AUR#704 June 3 U.S. Navy Stopover Sparks Anti-Nato Protests In Ukraine; Ukraine’s NATO Boat Taking On Water, Could Be Headed Toward Shipwreck; JFK To KYIV

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ACTION UKRAINE REPORT – AUR           
                 An International Newsletter, The Latest, Up-To-Date
                     In-Depth Ukrainian News, Analysis and Commentary

                      Ukrainian History, Culture, Arts, Business, Religion,
         Sports, Government, and Politics, in Ukraine and Around the World       

                        
ACTION UKRAINE REPORT – AUR – Number 704
Mr. E. Morgan Williams, Publisher and Editor  
WASHINGTON, D.C., SATURDAY, JUNE 3, 2006 
           –——-  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
1. U.S. NAVY STOPOVER SPARKS ANTI-NATO PROTESTS IN UKRAINE
END NOTE: By Jan Maksymiuk, RFE/RL Newsline
Vol 10, No. 100, Part II, Radio Free Europe/Radio Liberty (RFE/RL)
Prague, Czech Republic, Friday, June 2, 2006

2STATEMENT ON SITUATION IN CRIMEA BY THE U.S. EMBASSY
US Embassy Kyiv Press Office, Kyiv, Ukraine, Friday, June 2, 2006

3.        UKRAINE PRESIDENT BLAMES NATO EXERCISE ROW

                                ON POOR COORDINATION 
TV 5 Kanal, Kiev, in Ukrainian 1200 gmt 2 Jun 06
BBC Monitoring Service, United Kingdom, Friday, Jun 02, 2006

4.         PROPRESIDENTIAL PARTY CONDEMNS ANTI-NATO
                           RALLIES IN UKRAINE’S CRIMEA 
UNIAN news agency, Kiev, in Ukrainian 0753 gmt 2 Jun 06
BBC Monitoring Service, United Kingdom, Friday, Jun 02, 2006

5UKRAINE’S YUSHCHENKO WANTS PARLIAMENTARY POLITICAL

                    COALITION TO SPELL OUT NATO POSITION 
RIA Novosti, Moscow, Russia, Friday, May 2, 2006

6ANTI-NATO PROTESTS IN UKRAINE SIGN OF DEEP POLITICAL
      DIVIDE IN UKRAINIAN SOCIETY SAYS RUSSIAN ANALYST
Radio Mayak, Moscow, in Russian 1115 gmt 1 Jun 06
BBC Monitoring Service, United Kingdom, Friday, Jun 01, 2006

7.      ANTI-NATO PROTEST IN CRIMEA GAINING MOMENTUM
RTR Russia TV, Moscow, in Russian 1000 gmt 1 Jun 06
BBC Monitoring Service, United Kingdom, Thu, Jun 01, 2006

8. PROTESTS IN CRIMEA ‘PROVE’ ANTI-NATO MOODS IN UKRAINE 
ITAR-TASS, Moscow, Russia, Wed, May 31, 2006

9.         THE NATO WAY STATION ON THE ROAD TO EUROPE
Ukraine’s NATO boat taking on water, could be headed toward shipwreck
ANALYSIS & COMMENTARY: By Jim Davis
The Ukrainian Observer magazine, Issue 220
The Willard Group, Kyiv, Ukraine, June 2006

10WHY I BELIEVE UKRAINE’S FUTURE LIES WITH THE WEST & NATO
DIALOGUE AND DEBATE: By U.S. Rep. Robert Andrews
The Ukrainian Observer magazine, Issue 220,
The Willard Group, Kyiv, Ukraine, June 2006

11.               WHY I BELIEVE NATO MEMBERSHIP IS NOT IN

                                   UKRAINE’S BEST INTEREST
DIALOGUE & DEBATE: By Georgiy Kryuchkov
The Ukrainian Observer magazine, Issue 220
The Willard Group, Kyiv, Ukraine, June, 2006

12DELTA LAUNCHES NEW SERVICE FROM JFK TO KIEV, UKRAINE
                          Delta’s trans-Atlantic service keeps growing
Maria Saporta, Atlanta Constitution-Journal
Atlanta, Georgia, Thursday, June 1, 2006
 
13.         UKRAINE-U.S. BUSINESS COUNCIL BRIEFS NEW U.S
         AMBASSADOR AS HE PREPARES TO DEPART FOR KYIV
Ukraine-U.S. Business Council

Action Ukraine Report (AUR) #4 Article 13
Washington, D.C., Friday, June 2, 2006

14.     HUNGARY’S OTP BANK IN EURO650M UKRAINE PURCHASE
By Christopher Condon in Budapest
Financial Times, London, UK, Friday, June 2 2006

15OTP UKRAINE BUY A NEAR-TERM NEGATIVE SAYS JP MORGAN
Dow Jones Newswires, London, UK, Friday, June 2, 2006

16EBRD IMPROVES PROGNOSIS ON UKRAINE, NEW INVESTMENTS
        MAY BE EURO600 MILLION, INCREASES STAFF AND OFFICES
ForUm, Kyiv, Ukraine, Thu, June 1, 2006

17NORWAY’S AKER YARDS AND UKRAINE’S DAMEN SHIPYARDS
           PLAN JOINT VENTURE FOR SHIPYARDS IN MYKOLAYIV
Karin Jensen, AFX Europe, Oslo, Norway, Friday, Jun 02, 2006

18.        UKRAINE HOSTS 900 CAR COMPANIES AT AUTO SHOW
Asia Pulse, Tashkent, Uzbekistan, Thursday, June 01, 2006

19 JAPAN’S HONDA SETS UP FIRM IN UKRAINE TO BOOST SALES
Kiyori Ueno, AFX Europe, Tokyo, Japan, Thu, Jun 01, 2006

20. POLISH AGRICULTURE MINISTER LEPPER WARNS OF POSSIBLE
          RESTRICTIONS ON UKRAINE & RUSSIA FOR MEAT BANS
PAP news agency, Warsaw, in English 0909 gmt 31 May 06
BBC Monitoring Service, United Kingdom, Wed, May 31, 2006

ANALYSIS: By Roman Kupchinsky
Radio Free Europe/Radio Liberty (RFE/RL)
Prague, Czech Republic, Friday, June 2, 2006
 
22.  SPAIN & UKRAINE START AS GROUP H CHOICES IN WORLD CUP
By Simon Baskett, Reuters, Madrid, Spain, Friday, June 2, 2006
 
23UKRAINE JOINS UNICEF GLOBAL CAMPAIGN UNITE FOR CHILDREN
UNIAN, Kyiv, Ukraine, Friday, June 2, 2006
 
                      DIOXIN  – OFFICIAL TESTS RESULTS CITED
AFX NEWS Europe (Focus), Kiev, Ukraine, Friday,Jun 02, 2006

25  ART EXHIBITION: KASIMIR MALEVICH’S STYLE EVOLUTION
Began painting neo-primitive canvases evoking peasant art of his native Ukraine
TOP PICKS:
by Mariana Schroeder
Kasimir Malevich Art Exhibition in Barcelona, Spain Until June 26
The Wall Street Journal, NY, NY, June 2, 2006
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1
. U.S. NAVY STOPOVER SPARKS ANTI-NATO PROTESTS IN UKRAINE

 
END NOTE: By Jan Maksymiuk, RFE/RL Newsline
Vol 10, No. 100, Part II,Radio Free Europe/Radio Liberty (RFE/RL)
Prague, Czech Republic, Friday, June 2, 2006

Ukrainian opposition lawmakers have demanded the dismissal of
the foreign and defense ministers, blaming them for allowing a U.S.
naval ship to enter the port of Feodosiya in Crimea last week without
the required parliamentary authorization. Feodosiya residents have
blockaded the port, protesting what they see as an unwelcome NATO
intrusion into Ukrainian territory.

The U.S. cargo ship “Advantage” anchored in Feodosiya on May
27, bringing what Ukrainian Defense Minister Anatoliy Hrytsenko
described as U.S. “technical aid.” Seamen offloaded construction
materials to build barracks for Ukrainian sailors at a training range
near the town of Staryy Krym, not far from Feodosiya.
Two days later, Feodosiya residents, mobilized by local
chapters of the pro-Russia Party of Regions, the Natalya Vitrenko
Bloc, as well as the Russian Community of Crimea, began to picket the
port. Displaying anti-NATO slogans written in Russian, they are
continuing to block the U.S. cargo from getting to its destination.
The BBC reported that several hundred people were present at the
demonstration.

“Advantage” has also reportedly left a group of U.S.
servicemen in Feodosiya to guard the unloaded cargo, but their
presence has not been officially confirmed.

The situation has angered many Ukrainians. According to the
constitution, the deployment of foreign troops on Ukrainian territory
must be approved by the parliament for each individual case. The
Party of Regions, led by former Prime Minister Viktor Yanukovych, has
said in a statement that the disembarking of the U.S. naval ship in
Feodosiya was an example of “brutal contempt” for the constitution
manifested by the government. A group of opposition deputies has
drafted a resolution to dismiss the Ukrainian defense and foreign
ministers over the Feodosiya incident.

But Foreign Minister Borys Tarasyuk on May 31 denied that the
government breached the law. “The authors of this political
provocation claim that there has been a violation of the law about
foreign military units crossing into Ukrainian territory,” he said.
“But there are no such units.”

The government is planning to hold six separate military
exercises in Ukraine in 2006 with the participation of foreign
troops, including the multinational Sea Breeze 2006 exercise with a
sizable NATO contingent. However, an authorization of these exercises
by the Ukrainian parliament is still pending. In February, the
previous Verkhovna Rada rejected a presidential bill on allowing
foreign troops to take part in the maneuvers planned for 2006.
Tarasyuk assured journalists on May 31 that the government
will obtain permission from parliament. “The government will do
everything necessary to ensure that the parliament, when it resumes
its work, considers a bill allowing foreign troops into the country
for taking part in military exercises,” he said.

The newly elected Verkhovna Rada will resume its work on June
7, when the three allies in the 2004 Orange Revolution — the Yuliya
Tymoshenko Bloc, Our Ukraine, and the Socialist Party — are expected
to come up with a coalition accord to form a new government. A
potential parliamentary debate over the Feodosiya incident will most
likely complicate the formation of a ruling coalition. It could
create additional hurdles to approving the planned multinational
military exercise in 2006, and exacerbate political divisions within
the new legislature.

There are commentators in Ukraine who clearly see a “Russian
hand” behind what is taking place in Feodosiya. Historian Mykhaylo
Kyrsenko told RFE/RL’s Ukrainian Service earlier this week that
people in Feodosiya have been lured into anti-NATO protests by
pro-Russian political forces to further Russian interests in Ukraine.
“Those who reject or block this [U.S.] aid are opposing Ukraine’s
interests and serving another country. Which country? It is not
difficult to guess, once you see in what language they write their
posters with,” Kyrsenko said. “Therefore, I would make a distinction
between these hapless, deceived people and the organizers of this
provocation.”

Foreign Minister Tarasyuk suggested that the anti-NATO
demonstration in Feodosiya may be a cover for problems connected with
the deployment of a Russian naval force in another Crimean port,
Simferopol. “I have one piece of advice for the initiators of this
provocation — they should turn their attention to the disgrace of
the free use of land plots and buildings by units of the Russian
Black Sea Fleet in violation of Ukrainian law and bilateral
agreements,” Tarasyuk said.

