AUR#865 Sep 10 Investments From Italy, Wales, France, Finland, Russia, USA, Poland; Language Issues; Poland’s Kwasniewski; Leonid Kravchuk

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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       
 
UKRAINIAN CROSSROADS
COMMENTARY: Aleksander Kwasniewski, former President of Poland
The Wall Street Journal, New York, NY, Fri, Sep 7, 2007
(Article 21)
                      
ACTION UKRAINE REPORT – AUR – Number 865
Mr. E. Morgan Williams, Publisher and Editor, SigmaBleyzer
WASHINGTON, D.C., MONDAY, SEPTEMBER 10, 2007
INDEX OF ARTICLES  ——
Clicking on the title of any article takes you directly to the article.               
Return to Index by clicking on Return to Index at the end of each article
MACHINE PLANT IN IVANO-FRANKIVSK, UKRAINE IN OCTOBER
Invested 51 million euros in building and equipping the plant, will
also start producing freezers and refrigerators in the region
Interfax, Moscow, Russia, Friday, September 7, 2007

2ENTER THE WELSH DRAGON IN UKRAINE
Mining entrepreneur lining up $100 million to invest in projects in Ukraine
Grant Ringshaw, The Sunday Times, London, UK, Sun, Sep 9, 2007

3FRENCH ACQUISITION OF MAJOR UKRAINIAN CHEESE
PRODUCER SHOSTKA, EBRD PROJECT SUMMARY DOCUMENT
European Bank for Reconstruction and Development ( EBRD)
London, United Kingdom, August 17, 2007

4FINLAND’S NOKIAN TYRES SETS UP SUBSIDIARY IN UKRAINE
One of the world’s biggest tire producers
Interfax, Moscow, Russia, Friday, Sep 07, 2007

5UKRAINE: RAVEN RUSSIA SEEKS TO DEVELOP LOGISTICS PARK 
By Jim Pickard, Financial Times, London, UK, Thu, September 6 2007

6RUSSIAN ENERGY GIANT LUKOIL TO INVEST 1 BILLION IN

Co-investment vehicle managed by SigmaBleyzer Southeast European Fund IV
Interfax Ukraine, Kyiv, Ukraine, Tuesday, August 14, 2007

8.  ADVENT INTERNATIONAL OPENS KIEV OFFICE

Global Equity Firm Is One of First to Tap Ukraine for Business
By James Mawson, The Wall Street Journal
New York, New York, Tuesday, September 4, 2007

9POLISH FOOD COMPANY MASPEX EXPANDING IN UKRAINE
Planning largest investment of any Polish food company, EUR 50 million
Warsaw Business Journal, Warsaw, Poland, Friday, 7th September 2007

10UKRAINE: POLISH BANK PKO ADOPTS EXPANSION STRATEGY 
Polish News Bulletin, Warsaw, Poland, Fri, Sep 07, 2007

11POLISH BARLINEK PRODUCTION PLANT IN VINNICA, UKRAINE
Construction Poland, Krakow, Poland, Tuesday, August 28, 2007

12UKRAINE: BARLINEK II PETTET EBRD PROJECT SUMMARY

DOCUMENT FOR PELLET PRODUCTION FACILITY IN KOSIV
European Bank for Reconstruction and Development (EBRD)
London, UK, Thursday, September 6, 2007

13FINAL DECLARATIONS ON ODESSA-BRODY PIPELINE
EXTENSION COMING SOON SAYS POLAND’S ECONOMY MINISTER

New Europe, Issue 746, Brussels, Belgium, Sunday, 9 September 2007 

14UKRAINE’S INTERPIPE TO INVEST $760 MILLION BY 2009
REUTERS, Kiev, Ukraine, Friday, September 7, 2007

15.  AUSTRALIAN MANGANESE PRODUCER HOPES TO SECURE
DEAL WITH UKRAINE-BASED PALMARY ENTERPRISES
 

By Elizabeth Fry in Sydney, Financial Times, London, UK, Sep 6 2007

16BLACK SEA FLEET WILL LEAVE, WILL CRIMEA REMAIN RUSSIAN?
Russia said to be reinforcing presence in Ukraine’s Crimea
ANALYSIS & COMMENTARY:  By Oles Kamenskyy
Glavred, Kiev, in Russian 0000 gmt 5 Sep 07
BBC Monitoring Service, United Kingdom, Fri, Sep 07, 2007

17.  TWO FOREIGN POLICIES FOR ONE RUSSIA
Russian tactics in Ukrainian president-premier conflict
REPORT: By Tatyana Stanovaya
Politkom.ru website Moscow, in Russian 27 Aug 07
BBC Monitoring Service, United Kingdom, Fri, Sep 07, 2007

18UKRAINE’S REGIONS PARTY CANVASSING SIGNATURES FOR
REFERENDUM ON THE STATE STATUS OF RUSSIAN LANGUAGE
ITAR-TASS, Moscow, Russia, Friday, September 7, 2007

19LANGUAGE DIVIDES UKRAINE
Russia Today, Moscow, Russia, Saturday, September 8, 2007

20UKRAINE’S ETHNIC RUSSIANS OVERWHELMINGLY LOYAL
TO KYIV, LEADING MOSCOW ETHNIC ANALYST SAYS
Window on Eurasia: By Paul Goble, Vienna, Austria, August 24, 2007

 
21UKRAINIAN CROSSROADS
COMMENTARY: Aleksander Kwasniewski, former President of Poland
The Wall Street Journal, New York, NY, Friday, September 7, 2007
 
22UKRAINE’S FUTURE HANGS IN THE BALANCE
Ukraine’s first president, Leonid Kravchuk, talks to New Europe
By Kostis Geropoulos in Marmari, Greece
New Europe, Brussels, Belgium, Issue 746, Friday, 9 September 2007
 
23UKRAINIAN PARLIAMENTARY ELECTION QUOTES SEP 1-9
Quotes package from BBC Monitoring, in English 9 Sep 07
BBC Monitoring Service, United Kingdom, Sunday, Sep 09, 2007
 
Election list of former Ukrainian speaker bloc’s analyzed
ANALYSIS & COMMENTARY: By Viktor Chyvokunya, UP
Ukrayinska Pravda website, Kiev, in Ukrainian 8 Sep 07
BBC Monitoring Service, United Kingdom, Sunday, Sep 09, 2007
 
25UKRAINE: DARK HORSES IN LISTS OF OUR UKRAINE,
TYMOSHENKO BLOC AND PARTY OF REGIONS
ANALYSIS & COMMENTARY: by Viktor Chyvokunya, UP
Ukrayinska Pravda, Kyiv, Ukraine, Tuesday, September 4, 2007
 
TRAFFICKING IN UKRAINE 
By Louise Nelle News-Review staff writer
Petoskey News-Review, Petoskey, Michigan, Fri, Sep 7, 2007
 
27ELDERLY UKRAINIANS TESTIFY ON HOLOCAUST
By Maria Danilova & Randy Herschaft, Associated Press Writers
Associated Press (AP), Bogdanovka, Ukraine, Sunday, September 09, 2007
 
28MOSCOW BATTLE: HOW HITLER ALMOST BEAT STALIN
Stalin’s Tipping Point: The battle for Moscow – the biggest, bloodiest
clash in human history – helped turn the tide against Hitler. But the
Soviet leader came closer than most realize to defeat.
By Andrew Nagorski, Newsweek magazine
New York, New York, Monday, September 10, 2007
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1
ITALY’S ANTONIO MERLONI TO OPEN ARDO WASHING
MACHINE PLANT IN IVANO-FRANKIVSK, UKRAINE IN OCTOBER
Invested 51 million euros in building and equipping the plant, will
also start producing freezers and refrigerators in the region

Interfax, Moscow, Russia, Friday, September 7, 2007

IVANO-FRANKIVSK – Italy’s Antonio Merloni is planning to open a plant
that will produce Ardo washing machines in the Ukrainian city of Ivano-
Frankivsk in October 2007, Roman Tkach, head of the Ivano-Frankivsk
regional administration, said at a local government meeting on Thursday.

Antonio Merloni has already invested 51 million euros in building and
equipping the plant, he said. Tkach also said the company plans to start
producing freezers and refrigerators in the region.

The Ivano-Frankivsk plant will have capacity to produce 800,000- 900,000
washing machines per year. The plant is expected to produce about 200,000
units in the first year, about 300,000-400,000 units in the second and then
will gradually reach full capacity.

The plant will produce the new line of Ardo washing machines. About 20%
of the washing machines will be sold in Ukraine, while the rest will be
delivered to European countries.

Antonio Merloni purchased a controlling stock holding in the Ivita plant
from the Nord Group in 2003 and created the company Ukrainian Domestic
Appliances Ltd. on its core. tj
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LINK:
http://www.interfax.ru/e/B/finances/26.html?id_issue=11853923

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2.  ENTER THE WELSH DRAGON IN UKRAINE
Mining entrepreneur lining up $100 million to invest in projects in Ukraine

Grant Ringshaw, The Sunday Times, London, UK, Sun, Sep 9, 2007

TONY WILLIAMS, a mining entrepreneur who has brought four companies
to the London stock market, is lining up about $100m (£50m) to invest in
projects in Ukraine.

The 56-year-old former investment banker, who controls Dragon Group, is
in talks with Ukrainian groups to evaluate and finance the mining projects.

Ukraine’s Beregovo district is one of the largest undeveloped ore fields in
Europe and is thought to have lucrative deposits of minerals, including
zinc, lead, other base metals and gold.

Many western mining groups have shied away from investing in Ukraine because
of the country’s deep political divisions and the feud between President
Viktor Yushchenko and prime minister Viktor Yanukovich. Williams is hoping
that elections on September 30 will lead to a political deal and greater
stability.

“I am a big fan of Russia’s President Putin. If Ukraine could have someone
with similar strong leadership, the country has the potential to emerge as
one of the powerhouses of central Europe and develop an economy that would
surprise many people in western Europe,” said Williams. Dragon Group has
just opened an office in Moscow.

“I am hopeful that after the elections we can make significant progress and
invest more than a $100m.” Williams, a Welshman who has earned millions

through promoting mining projects, has a record of bringing companies to
the stock market.

These include UK-listed groups European Minerals, which is also listed in
Canada and operates in Kazakhstan, African Copper, which has assets in
Bot-swana, European Diamonds, which operates in Lesotho, and Arian
Silver. The four groups have a combined market value of more than $1
billion. Williams is chairman of European Minerals and Arian Silver.
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http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article2412775.ece
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3.  FRENCH ACQUISITION OF MAJOR  UKRAINIAN CHEESE
PRODUCER SHOSTKA, EBRD PROJECT SUMMARY DOCUMENT

European Bank for Reconstruction and Development ( EBRD)
London, United Kingdom, August 17, 2007

Project name: Shostka/Bel; Country: Ukraine
Project number: 38259; Business sector:Agribusiness
Public/Private: Private; Environmental category:B
Board date: 18 September 2007, Status:Passed structure review,

Pending final review; Date PSD updated: 17 August 2007

Project description and objectives: The proposed project comprises the
acquisition of a major Ukrainian cheese producer, Shostka, which will be
jointly owned by the French Group Bel and EBRD. The investors will expand
Shostka’s cheese production capacity and enhance its related infrastructure.

Transition impact: Transition impact derives from supporting investment of
the dairy sector in Ukraine and the development of a Ukrainian dairy
company.

In addition, backward linkages will be created and strengthened by increased
relationship with the local farming community. The Company’s aim is to lift
the average milk production per cow as well as the quality of the milk,
facilitate an increase in the size of farms within its network and increase
the number of large suppliers.

The client: OJSC Shostka City Milk Factory, a single-site producer located in
the North of Ukraine.

 
SICOPA a wholly owned foreign investments arm of Group Bel , the Sponsor,
97.5% owner of Shostka, one of the world’s leading branded cheese producers.

EBRD finance: Equity investment to acquire a minority stake in Shostka.
Total project cost:Up to USD 29 million co-financed by SICOPA and EBRD.

Environmental impact: Screened B/1 requiring an environmental, health and
safety (EHS) audit and analysis of Bel Shostka’s plant and associated
facilities.

The audit and analysis, which is due to begin shortly, will benchmark the
plant and facilities against Ukrainian and relevant EU regulations and
standards, including the European Commission’s Integrated Pollution
Prevention and Control Reference Document on Best Available Techniques
(BAT) in the Food, Drink and Milk Industry (August 2006).

Any identified non-compliances with national and EU/BAT will be formulated
into a costed and time-bound Environmental and Social Action Plan to be
agreed with the Company prior to Final Review. This summary will be updated
once the audit and analysis have been conducted and an EAP has been agreed.

Technical cooperation: Will be sought to specifically assist small farmers
to improve milk quality and productivity.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement of consultants.
Company contact:Rodolphe Boivin, 16 Boulevard Malesherbes
75008 – Paris, Email: rboivin@groupe-bel.com
EBRD contact:Antoine Deroide, Operation Leader: deroidea@ebrd.com
Business opportunities:For business opportunities or procurement, contact
the client company.
General enquiries: EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
Project Summary Documents are created before consideration by the EBRD
Board of Directors. Details of a project may change following disclosure of
a Project Summary Document. Project Summary Documents cannot be

considered to represent official EBRD policy.
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4.  FINLAND’S NOKIAN TYRES SETS UP SUBSIDIARY IN UKRAINE
One of the world’s biggest tire producers

Interfax, Moscow, Russia, Friday, Sep 07, 2007

BROVARY – Finland’s Nokian Tyres, one of the world’s biggest tire

producers, announced that it has set up a subsidiary in Ukraine.

