AUR#758 Sep 15 NATO Entry Talks Halted By Yanukovych; Pres Promises No Changes In Foreign Policy, Bunge Company Angry; PinchukArtCentre Opens In Kyiv

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,
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WHO IS IN CHARGE OF FOREIGN POLICY IN UKRAINE?

ACTION UKRAINE REPORT – AUR – NUMBER 758

Mr. E. Morgan Williams, Publisher and Editor
PUBLISHED IN WASHINGTON, D.C., FRIDAY, SEPTEMBER 15, 2006

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——- 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. UKRAINE’S YANUKOVYCH HALTS NATO ENTRY TALKS
By Peter Finn in Moscow, Washington Post Foreign Service
The Washington Post, Washington, D.C., Friday, Sept 15, 2006; Page A15

2. PRESIDENT PROMISES NO CHANGES IN FOREIGN POLICY
Committed to striving for membership in the EU and NATO
Press office of President Victor Yushchenko,

Kyiv, Ukraine, Monday, September 11, 2006

3. YANUKOVICH PUTS KIEV’S NATO PLANS ON HOLD
By Daniel Dombey in Brussels and Roman Olearchyk in Kiev
Financial Times, London, United Kingdom, Friday, September 15 2006

4. UKRAINE STALLS NATO BID TO BUILD PUBLIC SUPPORT
By Alan Cullison in Moscow, The Wall Street Journal
New York, New York, Friday, September 15, 2006; Page A8

5. UKRAINE TO PURSUE EU ENTRY, NATO DRIVE ON HOLD
By Dan Bilefsky, International Herald Tribune
Paris, France, Thursday, September 14, 2006

6. UKRAINE: YANUKOVYCH BLOWS HOT AND COLD IN BRUSSELS
Relations with NATO are, in words of one NATO diplomat, now “on ice.”
By Ahto Lobjakas, Radio Free Europe/Radio Liberty (RFE/RL)
Prague, Czech Republic, Thursday, September 14, 2005

7. UKRAINIAN PRIME MINISTER, PRESIDENT AT ODDS OVER NATO
UT1, Kiev, in Ukrainian 1800 gmt 14 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

8. UKRAINIAN DEFENCE MINISTER HRYTSENKO UNHAPPY WITH

PRIME MINISTER’S STATEMENT ON NATO
TV 5 Kanal, Kiev, in Ukrainian 0915 gmt 15 Sep 06
BBC Monitoring Service,United Kingdom, Thursday, Sep 15, 2006

9. TWO LEADING UKRAINIAN CENTRE-RIGHT MPs OUTRAGED
THAT PRIME MINISTER PUTS NATO ENTRY ON HOLD
UNIAN news agency, Kiev, in Ukrainian Thursday, 14 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

10. KINAKH SAYS YANUKOVYCH’S STATEMENTS ON UKRAINE’S
UNPREPAREDNESS FOR JOINING NATO MEMBERSHIP

Ukrainian News Agency, Kyiv, Ukraine, Thursday, September 14, 2006

11. UKRAINIAN PRIME MINISTER REJECTS ACCUSATIONS OF
BREACHING DECLARATION OF NATIONAL UNITY ON NATO
Ukrayinska Pravda web site, Kiev, in Ukrainian 14 Sep 06
BBC Monitoring Service, United Kingdom, Friday, Sep 15, 2006

12. UKRAINIAN PROPRESIDENTIAL PARTY CRITICIZES
PRIME MINISTER’S NATO STATEMENTS
Interfax-Ukraine news agency, Kiev, in Russian 1256 gmt 14 Sep
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

13. UKRAINE WILL BECOME NATO MEMBER SOONER OR
LATER SAYS POLISH PRIME MINISTER JAROSLAW KACZYNSKI
PAP news agency, Warsaw, Poland, Friday, 14 Sep 06

14. POLAND’S LECH WALESA APPEALS FOR FASTER EUROPEAN
INTEGRATION TO AVOID LOSING UKRAINE
AP Worldstream, Warsaw, Poland, Thursday, Sep 14, 2006

15. NATO PROMISES TO SUPPORT REFORM IN UKRAINE
Ukrainian News Service, Kyiv, Ukraine, Friday, September 15, 2006

TO STOP CORPORATE RAIDS
Dow Jones Newswires, Brussels, Belgium, Thu, September 14, 2006 .

17. UKRAINE PM FACES BUNGE ANGER OVER GRAIN PLANT
Urging government help to thwart an attempt by “corporate raiders.”
Bunge: Ukraine’s tax authorities behind in refunding $40m in tax rebates.
By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, Friday, September 15 2006

18. UKRAINE PARLIAMENT COMMEMORATE JOURNALIST
GEORGY GONGADZE WITH MOMENT OF SILENCE

Ukrainian News Agency, Kyiv, Ukraine, Friday, September 15, 2006

19. LANGUAGE ISSUE THREATENS UKRAINE’S NATIONAL

SECURITY SAYS COMMUNIST LEADER PETRO SYMONENKO
RIA Novosti, Moscow, Russia, Thursday, September 14, 2006

20. EXHIBITION OF CONTEMPORARY ART “NEW SPACE”
PinchukArtCentre, Besarabska Square, Arena, Kiev, Ukraine
Public Opening – September 16th, 2006, 20:00

PinchukArtCentre, Kyiv, Ukraine
Action Ukraine Report (AUR) #758, Article 20
Kyiv, Ukraine, Friday, September 15, 2006

21. RUSSIA DESERVES MORE THAN STABILITY FROM PUTIN’S LAST
YEAR: THE CHAOTIC CAPITALISM OF THE YELTSIN ERA HAS
BEEN BANISHED, BUT OTHER DISTURBING TRENDS
ARE NOW GAINING MOMENTUM

By Jonathan Steele, Moscow, The Guardian
London, United Kingdom, Thursday, Sep 14, 2006


22. SO, UKRAINE ISN’T ORANGE AFTER ALL
OP-ED: By Adam Swain, Kyiv Post, Kyiv, Ukraine, Wed, Aug 30 2006
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1. UKRAINE’S YANUKOVYCH HALTS NATO ENTRY TALKS

By Peter Finn in Moscow, Washington Post Foreign Service
The Washington Post, Washington, D.C., Friday, Sept 15, 2006; Page A15

MOSCOW, Sept. 14 — Prime Minister Viktor Yanukovych of Ukraine said
Thursday that his government would suspend negotiations on membership
in the NATO alliance, his first major step toward reversing his country’s
drift away from Russia and toward the West.

“Because of the political situation in Ukraine, we will have to take a
pause,” Yanukovych told reporters in Brussels after talks with NATO
Secretary General Jaap de Hoop Scheffer and NATO ambassadors. “We
have to convince society.”

The prime minister, who has said he personally opposes NATO membership,
cited insufficient popular support for the step. A recent survey found that
60 percent of Ukrainians are against membership in the alliance,
significantly more than support the prime minister and his coalition
partners.

Making Ukraine, a former Soviet republic, part of the alliance is a
cherished goal of Yanukovych’s rival, President Viktor Yushchenko.

In late 2004, the two men competed in a presidential election. Yanukovych,
Russia’s favored candidate, was initially declared the winner, triggering a
street revolt and a new vote that swept Yushchenko into office.

Yushchenko set the country on a firmly pro-Western course, setting off alarm
bells in Moscow and the Russian-speaking parts of his own country with a
promise to quickly push for Ukraine’s membership in the Western military
alliance.

Yushchenko had expressed hope that the country could join as soon as 2008,
and the issue was scheduled to be discussed at a NATO summit in November.

But the coalition that backed him disintegrated last September, and after
parliamentary elections earlier this year, Yanukovych, whose party won a
plurality of votes, resurrected himself on the back of his rivals’
infighting. He became prime minister in July.

American officials have been enthusiastic about Ukraine’s potential
membership in NATO. But they have become increasingly worried about the
anemic support for the move within the country, Western diplomats said in
recent interviews.

The prospect of Ukraine joining the alliance is also anathema to the Kremlin
and the vast majority of Russians, who regard it as an attempt to encircle
and isolate their country.

