, and to secure public support.

The United States is still the main driving force in the
process of integrating Ukraine into NATO. It was on Washington’s
initiative that 2008 was first mentioned as a possible NATO
accession date for Ukraine.

American interests and influence probably explain NATO’s
sudden change of attitude to the Russian Navy’s presence in the
Crimea. Earlier, NATO representatives had insisted that Ukraine
could only join NATO after the term of the Black Sea Fleet’s
presence in Ukraine expires. But in late April, a spokesman for
the NATO Secretary-General said at a press conference in Bulgaria:
“All 26 NATO member states support Euro-Atlantic integration for
Ukraine, politically as well as practically… And the issue of
the base at Sevastopol won’t halt that process.”

Comments made by US Secretary of State Condoleezza Rice at
the National Conference of Editorial Writers also fit into this
context. Rice noted that the United States has interests along
Russia’s borders, and asked Moscow to take this into account: the
Russians should “recognize that we have legitimate interests and
relationships with countries that are in their neighborhood even
if those countries were once part of the Soviet Union.”
(Translated by Elena Leonova)                        -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
20.                          “CHENEY’S DEMARCHE”
           US Vice President’s remarks on Russia ‘comparatively harsh’

COMMENTARY: By Askold Rodins
Diena, Riga, Latvia, in Latvian 8 May 06
BBC Monitoring Service, UK, in English, Tue, May 09, 2006

“A Joint View of Neighbouring Relations” – that was the completely neutral
title to a conference that took place in Vilnius last week. The leaders of
eight post-Communist countries were there, including those from the Baltic
countries, as were Richard Cheney, vice president of the United States, and
Javier Solana, foreign policy coordinator for the European Union.

The focus at the conference was on how neighbouring countries could develop
relations with Russia and Belarus. It is hard to say anything unprecedented
about the diplomatically semi-isolated country of Belarus, which is still
governed by Europe’s last dictator, Alexander Lukashenko. The same is not
true when it comes to Russia.

A bombshell effect in Vilnius was created by the speech of Cheney, in which
he provided a concentrated list of arguments which suggest that Russia has
moved away from the path of democracy.
                                    RUSSIA’S PROBLEMS
It is no secret that the “democratic system” in Russia is just the external
shell of Russia’s authoritarian regime. Russia regularly violates human
rights, even though no heads are being chopped off on Red Square. There is
essentially no press freedom in Russia, because all of the more or less
influential mass media resources are now under the control of the state.

The Internet is still free, but it has been suggested in Russia’s parliament
on more than one occasion that the “anarchy” of the Internet must be brought
to an end. Amendments to Russia’s law on non-governmental organizations
recently took effect – amendments which not only limit the operations of
NGOs, but also make it possible to shut down any organization which the
government dislikes.

Russia supports separatists in Georgia and Moldova, thus helping to threaten
the territorial integrity of those countries. Russia tries to inte4rfere
whenever it finds tendencies towards democracy in any of its neighbouring
countries – something that was seen most vividly during the election of
Ukraine’s president.

Russia has very warm relations with openly undemocratic regimes. Hamas in
Palestine does not try to hide the fact that it organizes acts of terrorism
in Israel, but Russia does not recognize it as a terrorist organization.
Finally, Russia has begun to use its energy resources as an instrument for
political blackmail.
                                             US THINKING
All of this criticism has been heard in public in the past, but in the
United States, discussions about these facts have so far involved either
influential members of the Senate or the House of Representatives, or second
or third-level civil servants. Cheney, for his part, is the second highest
ranking official in the US government, and that is something very different,

The closest colleagues of President George Bush have always avoided
criticisms of Russia, arguing that it is a trusted partner in the
international right against terrorism and the attempt to prevent the spread
of nuclear weapons. True, no one has ever denied that there are differences
of opinion on specific issues.

Cheney has now said that Russia should take a critical look at its domestic
and foreign policies in advance of the G8 summit of the world’s eight most
developed countries which is to take place in St Petersburg in mid-July.
                                     RUSSIAN RESPONSE
I was a bit surprised at the first reaction from Russia to the comparatively
harsh speech of the US vice president. There was no reaction from the
Russian president, the head of government or the speaker of Parliament. It
is quite possible that we will hear some kind of response when Vladimir
Putin makes his annual address to Parliament and the people on 10 May.