In a broader perspective, the Feodosiya protest may impair
Ukraine’s chances for a significant advance this year on its path
toward NATO membership. Some officials in Kyiv, including Tarasyuk,
hope that, at the NATO summit in Riga in November, Ukraine will be
offered a Membership Action Plan. Such plans are usually the last
step before receiving an official invitation to join the alliance.
The outburst of anti-NATO sentiments in Feodosiya will hardly make
NATO members more supportive of this advancement idea.

Sociological surveys in recent years show that Ukraine’s
official aspirations to join NATO are firmly supported by some 15-20
percent of Ukrainians and firmly opposed by some 55-60 percent of
them. There seems to be an informal consensus at present between the
administration of President Viktor Yushchenko and the opposition that
Ukraine’s potential NATO entry should be approved in a nationwide
referendum. But opinions differ on when such a plebiscite should be
held.

The Russia-leaning opposition forces would like to stage it
as soon as possible, when Ukrainians are more likely to say “no” than
“yes.” Yushchenko says the referendum should be held in “due course”
but does not specify any date.

Moscow, which officially does not object to Ukraine’s NATO
aspirations, would hardly remain unmoved if Kyiv was actually
accepted by the alliance. Russian Ambassador to Ukraine Viktor
Chernomyrdin was quite explicit about this on May 30. “When a
neighboring country becomes a member of the North Atlantic military
bloc, then, I’m sorry — then this strategic partnership [with
Russia] should be viewed from a different angle and [it should be
reviewed] whether this strategic partnership relationship should
continue to exist at all,” Chernomyrdin said.

Making Ukrainians like NATO rather than fear it seems to be
only a part of the tricky job Yushchenko has to do in order to
fulfill his ambitions of Euro-Atlantic integration. A no less tricky
task will be to persuade his compatriots that NATO membership for
their country does not necessarily mean a disastrous break with
Russia.                                    -30-

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Back issues of “RFE/RL Newsline” and the “OMRI Daily Digest”
are online at: http://search.rferl.org/
Jan Maksymiuk, Belarus/Ukraine/Moldova, MaksymiukJ@rferl.org
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2. STATEMENT ON SITUATION IN CRIMEA BY THE U.S. EMBASSY

US Embassy Kyiv Press Office, Kyiv, Ukraine, Friday, June 2, 2006

KYIV – On June 1, a commercially chartered airplane arrived at the
Simferopol airport, bringing a group of U.S. Marine reservists who are part
of a construction and engineering unit invited to Ukraine by the Ukrainian
government to assist with upgrading the Ukrainian training facility at
Staryy Krym.

They joined their colleagues who arrived on May 27 aboard the Advantage, a
commercial cargo ship that, at the invitation of the Ukrainian government,
entered the Crimean port of Feodosiya in Crimea and unloaded materials and
equipment for the construction project.

There are currently approximately 200 reservists in Crimea. All have
civilian jobs in the U.S.   To maintain their proficiency, they leave these
jobs for three weeks each year to fulfill their military commitment.  Once
this annual obligation is met they return to their civilian jobs in the U.S.
The reservists who arrived this week are not involved in any military
training exercise.

The construction unit is scheduled to build sanitary facilities and other
basic amenities for use by the Ukrainian military. In addition to the
materials they brought with them they plan to buy additional materials on
the local market in Crimea, boosting the local economy.  Any enhancements
that are constructed as part of the visit would remain at the disposal of
government of Ukraine for use by Ukrainian military units.

The reservists who arrived this week are anxious to begin the assistance
work they were invited here to do.  The U.S. Embassy is continuing to work
with the Ukrainian government to clear the construction equipment from the
port and to defuse tension caused by protests in Crimea.         -30-
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http://kiev.usembassy.gov/infocentral_eng.html
Public Affairs Section, United States Embassy Kyiv
4 Hlybochytska St., Kyiv  04050  Ukraine
(380 44) 490-4026, 490-4090; Fax (380 44) 490-4050
http://kiev.usembassy.gov; info@usembassy.kiev.ua

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3. UKRAINE PRESIDENT BLAMES NATO EXERCISE ROW ON
                                     POOR COORDINATION 
TV 5 Kanal, Kiev, in Ukrainian 1200 gmt 2 Jun 06
BBC Monitoring Service, United Kingdom, Friday, Jun 02, 2006

KIEV – Ukrainian President Viktor Yushchenko believes that lack of
coordination on the part of the military has contributed to the ongoing
conflict around the international military exercise Sea Breeze 2006 hosted
by Ukraine, the president’s spokeswoman has said.

Pro-Russian and radical left parties have been protesting in Ukraine’s
Crimea after a US ship called at Feodosiya to bring supplies for the
exercise, saying the government had failed to secure parliament’s permission
for the ship to call at the Ukrainian port and for the exercise to be held
at all.

The protesters have also prevented US personnel who arrived for the exercise
from entering the Ukrainian Defence Ministry’s recreation facility where
they were to be housed. Earlier today, the pro-Yushchenko Our Ukraine party
described the anti-NATO protesters as “a political branch of a foreign state
in Ukraine”.

The following is an excerpt from report by Ukrainian television TV 5 Kanal
on 2 June:

[Presenter] Ukrainian President Viktor Yushchenko’s spokeswoman Iryna
Herashenko has announced the president’s stance on the ongoing conflict over
the international military exercise Sea Breeze 2006. The president blames
lack of coordination on the part of uniformed agencies, Herashchenko told a
press conference.

She also said that representatives of the Defence Ministry could have agreed
all the details of the exercise both with the local authorities and with
international partners. The president hopes understanding will be reached
with the new parliament.

[Herashchenko] The former parliament did not vote for the exercise in spring
2006 just because the parliament was in the middle of an election campaign,
in pursuit of populism and because it was not concerned by Ukraine’s
international reputation.

Later on the parliament just dropped this issue and the political position
of the new parliament has to be clearly announced as soon as possible,
because the international image of Ukraine and its national interests are at
stake here.

[Presenter] Meanwhile, US servicemen who arrived in Crimea to prepare for
the international exercise Sea Breeze were not allowed to enter the Ministry
of Defence’s sanatorium in the town of Partenit, where they were supposed to
be housed. The road to the town was blocked by representatives of the
Communist Party, the People’s Opposition Bloc [of Nataliya Vitrenko] and
local Cossacks [pro-Russian paramilitary formations].

Accommodation for foreign experts was eventually found in another place, in
a sanatorium in the town of Alushta. Protesters are still picketing the
Starokrymskyy training ground [the venue of the exercise].

The Communist Party representatives say that on 1 June, a military plane
carrying 110 American mariners landed in Sympheropol airport. The Communist
Party believes that this is part of preparations for permanent presence of
NATO forces in Ukraine. The Communists have criticized the US military
attache and urged the Ukrainian president and the Ministry of Foreign
Affairs to deport him.

Today the Security and Defence Council of Ukraine will review the situation
in Crimea around the international Sea Breeze exercise. [Passage omitted:
protests against the international exercise Sea Breeze 2006 started on 27
May.]
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4.   PROPRESIDENTIAL PARTY CONDEMNS ANTI-NATO
                      RALLIES IN UKRAINE’S CRIMEA 

UNIAN news agency, Kiev, in Ukrainian 0753 gmt 2 Jun 06
BBC Monitoring Service, United Kingdom, Friday, Jun 02, 2006

KIEV – The fomenting of a scandal by certain political forces over the
arrival of a foreign warship in the port of Feodosiya for the participation
in an international military exercise in Ukraine is nothing but a
well-planned political act, seeking to destabilize the political situation
in Crimea and to discredit the Ukrainian government, the [propresidential]
Our Ukraine People’s Union party said in a statement forwarded to UNIAN
today.

[The US navy’s warship Advantage arrived in Feodosiya on 28 May for a

short period of time. It reportedly delivered a cargo to be used by the
American troops during the Sea Breeze-2006 international military exercise.
The anti-NATO rallies led by the Communist Party and the pro-Russian
Progressive Socialist Party continue in Feodosiya to date.]

Our Ukraine said in the statement that “in fact, these political forces are
ignoring the national interests of Ukraine. They represent a ‘political
branch’ of another foreign state in our country”.

Military exercises of such a high level are held annually. They seek to
improve the Ukrainian armed forces’ combat readiness, their cooperation with
the world’s leading countries and the professional integration of Ukraine’s
defence potential in the world’s security system. The Russian armed forces
can also take part in such military exercises, Our Ukraine said in the
statement.

[Passage omitted: At the height of the parliamentary election campaign this
spring, Ukrainian parliament failed to pass a decision on granting
permission to foreign troops to arrive in Ukraine for an international
military exercise.]

“Our Ukraine is stressing that the issue of holding international military
exercises should be resolved by legal means only. Therefore, any political
speculations on this issue can destabilize the political situation in
Crimea”, the statement reads. [Passage omitted: background]
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5.   UKRAINE’S YUSHCHENKO WANTS PARLIAMENTARY
     POLITICAL COALITION TO SPELL OUT NATO POSITION 
RIA Novosti, Moscow, Russia, Friday, May 2, 2006

KIEV – Ukraine’s president said Friday that a parliamentary coalition
agreement should contain a more precise position on the country’s relations
with NATO.

The former communist country has consistently said it wants to join the
alliance, but the current version of the coalition agreement mentions a
proactive policy on Ukraine’s rapprochement with it but not on integration.
Viktor Yushchenko said this position was “too vague.”

He also said he was concerned about the position on the land privatization
and urged the coalition to outline the exact structure of the government and
principles of governmental committees’ activities.

The president said he hoped talks on an agreement to form a parliamentary
coalition would be completed by next Wednesday, June 7, as Roman Bessmertny,
the leader of pro-presidential grouping Our Ukraine, had said earlier.

Our Ukraine has been involved in complicated talks with the bloc of a former
prime minister, Yulia Tymoshenko, and the Socialist Party to establish the
majority needed for the parliament to function in the wake of March 26
elections that failed to produce a clear winner.

The mooted coalition, which could bring an end to the parliamentary limbo
that has paralyzed Ukrainian politics since the March elections, now
comprises Tymoshenko’s bloc and the Socialist Party. Our Ukraine has yet to
sign the agreement.

Negotiations on forming a coalition, as mandated in the country’s
constitution, have been complicated over disagreements on who should be
appointed prime minister, and over Tymoshenko’s refusal to deal with the
pro-Russia Party of Regions, which came first in the parliamentary elections
and holds 186 seats but has been frozen out of the coalition.  -30-

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LINK: http://en.rian.ru/world/20060602/48974725.html
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6. ANTI-NATO PROTESTS IN UKRAINE SIGN OF DEEP POLITICAL
      DIVIDE IN UKRAINIAN SOCIETY SAYS RUSSIAN ANALYST

Radio Mayak, Moscow, in Russian 1115 gmt 1 Jun 06
BBC Monitoring Service, United Kingdom, Friday, Jun 01, 2006

The growing protest in Ukraine’s Crimea against NATO’s presence on the
peninsula in preparation for a joint NATO-Ukrainian naval exercise is a sign
of a deep divide in Ukrainian society, Russian political analyst Boris
Shmelev has said. Talking to Russian radio Mayak’s “Panorama” discussion
programme on 1 June, Shmelev, who is the head of the Centre for Comparative
Political Studies, said:

“I think that politicians and political analysts here in Moscow have not yet
fully recognized how serious the situation is. I think that what is
happening in Crimea at the moment is the beginning of a deep crisis in
Ukraine’s domestic politics that people have been speaking about for a long
time now. Ukraine is split. That is absolutely clear and that was
demonstrated by the last election.