Yanukovych stressed Thursday that he was not turning his back on the West.
“For the time being, we are looking at enlargement of our cooperation with
NATO,” rather than membership, he said. “We should be a reliable bridge
between the European Union and Russia.”

Yanukovych promised to continue supporting internal reforms that “will
bring us in the long term to accession of the European Union.”

E.U. officials, facing growing skepticism in the bloc’s 25 member nations
about any further expansion, were reserved, if not cold, to Ukrainian
membership but said a free-trade zone could be negotiated.

E.U. External Relations Commissioner Benita Ferrero-Waldner said the
union had no plans to offer Ukraine membership “at this moment.” -30-
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2. PRESIDENT PROMISES NO CHANGES IN FOREIGN POLICY
Committed to striving for membership in the EU and NATO

Press office of President Victor Yushchenko,
Kyiv, Ukraine, Monday, September 11, 2006

KYIV – In an interview for Milano Finanza (Italy), Victor Yushchenko has
said Ukraine would not change its foreign course, being committed to the
principles of democracy and economic development, and striving for
membership in the European Union and NATO.

“We have built a state with European state institutions and confirmed the
nation’s Euro-Atlantic course,” he said.

“We must continue developing Ukraine democratically, protect human rights
and ensure stability and unitary form of government in the country. We must
work to join WTO and integrate into the European Union and NATO,” he
added.

The Head of State said consolidation of the nation and economic prosperity
were among the major challenges facing Ukraine’s political elite. -30-
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LINK: http://www.president.gov.ua/en/news/data/1_10275.html

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3. YANUKOVICH PUTS KIEV’S NATO PLANS ON HOLD

By Daniel Dombey in Brussels and Roman Olearchyk in Kiev
Financial Times, London, United Kingdom, Friday, September 15 2006

Ukraine’s path towards greater integration with the west was cast into doubt
yesterday when Viktor Yanukovich, the country’s prime minister, said he was
putting on hold Kiev’s plans to join Nato.

On his first trip to Brussels since taking office last month, Mr Yanukovich
dashed the hopes of pro-western Ukrainian politicians, and of officials in
Europe and the US, that he would use the visit to endorse joining Nato’s
membership action plan – a stepping stone to membership of the 26-nation
alliance.

Instead, standing next to Jaap de Hoop Scheffer, Nato secretary general, Mr
Yanukovich argued that the membership bid had to be put on ice because of
popular suspicions about Nato membership and doubts about its impact on
relations with Russia.

“Because of the political situation in Ukraine we will now have to take a
pause, but the time will come when the decision will be made,” he said.

“We will do everything possible to persuade the Ukrainian people that there
is no alternative,” he said, adding that the question of Nato membership
should be kept separate from his administration’s goal of good relations
with Moscow.

Until recently the US, the most powerful country in Nato, had hoped that the
alliance would mark its November summit in Riga, the Latvian capital, by
bringing Ukraine into the membership action plan and hence a step closer to
full membership.

“The door to deepening the relationship is open,” said a senior Nato
diplomat who emphasised that the alliance’s ambassadors had told Mr
Yanukovich yesterday they valued the relationship with Ukraine.

“But allies also understand that it is up to Ukraine to set the pace for
that relationship.”

Recent polls indicate that Ukrainian opposition to joining Nato is running
at about two-thirds of the electorate.

Ukraine is also heavily dependent for low-cost oil and gas on Russia, which
strongly opposes any suggestion that the country join Nato. Mr Yanukovich’s
declaration yesterday could be a setback for plans to expand his governing
coalition by bringing in members of Viktor Yushchenko’s Our Ukraine party,
which favours joining Nato.

While Mr Yushchenko’s ascent to power following the 2004 Orange Revolution
was seen in the US and Brussels as a sign that Kiev had moved decisively
towards the west, Mr Yanukovich’s election triumph this year has cast doubt
on prospects for further Euro-Atlantic integration.

Mr Yanukovich stressed the importance of ties with the European Union, and
negotiations on a wide-ranging agreement are set to begin next year.

But while Ukraine would like a trade deal with Brussels, EU officials warn
this will be impossible if Kiev joins a customs union with Russia. Moscow is
promoting such a customs union with several former Soviet neighbours.
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4. UKRAINE STALLS NATO BID TO BUILD PUBLIC SUPPORT

By Alan Cullison in Moscow, The Wall Street Journal
New York, New York, Friday, September 15, 2006; Page A8

MOSCOW — In another sign of the cooling of the Orange Revolution’s
pro-Western zeal, Ukraine’s new prime minister told NATO that his country
is putting efforts to join the alliance on hold because of lack of public
support for the move.

“We have to take a pause,” said Prime Minister Viktor Yanukovych, Thursday
after meeting with the North Atlantic Treaty Organization’s chief in
Brussels. He said Ukraine would formally launch its bid to join the
alliance, but only after a referendum on the issue. “We have to convince
society.”

Ukraine’s backtracking on its aspirations to join NATO is a defeat to the
administration of U.S. President George W. Bush, which had hoped a quick
entrance of Ukraine into the alliance would tug the former Soviet state
decisively closer to the West.

Ukraine’s own slow movement on NATO is likely to also spell problems for the
entrance of another former Soviet state, Georgia, into the alliance. Though
public opinion in Georgia is strongly in favor of joining the alliance, NATO
members in Europe are wary of admitting Georgia without Ukraine coming
first.

The Kremlin has lobbied hard against Ukraine’s entrance into the alliance.
The Kremlin said that Ukraine as a NATO member would be a threat to Russian
security and warned Kiev that any movements toward membership would worsen
relations.

Mr. Yanukovych was named prime minister last month, after a pro-Western
coalition of politicians came to pieces over how to divide positions in the
government.

Mr. Yanukovych has been advocating closer relations to Moscow, which
backed him in 2004 presidential elections that were tainted by vote fraud and
reversed by the mass public demonstrations of the Orange Revolution.

Thursday was Mr. Yanukovych’s first visit to Brussels since he was named
prime minister. After meeting with NATO Secretary-General Jaap de Hoop
Scheffer, Mr. Yanukovych said that few Ukrainians — maybe 12% to 25% —
supported the idea of joining NATO.

He said that Ukraine shouldn’t be forced to make a choice between steering
the country to either a pro-Russian or pro-Western course. “We should build
a reliable bridge between Russia and the European Union,” he said.

Mr. Yanukovych also met with EU External Relations Commissioner Benita
Ferrero-Waldner and repeated that Ukraine was interested in joining the
union. But Ms. Ferrero-Waldner said this wasn’t a prospect for the moment.

Besides numerous trade ties with Russia, Ukraine also must worry about its
heavy dependence on Russian natural-gas deliveries. Ukraine is in the midst
of negotiations with Russia for next year’s shipments, and officials have
said that a sharp increase in prices by Russia could be ruinous to the
Ukrainian economy.

While Mr. Yanukovych has advocated a public campaign to drum up support
for NATO within Ukraine, analysts are skeptical that he would ever do such a
thing.

Ivan Presniakov, an analyst with the International Centre for Policy Studies
in Kiev, said that Mr. Yanukovych’s government appears to want to delay any
serious moves toward NATO membership for at least two or three years, so
that it can buy enough time for Ukrainian industry to retool and cope with
higher energy prices.

“I don’t think that they really want to increase the support for NATO right
now,” he said. “They want to do is calm the fears of Russia.”

Mr. Yanukovych’s political party made a strong showing in parliamentary
elections earlier this year, after campaigning strongly against NATO
membership. This summer his party orchestrated anti-NATO protests that
hounded U.S. soldiers out of a southern Ukrainian province. -30-
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Write to Alan Cullison at alan.cullison@wsj.com

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5. UKRAINE TO PURSUE EU ENTRY, NATO DRIVE ON HOLD

By Dan Bilefsky, International Herald Tribune (IHT)
Paris, France, Thursday, September 14, 2006

BRUSSELS – Seeking to prove his European credentials, Prime Minister Viktor
Yanukovich of Ukraine said Thursday that he was determined to pursue
membership in the European Union. But he warned that he was putting the
drive to join NATO on hold.