The company was registered in Ukraine in 2006 and began operations this
year, the head of Nokian’s Ukrainian office, Igor Bogdanov said at a press
conference on Thursday.

Nokian now has 30 distributors in Ukraine, he said. The company opened its
first branded tire store in Zaporizhiya in July. Bogdanov did not specify further

plans for development.
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5. RAVEN RUSSIA SEEKS TO DEVELOP LOGISTICS PARK IN UKRAINE

By Jim Pickard, Financial Times, London, UK, Thu, September 6 2007

Raven Russia, the Aim-listed Russian property vehicle, is seeking
shareholders’ permission to develop a 1m sq ft logistics park in Kiev,
Ukraine. The joint venture requires an EGM because the deal would be

outside Raven’s original geographical remit.

The shares rose 5½p to 96¾p as it said it had committed $1.9bn (£945m)

to various projects. The group raised £453m in its 2005 flotation – and a
rights issue in 2006 – to invest $3bn in Russian real estate.

Pre-tax profit of £32.1m (£4.5m) for the six months to June 30 was boosted
by the revaluation of its investment assets. Net asset value per share rose
from 106p to 110p.
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6.  RUSSIAN ENERGY GIANT LUKOIL TO INVEST 1 BILLION IN
PLASTICS PLANT IN UKRAINE’S IVANO-FRANKIVSK REGION
Will be one of the largest direct foreign investments in Ukrainian industry.

New Europe, Issue 746, Brussels, Belgium, Sat, 8 September 2007

The Russian energy giant LUKoil will invest more than USD one billion in
upgrading a Ukrainian plastics plant, Interfax reported on September 7.

The finance stream to the Karpatneftikhim plant in Ukraine’s western
Ivano-Frankivsk region will kick off in 2009, said Aleksei Smirnov, chairman
of the LUKoil-Neftekhim joint venture.

LUKoil began a USD 600 million expansion last year at the factory, to allow
the plant to produce chlorine and caustic soda.

The upgrades will allow the plant to run a full cycle of modern plastics
manufacture, from processing raw materials to producing finished product.

Most plastics used by Ukraine currently are partially manufactured in the
former Soviet republic, then exported to Poland or Romania for final
processing, and then re-imported, Smirnov said.

The ability to produce finished plastics domestically would assist the
country’s construction industry, which is booming and demands far more
modern plastics-based construction than Ukraine produces, said Volodymyr
Yatsuba, the country’s Minister of Construction.

The LUKoil project once complete will become one of the largest direct
foreign investments in Ukrainian industry. The record single investment was
the 2006 sale of the country’s largest steel mill, to Netherlands-headquartered

Mittal Steel for USD 4.81 billion.
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LINK: http://www.neurope.eu/view_news.php?id=77555
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7.  EBRD MAY MAKE EUR22.3M EQUITY INVESTMENT IN OISIW
LIMITED TO DEVELOP UKRAINIAN TELECOMS, MEDIA

Co-investment vehicle managed by SigmaBleyzer Southeast European Fund IV

Interfax Ukraine, Kyiv, Ukraine, Tuesday, August 14, 2007

KYIV – The European Bank for Reconstruction and Development (EBRD)
may make a EUR22.3-million equity investment in Cyprus-based Oisiw
Limited, a special purpose co-investment vehicle to invest alongside and
be managed by SigmaBleyzer Southeast European Fund IV (SBF IV), to
improve telecoms and media infrastructure in Ukraine.

As EBRD reported on Tuesday, the total project cost is up to EUR 200
million. EBRD’s equity investment will be made alongside with other equity
co-investors and limited partners associated with SigmaBleyzer Southeast
European Fund IV.

The project focuses on private sector development in the telecoms and

media industry sector, increasing competition, efficiency and delivery
of service.

An improved product offering and lower prices will be provided for

improved electronic communications in the regions.

As was reported earlier, SigmaBleyzer, a leading private equity firm focused
on Ukraine and Southeastern Europe, in February 2007 closed its fourth

fund, SigmaBleyzer Southeast European Fund IV (SBF IV).

The fund was closed at EUR 250 million ($326 million), the maximum
amount allowed by the partnership agreement, and 25% above its target.

A total of 40 partners invested in the new fund, with investments ranging
from a few million euros to 20% of the fund, provided by the largest partner
in SBF IV, the European Bank for Reconstruction and Development.

Other investors in the fund include Goldman Sachs, UBS, LVMH, Bank
Austria, InvestKredit and other large financial institutions and family
offices.

SBF IV announced plans to make investments of EUR 10-70 million, with
larger investments possible through a series of co-investment agreements
with its partners.

SigmaBleyzer created the first Ukrainian Growth Fund (UGF) in 1996. Since
that time, UGF has grown into a family of three funds consisting of UGF I,
UGF II, and UGF III. SigmaBleyzer runs offices in Bulgaria, Romania,
Ukraine, the Netherlands, [Kazakhstan] and the United States.

Among SigmaBleyzer’s Ukrainian projects is the country’s largest cable

TV operator – Kyiv-based CJSC Volia-Cable.
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8.  ADVENT INTERNATIONAL OPENS KIEV OFFICE
Global Equity Firm Is One of First to Tap Ukraine for Business

By James Mawson, The Wall Street Journal
New York, New York, Tuesday, September 4, 2007

Advent International has become one of the first international
private-equity groups to set up an office in Ukraine, despite an uncertain
outlook for businesses operating in the country ahead of snap elections this
month.

Advent, which primarily invests in midmarket-sized buyouts world-wide, has
made two appointments to its new Kiev office.

Tamas Nagy, formerly a deal maker for the firm in Hungary, Bulgaria and the
Czech Republic, has been named head of Advent’s Kiev team.

Natalie Polischuk, who most recently worked at Delta Private Equity Partners
in Moscow for four years, also joins as a principal. Before Delta, Ms.
Polischuk worked at the Ukraine-and Moldova-focused Western NIS Enterprise
Fund, managed by Horizon Capital, which has a Kiev office.

The appointments come as the buyout firm completes the reorganization of its
Central and Eastern European business.

In addition to its Kiev office and recently opened office in Romania,
Advent’s Central European network comprises regional centers in Prague,
covering investment in the Czech and Slovak Republics and Hungary; in
Warsaw, covering Poland and the Baltic States; and in Bucharest, covering
Bulgaria, Romania and Turkey.

Advent has 13 deal makers in these offices following the Kiev appointments.
There also are 11 private-equity fund managers at TurkVen, Advent’s Turkish
investment partner. TurkVen, which invests in the region from an
emerging-markets fund, was unavailable to comment on expectations it is set
to raise a new fund of between $500 million and $1 billion in size.

Henry Potter, a banker at the European Bank for Reconstruction and
Development responsible for its investment in Central and Eastern European
private-equity funds including Advent, said: “Advent is the first of the
larger Central and Eastern European firms to take the Ukraine seriously
enough to open an office and so it is a noteworthy event. But it will be
interesting to see if Advent can find deal flow in its target size range.”

Advent typically invests about $50 million of equity for an emerging-markets
buyout.

Other private-equity investors working in the region include SigmaBleyzer,
which closed a $250 million regional fund in February, Euroventures Ukraine
and Western NIS Enterprise Fund. However, these firms tend to strike smaller
deals than Advent.

Ukraine’s economy grew 7.9% during the first half, according to preliminary
gross-domestic-product figures, while industrial production rose 11.8% from
a year earlier, according to Swiss fund managers Fabien Pictet & Partners,
which manages the listed Ukraine Opportunities private-equity trust.

This performance boosted Ukraine’s equities index, the PFTS, which doubled
in the first half to make it the best performer world-wide.

However, further growth is dependent on the country’s political future.
Snap elections at the end of this month may involve a re-run of the 2004
presidential vote, in which a pro-Russian party led by Viktor Yanukovich
lost to pro-Western faction headed by Viktor Yushchenko after a revote
of the runoff between the two candidates.
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LINK: http://online.wsj.com/article/SB118885991240016267.html
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9.  POLISH FOOD COMPANY MASPEX EXPANDING IN UKRAINE
Planning largest investment of any Polish food company, EUR 50 million

Warsaw Business Journal, Warsaw, Poland, Friday, 7th September 2007

WARSAW – According to daily Parkiet, Maspex Wadowice is planning the
largest investment of any Polish food company in Ukraine amounting to
EUR 50 million.

It has already taken over a bankrupt sugar mill and is now planning to build
a new factory on the same site. Ukrainian analysts believe that it would be
more favorable for the company to take over an existing local juice
producer, as it will be difficult to establish a strong position of a new
brand on that market as promotion and marketing expenditures would have

to amount to $30 million.
 
Maspex’s other sector competitors, Hoop and Agros Nova, are also planning
expansion to the Ukrainian market. Hoop is already present in the Czech
Republic, Slovakia and Russia, while Agros Nova is busy investing in Russia.
 
“Just as companies from Western Europe transfer production to Poland, so
Polish enterprises are entering the Eastern markets which have cheaper labor
and raw materials,” said Roman Urban of the Institute of Agriculture and
Food Market Economics (IERiGZ). (Parkiet, pp. 1, 5) M.M.
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LINK: http://www.wbj.pl/?command=article&id=38600
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10.  POLISH BANK PKO ADOPTS EXPANSION STRATEGY IN UKRAINE

Polish News Bulletin, Warsaw, Poland, Fri, Sep 07, 2007

WARSAW – PKO BP is getting ready to start expanding in the East. Ukraine’s
Kredobank, 98.2 percent of which is owned by the Polish bank, will adopt a
new strategy.

PKO BP president Rafal Juszczak says the bank’s goal within five years is to
get into the top ten banks in terms of assets. He realises this will be
difficult without acquisitions, which he does not rule out.

At the moment Kredobank is 20-22 in Ukraine in terms of assets, with just
above 1 percent market share. Reaching the top ten means tripling its assets
and gaining 3.5 percent market share.

Kredobank is supposed to be working more closely with PKO BP, developing
business services. PKO BP will invest some $100m. Its Internet branch –
Inteligo – will start offering Kredobank’s customers Internet and phone
banking.

There are also plans to sell mortgage loans, credit cards, consumer loans,
etc. Currently 70 percent of Kredobank customers are corporate ones. By

2012 it should have an equal number of retail customers.
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11.  POLISH BARLINEK PLANT IN PRODUCTION IN VINNICA, UKRAINE

Construction Poland, Krakow, Poland, August 28, 2007

KRAKOW – Barlinek Invest, a subsidiary of the floorboard manufacturer
Barlinek, has launched a new production plant in the Ukrainian city of
Vinnica.

Over the next few weeks the new plant will reach its production target
capacity of 2 million m² boards a year.

Together with its other factory in the town of Barlinek itself the new
investment brings the group’s total potential output up to 8 m m²
floorboards annually.
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LINK: http://www.constructionpoland.com/next.php?id=52503
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12.  UKRAINE: BARLINEK II PETTET EBRD PROJECT SUMMARY
DOCUMENT FOR PELLET PRODUCTION FACILITY IN KOSIV
 
European Bank for Reconstruction and Development (EBRD)
London, UK, Thursday, September 6, 2007

Project name: Barlinek II Pellet; Country:Ukraine
Project number: 38463; Business sector: Public/Private:Private
Environmental category: B; Board date: 9 October 2007
Status: Pending concept review; Date PSD updated:6 September 2007

Project description and objectives: The project involves the construction of
pellet production facility in Kosiv, Western Ukraine, by Barlinek Invest, a
subsidiary of Barlinek SA, Warsaw Stock Exchange listed joint stock
company. The facility will also consist of softwood saw mill.

Transition impact: The project will have a significant transition Impact
derived mainly from: supporting regional expansion of a Polish company to a
neighbouring country, encouraging foreign direct investments into Ukraine,
skill transfer as well as demonstration effect of environmentally sound wood
processing and bio-fuel industry (Pellet) in Ukraine, promotion of
sustainable forest management standards and certification through market
mechanisms in Ukraine.

The project will also contribute to the facilitation of more efficient use
of wood resources. The skill transfer will take place thanks to training
programmes, innovative business processes and capital investments in
modern, high-tech production machinery.

The client: Barlinek Invest is 99% subsidiary of Barlinek SA, Poland.
Barlinek SA is a leading floorboard producer.

EBRD finance: The Bank will arrange EUR 9.5 million financing facility.
Total project cost: Confidential.

Environmental impact: Environmental due diligence showed that there are
no significant environmental issues associated with Barlinek’s production
facilities in Poland.

Since 1999 Barlinek has been implementing various environmental, health
and safety improvement measures, as a result of which the facilities are
currently in full compliance with all relevant Polish and EU environmental
standards.

The company is fully committed to structure its Ukrainian Project in line
with the standards and technology being applied in Barlinek SA (Poland) and
will fully meet Ukrainian and EU environmental, health and safety standards.

The Kosiv saw mill and pellet plant will be located in the presently desert
production shops located on adjacent pieces of land. The previous occupants
of the properties were a furniture manufacturer with a saw milling line and
a wooden handicraft manufacturer.

