AUR#847 May 25 More Turmoil, Prosecutor General Out; Struggle About Ukraine’s Future; Political Noise Will Not Derail Economy; No Returning To Past

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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       

 
                POLITICAL NOISE WILL NOT
                     DERAIL THE ECONOMY 
                                                 (Article Eight)
                        
     THERE IS NO RETURNING TO THE PAST
             “They do not realize that there is no returning to the past and that
                       it is a long way to the future embodied by Europe.”
                                          (Article Twenty-Seven)
                        
ACTION UKRAINE REPORT – AUR – Number 847
Mr. E. Morgan Williams, Publisher and Editor, SigmaBleyzer
WASHINGTON, D.C., FRIDAY, MAY 25, 2007 

               –——-  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.         UKRAINIAN PRESIDENT FIRES PROSECUTOR GENERAL
By Natasha Lisova, Associated Press, Kiev, Ukraine, Thu, May 24, 2007
 
2.   SCUFFLES AS YUSHCHENKO SACKS CENTRAL PROSECUTOR
By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, Thursday, May 24 2007

3.      UKRAINIAN PRESIDENT ACCUSES GOVERNING COALITION
                               OF NEGOTIATING IN BAD FAITH 

TV 5 Kanal, Kiev, in Ukrainian 1500 gmt 24 May 07
BBC Monitoring Service, United Kingdom, Thursday, May 24, 2007

4. UKRAINIAN PRES REFUSES TO NAME DATE FOR SNAP ELECTION 

TV 5 Kanal, Kiev, in Ukrainian 1600 gmt 24 May 07
BBC Monitoring Service, United Kingdom, May 24, 2007

5.            UKRAINIAN PRESIDENT WARNS INTERIOR MINISTER

                                   OVER USE OF RIOT POLICE 
TV 5 Kanal, Kiev, in Ukrainian 1505 gmt 24 May 07
BBC Monitoring Service, United Kingdom, Thursday, May 24, 2007

6.      UKRAINIAN PRIME MINISTER VOWS NOT TO ALLOW “CIVIL
                           WAR” IN TV ADDRESS TO THE NATION 

UT1, Kiev, in Ukrainian 1815 gmt 24 May 07
BBC Monitoring Service, United Kingdom, Thursday, May 24, 2007

7.    JAMES SHERR: THIS STRUGGLE IS NOT ABOUT YUSHCHENKO.
                               IT IS ABOUT UKRAINE’S FUTURE
INTERVIEW: With James Sherr, The Day Weekly Digest

Kyiv, Ukraine, Tuesday, May 22, 2007

8 UKRAINE: POLITICAL NOISE WILL NOT DERAIL THE ECONOMY
RESEARCH AND ANALYSIS: By Lars Rasmussen, Analyst
Danske Research, Danske Bank, Denmark, Tuesday, May 22, 2007

9.    DENMARK COMPANY TO BUILD CONSTRUCTION MATERIALS 
                           PLANT IN UKRAINE FOR $145 MILLION
Interfax, Kyiv, Ukraine, Thursday, May 24, 2007

10.        ROMANIAN COMPANIES EXPAND TO EASTERN EUROPE
                 Bulgaria, Serbia, Ukraine & Moldova – The Main Attractions.
By Andrada Cristea, Nine O’Clock, Bucharest, Romania, Wed, May 23, 2007

11HUNGARIAN FIRM TO EXPAND GAS PIPELINE TOWARDS UKRAINE
Portfolio Online Financial Journal, Budapest, Hungary, Wed, 23, May 2007

12.   POLISH PRES KACZYNSKI DISCUSSES ENERGY COOPERATION
                 WITH UKRAINE’S FOREIGN MINISTER YATSENYUK
Interfax, Warsaw, Poland, Wednesday, May 23, 2007

13. OSCE: UKRAINE, BELARUS, MOLDOVA CHOKING ON TOXIC WASTE
Agence France Presse (AFP), Prague, Czech Republic, May 24, 2007

14.       UKRAINE: LAND PRIVATIZATION TO BE COMPLETED SOON 

Interfax, Kyiv, Ukraine, Wednesday, May 23, 2007

15BOARD OF UKRAINE OPPORTUNITY TRUST OUSTED IN LONDON
By Daniel Thomas, Financial Times, London, UK, Thursday, May 24 2007

16TOSHIBA EXPANDS NOTEBOOK PC DISTRIBUTION TO UKRAINE
PRWEB, Limassol, Cyprus, Thursday, May 24, 2007

17.              UKRAINE-NORTH AMERICAN INVESTMENT FORUM:
                        Investing in Eastern Europe’s Fastest-Growing Market
                 The New York Marriott Marquis Times Square, New York, NY
                            Monday June 4, 2007 – Wednesday June 6, 2007
Ukraine-North America Investment Forum website
New York, New York, May 2007

18UN: FREEDOM OF EXPRESSION INCREASES IN UKRAINE DESPITE
        INTIMIDATION FROM INDIVIDUALS LINKED TO AUTHORITIES
United Nations, Scoop Independent News, New Zealand, Thu, 24 May 2007

19.        UKRAINE’S CONSTITUTIONAL COURT UNDER PRESSURE
                          More judges devoured by Ukrainian political crisis
ANALYSIS & COMMENTARY: By Pavel Korduban
Eurasia Daily Monitor, Volume 4, Issue 100
The Jamestown Foundation, Wash DC, Tue, May 22, 2007

20“POLITICAL TOURISM” & MANAGED CIVIL SOCIETY IN UKRAINE
                         Yanukovych camp secretly paying demonstrators
ANALYSIS & COMMENTARY: By Taras Kuzio 
Eurasia Daily Monitor, Volume 4, Issue 100
The Jamestown Foundation, Wash DC, Tue, May 22, 2007

 
21. “UKRAINE ON THE EVE OF AN ELECTION: WHAT IS HAPPENING
                            ON THE SPIN-DOCTOR MARKET?”
ANALYSIS & COMMENTARY: By Pavlo Bulhak
Ukrayinska Pravda website, Kiev, in Russian 22 May 07
BBC Monitoring Service,United Kingdom, Thursday, May 24, 2007
 
22 ORTHODOX CHURCH WANTS CHURCH, SEMINARY IN PRAGUE
    Church mainly tries to help Ukrainian workers in spiritual sphere, and also by
  offering them protection from the mafia and in securing labour permits for them.
Czech News Agency (CTK), Prague, Czech Republic, May 24, 2007
 
23PRAGUE ORTHODOX ARCHBISHOP DENIES HE WAS StB AGENT 
Czech News Agency (CTK), Prague, Czech Republic, Thursday, May 24, 2007
 
 
25.               FOR ESTONIA AND NATO, A NEW KIND OF WAR
By Anne Applebaum, Columnist, The Washington Post
Washington, D.C., Tuesday, May 22, 2007; Page A15
 
 
                                       IN UKRAINIAN SOCIETY?
    Graves turned out to contain the remains of victims of purges before WW II.
By Stanislav Kulchytsky, Professor, Historian, Scholar
The Day Weekly Digest, #14, Kyiv, Ukraine, Tuesday, 22 May 2007

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1
 UKRAINIAN PRESIDENT FIRES PROSECUTOR GENERAL

By Natasha Lisova, Associated Press, Kiev, Ukraine, Thu, May 24, 2007

KIEV, Ukraine – The president fired Ukraine’s top prosecutor Thursday and
the interior minister appeared to defy the order, sending dozens of police
to surround the prosecutor’s building and dramatically raising the stakes in
the political chaos in the former Soviet republic.

Prosecutor General Svyatoslav Piskun, who has long sparred with President
Viktor Yushchenko, initially pledged to defy the order but later appeared to
soften his stance.

Still, the dismissal prompted Yushchenko’s longtime rival, Prime Minister
Viktor Yanukovych, to cut short a trip to the Black Sea Crimean peninsula,
returning home to Kiev for an urgent meeting with his government.

The former Soviet republic has been mired in political crisis since
Yushchenko last month ordered parliament dissolved and called for new
elections – a move he said was necessary to prevent Yanukovych from

usurping power.

Dozens of police dispatched by Interior Minister Vasyl Tsushko – a
Yanukovych ally – linked arms and formed a chain around the prosecutor’s
building in downtown Kiev, and dozens of pro-Yanukovych protesters

carrying blue-and-yellow flags rallied outside. Piskun remained in his office.

Inside, security agents, lawmakers and others scuffled in the hallways, as
lawmakers supporting Piskun tried to enter his office. Interior Ministry
spokesman Konstantin Stogniy said Thursday evening that police officers
continued to secure the building at the request of Piskun.

Yushchenko convened an emergency meeting of the heads of enforcement

bodies, the presidential office said.

Piskun told reporters that he would heed the order once it was published in
the presidential register Friday and officially came into effect. He also
said parliament must give its approval for the dismissal.

“The president’s order must be published officially. I will fulfill it but I
will appeal against it to the court,” he said.

Yushchenko later told reporters that the decision to fire Piskun was legal
and did not need parliament’s approval. He also accused Piskun of being
politically involved and of not fulfilling his duties.

“It was not the president’s right (to fire Piskun), it was the president’s
obligation,” he said, speaking of himself in the third person.

In a nationally televised address late Thursday, Yanukovych urged the army
to stay out of the crisis, and called Yushchenko a dictator. “The government
will not allow anarchy, civil war,” he said.

Yushchenko has sparred with Piskun for years. Yushchenko, who was

disfigured by a 2004 dioxin poisoning, dismissed Piskun two years ago,
complaining about the slow pace of the investigation into the attack.

Piskun appealed the dismissal and a court in December ordered him
reinstated. Yushchenko last month acceded to that order and reappointed
Piskun.

But on Thursday, Yushchenko reversed course and fired Piskun a second time,
saying that it was illegal for him to be simultaneously both prosecutor-general

and a member of parliament. Piskun became a lawmaker last year as a member
of the party of Yushchenko’s rival, Prime Minister Viktor Yanukovych.

Despite the order, its legal basis was uncertain because Yushchenko
dissolved parliament in early April, several weeks before he reappointed
Piskun.

Meanwhile, the constitutionality of Yushchenko’s order dissolving parliament
is being considered by the Constitutional Court, leaving a doubt whether the
old parliament still legally exists.                          -30-
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2.  SCUFFLES AS YUSHCHENKO SACKS CENTRAL PROSECUTOR

By Roman Olearchyk in Kiev, Financial Times
London, United Kingdom, Thursday, May 24 2007

KIEV – Fighting broke out at the central prosecutor’s office in Kiev on
Thursday after President Viktor Yushchenko sacked Svyatoslav Piskun the
general prosecutor, in a move which increased the political conflict
gripping Ukraine.

Security guards controlled by the president scuffled with Interior Ministry
police troops loyal to his bitter rival, Viktor Yanukovich, the prime
minister, who were sent to protect the prosecutor, a member of the premier’s
Regions party.

Mr Yushchenko dismissed Mr Piskun for refusing to relinquish his seat in
parliament under legislation that forbids state officials from holding two
jobs. But the move was widely seen as the latest move in the president’s
political battle with Mr Yanukovich.

Political worries spread to the markets where Ukraine’s currency, the
hryvnia, hit a six-week low against the dollar and Ukrainian dollar-
denominated bond spreads and credit default swaps widened.

Tensions are now at their highest since the 2004 Orange Revolution when the
pro-west Mr Yushchenko defeated the Russia-oriented Mr Yanukovich.

Mr Yanukovich staged a comeback by winning the March 2006 parliamentary
elections, became prime minister, and renewed a power struggle with Mr
Yushchenko.

The conflict became a full-blown crisis on April 2 this year, when Mr
Yushchenko dissolved parliament and called early elections. Mr Yanukovich
refuses to recognise the legality of the call, and constitutional court
judges are split along party lines, leaving them unable to rule.

On Thursday, Mr Piskun left his office when confronted by Mr Yushchenko’s
official but returned later under the protection of elite Interior Ministry
police, who clashed with security guards responsible for protecting state
buildings.

Vasyl Tsushko, interior minister, a Yanukovich ally, positioned elite police
troops around the prosecutor’s building and vowed to protect Mr Piskun
against what he described as a presidential coup d’état.

In a televised press conference, Mr Yushchenko denied he was plotting to
impose presidential rule.