“Because of the political situation in Ukraine, we will now have to take a
pause,” he said after a meeting at NATO headquarters.

The distancing of the former Soviet republic from NATO is a deviation from
President Viktor Yushchenko, his political rival, who has advocated joining
NATO since he came to power after defeating Yanukovich in a disputed
election in 2004.

Yushchenko agreed to Yanukovich’s return to power in hotly contested
parliamentary elections in March in exchange for a pledge by Yanukovich that
the country would continue on a pro-Western path.

But on his first visit to Brussels since becoming prime minister, Yanukovich
said Ukrainians remained cool to NATO and that membership would be submitted
to a referendum once the country had undergone political and economic
reforms.

“Over the last two years, I have detected more of a negative attitude of the
Ukrainian people with regard to the Atlantic Alliance and the possibility of
joining,” he said. “This is because of a lack of information.”

A majority of Ukrainians oppose membership in NATO, he said, due to a
lingering distrust of the alliance that has outlived the Cold War. Many fear
it could alienate Moscow.

In May, anti-NATO demonstrations erupted in Crimea, home to many ethnic
Russians as well as Russia’s Black Sea fleet, amid fears that the United
States planned to build a base in Ukraine. Wariness of NATO is particularly
strong in the eastern and southern regions, where Yanukovich has many
supporters, Ukraine experts said.

Analysts and NATO officials said Yanukovich’s statement should not be
interpreted as a sign that Ukraine was being pulled back into Moscow’s orbit
or distancing itself from the West.

“It is difficult to foresee how a country whose people are skeptical of NATO
can join the alliance for now,” said a senior NATO official, who asked for
anonymity to avoid breaching protocol. “The fact that the country wants to
strengthen its ties to the EU is a positive sign.”

Yanukovich’s distancing of Kiev from NATO may aggravate the power struggle
between him and Yushchenko. But Marius Vahl, a Ukraine expert at the Center
for European Policy Studies, said Yushchenko was unlikely to seize on the
issue because joining NATO remains deeply unpopular with Ukrainians.

He added that Russia’s often strained relations with NATO had improved
recently and that Ukraine’s decision would encourage this trend. “Ukraine
joining NATO would harden Russia’s attitude toward NATO at a time when
relations are good,” he said.

Yanukovich said he remained determined to steer Ukraine toward the European
Union. “We have the firm intention to have excellent relations with the EU
and a stable relationship, which will bring us in the long term to accession
of the European Union,” he said.

But the EU external relations commissioner, Benita Ferrero-Waldner, said the
bloc had no plans to offer membership for now and instead would propose
closer economic and political ties, including greater collaboration on
energy policy and a free-trade agreement once Kiev joins the World Trade
Organization.

Analysts said the lack of a firm membership offer from the EU risked slowing
reforms. “The unwillingness of the EU to invite Ukraine to join makes
Ukraine less likely to become a modern and prosperous country,” Vahl said.

Ukraine has grown increasingly frustrated with Brussels’ refusal to offer
membership. Yet many European countries fear that another big country like
Ukraine – its populations is about 47 million – would hamper the bloc’s
effectiveness. Such fears reflect expansion fatigue in a Union that already
includes 25 countries and 470 million people. -30-
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LINK: http://www.iht.com/articles/2006/09/14/news/ukraine.php
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6. UKRAINE: YANUKOVYCH BLOWS HOT AND COLD IN BRUSSELS
Relations with NATO are, in words of one NATO diplomat, now “on ice.”

By Ahto Lobjakas, Radio Free Europe/Radio Liberty (RFE/RL)
Prague, Czech Republic, Thursday, September 14, 2005

BRUSSELS – Today’s visit to Brussels by Viktor Yanukovych was not
his first as Ukraine’s prime minister.

Given, however, that the last time Yanukovych was prime minister was
immediately before the Orange Revolution in 2004, the current visit was
eagerly awaited by EU and NATO officials as an opportunity to probe his
government’s intentions.

And true to most expectations, Yanukovych today confirmed Ukraine will
continue seeking EU membership.

His EU host, the Finnish foreign minister and current EU chair, Erkki
Tuomioja, gave Yanukovych’s renewed call for an accession perspective a
courteous, if clearly noncommittal welcome.

“I would say that the most important result of this meeting was that we were
able to confirm, to take first of all on our side to welcome and take note
of Ukrainian intentions to continue their European vocation, and from our
side our firm commitment to furthering this,” Tuomioja said.

When it comes to action, however, the EU remains cool. Only this week, the
European Commission floated plans to negotiate a new partnership treaty with
Kyiv — underscoring that the treaty would not address the issue of
membership.

One EU diplomat, who asked not to be named, told RFE/RL that the Ukrainian
side was told in the run-up to Yanukovych’s visit not to press the issue.
“Don’t ask, because you won’t like the answer,” was how the official summed
up the EU message delivered to Kyiv.

The official said the EU today met Yanukovych with a pre-prepared “defensive
point” to ward off demands for a membership perspective. The “defensive
point” boils down to the standard EU line — Ukraine’s EU membership is not
presently on the agenda.

This does not mean that the EU has formally ruled it out, but simply that it
wants to focus on concrete cooperation and reforms to bring the two sides
closer.

The EU is encouraging political and economic reforms in Ukraine to bring the
country closer to its own legislative standards. And the union is holding
out for the prospect of a free-trade zone with Ukraine, but on condition the
country first joins the World Trade Organization.

Ukraine is also hoping to sign an agreement by the end of this month easing
EU visa rules. Although Yanukovych today described the agreement as the
first step on the road towards the abolition of visas altogether, it will in
the foreseeable future be limited to cutting red tape, visa fees, and
waiting times.

Ukraine itself must sign up to a readmission treaty obliging it to take back
illegal immigrants who reach the EU via its territory.

The EU was also keen to win assurances from Yanukovych that Kyiv will
continue its strict enforcement of controls on the border with Moldova’s
breakaway region of Transdniester.

Yanukovych said today Ukraine will continue supporting the peace plan put
forth last year by the country’s president, Viktor Yushchenko.

Finnish Foreign Minister Tuomioja today took pains to acknowledge that the
fact that Yanukovych hails from the pro-Russian camp in Ukraine will not in
itself hamper cooperation with the EU.

“We [also] covered relations with Russia, because our common view and
understanding is that there is no contradiction between Ukraine’s good
relations with Russia and good relations with Europe — and neither with
[the] EU’s good relations with Russia,” Tuomioja said. “So, we do not see
any competition in this respect.”

However, Yanukovych revealed his pro-Russian colors while visiting NATO
headquarters today. The Ukrainian prime minister told NATO ambassadors that
his country wants to move step by step about plans to join the alliance
because of public opposition.

This means Kyiv has given the cold shoulder to those NATO member states —
led by the United States and Poland among others — who were preparing to
indicate at the alliance’s November summit in Riga that a membership
invitation is in the offing. Ukraine’s relations with NATO are, in the words
of one NATO diplomat, now “on ice.” -30-
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7. UKRAINIAN PRIME MINISTER, PRESIDENT AT ODDS OVER NATO

UT1, Kiev, in Ukrainian 1800 gmt 14 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

KIEV – Ukrainian Prime Minister Viktor Yanukovych’s remarks that NATO
integration moves will be put on hold fly in the face of earlier statements
by President Viktor Yushchenko, Ukraine’s state-run TV said.

Yanukovych’s visit to Brussels on 14 September mainly focused on developing
stronger ties with the EU, but officials in Brussels said Ukraine stood no
chance of membership at the moment, the TV said.

The following is the text of the report by Ukrainian state-owned television
UT1 on 14 September:

[Presenter] Ukraine is not ready to join NATO because most of its citizens
are against this, [Ukrainian Prime Minister] Viktor Yanukovych has told the
NATO secretary-general [Jaap de Hoop Scheffer] at the start of his visit to
Brussels.

The step that comes last before joining NATO – joining the Membership Action
Plan – has thus been postponed.