This situation could not have lasted indefinitely. One way or another, that
rift, that conflict had to come out. I think what we are seeing now is the
beginning of this process, of an open expression of this conflict in
Ukrainian society, in the Ukrainian state, which should make the Ukrainian
elite react to it.”

The core of the matter is in the political situation which has developed in
Ukraine and in the domestic and foreign policy being pursued by the
country’s leadership, Shmelev said. “I think they protest not so much
against NATO and this NATO exercise as against this policy.

They – Ukrainian citizens living in Crimea – are indignant that their
interests are ignored, that their lawful rights are violated, that their
right to use the Russian language is not recognized. They are even more
incensed by the foreign policy that is aimed at confrontation with Russia,
at severing relations with Russia. Thus they are trying to have their
interests taken into account,” he went on to say.

One must bear in mind that the process of forming a government in Ukraine is
still under way and that one of the options on the agenda is a union between
President Viktor Yushchenko and the leader of the opposition, Viktor
Yanukovych, Shmelev continued.

“What we are seeing happen in Ukraine at the moment is the aspiration of
political leaders and political elite from the Yushchenko camp to push
events in that direction and to create this bloc, the Yushchenko-Yanukovych
bloc,” he said, calling this outcome a compromise between different parts of
Ukraine and different business groups.

Asked about Russia’s attitude to the current crisis in Ukraine, Shmelev
said: “It is a tricky matter since we are dealing with a sovereign state
which is undergoing complex political processes. Russia must respect the
principle of non-interference in the internal affairs of that sovereign
state.”

At the same time he went on to add that the focus of Ukraine’s foreign
policy needs to be changed more towards Russia. The protesters are appealing
to Russia for help. Therefore, “Russia’s image should be realized in the
eyes of east Ukrainians accordingly”, Shmelev said.

“Russia is by no means interested in stirring up tension either in Crimea or
Ukraine in general. Russia is interested in a stable and prosperous Ukraine.
But neither the leadership in Kiev nor Russia can ignore the opinion of the
people of Ukraine,” he said.

In reply to listeners’ calls insisting that Crimea is Russian land and
should be restored to Russia, Shmelev said that although Ukraine in its
current borders is “a historical nonsense”, this matter is closed once and
for all and any further discussion of it will end in nothing but a political
catastrophe for Russia.                         -30-
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7. ANTI-NATO PROTEST IN UKRAINE’S CRIMEA GAINING MOMENTUM

RTR Russia TV, Moscow, in Russian 1000 gmt 1 Jun 06
BBC Monitoring Service, United Kingdom, Thu, Jun 01, 2006

MOSCOW – [Presenter] And now to Feodosiya [Ukraine] where protesters

started a big rally about an hour ago against Ukraine joining NATO. Delegations
from the country’s major towns have joined local picketers. The protest is
gathering more momentum every day, with demands being made for Ukraine’s
leadership to stand down. Our special correspondent Mariya (Kireytseva) is
in Crimea.

Mariya, how big is the meeting and what are the slogans?

[Correspondent] Hundreds of people here in the port of Feodosiya have
blocked all exits from the port to prevent containers of arms and ammunition
and US military hardware from being taken out.

President Viktor Yushchenko signed the decree on Ukraine and the USA

holding exercises. But whether they will take place now depends on Ukraine’s
parliament, which will sit on 7 June. But preparations for the exercises are
in full swing. [Passage omitted]

The first secretary of the Communist Party of Crimea, Leonid Grach, has

now arrived at the port of Feodosiya. This is what he told our television:

[Grach] This protest of ours today is not only aimed at protecting our
territory, our national unity and Ukraine’s national security, it is a
message, including to the people of Russia, that we Slavs need to unite.
Today we need to give a rebuff to American [quote cut off mid-sentence].
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8. PROTESTS IN CRIMEA ‘PROVE’ ANTI-NATO MOODS IN UKRAINE 

ITAR-TASS, Moscow, Russia, Wed, May 31, 2006

MOSCOW – The overwhelming anti-NATO sentiment, shared by
most of the population of Ukraine, is borne out by the surging
protests in Crimea against the call of a NATO warship to Feodosia.

The protests in the port of that city are again turning Crimea into an
apple of discord between Ukraine and Russia and are fraught with a
scandal at the Ukrainian parliament’s June 7 meeting, which is to
determine the fate of the ruling coalition. They were triggered by the
unsanctioned call of the NATO warship “Advantage” to the port of
Feodosia, where it brought a load of engineering and building
equipment, as well as armaments.

As of Saturday, the local population and members of the Communist
Party, the Party of Regions, the Progressive Socialist Party, and the
“Russian Community of Crimea” organization are blocking the seaport
and preventing the delivered cargos from being unloaded.

The “Nezavisimaya Gazeta” reports that in view of this incident the
Communist faction in the Ukrainian parliament is determined to call on
the MPs on June 7 to dismiss Acting Defence Minister Anatoly
Gritsenko and Acting Foreign Minister Boris Tarasyuk.

The Communists are blaming them for their betrayal of national interests
and breach of the Constitution. Communist Party leader Pyotr Simonenko
has stated that the Communist faction would call on the Prosecutor
General’s Office to institute criminal proceedings against those, who
had provoked the Feodosia events. The Communist Party also deems it
necessary to impeach President Viktor Yushchenko.

According to an agreement, which was signed last year, the NATO forces

were planning to modernise the training base of the Starokrymsky testing
ground of the Ukrainian Navy, which, in accordance with the Partnership for
Peace Program, is to be used to train peacekeeping military contingents.
 
Plans were afoot to make use of this testing ground during the July-August
“Sea Breeze-2006” exercise, which were endorsed in the Military Cooperation
Plan between the Ukrainian Defence Ministry and the U.S. European
Command.

However, according to the Ukrainian Constitution, only the parliament is

entitled to permit the presence of any foreign military forces and hardware
on national territory. The previous Ukrainian parliament had blackballed
last February a bill “To Permit the Armed Forces of Other Countries to
Take Part in Multinational Military Exercises on the Ukrainian Territory in
2006″. Therefore, all the international military exercises on Ukrainian
territory, which were planned for this year, as well as the call of a NATO
ship to Feodosia, are for the time being illegitimate.

Pyotr Simonenko also told reporters that he would move to include an item

in the agenda of the upcoming parliament meeting to immediate amend
the State Budget Law for 2006. The Communists are planning to rule out
from this chief financial document the article on the financing of Ukraine’s
cooperation with NATO and to use this money to update the Ukrainian
army.

In the meantime, the blockade of the Feodosia port is already in its fifth

day. The population of Crimea are protesting against the joint Ukraine-
NATO exercise and pledging never to give up and to withstand a dragged
out siege. The NTV television reports only several teams of the so-called
“People’s Home Guard” on now posted in the port of Feodosia. They are
blocking all the entrances and exits, are preventing American hardware
and containers with armaments from being moved from the pier.

Several hundred people from other regions of Crimea will reinforce the

Feodosia protesters on Wednesday.

Following the example of Feodosia, whose municipal council had declared

the city “A NATO-Free Territory”, the local legislators of the Leninsky
District of Crimea have adopted a similar decision. The Kirovsky District
of the Autonomous Republic is also planning to become an “anti-NATO
territory” on Wednesday. It is worth noting in this connection that the
testing ground, where the Ukrainian-NATO exercise was to be held, is
located precisely in that district.

All the public opinion polls of recent years have shown that most

Ukrainians are against Ukraine’s accession to NATO, against the policy,
which the current “Orange” authorities are now pursuing.

For instance, only 19.2 percent of the respondents of the January 2006
public opinion poll, held by the Democratic Initiative Foundation, had
positively answered to the question of whether Ukraine should accede
to NATO or not, while 55 percent gave negative answers, and 25.8
percent found it difficult to answer the question.

In the meantime, the situation in the area of Feodosia has already

transcended the limits of a domestic Ukrainian problem. Moscow has
reacted to the protests of the Crimean population. There were calls
in the Russian State Duma to reconsider the status of Crimea and to
make it again part and parcel of the Russian Federation.

The Russian MPs instructed the Duma Committees or International

Relations and for CIS Affairs to obtain information from the
Russian cabinet on the measures to incorporate the Crimea Peninsula
again into the Russian Federation.

Former Soviet Leader Nikita Khrushchov gave Ukraine a “regal gift”

in 1954 by transferring Crimea to Ukraine on the occasion of the
tercentenary of Ukraine’s reunification with Russia. Of course, the
transfer of Crimea Region from the Russian Federation to the
Ukrainian Soviet Socialist Republic within the bounds of “an
indivisible and inviolable Soviet Union” was a sheer formality.
Nobody could even imagine at that time that the USSR would
collapse in 1991 and Crimea would become a part of the independent
Ukraine.

The Russian MPs are referring to the fact that the bilateral treaty,

according to which Russia had recognises the Ukrainian State within
its present borders, will expire in 2007. In view of this, they deem it
necessary to declare before November 30, 2006, Russia’s refusal to
prolong the treaty and to get Crimea back to the Russian Federation
in keeping with the 1774 Kuchuk-Kainarji Treaty.

“Such a turn of events leaves no hopes for an early end to the

permanently escalating dispute over the Russian military presence
in Ukraine,” the newspaper “Kommersant” stresses.

Ukrainian politicians regard the State Duma’s idea to get Crimea back

to Russia as a Kremlin provocation and order, the NEWSru.com site
reports. Ukrainian politicians and experts have already condemned
the initiative of the Russian parliamentarians. Head of the Press Service
of the Ukrainian Foreign Ministry Vasily Filipchuk stated: “We deem
it unworthy to comment on such provocations.”

At the time when the Ukrainian Foreign Ministry had avoided commenting

on the said initiative, some Ukrainian parties have expressed their view
on the Duma venture. For instance, “Our Ukraine” has stigmatized “the
historical-populist manipulations” of the Russian State Duma. “It is
unseemly for the supreme legislative body of Russia to make political
decisions based on the 250-old events of past history,” says the bloc’s
official release.

“The Russian authorities are by no means calling in question Ukraine’s

sovereignty over Crimea,” member of the Presidential Council for the
Development of Civic Relations and Human Rights Sergei Markov
comments in the newspaper “Komsomolskaya Pravda”. “The sides
have signed a so-called ‘Big Treaty’ and Russia recognises Ukraine’s
territorial integrity even though that country includes several purely
Russian or Russian-speaking regions.

However, none else but the Ukrainian authorities are apt to torpedo this
Accord. Ukrainian officials may bring about a situation when this treaty

will collapse and Ukraine will most probably fall apart. Therefore, the
Russian authorities should make appropriate preparations and examine
all the possible versions,” Markov points out.

The majority of Russian and Ukrainian experts rank Ukraine’ s cooperation

with NATO among the chief negative factors of the relations between
the two countries. This was indicated by a poll of experts, held last April
and May simultaneously on the territories of Ukraine and Russia by the
Alexander Razumkov’s Centre of Economic and Political Studies of
Ukraine and the Russian Socio-Political Centre Foundation.