Mr Yanukovich’s allies have accused Mr Yushchenko of plotting a forceful
overthrow of government with the intention of imposing presidential rule. Mr
Yushchenko has repeatedly denied such plans while calling for a compromise
deal.

The president said his sacking of the general prosecutor was necessary to
prevent Mr Yanukovich’s coalition from usurping power.         -30-

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3.  UKRAINIAN PRESIDENT ACCUSES GOVERNING COALITION
                               OF NEGOTIATING IN BAD FAITH 

TV 5 Kanal, Kiev, in Ukrainian 1500 gmt 24 May 07
BBC Monitoring Service, United Kingdom, Thursday, May 24, 2007

KIEV – President Viktor Yushchenko has accused the governing coalition

of negotiating in bad faith on conditions for holding a snap parliamentary
election in line with his two decrees dissolving parliament.

Speaking at a news conference on 24 May, Yushchenko said, “I got the
impression that the governing majority view the talks that have been going
on for 52 days since the day of publication of the first decree as a
fiction, as a means to drag out time, to apply pressure on court bodies,
demobilize the work of the Prosecutor-General’s Office, and to give signals
to society that the authorities are incapable of holding an election.”

Yushchenko also said that at his meeting with Prime Minister Viktor
Yanukovych on 23 May, he believed that they had reached an understanding on
choosing a date for the election. “This date was named. The decision was
confirmed.

There was an agreement that by evening a protocol would be on the table that
would be signed by the working group members, the joint coordinators,
[National Security and Defence Council Secretary] Ivan Plyushch and [First
Deputy Prime Minister] Mykola Azarov, and five party leaders or the leaders
who wished to sign it.

We were talking about a confirmed position. The language was specific. But
unfortunately this protocol did not appear.”                    -30-
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4. UKRAINIAN PRES REFUSES TO NAME DATE FOR SNAP ELECTION 
TV 5 Kanal, Kiev, in Ukrainian 1600 gmt 24 May 07
BBC Monitoring Service, United Kingdom, May 24, 2007

KIEV – President Viktor Yushchenko has refused to name the date for a snap
parliamentary election which he suggested had been agreed with Prime
Minister Viktor Yushchenko on 23 May.

Speaking at a news conference on 24 May, which was broadcast live on 5

Kanal TV, Yushchenko said, “I could name [a date], but you understand –
this date is a working option.

If it has not been approved, if we agreed it with the prime minister, and
now it is not announced or signed on paper, what date should I name – the
one that was not approved?”

Earlier in the news conference, Yushchenko said that at his meeting with
Yanukovych on 23 May, they had seemed to reach an understanding on

choosing a date for the election. “This date was named. The decision was
confirmed.” However, a document fixing the date was not approved. -30-
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5.   UKRAINIAN PRESIDENT WARNS INTERIOR MINISTER
                                OVER USE OF RIOT POLICE 

TV 5 Kanal, Kiev, in Ukrainian 1505 gmt 24 May 07
BBC Monitoring Service, United Kingdom, Thursday, May 24, 2007

KIEV – Ukrainian President Viktor Yushchenko has issued a strongly-worded
warning to Interior Minister Vasyl Tsushko for involving Berkut
special-purpose police units in incidents at the Prosecutor-General’s Office
today.

Speaking at a news conference broadcast live by Ukraine’s 5 Kanal television
after a meeting with heads of uniformed agencies on 24 June, Yushchenko said
Tsushko broke the law when he ordered special-purpose police to enter the
Prosecutor-General’s Office to guard Prosecutor-General Svyatoslav Piskun,
whom Yushchenko had sacked earlier today but who had stormed into the top
prosecutor’s office with the help of coalition MPs.

“What Minister Tsushko did today is a crime. The people who carried out the
order committed a crime. I warn that this should be the last instance of
force methods being used in settling a political conflict. The best response
from units armed with weapons, well-organized and well-trained, is stay away
from illegal actions in settling the crisis.

I call on all uniformed structures to pull back to square one and not to
stand in the way of politicians, in this case, formulating legal decisions
in line with the law and the constitution,” Yushchenko said.

He slammed Tsushko for making politically charged statements. Tsushko
had said that “a coup d’etat” was taking place in Ukraine.

“I have given guarantees to the nation that uniformed structures will not be
dragged into solving the political conflict.

Therefore, today I ordered the newly appointed prosecutor-general [Viktor
Shemchuk], the man who is carrying out the duties of the prosecutor-general,
and the Security Service to sort out the situation that happened with Berkut
units entering the Prosecutor-General’s Office.

Now they have been withdrawn, but the question remains – who issued this
criminal order and who will bear criminal responsibility for using force in
solving a political conflict. This is no joke. I would like the minister of
internal affairs not to comment on presidential decree. This is none of his
business – if he is still the minister,” Yushchenko said.

Yushchenko once again strongly rejected the use of force in resolving the
political crisis and urged all uniformed agencies to stay out of politics.  -30-

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6.  UKRAINIAN PRIME MINISTER VOWS NOT TO ALLOW
           “CIVIL WAR” IN TV ADDRESS TO THE NATION 
UT1, Kiev, in Ukrainian 1815 gmt 24 May 07
BBC Monitoring Service, United Kingdom, Thursday, May 24, 2007

Ukrainian Prime Minister Viktor Yanukovych has said in a TV address to

the nation that his government will use all power at its disposal not to allow
civil war. He said President Viktor Yushchenko’s decree sacking
Prosecutor-General Svyatoslav Piskun was illegal.

He added that the president was either misinformed or deliberately selective
in applying the law to his opponents and friends.

Yanukovych said such selectiveness reminded him of Spanish dictator
Francisco Franco. Yanukovych also accused the presidential inner circle of
forcing law-enforcement agencies to carry out political orders from the
opposition.

The following is the text of the address by Yanukovych carried by the
Ukrainian state-owned television UT1 on 24 May:

Dear compatriots. The events taking place in Ukraine today once again
confirm how immature and fragile the achievements of democracy are here,

how easy it is to ruin them and to provoke a return to an authoritarian regime.

We have seen for ourselves that the irresponsible, unlawful actions to which
officials from the president’s inner circle have resorted in trying to
remove the Ukrainian prosecutor-general became the spark that ignited
confrontation and conflict. Such acts of provocation may lead to
extraordinary events. It is our duty to do our best to prevent this.

It is a pity and shame that at the time when Ukraine is hosting events that
are crucial to its future, such as a summit of CIS heads of state where lots
of vital issues can be addressed – we are forced instead to focus our
efforts on correcting the violations of the law committed by officials from
the presidential secretariat, who are trying to get law-enforcement bodies
not to defend the law and the constitution, but to carry out orders from
opposition parties.

I am deeply upset by the fact that the president is in effect being deceived
and cut off from comprehensive information. But the president must know that
the secretariat of the Supreme Council back on 14 May registered a statement
by Svyatoslav Piskun asking to be relieved of his parliamentary mandate.

If the president knew about this and signed the illegal decree on the
prosecutor-general’s dismissal and his official resorted to a force option,
bypassing procedures and attempting to block the work of the legitimate
prosecutor-general, then one needs to be held accountable for this in
accordance with the law.

Also, the president cannot but know that a deputy head of his secretariat,
Roman Bezsmertnyy, has been working in the presidential chancellery for
several months while remaining a member of parliament. Why hasn’t he been
sacked yet?

Why is the president so selective in applying the law? Why does the
guarantor of the constitution use the power of the law against some people
and turn a blind eye to lawlessness by others?

Does Viktor Andriyovych live according to the principles of dictator Franco?
Everything for friends, the law for enemies.

Maybe the president is simply unaware of many nuances and this is what can
explain some of his illogical steps. But an ordinary citizen could be
excused for such lack of awareness, explaining it by some character trait or
lack of experience. When we talk of a state figure whose decisions affect
the lives of millions, this is simply dangerous.

Does the president know that at this very moment unknown individuals have
seized the session hall of the Constitutional Court? Do his officials, who
never stop settling scores with each other, ever inform the president of the
orders being issued on his behalf?

Problems with infighting between various groups in the president’s entourage
have repeatedly caused misunderstandings and sharp confrontations. This is a
very dangerous process.

This cannot be taken lightly. Order should be restored. The normal
functioning of all branches of power should be renewed. The uninterrupted
and independent operation of courts should be ensured.

All law enforcement agencies should be kept within the bounds of the law,
not allowing the army to be provoked into illegal action. This is very
dangerous.

The turmoil that irresponsible political failures have stirred up may lead
to disaster in Ukraine. The government has no right to allow this. It is our
duty to finally protect citizens from upheavals, clashes and stress, which
are staged by some officials – before each great holiday, unfortunately.

I call on all responsible forces in this state to do their utmost to restore
peace and stability in this country.

We should concentrate our efforts on making sure that law-enforcement bodies
exclusively uphold the law instead of carrying out political orders from the
opposition.

We should act in such a way as to help calm, common sense and statist

wisdom get the upper hand.

I assure you, dear compatriots, that the government will not allow anarchy
in Ukraine. It will not allow civil war.

Our country will live in stability and prosperity. We have enough strength
and power to ensure peaceful and prosperous life for the people.  -30-

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7. JAMES SHERR: THIS STRUGGLE IS NOT ABOUT YUSHCHENKO.
                               IT IS ABOUT UKRAINE’S FUTURE

INTERVIEW: With James Sherr, The Day Weekly Digest

Kyiv, Ukraine, Tuesday, May 22, 2007

One knows well Senior Associate worker of the Conflict Research Center of
the Institute of Defense of Great Britain James Sherr in Ukrainian political
and expert circles.

It is worth taking into consideration the opinion of the British analyst,
who specializes in the questions of Ukraine’s foreign and security policy at
least because, unlike western diplomats and NATO state officials, he is
capable of expressing the western thoughts concerning the processes that
are taking place in Ukraine.

Previously, in the interview to Den/The Day, he expressed his doubts that
the Act of National Unity, signed by the leading political parties of
Ukraine, the Speaker of the Verkhovna Rada and the president of Ukraine
would guarantee the goals, put in it.

He also admitted that the Coalition of People’s Unity is the latest
manifestation of the county’s disunity. What results will have the latest
rearrangements within the RNBO for Ukrainian security?

Why is the Ukrainian president incapable of selecting effective managers for
the leading posts in the Secretariat and the RNBO? Can the West act as an
intermediary for solving the conflict between the president and the
prime-minister?

What consequences will have the signing of Declaration on Building the
Trans-Caspian gas pipeline by Russia, Kazakhstan, and Turkmenistan for
Europe, and Ukraine, in particular.

On this in the exclusive interview to The Day by the British analyst James
SHERR.

[The Day] What consequences can the latest appointments in the National
Security and Defense Council (RNBO), especially the replacement of Haiduk

by Pliushch, have for Ukraine?

[James Sherr] Until this decision was made, it is important to say that from
the time of the second presidential decree on the dismissal of parliament
the president and his people behaved with good judgment and skill.

The legality of what they did is very much in question, but the legitimacy
is not in question because in any properly democratic system a defection of
parliamentarians on such a scale would immediately force an election.

So it is of absolutely vital interest that the electors of Ukraine decide
whether the traitors are to be rewarded or punished. But now we have this
sudden decision that I fear may again snatch defeat from the jaws of
victory. It is a serious, strategic misjudgement.

[1] First, about the political misjudgement. It is vital for Ukraine that
all influential forces and all regions be properly represented. Vitalii
Haiduk and the Industrial Union of Donbas added a vital eastern Ukrainian
element to the president’s camp and in support of Ukraine’s Euro-Atlantic
course. They are exceptionally pragmatic people.

Of course, they have brought their own interests that have made the
president’s side a broad coalition, which is what it should be, and not
narrow interests and a narrow clique of “dear friends.”

He has now lost this strength and fallen back on a narrow clique of people –
the “dear friends” or some who are worse – and they are a source of
weakness. The president seems to have forgotten a basic truth about his own
position in this country.

He is strong when he is a representative of all dissatisfied and
democratically minded forces in the country. He is weak when he represents
only himself, his own immediately circle of people, and Our Ukraine.

This struggle is not about Yushchenko. It is about Ukraine’s future.