This is despite the fact that President Viktor Yushchenko said as recently
as last month that Ukraine was not going to delay the signing of this
document. Here’s Iryna Herasymova with the details of the prime minister’s
tour of Brussels.

[Correspondent] Brussels still sees the Ukrainian prime minister as a
pro-Russian politician, the local press says. But the European Commission
has given assurances that it was waiting for Yanukovych to find out if
Ukraine’s course towards European integration indeed remained unchanged.

The EU found this out immediately after a welcome ceremony for the Ukrainian
delegation at Brussels National airport last night.

But Ukraine did not hear any guarantees of EU entry. On the contrary, EU
Foreign Policy Commissioner Benita Ferrero-Waldner – all smiles – explained
that this is not on the agenda right now.

[Ferrero-Waldner, overlaid with Ukrainian translation] The future is
uncertain, but I can say for certain that Ukraine currently has no prospect
of membership.

[Correspondent] The prime minister made a gesture in response, but in
relation to NATO. Ukrainians are not willing to join NATO, he said. People
need to be given an explanation of what NATO membership means first.

[Yanukovych] Society does not support this now, only a small part of it
does – 12-25 per cent.

[Correspondent] Yanukovych made it clear that the main task of the Brussels
visit is to forge closer ties with the EU. Therefore, a key topic for
discussions with EU commissioners is a new, expanded, bilateral accord on
partnership. Directions for talks on this have already been approved.

However, Ukrainian foreign relations experts say that this document will not
be signed any time soon.

[Oleksandr Sushko, captioned as scientific director of the Euro-Atlantic
cooperation institute] At this stage, Ukraine and the EU have somewhat
different approaches to the essence and goals of this accord.

This is the reason why talks are not going to be easy or end soon. I believe
that these difficult talks will take two years and result in a new framework
agreement defining the parameters, goals and essence of cooperation between
Ukraine and the EU.

[Correspondent] The European Commission said that the new accord will go far
beyond the current one. Ukrainian officials are upbeat about the results of
the current talks.

Economics Minister Volodymyr Makukha said that Ukraine’s accession to the
WTO had been agreed upon. Now the onus is on parliament to adopt a string of
necessary laws. -30-
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8. UKRAINIAN DEFENCE MINISTER HRYTSENKO UNHAPPY WITH
PRIME MINISTER’S STATEMENT ON NATO

TV 5 Kanal, Kiev, in Ukrainian 0915 gmt 15 Sep 06
BBC Monitoring Service,United Kingdom, Thursday, Sep 15, 2006

KIEV – Ukrainian Defence Minister Anatoliy Hrytsenko has said he disagrees
with Prime Minister Viktor Yanukovych’s statement in Brussels on 14
September to the effect that it is too early for Ukraine to start working on
a NATO membership action plan.

Hrytsenko was speaking at a news conference at the Interfax-Ukraine news
agency on 15 September, which was broadcast live by the private 5 TV Kanal.

Hrytsenko said Yanukovych should have consulted him before making such
statements. “Unfortunately, after this trip, it is 100 per cent clear for me
at least that no decision will be taken in Riga [at a NATO summit] on
Ukraine joining the NATO membership plan. Unfortunately. We really had this
chance. We are ready for this, and this would benefit Ukraine and
Ukrainians,” he said.

Hrytsenko said that living standards would improve in Ukraine if it joined
NATO. Hrytsenko said he is not going to resign over his disagreement with
Yanukovych. -30-
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9. TWO LEADING UKRAINIAN CENTRE-RIGHT MPs OUTRAGED
THAT PRIME MINISTER PUTS NATO ENTRY ON HOLD

UNIAN news agency, Kiev, in Ukrainian Thursday, 14 Sep 06
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

KIEV – Two leading centre-right MPs in Ukraine have bitterly criticized
Prime Minister Viktor Yanukovych’s remarks on 14 September that his
government is putting moves to join NATO on hold.

MP Anatoliy Matviyenko of the propresidential Our Ukraine faction called
Yanukovych’s remarks “immature, illogical and provocative”, the UNIAN
news agency reported at 1434 gmt on 14 September.

Yanukovych might have his own views on the issue, but he should understand
that Ukraine needs stability, Matviyenko said.

“He signs the declaration, then keeps mum and, in the end, blurts it out.
This just shows that he is not a statesman,” Matviyenko said.

Yanukovych’s remarks are likely to further complicate the stalling coalition
talks between Our Ukraine and the Party of Regions, he added.

“The upshot of the talks might be that we differ on one of the most crucial
issues,” UNIAN quoted Matviyenko as saying.

In a separate report at 1446 gmt, the agency quoted MP Andriy Shkil, a
prominent member of Orange Revolution figure Yuliya Tymoshenko’s bloc, as
saying Yanukovych’s remarks show that his Party of Regions is not going to
honour the declaration of national unity.

It was signed in early August by President Viktor Yushchenko and the leaders
of major parties, including Yanukovych, in an effort to end the political
crisis that erupted after the March parliamentary election produced
inconclusive results.

“They could promise something he was not going to do or reword the bits that
were unclear, but when asked why they are not willing to ask NATO for the
start of membership preparations – the so-called Membership Action Plan, –
he said that Ukraine was delaying its NATO entry,” Shkil said.

“The declaration is not worth the paper it’s written on,” Shkil said. It was
clear from the beginning that President Viktor Yushchenko’s backing for
Yanukovych’s nomination for prime minister amounted to rolling back
European integration, Shkil said. -30-

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10. KINAKH SAYS YANUKOVYCH’S STATEMENTS ON UKRAINE’S
UNPREPAREDNESS FOR JOINING NATO MEMBERSHIP

ACTION PLAN VIOLATE NATIONAL UNITY DECLARATION

Ukrainian News Agency, Kyiv, Ukraine, Thursday, September 14, 2006

KYIV – Member of the Verkhovna Rada Anatolii Kinakh (Our Ukraine Bloc’s
faction) believes Premier Viktor Yanukovych’s statements that Ukraine is not
ready to join the Action Plan for NATO membership violate the Declaration of
National Unity.

This follows from a statement of the Our Ukraine Bloc’s press service, a
copy of which was made available to Ukrainian News.

He recalled that the Declaration provided a compromise definition of aims of
the Euro-Atlantic integration policy. According to the document, the
question on Ukraine’s membership in NATO will be solved through a
nationwide consultative referendum.

Kinakh believes that Ukraine had a chance to sign this document during the
Alliance’s summit in Riga (Latvia), and further delaying of the decision
will harm Ukraine.

‘Deviation from these terms will essentially change the dynamics of
Ukraine’s integration with the world community and will bring great harm to
strategic interests of our state,’ Kinakh said.

According to him, the membership action plan will continue economic and
political reforms and consolidate European standards and democracy. The
lawmaker says that it’s necessary to inform the public what advantages
Ukraine may receive from joining NATO.

As Ukrainian News earlier reported, during the Ukraine-NATO commission
meeting in Brussels (Belgium), Yanukovych said that broadening cooperation
with NATO was a pressing issue for Ukraine, noting that only 12-25% of
Ukrainian citizens support the country’s accession to NATO. -30-
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11. UKRAINIAN PRIME MINISTER REJECTS ACCUSATIONS OF
BREACHING DECLARATION OF NATIONAL UNITY ON NATO

Ukrayinska Pravda web site, Kiev, in Ukrainian 14 Sep 06
BBC Monitoring Service, United Kingdom, Friday, Sep 15, 2006

KIEV – Prime Minister Viktor Yanukovych has said that there is nothing in
the declaration of national unity [signed by President Viktor Yushchenko and
leaders of major political parties on 3 August as a tool to put end to the
four-month long political crisis] that compels him to support the NATO
membership action plan for Ukraine.

“The declaration does not say that we are supporting the action plan. It
does say, however, that the decision to join NATO should be taken based on
the outcome of a referendum,” Yanukovych responded to a question about the
outraged reaction of the [president’s] Our Ukraine party to his refusal to
declare Ukraine’s wish to join the NATO membership action plan.