As many as 85.3 percent of those polled believe the promotion of

cooperation with NATO is negatively affecting the relations between
Ukraine and Russia, and 77.3 percent of the Russian experts share this view.

Ukrainian First Deputy Foreign Minister Anton Buteiko believes Ukraine

could accede to NATO already in 2008.

“The decision to join NATO will be made with due account of the view

of the Ukrainian people. I always avoid making, but I think 2008 is a quite
realistic year for Ukraine’s accession to that organization,” Buteiko said.

He confirmed Ukraine’s immutable course to join NATO and the

European Union, and described the negative attitude to NATO of a
considerable portion of the Ukrainian population as a hangover
of Soviet propaganda and insufficient present-day explanatory work.

“Of course, the Feodosia protests are a political move of the Ukrainian

opposition. However, its actions are based on the really existing view of
the Crimea population on NATO,” Deputy Director of the Institute of
CIS Nations Vladimir Zharikhin told Itar- Tass.

The institute’s November and May sociology studies have shown that

more than 80 percent of the population of Crimea and Sevastopol are
against Ukraine’s membership in NATO, he added.

As to the initiative of the Duma members (the political analyst specially

stressed that it in no way means the Lower House’s decision to demand
Crimea’s return to Russia), “it is symmetrical to the demarche of the
Ukrainian acting foreign minister, who had raised the question of
canceling the terms on which the Russian Black Sea Fleet is based in
Sevastopol, as well as some financial matters,” Zharikhin believes.

On the whole, the pragmatic and ideological wings of the pro-presidential

“Our Ukraine” bloc are now at loggerheads, Zharikhin stressed. The
latter, is advocating Ukraine’s accelerated accession to NATO. “The
people, who had polled only 14 percent of the votes at the recent
elections, now want to force their geopolitical line on Ukraine,” he noted.

However, this will not be easy, because such a potential member of the

“Orange” coalition as the Socialist Party of Ukraine is opposing this line.
The differences on the NATO issue among the future members of the
coalition are increasingly complicating its formation and have left the
matter unresolved for two months running.              -30–
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9.     THE NATO WAY STATION ON THE ROAD TO EUROPE
  Ukraine’s NATO boat taking on water, could be headed toward shipwreck

ANALYSIS & COMMENTARY: By Jim Davis
The Ukrainian Observer magazine, Issue 220
The Willard Group, Kyiv, Ukraine, June 2006

At a press conference recently in Riga, Latvia, President Viktor Yushchenko
said that he would have the NATO membership plan for Ukraine ready before
the alliance members convene in the Latvian capital in November.

This seems to suggest two things. First, that the internal government
workings in regard to NATO membership are on track and secondly that the
president himself is deeply involved in this process. Investigation suggests
that probably neither is the case.

An broad consensus among leaders in Kyiv, Brussels and Washington suggests
that not only is Ukraine’s NATO boat taking on water, it could be headed
toward a shipwreck within the next year or so unless there is inspired,
consistent and resolute political leadership directly from the top in
Ukraine.

The principal problems at this point are several.

[1] First, most of the middle-aged and older Ukrainian population was
indoctrinated for most of their lives with Soviet-era anti-NATO propaganda.
NATO was presented on a daily basis as the devil incarnate and, although the
Cold War may have theoretically ended with the collapse of the Soviet Union,
the intervening years have done little to change the mindset that was
carefully crafted during the Soviet years.

[2] It is a bit harder to gauge the depths of the second problem, but it
cannot be ignored. Ukrainians are proudly and distinctly Ukrainian, not
Russian, but their identification of themselves as Slavic brothers with the
Russians is so deeply ingrained that it remains a part of the problem. When
the Kursk submarine went down, it was a Russian problem but one deeply
felt among the Ukrainian population.

And when the Russian army, during the height of the Kosovo crisis, made a
mad dash for the main airport in Kosovo, most Ukrainians were cheering on
their Russian Slavic brothers. And a large number, perhaps even a majority
of Ukrainians, still worship at altars under the control of the patriarch of
Moscow.

[3] And finally, Ukrainians are prone to fall prey to inertia, brought on by
a belief that both the psychic and economic costs of breaking out of the
sphere of “mother Russia” are just too great to bear. This is complicated by
the fact that Ukraine’s military-industrial complex has very deep ties to
Russia, and Ukraine’s energy sector is even more dependent on Russia.

There is a considerable body of opinion that during last winter’s gas
crisis, Russia hazarded its reputation as a reliable supplier of natural gas
to Europe for no other reason than to forcefully remind Ukrainians of this
interdependence.

When addressing the Ukrainian population, the case against NATO is a very
easy one to make. Europe is far away and different from us; we have our
long-time Slavic neighbors next door. The financial and economic costs of
joining NATO are great and, in spite of help promised by the Europeans and
Americans, Ukrainian taxpayers are likely to bear a substantial part of the
burden. And even if we do join NATO, will that really have an impact on
Ukraine’s ability to gain membership in the European Union?

If one assumes that NATO membership is a laudable and reachable goal,
what is needed to overcome the obvious problems and reach the goal?

During the recent parliamentary elections, one of the best-financed
groupings with some of the best-known political names in modern Ukrainian
history, the Ne Tak Bloc, spent huge amounts of money on a campaign that
counted opposition to NATO membership among its principal issues.

It is impossible to know just how much NATO opposition was a part of the
voters’ decision-making process, but the Ne Tak group was one of the lowest
polling of the major contenders, drawing only 1.01 percent of the national
popular vote.

In spite of this brief ray of sunshine, one giant hurdle lies ahead and
overcoming that hurdle would require no less than one year and perhaps
even more of extremely difficult work.

Much of the opposition of NATO comes from the ingrained opposition to
the alliance as a residual of the Soviet Union. However, the more subtle and
clever of anti-NATO politicians are now pushing a plan that is devilish in
its simplicity and has the best chance of defeating the decade long pro-NATO
effort.

Regions leadership talks grandly about supporting the European integration
model – which could be true – but hopes to use the current worldwide
rhetoric about expanding democracy as a means of accomplishing their
anti-NATO ends.

No matter who manages to claim parentage of this child, it seems inevitable
that the final chapter of the NATO membership saga will be written in a
nationwide referendum, sometime in the next two to three years. Both those
in the open opposition and those who are more circumspect in their
opposition seem to believe that a referendum would be the death knell for
NATO membership. They could be right.

Poll results developed by some of Ukraine’s most professional pollsters
suggests that if a national poll were held today, it is entirely possible
that no more than 20 percent of the electorate would vote in favor.

For the pro-NATO forces, the problem thus becomes how to effect a major
change in the public sentiment on this issue. And that is further
complicated by the fact of Ukraine’s relative immaturity as an independent
nation.

Even before a government is formed based on the results of the March 2006
parliamentary poll, the focus has already changed in a major way to
jockeying for position in the next presidential election. As much as that
may complicate the NATO membership issue, it is a fact of political life in
Ukraine and must be accounted for in pro-NATO planning efforts.

With all of the difficulties, is the battle for NATO membership winnable?
Just as the voices of opposition are strong, there is an equally strong
echoing voice from NATO advocates in Ukraine and the world that very firmly
believe and can make a reasonable case that the goal is not only doable, but
can and must be accomplished.

In late April of this year, the Ukraine-NATO Civic League (UNCL), an
umbrella organization for more than 40 Ukrainian NGOs met at the Ukrainian
House in Kyiv for a day-long conference titled, “Society’s Role in the
Realization of a Strategic Course for Euro-Atlantic Integration.” The event
was sponsored by the NATO Information and Documentation Center in Kyiv
with about 150 participants.

Small events like this have been going on for years and they have had a
generally positive effect. There is a small but dedicated cadre of “true
believers,” who are convinced that Ukraine’s future as a truly independent
nation is tied to NATO accession and subsequent EU membership.

Unfortunately for the real proponents their numbers today constitute a very
small minority, perhaps no more than 10 percent of the electorate.

So, how does one get from point A to point B on the road to NATO
membership? One of those who addressed the April UNCL event, Dr.
Walter Parchomenko, a highly regarded scholar – and the American-born
son of Chernihiv-native parents – offered some suggestions.

Parchomenko perceives, probably quite correctly, that it is the more
open-minded young Ukrainians who have a much higher probability of
responding positively to a pro-NATO campaign. Among Parchomenko’s
post-conference observations and suggestions:

[1] The UNCL must expand and intensify its current program of student NATO
assemblies, Euro-clubs, summer camps, seminars, training sessions, and other
activities. [It is significant – and revealing – that nearly 100 of those
who attended the April event were students, representing all regions of
Ukraine.]

[2] Ilko Kucheriv, director of the Democratic Initiatives Foundation, a
highly respected survey research agency, said in his presentation that today
” …society doesn’t know about NATO and doesn’t support it.  Information
about NATO appears rarely, mostly on television news and only for a few
seconds.”

[3] In regard to the three basic arguments made against NATO today in
Ukraine –  it is an aggressive bloc (the Cold War argument); it is expensive
and unaffordable for the country; and membership will ruin relations with
Russia –  no effort whatsoever has been made by the Ukrainian government to
counter the pre-election anti-NATO campaign.  As a result, Ukrainian support
for NATO has dropped even further.

[4] The State Committee for Television and Radio Broadcasting (SCRTVB) is
responsible for coordinating and disseminating information about NATO and
Euro-Atlantic integration issues to the Ukrainian public.  However, to date
virtually nothing has been done to systematically inform Ukrainians about
NATO and the advantages of membership.

Oleksandr Semikov, an active member of the UNCL and a regional NGOer,
offered the following insight.  He said this official failure is not
primarily about money.  The State Committee for Television and Radio
Broadcasting has been given an enormous budget for special NATO- Euro
Integration projects.

Rather, the problem lies with “information politics” of the government.  In
his words, “it’s not that we can’t give the needed, important information,
we don’t want to.  Today, there is insufficient political will.”

[5] Virtually no attention has been given to use of the Internet to capture
the attention of Ukrainian youth regarding Euro-Atlantic integration issues.

Ultimately, there are certain hard political realities that emerge from a
study of the NATO accession issue. First, the administration and the
government give lip service to NATO support, but have as yet shown no
interest in undertaking the systematic effort necessary to implement a
pro-NATO information campaign throughout the country.

Further, one of the most effective tools for such a campaign, television,
has not been employed in any meaningful way. Ironically, the structure to do
this already exists in SCRTVB and the money has long since been available.
But the political will is lacking for such a television campaign and
therefore, the state’s own television system sits on its hands and does
little or nothing.

Battles, parades and public relations campaigns are led from the front. And
in this case it is clear that the only leader has the power and prestige to
lead such a campaign is President Viktor Yushchenko.

It must be said that for Yushchenko this is a very high risk game. Some
political scientists are convinced that Yushchenko is faced with an
extremely difficult choice, and to a great extent his choices relate to
foreign influences and the domestic political calendar.

U.S. Secretary of State Condoleezza Rice within the last few weeks sent a
strong public political message (and almost certainly an even stronger
back-channel diplomatic message) that the NATO membership door is now
open and Ukraine must hurry to make its entry. This not-too-subtle political
pressure is heightened by the planned visit to Ukraine in June of President
George W. Bush, almost certainly at least partly related to the NATO issue.