[2] Second, he has made a great error institutionally because the RNBO

must function as a state institution and not as a political institution. Its
professional staffers constantly work on issues of considerable state
importance: the coordination of defense and security sector reforms,
negotiations of borders with Russia and Romania, the problem of
Transdnistria, the issue of energy security.

This corps of people cannot be distracted, and this important work cannot

be compromised by political battles, particularly at a time when the country
distrusts all institutions, even the Constitutional Court.

No one in power in Ukraine today seems to understand the importance of
institutions as institutions. In a mature and stable democracy the character
of institutions is deemed more important than the character of politicians.

[3] And the third, by losing Haiduk the president and the country have

lost one of the few people with the will and competence to advance the
energy security of Ukraine. And this issue affects the whole future of
Ukraine’s economy, its political course, and its independence.

[The Day] In this context, how should Skypalsky’s appointment as the
deputy head of the SBU be regarded? What does it mean?

[James Sherr] This looks like a sound decision. The SBU is still a divided,
even a vulnerable, institution. Whenever it is weak, outside forces play
with it and are able to work inside it, including the special services of
neighbors who still have the common language and share the post-Soviet
security culture.

And this risk is most acute where the territorial integrity and sovereignty
of the country are most at risk, namely in the Crimea. It is vital for the
SBU in the Crimea to function as the SBU of Ukraine and not as a law unto
itself or a servant of outside interests.

I believe that Skypalsky understands this, and I hope he will be able to
restore vertical authority and coherence to this organization, which is
again a casualty of political struggle in Ukraine.

[The Day] You know Stalin’s famous slogan: “Cadres decide everything.”
Why does the Ukrainian president not understand this? Why doesn’t he
choose proper people and effective managers for his camp?

[James Sherr] Excuse me, this is a Stalinist maxim and it is turned upside
down. The country needs legitimate, effective laws and institutions – people
cannot decide everything.

[The Day] Do you think that the election will change anything in Ukraine?

[James Sherr] The country needs elections! But the question now is how
much legitimacy they will have and whether the result will be accepted by
the losing side. Today the country expects attempts at falsification on all
sides. This is a very unhealthy situation.

[The Day] Yanukovych recently said that he prefers to have a mediator in the
negotiations with Yushchenko. Do you think mediators will help resolve the
crisis in Ukraine?

[James Sherr] I do not think the West will mediate. Europe does not know
what to do with Ukraine. Many have given up. This is very upsetting in
Europe because everyone understands Ukraine’s importance.

But who in Ukraine has the combination of principle and competence to
move this country in a productive direction? Who is able to act as an
effective partner? Do you see anyone?

[The Day] What consequences can the recent signing by Russia, Kazakhstan,
and Turkmenistan of the Declaration on building the Trans-Caspian gas
pipeline through Russian territory have for Europe’s energy policy?

[James Sherr] It shows again that energy is about politics and geopolitics,
not just economics. Is it in the economic interests of Kazakhstan and
Turkmenistan to sell oil and gas to Russia for well below the price that they

will get on the oil market? Do they doubt that the Trans-Caspian pipeline
would be built if they became partners in this project?

It is political issues that have pushed these economic issues to the
background.

[1] First, to this day the Kazakh elite is apprehensive about those in
Russia who believe that the natural border of Kazakhstan runs to the south
of northern Kazakhstan and not to the north of northern Kazakhstan. They
never want Russia to have an opportunity to undermine their sovereignty.
This is the first factor.

[2] Second, the overwhelming priority for both Kazakhstan and Turkmenistan
is internal, governmental, and regional security. The democracy agenda of
the US and the EU have made them very apprehensive.

The Western reaction to the events in Andijan in 2005 was a shock to all the
countries in Central Asia, who were becoming closer to the West. Only Russia
can guarantee the regime security of the Central Asian states.

[3] The third issue concerns President Nazarbaev: the EU’s energy policy.
He sees that the EU has a tough energy strategy on paper but does nothing to
implement it. So why should the Russians when even the EU is too preoccupied
to do so?

[The Day] What can this new pipeline mean for Ukraine?

[James Sherr] If President Nazarbaev asks these questions and answers them
in this way, then it is very clear how difficult it will be for Ukraine to
behave differently.                                         -30-
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LINK: http://www.day.kiev.ua/181826/
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8.    POLITICAL NOISE WILL NOT DERAIL THE ECONOMY

RESEARCH AND ANALYSIS: By Lars Rasmussen, Analyst
Danske Research, Danske Bank, Denmark, Tuesday, May 22, 2007

[1] On April 2, 2007, President Viktor Yushchenko decided to dissolve the
parliament and sign a presidential decree ordering early parliamentary
elections to be held on May 27, 2007.

[2] Early elections will clear the air, but it will not really change the
composition of the parliament as the governing coalition will retain power.

[3] We argue that the political noise in the short run will not derail the
economy and the ongoing upswing, as to a large extent it is driven by a
strong global demand for Ukrainian export goods and an undervalued
currency.

[4] We would welcome it if Orange Viktor and Blue Viktor could approach one
other and go forward with reforms putting Ukraine on track for EU and WTO
membership, as this could help unlock the long-term enormous growth
potential in Ukraine.
                                        THE DEADLOCK
                       Yushchenko’s political maneuvering
Ukraine has been caught in a political deadlock since April 2, when
President Viktor Yushchenko decided to dissolve the parliament and sign a
presidential decree ordering early parliamentary elections to be held on May
27, 2007 . Later this was postponed to June 24, 2007.

The deadlock follows a long struggle for power since the parliamentary
elections last summer between President Yushchenko and the parliament
with the pro-Russian Prime Minister Viktor Yanukovych.

A bitter fight between the Coalition of National Unity, which is the name
of the governing coalition consisting of the Party of Regions, the Communist
Party, and the Socialist Party, and the opposition, consisting of Yulia
Tymoshenko’s Electoral Bloc and Yushchenko’s own Our Ukraine party,
and the Civil Movement “People’s Self-Defence,” often resulted in the
opposition boycotting the parliament’s sessions.

The parliament and cabinet of ministers appealed to Ukraine’s Constitutional
Court (CC) that Yushchenko’s decree was unconstitutional and that it should
be annulled. The CC has decided to spot any considerations on the legality
of Yushchenko’s decree. The president subsequently cancelled the decree and
the parliament might be reassembled as early as tomorrow.

Yesterday President Yushchenko and Prime Minister Yanukovych had a long
meeting trying to sort out the stalemate between the presidency and the
government. After five hours of talks we did not receive any statements from
either party, but we got some indication from the Tymoshenko bloc that an
election might be postponed further to September.
                                     WHERE ARE WE NOW?
The impasse will probably continue until the parliamentary elections are
held . and then nothing will change as polls show that the Coalition of
National Unity will most likely retain its majority in the parliament.

We would welcome either party approaching the other and together go forward
with continued reforms, a democratisation process, a reduction of corruption
and red tape barriers and an improvement of private property rights as this
would move Ukraine closer towards WTO and EU.
                 ECONOMIC BOOM FIRMLY ENTRENCHED
                      Political noise will not derail the economy
The Ukrainian economy is currently in good shape, growing 7-8% y/y spurred
by healthy demand and high and rising prices for its export goods . the
most important export sectors in Ukraine are the agricultural and metal
sectors . and cheap import prices on gas from Russia (roughly half of the
market price).

Public finances are fairly healthy (low public debt) and consumer spending
is very strong. The risks to the economy look more to be overheating rather
than a slowdown due to the political noise. Heavy borrowing and rising
consumer spending has lead to rising inflation, which now is above 10% y/y .
this calls for some monetary tightening.

Remember that the Ukrainian Hryvnia (UAH) is pegged to the USD and that
it currently is somewhat undervalued due to the weak dollar and rising
productivity.

In fact looking at the pegged currencies in Central and Eastern Europe,
they all show signs of rising inflation, as the monetary tightening coming
through appreciation in floating currencies is not allowed.

We therefore welcome recent indications from the Ukrainian central bank that
it (from 2010) could allow more flexibility in the UAH. Note that the NBU is
still concerned about the political jitters, and it will only gradually
loosen its grip on the currency to avoid speculative attacks and financial
turmoil.
                                       SUMMING UP:
The economy is moving in the right direction and Ukraine has enormous
growth potential in the longer run – if the politicians manage to unlock it.
Politically we are not really moving in these days.

 
         WE NEED REFORM, REFORM, AND REFORM                         
The deadlock will not really be resolved by parliamentary elections, but we
do not think that the political noise can derail the economic upswing, which
right now seems firmly entrenched. Of course in the longer run we need
political stability and we need reform, reform, and reform.       -30-
————————————————————————————————–
NOTE: This report has been prepared by Danske Research, which is part
of Danske Markets, a division of Danske Bank. Danske Bank is under
supervision by the Danish Financial Supervisory Authority.
Lars Rasmussen, laras@danskebank.dk
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http://mediaserver.fxstreet.com/Reports/a61c7417-1c76-4d4d-bcd5-64906de44414/5eb60dc7-cd88-4327-a2a5-147a76d7dd52.pdf
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9.  DENMARK COMPANY TO BUILD CONSTRUCTION MATERIALS 
                         PLANT IN UKRAINE FOR $145 MILLION

Interfax, Kyiv, Ukraine, Thursday, May 24, 2007

KYIV – Denmark’s Rockwool International A/S plans to build a plant in
Ukraine to produce insulation materials with a capacity of 110,000 tonnes
of products per year.

According  to  the  company’s quarterly report, the cost of the new
plant is estimated at 800 Danish kroner (about $145 million). The plant
is to be launched in the first half of 2010.

Rockwool  is  the largest producer of mineral wool in the world and
has 23 companies in Europe, North America and Asia, employing over 7,400
people.

Rockwool sales in 2006 reached 1.5 billion euros, up 12% from 2005.
Poland,  Ukraine  and  Belarus accounted for 7% of the company’s overall
sales last year.

This  year  Rockwool  Ukraine  expects  growth in sales of 10%-20%,
compared with 11.9% last year.

In  total,  according  to  company  estimates,  sales of insulation
materials  in Ukraine in 2006 will amount to 6 million – 8 million cubic
meters.                                                      -30-
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10. ROMANIAN COMPANIES EXPAND TO EASTERN EUROPE
                 Bulgaria, Serbia, Ukraine & Moldova – The Main Attractions.

By Andrada Cristea, Nine O’Clock, Bucharest, Romania, Wed, May 23, 2007

BUCHAREST – Romanian businessmen have ever more daring expansion plans.
The companies do not hesitate to allot millions of EUR in order to tap the
markets from Eastern Europe which have a very big development potential, as
it arises from an analysis of the daily ‘Adevarul.’

The western market attracted brands locally recognized such as Rompetrol in
France and Jolidon in Italy. Thus, Jolidon began its expansion in 2000 by
opening a representation in Budapest, which continued with a new
inauguration in 2001 in Milan.

Presently, the group has 55 shops in the main cities and commercial centers
from our country, three in Budapest and 35 in Italy.

In the domain of electronic and electrical household appliances, the firms
want to develop, because the Romanian market is stagnating.

The company Flamingo already has 27 shops in countries like Bulgaria,
Croatia, The Netherlands, Hungary, Macedonia, Moldova, Serbia and
Montenegro. But the people from Flamingo want to continue their
development in Romania.

Domo, the third retailer in this domain on the Romanian market, expands in
the cities along the Danube. Domo has already shops in Sofia, Ruse, Varna,
Plovdiv, Haskovo, Sliven, Sumen, Jambol.

The target for the present year is to have 12 shops in this area. Although
the leader of this market with a quota of 26 per cent, Altex is only a local
brand that has not yet crossed the border.

Shifting to another sector, Serbia and Bulgaria are the first two countries
in which the group Mobexpert has chosen to develop, the first reason being
the proximity.

“The specific of these markets is very close to that of Romania, and thus we
can capitalize some of the experiences that we had here,” declared Dan Sucu,
chairman of the group.

The latter says that the level of investments in shops is around EUR 7 M, of
which five for the hypermarket from Sofia and EUR 2 M for the two shops
Mobexpert Office from Sofia and Belgrade. Sucu announced that he wants
also to expand to Ukraine and Moldova.

In its turn, Romstal wants to impose itself on the relevant market from
Eastern Europe, an objective for which it has budgeted tens of millions of
Euro.