[Yanukovych said in Brussels on 14 September that Ukraine is not ready yet
for joining the action plan.]

“Certain politicians have their own views and this is their right,”
Yanukovych said. He added: “But these certain politicians have to take into
account the point of view of society of which only 12 to 25 per cent support
the idea of joining NATO.”

“I would like us to always pay attention to public opinion which has always
been and always will be a barometer for me,” Yanukovych said. -30-
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12. UKRAINIAN PROPRESIDENTIAL PARTY CRITICIZES
PRIME MINISTER’S NATO STATEMENTS

Interfax-Ukraine news agency, Kiev, in Russian 1256 gmt 14 Sep
BBC Monitoring Service, United Kingdom, Thursday, Sep 14, 2006

KIEV – [Propresidential bloc] Our Ukraine believes that Prime Minister
Viktor Yanukovych’s statement that Ukraine is not prepared to implement a
NATO accession plan is a breach of the national unity memorandum [which
Yanukovych signed on 3 August].

“The statement Viktor Yanukovych made in Brussels today to the effect that
Ukraine is not prepared to begin to implement an action plan to join NATO is
an example of how the clauses of the declaration of national unity are
violated.

This is a very provoking move,” Our Ukraine press service quoted Our Ukraine
MP Yuriy Klyuchkovskyy. He said that this statement can hamper the setting
up of a national unity coalition [involving Our Ukraine].

The deputy head of the parliamentary budget committee, Pavlo Zhebrivskyy,
said that Yanukovych’s statement “is one of the last bricks to the wall
separating Our Ukraine and the Party of Regions.

He said that the bloc intended to join the coalition but unless the foreign
political course of the state is preserved “we have nothing to discuss with
representatives of the Party of Regions”.

“Our Ukraine can go into hard-line opposition to the so-called anti-crisis
coalition [involving Yanukovych’s Party of Regions] and to the course to
scrap the European choice, reforms and the liberalization of the economy,”
Zhebrivskyy said.

The head of the parliamentary committee for security and defence, Anatoliy
Kinakh, said that joining the NATO membership action plan would be a
continuation of political and democratic reforms in Ukraine, the
introduction of European and world standards, the protection of human rights
and the competitive economy.

“Therefore, if Ukraine wastes this opportunity, because the November Riga
NATO summit was expected to declare readiness to agree on Ukraine joining
the action plan, a failure to follow this schedule will significantly
decrease the dynamics of Ukraine’s integration into the world community and
deal a serious blow to the strategic interests of our state,” Kinakh said.

Yanukovych said in Brussels today that currently Ukraine is not prepared to
implement the NATO membership action plan. -30-
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13. UKRAINE WILL BECOME NATO MEMBER SOONER OR
LATER SAYS POLISH PRIME MINISTER JAROSLAW KACZYNSKI

PAP news agency, Warsaw, Poland, Friday, 14 Sep 06

WASHINGTON – Despite present difficulties Ukraine will become a NATO
member sooner or later, Prime Minister Jaroslaw Kaczynski has said.

Commenting Thursday’s [14 September] remark of Ukrainian Prime Minister
Viktor Yanukovych that Ukraine would not seek NATO membership now,
Kaczynski said that it was not new news for him, as he heard it from
Yanukovych himself.

Kaczynski noted that the “effects from our point of view are obviously not
good as we would like to see Ukraine in the alliance as soon as possible”
and he expressed the hope that sooner or later Ukraine will become NATO
member.

On Thursday Poland’s prime minister met House of Representatives Speaker
Dennis Hastert. After the meeting Kaczynski said that the Polish government
would seek to legalize dual citizenship in Poland. -30-
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14. POLAND’S LECH WALESA APPEALS FOR FASTER EUROPEAN
INTEGRATION TO AVOID LOSING UKRAINE

AP Worldstream, Warsaw, Poland, Thursday, Sep 14, 2006

POLAND – Nobel Peace Prize laureate and Solidarity founder Lech Walesa
urge European leaders Thursday to speed up the integration process of poorer
eastern European countries and to avoid losing Ukraine.

Walesa, who won the 1983 Nobel Peace Prize for leading Poland’s
anti-communist Solidarity movement, said western Europe must change its
attitude toward helping poorer eastern nations improve their economic level.

“We have lost Belarus and now we risk losing Ukraine,” Walesa told private
TVN24 television.

“Europe must unite as soon as possible, bring economies to similar level,
increase its tempo and include the economically poorer nations,” he said.
“Ukraine will see that it pays off, that this is the right direction, and
then we will win Ukraine back in our orbit.”

Walesa’s statement came as Ukraine’s new prime minister, Viktor Yanukovych,
told NATO that he was putting moves toward membership in the alliance on
hold, but he said the former Soviet Republic still wanted to join the
European Union.

The previous, pro-Western government had hoped NATO would give Ukraine
a plan preparing the way for membership at a summit in November, and was
hopeful it could get an invitation to join as early as 2008. -30-
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15. NATO PROMISES TO SUPPORT REFORM IN UKRAINE

Ukrainian News Service, Kyiv, Ukraine, Friday, September 15, 2006

NATO has promised to support further military and security reforms in
Ukraine. The press service of the Cabinet of Ministers announced this,
citing a statement that NATO’s Secretary-General Jaap de Hoop Scheffer made
at a meeting of the Ukraine-NATO Commission attended by Prime Minister
Viktor Yanukovych.

‘The secretary-general of NATO gave a positive assessment of the current
level of cooperation between Ukraine and the alliance.
He assured that NATO will continue to support the implementation of reforms
in Ukraine,’ the press service said.

At the start of the meeting, Scheffer congratulated Yanukovych on his
appointment as Ukraine’s prime minister and wished him fruitful work in the
post.

Scheffer said that NATO approved the course that Ukraine has taken in the
past few years, particularly the holding of transparent and democratic
parliamentary elections and the formation of a coalition government.

Yanukovych said that the main direction of the activities of the new Cabinet
of Ministers is fighting corruption, implementing economic reforms, and
improving the investment climate in Ukraine.

Yanukovych also said that Ukraine favors a deepening of its relations with
NATO. He confirmed Ukraine’s desire to continue to participate in
peacekeeping operations under the auspices of NATO.

Yanukovych stressed that the Ukrainian authorities have a coordination
position on cooperation with NATO and that this position is stipulated in
the Universal Declaration of National Unity, which states that Ukraine’s
accession to NATO and its cooperation with NATO are to be considered
separately.

According to Yanukovych, what is necessary right now is broader information
of the Ukrainian public about the positive aspects of European integration
while the final decision on Ukraine’s accession to NATO will be made after
the holding of a national referendum on the issue.

The press service of the Cabinet of Ministers also said that the
participants in the committee’s meeting also discussed topical issues
involving cooperation between Ukraine and NATO in the political, defense,
and security areas.

Scheffer said that NATO was prepared to assist Ukraine in implementing
military and security reform and stressed the importance of the assistance
that Ukraine is providing via the cooperation on the international fight
against terrorism.

Yanukovych said that it was very important for Ukraine to participate in the
creation of a new European security system.

Regarding the date of a national referendum on Ukraine’s accession to NATO,
Yanukovych said that the referendum would take place only if systemic
economic and social reforms are implemented and if the living standard of
Ukrainians improved.

According to Scheffer, Yanukovych’s visit to Brussels is an important step
toward deepening the cooperation between Ukraine and NATO.

As Ukrainian News earlier reported, Yanukovych traveled to Brussels
(Belgium) on September 13 for meetings with the leaderships of the European
Union and NATO.

Yanukovych believes that broadening cooperation with NATO is presently a
pressing issue for Ukraine. The signatories to the Universal Declaration on
National Unity agreed to perform the procedures on Ukraine’s accession to
NATO but stated that the final decision on accession to NATO will be made
via a referendum. -30-
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16. UKRAINE MULTINATIONAL INVESTORS URGE NEW LAWS
TO STOP CORPORATE RAIDS

Dow Jones Newswires, Brussels, Belgium, Thu, September 14, 2006 .