The choice for Yushchenko is whether he wants to take up the challenge of
gaining NATO membership or whether he wants to win re-election as president.
It is not impossible to do both, but it is considered highly unlikely.

The campaign that Yushchenko will choose to focus on remains to be seen
but for success in either, the choice must come soon.     -30-
——————————————————————————————-

FOOTNOTE:  Jim Davis is a distinguished journalist, writer, editor,
political analyst and commentator, who has lived in Ukraine for 14 years. 
He was born in the deep South, worked as an agricultural radio broadcaster,
and handled press relations for the U.S. House of Representatives
Agricultural Committee before heading off to Ukraine.  AUR EDITOR
——————————————————————————————–
LINK: http://www.ukraine-observer.com/articles/220/860
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10. WHY I BELIEVE UKRAINE’S FUTURE LIES WITH THE WEST AND NATO

DIALOGUE AND DEBATE: By U.S. Rep. Robert Andrews
The Ukrainian Observer magazine, Issue 220,
The Willard Group, Kyiv, Ukraine, June 2006

The congressional district that I represent in the U.S. House of
Representatives is composed of approximately 650,000 persons with a very
wide range of ethnic and national backgrounds, including a substantial
number of Ukrainian-Americans.

It was through the Ukrainian-Americans in my district that I first became
interested in the history of Eastern Europe and Ukraine in particular.

And it is because of what I have learned and the strong feelings of my
Ukrainian-American constituents that I have become not only a strong
supporter of a free and independent Ukraine, but also of Ukraine’s ambitions
for membership in the North Atlantic Treaty Organization (NATO) and
ultimately the European Union.

I have watched with interest and pride the development of Ukraine as an
independent nation, and made every effort possible to support and defend
Ukraine’s desire to throw off its past and take its place as one of the
great nations of Europe.

Although Ukraine’s interest in NATO membership came much later, the
fledgling nation telegraphed its future direction when it joined the North
Atlantic Cooperation Council (later renamed the Euro-Atlantic Partnership
Council), immediately upon achieving independence with the break-up of the
Soviet Union.

Later, Ukraine led the way for other Eastern European nations when in 1994
it became the first of the Commonwealth of Independent States to join the
Partnership for Peace (PfP) – a major program of practical security and
defense cooperation between NATO and individual Partner countries.

Ukraine’s PfP membership began to pay dividends for Ukraine’s military early
on as it chose to support NATO-led peacekeeping operations in the Balkans
during the 1990s, and thereby gained valuable experience that eventually
made it a leader among world nations providing peacekeeping support to NATO,
the United Nations and Coalition forces in Iraq.

Ukraine’s move toward full membership in NATO is certainly a bold and brave
one, but it is hardly the first such move in its short history.  In my
opinion, one of its best-informed and most courageous moves was to renounce
nuclear weapons and to ratify the Non-Proliferation Treaty.

Later it ratified the Open Skies Treaty, which in a quite symbolic way
demonstrated Ukraine’s devotion to openness and transparency in its
relations with the rest of the world.

Earlier actions had clearly shown Ukraine’s intentions to increase its
integration into European and Euro-Atlantic structures, but a very concrete
and important step was made in the 1997 Charter on a Distinctive
Partnership, which recognized the importance of an independent, stable and
democratic Ukraine to European stability.

This partnership agreement between NATO, its member states and Ukraine made
it clear that it was in the best interests of all to broaden and strengthen
cooperation and to develop a distinctive and effective partnership, which
would promote further stability and common democratic values in Europe.

As a natural development of The Charter, principles and arrangements were
established for further development of NATO-Ukraine relations and areas were
identified for consultation and cooperation. The vehicle for implementation
of these new avenues of cooperation was the NATO-Ukraine Commission,

which came to play a crucial role in NATO-Ukraine relations.

From 1997 through 2002, cooperation developed and expanded into the areas

of defense reform, economic aspects of defense, military-to-military
cooperation, armaments, civil emergency planning, and science and
environment.

In one of the many ironies growing out of the end of the Soviet Union,
Ukraine’s huge Yaroviv Training Area, home in earlier times to Warsaw Pact
exercises, now has been invaded by thousands of NATO personnel, coming not
as warriors, but as part of joint peacekeeping exercises with Ukrainian
military personnel.

As the relationship between NATO and Ukraine developed, it seemed inevitable
that there would be further developments toward integration. In May 2002, as
the entities approached the fifth anniversary of their agreement,
complementary action by both sides propelled the partnership to a new level.
Ukraine announced a new goal of eventual NATO membership, quite a jump for a
country that only a few years earlier had been a member of NATO’s most
implacable opposition, the Warsaw Pact.

Responding to Ukraine’s formal announcement of efforts toward accession, at
a meeting in Reykjavik the same month NATO Foreign Ministers agreed with
their Ukrainian counterpart to explore ways to take the NATO-Ukraine
relationship to a qualitatively new level.

There were no illusions on either side that the relationship would be
trouble-free and within only a matter of months a problem of seemingly
monumental proportions arose when Ukraine was accused of selling one of the
world’s most advanced air defense systems to Iraq, at that time led by one
of most disreputable characters on the international political stage.

In spite of the obvious large and highly negative wave in the sea of
partnership, development of a NATO-Ukraine Action Plan was completed and

the plan was adopted at an NUC meeting of foreign ministers in Prague in
November 2002.

The adoption of the Action Plan, while NATO was dealing with very serious
doubts raised by the alleged sale of air defense systems to Iraq, once again
demonstrated the commitment of NATO member states to the development of
strong and durable NATO-Ukraine relations. Again, Ukraine was encouraged to
move towards closer Euro-Atlantic integration.

Demonstrating that NATO is not only a military alliance, but also has strong
political and economic components, NATO continued over the next two years to
work with Ukraine on military matters while at the same time emphasizing
that, in order for positive moves on all fronts, it was absolutely necessary
for Ukraine to assure free and fair elections for the presidency in 2004.

Ukraine was also pushed to guarantee media freedoms and the rule of law, to
strengthen civil society and judiciary, to improve arms export controls and
to allocate adequate financial resources for the implementation of planned
defense and security sector reforms.

The Ukraine-NATO partnership was severely tested in November and December
2004 by events surrounding the contested presidential election. NATO
demonstrated its high level of concern by postponing a planned
ministerial-level NATO-Ukraine Commission meeting, and NATO’s Secretary
General issued a strong statement re-emphasizing that free and fair
elections are a bedrock principle required for those seeking NATO
membership.

Soon after election problems were settled, newly-inaugurated President
Viktor Yushchenko attended a summit meeting at NATO Headquarters and
reiterated Ukraine’s strong commitment to the path of seeking NATO
membership and further Euro-Atlantic integration.

I recount all this history to remind Ukrainians, Ukrainian-Americans and all
those in the world who support Ukraine’s path to a bright, Euro-centric
future that Ukraine and NATO have come a long way together and are now
tantalizingly close to the goal of full NATO membership for Ukraine.

The goal was worthy from the very beginning and it is hard for me to see
Ukraine reaching its true greatness if now, at the last minute, it swerves
from that goal when it is so close at hand.

I have no doubt that my colleagues in the Congress, both House and Senate,
are prepared to go the extra mile in helping Ukraine reach its original and
laudable goal of Euro-integration. I join all those who wish for Ukraine’s
independent future in assuring all that both our thoughts and our actions to
assist Ukraine toward that goal are as strong as ever.

I hope that Ukraine will win the opportunity to join NATO and we will all be
the better for it when Ukraine is able to accept that invitation and all the
challenges that go with it.                           -30-

————————————————————————————————–
Rep. Robert Andrews represents New Jersey’s 1st Congressional
District in the U.S. House of Representatives
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LINK: http://www.ukraine-observer.com/articles/220/863
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11.       WHY I BELIEVE NATO MEMBERSHIP IS NOT IN
                             UKRAINE’S BEST INTEREST

DIALOGUE & DEBATE: By Georgiy Kryuchkov
The Ukrainian Observer magazine, Issue 220
The Willard Group, Kyiv, Ukraine, June, 2006

My opposition to Ukraine’s membership in the North Atlantic Treaty
Organization (NATO) is well-known, long-held and based on what I
consider good reasons of logic and law.

The legislative heritage of constitutional norms disagrees with our state
membership in any military blocs. The Declaration of Independence, a
cornerstone document promulgated on July16, 1990, and later supported by
more than 90 percent of voters in a national referendum in December 1991
affirms Ukraine’s intention to become a permanently neutral state that does
not participate in military blocs. Until now this document is regarded as an
integral part of the current Constitution.

Not a single political party that overcame the 3 percent election barrier in
the parliamentary elections of 2006 included support of NATO membership in
their election platform, with Yushchenko’s Our Ukraine being no exception.
NATO membership support appeared only in the election platform of the
Kostenko-Plyushch bloc, which collected only about 1.5 percent of the
popular vote.

All public opinion polls conducted in recent years have shown that the idea
of Ukrainian membership in NATO is supported by less than 20 percent of
respondents. The latest poll, conducted by Den newspaper this spring
produced a result consistent with previous polls. The intensive brainwashing
campaign launched due to the Yushchenko – Tarasyuk initiative has further
strengthened the negative public attitude.

People have not forgotten that shameful role NATO played in Kosovo;
intuitively they understand that legalization of the new independent
pro-Albanian state Kosovo may establish a dangerous precedent. A domino
effect could emerge in other countries neighboring Ukraine, such as the
Transdnestrian region or the Russian Federation with its unsettled problems
in Caucasus, or in Ukraine itself in the Crimea.

Although President Yushchenko claimed that there would be another national
referendum on this issue, it remains unclear when and under what
circumstances it might be conducted. Meanwhile, beginning from the 2006-2007
academic year, pro-NATO propaganda has been inserted in the curricula of
high and higher school establishments.

Not long ago, Foreign Minister Tarasyuk said publicly that, if Ukraine joins
NATO, it would help the country to reduce the budget expenditures on
fortification of state frontiers. NATO proponents claim we would then have
no need to fortify the Western border.

It is hard to say whether such statements may be conducive to our national
security. And it is even harder to assess the claim President Bush has made
quite recently that he would like Ukraine to become a NATO member by the end
of his term in office, i.e. in 2008. Perhaps, open political interference
could be the most accurate assessment.

The reigning state officials try to persuade people that with Ukraine’s
entry into NATO the state military expenditures would be reduced. Yet, it is
just a mere lie. NATO requirements provide that the expenditures should
amount to 2 percent of the national GDP and no under funding is allowed. For
many years our budget funding was less than 1.6 percent.

Readers should be aware of the following statistics. France and Italy with
their 60.7 and 58.1 million person population have total military strength
of 254,900 and 292,900 respectively. Their military budgets amount to $41.6
and 17.6 billion.

In Ukraine at the end of 2005, our military strength was 245,000 and our
annual defense budget totaled $1.36 billion. Last year Poland spent $833
million for the purchase of new military equipment, while Ukraine spent only
$28 million, 40 times less.

Furthermore, during the period from October 1, 2001, till November 1, 2005,
combat planes of the United States and Germany crossed Ukrainian airspace
3686 and 442 times, respectively. They were provided with navigation
services by our armed forces and invoiced for $5,752,000 and 434,000
respectively. The Germans have already paid $392,000 while the Americans
have paid Ukraine not one cent of the cost for the navigation services
rendered to them.