Barlinek does not expect any environmental issues associated with the land
or the buildings. This will be verified through environmental due diligence
carried out by the Bank. Following the examination, a separate Environmental
Action Plan for the new plant in Kosiv may be agreed with Barlinek.

It is expected that the plant in Kosiv will introduce state of the art
technology with high standards of energy and resource efficiency and has
potential for demonstrating benefits of environmentally sound wood
processing in Ukraine.

The project provides an opportunity to further promote sustainable forest
management standards and certification through market mechanisms in
Ukraine. The project will also be promoting bio-fuel (pellet) manufacturing
industry and markets in Ukraine.

Technical cooperation: None.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement of consultants.
Company contact: Barlinek SA Ul. Zagnanska 27, 25-528 Kielce. Poland
EBRD contact: Wojciech Ciszek, Operation Leader: ciszekw@ebrd.com
Business opportunities: For business opportunities or procurement,
contact the client company.

General enquiries: EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
Project Summary Documents are created before consideration by the EBRD
Board of Directors. Details of a project may change following disclosure of
a Project Summary Document. Project Summary Documents cannot be
considered to represent official EBRD policy.
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LINK: http://www.ebrd.com/projects/psd/psd2007/38463.htm
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13.  FINAL DECLARATIONS ON ODESSA-BRODY PIPELINE
EXTENSION COMING SOON SAYS POLAND’S ECONOMY MINISTER

New Europe, Issue 746, Brussels, Belgium, Sunday, 9 September 2007 

Poland is certain that Azerbaijan, Georgia and Lithuania will make final
declarations on joining the Polish-Ukrainian oil pipeline company Sarmatia
during a summit of the five nations interested in the project in Georgian
capital Tbilisi on September 27, Poland’s Economy Minister Piotr Wozniak
said on September 6.

“On September 27, the parties will agree on the creation of the new Sarmatia
company with a business plan for the extension of the Odessa-Brody pipeline
to Poland,” Interfax quoted Wozniak as telling a press conference during the
Economic Forum in Krynica.

Poland hopes to diversify its energy supplies, reducing the present
near-total dependence on imports from Russia, by reversing the flow of
a pipeline between the Black Sea port of Odessa and Brody, near the
Polish-Ukrainian border, and its extension on to Adamow, on the
Polish-Belarussian border, from where it will connect to an existing
pipeline to the refinery at Plock.

Companies from Azerbaijan, Georgia and Lithuania said in June they would
join the project. Wozniak said Lithuania would have roughly one percent of
shares in the new Sarmatia company, while Azerbaijan, a key potential
supplier of crude for the pipeline, will have around 24 percent. Wozniak
also denied earlier press reports, according to which Azerbaijan would
reduce its involvement to only one percent.

“Other parties are also welcome to join the project,” the economy minister
said. “Slovakia is also potentially welcome, as is Kazakhstan. We are open
to all non-passive investors.” Wozniak declined to say if Russia’s
involvement in the project was also welcome.
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LINK: http://www.neurope.eu/view_news.php?id=77569
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14.  UKRAINE’S INTERPIPE TO INVEST $760 MILLION BY 2009

REUTERS, Kiev, Ukraine, Friday, September 7, 2007

KIEV – Ukraine’s largest pipe producer, Interpipe, will invest $760 million
in its infrastructure by 2009, most of which will be devoted to building an
electric steel mill, a company spokesman said on Friday.

The company, which has been linked by media reports to the world’s
third-largest steel pipe maker, TMK (TRMK.RTS: Quote, Profile, Research)
of Russia, said at the beginning of the year that it planned to spend $700
million on investments between 2007-08.

“Investment plans were updated. According to the latest data, investment for
this period will be $760 million of which $610 million will be earmarked for
construction of an electric steel mill,” an Interpipe spokesman said.

He did not say where the funds would come from, but Interpipe has previously
said it plans to issue debt and has placed a three-year, $200 million loan
participation note.

Interpipe, controlled by tycoon Viktor Pinchuk, includes seamless pipe maker
Nizhnedneprovsky (NITR.PFT: Quote, Profile, Research), Novomoskovsk
pipe plant (NVTR.PFT: Quote, Profile, Research), Nikopol pipe company, the
Nikotube and Mogilevsky steelworks, and Nikopol ferro-alloys plant. It
produced 1.2 million tonnes of steel pipes in 2006.
———————————————————————————————-
LINK: http://uk.reuters.com/article/oilRpt/idUKL0773920320070907
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15. AUSTRALIAN MANGANESE PRODUCER HOPES TO SECURE
DEAL WITH UKRAINE-BASED PALMARY ENTERPRISES 

By Elizabeth Fry in Sydney, Financial Times, London, UK, Sep 6 2007

Territory Resources on Wednesday said it hoped to secure a deal with
Ukraine-based Palmary Enterprises for joint operation of Consolidated
Minerals, the Australian manganese producer at the centre of a takeover bid.

Michael Kiernan, Territory’s chairman, said talks with Palmary had gone well
and he thought the investment group would be receptive to the idea of
operating Consolidated Minerals as a joint venture once Palmary had secured
a deal.

This week Perth-based Consolidated’s board unanimously recommended a

A$902m ($743m) cash offer from Palmary Enterprises, in the absence of a
superior proposal.

The offer trumped bids by Territory and by Pallinghurst Resources, a
London-based natural resources investment fund led by Brian Gilbertson,
former chief executive of BHP Billiton.

“They asked for a proposal to that effect to be put in writing, which is
what we have done,” he said. Mr Kiernan said Palmary was not interested

in managing and running a manganese operation, and needed another party
to work with.

Palmary, which has built a 14 per cent stake in Consolidated Minerals during
the past two months, is offering A$3.95 a share for the Australian miner.
Consolidated’s board said this week it believed the Palmary bid was
“superior to the Pallinghurst offer”.

It instructed shareholders to reject a third offer for the group from
iron-ore miner Territory, which bid A$2 cash and 1.5 of its own shares for
every Consolidated Mineral share, valuing the company at A$779m.
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16.  BLACK SEA FLEET WILL LEAVE, WILL CRIMEA REMAIN RUSSIAN?
Russia said to be reinforcing presence in Ukraine’s Crimea

ANALYSIS & COMMENTARY:  By Oles Kamenskyy
Glavred, Kiev, in Russian 0000 gmt 5 Sep 07
BBC Monitoring Service, United Kingdom, Fri, Sep 07, 2007

The Russian intelligence services are taking steps to ensure that Russia’s
presence in Crimea continues after the withdrawal of the Black Sea Fleet in
2017, a propresidential website has written.

Building and privatizing various facilities in Sevastopol is one of the ways
to achieve this goal. The author gave names of the Russian intelligence
officers who allegedly are overseeing the construction of such facilities
and indicates their location.

The following is an excerpt from the article by Oles Kamenskyy, datelined
Sevastopol, entitled “The BSF will leave, but will Crimea remain Russian?”
published on the Ukrainian news website Glavred on 5 September;

subheadings have been inserted editorially:

It has recently become increasingly obvious that the tasks being addressed
by the BSF [Black Sea Fleet] of the RF [Russian Federation] in actual fact
extend far further than the framework of purely military questions.

At present the BSF is preparing a reserve trench for Kremlin strategists,
just in case it will have to leave here in 2017.

Frankly speaking, there are few people who would dispute the assertion that
the Black Sea Fleet in Crimea and Sevastopol is an instrument of high
politics. [Passage omitted: Pro-Russian public feelings stirred up in Crimea
by the fleet’s presence.]

To all appearances, they understand in Moscow that the BSF of the RF will
not be able to remain an ideological pivot of the local pro-Russian lobby
for long, and hence they needed to propose something to replace it – to find
a no less effective instrument of control over the situation in Crimea and
Sevastopol after the last Russian sailor leaves the territory of Ukraine.
And it looks as if such an instrument has already been found, and it is
fairly simple – to buy Crimea.

To buy not in the way that they buy masses of people to take part in rallies
and pickets for returning the peninsula to the composition of Russia, but in
the literal sense of the word, metre by metre, and then nobody will have to
prove anything.

By natural means Crimean land will gain Russian owners, who, without any
fuss and brain-washing will be solidly behind it. [Passage omitted: Moscow
mayor Luzhkov is the prime mover in this campaign.]
Fleet busy building on leased Sevastopol land
The BSF has been building up Sevastopol for a long time, and that is nothing
new. But the custom that Ukrainian officials are trying not to notice is the
fact that the fleet is methodically continuing to assimilate the land that
it received for temporary use on the basis of the base agreements signed.

This is how it was with the construction on the territory of the BSF Admiral
Oktyabrsky training detachment of the Black Sea branch of MSU [Moscow State
University]; and on the same principle, at the motor park of the BSF marines
regiment in the area of Kozacha Bay construction is proceeding full speed
ahead on a housing estate for the Russian military.

There are other confirmations of this too. But sooner or later the question
will arise of returning the land to Ukraine, and what then?

Then the Ukrainian state will no longer be in a position to dispose of its
own land as it sees fit. Where the Ukrainian navy could have been based
after the departure of the Russian fleet from Sevastopol it will not be able
to be based; where domestic investors could have come they will not come
now – the former military infrastructure by that time will already have been
masterly retooled according to the dreams of the uncle from Moscow.

This fully applies also to another property leased by the Russian side in
Ukraine. Thus, despite official statements from the Russian higher military
leadership about the cessation in March 2006 of the practice of subletting
by the BSF, at present about 10 berths in Sevastopol are still in the hands
of commercial structures.

Buildings have already been built at some of them, and a retooled waterside
front has been constructed for private interests. The subletting of three
berths has been legalized by merchants in court up to 2017.

And the same fate awaits the berths as that of the military barracks. It is
not likely that it will prove possible to chase out the businessmen who have
thoroughly settled there and invested their money.

For example, it is doubtful that it will be possible to dislodge from their
familiar berths in Yuzhnaya and Kozacha bays the open joint-stock company
Akar – the commercial mission of the Republic of Tatarstan in Ukraine – the
basic supplier of fuel for the BSF, before whose management every new BSF
commander cringes just like a schoolboy, and which is well received in the
corridors of the Sevastopol authorities.

For now the city is suffering damage from such entrepreneurialism of the
BSF. At the present time enterprises of Sevastopol’s maritime transport
complex – Sevmortorgport, Sevmorrybport and Yugtorsan – are forced to lease
additional berths to unload cargo, embark passengers and floating moorings
from those same commercial structures instead of earning money themselves.
Involvement of Russian intelligence services

What is more, representatives of Russian special services are also engaged
in buying up Crimea from Ukraine. For example, one leader of the BSF
intelligence service, First Rank Captain Sergey Khudoley, is actively
engaged in studying the land and real estate market in Sevastopol, and is
also personally present at court sittings devoted to this matter.

Apart from that, at the beginning of summer this year on the territory of
the Signal garage cooperative, which is located in Sevastopol in the region
of the children’s medical complex on Gen Ostryakov Avenue, the Russian

James Bonds have founded their closed type garage cooperative.

What is more, being citizens of another state and not having the legal
possibility to create a cooperative, Russian intelligence officers Oleg
Kochetov, Yuriy Chervyakov, Vladimir Grabovenko, Vladimir Krivoblutskiy and
some others under the leadership of Second Rank Captain Aleksandr Kovalev
have developed the following scheme for obtaining plots of land.

According to a contract with the chairman of a cooperative on the territory
of Signal, they have been allocated a separate plot of land for the
construction of 17 garages.

This plot was formulated as a cooperative within a cooperative, whose
membership documents the Russian military prepared themselves at their own
printing press. But the intelligence officers did not build the garages with
their own hands, bringing in workers and machinery from the construction
directorate of the Black Sea Fleet.

Incidentally, an officer of the central apparatus of Russian intelligence,
one Vladimir Zemlyak, who visited Sevastopol either for service or personal
reasons, also availed himself of a place for his car in the cooperative.

Probably someone will say that this is all trivialities and chance events.
But one can find too many of them now in the latest history of the BSF.

It hardly looks a chance that the BSF is building and continuing to build
here in Ukraine instead of building at home in Russia in preparation for
2017. It can also hardly be called a chance that officers of the Russian
special services are engaged in building garages during working time and
that they are being helped in this by the fleet’s construction
organizations.

After all, what might seem on the surface like greed for personal profit
smacks more of carrying out tasks set by the fleet intelligence service.

And visible confirmation of this is provided by a speech that has become
public knowledge from the former chief of the intelligence directorate of
the BSF, currently the head of the Sevastopol branch of the Institute of CIS
Countries, Yevgeniy Sobolev, at a closed party for his former colleagues on
the occasion of Victory Day, where he said the following: We are witnessing
transformations in Russia and many other countries that are friendly to us
for now. The service that we bore was necessary.

“It is also necessary now and will be necessary for a long time. And
whatever they say, we always achieve our goal. Therefore I want to wish the
commanders and servicemen understanding of the fact that ’17 is coming…
[ellipsis as published] but if anyone is waiting for us to leave, they’ll be
waiting in vain. Sevastopol was, is and will be a city of Russian glory.