The first impression, however, is that people in Moscow either did not
really understand or simply are pretending not to understand the meaning of
Cheney’s speech. It is possible, as has been suggested in the press, that
they are clinging on to the illusion that Cheney expressed his subjective
view, which coincides with the ideas about Russia that are held by some
politicians in the United States.

These people add that in the end, it was Cheney who spoke, and not Bush
himself – Bush, after all, supposedly has very good personal contacts with
                                      UNIFIED US POLICY
In the United States, it does not tend to be the case that the president
supports one kind of foreign policy while the vice president supports
another. Without Bush’s agreement, Cheney would not have issued a public
challenge to Russia, calling on it to return to the path of democracy.

The influential Republican senator John McCain, who is one of the more
promising Republican candidates in the next US presidential election, has
called on Bush to ignore the G8 summit in St Petersburg, but bush feels that
this would be counter-productive. That, at least, is what he has been saying
so far.

To be sure, diplomacy is on the border of hypocrisy if a meeting of heads of
state from the world’s most democratic countries is organized in Russia,
which in truth does not satisfy even the most elementary criteria for a
democratic country.

Russia was included in the G8 in 1997, when it was not (as it is still not)
one of the world’s most developed or democratic countries. Membership
represented support to the then president of Russia, Boris Yeltsin, and it
was meant to encourage the development of a democratic society. The stimulus
was obviously insufficient. Too much has been given to Russia, with others
making peace with the fact that the returns are negligible or non-existent.

The concept of “regulated democracy” is taking deeper and deeper root in
Russia. The Kremlin’s propagandists claim falsely that it is democracy with
a national face. It is not democracy at al. Now Russia has been clearly told
that it must make a true choice – either democratize itself, or be
recognized at the international level as a country with little in the way of
democracy.                                        -30-

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           Please contact us if you no longer wish to receive the AUR    
Ostap Skrypnyk, Executive Director, Ukrainian Canadian Congress (UCC)
Winnipeg, MB, Canada, Wednesday, May 10, 2006

In recent months, the world has been increasingly shocked by the ongoing
genocide in the Darfur region of Sudan. There, mainly Arab militias known
as the Janjaweed are being used by the Sudanese Government to ethnically
cleanse the region of the local non-Arab population.

The scale of the tragedy evolving there is terrible. Recent reports estimate
that more than 300,000 people have already died. Over 2 million people had
been displaced from their homes and hundreds of thousands have fled to
the neighbouring country of Chad.

What is disturbing for Ukrainian Canadians is that food is being used as a
weapon by the government. The victims face death from starvation and
disease as the Government of Sudan and militias attempt to prevent
humanitarian aid from reaching them.

This eerily mirrors what took place in Ukraine during the Genocide-Famine
of 1932-33 when the rulers of the Soviet Union purposely took food from
the Ukrainian countryside and allowed millions to die of starvation as part
of their plan to destroy the Ukrainian people and eliminate the private
ownership of land.

The Ukrainian Canadian Congress calls upon the people and Government
of Canada to add their voices to those who are calling for international
action to stop the outrages in Darfur. Additionally, the UCC urges the

Canadian government to take the lead in protecting the victims and alleviating
their plight.

In 1932-33 the world was silent as millions of Ukrainians were starved to
death in a famine engineered by Stalin. We cannot and will not allow that to
happen again to any people. Atrocities such as Darfur are no longer a secret

to the rest of the world. Today, we must act collectively to stop the genocide
in Darfur. It is not too late.                               -30-
Ostap Skrypnyk, Executive Director, Ukrainian Canadian Congress
Suite 647, 167 Lombard Avenue Winnipeg, MB R3B 0V3
Toll free 866 942 4627; Cell 204 229 6577;;
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Irish Times, Dublin, Ireland, Thursday, May 11, 2006

The level of activity of the earth’s crust under Europe has prompted a call
for a co-operative topographical study, writes Dick Ahlstrom .

The earth really does move for many Europeans. The ground beneath our

feet rises and falls and drifts about to a much greater extent than we ever

For this reason a Dutch expert will argue for a more co-ordinated approach
to the study of Europe’s topography when he delivers a public lecture this
evening in Dublin.