“In 2007, the development plans of Romstal will focus on the expansion to
two new highly competitive markets: Bulgaria and Serbia,” declared Ovidiu
Henter, Executive General Manager Romstal.

Presently, the retail network of the company has 157 selling points, of
which 120 in Romania, 19 in Ukraine, 17 in the Republic of Moldova, and one
in Italy, with a total surface of 70,000 sq m.

The new owner of the company ‘La Fantana,’ the investment fund Innova
Capital, announced that the plans for 2008 include the listing on the
markets neighbouring Romania and the listing with BVB.

“In 2007 we intend to prospect the markets from Ukraine, Hungary and
 Greece,” declared Cristian Amza, founder and General Manager of the group
‘La Fantana.’                                       -30-
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http://www.nineoclock.ro/index.php?page=detalii&categorie=business&id=20070522-509943
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11. HUNGARIAN FIRM TO EXPAND GAS PIPELINE TOWARDS UKRAINE

Portfolio Online Financial Journal
Budapest, Hungary, Wednesday, 23, May 2007

BUDAPEST – Hungarian oil and gas group MOL has announced on
Wednesday that it plans a expansion of a gas pipeline towards Ukraine,
which would cost HUF 48 billion (EUR 193.66 m).

The announcement comes after a report in the local press that MOL was
considering to increase the throughput capacity of the Hungarian section of
the “Brotherhood” natural gas pipeline, on which Hungary imports gas from
Ukraine, to meet growing demand in peak periods and supply strategic gas
facilities.

MOL said the 100-km gas pipeline expansion was to be completed by 2010,
and stressed that the intention was to serve domestic needs, not to provide
an
alternative to either the Nabucco pipeline, on which gas is delivered from
Central Asia to Europe, or the Blue Stream pipeline, on which Russian gas is
delivered to Europe bypassing Ukraine.

Broadsheet Népszabadság reported today that the new pipeline, which would
run parallel to an existing pipeline connecting near the Hungarian-Ukraine
border, could have a peak capacity of 10 billion cubic metres a year.

Experts say the expansion is necessary for the company to fill a large
strategic gas storage facility it is building by 2010.

According to MOL communication director Dóra Somlyai, none of the
alternative plans – Nabucco, Blue Stream or the LNG terminal to be built on
the northern Adriatic island of Krk, would be completed by the date. She
estimates their completion not before 2015.

While additional domestic demand will be 2-3 billion cubic metres a year by
the end of the decade, the new pipeline could have a capacity of as much as
10 billion cubic metres annually, but Somlyai said they would normally
deliver less than the top capacity.

Hungary’s annual gas consumption is about 14 bn cubic metres, 80% of which
comes from imports, and 70% of which comes from imports from Russia.
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12.  POLISH PRES KACZYNSKI DISCUSSES ENERGY COOPERATION
                 WITH UKRAINE’S FOREIGN MINISTER YATSENYUK

Interfax, Warsaw, Poland, Wednesday, May 23, 2007

WARSAW – Poland’s president, Lech Kaczynski, discussed energy cooperation
with Ukrainian Foreign Minister Arseniy Yatsenyuk at a Tuesday meeting in
Warsaw, the presidential press office said in a press release.

“Issues of bilateral cooperation, including on energy, as well as connected
to the preparations of the European Championship [at football] in 2012,” the
release reads. “The interlocutors made a positive evaluation of the results
of the Krakow meeting on energy security and announced further consultations
on the subject.”

Poland and Ukraine have for years been discussing the project to reverse the
flow of oil in a pipeline linking the Black Sea port of Odessa to the town
of Brody near the border between the countries to carry crude from the
Caspian region to Poland and on to Western Europe.

The project, which would require extension of the pipeline to the Polish
city of Plock – and potentially on to the Baltic Sea port of Gdansk – is key
to plans to reduce dependence on energy imports from Russia.

The presidents of Poland, Ukraine, Azerbaijan, Georgia and Lithuania, and
representatives of Kazakhstan, discussed the subject at a summit in the
Polish city of Krakow on May 11-12.

At the same time, however, Kazakhstan agreed a deal with Russia and
Turkmenistan to pipe more of its hydrocarbons through a new pipeline across
Russian territory, likely spoiling any chance of deliveries from the Caspian
through an alternative route.                              -30-
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13. OSCE: UKRAINE, BELARUS, MOLDOVA CHOKING ON TOXIC WASTE

Agence France Presse (AFP), Prague, Czech Republic, May 24, 2007

PRAGUE – Toxic waste, water pollution and the legacy of Chernobyl have
plunged Ukraine and neighbouring Moldova and Belarus into an environmental
crisis, the Organisation for Security and Cooperation in Europe (OSCE).

In a report released in Prague this week, the OSCE said contaminated
military sites were also a festering problem. “Ukraine has approximately 2.5
millions tonnes of Soviet-era ammunition that requires disposal, including
four burial grounds for radioactive waste”, said the report.

The break-up of the Soviet Union had solved some environmental problems,

but exacerbated others because of lax regulation and increased exploitation of
natural resources, it said.

The application of stricter EU environmental standards in Slovakia and
Hungary, Ukraine’s neighbours, has resulted in attempts to export
environmental problems across their eastern borders.

The report aimed to help “identify the most dangerous points and to enhance
awareness,” Bernard Soy, Coordinator of OSCE Economic and Environmental
Activities, told AFP.

Up to 10 percent of Ukrainian waste disposal sites belonging to the military
require major repairs, the report said, pointing to a series of accidental
explosions between 2004 and 2006 at the Novobohdanivka arsenal in the south
of the country.

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14.  UKRAINE: LAND PRIVATIZATION TO BE COMPLETED SOON 
Interfax, Kyiv, Ukraine, Wednesday, May 23, 2007

KYIV – The process of land privatization in Ukraine will be completed

within seven or eight months, President Viktor Yushchenko said.

“Within the next seven or eight months, land privatization in Ukraine, which
started in 2000, will be completed through farmers’ acts,” Yushchenko said
at a meeting with foreign investors and diplomats in Kyiv on Wednesday.

Ukrainian legislation now faces the task of creating a register and various
mortgage mechanisms. ” I am sure that parliamentary debates on the main
issue – canceling the moratorium on land sale – will be successfully
completed in the third and fourth quarters 2007,” the president said.

The position on this moratorium issue is simple, he said: “as we agreed with
key political forces, the land market in Ukraine must start to fully operate
as of January 2008.”

“Ukrainian landowners must be allowed to use their title to the land,” the
president said.                                        -30-
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15. BOARD OF UKRAINE OPPORTUNITY TRUST OUSTED IN LONDON

By Daniel Thomas, Financial Times, London, UK, Thursday, May 24 2007

LONDON – Viscount Asquith and the rest of the board of Ukraine Opportunity
Trust have been ousted by activist shareholders.

The rebel shareholders were led by Fabien Pictet & Partners, the trust’s
fund manager, which also owns a 7 per cent stake. Fabien had backing from
Laxey Partners.

Lord Asquith and fellow directors Anthony Townsend and Garth Milne had
threatened to replace FPP as the fund manager of the £32m trust. Mr Townsend
is a former chairman of the Association of Investment Trust Companies.

Lord Asquith, a descendant of prime minister Herbert Asquith, is a former
diplomat whose postings included Moscow and Kiev.

The directors appointed to replace them are led by Miles Morland, founder of
Blakeney Management, a fund manager specialising in Africa. He is a director
of Dubai Investment Group and SABMiller.

“This is a huge lesson in choosing members of a company’s board,” said
Fabien Pictet, chairman of FPP. He said the new board was “100 times better”
than the old. “They are professionals. It is a fantastic result. This has
taken up too much of our time and money in the last few months.”

Analysts said that while managers had ousted boards on trusts in the past,
such aggression was unusual. Simon Moore, investment company analyst at
Collins Stewart, said:”There has never been so much dirty washing paraded in
an investment trust announcement.

“The board is extremely professional, but perhaps needed to consult the
majority shareholders before trying to follow what they regarded as their
star fund manager.”

The trust said mutual confidence between the board and managers had broken
down; the board had decided to step down following discussions with
shareholders and management.

An extraordinary meeting on Friday, originally called to hear the proposals
to replace the board, will go ahead under the new leadership. Shares in the
trust, which earlier this week stood at a discount to net asset value of
about 15 per cent, jumped 35c, or 7.5 per cent, to close at $10.75.  -30-

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16. TOSHIBA EXPANDS NOTEBOOK PC DISTRIBUTION TO UKRAINE

PRWEB, Limassol, Cyprus, Thursday, May 24, 2007

LIMASSOL, Cyprus – ASBISc Enterprises Plc (ASBIS), a leading supplier of
computer components to the EMEA emerging markets, has announced today that
it has expanded its distribution agreement with Toshiba Europe GmbH, a
division of Toshiba Corporation, to include Ukraine, one of the largest
markets in Eastern Europe.

This expansion complements the existing authorized distributorship agreement
between ASBIS and Toshiba, covering 15 countries of the EMEA region –
Russia, Kazakhstan, Belarus, Czech Republic, Slovakia, Croatia, Slovenia,
Serbia, Montenegro, Bosnia & Herzegovina, F.Y.R. Macedonia, Albania, Libya,
Yemen and Iraq.

“Over the last year, Toshiba has observed increased demand for its mobile
products in the growing markets of Eastern Europe, so it makes good business
sense for us to enhance our market presence in that region,” said Pieter
Ickx, general manager for emerging markets EMEA at Toshiba.

“ASBIS has a well-established customer base that opens up new opportunities
for Toshiba in these rapidly growing markets, and the addition of Ukraine is
a natural progression of our existing relationship in the EMEA region.”

“We consider Ukraine our second most significant market in the CIS after
Russia. Over the last years, this market has been growing at a faster pace
than the neighbouring countries,” said Igor Snytko, regional general
manager, CIS and Baltics, at Toshiba Europe GmbH.

“Therefore it is very important for us to work here with loyal and efficient
partners who share our objectives and approaches.

Over the previous years we have been able to ramp up our sales in this
country, and we hope that the agreement with such a serious distributor as
ASBIS Ukraine will help further enhance Toshiba’s positions on the Ukrainian
market, and contribute to meeting the growing consumer demand for top
quality mobile computers.”

In line with the agreement, ASBIS Ukraine, which has wide regional presence
across the country, is already beginning an active promotion of the whole
range of Toshiba’s mobile PCs, and is about to start offering its partners
all certified series of Toshiba notebooks – Satellite, Qosmio, Tecra and
Portégé – meeting expectations of both home users and corporate clients.

Laurent Journoud, ASBIS’ executive vice-president, sales and marketing,
said, “The expansion of our Toshiba distribution to Ukraine enables us to
strengthen our mobile offerings with industry leading notebooks that meet
the needs of a wide range of customers.

Toshiba’s product mix is excellent and their market strategy is brilliant.
ASBIS intends to expand the presence of Toshiba notebooks and help increase
its market share on this market. We strongly believe that our expanded
cooperation with Toshiba will be extremely beneficial for the vendor, for
us, and especially for our customers in Ukraine”.
                                           ABOUT TOSHIBA 
The Computer Systems Division of Toshiba Europe GmbH is a leading vendor for
mobile computing solutions. Headquartered in Neuss, Germany, the Computer
Systems Division of Toshiba Europe GmbH is a wholly owned subsidiary of the
Toshiba Corporation, the world’s eighth-largest computer and electronics
company.

Toshiba Corporation is a leader in information and communication systems,
electronic components, consumer products and power systems. The company’s
integration of these wide-ranging capabilities assures its position as an
innovator in advanced components, products and systems.

Toshiba has more than 172,000 employees worldwide and annual sales of over
US$52 billion (2006). For more information please visit
http://eu.computers.toshiba-europe.com.
                                             ABOUT ASBIS 
ASBISc Enterprises PLC (LSE: ASB.L) specialises in the distribution of IT
products from worldwide leading manufacturers such as Intel, AMD, Hitachi,
Seagate, and Samsung. ASBIS has four master distribution centers which
supply products for in-country operations across emerging markets of EMEA.

Central purchasing, online B2B platform, international experience of
corporate management and the local expertise of country teams, together with
an intimate knowledge of Eastern Europe and its myriad of cultures have
allowed ASBIS to forge a premier position in this region and has also
enabled it to penetrate the emerging markets of EMEA quickly and
cost-effectively.