Like it or not, these are all links, small and big ones, in a single chain,
a chain that in the final analysis is due to lead to the fact that after the
BSF leaves, Crimea de facto will remain Russian.
———————————————————————————————–

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========================================================
17.  TWO FOREIGN POLICIES FOR ONE RUSSIA
Russian tactics in Ukrainian president-premier conflict

REPORT: By Tatyana Stanovaya
Politkom.ru website Moscow, in Russian 27 Aug 07
BBC Monitoring Service, United Kingdom, Fri, Sep 07, 2007

President Vladimir Putin three times last week held meetings with Ukrainian
Prime Minister Viktor Yanukovych as part of the MAKS air show in

Zhukovskiy.

The visit showed how well Russia’s relations with the “constructive”
Yanukovych are shaping up and how difficult they are proving with the
“orange part” of the Ukrainian establishment. The “diarchy” in Ukraine’s
foreign policy caused a row here.

Yanukovych’s visit made no provision for official interstate negotiations.
Nonetheless, the president was as open as could be to meetings: there were
three such, including Vladimir Putin’s visit to the Ukrainian pavilion.

As Yanukovych himself announced, he discussed with the president not only
the campaign situation in Ukraine and general issues of bilateral relations
but also the problem of the transit of energy resources via Ukraine to
Europe.

The informal consultations largely testify to the sufficiently
well-established dialogue between the Russian leader and the Ukrainian prime
minister.

Despite the fact that it was long since Yanukovych could have been
considered a pro-Russian politician, it is convenient for the Kremlin to do
business with him, not with the ideologically “loaded” “orange part” of the
Ukrainian establishment.

Specifically, despite the fact that Yanukovych has not scored any visible
successes based on the results of the visit, he is paving the way for a
solution of relatively complex, problematic issues of Russo-Ukrainian
relations.

This applies not only to power industry but to cooperation in the aviation
sphere as well. For example, at the MAKS air show the directors of the
Aviation of Ukraine national corporation and OAK [United Aircraft
Corporation] signed a memorandum on the development of commercial and

cargo equipment.

In the course of a conversation with General Designer D.S. Kiva the
important guests discussed the two countries’ cooperation in a resumption of
the series manufacture of modernized An-124 planes and the organization of
the production of the An-148 new-generation regional airliner, which
displayed its high performance characteristics in a demonstration flight.

The president also advocated continued interaction in the development and
manufacture of the An-70 military transport plane.

The latter news may be considered sensational. We recall that the production
of the An-70 has been one of the most serious problems, not so much economic
as political, between the two countries.

Ukraine promised to build as part of the Russo-Ukrainian Medium-Haul
Transport Plane consortium 65 planes for Ukraine and 164 for Russia’s MoD
before 2018. The issue was, in effect, one of support for Ukraine’s aviation
industry on the part of the Russian state.

At the end of 2002 the MoD attempted to block the construction, justifying
this by the planes’ unreliability and their costliness. But in 2003 the
problems were removed: this was part of the political measures on the part
of the Kremlin aimed at supporting Leonid Kuchma, who was pushing Viktor
Yanukovych for the office of president of Ukraine.

Nonetheless, the project shortly after once again began to spin its wheels,
and in mid-2006 Russia officially announced that it was pulling out of the
consortium. The government’s position was tersely summed up by the deputy
prime minister, Defense Minister Sergey Ivanov: “The project was inaugurated
in the mid-1980s.

“Twenty years have elapsed since then, in this time the niche that was
earmarked for a medium-haul military transport plane has practically been
filled. First, the modernized Il-76. On the other hand, we have our own new
plan for the development of a medium-haul transport plane. This is a purely
Russian plane.”

The An-70 project has hitherto been, in effect, dead, and the very fact of
dialogue on this subject and the theoretical concession on the part of the
Russian president concerning a resumption of negotiations testifies to the
positive dynamics in relations between the Ukrainian premier and the Russian
president.

It is obvious here that some resumption of the consortium’s work is out of
the question. It is possible that Vladimir Putin is simply making it
understood that, given constructive relations, even the “deadest” subjects
stand a chance of resuscitation.

Meanwhile, as soon as the meetings between Yanukovych and Putin in Moscow
were over, a new row, which testifies to the problems of the dialogue
between Russian officials and the “orange part” of the establishment, broke
out between Russia and Ukraine.

Vladimir Lysenko, counselor of the Russian Embassy in Ukraine, allegedly
make in Kiev a high-decibel statement, threatening a revision of the Grand
Treaty of 1997, which enshrines the status of the Crimean peninsula: this
could happen if the Ukrainian authorities continue to put pressure on the
Black Sea Fleet.

Ukraine accused Russia of encroachment on its territorial integrity, and the
embassy was forced to deny the counselor’s words–there even ultimately
appeared a conjecture that these words had been spoken not by Lysenko but by
an activist of the Russian movement in Ukraine who had been taking part in a
roundtable together with him.

The problem is that, following the parliamentary elections in Ukraine, there
will be a meeting between Putin and Viktor Yushchenko, at which, on the
initiative of the Ukrainians, the central issue will be a number of ideas
concerning the temporary presence of Russia’s Black Sea Fleet in Sevastopol.

These initiatives, relatively unpleasant for Russia, essentially amount to
limitation of Russia’s rights and an increase in the rental payment.

The row that has erupted between Russia and Ukraine hereby arose not only on
account of long-standing disagreements on this specific issue but also over
an uncrafted dialogue between officials of the two countries.

A situation whereby two centers of influence in the shape of Yushchenko and
Yanukovych not only cannot come to an agreement on the priorities in foreign
policy (which in this country is now the norm) but are getting in each
other’s way backstage also is taking shape.

The premier accused the Ukrainian Embassy in Russia of impeding his visit to
Moscow on directions from the Foreign Ministry, which is not subject to
Yanukovych’s control.

The competition between the two centers of influence and the differing
nature of relations with Russia are enabling the Kremlin to be an active
player with Ukraine while giving Yanukovych advance payments that are none
too realistic and ignoring the calls of Yushchenko for the closer definition
of the agreements on the Black Sea Fleet.
———————————————————————————————–
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18.  UKRAINE’S REGIONS PARTY CANVASSING SIGNATURES FOR
REFERENDUM ON THE STATE STATUS OF RUSSIAN LANGUAGE

ITAR-TASS, Moscow, Russia, Friday, September 7, 2007

KIEV – Ukraine’s Regions Party on Friday began to canvass signatures in
support of a referendum on the state status of the Russian language in the
country.

The campaign is due to start at 12:00, Moscow time, in Kiev’s Independence
Square and will involve lawmakers. Similar signature collecting actions will

be held in Kharkov, Simferopol, Donetsk, Odessa and Poltava.

The Ukrainian citizens have been asked to answer three important political
questions which have long been worrying the society. They will be asked to
consider giving the state status to the Russian language, together with
Ukrainian.

The organizers also plan to include in the ballots a question about the
possibility of direct election of regional governors and heads of district
administrations. The third question concerns Ukraine’s participation in

political blocs or military alliances.

Ukrainian President Viktor Yushchenko criticized the initiative of the
Regions Party led by Prime Minister Viktor Yanukovich.

“To call a referendum of this kind would mean to violate the existing
regulations for amending the Constitution of Ukraine,” Yushchenko told
reporters. “It is regrettable that the Prime Minister is conducting a policy
of this kind.” “These issues require more detailed consideration,” he said.

Boris Kolesnikov, the chief of the Regions Party’s election staff said polls
show that 45% Ukrainians speak in favor of making Russian the second state
language and 60% oppose the idea of Ukraine’s engagement in whatever
military blocs or alliances.

September 30, Ukrainians will go to the polls in an early parliamentary
election. The two major political forces, the blocs supporting President
Yushchenko and Prime Minister Yanukovich, will take part in the election.
———————————————————————————————-
http://www.itar-tass.com/eng/level2.html?NewsID=11850901&PageNum=0
———————————————————————————————–
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19.  LANGUAGE DIVIDES UKRAINE

Russia Today, Moscow, Russia, Saturday, September 8, 2007

With a snap parliamentary election to be held in just three weeks in
Ukraine, politicians are fighting for the electorate. Russian-Ukrainian
relations have become a hot subject again, and the language debate is
one of the most divisive in Ukraine.

Three million signatures are needed to make Russian the second official
language in Ukraine. Pushing for a referendum on this issue, the Prime
Minister’s Party of Regions says it shouldn’t be a problem with around
half the country of 48 million speaking Russian.

Russian-speaking Ukrainians complain of discrimination. More than 80%

of schools in the country switched to Ukrainian after the break-up of the
Soviet Union. As a result, the Russian-speaking people have almost no
chance to educate their children in Russian.

Besides, those who grew up in Soviet times find it difficult to fill in
forms in government offices and compete for jobs.

Tatyana Leshchenko was born and bread in Ukraine. During Soviet times,
her family studied Russian at school and conversed in Russian at work.
Although she understands Ukrainian, reading and writing in it is not at all
easy for her and her family members.

“To present a doctoral thesis, my son hired an interpreter. Everybody was
laughing when he was reading it in Ukrainian,” she says.  Apart from the

language issue, the Prime Minister’s party is asking whether Ukraine should
join any military alliances.

While their rivals are campaigning the opposite. The presidential Our
Ukraine party and Yulia Tymoshenko’s Block are convinced that the
dominant Ukrainian language and membership in NATO will lessen the
Russian influence on this newly independent state.
———————————————————————————————–
LINK: http://www.russiatoday.ru/news/news/13787
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20.  UKRAINE’S ETHNIC RUSSIANS OVERWHELMINGLY LOYAL
TO KYIV, LEADING MOSCOW ETHNIC ANALYST SAYS

Window on Eurasia: By Paul Goble, Vienna, Austria, August 24, 2007

Vienna, August 24 – Ethnic Russians in Ukraine are overwhelmingly loyal to
Kyiv, a reflection of both their experiences at the end of the Soviet period
and the strides the Ukrainian government has made to create a political
rather than ethnic nation in that country, according to a leading Moscow
specialist on ethnic issues.

Consequently, Sergei Markedonov argues in an article posted online this
week, Moscow’s continuing efforts to exploit what many Russian officials
and still believe is a significant dividing line within Ukraine are doomed
to fail and may even backfire
(http://www.russ.ru/layout/set/print//politics/docs/ukraina_raskola_ne_predviditsya).

On the one hand, Markedonov’s conclusions resemble those of Kremlin aide
Modest Kolerov who in June 2006 urged that Moscow recognize that “there are
no pro-Russian forces in the post-Soviet space” and that those who present
themselves as such are marginal figures who lack any support in the
countries where they now live.

But on the other, the Moscow analyst’s remarks this week are a significant
extension of those ideas because they directly address the situation in
Ukraine, a country that, in Markedonov’s words, has always occupied “a
special role” in Russian thinking and “Soviet nostalgia.”

The creation of Ukraine in its current borders, Markedonov reminds his
readers, was the work of Joseph Stalin who added the six western oblasts to
the Ukrainian SSR at the end of World War II and Nikita Khrushchev who
transferred Crimea to Ukraine in 1954.

As a result, Ukraine even in Soviet times had an ethnically diverse
population, and Ukraine itself represented “an imagined community,” one in
which ethnic Ukrainians for nationalist reasons and ethnic Russians there as
the result of their specific life experiences with Russians from the RSFSR
found a great deal of common ground.

Ukrainian nationalist sympathies in the late Soviet period are well-known,
but Markedonov offers an interesting detail: Vitaliy Shelest’, the son of
Ukrainian party boss Pyotr Shelest, repeatedly read and accepted most of
the arguments of Ivan Dzyuba’s classic “Internationalism or Russification.”

But what the Moscow analyst says about ethnic Russians in the Ukrainian SSR
is even more important. Markedonov, a native of Rostov, said that in the
1970s and 1980s, ethnic Russians in eastern Ukraine were horrified by and
viewed themselves as very different than the RSFSR Russians who traveled
there to buy food.

And those experiences rather than some misplaced optimism about the future
explain why ethnic Russians in the eastern portions of Ukraine voted for the
independence of that country from the Soviet Union almost as
enthusiastically as ethnic Ukrainians did.

Such attitudes, however, might not have mattered much if the post-Soviet
Ukrainian leadership had sought an émigré-based ethnic national state, as
some Ukrainians hoped. But instead, Kyiv has actively promoted the creation
of “a political Ukrainian nation,” one with a place for ethnic Russians as
well as ethnic Ukrainians.

This process, Markedonov continues, is “far from its completion,” but he
argues that Moscow must recognize and base its policies toward Kyiv on the
reality that over the last 16 years, “the Kyiv elite has been able to do a
great deal to overcome the ethno-cultural split of the country.”

By acting in this way, the Moscow analyst says, Ukrainian leaders have been
able to prevent their country from falling into the difficulties in which
Georgia or even Moldova have found themselves and “what is most important”
have been able to “create the traditions of a civilized transfer of power
and the achievement of compromises.”

Since 1991, Ukraine has had three presidents. It has had even more prime
ministers. And it has a political system in which compromise has been
enshrined as a political virtue, something not found in many other
post-Soviet states, including the Russian Federation.

As a result, Markedonov concludes, “the state in Ukraine exists, and a
single political nation has become to be formed.” And the sooner that people
in Moscow understand this, the batter” instead of continuing to pursue
policies based on assumptions that are no longer true if they ever were.
———————————————————————————————–
Until December 2006, Paul Goble was vice dean for the social sciences and
humanities at Audentes University in Tallinn and a senior research associate
at the EuroCollege of the University of Tartu in Estonia. While there, he
launched the “Window on Eurasia” series which at that time he distributed
directly via e-mail.