BRUSSELS – Representatives of multinational companies active in the Ukraine
lambasted the Kiev government and European Union this week, saying both
need to work harder toward Ukrainian legal reforms to stop the expensive and
potentially damaging practice of corporate raiding.

Corporate raiding is the suit-and-tie equivalent of pirates seizing a ship
and plundering its booty. Representatives of Bunge Ltd (BG), a global
agribusiness empire worth $6.66 billion, and private Ukraine TV station One
Plus One – which is partly owned by NASDAQ-listed media firm Central
European Media Enterprises (CETV) – say this practice is costing them
millions in legal fees and may stifle future investment into the country.

The E.U. has the tools to pressure Ukraine into legal reforms, they say;
Brussels can hold out on granting Ukraine a coveted free trade agreement,
and it can delay its admission to the World Trade Organization.

“The time is right. The E.U. must do more to get things to change,”
Kiev-based lawyer Sergiy Koziakov told Dow Jones Newswires Thursday.
Koziakov leads a law firm that’s been appealing what he says is a corrupt
court ruling in favor of a corporate raider and against One Plus One.

“Western governments need to make the point that if Ukraine wants access to
the E.U., to the WTO, to a common free trade zone, they need to create the
adequate business climate,” said Dexter Frye, managing director of Bunge’s
operations in the Ukraine.

Corporate raiders largely operate from legal firms, exploiting corrupt
courts and judges. Their methods for entering and plundering a company
range from harassment through allegations of wrongdoing until a payoff is
extracted, to sophisticated timing of dud court orders that can lead to a
company being in the hands of the raiders long enough for them to auction
off the assets.

E.U. officials recognize the practise as a growing problem.

During a meeting between Ukraine Prime Minister Viktor Yanukovych and
E.U. officials to discuss closer commercial and diplomatic ties, the two
sides discussed “difficult issues, talking openly about corruption,” said
akari Tuomioja, foreign affairs minister for Finland, which currently holds
the rotating presidency of the European Union.

“Justice, liberty and security” are among the most important issues for
Ukraine to tackle before entering into formal agreements with Europe, E.U.
officials said.

Multinationals have been keen to enter Ukraine. Once hailed the bread
basket of the Soviet Union, investors say the country offers fertile land, a
qualified workforce and easy access to eastern markets.

Yet Ukraine has come under increasing pressure to fight corruption. “We
want to remain in Ukraine,” said Henri Rieux, corporate affairs director for
Bunge Europe. “But you cannot stay in such a climate with such a corporate
structure. It’s a place where they simply don’t respect the rule of law.”
===================================================
By Juliane von Reppert-Bismark, Dow Jones Newswires
juliane.vonreppert@dowjones.com

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17. UKRAINE PM FACES BUNGE ANGER OVER GRAIN PLANT
Urging government help to thwart an attempt by “corporate raiders.”
Bunge: Ukraine’s tax authorities behind in refunding $40m in tax rebates.

By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, Friday, September 15 2006

KIEV – Bunge, the US-based agriculture group, is urging Ukraine’s government
to help thwart an attempt by “corporate raiders” seeking to strip away its
ownership rights over a prized sunflower seed processing plant.

The escalating conflict was raised by Bunge officials ahead of a visit to
Brussels yesterday by Viktor Yanukovich, the Ukrainian prime minister. It
is his first official trip to Europe since taking charge of the former
Soviet state’s government in August.

The troubles facing Bunge, a large foreign investor in Ukraine, could prove
embarrassing for Mr Yanukovich who will meet high-ranking EU and Nato
officials.

A Bunge official said that a Ukrainian business group last year acquired a
minority stake in the Dnipropetrovsk plant, which is 94 per cent owned by
Bunge.

It has since embarked on a well-orchestrated campaign, including litigation,
intended to squeeze Bunge out of its investment, the official said.

“Utilising the same tactics by which they have successfully secured the
assets of other companies operating in Ukraine – the raiders purchase a
small number of common shares, and then exploit a weak judicial system
to secure court rulings nullifying the rights of the company as the majority
shareholder.”

Dominant Ukrainian business groups are notorious for utilising aggressive
corporate takeover tactics in settling differences among themselves, but
have rarely targeted foreign corporations openly.

Bunge, which generates an annual turnover of $350m at its Ukrainian grain
trading and processing operations, has warned authorities in Kiev that it
could scale back investments if the dispute is not handled justly. Bunge has
invested in excess of $150m to date.

“The actions of these raiders have gone unchecked to the point where they
have started targeting international companies such as Bunge. If they are
allowed to continue their activities, this will send a devastating message
to all companies operating in or entering Ukraine,” the company said.

Ukraine is home to a prospering agriculture market and has benefited from
investments from many leading international firms including Cargill and
Archer Daniels Midland.

Investors have repeatedly complained of bureaucratic red tape, including the
government’s tardiness in refunding value added tax, set at a rate of 20 per
cent. Bunge said Ukraine’s tax authorities are behind in refunding it some
$40m in tax rebates. -30-
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http://www.ft.com/cms/s/eea9bc4c-4456-11db-8965-0000779e2340.html

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18. UKRAINE PARLIAMENT COMMEMORATE JOURNALIST
GEORGY GONGADZE WITH MOMENT OF SILENCE


Ukrainian News Agency, Kyiv, Ukraine, Friday, September 15, 2006

KYIV – The Verkhovna Rada commemorated journalist Georgy Gongadze
with silence. Verkhovna Rada Chairman Oleksandr Moroz said this at the
plenary session of the parliament.

Moroz stated, that journalist’s activity stimulated the development of
democracy in the country.

Speaker reminded, that Gongadze’s murder made thousands of people protest.
As Ukrainian News earlier reported, the trial of the men suspected of
murdering Gongadze opened at the Kyiv Appeal Court on January 9.

The suspects are three former employees of the Internal Affairs Ministry’s
department of external surveillance: Valerii Kostenko, Mykola Protasov and
Oleksandr Popovych.

An international arrest warrant was issued for another suspect, Oleksii
Pukach, who is the former head of the Internal Affairs Ministry’s department
of external surveillance.

The Prosecutor-General’s Office said that only the first part of the
Gongadze murder case – the one involving the people who murdered
Gongadze – was sent to court.

According to the Prosecutor-General’s Office, the second part involves the
people who ordered the murder and organized it. -30-
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19. LANGUAGE ISSUE THREATENS UKRAINE’S NATIONAL
SECURITY SAYS COMMUNIST LEADER PETRO SYMONENKO

RIA Novosti, Moscow, Russia, Thursday, September 14, 2006

KIEV – The leader of Ukraine’s Communists said Thursday failure to resolve
the language problem jeopardizes Ukraine’s national security.

The status of the Russian language was one of the hotly debated issues that
delayed the signing of a national unity agreement on key policies by
President Viktor Yushchenko and parliamentary leaders before Viktor
Yanukovych’s appointment as prime minister last month. The sides eventually
agreed to keep Ukrainian as the main state language, without entrenching it
as the only official language.

“Our party stresses that foot-dragging on the language issue is a real
threat to Ukraine’s national security,” said Petro Symonenko, whose party is
part of a ruling coalition that also comprises the Party of Regions, the
Socialists and some members of pro-presidential Our Ukraine.

“In particular, delay in granting Russian the status as a second state
language is in conflict with Ukraine’s European choice.” He said the current
policy pursued by the authorities in the language realm antagonized certain
forces in Russia who speculated on this problem and created an unfavorable
political climate, impeding the normalization of Ukrainian-Russian
relations.

“We are planting a humanitarian time bomb in relations with Russia,” he
said. “This also affects economic matters.”

Yanukovych said last month that granting Russian the status of an official
language in the country was impossible under current conditions, but that
Ukraine needed a law to regulate the use of the Russian language, in line
with the European Charter for Regional or Minority Languages.

Symonenko said the Communist faction would advocate budget spending in full
on programs to enable the Charter to be applied in Ukraine.