As a result, ASBIS is now one of the largest distributors of IT components
and the only company able to distribute to the vast majority of countries in
Eastern Europe. The size of its operations means ASBIS is able to pass on
significant value to its customers.

ASBIS has more than 700 employees, over 14000 customers and annual

revenues at record level in excess of US$ 1 billion (2006). For more
information, visit the company’s website at www.asbis.com.        -30-
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17.  UKRAINE-NORTH AMERICAN INVESTMENT FORUM:
          Investing in Eastern Europe’s Fastest-Growing Market
            The New York Marriott Marquis Times Square, New York, NY
                       Monday June 4, 2007 – Wednesday June 6, 2007

Ukraine-North America Investment Forum website
New York, New York, May 2007

NEW YORK – The Ukraine-North America Investment Forum will be held at the
New York Marriott Marquis Times Square from June 4-6, 2007. The event is
expected to be the largest investment conference in North America this year
specifically focused on the Ukrainian market.

The conference is being organized in cooperation with the New York Stock
Exchange Euronext, InvestUkraine as well as with the support and
participation of leading Ukrainian companies, major North American
investment banks, hedge funds, and major US venture capital funds.

Key participants in the Forum will include senior officials from the
International Finance Corporation, the EBRD, the State Export-Import Bank

of Ukraine, a deputy minister from Ukraine’s Finance Ministry, a high-ranking
representative from Ukraine’s State Property (Privatization) Fund, Ukraine’s
Presidential Secretariat, and the US Embassy in Ukraine.

Companies that have confirmed their participations as speakers and sponsors
to date are: System Capital Management (Ukraine’s largest conglomerate), XXI
Century Investments (the country’s leading real estate developer), the
Industrial Union of the Donbas (a major player in steel and metals), JP
Morgan, Ernst and Young, Standard and Poor’s, New Spirit Capital, Draper
Fisher Jurvetson Nexus Fund, Horizon Capital, CFC Consulting, Shevchenko
Didkovskiy & Partners, Concorde Capital, International Mortgage Bank (IMB
Ukraine), and the American Chamber of Commerce in Ukraine.

Even as Ukraine’s democracy faces a period of political contestation, the
country’s economy is growing rapidly, with GDP rising at an annual rate of 7
percent. Ukraine’s stock market is up over 75 percent over the last 12
months. The government has announced that major state-owned companies are
slated for privatization, including Ukrtelekom.

A recent study by the Chicago-based consulting company A.T. Kearney ranked
Ukraine among the world’s three most promising retail markets worldwide, and
according to a recent Standard & Poor’s report, investments in the newer
emerging markets, including Ukraine, are now increasingly common among the
portfolios of leading international investors.

All this represents an opportune moment for the investment community of
North America to meet with Ukrainian businesses, investment banks, and
investor eager to develop partnerships, issue bonds, and raise capital
through IPOs, venture capital, mezzanine financing, and private equity.

Conference themes include:
. Strategies for Raising Capital
. Capital Needs of Ukraine’s Government and Private Sector
. Investing in Ukraine-Focused Mutual Funds, Equities, & Closed-End Funds
. IPOs/Private Placements: Ukrainian Corporations Share Experiences
. A Dynamic Legislative/Legal Framework for Ukraine’s Economy
. Major Privatization Opportunities for 2007
. Investing in Ukraine: A View from Wall Street

Special forum sessions will highlight opportunities in Ukraine’s booming
real estate sector, as well as provide an overview of infrastructure
development and potential for public-private partnerships.

There will also be opportunities for sector-specific breakaway meetings and
one-on-one discussions with Ukraine’s business leaders.

Registration for the three-day event is $1,500 and includes all meals and social

events. You can register by logging on to www.ukrainebusinessforum.net or
calling Adrianna Melnyk at 1-212-388-0177.                  -30-
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18. UN: FREEDOM OF EXPRESSION INCREASES IN UKRAINE DESPITE
        INTIMIDATION FROM INDIVIDUALS LINKED TO AUTHORITIES

Press Release: United Nations, NY
Scoop Independent News, New Zealand, Thursday, 24 May 2007

While democracy and free expression have increased in Ukraine in the past
few years, journalists are still subject to intimidation by individuals said
to be linked to authorities, an independent United Nations expert said
today.

“Despite the ongoing political instability, the country is steadily
progressing towards a democratic system based on the rule of law, good
governance and human rights,” Ambeyi Ligabo, the UN Special Rapporteur
on the promotion and protection of the right to freedom of opinion and
expression, said after a visit to the east European country.

“However, the current political situation, marked by a strong polarization
of opinions, does not contribute to the full enjoyment of the right to
freedom of opinion and expression, especially for foreigners residing in the
country, ethnic groups and migrants, who are often victims of
discrimination,” he said.

Mr. Ligabo, an unpaid expert who reports to the UN Human Rights Council,
said that he met with a number of journalists who were victims of violence
by various gangs and others allegedly linked to state security organs and an
academic institution.

In addition, he was told that many journalists, especially from the regions
outside the capital, are under severe pressure and intimidation from local
authorities while others are frequently harassed, arrested and framed on
hollow court charges.

He also noted that there is undue delay in the determination of cases of
violence against journalists and many of the perpetrators have not been
brought to justice.

“This general situation of uncertainty, compounded by uncompromising
struggle for power amongst competing political parties, has created
considerable distress among ordinary citizens and, if not excised properly,
may eventually undermine democratic achievements so far made.”

He was pleased that many people in authority were willing to discuss the
problem with him, but he stressed that all sides, particularly the
Government, need to make more concerted efforts to protect human
rights, including the passage of legislation on free expression that is in
conformity with international standards.

In addition, he said that much Ukrainian media was of low quality,
increasing polarization in the country.

This could be remedied by training and the appointment of the relevant
officials in a democratic and transparent way, he said. “They should be
allowed to run their mandates independently, without political
 interference,” he added.

Mr. Ligabo said he would provide more concrete recommendations to the
Government of Ukraine, media professionals, journalists, civil society
organizations, and others in the near future.                   -30-
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LINK: http://www.scoop.co.nz/stories/WO0705/S00425.htm
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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19. UKRAINE’S CONSTITUTIONAL COURT UNDER PRESSURE
                        More judges devoured by Ukrainian political crisis

ANALYSIS & COMMENTARY: By Pavel Korduban
Eurasia Daily Monitor, Volume 4, Issue 100
The Jamestown Foundation, Wash DC, Tue, May 22, 2007

On May 21, the Constitutional Court of Ukraine (CC) closed proceedings
related to President Viktor Yushchenko’s April 2 decree to disband
parliament.

This was a pure formality, as Yushchenko had on April 26 invalidated his own
decree by issuing another decree disbanding parliament and rescheduling an
early parliamentary election for June 24. The CC launched proceedings on the
April 26 decree on May 14.

No matter in whose favor the CC may deliver its verdict, the opposing side
will hardly recognize it. This is because the CC has lost credibility,
become incapacitated by political pressure, dismissals, and resignations of
its judges, and discredited by allegations of corruption.

In this situation, no legal ruling can solve the political crisis caused by
Yushchenko’s decision to disband parliament. The ultimate solution can
apparently be only political, reached between Prime Minister Viktor
Yanukovych and Yushchenko.

As early as April 9, parliament issued a statement accusing Yushchenko of
“putting unprecedented pressure” on CC judges. The following day, Yushchenko’s
representative at the CC, Volodymyr Shapoval, said that any verdict
regarding Yushchenko’s April 2 decree would be purely political. Shapoval
made his comments even before the CC officially started looking into
Yushchenko’s decree, which happened on April 11.

From the very beginning, both sides to the conflict apparently agreed on one
point: the CC would not rule in Yushchenko’s favor.

His team and the media backing Yushchenko were convinced that the majority
of the CC’s 18 judges sympathized with the Yanukovych camp and were
“corrupt.” Yanukovych’s side has insisted that Yushchenko’s decision to
disband parliament had been unconstitutional.

In this situation, the strategy of Yushchenko’s team has been to
incapacitate the CC, while Yanukovych’s camp has been at pains to maintain
the status quo.

On April 16, the Security Service (SBU), which is loyal to Yushchenko,
accused CC judge Syuzanna Stanik of corruption, saying that some property
had been handed over to her close relative, apparently in return for certain
services.

Stanik flatly denied this, and her husband alleged, in an interview to
Channel 5 on April 24, that he had been offered a “big sum of money” himself
in return for influencing his wife.

On April 18, representatives of Yulia Tymoshenko Bloc, allied with
Yushchenko, tried to physically prevent CC judges from entering the court,
and the judges managed to reach their workplace only thanks to intervention
from riot police.

Since then, crowds of Yanukovych supporters have being watching the
entrances to the court, which prompted their rivals to accuse them of
putting psychological pressure on the judges.

On May 1 Yushchenko issued a decree dismissing Stanik. He also dismissed two
other CC judges, Valery Pshenychny and Volodymyr Ivashchenko, “for breaching
the oath” of office on April 30 and May 10 respectively. The CC issued a
statement on May 10, complaining of pressure.

It expressed concern over the dismissal of the three judges, as well as over
a bill registered in parliament — dominated by Yanukovych supporters —
providing for the dismissal of five CC judges who are perceived to be
backing Yushchenko.

On May 15-17 two courts located in Yanukovych’s Donbas stronghold
invalidated the dismissals of the three judges by the president. Yushchenko’s
secretariat has lodged appeals. But one of the three, Pshenychny, became
acting chief judge of the CC on May 17, when CC Chief Judge Ivan

Dombrovsky finally resigned.

(He had tendered his resignation for the first time immediately after
Yushchenko’s April 2 parliament dissolution decree, complaining of pressure,
but not specifying who was pressuring him.)

This angered Yushchenko’s secretariat. Yushchenko’s legal adviser, Ihor
Pukshyn, said in a commentary issued on April 17, “The CC does not exist as
an institution in Ukraine.” Pukshyn said there was no quorum on the court
after the dismissal of three judges. Furthermore, he said, four CC judges
were on sick leave.

One of those four, Dmytro Lylak, resigned from the CC on May 21. Ukraine’s
mainstream media have interpreted this as the beginning of an exodus of
pro-Yushchenko’s judges from the CC.

On May 18, the head of Yushchenko’s secretariat, Viktor Baloha, declared,
“After the appointment of Pshenychny as acting chief judge of the CC, no
ruling of this court can be legitimate.”

On the same day, Yushchenko’s Our Ukraine party issued a statement urging
the Prosecutor-General’s Office to launch criminal proceedings against the
judges who had been dismissed by Yushchenko. Pshenychny complained to
journalists on May 21 that state guards, acting on instructions from
Yushchenko’s secretariat, had tried to prevent him from entering the CC
building.

Also on May 21, Yushchenko turned to a district court in Kyiv suggesting
that the CC should be banned from ruling on legal cases. This may be the
beginning of the end of the current Ukrainian Constitutional Court.
———————————————————————————————–
(Interfax-Ukraine, April 4, May 10; UNIAN, April 10; Channel 5, April 18,
24, May 18; Itar-Tass, May 18; Ukrayinska pravda, May 10, 17, 21)

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LINK: http://www.jamestown.org
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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20.                             “POLITICAL TOURISM” &
                    MANAGED CIVIL SOCIETY IN UKRAINE
                       Yanukovych camp secretly paying demonstrators

ANALYSIS & COMMENTARY: By Taras Kuzio 
Eurasia Daily Monitor, Volume 4, Issue 100
The Jamestown Foundation, Wash DC, Tue, May 22, 2007

The Parliamentary Assembly of the Council of Europe’s experts on Ukraine
have pointed out that the ongoing “blue Maidan” demonstrations in downtown
Kyiv’s Independence Square are incompatible with democracy.

Although the Maidan-2007 demonstrations are taking place in the same
location as those staged by the “orange” supporters of then-presidential
candidate Viktor Yushchenko in 2004, today’s gatherings are not voluntary.

Rather, they are funded and managed by Prime Minister Viktor Yanukovych’s
Party of Regions through the use of so-called political tourism.

“It should be stressed that Maidan-2007 is not Maidan-2004. If the ‘orange
revolution’ was based on broad popular support of faith in the improved
running of the country and a better future, today’s demonstrations, on the
whole, are artificially managed by both sides” (maidan.org.ua, April 18).