Prior to joining the faculty there in 2004, he served in various capacities
in the U.S. State Department, the Central Intelligence Agency and the
International Broadcasting Bureau as well as at the Voice of America and
Radio Free Europe/Radio Liberty and at the Carnegie Endowment for
International Peace.

He writes frequently on ethnic and religious issues and has edited five
volumes on ethnicity and religion in the former Soviet space. Trained at
Miami University in Ohio and the University of Chicago, he has been
decorated by the governments of Estonia, Latvia and Lithuania for his work
in promoting Baltic independence and the withdrawal of Russian forces from
those formerly occupied lands.
————————————————————————————————-
http://windowoneurasia.blogspot.com/2007/08/window-on-eurasia-ukraines-ethnic.html
—————————————————————————————————-
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21.  UKRAINIAN CROSSROADS

COMMENTARY: By Aleksander Kwasniewski, former President of Poland
The Wall Street Journal, New York, NY, Friday, September 7, 2007

Ukraine’s gradual but sometimes uneven progress toward democracy has

shown once again that this path is never easy. Nothing worth fighting for ever
is. Institutional models can be borrowed from established democracies and
adapted to local circumstances with some success.

But acquiring the habits and culture of a democratic society, without which
even the best-designed institutions are prone to malfunction, is an
altogether more difficult task. We need to be patient and respectful,
especially when looking at countries without long democratic traditions.

All this must be kept in mind when trying to understand the significance of
this month’s parliamentary election in Ukraine. The Orange Revolution of
2004 was a breakthrough because it removed electoral fraud as a routine fact
of political life in Ukraine and made proper democratic competition possible
for the first time.

But that single event was never going to wipe away at a stroke the legacy of
authoritarianism that continues to weigh so heavily on the present. It
should surprise no one that there have been setbacks as well as successes in
the last three years.

The recent period has been particularly challenging, largely because last
year’s parliamentary election failed to produce a clear result in favor of
one political bloc or another.

To his credit, President Viktor Yushchenko resisted partisanship and saw
this as an opportunity to create a new dynamic in Ukrainian politics based
on a spirit of national reconciliation and the shared objective of European
integration.

A broad power-sharing coalition was formed last summer between Mr.
Yushchenko’s Our Ukraine party and the Party of the Regions, led by his
rival for the presidency, Viktor Yanukovych, who was appointed prime
minister.

If that experiment ended in constitutional crisis and the need for a new
election, it is because not everyone entered into it with the same
high-minded intentions.

A struggle for power ensued in which parliamentarians from Our Ukraine

and another party defected to the Party of the Regions under questionable
circumstances, and parliament sought to strip President Yushchenko of his
constitutional prerogatives.

Sorting out the rights and wrongs of that situation hardly matters now. The
important fact is that Ukraine’s political leaders eventually agreed that
the only way to settle their differences was to call a new election. In
doing so they gave themselves another chance to demonstrate their

commitment to European values.

This came as a great relief to Ukraine’s friends across Europe, not least
because the main political parties invited the European Union to help
monitor the election to ensure that it meets international standards.

That invitation was accepted in good faith and in the belief that a
cross-party consensus existed to guarantee a fair and democratic contest.
Regrettably, the integrity of that consensus has been called into question
by the statements and actions of some political leaders.

The decision by one bloc to reconvene the already dissolved parliament on
Sept. 4 might be dismissed as a political stunt, but the statement by the
justice minister that it could be a reason to cancel the new election
threatens to plunge Ukraine into a crisis it can ill afford.

This is a delicate moment for Ukraine. It will probably secure the hard-won
goal of World Trade Organization accession later this year, opening the way
for a new chapter in relations with the EU. An enhanced EU-Ukraine bilateral
agreement is due to be negotiated, with a free-trade area as its
centerpiece.

This would not give Ukraine the EU candidate status it desires, but it would
put the country on a fast track toward deeper economic and political
integration and would constitute a genuine breakthrough.

This prospect has been greatly strengthened by the new realism in the
attitude of Ukraine’s leaders toward Europe and their willingness to put the
substance of integration before the theology of accession status.

But these gains are predicated on Ukraine’s continued progress as a country.
They would be put in jeopardy if it relapsed into a state of semipermanent
crisis without a functioning government to negotiate with, or any clear
sense of where ultimate political authority lay.

The election is an important opportunity for Ukraine not only to produce a
stable government with a clear mandate, but to demonstrate that it is a
country that Europe can do business with. If Ukraine becomes known as the
kind of country where political agreements are broken on a whim, it will
have damaging repercussions for its European ambitions.

Of course, the European Union cannot tell Ukraine what to do. We forfeited
that right when we declined to offer it the prospect of membership, which
would have allowed us to assess its policies against the accession criteria
that apply to all potential member states. But we can and should make it
clear that actions have consequences.

The Sept. 30 election is a chance for Ukraine to prove the doubters wrong
and settle its internal differences in a mature and democratic fashion. The
sooner all of its leaders are able to recommit themselves to that course,
the better for Ukraine’s European prospects.
——————————————————————————————
LINK: http://online.wsj.com/article/SB118911538801119836.html
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
22.  UKRAINE’S FUTURE HANGS IN THE BALANCE
Ukraine’s first president, Leonid Kravchuk, talks to New Europe

By Kostis Geropoulos in Marmari, Greece
New Europe, Brussels, Belgium, Issue 746, Friday, 9 September 2007

Leonid Kravchuk, Ukraine’s first president after the collapse of the Soviet
Union, called upon all the country’s political forces to unite around
specific key issues before the crucial parliamentary elections on September
30, 2007, to avoid a repeat of the prolonged political crisis that has
troubled Ukraine since the Orange Revolution in 2004.

The political crisis cannot go on indefinitely, he said. “The moment will
come that the Ukrainian political forces will understand either they are
going to act in the interest of the people, otherwise they will have to go,”
Kravchuk told New Europe in the resort town of Marmari on the Greek island
of Evia, where he was attending a Ukrainian-Greek forum on September 7.

Kravchuk, who in December 1991, together with Boris Yeltsin of Russia and
Stanislaw Shushkevich of Belarus, signed an agreement in the Viskuli
government residence in Belarus’ Belavezhskaya Pushcha National Park,
formalising the breakup of the USSR and leading to the formation of the
Commonwealth of Independent States, agreed to leave his post before the end
of his term in 1994 and holding an early election.

Today, he stressed, the three major parties — Party of Regions, Bloc Yulia
Timoshenko and Our Ukraine — hold on to power for the sake of power and
have lost their connection to the Ukrainian people.

Kravchuk said the elections have become the biggest issue and the biggest
problem. Ukraine’s 47 million people are tired of this situation, he said.

Ukrainian President Viktor Yushchenko and Prime Minister Yanukovich have
been wrestling for dominance since 2004, when Yushchenko led the Orange
Revolution. A hard-won agreement between the two leaders to hold early
parliamentary elections on September 30 has eased the confrontation. But the
truce may be only temporary.

Kravchuk leaned back in his chair pondering the conditions that led Ukraine
into a political crisis. He said whether or not Ukraine will avoid another
prolonged political stalemate after the elections “will depend on how all
political forces, in Ukraine will view this issue.

“Not only the decisive Ukraine political forces which we define as Party of
Regions, Bloc Yulia Timoshenko and Our Ukraine. These forces have
monopolised today the shaping of Ukrainian political landscape. But they
don’t represent the whole Ukrainian nation and even not all the Ukrainian

voters.”

He explained that approximately half of the votes the three major parties
received were through the system of allocation. “These are the votes of
other parties which could not pass the three percent threshold, so these
three parties got automatically the votes of other parties,” Kravchuk said.

The soft-spoken politician called on Yushchenko to take into consideration
the issues troubling the whole country and not only those concerning Our
Ukraine party.

“If today all the political forces unite around some specific issues, and
the president will take the position of the president of the whole Ukraine
and not that of part of the country — because today he is the president of
the opposition — then in this case Ukraine will be able to overcome these
problems and follow the course which has been defined by the Ukrainian
referendum,” he said.

Kravchuk said the issue of Ukraine’s accession to NATO, the European
Union and its relations with Russia will definitely be the topic of very hot
debates during the parliamentary elections.

He added that Ukrainians are not interested for the time being in their
country joining NATO. He said, citing recent polls, that 87 percent of
Ukrainians believe that Ukraine should not be a member of NATO.

Ukraine’s accession to the defence alliance may also complicate Kiev’s
relations with Moscow. “Naturally, Russia is opposed to Ukraine’s accession
to NATO. She doesn’t want the extension of NATO to be close to Russia.

“We should take this into consideration (and) not follow whatever Russia
says, but to keep it in mind in order not to deteriorate relations between
Russia and NATO, which can cause serious problems in European security.

“I’d like to say that some European countries understand this position of
Ukraine and this position of Russia,” he said, adding that Ukraine alone
should decide if and when it wants to join NATO.

A few hours earlier he admitted to Ukrainian journalists that if Russia cut
off relations with Ukraine for one day, Ukraine would be wiped off the map
economically. “Both our countries are very productive. We rely very heavily
on them whether we like it or not,” he said.

“Regarding the European Union, I have said that Ukraine is not ready yet to
become a member of the European Union. She has to solve a number of
complex issues: legislative, economic, spiritual. And upon solution of all
these issues it will have all the reasons to enter the European Union,” he told
New Europe.

Ukraine has to get its own house in order first. “The most important issue
today for Ukraine is to definitely solve its own internal problems. The
sooner we will solve our internal problems, the more chances Ukraine will
have to become a member of the European international organisations
including the EU,” Kravchuk said.
——————————————————————————————-
LINK: http://www.neurope.eu/view_news.php?id=77561

————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
23.  UKRAINIAN PARLIAMENTARY ELECTION QUOTES SEP 1-9, 2007

Quotes package from BBC Monitoring, in English 9 Sep 07
BBC Monitoring Service, United Kingdom, Sunday, Sep 09, 2007

Campaigning officially kicked off in Ukraine on 2 August for an early
general election due on 30 September. The agreement to hold the election was
seen as a compromise between Ukraine’s two feuding leaders, President Viktor
Yushchenko and Prime Minister Viktor Yanukovych.

The country has been in a state of crisis since April, when Yushchenko
dissolved parliament and called a fresh election saying his power had been
usurped and people’s choice distorted as a number of opposition MPs were
lured into the progovernment coalition.

The former Orange Revolution allies – propresidential Our Ukraine-People’s
Self-Defence bloc and the opposition Yuliya Tymoshenko Bloc – have been

seen fighting for voters with the progovernment coalition of the Party of
Regions, the Communists and the Socialists.
Orange allies attacking progovernment coalition parties
Yushchenko warned ruling coalition MPs against opening parliament’s autumn
session on 4 September in a pre-recorded address to the nation.

“I say it strongly and in cold blood: dear deputies, please calm down, do
not abuse people’s patience, do not make a laughing stock of the Supreme
Council. The Ukrainian parliament’s building is the life of the country, not
a base for your experiments and battles with windmills. (State-owned UT1 TV
channel, 3 Sep 07)

Opposition leader Yuliya Tymoshenko accused the Party of Regions’ key
sponsor and number seven on the election list, Donetsk tycoon Rinat
Akhmetov, of “nicking” the Dniproenerho power generating company from the
state and building a monopoly on the electricity market, threatening him
with re-privatization when she comes to power.

“Rinat, if you are so worried about domestic power engineering and
everything connected with it, why don’t you privatize the Chernobyl nuclear
power plant, for example? Come to think of it, by the way, a prime
ministerial dacha could also be built there.

The Shelter as a residence for Viktor Yanukovych. Or the sarcophagus. Does
that sound bad? What is more, the land there is wonderful, there are no
neighbours, the fish are size of whale sharks, they say, and the
strawberries the width of water melons,” Tymoshenko said in an article.
(Korrespondent magazine belonging to the American-owned KP Publications
group, 7 Sep 07)

Tymoshenko promised to reverse the gas accords signed with Russia in early
2006 if she becomes prime minister after the election. The accords
eliminated a fixed low price of Russian gas for Ukraine until 2010 and
introduced an intermediary, the Swiss-registered company RosUkrEnergo, to
Ukrainian-Russian gas relations.

“I think we will go to the Stockholm court and will get a ruling. I am
convinced of the lawfulness of Ukraine’s position. Ukraine has not
unilaterally altered a single long-term contract signed with Russia –
neither the land rent for the Russian Black Sea Fleet nor any other issues
agreed for the long term.

“For some reason, long-term accords could be changed unilaterally with
regard to Ukraine, with the help of top officials from Ukraine. This is not
so easy to do. It is rampant, large-scale corruption that has led to the
annulment of all direct interstate agreements between Russia and Ukraine,”
Tymoshenko said. (TV producer Oleksandr Rodnyanskyy’s One Plus One TV
channel, 7 Sep 07)

“For 16 years now, initially (former Ukrainian President Leonid) Kuchma and
his team and later the Party of Regions have been promising to make Russian
the second national language but again this is just a lie and a distraction
which they use when necessary ahead of an election,” Tymoshenko said, adding
that Yanukovych “never put the issue of a second national language on the
agenda for discussion although he had the absolute power of 300 votes in
parliament”. (Tycoon Ihor Kolomoyskyy’s UNIAN news agency, 5 Sep 07)

Self-Defence leader and ex-Socialist Yuriy Lutsenko criticized his former
party boss Oleksandr Moroz for convening the parliament that Yushchenko had
disbanded. “This is indeed not a Supreme Council. This is a gathering of lovers

of Mr Moroz’s poetry,” Lutsenko said. (ICTV TV channel owned by steel
tycoon Viktor Pinchuk, 9 Sep 07)

The president’s chief of staff and head of the Our Ukraine-People’s
Self-Defence election HQ, Viktor Baloha, said the bloc sees no sense in
signing the Yanukovych-proposed code of behaviour to ensure a transparent
and fair election campaign.