The Communist Party, which has 21 seats in the 450-member Supreme Rada, will
also advocate a long-debated common economic space for Ukraine, Russia,
Belarus, and Kazakhstan, he said.

“The creation of the common economic space should be an important part
of the government’s anti-crisis program, along with the formation of a
gas-transportation venture, comprising Ukraine, Russia and interested
parties from Europe and Asia,” he said. -30-
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LINK: http://en.rian.ru/world/20060914/53868303.html
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20. EXHIBITION OF CONTEMPORARY ART “NEW SPACE”
Pinchuk Art Centre, Besarabska Square, Arena, Kiev, Ukraine
Public Opening – September 16th, 2006, 20:00


PinchukArtCentre, Kyiv, Ukraine
Action Ukraine Report (AUR) #758, Article 20
Kyiv, Ukraine, Friday, September 15, 2006

KYIV – On Saturday, the 16th of September, Victor Pinchuk’s Foundation
“Contemporary Art in Ukraine” will open in Kyiv one of the largest Eastern
Europe centers for contemporary art – the PinchukArtCentre.

PinchukArtCentre is situated in downtown Kyiv, in an old building on
Bessarabska square. Its total surface is 2,500 square meters.

According to international and Ukrainian experts, this facility, designed by
the French architect Philippe Chiambaretta, is unique. Its creation is the
fulfillment of the promise given by the founder of the Centre, Victor
Pinchuk, to do his best to provide in Ukraine conditions not only for
exhibiting contemporary art but also for its creation.

The world of culture speaks a variety of languages. One of them is the
language of contemporary art. On the one hand, it does not require
translation.

On the other hand, this language implies getting used to it and speaking it.
Impressing, sometimes shocking and even unpleasant, this language is
capable of talking to a person in an unusual way about ordinary things.

At the same time, it is only the contemporary art that can accept absolutely
naturally the things that would seem surprising and fancy. It is always
talking about future, about what is still difficult today to understand and
notice.

It is right to the new space and at a new time that the PinchukArtCentre
opens its door. It is intended to become a cultural portal that will bring
the newest art trends to Ukraine and will integrate the Ukrainian
contemporary art into the worldwide cultural context.

PinchukArtCentre will be inaugurated with the exhibition entitled “New
Space” (curated by Nicolas Bourriaud, France, and Olexandre Soloviov,
Ukraine).

The visitors will have an opportunity to see the works of acknowledged
international masters and contemporary Ukrainian artists such as Serhiy
Bratkov, Olaxandre Gnylitsky, Olafur Eliasson, Oleg Kulik, Boris Mikhailov,
Sarah Morris, Philippe Parreno, Thomas Ruff, Arsen Savadov, Oleg Tistol,
Karsten Holler, Vasyl Tsagolov and others.

By opening its exhibition premises, PinchukArtCentre continues and
strengthens the support for the Ukrainian contemporary art and obtains the
possibility to present the most progressive and promising international art
to the Ukrainian and international audience.

For the invitees, the exhibition will be open to visit from 2.00 p.m. on the
16th of September, and at 8.00 p.m. on the same day, the opening ceremony
will start in the Arena complex featuring Oleg Lundstrem Jazz Orchestra
(Russia) and the German band Booka Shade.

A unique video show will also be presented to the visitors in which the
video and the reality are combined in an unforgettable performance. Starting
from the 17th of September, the exhibition “New Space” will be open for free
visiting in PinchukArtCentre.
INFORMATION
Created in 2003 on the initiative of the famous Ukrainian patron of arts
Viktor Pinchuk with the ambition to promote the development of the
contemporary artistic scene in Ukraine, the Foundation for Contemporary Art
organises exhibitions and creative workshops, provides grants to Ukrainian
artists.

The collection composed of about 300 artworks, was presented in Kyiv several
times, and introduced to the international audience in Venice in the Palazzo
Papadopoli, on the occasion of the 2005 Biennale.

Web address of PinchukArtCentre: www.c-artpinchuk.org. Olexandre Soloviov,
curator of PinchukArtCentre, info@c-artpinchuk.org, tel. +38 044 490 48 06,
fax +38 044 494 11 29

Contacts: Tatiana Overina, Advisor on communications for Victor Pinchuk’s
Foundation, overina@pinchukfund.org, tel. +38 044 494 11 45,
fax: + 38 044 494 11 49. -30-
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21. RUSSIA DESERVES MORE THAN STABILITY FROM PUTIN’S LAST
YEAR: THE CHAOTIC CAPITALISM OF THE YELTSIN ERA HAS
BEEN BANISHED, BUT OTHER DISTURBING TRENDS

ARE NOW GAINING MOMENTUM

By Jonathan Steele, Moscow, The Guardian
London, United Kingdom, Thursday, Sep 14, 2006

On the seventh floor of a skyscraper that towers over southern Moscow an
entire wall is covered by screens of electronic data. At computer terminals,
operators monitor the flow of Russia’s most lucrative export product.

This is mission control for Gazprom, Russia’s state-owned energy
conglomerate – the place from which, if you are Dick Cheney or a Russophobe
of his ilk, the Kremlin intends to run Europe, if not the world.

Pressing a button here can bring a country to its knees, so the nightmare
has it, or at least cause its citizens to shiver by cutting off their gas.

About 40 experts on Russia – journalists, academics and policy analysts from
Europe and the US – were granted rare access to Gazprom’s inner sanctum last
week. It was the third year Russia has invited the so-called Valdai
Discussion Club for meetings that culminate in a three-hour
question-and-answer session with Vladimir Putin.

The message the Russians wanted to give us was that blackmail is not on the
agenda. Energy producers need customers willing to sign long-term purchasing
contracts just as much as energy consumers want guarantees of supply.

Putin even rejected the description of Russia as an “energy superpower”,
telling the group that the label was “deliberately fed to the media in order
to bring about an association with the terrible Soviet Union”.

Watching the screens in Gazprom’s control room, you certainly have an
impression of a Gulliver rather than a Goliath. The web of pipelines ties
Russia to Europe. Almost none go east. Fears that Russia could dump Europe
and switch gas sales to Asia are absurd. Although Putin said Russia plans to
increase energy exports to Asia by a factor of 10 by 2020, this would total
only 30%; 70% will still go to Europe.

The second message to our group was that Russia’s transition to western
capitalism is a long way from completion. The current hybrid of state
ownership and regulated prices for energy will not end soon, nor will the
government’s determination to keep control of strategic assets. Pipelines
will not be sold to foreigners, which would only give them windfall profits,
Putin says.

Appointing Kremlin managers to the boards of gas and oil companies is a step
towards good corporate governance, not away from it, since the oligarchs who
seized control of former Soviet assets in the 1990s evaded taxpaying on a
massive scale.

At the same time the Kremlin wants to move as quickly as politically
possible towards charging market prices for the energy it sells inside
Russia and to former Soviet republics. It finds it ironic that the west
calls on Moscow to charge more, only to complain of Russian intimidation
when Ukraine refused to sign a new contract last year and Russia stopped
sending gas after the old contract had run out.

Within Russia, Gazprom is not yet raising prices for fear of a social
explosion. Russian consumers have had to accept several shocks in the past
15 years, from the hyperinflation of the early 90s and the bank collapses of
1998 to sharp increases in housing costs and fares for domestic flights and
urban transport.

Putin’s restoration of a strong Russian state and his calm defence of
national interests after the often demeaning pro-westernism of the Yeltsin
years are the key to his high poll ratings. The concerns stem from other
trends.

He is continuing to re-exert central control over politics at all levels,
apparently so that he can suppress protest rather than respond to it. The
Russian parliament was emasculated in 2004 by “reforms” that created high
hurdles to small parties and independents trying to enter the Duma.

The largest opposition party, the Communists, lost much of its support after
Putin stole its “national-patriotic” agenda six years ago. Now, with
parliamentary elections due next year, the Kremlin is trying to manipulate
the three smaller parties that raise social-protection issues.

It engineered leadership purges to put Putin supporters in charge of the
Party of Life, the Pensioners’ party and the party known as Motherland, and
encouraged the three to merge. The new creation has yet to choose a name,
but the Moscow joke is that to call it “the life of pensioners in the
motherland” would be too stark since everyone knows there is no feel-good
factor there.