Parliamentary chairman Oleksandr Moroz, whose Socialist Party (SPU) is a
member of Yanukovych’s ruling Anti-Crisis coalition, admitted, “All of the
coalitions, meetings, and actions in the last few weeks are the result of
political technology and not examples of civic action” (maidan.org.ua, April
16).

Paid political tourism was condemned by President Yushchenko, who demanded
that the prosecutor’s office investigate the tales of students and high
school pupils pressured to give up their studies when they participated in
the blue Maidan.

A Tymoshenko bloc appeal to the prosecutor and Security Service complained
that students and high school pupils were both losing out on their studies
and being placed in physical danger.

Earlier this month an illegally operating mini-bus organized by the Party of
Regions crashed en route to Kyiv, putting the high school passengers in the
hospital (byut.com.ua, May 4).

There is crucial difference between the 2004 orange and 2007 blue Maidans;
namely, the former was largely the work of spontaneous, self-organized civil
society while the latter is the product of a managed civil society that has
emerged out of the managed, one-party democracy still prevalent in
Yanukovych’s home region of Donetsk.

The 2007 blue Maidan is discredited by reports of blue supporters being paid
to travel to Ukraine; similar reports about orange voters in 2004 do not
exist.

The Guardian (April 5) wrote, “However, it was clear that not all Mr
Yanukovich’s protesters had willingly traveled to Kiev” and quoted “Lyosha”
from Krivoy Rih in eastern Ukraine: “I only came here because I work at a
metallurgical plant which belongs to an oligarch who supports Yanukovich.”
“They sent 40 of us here in a bus and they’re giving us 100 hryvnia [$20]
per day,” she admitted.

Maidan.org.ua (March 28, 31, April 5) reprinted information distributed in
eastern Ukraine, offering the opportunity to undertake paid political
tourism in Kyiv. Residents of Kharkiv were offered a full day’s “pay” of 150
hryvni ($30). Poltava students were offered 80 hryvni (without food) or 50
(with food). Senior political tourists obtain between 100-150 hryvni per day
while students are offered 90.

Transportation by coach or train to and from Kyiv is free. The mass use of
trains for organized political tourism was first undertaken in the 2004
elections when the Yanukovych campaign organized hundreds of thousands of
its political tourists to vote with multiple absentee ballots in western and
central Ukraine.

Heorhiy Kirpa, then minister of transport, committed suicide on December 27,
2004, fearing that his role in the organization of election fraud would lead
to criminal charges.

In 2007, similar abuse of public transportation is sanctioned by Socialist
Minister of Transport Mykola Rudkovsky. Train tickets are in short supply
and prices have increased.

“Trains are headed for the capital with people who have little opportunity
of earning a living at home, and obtain income for their participation in
political activities organized by the pro-government coalition,” Tymoshenko
bloc member Mykhailo Volynets said (byut.com.ua, May 4).

Oleksandr Chernenko, a member of the Committee of Voters NGO, went
undercover on an organized train traveling to Kyiv with blue supporters
(Focus.in.ua, April 23).

He reported that 20% were genuine supporters, but they still took the
stipends offered. Each political tourist, primarily students and teenagers
keen to see Kyiv, was paid 130 hryvni ($26) for an overnight protest.

This per diem, plus the cost of train transportation, meant that each
political tourist cost the Party of Regions 300 hryvni ($60).

The Yanukovych government’s lack of transparency makes it unclear as to the
source of this funding. In April Deputy Prime Minister Volodymyr Rybak
appealed in writing to the directors of enterprises to provide donations to
the Party of Regions, prompting the Tymoshenko bloc to accuse Rybak of abuse
of office (Komersant-Ukraina and byut.com.ua, April 24).

Political tourism comes with two major problems. During the Orange
Revolution, blue/Yanukovych voters stayed in Kyiv for one or two days and
then either defected to the orange camp, which had arranged accommodations,
warm clothes, food, and medical care, or returned to Donetsk.

Few had the staying power of the orange voters whose convictions made them
stay for 17 days in cold weather on Kyiv’s streets. The 2007 crop of
political tourists stands for three hours on the blue Maidan and then real
tourism takes precedence.

A second problem relates to depth of conviction of the protestors. The
Guardian (April 5) quoted Lyosha: “But I don’t support him [Yanukovych]. I
just didn’t want to lose my job. I’m for Tymoshenko.” Political tourists are
not necessarily committed Party of Regions supporters.

The Party of Regions has learned from two mistakes committed in 2004. First,
organizers now strictly ensure that no hard liquor is drunk on the way to
Kyiv. In 2004, numerous film clips showed intoxicated blue supporters, while
alcohol was forbidden among the orange crowds.

Second, political tourists are warned not to speak to journalists. The gang
leaders remember in 2004 when intoxicated blue representatives gave
outlandish interviews to the two independent television channels: Channel 5
and Era.

The 2004 orange and 2007 blue Maidans are different in another important
manner. Crime dramatically dropped in Kyiv during the Orange Revolution
whereas the number of crimes during the blue Maidan has risen by 65-70% and
break-ins by an even higher amount (maidan.org.ua, April 19). It would seem
that some of the political tourists have other things on their mind besides
politics or even tourism.

Yanukovych’s U.S. public relations advisors are seeking to use Ukraine’s
ongoing political crisis to portray him as a “re-born democrat” because he
has allegedly undergone, “one of the most extreme makeovers in global
politics” (Wall Street Journal, May 15). But PACE’s accusations, combined
with Moroz’s public admission and evidence collected by NGOs, undermine

this claim.                                         -30-
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LINK: http://www.jamestown.org
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21.    “UKRAINE ON THE EVE OF AN ELECTION: WHAT IS
              HAPPENING ON THE SPIN-DOCTOR MARKET?”
ANALYSIS & COMMENTARY: By Pavlo Bulhak
Ukrayinska Pravda website, Kiev, in Russian 22 May 07
BBC Monitoring Service,United Kingdom, Thursday, May 24, 2007

Ukrainian and foreign political scientists and spin doctors are drafting
plans for a forthcoming election campaign, a website has reported.

The author said the “blitzkrieg” timing of the campaign means parties will
rely more on “black” campaign tactics. He examined past cooperation between
parties and pundits and predicted that top parties will spend form 15m to
40m to get into parliament.

The following is an excerpt from the article by Pavlo Bulhak, entitled
“Ukraine on the eve of an election: what is happening on the spin-doctor
market?”, published on the Ukrainian website Ukrayinska Pravda on 22 May,
subheadings appear as in the original:

While politicians are unsuccessfully trying to reach a compromise on the
date and format of the snap election, the very prospect of holding an
election has perked the domestic market of political technologies.

At the very least, the process of recruiting political spin doctors for work
is gaining momentum in both regional and central headquarters. [Passage
omitted: It is difficult to assess the quality of spin doctors’ work as the
activity is non-transparent.]

Reliable information says that in 2006, the Party of Regions, which promised
“improvements in your life today”, worked with a group of American spin
doctors headed by Paul Manaforte. Eduard Prutnyk and Ihor Chaban also
helped.

The Yuliya Tymoshenko Bloc [YTB], which “fought for justice”, found help
from Dmytro Vydrin, Oleh Medvedev, Viktor Ukolov, Oleksiy Kovzhun and

Mykola Bahrayev who organized congresses.

Our Ukraine, which told voters “don’t betray the Maydan”, worked with Roman
Bezsmertnyy’s team which included Ihor Zhdanov, Anatoliy Lutsenko and
Tetyana Mokridi.

Campaign technology for the Socialist Party of Ukraine [SPU], which was
“building Europe in Ukraine”, mostly worked with the grey cardinals Iosyp
Vinskyy and Yaroslav Mendus.

Mykola Veresen and Petro Shelest’s group worked with the Communist Party of
Ukraine [CPU], “whose views are shared by geniuses”. (By the way, Shelest is
the grandson of a former CPU secretary.)

Viche was led by Vadym Karasyov, Pora-Reforms and Order, whose “civil acts
changed history” worked with Ihor Hryniv, Yaroslav Lesyuk and Denys Bohush.

The People’s Bloc of Lytvyn worked with Kostyantyn Bondarenko. And finally
the Progressive Socialist Party of Ukraine [PSPU] consulted with Ihor
Shuvalov and Dmytro Belyanskyy.

        A LIGHTNING-QUICK CAMPAIGN TO INFLUENCE
                                  SPIN DOCTOR MARKET 
The current “blitzkrieg” nature of the looming campaign could influence both
how it is conducted and also how specialists are attracted to regional and
central headquarters.

[1] First, most of the political forces are not going to “reinvent the
bicycle” and will place their bets on tested spin doctors with whom they
worked in 2006.

[2] Second, the demand for spin doctor-Vikings who are unable to bring new
ideas and concepts has drastically fallen. One can predict that compared to
2006, only 30 to 40 per cent of specialists will really find work.

However, internal competition could sharpen, key figures in the market
predict, but they say this will not affect the sums involved in contracts
for the top spin doctors who are responsible for planning and carrying out
the entire campaign for a bloc or party.
[Passage omitted: Spin doctors cost at least 200,000 dollars for the length
of a campaign.]
 NEW TENDENCIES & THE NATURE OF A SNAP ELECTION 
Parties will not fully decline the services of foreign specialists. As far
as we know, both the opposition and pro-authority parties will seek their
advice. Parties will mostly place their bets on Ukrainian staff, but they
will also recruit Russians who specialize in “black technologies”.

People say that Europeans, and especially Poles, will be invited to
campaigns as well as Americans. Europeans and Americans will be responsible
for modern media technologies since campaigns will focus on this media as
the most effective and mass manner of mobilizing voters.

In light of this, one can predict the biggest expenses, or about 75 per cent
of campaign budgets, will be spent by parties on political advertising on
television. Data from the All-Ukrainian Advertising Coalition shows this
advertising was valued at 35m dollars in 2006.

Of that figure, the Party of Regions spent 6m dollars, and YTB 500,000
dollars, compensating this with [YTB leader Yuliya] Tymoshenko’s trips to
regions. Our Ukraine spent 3m dollars. Besides this data from the Ukrainian
Outdoor Advertising Association shows outdoor advertising cost parties
another 20m dollars in 2006.

On one hand, large demand for political advertising could lead to increasing
costs for it. On the other hand, in light of parties exhausted finances
after 2006, campaign budgets will be less.

Top level parties which count on getting into parliament will spend from 15m
to 40m dollars on the entire campaign. At the same time, key parties intend
to make regional headquarters financially independent.

The technological nature of the campaign can be confirmed by information
from players on the market – they say “dirty campaigning” will be used most
of all, like the infamous “invitation” to McDonald’s on Tymoshenko’s
birthday in 2006, or the recent post cards in Donetsk, with a photo of
[Prime Minister and Party of Regions leader Viktor] Yanukovych on utilities
bills with the words “I’ve already made it better!”

As well, “information wars” will be used more frequently. And new network
and “viral” campaigns will be used along with hacking attacks on rivals
web-sites.

Campaign headquarters will be fairly active in working with internet
communities and especially with blogs. [Passage omitted: Campaigns likely to
focus on slogans rather than ideologies.]
          SPIN AS POLITICS: THE EXPERIMENT CONTINUES
One of the most interesting tendencies on the domestic political spin market
is that more and more political spin doctors and political scientists are
getting on blocs’ and parties’ election lists and becoming MPs and getting
involved in politics.

[YTB MP] Mykola Tomenko can be cited as a successful example of this.
Nevertheless, says Vadym Karasyov, who recently ran for parliament on the
Viche ticket, things are not so comfortable there.

“Not everyone is able to become a big-time politician, others can eventually
leave politics and return to spin, such as Dmytro Vydrin. I was also not
very comfortable there”, Karasyov stresses.

The expert said the reason for some political scientists leaving big
politics was the line of command nature of party life.

“A political scientist with a brand is already number one; he is constantly
on television and he can manoeuvre and have his own personal bit of fame.
But when they are pushed into a party, they only work on the party leaders.

And then they are forced to change from being independent creative people
into soldiers and mouthpieces for the party. Not everyone likes that”,
Karasyov said.