“The party that was accused of resorting to black PR and dirty tricks during
the election campaigns in 2004 and 2006 is now actively seeking to improve
its image. Certainly, a slogan about a fair election perfectly fits this
purpose,” Baloha said. (Interfax-Ukraine news agency, 3 Sep 07)
Progovernment parties versus Orange camp
Yanukovych criticized the president for enacting the National Security and
Defence Council’s decision to suspend Transport and Communications Minister
Mykola Rudkovskyy and Emergencies Minister Nestor Shufrych.

“Such meetings don’t add anything to stabilization, as they deal with the
usurpation of power by one state institution,” Yanukovych said. (ICTV, 9 Sep
07)

Socialist leader and parliament speaker Oleksandr Moroz lashed out at the
president while opening the autumn session of the disbanded parliament.

“It is a pity that President Viktor Yushchenko, an individual who due to his
position should have taken an absolutely different position and should have
been the guarantor of the constitution, law and order, is spearheading this
campaign against the constitution and parliament.

“It is a pity that for more than a year the Ukrainian government, instead of
doing productive and meaningful work for the benefit of the people and the
country, has been trying to counteract these attacks from Bankova [Street,
location of presidential secretariat], which is the generator of destructive
actions or, in other words, turmoil,” Moroz said. (UT1, 4 Sep 07)

Moroz was shown in a TV advert criticizing the president for calling an
early election. “The adventure with the early parliamentary election initiated

by Viktor Yushchenko is nothing but war against the constitution, the
judiciary and local governance reform,” Moroz said. (ICTV, 5 Sep 07)

Interior Minister Vasyl Tsushko of the Socialist Party warned political
rivals against using provocative techniques to boost their ratings ahead of
the polls following a statement by Transport and Communications Minister
(Socialist Party) Mykola Rudkovskyy that the presidential secretariat
masterminded a plan for acts of provocation on the railways that may cause
multiple victims.

“They will be brought to justice according to the law. They should not even
think of boosting their popularity at the expense of the people or, God
forbid, at the expense of human victims,” Tsushko said. (Interfax-Ukraine
news agency, 5 Sep 07)

Tsushko criticized the Party of Regions’ move to hold a national referendum
on the status of the Russian language, joining NATO and electing governors
as “political bluff”.

“As for the status of Russian as a second state language, please tell me why
should residents of Ivano-Frankivsk Region, where 99 per cent use Ukrainian,
need it? We should leave it up to local councils to decide if they need a
second state language. There are villages in Odessa Region where they speak
Moldovan only. What should they do?” Tsushko said. (UNIAN, 6 Sep 07)

Hanna Herman of the Party of Regions denied that the party’s main election
strategy is snatching and mocking campaign moves and slogans of its
political rivals.

“As for the opposition’s trump cards and whether or not they have been
snatched, you know our main trump card is our deeds. We will not play cards
with political card cheaters,” Herman said. (ICTV, 9 Sep 07)
Press comments
Article headlined “Zombies going to the polls”: This is not a horror film,
but the realities of Ukrainian democracy. In spite of the annual decrease in
the country’s population, the number of voters is not lessening.

On the eve of the forthcoming election, the deceased are coming to life and
together with us are heading for the polling stations. (Daily Stolichnyye
Novosti owned by businessman Vadym Rabinovych, 4 Sep 07)

The Regionals (Party of Regions members) no longer have confidence that

they will win on 30 September, as their ratings have been falling
catastrophically, most rapidly in the south and east, which are their
electoral strongholds. (Obozrevatel website, owned by Tymoshenko’s former
ally Mykhaylo Brodskyy, 5 Sep 07)
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
24.  LOOKING AT OUTSIDERS

Election list of former Ukrainian speaker bloc’s analyzed
 
ANALYSIS & COMMENTARY: By Viktor Chyvokunya
Ukrayinska Pravda website, Kiev, in Ukrainian 8 Sep 07
BBC Monitoring Service, United Kingdom, Sunday, Sep 09, 2007

The election bid of former parliamentary speaker Volodymyr Lytvyn’s bloc is
supported by businessman Vasyl Khmelnytskyy, a well-informed Ukrainian
website said. Khmelnytskyy himself is running for parliament on the list of
the ruling Party of Regions, the website adds.

The following is an excerpt from the article by Viktor Chyvokunya entitled
“Looking at outsiders” and posted on the Ukrayinska Pravda website on 8
September:

Amidst the campaign routine the author of this article was listening to a
radio news bulletin. Although it was a music station the news were
political. The first to go on the air was a statement by a political pundit
that the Lytvyn Bloc has (just imagine!) a candidate for prime minister in
its ranks. The next piece of news was the same funny.

An opinion poll conducted by an unknown pollster revealed that in addition
to the Party of Regions, the Yuliya Tymoshenko Bloc and Our Ukraine-People’s
Self-Defence, two more political forces can make it into parliament, namely
the Communists and the Kuchma Bloc.

The early election has resuscitated many politicians of the past who pay for
news reports about themselves, targeting the clueless public. Although, none
of them is standing any chances, they pin their hopes on the decimal points
of per cents to improve their results.

Among the second echelon of the campaign participants, the Lytvyn Bloc is
believed to have the best chances. After the fiasco of 2006, the former
speaker reshuffled his team. New sponsors have replaced Serhiy Lyovochkin
and Ihor Yeremeyev. The Lytvyn project at the early election is the product
of the well-known Ukrainian political sponsor, Vasyl Khmelnytskyy.

Being one of the biggest land owners in Kiev, Khmelnytskyy and his partner
Andriy Ivanov was involved in the Zaporizhstal steelworks but then focused
on business projects in the capital.

It would be an exaggeration to call Khmelnytskyy a politician. For the past
ten years, he has delivered no public speech, given no interview and
defended no ideological values.

He simply supply various projects with money. He began with the Party of
Greens, then he supported Women for the Future and the Renewed Communist
Party. After the Orange revolution he was taken for probation to the Yuliya
Tymoshenko Bloc, but he failed to stand up to pressure and ended up in
Viktor Yanukovych’s Party of Regions election list.

A potentially successful part of the Lytvyn Bloc’s list is filled with
Khmelnytskyy’s people. Ukrayinska Pravda has found at least seven people
linked to his businesses. All of them used to take part in Khmelnytskyy’s
previous projects.

Serhiy Pavlenko is No 13 in the Lytvyn Bloc. The Central Electoral
Commission lists him as an employee of the regional development investment
strategy institute. In 1998 when Khmelnytskyy debuted in politics and
supported the Party of Greens, Pavlenko was elected an MP as No 9 on the
environmentalist’s list.

At the time, he was listed as the director of the Real-group Ltd, while
Khmelnytskyy was just the head of Real-Group’s IT department. Khmelnytskyy
has always tried to stay in shadow without attracting attention to himself.

It is interesting that in the education slot Khmelnytskyy indicated at the
time: technical college and basic secondary school. Currently, the Party of
Regions lists him as a man with basic university education.

Another Khmelnytskyy’s man, Volodymyr Herasymchuk, is No 17 in the Lytvyn
Bloc list. He is listed as a consultant of the Media-Audit company. Nine
years ago, a director of this company was elected to parliament on the quota
of the Party of Greens.

No 18 is Mykola Shmidt, a member of the Kryvorizhstal supervisory council at
the time when Khmelnytskyy took part in the work of this plant. No 19 is
Ihor Holovchenko, who was No 2 in the list of the Renewed Communist Party at
the 2002 election. At the time, it was Khmelnytskyy who financed this party.

No 20 is Vadym Hryvkovskyy. At the 2002 election he was running for
parliament in the Women for the Future election list, while his brother was
in the list of the Renewed Communist Party. Both projects were supported by
Khmelnytskyy.

No 22 is another protege of Khmelnytskyy, Oleh Polishchuk, who was member

of parliament in the list of the Party of Greens in 1998. No 25 is Valeriy
Remez, who ran for parliament on the list of the Renewed Communist Party.

All Khmelnytskyy’s people appeared on Lytvyn’s list on the quota of the
Labour Party, which is headed by the “father of the constitution” Mykhaylo
Syrota.

Another group of influence in the Lytvyn Bloc is Ihor Sharov. The former
leader of the Working Ukraine faction lost interest in this project
simultaneously with Viktor Pinchuk and Serhiy Tyhypko. At this election
Sharov is the head of Lytvyn’s campaign HQ, he is No 12 in the list.

Sharov also has long-standing relations with Khmelnytskyy. In 2002, even
Sharov’s brother ran for parliament on the list of the Khmelnytskyy-financed
Renewed Communist Party. Since Sharov is close to Pinchuk, it would be
natural to see in Lytvyn’s list the people of the former president Kuchma’s
son-in-law.

Actually, there are no key people from Pinchuk’s inner circle in Lytvyn’s
list. There are, however, a few politicians connected with Pinchuk’s name.
Former Economics Minister Mykola Derkach in No 3.

Former President Kuchma appointed him after the dismissal of Valeriy
Khoroshkovskyy. Derkach was considered to be close to Pinchuk. At the
moment, he is the head of the Dnipropetrovsk Region branch of the People’s
Party.

Another Pinchuk’s companion, Viktor Drachevskyy, is No 110. Drachevskyy

was elected MP in 2002 to make it impossible for Oleksandr Zhyr to continue to
lead a parliamentary commission set up to investigate the Gongadze case.

Zhyr was disqualified from the race and Pinchuk’s man won without fight in
the Nikopol and Marhanets constituency. However, Drachevskyy’s feats are
long forgotten.

Another former MP Oleksandr Bandurka is also in hopeless 80 place.
Stela Khlus, who is commonly known as gymnastics Olympic champion Stela
Zakharova, is No 43. The Kiev authorities are represented in the Lytvyn list
by No 5.

This is Viktor Pavlyshyn, the head of Kiev’s Shevchenko district state
administration and current opponent of mayor Leonid Chernovetskyy. Deputy
Kiev mayor Mykhaylo Holytsya is No 46.

Although Lytvyn’s list unites mostly people from the past political epoch,
it features the current acting head of Mykolayiv Region Oleksiy Harkusha (No
4). A few months ago the presidential secretariat unexpectedly appointed him
to this post, which looked as a bid to diminish the influence of the
Yanukovych’s party in a crucial region.

No 49 is Ivan Atamanenko, the director of the Renesans-Pivden Ltd. He is
building a bloc of residential apartments over the Supreme Council’s
[parliament] Lower Oreanda sanatorium in Crimea. Sources say that Lytvyn
also has some interest in this project.

It seems, Lytvyn does hope for success. He even has a kind of technical
candidate, on whose behalf he can file official complaints and appoint
observers. The Peasant Bloc Agrarian Ukraine fits these criteria. Among its
founders is the Ukrainian Peasant Democratic Party.

The party’s leader, Valeriy Voshchevskyy, is a plenipotentiary
representative of the Lytvyn Bloc. [Passage omitted: election lists of the

Kuchma Bloc and other minor blocs analyzed.]
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
25.  UKRAINE: DARK HORSES IN LISTS OF OUR UKRAINE,
TYMOSHENKO BLOC AND PARTY OF REGIONS

ANALYSIS & COMMENTARY: by Viktor Chyvokunya, UP
Translated by Anna Ivanchenko
Ukrayinska Pravda, Kyiv, Ukraine, Tuesday, September 4, 2007

In August Ukrayinska Pravda carried out a detailed analysis of who is led to
election by Yulia Tymoshenko Bloc, Our Ukraine and the Party of Regions.

However, some interesting names have not made it to the publication due to
the lack of information on the people carrying them. Now we have managed to
find out new details about the profiles of three election lists’ favorites.

They are a graduate of school preparing Russian special services staff, a
son of Yulia Tymoshenko’s closest aid, and a moneybag of the Constitutional
Court head.
Our Ukraine – People’s Self-Defense
Yuriy But who occupies the 61st position on the election list is probably
the most mysterious person among those who can make it to the Parliament as
members of President’s bloc.

He was put forward as an MP candidate according to Yuriy Lutsenko’s quota.
Election documents describe Mr. But as an associate professor of civil and
legal disciplines chair in the leading Ukrainian university, Institute of
arts headed by Mykhaylo Poplavsky. However, this modest post hides some
fascinating biography details.

Before Mr. But appeared in the NU-NS list, the Internet contained only fact
about him: he defended his Ph.D. dissertation entitled “Criminal
responsibility of military personnel for violation of weapons application
rules” in Moscow in 1999.

When Ukrayinska Pravda analyzed the list of Our Ukraine in a separate
article it was noted that Mr. But is listed in the database of tax
administration as a co-founder of “United consultants of Ukraine” company.
Another shareholder of this firm is a Russian company dealing with taxes
optimization, FDP United Consultants.