The director of the Amsterdam-based Netherlands Research Centre for
Integrated Solid Earth Science, Prof Sierd Cloetingh, delivers a free public
lecture this evening at 8pm in the Robert Emmet Theatre, Trinity College,
Dublin, looking at how our landscape changes due to geological processes
deep within the earth.

“In the last few years we are increasingly realising there is a far stronger
connection between the deep earth and the surface,” says Cloetingh.

This isn’t only in the active zones where crustal plates crash and grind
into one another to trigger earthquakes and volcanoes, he says. These cause
horizontal movements, whereas changes deep underground also cause uplift

and sinking in the centre of crustal plates that can have profound effects for
people at the surface.

The Carpathian Mountains which run from Slovakia and Poland through

Ukraine and into Romania provide examples of this, Cloetingh maintains.

The crust beneath the Carpathians is reckoned to be the thinnest in
Continental Europe, he says, which allows ready deformation of the crust at
the surface.

He cites the rapid scouring of the River Danube’s channel in the Carpathians
as an example. “The River Danube is cutting through the Carpathians which
are rapidly uplifting,” he says.

This has left the river’s surface a full 500m below where the river formerly
flowed. It also dumps huge amounts of silt and debris into the Black Sea
which affects the river’s delta and the sea itself.

Another example is the “Focsani Depression”, a deep basin in the southern
bend of the Carpathians in Romania. It holds 16-million-year-old sediments
13km deep and the entire region is experiencing significant subsidence. This
region is now much more prone to flooding as a result, says Cloetingh.

The talk tonight is a “statutory public lecture” organised by the School of
Cosmic Physics within the Dublin Institute for Advanced Studies. Cloetingh
will discuss these topological changes and a project called “Topo-Europe”,
an effort to foster much closer collaboration between Europe’s geological

The Institute is involved in this work, explains the director of the school
of cosmic physics, Prof Alan G Jones. He studies the earth’s lithosphere,
which reaches from the surface down to depths varying from 100km to 300km.

This zone is known as the asthenosphere, Jones explains, where the extreme
heat, about 1,350 degrees, makes the rocks go plastic, “soft enough to allow
the crust to float on it”, he says.

He is involved in Topo-Europe and will send two graduate students off on a
project to carry out electromagnetic readings along a 900km line running
from Madrid to the Atlas Mountains in Morocco.

They will have highly sensitive devices able to measure magnetic fields in
rocks hundreds of kilometres underground. The fields will be just one 10
millionth of the earth’s own magnetic field, much less than the field
produced by a child’s horseshoe magnet.

“I am involved in projects where we try to understand geophysical
processes,” says Jones. “We are trying to understand how the earth works.”

More on Topo-Europe can be found at:

[return to index] [Action Ukraine Report (AUR) Monitoring Service]

UNIAN news agency, Kiev, in Ukrainian 1156 gmt 4 May 06
BBC Monitoring Service, UK, in English, Thu, May 04, 2006

VILNIUS – Ukrainian President Viktor Yushchenko has said that a decision on
Ukraine’s entry into NATO will be adopted in a nationwide referendum, but
not until the issue becomes topical. Yushchenko was speaking in Vilnius,
answering questions from Ukrainian journalists.

“Ukraine’s integration into any system, the EU or NATO alike, will go ahead
only if it is endorsed by citizens and only through the mechanism of a
nationwide referendum,” Yushchenko said. But he stressed: “Referendums
will be held, but only at those times when this question becomes topical;
the nation should not be asked a question that is not currently on the

As regards Ukraine’s Euro-Atlantic integration, the president said the
authorities would pursue the aforementioned policy openly, publicly and with
the unequivocal consent of the nation. Yushchenko said that movement along
the path of European and Euro-Atlantic integration should be conscious,
“people should believe in the process we are talking about”, and first the
elite should realize and embrace general systemic values.

Yushchenko said that at the moment there did not seem to be any big
discussion of what integration processes Ukraine should pursue. “When
we talk about European integration, an overwhelming majority of people’s
deputies vote for this kind of integration.

I am convinced that this course is backed by civic institutions and
journalists. I think this trend is also backed by the political and business
elite… [ellipsis as received] This position is supported by the citizen of
Ukraine,” the president said, adding that just three or four years ago a
debate was under way on which way Ukraine should go. [Passage omitted:
generalities about the value of free choice and NATO being a security

[Interfax-Ukraine reported at 1106 gmt on 4 May 06 that Yushchenko described
Ukraine’s NATO entry as his country’s “strategic priority”. He was quoted as
saying: “The European integration course is considered not only from the
perspective of ensuring state security, but also as a step towards having
Ukraine join the community of the most developed countries that profess
common democratic values.”]