But potential MP from Yuriy Lutsenko’s People’s Self Defence, Oles Doniy,
admitted he is not afraid of repeating the “Vydrin syndrome”. “Few people
know this, but I will be more involved in culture than in politics in the
next parliament”.
[1] Vitaliy Balla, political consultant:
“We do not advertise who we work for. Not enough time has passed. But I can
tell you that we are now handling one project which the whole country sees
and it is going rather successfully. I will only say we have been doing it
for about six months. It is a bright and visible project.

“And I’ll say our services are not cheap – they cost tens of thousands of
dollars a month. But we get paid, because the results are worth it.

“The budget for a parliamentary campaign this year depends foremost on how
long it lasts: 60 or 90 days. Strict control will see the cost at about four
or five to 10 dollars for one vote. And the main thrust will be on getting
voters to the voting booths.

“There are very few Ukrainian spin doctors. The market is mainly filled with
political scientists who call themselves spin doctors.

But these are two very different things. Spin doctors create the processes,
and political scientists comment on them.” [Passage omitted: comments by
another spin doctor]
[2] Oleh Medvedev, spin doctor:
[Passage omitted: It is questionable whether the spin doctor market even
exists in Ukraine.] “I have never been involved in making budgets, but I
remember the period, in particular during the 2004 campaign by Viktor
Yushchenko, when for several weeks, there was no money at all.

YTB had more money, but was spending it very carefully. A lack of money
sometimes meant having to go without some very prospective projects.

“You may not believe me, but there have been campaigns in which I got no
money. For example, I did not get a single kopeck from the YTB campaign. And
the services of Ukrainian specialists is significantly less than for
Russians.”
[3] Oles Doniy, political scientist:
“I know politicians who can build their election campaigns on their own,
Yuliya Tymoshenko and Yuriy Lutsenko. But at the same time, I do not see any
political scientists or politicians whom I would trust with carrying out an
entire election campaign.

“I am aware of instances in which foreign specialists were actively
attracted by both the opposition and the coalition. For example,
representatives from Russia are already working here as consultants or in
carrying out training for headquarters.

I also know about intentions to attract the Polish specialists, who showed
what they can do during the mayoral election in Lviv. It is likely they will
be attracted by one of the Orange forces.”
[4] Denys Bohush, spin doctor:
“The latest in world tendencies in network technologies will be actively
used. For example, the [Kiev] mayoral campaign by Leonid Chernovetskyy was
the first showing of network technology.

Crudely put, this is how to give 4m dollars to voters in a way that the
money gets to the potential voter one way or another and forces him to vote
correctly.

“Foreigners are already working for Yuliya Tymoshenko and the Party of
Regions and with Our Ukraine, the SPU and the CPU.

They nearly all have someone from Russia or a line of contacts along lines
of agreeing this or the other step during the campaign in terms of ‘this is
good or bad for Russia’.

Overall, the Ukrainian school of spin is very strong, we learned ‘black
technology’ very fast and are moving towards a more or less civilized
culture of holding an election campaign. The black PR used by Ukrainians is
not as evil as that used by Russians.”
[5] Viktor Nebozhenko, political scientist:
“Many Russian spin doctors will come for this campaign in Ukraine. They will
work for both the opposition and the coalition. This will be the last gulp
of air for all Moscow show-spin doctors.

They are perfectly aware that spin doctors are not needed in authoritarian
Russia – they need propaganda there. And they also know that the market in
Kazakhstan is closing to them, since a regime is forming which does not even
need campaigners or people pushing propaganda.

The Americans will be here, and not only Paul Manaforte’s group, but other
groups of specialists, especially those linked to media technologies. The
now-famous slogan ‘Improving your life today’, is the classic American
technology ‘Make a telephone call right now’, built on the principle of
television shopping.

“To be frank, it is not considered a very high level of qualification. Now
the Party of Regions has a looming tragedy: what do they tell people this
time?

And so it is very likely the Americans will use methods directed at
promoting the enthusiasm of their voters, using the marketing techniques of
alcohol and tobacco.”
[6] Kostyantyn Bondarenko, political scientist:
“Foreign specialists have always worked for us, and they will not disappear.
The geography of these specialists is the United States and Russia.

European spin doctors work less and they are less well-known and the sharks
from the united States and Russia are the favourites. As far as the
technologies they will use, nearly all foreign specialists who come to
Ukraine lean towards ‘black technologies’ for some reason.”
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22. ORTHODOX CHURCH WANTS CHURCH, SEMINARY IN PRAGUE
          Church mainly tries to help Ukrainian workers in spiritual sphere, and
              also by offering them protection from the mafia and in securing

                                      labour permits for them.

Czech News Agency (CTK), Prague, Czech Republic, May 24, 2007

PRAGUE – The Orthodox Church would like to build a spiritual and
administrative centre in Prague, saying there is no suitable church nor a
seminary for future priests, Archbishop Krystof, Czech and Slovak
Metropolitan of the Orthodox Church, told journalists today.

“We have so many believers that churches cannot accommodate them, and

they stand in the street particularly on holidays,” he said. The church denied
today the press information that a telephone exchange of the Defence
Ministry connected with NATO was in the building in Prague which the
church already uses.

It said that there is a normal telephone exchange. The church also confirmed
that it has provided temporary asylum for refugees waiting for their
applications to be proceeded.

“I consider it my mission to attain a situation where our church will be
capable of offering spiritual care for foreign believers as well,”
Archbishop Krystof said.

According to church sources, about a quarter million foreign Orthodox Church
adherents live in the Czech Republic legally and a greater number stay in
the country illegally.

The Orthodox Church mainly tries to help Ukrainian workers not only in the
spiritual sphere, but also by offering them protection from the mafia and in
securing labour permits for them.

The church has already helped thousands of people this way. Some eye
witnesses say that money is collected in churches “to a hat” for particular
cases as well as for bribes for the foreigner police.

The church did not comment today on this information which the police
allegedly previously belittled. Director Svatava Marie Kabosova, unofficial
spokeswoman for the Orthodox Church, said the church could help the Czech
state deal with the workers coming from the East.

“Our priests hear a lot, they are shocked what they hear from these people,
but they are protected by the seal of confession,” she said. ms/dr  -30-

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23.  PRAGUE ORTHODOX ARCHBISHOP DENIES HE WAS StB AGENT 

Czech News Agency (CTK), Prague, Czech Republic, Thursday, May 24, 2007

PRAGUE – Archbishop Krystof, Czech and Slovak Metropolitan of the Orthodox
Church, today dismissed the information that he collaborated with the former
communist secret police (StB). “A court decided in 1997 that I was
wrongfully listed as an StB agent,” Krystof said.

The media wrote that the StB listed the current archbishop as an agent with
code names Dalimil and Radim. Krystof has been the church’s metropolitan
since last May.

He also rejected views that Czech Orthodox believers were part of the
Russian Orthodox Church or even Russian agents.

The Orthodox Church has some 30,000 followers in the Czech Republic and
70,000 in Slovakia. However, the church serves also to foreigners who work
in the country, mainly Russians, Ukrainians, Bulgarians, Greeks and
Romanians.

According to the church’s estimates, some 250,000 of them work legally in
the Czech Republic and about the same number works illegally in the country.
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24.    UKRAINE’S AMBASSADOR TO THE U.S., OLEH SHAMSHUR,
PARTICIPATES IN CEREMONY IN REMEMBRANCE OF JACK PALANCE,
      OSCAR-WINNING AMERICAN ACTOR OF UKRAINIAN DESCENT

Embassy of Ukraine, Washington, D.C., Wednesday, May 23, 2007

WASHINGTON  – Oleh Shamshur, Ukraine’s Ambassador to the United States,
participated May 22, 2007, in a solemn ceremony in remembrance of Jack
Palance, an Oscar-winning American actor of Ukrainian descent, that took
place in Hazleton, PA, where Palance was born and where he spent his
childhood and youth.

Remembrance ceremony was held at the St. Michael’s Ukrainian Catholic
Church. Church’s senior priest Rev. Gregory Maslak, accompanied by choir
singing and organ music, conducted a memorial service.

In his remarks Ambassador Shamshur presented his condolences to the family
of Jack Palance and marked the life and motion picture career of the actor
whom both the US and Ukraine can be proud of. Being an American actor,

Jack Palace cared for Ukraine and was proud of his Ukrainian origin, the
Ambassador said.

Jack Palance earned his second Oscar nomination playing cold-blooded
gunfighter Jack Wilson in 1953’s cinema classic Shane.

Born Volodymyr Palahnyuk in the Lattimer Mines section of Hazle Township,
Pennsylvania, Palance was of Ukrainian descent and the son of an anthracite
coal miner. He also worked in coal mines during his youth before becoming a
boxer.

With the outbreak of the Second World War, Palance’s boxing career ended

and his military career began. Palance’s rugged face, which took many beatings
in the boxing ring, was disfigured when he bailed out of his burning B-24
Liberator while on a training flight over southern Arizona, where he was a
student pilot.

Plastic surgeons repaired the damage as best they could, but he was left
with a distinctive, somewhat gaunt, look. After much reconstructive surgery,
he was discharged in 1944.

Palance graduated from Stanford University in 1947 with a Bachelor of Arts
degree in Drama. During his university years, to make ends meet he also
worked as a short order cook, waiter, lifeguard at Jones Beach State Park,
and photographer’s model.

Palance’s acting break came as Marlon Brando’s understudy in A Streetcar
Named Desire, and he eventually replaced Brando on stage as Stanley
Kowalski. In 1947, Palance made his Broadway debut, and this was followed
three years later by his screen debut in the movie Panic in the Streets
(1950).

The very same year, he was featured in Halls of Montezuma about the U.S.
Marines in World War II, where he was credited as “Walter (Jack) Palance”.

Palance was quickly recognized for his skill as a character actor, receiving
an Oscar nomination for only his third film role, as Lester Blaine in Sudden
Fear. The following year, Palance was again nominated for an Oscar, this
time for his role as the evil gunfighter Jack Wilson in Shane.

In 1957, Palance won an Emmy Award for Best Actor for his portrayal of
Mountain McClintock in the Playhouse 90 production of Rod Serling’s
Requiem for a Heavyweight. While still busy making movies, in the 1980s
Palance also co-hosted (with his daughter Holly Palance) the television
series Ripley’s Believe It or Not!.

Four decades after his film debut, Palance won an Academy Award for Best
Supporting Actor in 1992 for his performance as cowboy Curly Washburn

in the 1991 comedy City Slickers.

Stepping onstage to accept the award, the intimidatingly fit 6′ 4″ (1.93 m)
actor looked down at 5′ 7″ (1.70 m) Oscar host Billy Crystal (who was also
his co-star in the movie), and joked – mimicking one of his lines from the
film – “Billy Crystal… I crap bigger than him.” He then dropped to the
floor and demonstrated his ability, at age 73, to perform one-handed
push-ups.

Palance has a star on the Hollywood Walk of Fame at 6608 Hollywood
Boulevard. In 1992, he was inducted into the Western Performers Hall of Fame
at the National Cowboy & Western Heritage Museum in Oklahoma City,

Oklahoma.                                            -30-
————————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
25.         FOR ESTONIA AND NATO, A NEW KIND OF WAR

By Anne Applebaum, Columnist, The Washington Post
Washington, D.C., Tuesday, May 22, 2007; Page A15

And now for a quick quiz: A European country – a member in good standing
of NATO and the European Union — has recently suffered multiple attacks
on its institutions. Can you (a) name the country, (b) describe the attacks
and (c) explain what NATO is doing in response?

If you can’t, don’t worry: NATO itself doesn’t quite know what it is doing
about the attacks, despite the alliance’s treaty, which declares that an
armed attack on one of its members is “an attack against them all.” The
country is Estonia — a very small, very recent member of NATO; the attacks
are taking place in cyberspace; and while the perpetrators aren’t exactly
unknown, their identities can’t be proved either.

Which creates a dilemma, or rather several: Is this an “armed attack”? Is
the NATO alliance obliged to respond? And if yes, how? None of these
questions have clear answers. And if you thought that terrorists
headquartered in ungovernable bits of the undeveloped world were our
worst problem, think again.

To add an extra layer of complication to this story, it’s important to
understand that its origins lie not in the high-tech cyber-future but in the
Cold War past. Several weeks ago, the Estonian government decided to move
a bronze statue of a Soviet soldier from its place in the center of Tallinn,
the Estonian capital, to a cemetery outside of town, together with the
remains of the Soviet soldiers who had been buried beneath it.