Some websites published information that Yuriy But is a brother of
international weapon trader Viktor But which even triggered Lutsenko’s
reaction: “I fully refute the rumors on his connections with an alleged
relative who sold weapons, it is only a person with the same last name who
does live in Moscow.”

Mr. Lutsenko turned out to be informed about Mr. But’s biography but
naturally he didn’t tell everything.

“Yuriy But was born in the city of Baturino in Chernihiv region, he did work
for some time in Moscow, in the legal field. Now he is completing his second
Ph.D. dissertation in Kyiv. We need solid legal professionals,” this is how
Mr. Lutsenko explained the presence of this person on the list.

And some days ago Ukrayinska Pravda managed to find But’s biography. He does
have only two things in common with weapon supplier to Africa – they have
the same last names and patronymics, which raised the rumors.

However, it seems that these people are really foreign to each other. Viktor
But was born in Dushanbe, while our Ukrainian But was born in Bakhmach of
Chernihiv region. When talking about Baturino Mr. Lutsenko confused the
names of cities.

But the biography of Yuriy But from Our Ukraine list is also quite
fascinating. For example, this MP candidate is a holder of Ukrainian
passport which was received by him only. two years ago, on March 4, 2005.

Mr. But obtained Ukrainian citizenship on July 18, 2002 in Moscow embassy.
And if early election took place on May 27 Mr. But might not have been
allowed to participate in it as the five-year term of his citizenship had
not yet been reached.

Mr. But’s education and place of work point to the peculiar field of his
interest. In particular, he graduated from department of law of Russian
Federation Ministry of Defense Military University.

“This institution is a great place to hone new employees, namely educated
intelligence and counter-intelligence officers, law advisors, investigators,
prosecutors, psychologists, translators and journalists,” this is how the
Military University advertises itself.

The very same text notes that university graduates occupy executive
positions in the Head administration of Russian Ministry of Defense
intelligence, Federal agency of governmental communications, Federal
Security Service, Ministry of Internal Affairs and other law enforcement
institutions.

The site also informs that graduates of Ministry of Defense Military
University leave the school with lieutenancy. Until 1994 future MP candidate
from Our Ukraine-People’s Self Defense Yuriy But served in the Armed forces
of Russia.

Later, in 1994-2000 Mr. But worked on the post of senior lecturer in one
more peculiar institution, Military academy of strategic rocket forces. We
do not need to explain the reader what this name means and what kind of
people work there. During these years the university name also changes –
instead of “named after Felix Dzerzhinsky” it becomes “named after Peter the
Great”.

An institution attached to Putin’s administration became another step in
Yuriy But’s career – in 2000-2002 Yuriy Lutsenko’s brother-in-arms was a
director of Russian State Service Academy Center for International Projects
and Cooperation attached to the President of Russia.

Ukrayinska Pravda managed to reach the HR department of Moscow academy

which confirmed that Mr. But headed the above mentioned center and had
Russian citizenship at that point.

But the year of 2002 brought about something that forced Yuriy But return to
Ukraine. We do not know the exact circumstances, but we do know that last
year he tried to obtain a post at the secretariat of Yanukovych’s Cabinet of
Ministers.

Now Mr. But has found himself as a lawyer in Lutsenko’s team.
Yulia Tymoshenko Bloc
The 136th position on the BYuT list is occupied by Yuriy Valentynovych
Tregubov, born 1973, who is deputy prosecutor of Dnipropetrovsk region. His
name has lately appeared in the press in connection with the investigation
of serial murder committed in the region by 19-year-olds.

Mr. Tregubov is not only a current official of law enforcement agency.
Actually he is the second representative of power on the BYuT list after
Oleksandr Turchinov who still occupies the post of deputy secretary of
Security Council.

Naturally, this person couldn’t but interest the journalists, especially due
to the fact that Olga Tregubova is the closest aid of Yulia Tymoshenko among
her entourage, and she is even called “BYuT’s keepsake”.

To find out if family connection brought the young prosecutor to the list,
Ukrayinska Pravda addressed directly Olga Tregubova who was present at the
last press conference of Yulia Tymoshenko last Friday. But she was reluctant
to answer this simple question. The reasons for such secrecy became known a
bit later.

In fact, Yuriy Tregubov is the son of Olga Tregubova, Yulia Tymoshenko’s
principal aid. We managed to find it out thanks to the database on natural
persons. Both he and she are registered in the same apartment in the
building on Malinovskogo street in Dnipropetrovsk.

The 120th number of the list Oleg Malich is another interesting character on
whom we have recently managed to obtain some information. The documents

describe him to be a deputy head of Kyiv mobile mechanized column-2 JSC
observation council.

However, according to the sources, the appearance of Mr. Malich in BYuT list
came as a great surprise as he carried out his previous activities together
with Kyiv region ex-governor from the Kuchma era Anatoliy Zasukha.

The land in Obukhiv district of Kyiv region was his alleged area of
interest – it is there that the prestigious cottage villages are located.

In particular, it was Mr. Malich who took part in the sale of well-known
huge land plot in Rudyky to Andriy Kluev, where this Vice Prime Minister
built a palace for himself.

Mr. Malich is associated with the construction of Sosnoviy Bir (Pine Forest)
cottage village which was allocated 84 hectares of land near Kozyn. Later
Viktor Pinchuk built his mansion nearby. Back in the Kuchma era a criminal
case was initiated on the issue of land allocation to the future BYuT
member.

Besides, according to some information, an island on a dam in Koncha-Zaspa
where brothers Buryak from BYuT dwell also belongs to Mr. Malich.

In a conversation with Ukrayinska Pravda, Tetyana Zasukha stated that the
name of Malich rang the bell to her. “No wonder because I was an MP from
Obukhiv district for eight years, and everybody there knows me,” she
explained.
Party of Regions
Ukrayinska Pravda didn’t notice at first an interesting person among Party
of Regions favorites as well – the 123th position on the list is occupied by
MP candidate Sergiy Mykolayovych Moshak.

In early 2000s Moshak worked as a manager of Expocenter which was a part of
the State Affairs Administration system headed by Yuriy Dagayev. Later on,
according to some information, the Moshak family moved to the USA.

The documents describe him as “consulting aid of a people’s deputy” – but in
fact, according to the information of Ukrayinska Pravda sources, Mr. Moshak
was included in the PR list as a person close to head of Ukrainian
Constitutional Court Andriy Stryzhak.

Sources in the Party of Regions headquarters claim that Mr. Moshak was
advised by Anton Prigodsky, a close friend of Mr. Yanukovych who is
responsible for relations with the Constitutional Court.

The appearance of close brother-in-arms of the Constitutional Court head on
the Yanukovych’s list encourages us to reflect on special relationship of
Mr. Stryzhak with the Party of Regions.

However, Mr. Prigodsky himself told Ukrayinska Pravda that he “doesn’t
remember” such person as Sergiy Moshak.

Still, this story has one more character. The gratitude if it was there in
this case went from Moshak to Stryzhak not directly but through his old
crony, American citizen Alex Rowt who is the owner of Azot, a chemical plant
with third largest capacity in Ukraine located in Severodonetsk [Lugansk
region].

During this election Mr. Rowt established contacts with both rivaling camps.
The PR list obtained Rowt’s person – Oleksiy Kunchenko who came from the
Socialist Party having lost faith in Moroz’s perspectives.

But at the same time Mr. Rowt found common grounds with the President’s
secretariat chiefs as well.

Mr. Rowt gained control over Azot in the midst of Orange revolution with no
privatization tender whatsoever – for the reason of bankruptcy procedure
start and establishment of a joint venture where the assets of the state
enterprise were transferred.

After the Maydan events one of Our Ukraine leaders in conversation with
Ukrayinska Pravda promised that Azot will be the second object of
reprivatization after Krivorozhstal.

But this member of Our Ukraine has long lost influence in Bankova
[President’s office], and Mr. Rowt found protection in the person of Anatoliy

Kinakh and then in that of Valentyna Semenyuk, and now no one talks about
returning the enterprise to the state.

Moreover, in summer Mr. Rowt was presented with an order “For services.”
As Yushchenko’s decree runs, it was given “for significant personal
contribution to the strengthening of economic relations between Ukraine and
the USA.”

Now, one more detail needs to be mentioned – Mr. Rowt was born in the
glorious city of Mukachevo, the motherland of Viktor Baloha.
———————————————————————————————–
LINK: http://www2.pravda.com.ua/en/news/2007/9/4/8752.htm

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
26.  MICHIGAN COUPLE HELPS FIGHT ABUSE AND
HUMAN TRAFFICKING IN UKRAINE 

By Louise Nelle News-Review staff writer
Petoskey News-Review, Petoskey, Michigan, Fri, Sep 7, 2007

HARBOR SPRINGS – When Jason Wiser went to Ukraine in June
2006 he did not intend to stay for very long.

“I went there really on a short-term mission trip,” Wiser said. “I
thought it would be a great opportunity and it was something that I
always wanted to do.”

As the son of full-time missionaries Janice and Dale Marcum, Wiser,
36, has missionary work in his blood. So perhaps it comes as no
surprise that his short-term trip turned into a long-term trip as he
followed in his parents’ footsteps to became a full-time missionary.

Now, the former Harbor Springs resident lives in Transcarpathia – a
southwest region of Ukraine – where he and his wife, Valeriia, work
with the Committee for Sexual Protection of Children in Ukraine
(CSPCU).

The committee is an organization dedicated to protecting children from
human trafficking and abuse. Although the committee protects all
children, Wiser said one of their main targets is orphans.

“There’s a lot of sexual abuse in orphanages in Ukraine and someone
needs to do something about it,” he said.

In a country where there are about 300 state run orphanages and more
than 125,000 known orphans – not including thousands of homeless
children and abandoned babies in baby wards – Wiser said orphans are
stereotypically considered a social and economic burden.

They also tend to be overlooked by authorities and are popular targets
for human traffickers.

As a result, Wiser said CSPCU is trying to raise awareness, educate
the public and take action to prevent abuse and prosecute offenders.

In terms of human trafficking, Wiser said the committee supports
groups directly involved with victims. They are also working to
prevent traffickers from receiving information about orphans.

“Traffickers are getting this information on when these kids get
released and then they target them. We want to seal this information
so it’s not available,” Wiser said.

He added, “It’s not just Ukraine. It’s all over, but we’re targeting
this information specifically to Ukraine.”

In terms of abuse, the committee is currently creating a plan to gain
access to orphanages in order to monitor what happens inside and
tackle abuse where present.

Within two years, the committee will put its plan into action through
awareness and education. Awareness includes prosecution, counseling
and media. Education includes sexuality (both social and moral
repercussions), health issues like sexually transmitted diseases and
birth control.

Why the committee has spent and continues to spend time carefully
planning is because they are dealing with a very complicated situation.

First, Wiser said there is the problem of entering orphanages. Many
orphanages have closed doors whether they be physical or social
obstructions. Children may be able to go out but outsiders may not go
in – though orphanages usually welcome persons bringing supplies such
as school items and clothing.

And once inside, completing social work as a teacher, doctor or
missionary remains very difficult. Wiser said if an orphanage notices
an outsider trying to monitor orphans that person will no longer be
welcome.

Despite obstacles, though, Wiser said the situation has improved.
“More and more doors are opening and you can get in if you have the
right authority and the right government backing,” he said.

When the committee identifies an instance of child abuse, Wiser said
they take action.

“The biggest difficulty is evidence,” he said. “Look at the orphanage
situation. Who is going to believe the orphan? A lot of the time, the
doctors looking for physical proof of abuse work for the orphanage.”

He added that people who are able to help are sometimes connected to
the person responsible for the abuse. Also, because orphanages are so
close-knit, disconnecting these individuals in order to uncover the
truth is not an easy task.

But in spite of all of this, Wiser said he does not want to paint a
negative picture of Ukraine. “It’s a wonderful country and there are some
incredibly wonderful things happening,” he said.

He added, “You’ve got a country that had a huge political
transformation from communism to democracy in 16 years. People are
banding together and there’s a lot of progress being made as far as
demanding social reform.”

To learn more about Wiser’s mission, visit www.chxfof.org/michbridge.htm.
———————————————————————————————-
Louise Nelle can be contacted at 439-9339, or lnelle@petoskeynews.com.
http://www.petoskeynews.com/articles/2007/09/08/news/news06.txt

———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
27. ELDERLY UKRAINIANS TESTIFY ON HOLOCAUST

By Maria Danilova & Randy Herschaft, Associated Press Writers
Associated Press (AP), Bogdanovka, Ukraine, Sunday, September 09, 2007

BOGDANOVKA, Ukraine – From the porch of her mud hut, Vera Filonok

saw tens of thousands of Jews shot, thrown in a ravine and set on fire. Many
were still alive and they writhed in the flames “like flies and worms.”

The memories of what she saw in 1941 have seared her soul for six decades,
but until recently she had talked about it with no one except neighbors in
her remote Ukrainian village. Then a soft-spoken French priest came to town.

Roman Catholic Rev. Patrick Desbois and his small team of investigators have
spent six years canvassing the towns and villages of Ukraine to patiently
hear elderly people tell of what they saw during those terrible years when
they were young.