Equally worrying is the accelerating trend towards the marketisation of
Russia’s education and health systems. Universal provision, free at the
point of delivery, has collapsed. The health sector in particular is
severely affected. Imposing charges for consultations with doctors,
operations and private hospital rooms has split the system in two.

The Soviet practice of small “presents” to doctors has become one of
virtually mandatory payment at high rates. The World Health Organisation
ranks Russia at 127th out of its 192 member nations, and at 75th according
to the amount the government spends on healthcare.

Putin recognises a health crisis, particularly in the country’s declining
birth rate and the reduced life expectancy for adults. He has made education
and health two of his four “national projects”. The trouble is the
stinginess of his response and the way that government money is spent.

Flush with energy revenue, Putin has set up a stabilisation fund for the
economy, but his advisers insist it will not be used for short-term
injections of cash into social services.

A system of “childhood certificates” not only provides higher maternity
allowances once a baby is born but earmarks money for pregnant women to pay
delivery fees, thereby subsidising the new market system in health.

“Why do we need to break the old Soviet system instead of making it better?”
asks Leonid Roshal, who chairs the president’s newly formed commission on
public health.

As Putin moves nearer to his final year in office, he deserves credit for
restoring stability after the chaotic capitalism of the Yeltsin era. But he
has done little to reduce the greedy culture of rent-seeking that emerged in
the early 90s, in which the owners of every asset, whether natural
resources, property, skills or a job in the police or other government
sectors, look to extract an unfair profit.

“In 1990 only three or four of my fellow economic graduates at Moscow
University went into government. The rest wanted to make money in business,”
a banker told me last week. “Now 70% go into government. You can make more
money there.” Putin’s legacy needs to be better than that. -30-
(j.steele@guardian.co.uk)
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
22. SO, UKRAINE ISN’T ORANGE AFTER ALL

OP-ED: By Adam Swain, Kyiv Post, Kyiv, Ukraine, Wed, Aug 30 2006

The re-emergence of Viktor Yanukovych as prime minister of Ukraine must
rate as one of the most implausible developments even to the many seasoned
observers who have long become accustomed to ‘transition shocks’ in
post-Soviet Europe.

The so-called Orange Revolution, which followed the rigged presidential
election illegitimately ‘won’ by Mr. Yanukovych in late 2004 was supposed to
usher in a new democratic Ukraine firmly anchored to Euro-Atlantic
geopolitical and economic structures.

However, the new government is committed to encouraging the nascent
Ukrainian capitalism that has emerged out of the gangsterism of the 1990s
and to re-establishing a close and cooperative relationship with Russia,
whatever the West may say. Tellingly, the new government has an unambiguous
democratic mandate.

Compared to the temporary economic shocks of the 1990s that were anticipated
and analyzed by neoliberal economists, Mr. Yanukovych’s resurrection is all
the more shocking because it suggests that the future of Ukraine is not
Orange after all.

Combined with the re-election of President Lukashenko in Belarus earlier
this year and Mr. Putin’s willingness to assert Russia’s national interests
even at the expense of offending the West, it looks as if the future of the
post-Soviet world can not be understood purely in terms of a single Western
modernity.

Rather than being a source of cheap labor and a client of the West, it is at
least possible that Ukraine will take its place in a new emergent capitalism
centered on Russia with access to cheap and plentiful hydrocarbons and the
potential to rival the West.

Is it any wonder then that Western governments have been so keen to
destabilize and re-align Ukraine?

That Mr. Yanukovych becoming prime minister for a second time – with
enhanced powers that arguably make him more powerful than President
Yushchenko – has shocked so many onlookers, is because so much comment in
the West leading up to and following the Orange Revolution was based on
wishful thinking.

Whilst the Orange Revolution unquestionably mobilized millions of people
yearning for a new Ukraine, it was not, as widely claimed, solely a national
and democratic reawakening. It was also the occasion for the latest tactical
scramble for power amongst the cosy elite that has misruled Ukraine since
Independence.

Sober analysis of the protagonists revealed that the distinction between the
‘goodies’ and the ‘baddies’ was not so clearly drawn as was often supposed.

The mass mobilization and the political jousting would not have occurred
without the sophisticated political operation, predominately ‘made in the
USA’, which destabilized the finely balanced domestic political landscape.

The aim of U.S. foreign policy toward Ukraine has been clear and consistent
ever since Independence: to as far as possible detach Ukraine from Russian
influence.

To this end, members of the nationalist Ukrainian Diaspora in academia, the
media and elsewhere have often been willing accomplices.

Ukraine has been subject to Western meddling through the operation of
supposedly independent foundations, aid programs and technical assistance
projects, as well as through the more formal (but often less public)
instruments of Western diplomacy.

The failure to impose neoliberal economic policies in the 1990s led the U.S.
to switch its focus to so-called ‘political processes’ and ‘civil society’.
This entailed the mobilization of students, academics, NGOs, journalists and
politicians to provide evidence of the authoritarianism of former Ukrainian
President Kuchma’s incumbent regime.

Accordingly, Mr. Yushchenko’s presidential campaign focused largely on the
legitimacy of the election process itself. Hence the staged fracas between
Mr. Yushchenko and the guards protecting the Central Election Commission
building in Kyiv before the presidential election.

Hence, too, the agents provocateurs who organized Orange rallies in the
politically hostile east of the country in order to video the anticipated
response. Both Mr. Yushchenko’s campaign and the supposedly non-partisan
interventions by Western governments were justified by the reaction they
provoked.

Once demonstrators had flooded onto the streets of Kyiv, they were lauded as
the embodiment of the ‘Ukrainian people’ conveniently ignoring that ‘other’
Ukraine, which had supported Mr. Yanukovych and which was as suspicious of
the events at Maidan as the demonstrators were of the electoral process.

Equally damning is the way the Orange Revolution failed to deliver stable
government, failed to maintain rapid economic growth and made little
progress in cracking down on corruption. Far from strengthening the state
and promoting structural economic reform the Orange Revolution destabilized
the productivist ideology that had united the country.

Just as the state was showing signs of consolidation and alignment after
years of division between ministries and competing regional lobbies, the
Orange Revolution undermined an already weak state machine.

The renationalization of the Kryvorizhstal steel mill that had been
controversially sold to IMU, a holding company jointly owned by two of the
largest business empires in the country, and its subsequent resale to the
London-based Mittal Group, symbolized the severing of connections between
the state and the country’s national capitalists.

Government was largely paralyzed and many voters found Mr. Yushchenko’s
apparent fixation with NATO accession a bewildering distraction. Such
political instability merely served to discourage much-needed investment and
undermine economic growth.

The conditions that had enabled rapid economic growth were torn asunder by
the Orange Revolution and rendered the country almost ungovernable.

The appointment of Mr. Yekhanurov as prime minister last autumn was an
acknowledgment that Mr. Yushchenko and his allies couldn’t govern the
country without reaching an accommodation with their political foes based in
the financial and industrial heartland in the east of the country.

The finely balanced waxing and waning as the regional lobbies vied with one
another for influence in Kyiv was disrupted by the Orange Revolution.

During his first spell as prime minister, Mr. Yanukovych proved particularly
adept at brokering between the rival regional lobbies and is perhaps now
best placed to coax and cajole them to forge a functioning national state
machine united in common cause with a governable national economy.

It is paradoxical that the most fervent supporters of the Orange Revolution
now have the least confidence that it will have a lasting effect on the
country.

But since Mr. Yanukovych and his party have apologized for their role in the
rigged election and now unambiguously defend free elections and a free
media, it is at least possible that his premiership will show the Orange
Revolution marked the beginning of a new Ukraine after all. Only not the new
Ukraine envisioned by many Orange protagonists and their patrons in the
West. -30-
———————————————————————————————–
Adam Swain is a lecturer in Geography at the University of Nottingham,
UK.; LINK: http://www.kyivpost.com/opinion/oped/25002/
————————————————————————————————
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