To add to this, our forces are equipped with arms of the third and fourth
generation while NATO uses arms of the fifth and sixth generation. In Poland
the starting wage of a contract serviceman is $800; with us it is ten times
smaller.

The economic consequences of Ukraine’s entry into NATO would bring a hard
blow to Ukraine’s national defense industry because of the drastic reduction
of exports from our enterprises.  For instance, the famous plant Motor-Sich,
involved in a close partnership with the Russians, takes part in the
execution of Russian programs on modernization of helicopters, transport,
training aircraft and other equipment.

This Russian-Ukrainian cooperation in 2005 allowed the Motor Sich plant to
reach an annual turnover of one billion hyrvnia. Naturally, when Ukraine
joins NATO Russian cooperation would decrease or cease.

Finally, a peculiar feature of the present state of Ukraine’s national
security is a rapid increase in internal threats and risks. This has been
caused by a precipitous decline in our industrial and technical potential,
degradation of our scientific capacities and technologies, a dangerous
concentration of obsolete explosive ammunition, poor quality of training of
military personnel and sky-rocketing increases in government bureaucracy.

Suffice it to say that the number of admirals in our Navy exceeds that of
the number of our combat-ready large-capacity vessels.

For all of the reasons above and others too numerous to mention, I have been
and remain opposed to any move by Ukraine to join NATO.
————————————————————————————————
NOTE: Georgiy Kryuchkov, a life-long member of the Communist Party, has
played a leading role in the military-industrial policies of Ukraine, both
during the Soviet era and since independence. During the just-ending
convocation of the parliament, he served as chair of the Committee on
National Security and Defense. He is well-known and highly regarded in both
Washington and Moscow.   (The Ukrainian Observer)

————————————————————————————————-
LINK: http://www.ukraine-observer.com/articles/220/864
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12. DELTA LAUNCHES NEW SERVICE FROM JFK TO KIEV, UKRAINE
                          Delta’s trans-Atlantic service keeps growing

Maria Saporta, Atlanta Constitution-Journal
Atlanta, Georgia, Thursday, June 1, 2006

ATLANTA – Maybe Delta Air Lines should add a new slogan: Your trans-
Atlantic airline.

Just this week, Delta is launching nonstop service from Atlanta to Athens,
Greece; Venice, Italy; and Edinburgh, Scotland; as well as new service from
New York’s JFK to Kiev, Ukraine.

These flights are part of an aggressive international strategy to get Delta
back on its wheels and out of bankruptcy.

Since March, Delta has begun 11 new trans-Atlantic routes – making it the
world’s top airline offering service between the United States and Europe
based on seat capacity, destinations and number of weekly flights.

By the end of this week, Delta will have more than 50 daily flights to a
total of 29 trans-Atlantic destinations. Delta’s enhanced international
flare shone brightly on Monday when it relaunched daily service to Athens,
complete with balloons and dignitaries.

“This is a tremendously important event because it links again two Olympic
cities,” said Alexandros Mallias, the Greek ambassador to the United States.
“As the Atlanta airport is a world hub, the Athens airport is also a hub for
safe tourism and for doing business in the Balkans and the Southeast
Mediterranean.”

Delta had nonstop flights between Atlanta and Athens during the summers of
1999 and 2000, but then the service was discontinued. Mallias said the
relaunching of the Athens flight “is another strong signal of confidence in
Greece as a destination.”                         -30-

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13.    UKRAINE-U.S. BUSINESS COUNCIL BRIEFS NEW U.S
       AMBASSADOR AS HE PREPARES TO DEPART FOR KYIV

Ukraine-U.S. Business Council
Action Ukraine Report (AUR) #4 Article 13
Washington, D.C., Friday, June 2, 2006

WASHINGTON – Members of the Ukraine-United States Business Council
gathered Wednesday, May 31, at the University Club in Washington, D.C.
to brief William B. Taylor, Jr. about Ukraine’s business conditions and
prospects.

 Mr. Taylor was confirmed by the Senate on Friday, May 26, expects to be
sworn in as U.S. Ambassador to Ukraine on June 5th and depart for Kyiv by
the end of the week.

Council members, who represent a large percentage of U.S. trade and
investment in Ukraine, told the ambassador about the fast growth of the
Ukrainian market in consumer goods and services.

Others spoke of the huge potential they saw in agriculture, food processing,
telecommunications, and energy, among other sectors. Several spoke of “the
good story” they have to tell about their company’s experience in Ukraine.

Council President, Dr. Susanne Lotarski, introduced Mr. Taylor as someone
who knew Ukraine well and had helped design and implement American
assistance programs for Ukraine. Many Council members, she said, had seen
and benefited from his strong advocacy for economic, commercial and legal
reforms to develop the private sector and attract foreign investment.

Ambassador Taylor said that he felt the relationship between Ukraine and the
United States has never been better than it is now.  He asked the attendees
about what business climate issues deserved his focus once he arrived in
Kyiv.

Members agreed that stronger rule of law and reduction of corruption topped
the list of business needs.  While progress in intellectual property rights
protection and the system of VAT refunds was noted, Council members
saw a need for further improvements in both.

Members’ hopes for Ukraine include adoption of a coherent energy plan
and market-drive agricultural policy that includes private land ownership,
government organizational reform, and transparent privatization and
regulatory processes.

Turning to U.S. programs, members of the Ukraine-United States Business
Council expressed their hope that the new ambassador would urge the
Ukrainian government to resolve quickly the U.S. Overseas Private Investment
Corporation’s (OPIC) outstanding insurance expropriation claim against
Ukraine.

Resolution of this issue would reopen OPIC programs and could release,
over the next few years, up to $500 million in OPIC-backed private equity
investment programs to support Ukrainian businesses.  The Ambassador said
he had recently received a briefing from the President of OPIC on the
outstanding issue and this would be one of his top priorities as he began
his work in Kyiv.

Realistic risk ratings and more competitive export credit financing by the
U.S. Export-Import Bank (Ex-Im) also ranked high for U.S. industrial and
agricultural machinery exporters.

President Lotarski pointed out that the U.S. air carrier Delta will make its
first non-stop flight from New York City to Kyiv, using a Boeing jet, on
Thursday, June 1, with the inaugural landing in Kyiv early Friday afternoon.
Business and travel between the two countries is expected to continue to
expand rapidly.  Ukraine no longer requires U.S. citizens to have visas for
short business and tourism trips, Lotarski said.

In conclusion, Ambassador Taylor invited members of the Council to visit him
at the U.S. Embassy in Kyiv and to keep him informed about the development
of the private business climate in Ukraine.  They in turn offered him their
support and wished him a successful tour in Ukraine.

Council members participating in the meeting included representatives of
American Life Insurance Company, Archer Daniel Midland Company, Boeing,
Cargill, Cape Point Capital, Case New Holland, Deere & Co, the Eurasia
Foundation, Procter & Gamble, SALANS, SigmaBleyzer, and Westinghouse.

Guests from DutkoWorldwide, Jonathan Partners, The PBN Company,
PFC Energy, United Technologies, the Departments of State and Commerce
also attended.
————————————————————————————————–
For further information, contact:  Dr. Susanne S. Lotarski, President,
Ukraine-United States Business Council, P.O. Box 42067, Washington, DC
20015; telephone/fax: (301) 654-9359;  slotarski@boo.net.
—————————————————————————————————
         OFFICERS OF THE UKRAINE-U.S. BUSINESS COUNCIL
E. Morgan Williams, SigmaBleyzer, Chairman, Executive Committee, Board
of Directors; John Stephens, Cape Point Capital, Secretary/Treasurer;
Members of the Ukraine-U.S. Business Council Executive Committee:
Van Yeutter, Cargill; John W. Rauber, Jr, Deere & Co; Shannon Herzfeld,
Archer Daniels Midland; Michael Kist, Westinghouse; and Andrew Bej,
American Life Insurance Company/AIG.
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14. HUNGARY’S OTP BANK IN EURO650M UKRAINE PURCHASE

By Christopher Condon in Budapest
Financial Times, London, UK, Friday, June 2 2006

OTP Bank agreed yesterday to pay Euro650m ($836m) for JSCB, Raiffeisen
Bank’s corporate banking subsidiary in Ukraine. The deal, signed in
Budapest, values JSCB at 4.1 times book value using the balance sheet for
the year ending 2005.

The deal will offset much of what Raiffeisen paid to move up a notch in the
Ukrainian market last year when it bought Aval Bank, the country’s second
largest bank by assets, for Euro1bn.

Raiffeisen, which has a strong presence across the region, built JSCB from
scratch in 1998 and originally intended to merge it with Aval. Analysts
said, however, that strong buyer interest made the Austrian bank reconsider.
Banking asset prices in central and east Europe have jumped dramatically in
the last two to three years.

Last December, Raiffeisen’s Austrian rival, Erste Bank, paid Euro3.75bn for
a 62 per cent stake in Romania’s Banca Comerciala Romana, or 5.8 times book
value.

OTP, led by Sandor Csanyi, is also bidding for Serbia’s Kulska Bank and is
rumoured to be pursuing a 25 per cent stake in Russia’s Investsberbank, as
well as another unnamed Ukrainian bank. The company has also made a bid for
CEC, Romania’s national savings bank.

Analysts estimate that OTP will still have about euro1bn available for
acquisitions after today’s deal. OTP has expanded into Slovakia, Croatia and
Bulgaria, but more recently was out bid by larger European rivals for banks
in Ukraine, Romania, Serbia and Albania.

JSCB had total assets of Euro1.2bn at the end of 2005. It operates 39
branches and concentrates chiefly on corporate banking services. Angelika
Zwerenz, a banking analyst for Erste Bank in Vienna, said that ultimately
OTP wanted a strong retail presence in Ukraine, but she called the
acquisition a good first step, giving OTP a 3-4 per cent share.

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15. OTP UKRAINE BUY A NEAR-TERM NEGATIVE SAYS JP MORGAN

Dow Jones Newswires, London, UK, Friday, June 2, 2006

LONDON – OTP Bank’s (OTP.BU) purchase of Raiffeisen Ukraine for

a hefty EUR650M is a near-term negative due to the high price tag, JP
Morgan says. “Late to the party, OTP has paid a very rich sum for a
Ukrainian banking license and a foothold in the local market.”

Adds OTP will need to invest heavily in branch expansion and retail
initiatives to achieve a desired retail franchise in Ukraine due to limited
opportunities to achieve the customary 10% market share through market
consolidation. Shares closed at HUF6,959. (EHB)

 
OTP Bank (OTP.BU) is faced with increasing client retention risk in
Ukraine’s heavily relationship-driven commercial banking market, JP Morgan
says. Adds many of the key local competitors are owned by industrial
groups with relevant economic power and political connections.
Notes furthermore the Ukrainian retail banking sector prospects may be
dampened by an anticipated deceleration in the growth of real disposable
income and an expected increase in unemployment. Shares closed at
UF6,959.  (EHB)                                -30-
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Contact us in London.  Markettalk.eu@dowjones.com
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16. EBRD IMPROVES PROGNOSIS ON UKRAINE, NEW INVESTMENTS
        MAY BE EURO600 MILLION, INCREASES STAFF AND OFFICES

ForUm, Kyiv, Ukraine, Thu, June 1, 2006

KYIV – EBRD has made better prognosis on GDP increase of Ukraine in
2006. According to the recent data, it will be scaled up from 1.2% to 2%
regarding the economic development of Ukraine in January-March, 2006.
It was revealed by Kamen Zahariev, EBRD Country Director in Ukraine.