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
24.                          UKRAINE HEADED FOR NATO

Deputy Director General, Center for Political Technologies
RIA Novosti, Moscow, Russia, Friday, May 5, 2006

MOSCOW – The speech made by U.S. Vice President Richard Cheney
at the Baltic and Black Sea Summit in Vilnius has shown that the United
States is ready for a continued complication of relations with Russia.

The U.S. goal is to keep expanding in the former Soviet space, which can
blow up the Commonwealth of Independent States (CIS).

The CIS policies have been traditionally influenced by Russia, but the
situation started changing several years ago. The Community of Democratic
Choice established last year includes three CIS states – Ukraine, Georgia
and Moldova. Their leaders attended the Vilnius summit alongside the new
NATO members – the Baltic countries, Poland, Romania and Bulgaria.

Ukrainian President Viktor Yushchenko and Georgian leader Mikhail
Saakashvili reaffirmed their pro-Western course. Yushchenko said his
country hoped to become an associated member of the European Union
and to join NATO, but that calm statement was as unpleasant to Russia as
the emotional attacks by Saakashvili.

Georgia, which has not settled the Abkhazian or South Ossetian problems,
cannot be admitted to NATO because of this. Ukraine’s position is somewhat
different. NATO spokesman James Appathurai said in late April: “All of
NATO’s 26 member-nations support Ukraine’s Euro-Atlantic integration, both
politically and practically, and the [Sevastopol] base issue will not stop

Ukraine’s access to the Alliance is hindered by the presence of the armed
forces of a non-member on its territory. However, the U.S. and many other
NATO states, primarily those that represent “New Europe,” may disregard
this principle because they want Ukraine to join the bloc as soon as

The West seems unsure that Kiev’s pro-Western choice has become
irreversible. Verbal encouragement of Ukrainian regime’s policies and
criticism of Moscow, such as made by Cheney in Vilnius, seem insufficient.

The West may use the political opportunities offered by Yushchenko’s
pro-Western government, especially because experts forecast that the next
Ukrainian government will be pro-Western too. In a word, Ukraine may be
admitted to NATO in 2008-2010.

This will come as a major shock for Russia, and not only because the
Kremlin regards the post-Soviet space as its sphere of influence – this is
why it reacted so strongly when U.S. Secretary of State Condoleezza Rice
said Russians should “recognize that we have legitimate interests and
relationships with countries that are in their neighborhood even if those
countries were once part of the Soviet Union.”

Moscow cannot prohibit the United States to operate in these countries, but
the two states pursue opposite goals in Ukraine, Belarus, Georgia and
Moldova. Therefore, the strengthening of the U.S. stand there is fraught
with increased rivalry between them.

Moreover, Slavic and predominantly Orthodox Ukraine had been incorporated
into Russia in the 17th century, and Russians cannot imagine it joining a
bloc that is regarded negatively in Russia. For decades NATO had been in
stark confrontation with the Soviet Union, and its break-up did not improve
Russians’ attitude to it because of the 1999 war in Yugoslavia.

They mistrust the Alliance’s claim that it has become a purely political
organization. The admission of the Baltic countries to NATO alarmed mostly
the Russian establishment, because the general public in the Soviet Union
had regarded them as “Western” republics. But Ukraine’s accession will most
certainly provoke sharp anti-Western sentiments in the Russian elite and
the public. The psychological injury will fan the siege mentality, which is
only a step away from another, though slightly different, cold war.

The U.S. is ready to take the risk because the Bush administration fears
the growing influence of Russia in Europe. The swelling capitalization of
state-owned energy giant Gazprom and Russia’s increasing economic
independence, including active repayment of foreign debts, the growth of
gold and international reserves, and the accumulation of the Stabilization
Fund, may strengthen the Kremlin’s foreign policy ambitions. This is why
the U.S. has opted for a highly risky strategy of “pre-emptive deterrence”
in regard to Russia, with the key part assigned to the Euro-Atlantic
integration of Ukraine.                            -30-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

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