That might not sound like a casus belli, but to the Russian minority in
Estonia, most of whose families arrived in the country after the Red Army
drove the Germans out in 1945, that statue had become a rallying point, as
well as a justification of their right to remain.

To the Estonians, a tenth of whom were deported to Siberia after 1945, the
statue had become a symbol of half a century of Soviet occupation and
oppression.

When the statue was removed, a riot ensued; a Russian protester was killed;
hooligans attacked the Estonian ambassador in Moscow; and, a few days
later, Web sites of the Estonian government, banks and newspapers began
to go down.

Elsewhere, this might not have mattered quite so much. A defense information
specialist from another newish NATO member state told me, somewhat ruefully,
that his country wouldn’t be vulnerable to a cyber-attack because so little
of its infrastructure is sophisticated enough to use the Internet.

But Estonia — “e-Stonia” to its fans — practices forms of e-government
advanced even by Western European standards. Estonians pay taxes online,
vote online, bank online. Their national ID cards contain electronic chips.

When the country’s cabinet meets, every member carries a laptop. When
denial-of-service attacks start taking down Estonian Web sites, it matters.

Of course, as is the way of these things, the attacks’ precise origin cannot
be determined. Unlike classic terrorism, the essence of modern cyber-warfare
is its anonymity. Though some attacks did appear to come from PCs
belonging to the Russian presidential administration, others came from as
far afield as Brazil and Vietnam. As a result, even the Estonian
government’s experts have backed away from directly accusing the Russian
government.

After all, angry hackers can organize a ” botnet” — computers that have
been remotely hacked and forced, unwittingly, to send out spam or viruses —
anywhere.

Indeed, “patriotic” Chinese hackers have made a specialty of this sort of
assault, using computers all over the world to attack both Japanese and U.S.
government Web sites at moments of high tension.

Both the anonymity and the novelty may turn out to be part of the appeal,
particularly if, as some in NATO now believe, the attacks are Russian
“tests” of the West’s preparedness for cyber-warfare in general and of
NATO’s commitment to its newest, weakest members in particular.

Some believe the Russian government is experimenting with different tactics,
trying to see which forms of harassment work best: whether the verbal
attacks on Estonia, the Russian oil pipeline to Lithuania that mysteriously
needs repairs, or the embargos on Polish meat products and Georgian wine.

If that is the case, surely the lesson of the past three weeks is that
cyber-warfare has a lot going for it: It creates no uproar, results in no
tit-for-tat economic sanctions, doesn’t seem like a “real” form of warfare
and doesn’t get anyone worried about Europe’s long-term energy needs.

NATO did, in the end, quietly send a few specialists to Estonia, as (even
more quietly) did the Pentagon. A few Europeans complained a bit at a summit
over the weekend, too. But there the affair will end — until whoever forced
the Estonian government out of cyberspace comes back online, better armed
for the next battle.                                     -30-
————————————————————————————————
Anne Applebaum, applebaumanne@yahoo.com
————————————————————————————————
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/21/AR2007052101436.html

——————————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
26. SHRINKING SCOPE OF RUSSIAN LANGUAGE STUDY IN FORMER
         SOVIET REPUBLICS WORRIES RUSSIAN FOREIGN MINISTRY

ITAR-TASS, Moscow, Russia, Wednesday, May 23, 2007

MOSCOW – The Russian Foreign Ministry “is concerned over the policy by a
number of former Soviet republics to scale down Russian language programs,”
an official said in the runup to a conference over the status of the Russian
language abroad in Moscow on May 29-30.

“Such conferences have already been held in all former Soviet republics,”
director of the department for relations with Russian diasporas abroad
Alexander Chepurin said on Tuesday.

The diplomat said “more than 17 million ethnic Russians live in former
Soviet republics at present, and another ten million elsewhere in the
world.”

“The scaling down of the use of the Russian language in these countries is
noted in such fields as education, the mass media and records management,”
Chepurin said. At the same time, “the Russian language has been and remains
a language of inter-ethnic communication,” he underlined.

More than 30 percent of the population of Kazakhstan and Ukraine are
Russian-speaking, in Estonia and Latvia, they make up 30 percent, and in
Kyrgyzstan, Belarus and Moldova – 10 percent,” according to the official.

Russian-speakers total 5 to 10 percent of the population in Uzbekistan and
Lithuania, 2 percent in Georgia, and less than 1 percent in Tajikistan and
Armenia,” the diplomat went on to say.

“Kazakhstan and Kyrgyzstan recognized the Russian language as official, used
alongside the state language. In Estonia, this language has no status at
all,” Chepurin said. “Eighty percent of programs to support the Russian
language are funded with federal budget money.”

“The Russian Foreign Ministry does a lot to provide printed, audio and video
products in Russian for Russian speaking populations in CIS states. This
work is part of the federal program to support compatriots abroad in the
period from 2006 through 2008.”

Commenting on the upcoming 9th International Congress of the Russian Press
in Paris on June 14-1, organized by the world association of the Russian
press and the Itar-Tass news agency Chepurin underlined the importance of
this forum.

“We positively access the plans of the Congress’s work and support its
holding within the framework of the Year of the Russian language. The
Russian Foreign Ministry is planning to actively build up interaction with
Congress organizers and provide all kinds of assistance to them,” he said.

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
27.       IS BYKIVNIA A SYMBOL OF DECOMMUNIZATION
                                  IN UKRAINIAN SOCIETY?
 Graves turned out to contain the remains of victims of purges before WW II.

By Stanislav Kulchytsky, Professor, Historian, Scholar
The Day Weekly Digest, #14, Kyiv, Ukraine, Tuesday, 22 May 2007

We have two significant anniversaries this year, separated by two decades.
What makes them similar somewhat is the fact that they launched a series of
important events.

Thus, the February revolution opened the road for fateful events in Ukraine
and we are marking its 90th anniversary. Regrettably, events took place
toward the end of 1917 that must be remembered, not celebrated. The
Bolsheviks came to power in Petrograd in November.

In December they established a powerful body of state security, the All-
Russia Emergency Commission, or VChK [generally known as the Cheka],

meant to destroy or isolate all dissenters. Two decades later a plenary
meeting of the CC VKP(b) was held in February-March 1937.

Its resolutions signaled the launch of a “cleanup” throughout the country
where Stalin’s socialism now reigned. Month after month the Cheka/NKVD
methodically closed their cases of “enemies of the people” using the most
simple method of mass shootings.                                        
           IN BIG CITIES THOUSANDS WERE MASSACRED 
In big cities thousands were massacred and the authorities found themselves
faced with a serious problem: what to do with the material evidence, bodies?
The NKVD leadership decided to bury them in the suburbs and place the sites
under special control.

It was thus Kuropaty appeared at Minsk, the Butovsky proving ground at
Moscow, and Bykivnia at Kyiv. With time the security details were withdrawn
and no one seemed to remember the victims.

When the Wehrmacht occupied a part of the Soviet territory the Nazis tried
to the demonstrate to the rest of the world the scope of Stalin’s atrocities
(particularly in Vinnytsia and Katyn). The Soviet media immediately blamed
the Nazis for the mass executions.

A specific situation developed with Bykivnia. It is safe to assume that the
populace promptly put two and two together and knew what all those NKVD
trucks were bringing to a fenced-off site in the Bykivnia forest. Yet the
subject started being discussed only in the spring of 1941.

In 1944 the Bykivnia graves were qualified by a Soviet war crimes commission
as ones belonging to inmates of the Darnytsia [Nazi] POW camp. The picture
looked convincing because the camp was located nearby where 75,000 Red Army
officers and man had died. However, talk about mass shootings prior to the
war continued.

In 1971 a new governmental commission studied Bykivnia. It confirmed the
findings of the previous one. Ditto the third commission that studied the
place in 1987.

To make the picture even more convincing, a gravestone was placed with the
legend, “Buried here are Soviet soldiers, partisans, and civilians massacred
by the fascist aggressor in 1941-43.”

However, a different political situation was unfolding in the country and
the Council of Ministers of the Ukrainian SSR ordered to study the Bykivnia
burial site again in 1988. The graves turned out to contain the remains of
victims of purges before WW II.
SEVENTY YEARS SEPARATE US FROM THE GREAT TERROR
Seventy years separate us from the Great Terror. There are practically no
survivors of witnesses of that terror left in the postcommunist countries,
yet our memories remain.

On May 19, Patriarch Aleksii and Metropolitan Lavr, head of the Russian
Orthodox Church abroad, consecrated the Temple of New Russian Martyrs on

the Butovsky proving ground. On May 20, Viktor Yushchenko took part in a
mourning ceremony by the national historical memorial preserve Bykivnia
Graves.

The 70th anniversary of the Great Terror makes one wonder whether our
society will be decommunized before the last generation of graduates of the
Soviet political school step down from the stage.

We can understand now that decommunization started in the Soviet Union a
long time ago. Last year historians concentrated on the 50th anniversary of
the 20th Congress of the CPSU. This event can be regarded as the launch of
the process.

[1] The beginning turned out to be very cautious as the topic at the time was
the struggle against the cult of Stalin’s personality. [2] The second stage of
the campaign, tagged by historians as destalinization, fell on the period of
Gorbachev’s perestroika.

The last Communist Party General Secretary failed to adjust the communist
doctrine, party, and sociopolitical order to the challenges of the modern
times.

However, a number of “birthmarks” of communisms remained in the countries
that rose from the debris of the Leninist-Stalinist empire.
  COMMUNITY PARTY IN UKRAINE OBSCURES MEMORIES
     ABOUT THE HEINOUS CRIMES OF THE SOVIET EPOCH

Ukraine perhaps has the greatest number of these birthmarks. Last year the
Communist Party joined the governmental coalition.

Facts show that this allows this party to obscure the memories about the
heinous crimes of the Soviet epoch, including by providing conditions in
which it is possible to introduce corrections in modern school history
textbooks.

Let us hope that the unnatural alliance between the Communists, Socialists
and the Party of Regions will sooner or later lose its political meaning.
This, however, does not promise quick success in the decommunization
process.

It must be understood that people living in various regions of Ukraine have
different historical memories. Whereas those in the western regions have a
strong immunity to communism, inoculated by mass postwar repressions,

people in the southeast often harbor nostalgic memories.

Even the older generation here did not suffer from repressions that
accompanied the formation of the Soviet system.

In the minds of many residents of these districts communism is associated
with Soviet propaganda proclaiming social equality, paternalism by the state
that was the main factor of the socioeconomic order and with which many

were quite content.

More often than not the point in question is the older generation. These
people refuse to accept the realities of initial capitalism in which we all
of us found ourselves after the Soviet Union’s collapse.

                THERE IS NO RETURNING TO THE PAST
They do not realize that there is no returning to the past and that it is a
long way to the future embodied by Europe.

Precisely these moods among the Ukrainian electorate are being supported by
political parties rooted in the CPSU, thus throwing monkey wrenches into the
works of decommunization.

Finally, it should be stressed that to try to decommunize this society by
anticommunist propaganda would be futile. The communist doctrine in its
abstract form does not have a single negative element.

However, a body politic built on this doctrine will always be a threat to
man’s freedom, even life. This is evidenced by the historical experience of
several dozen countries.

Final decommunization depends [1] primarily on a successful implementation

of the European standards regulating economic and political life; [2] second,
on an effective treatment of the historical memory of all those graduates of the
Soviet school, using educational means.
                      ATTEMPTS TO EDIT HOLODOMOR & 
       BYKIVNIA OUT OF SCHOOL TEXTBOOKS DOOMED
Attempts by modern communists to edit the Holodomor and Bykivnia out
school textbooks are doomed, among other things because these and other
crimes of the Soviet regime can no longer be hushed up.

However, it is necessary for all citizens to become aware of the in-depth
reasons for these atrocities and their regular nature in conditions of
dictatorship.

Then the problem of renaming Dniprodzerzhynsk – so as to leave no mention
of Dzerzhynsky, the founder of the Cheka – will be solved automatically.
 
Final decommunization is possible only after business and political
competition are finally asserted in our society as the main factors
of democracy.                                    -30-
———————————————————————————————
LINK: http://www.day.kiev.ua/181823/
———————————————————————————————–
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