“Our economists have made a new prognosis which takes into account showings
of the first quarter of this year. The prognosis has been trimmed according
to 2% of GDP increase. It is a conservative estimation and we hope that the
result will exceed expectation,” said Mr. Zahariev.

According to his words, EBRD supposes to invest over euro550 million in
Ukraine.

“We extend our influence. New investments may be euro550-600 million,”
opined Mr. Zahariev adding that Ukraine took the second place after Russia
according to EBRD investment volume of the last year. “It means Ukraine
becomes one of the key countries for EBRD investments,” concluded Country
Director Zahariev.

EBRD is willing to open $100-million back-up line for Ukrainian banks
engaged in the energy saving projects. He complains that the work on
municipal water- and heat-supply projects has been slowed down by the
legislation fallibility of Ukraine.

“It is not always when we demand the tariffs increase. But for long-term
perspective the tariffs must be self-supporting otherwise the investment in
this sector will be impossible. It will banefully influence Ukraine,”
emphasised MR. Zahariev.

EBRD intends to open its representative office in Dnipropetrovs’k. “We
enlarge our staff in Kyiv office by 10-15%, and a decision to open a
regional office in Eastern Ukraine has been recently passed.

It will be located in Dnipropetrovs’k and be charged with Kharkiv, Donetsk,
Luhansk, Dnipropetrovs’k and Zaporizhzhya. It is connected with the
Bank operations increase in Ukraine,” mentioned Mr. Zahariev.

Such step will get EBRD closer to the industrial regions of the country.

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LINK: http://en.for-ua.com/news/2006/06/01/112135.html
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17. NORWAY’S AKER YARDS AND UKRAINE’S DAMEN SHIPYARDS
          PLAN JOINT VENTURE FOR SHIPYARDS IN MYKOLAYIV

Karin Jensen, AFX Europe, Oslo, Norway, Friday, Jun 02, 2006

OSLO – Aker Yards ASA said it and Damen Shipyards Group plan to

establish a joint venture which will own Damen Shipyards’ Okean yard
in Mykolayiv, Ukraine.

This cooperation fits Aker Yards’ strategy to increase its steel and
shipbuilding capacity, said Aker Yards chief executive Karl Erik Kjelstad.

Aker Yards will pay 10 mln eur in cash for a stake in the Okean yard.
Further payments will be dependent on the financial performance of the

yard. The transaction is subject to clearance by government authorities.
———————————————————————————————–
karin.jensen@afxnews.com kj/jfr
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18. UKRAINE HOSTS 900 CAR COMPANIES AT AUTO SHOW

Asia Pulse, Tashkent, Uzbekistan, Thursday, June 01, 2006

TASHKENT, Nine hundred car companies from 30 countries around the world
presented their new models at the 14th International Kiev auto exhibition
SIA 2006 in the Ukraine.

Along with the Aston Martin DB 9 Coupe, the Citroen C6, Dadi Shuttle,
Ferrari 612 Scaglietti, Hyundai Accent, Nissan 350 Z the “Nexia” and “Matiz”
of the Uzbek “UzDaewooAuto” were also presented at the “Expocenter Ukraine”.

The Uzbek cars were exhibited in the largest pavilion of the saloon and
considered to be one of the most popular among the specialists and guests of
the SIA 2006. Uzbek carmakers have been participating in the Kiev auto
saloon for the second time this year.

In 2003, they presented “Matiz” cars and “UzOtoyo’l” buses, as well as an
evacuator, fire and bread-carrier trucks on UzOtoyo’l chassis. The reports
suggest that the demand for Uzbek cars has been on a constant rise in the
Ukraine.

This year, the number of cars sold on the local market has increased more
than fivefold compare to the previous year. The service and supply system
has been put in place throughout the country with the distribution network
further expanding. (http://www.UzReport.com)           -30-
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19. JAPAN’S HONDA SETS UP FIRM IN UKRAINE TO BOOST SALES

Kiyori Ueno, AFX Europe, Tokyo, Japan, Thu, Jun 01, 2006

TOKYO – Honda Motor Co said European unit, Honda Motor Europe

Ltd, has set up a new company in Ukraine to boost sales of its cars and
car parts there.

The new firm, Honda Ukraine LLC, capitalized at 3 mln euros, will start
operations at the end of July, Honda said in a statement.

It added that Honda is aiming to boost sales in Ukraine to around 5,500
units in 2007 from 2,200 units in 2005. (1 euro = 144.14 yen)
Kiyori.Ueno@xfn.com, ku/mb                  -30-
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20. POLISH AGRICULTURE MINISTER LEPPER WARNS OF POSSIBLE
          RESTRICTIONS ON UKRAINE & RUSSIA FOR MEAT BANS

PAP news agency, Warsaw, in English 0909 gmt 31 May 06
BBC Monitoring Service, United Kingdom, Wed, May 31, 2006

WARSAW – Deputy Prime Minister and Agriculture Minister Andrzej Lepper

said on Wednesday [31 May] that next week Poland might impose restrictions
against Russia and Ukraine if the European Union did not help Poland resume
its food exports to those countries.

On Tuesday, Ukrainian chief veterinarian Ivan Bisiuk said that Ukraine would
not lift its ban on Polish meat in view of repeated illegal transports of
Polish meat to Ukraine. Ukraine banned imports of Polish meat on 26 March.

“We can impose restrictions on food transported to Ukraine and Russia
through Poland from western countries,” Lepper told the [public] Polish
Radio First Programme. “If the EU does not get involved in solving this
conflict we can impose such restrictions very fast,” he added.

Lepper added he supported Poland’s EU membership but stressed this
membership must be based on equal rights.

 
“What partnership we are speaking about if the EU countries are engaged in a
normal trade with Russia and Ukraine and do not want to defend Poland,”
Lepper asked.

Meanwhile, the proUA information portal said on Wednesday the Ukrainian ban
on Polish meat imports did not protect Ukrainian producers and consumers but
was helping importers from other countries.

According to the article, Bisiuk’s statement shows that Ukraine admits that
apart from “some signals” it does not have any evidence testifying to cases
of meat and meat products without proper veterinary certificates being
brought into the country.                             -30-

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21. UKRAINE: GAS-PRICE INCREASE COULD CAUSE SEVERE PROBLEMS 

ANALYSIS: By Roman Kupchinsky
Radio Free Euopre/Radio Liberty (RFE/RL)
Prague, Czech Republic, Friday, June 2, 2006

Ukraine’s energy problems seem to be never ending. Now, less than half a
year after Gazprom briefly cut off gas supplies to Ukraine, the Russian gas
monopoly is threatening to raise the price again.

On May 22, Aleksandr Ryazanov, Gazprom’s deputy CEO, told the “Komersant
Ukrayiny” daily that on July 1 the price of gas to Ukraine is to be
increased from $95 per 1,000 cubic meters to $120-$130. The current price
for a “mixed basket” of Russian and Central Asian gas was agreed upon in
January during the course of tense negotiations that ended in the cut off.

                                       ECONOMIC WOES
If Gazprom follows through on its threat, the impact on the Ukrainian
economy could be huge.

The economy is already in trouble. A recent European Bank for Reconstruction
and Development (EBRD) projection said that Ukraine’s GDP growth rate could
halve from 2.4 percent in 2005 to 1.2 percent in 2006. According to the
report, the likely cause is the higher prices Ukraine is already paying to
import gas. Add to that the worsening disarray in the country’s state-owned
energy sector, which is sliding into greater debt.

If Gazprom manages to get its way and increase the price of gas, this might
mean an additional bill of $625 million-$875 million from July-December.

On May 31, the Ukrainian government announced that beginning on July 1,
domestic consumers will pay $82.80 for 1,000 cubic meters of gas, a 50
percent increase. Raising it again in the near future might prove difficult.

In the first six months of 2006, the increased cost of energy has seen
consumer prices rising at an annualized rate of 19 percent. A further
increase in the price of gas is likely to exacerbate inflation.

A severe economic downturn could bring down a pro-Yushchenko government

and force the president to appoint a government from the pro-Russia Party of
Regions.
                                       LITTLE LEVERAGE
Ukraine has few, if any, options to avoid the price increase or to
retaliate. The transit fee for Russian gas going through Ukrainian pipelines
was set for 10 years in the January agreement and is unlikely to be raised
before then.

Increasing the rent for the Russian Black Sea fleet based in Sevastopol is
unlikely, largely due to Yushchenko’s reluctance to anger the Kremlin.

Some energy conservation efforts have only begun being implemented, but will
not produce significant savings for another five or 10 years.

One option could be Ukraine handing over control of its pipeline system and
underground storage system to Russia in return for cheaper gas. That,
however, is highly unlikely to happen as Yushchenko has often stated that he
will not give these up.
                                              TIMED MOVE
Why has Russia chosen to make the decision to raise prices now?

The simple answer is the fact that, according to Moscow, the contract signed
in January is up for review in six months.

“In our contract, the price was agreed upon for the first half of 2006,”
Gazprom deputy head Aleksandr Medvedev told RIA Novosti on May 26.
“The end of this period is approaching and both sides will discuss the price
for the following period.”

But Ukraine seems to understand the terms of the contract a little
differently. Yushchenko has made numerous assurances to his countrymen that
the price agreed upon in January will remain at the $95 level for five
years. Now that his promise has been challenged by Gazprom officials, the
Ukrainian government might well feel the need to protect the image of the
president and put up fierce resistance to any price rise.

                                         G-8 MEETING
It’s also possible that policymakers in the Kremlin are timing their
decision to increase gas prices for Ukraine to coincide with the upcoming
Group of Eight industrialized economies (G-8) meeting in July.

That could be Russia’s signal to the West that it will conduct business in
the CIS to promote its own geopolitical interests, regardless of how any of
the G-8 members might react.

Former premier Yuliya Tymoshenko has spoken out against the gas middleman,
RosUkrEnergo (TASS) Another possible explanation for the thinly veiled
threat to raise gas prices for Ukraine is that this is a form of pressure
being applied by the Kremlin to prevent the appointment of Yuliya Tymoshenko
as prime minister. During her short term as premier in 2005, Tymoshenko was
outspoken about the need to remove RosUkrEnergo, the controversial

middleman for gas deliveries from Central Asia, from the Ukrainian market.

After Tymoshenko left office, RosUkrEnergo, reportedly at the insistence of
the Kremlin, was given a lucrative role to play in the delivery and sale of
gas to Ukraine. The January contract provided for RosUkrEnergo to create a
joint venture company with Naftohaz Ukrayiny, the state-owned oil and gas
monopoly,named UkrHazEnergo. The newly created company recently announced
that it is expanding and intends to drill for gas in Ukraine and Russia.

If Tymoshenko is appointed prime minister, Moscow fears she might exclude
UkrHazEnergo and RosUkrEnergo from the Ukrainian market.

On May 30, Russian Ambassador to Ukraine Viktor Chernomyrdin  linked

the gas issue with political relations. Chernomyrdin was quoted by Interfax as
saying that Ukrainian-Russian relations were affected by relations between
Ukraine and NATO, the problems with the Russian Black Sea Fleet, Kyiv’s
“search for democracy,” and the creation last month of the “Organization for
Democracy and Economic Development-GUAM.”

He also said that Kyiv and Moscow could settle the problem of a possible
gas-price rise with an improvement of political relations.    -30-
————————————————————————————————–
Roman Kupchinsky is the organized crime and terrorism analyst for RFE/RL
Online and the editor of “RFE/RL Organized Crime and Terrorism Watch.” He
graduated from Long Island University in Brooklyn with a degree in political
science. He was the president of Prolog Research and Publishing Corporation
in New York prior to joining RFE/RL where he was director of the Ukrainian
Service for 10 years.
—————————————————————————————————
http://www.rferl.org/featuresarticle/2006/06/EF09C5D8-341B-4320-BB9A-2D3A2F318A50.html

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22. SPAIN & UKRAINE START AS GROUP H CHOICES IN WORLD CUP

By Simon Baskett, Reuters, Madrid, Spain, Friday, June 2, 2006

MADRID – Spain and Ukraine breathed a sigh of relief when they were drawn
alongside Tunisia and Saudi Arabia in Group H for the World Cup.

On paper the two European sides are strong favourites to claim the top two
places and a passport into the knockout round, leaving the other two teams
to scrap it out for the minor places.

Ukraine qualified for their first ever World Cup with a spectacular campaign
in which they saw off Euro 2004 winners Greece, 2002 World Cup semifinalists
Turkey and former European champions Denmark.

Their primary weakness, however, is seen as their likely overdependence the
team’s one truly world-class player, Andriy Shevchenko who goes to the
finals just days after joining English champions Chelsea from AC Milan for a
reported British record transfer fee of 45 million euros (30.8 million
pounds).

Coach Oleg Blokhin, like Shevchenko a former European Footballer of the
Year, has also expressed his concerns about the lack of competition for
places in the squad, saying his players are in danger of becoming
complacent.

Spain were far less impressive than Ukraine in qualification and had to take
the playoff route to ensure their place in at an eighth successive World
Cup, but a 19-match unbeaten run and an emphatic 6-2 aggregate victory over
Slovakia make them confident of progressing beyond the group stage.

Injuries to leading figures like Raul, Xavi and Vicente have forced changes
in the likely starting line-up in Germany, but the emergence of some
talented youngsters such as Cesc Fabregas, is likely to provide ample
compensation.

The opening group match between the two sides in Leipzig on June 14 is the
likely group decider, but both teams will do well not to underestimate their
other opponents.

If there is a definite result from that match, then the winner will be in a
very strong position. Whoever loses though will have to ensure maxium points
in their second game with Spain facing Tunisia in Stuttgart on June 19 and
Ukraine meeting the Saudis in Hamburg on the same day.

Tunisia, who have qualified for the World Cup for a third time in
succession, won the African Nations Cup on home soil in 2004, gave a good
account of themselves in last year’s Confederations Cup and can count on the
experienced hand of former France boss Roger Lemerre as coach.

Saudi Arabia will be at their fourth successive World Cup, and although they
were dealt an embarrassing whitewash in South Korea and Japan, they are
hoping that the appointment of Brazilian coach Marcos Paqueta will
revitalise the team in Germany.

Although he looks to be facing an uphill battle in Germany, the presence of
Asian Footballer of the Year Hamad Al Montashari in defence, the influential
Mohammed Noor in midfield and rising star Yasser Al Qahtani up front will
give them hope of scoring an upset or two.               -30-

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LINK: http://today.reuters.co.uk/news/
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23. UKRAINE JOINS UNICEF GLOBAL CAMPAIGN UNITE FOR CHILDREN

UNIAN, Kyiv, Ukraine, Friday, June 2, 2006

The United Nations Children’s Fund (UNICEF) was joined on 1 June by the
Government of Ukraine, UNAIDS and other partners in launching the Global
Campaign Unite for Children, according to the UN Ukraine’s office.

The primary goal of the Campaign is to unite the actions of decision
makers – the Government, local authorities, business leaders – and the
general public and to place children at the centre of the response to
HIV/AIDS.

The Campaign was initiated by the President of Ukraine, Viktor Yushchenko,
urging a faster response to help children and young people to prevent HIV,
to ensure that mothers can prevent the transmission of HIV to their unborn
child, to ensure pediatric treatment for children in need and provide for
the needs of children orphaned or made vulnerable by AIDS.

Ukraine remains the country in Europe worst affected by HIV/AIDS with 1.4
per cent of the population aged 15 to 49 estimated to be infected with HIV.
Children in Ukraine are also threatened by HIV/AIDS: to date some 11, 000
children have been born to HIV-positive mothers and 186 have already died of
AIDS. Over 80 per cent of HIV positive people in Ukraine are under 30 while
the HIV pandemic is increasingly affecting women, especially those under the
age of 25.

‘HIV/AIDS is not someone else’s problem. It is mine and it is yours.
Fighting HIV is the responsibility of every single one of us. Only together
can we make a difference for the future of our country and our children,’
Liliya Podkopayeva, Olympic Champion and UN Goodwill Ambassador
on HIV/AIDS in Ukraine said.

The Unite for Children. Unite against AIDS Campaign aims to alert
governments, decision makers and the general public to the fact that
children are missing from the global AIDS agenda. The Campaign seeks to
achieve the following four goals in Ukraine by 2010:

[1] Decrease mother-to-child HIV transmission to less than 5 per cent
through increased provision of prenatal care and sexual and reproductive
health services to all women and couples who need them.
[2] Provide pediatric treatment with antiretroviral and other special
medications to all children who need them.
[3] Prevent new infections, reducing the number of young people living with
HIV/AIDS by 25 per cent.
[4] Protect and care for children affected by AIDS, providing support to at
least 80 percent of children in need of care and services.

A recent UNICEF-supported survey in Ukraine revealed that HIV-positive
women and their children still face high levels of stigma in the health care
system, educational institutions, at the workplace and in their communities
and families.

‘One of the major challenges we face is the need to break the silence, and
address the denial that surrounds HIV/AIDS. Children are the ‘missing face’
of the pandemic and they need our immediate action. This requires visionary
leadership and significant individual courage,’ said Jeremy Hartley, UNICEF
Representative in Ukraine.

‘We will not prevent infections unless we overcome the widespread stigma and
discrimination associated with HIV/AIDS and address the needs of the most
vulnerable groups – especially children and young people.’

A National Consultation around the Unite for Children. Unite against AIDS
Campaign that brought together civil society activists, heads of government
authorities, the donor community, people living with HIV/AIDS, UN agencies
and young people produced a joint call for action and the basis for a
national strategy for the Campaign over the next five years.

‘It is very encouraging to see Ukraine joining the growing number of
countries launching this Campaign for children. The priorities of the
Campaign may not be new for Ukraine, but they are intended to reinforce and
dramatically expand all our work on HIV/AIDS with a vision to free young
lives from the crushing burden of HIV/AIDS and make a real difference to
children’s lives,” added Jeremy Hartley.

The Unite for Children. Unite against AIDS Campaign was launched globally at
the United Nations in New York in October 2005. The President of Ukraine was
present in New York at this time, attending the World Summit on the 60th
Anniversary of the United Nations.                        -30-

——————————————————————————————————
LINK: http://www.unian.net/eng/news/news-156514.html
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
24. UKRAINE’S YUSHCHENKO DELIBERATELY POISONED WITH
                DIOXIN  – OFFICIAL TESTS RESULTS CITED

AFX NEWS Europe (Focus), Kiev, Ukraine, Friday,Jun 02, 2006

KIEV – Ukraine’s President Viktor Yushchenko was the victim of a deliberate
poisoning with the toxic chemical dioxin, the country’s state prosecutor
said Thursday, citing official test results more than a year after the
politician was disfigured by a mystery illness.

Tests carried out by Ukrainian, US, German and Japanese experts “allow us to
think that Viktor Yushchenko was poisoned in a premeditated fashion,” the
prosecutor said in a statement. It did not give details of the likely timing
or circumstances of the poisoning.

Yushchenko still bears facial disfigurement after falling ill during his
presidential election campaign in September 2004, the day after he had dined
with officials from the Ukrainian security services.

Authorities rejected allegations that Yushchenko had been poisoned but later
tests by Austrian doctors who treated him revealed the presence of dioxin.

The illness came during a bitter presidential election campaign in which he
was the main opposition candidate. He was later elected president in the
so-called “Orange revolution”, when he led protests against rigged
second-round voting.

The poisoning severely disfigured his once handsome features and stopped him
from campaigning for several crucial weeks before the first round of voting.

In the months after Yushchenko came to power in 2005, the investigation into
who poisoned him did not advance. The Ukrainian leader blamed the lack of
progress on the former prosecutor general, Svyatoslav Piskun.

Under the new prosecutor general, Ukrainian investigators for the first time
took samples of Yushchenko’s blood as part of the official investigation and
forwarded them for analysis to laboratories abroad.

Results announced last year from laboratories in several countries confirmed
a massive presence of dioxin in Yushchenko’s blood, but did not indicate
whether the poisoning was deliberate. (newsdesk@afxnews.com afp/jsa)
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
25. ART EXHIBITION: KASIMIR MALEVICH’S STYLE EVOLUTION
Began painting neo-primitive canvases evoking peasant art of his native Ukraine

TOP PICKS: by Mariana Schroeder
Kasimir Malevich Art Exhibition in Barcelona, Spain Until June 26
The Wall Street Journal, NY, NY, June 2, 2006

BARCELONA – Kasimir Malevich (1878-1935), one of the central figures
of the Russian avant-garde, changed styles often in the course of his life.

He began as an impressionist, moved on to fauvism, and by 1910-11 was
painting neo-primitive canvases evoking the peasant art of his native
Ukraine.

In 1915 he invented Suprematism, and he began creating radically abstract
works that influenced the development of art.

The Malevich exhibition at the Fundació Caixa Catalunya documents the
remarkable course of his career with 102 paintings — the biggest Malevich
show ever in Spain — including examples from every period of his artistic
oeuvre. Most of the works come from museums and private exhibitions in
Russia, and many have never been seen in the West.

The nucleus of the show is formed by Suprematist works, such as the
emblematic “Black Square” (1929). One section deals with Malevich’s
“Architectons,” white constructions made up of cubic elements resembling
architectural models.

Toward the end of his life Malevich returned to figurative painting, but
these post-Suprematist works were also silent protests against Stalinist
repression. “Torso in a Yellow Shirt” is a self-portrait without face or
hands.

“Peasant Woman with Black Face” shows a white body with a coffin
where the head should be, a statement about abandonment and the futility
of protest in a totalitarian regime in which millions of people were killed.

The show is in the Caixa’s exhibition space inside Antoni Gaudí’s La
Pedrera and it would be a shame not to go up to the roof of the building
for the fantastic sight of Gaudí’s landscape of chimneys, which, in their
abstractly human forms, unintentionally complement the works of Malevich
tairs. (Exhibition on until June 25; 34-93-484-55-30)

———————————————————————————————
LINK: www.fundaciocaixacatalunya.orghttp://www.wsj.com
———————————————————————————————–
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