He says his team has pinpointed more than 600 mass execution sites, about

70 percent of them previously unknown. It has surveyed about a third of
Ukraine, he says, and estimates there are at least 2,500 such sites
throughout the Texas-sized country.

The work of Desbois and his Yahad-In Unum group is adding important new
information to the history of the Holocaust – a period exhaustively studied
in some countries but still veiled in much of the former Soviet Union.

With the Soviet collapse, the declassification of Soviet war archives and
the general opening up of this country of 47 million, it has now become
possible to speak to the witnesses.

Vital to the effort, says Desbois, is the U.S. Holocaust Memorial Museum in
Washington and its vast Soviet archival material available.

That and Desbois’ field work have expanded historians’ knowledge about the
public nature of the killings, the large variety of methods of execution,
and the Nazis’ forced recruitment of children to assist in their actions.

“You have a marriage of validation with the sources 60 years apart,” said
Paul Shapiro, director of the Center for Advanced Holocaust Studies at the
U.S. Holocaust Memorial Museum in Washington. “Using the two sources
together one can understand what happened on the ground in those towns

and villages in Ukraine.”

While the Soviet Union glorified its victory over the Nazis, it refused to
acknowledge the massive and systematic killings of Jews. The refusal
reflected both anti-Semitism and official resistance to singling out ethnic
groups in what was supposed to be a single Soviet nation.

Historians say some 1.4 million of Soviet Ukraine’s 2.4 million Jews were
executed, starved to death or died of disease during the war. Their remains
are strewn around the country in common graves, many of them ignored and
unmarked.

The destruction of Ukrainian Jewry is epitomized by Babi Yar, a ravine in
the capital Kiev where the Nazis killed about 34,000 Jews during just two
days in September 1941.

What happened in Bogdanovka was even bloodier – 48,000 killed. And the
perpetrators were not Germans but Romanians and the Ukrainian police they
enlisted to help them play their own part in Hitler’s genocide.

In 1941, Romanian troops allied with the Nazis occupied a large part of what
is now southern Ukraine and began exterminating Jews. Those who survived

the initial killings were herded to Bogdanovka and placed in stables and
pigsties teeming with fleas and manure.

The massacre began when the Romanians and Ukrainians nailed shut one of

the pigsties’ doors and windows, then torched it, burning all inside alive. The
killing went on for three weeks in late December 1941 and early January
1942 – with a break for Christmas.

Vera Filonok was 16 when she witnessed the blaze from Konstantinovka, a
village lying across the quiet Bug River. “We sensed the smell – of burning
hair, clothes, bones – a very strong, acrid smell,” she said, raising a hand
to her wrinkled face. “People were being burned alive. For me that was the
most terrifying thing.”

After the fire came gunshots, recalled Filonok’s neighbor Raya Trofimova. A
German soldier living in her family’s home lent her his binoculars; through
them she saw victims kneel in front of a gully in their underwear, their
valuables piled beside them.

“They would line them up before the ravine and shoot them … they would
tear away children from mothers and just throw them in there,” said
Trofimova, now 85. When her mother returned home that day, Trofimova
recalled, she shut the windows and draped them with blankets to shield her
three children from the sights and smells.

“Ta-ta-ta,” Trofimova mimicked the gunshots ringing out across the river,
day and night. “And what could we do? If you protested, you would be taken
to the same pit.”

Anatoly Veliminchuk was 11. He said he saw people thrown into two wells,
many still alive. “I felt bad, it was painful – what did it matter that they spoke

their Jewish way and we spoke Ukrainian or Moldovan?” he asked as he
pointed to what used to be the wells – now two small pits in a field covered
with dry grass and discarded plastic bottles.

Desbois registers an event or killing site only after obtaining three
independent witness accounts. His team has two translators, a photographer
and cameraman, a ballistics specialist and a mapping expert.

The 52-year-old priest was raised on his grandfather’s stories of surviving
a Nazi prison camp in Ukraine, and has devoted his career to healing wounds
between Catholics and Jews. His group, Yahad-In Unum – which combines the
Hebrew and Latin words for “together” – was founded by influential Catholics
and Jews.

Ukraine’s Jewish leaders say the community is grateful for the effort. “What
they are doing is holy work, because everybody is forgetting about this
tragedy,” said Yakov Blaikh, Ukraine’s chief rabbi.

The Holocaust is still controversial and divisive in Ukraine because of the
wartime collaboration with the Nazis, and the museum nearest to Bogdanovka
commemorates those “who saved the motherland,” but says nothing about the
massacres of Jews.

Anatoly Podolsky, head of the Ukrainian Center for Holocaust Studies, said
Ukraine still needs to more fully confront the Holocaust, but that allowing
Desbois to operate here shows that “there is no longer that endless
untruthful silence that existed in Soviet Ukraine.”

Shattering that silence is Desbois’s goal. At the end of a long day of talking

with tearful witnesses, his shoes covered with dust, Desbois said his
mission isn’t to seek retribution – “I am not here to judge” – but to record
the tragedy for the sake of its victims.

“God wants these poor people to be finally buried and rest in peace …

and  that they receive the Jewish prayer they deserve,” he said.
———————————————————————————————-
Associated Press Writer Randy Herschaft reported from New York.
United States Holocaust Memorial Museum: http://www.ushmm.org
Yahad-In Unum: http://www.yahadinunum.org/index.en.html
———————————————————————————————–
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
28.  MOSCOW BATTLE: HOW HITLER ALMOST BEAT STALIN
Stalin’s Tipping Point: The battle for Moscow – the biggest, bloodiest
clash in human history – helped turn the tide against Hitler. But the
Soviet leader came closer than most realize to defeat.

By Andrew Nagorski, Newsweek magazine
New York, New York, Monday, September 10, 2007

By mid-October 1941, most of Moscow’s residents were convinced that
their city was about to be overrun by the Germans.

The NKVD, as the Soviet secret police was then called, had prepared the
first of what promised to be a series of pamphlets. “Comrades! We left
Moscow due to the continuous attacks of the Germans,” it declared. “But
it’s not the right time for us to weep.”

The “Underground Party Committee” that signed the statement vowed that
Moscow would be liberated. Since the city held out in the end, this
admission of defeat was ultimately buried in the NKVD’s classified files
rather than distributed.

In fact, much of the story of how close Moscow came to falling-a defeat that
would likely have transformed the course of the war-has been obscured by
decades of deliberately distorted history. Now it’s a story that can be
told.

The battle for Moscow, which officially lasted from Sept. 30, 1941, to April
20, 1942, pitted two gargantuan armies against each other in what was the
greatest clash of arms in human history.

Seven million men were involved in some stage of this struggle-twice the
number who would later fight at Stalingrad, which most people erroneously
believe was the bloodiest battle of World War II.

The losses were more than twice that of Stalingrad; during the battle for
Moscow, 2.5 million were killed, missing, taken prisoner or severely
wounded, with 1.9 million of those losses on the Soviet side.

For the first time a Hitler blitzkrieg was stopped, shattering his dream of
a swift victory over the Soviet Union. The defeat was also the first signal
that Germany would lose the war.

As Fabian von Schlabrendorff, a German officer who later joined the
conspiracy against Hitler, explained, it destroyed “the myth of the
invincibility of the German soldier.” And yet the battle for Moscow is now
largely forgotten.

This is no accident. Any honest account of the battle for Moscow would
undermine the Soviet story line of “The Great Patriotic War.” Those
sanitized versions, now reinforced in the era of President Vladimir Putin,
portray Joseph Stalin as a military genius and his people as heroically
united against the German invader.

(It’s no coincidence that Stalin’s reputation plummets when there’s a period
of liberalization in Russia and rises when there’s a new clampdown.)

But it was Stalin’s blunders, incompetence and brutality that made it
possible for German troops to approach the outskirts of Moscow-and to kill
or capture so many Soviet troops along the way.

Boris Vidensky was a cadet at the Podolsk Military Academy when the war
started and was one of the lucky few of his class who survived when they
were thrown, thoroughly unprepared, against the advancing Germans. He
went on to become a senior researcher at the Military History Institute in
Moscow.

In retirement, he recounted that after the war, Marshal Georgy Zhukov, the
legendary Red Army commander, ordered his deputy to roughly calculate the
losses of his troops near Moscow.

When the deputy showed him the number he came up with, Zhukov quickly
barked out an order: “Hide it and don’t show it to anybody!”

It wasn’t just the human toll that was embarrassing; after all, Stalin
always considered his soldiers-and anyone else-to be expendable. He never
flinched at sending millions to their deaths.

More unsettling was that fact that, while some troops fought heroically from
the start, hundreds of thousands surrendered to the enemy at the moment of
the country’s greatest peril.

And many civilians panicked, engaging in looting and other forms of
lawlessness that were normally unthinkable in Stalin’s police state. No
wonder that Soviet histories preferred to move on quickly to talk about
other battles.

Those Muscovites who remember Oct. 16, 1941, the day when everyone
assumed the Germans were about to arrive, still speak about it with a sense
of astonishment.

Dmitry Safonov, who was working at an artillery factory near Moscow that
was to be evacuated to the Urals, had returned that day to pick up some
belongings.

“All of Moscow seemed to be streaming out somewhere,” he recalled. Cars
and trucks were loaded down with personal belongings, and at the railroad
station Safonov saw suit-cases, bags, clothes, lamps, even a piano, all
abandoned by those who were trying to board anything that was moving out.
The train platforms were jammed with people. “I hardly recognized the city,”
he said.

Looters attacked food stores, factory workers went on strike, and angry
crowds blocked those who were trying to flee in cars, pulling them out,
beating and robbing them. Other residents tore down their posters of Marx
and Lenin, stuffing them and other communist propaganda into garbage bins
outside.

That would have been an unspeakable crime before, but no one was enforcing
the old rules. Thick black smoke arose from the chimneys of the Lubyanka,
the NKVD headquarters, as the secret police hastily burned their files.

Much of the Soviet government, along with foreign diplomats and journalists,
had just been evacuated by rail to Kuibyshev, the Volga city about 600 miles
away that was supposed to serve as the new base for the government once the
capital fell. And Stalin was expected to join them within a day or two.

A special train was already waiting at the station, along with his personal
Douglas DC-3 and three other planes in case he had to make an even hastier
exit.

Stalin’s policies and gross miscalculations had led to this near disaster.
His wholesale purges of the Red Army in 1937 and 1938 deprived the military
of many of its most experienced officers.

Among the first victims: Marshal Mikhail Tukhachevsky, the aristocrat turned
Red Army commander who had predicted that Germany could attack without
warning and that the result would be a long, costly conflict.

“What are you trying to do-frighten Soviet authority?” Stalin demanded. The
Soviet dictator then had him tortured and executed for allegedly plotting a
coup with the help of German fascists. Thousands of other senior officers
met a similar fate.

After he made common cause with Hitler by agreeing to the Soviet-Nazi
nonaggression pact of Aug. 23, 1939, Stalin refused to heed countless
warnings from his own spies and Western governments that the Germans were
about to invade. He did not allow his military leaders to put their men on
alert, which led to the initial string of German victories.

The invaders killed or captured huge numbers of Red Army troops, and seized
weapons caches that had been left near the border area. As a result, many
Soviet troops were sent into battle without guns.

Ilya Druzhnikov, a book illustrator dispatched to the front, recalled that
there was only one rifle available for every 10 men in his unit. This meant
that unarmed soldiers trailed each armed man, waiting for him to fall so
that one of them could pick up his weapon.

Stalin was ultimately saved by Hitler’s even bigger blunders. The German
dictator sent his armies into Russia in late June 1941 without winter
clothing: the Führer was convinced they would triumph before the weather
turned.

By mid-July, the Germans had advanced to the Smolensk region, and Hitler’s
generals, like the panzer commander Heinz Guderian, wanted to keep driving
due east to Moscow, only about 230 miles away.
HITLER: TURN SOUTH AND TAKE UKRAINE FIRST
But Hitler ordered them to turn south and take the Ukraine first. They did,
losing precious time in the process.

Once “Operation Typhoon” was launched against Moscow on Sept. 30, the
roads quickly turned to mud during the rainy season and then the
temperatures began plummeting.

Wrapping themselves in anything they could steal from the civilian
population, the Germans still froze-and their bodies were often left stacked
like firewood since they couldn’t be buried till spring.

Soviet resistance noticeably stiffened. Hitler’s insistence on launching an
immediate reign of terror in the occupied Soviet territories and the
merciless treatment of Soviet POWs, most of whom perished, proved a boon
to Stalin’s efforts to rally his troops. But he wasn’t taking any chances.

“Blocking units” were set up behind Red Army lines with orders to
machine-gun any soldiers who tried to retreat. The delay of the German drive
to Moscow also provided Stalin with time to redeploy about 400,000 troops
stationed in Siberia, once he became convinced Japan wouldn’t attack from
the east.

These troops, equipped with full winter gear, soon began to score victories
against the overextended, exhausted, freezing Germans.

On Oct. 16, the worst day of the panic in Moscow, Stalin was not yet
confident of such an outcome. An Air Force officer saw him sitting at his
desk asking himself again and again, “What shall we do? What shall we do?”
Two days later, the Soviet leader went to the station where his special
train was waiting.

As Pavel Saprykin, who was part of the work detail that prepared the train,
recalled in his old age, he saw Stalin walk up to his carriage, then pace
the platform beside it. But he didn’t board it. Instead, he left the
station. It proved a fateful decision, signaling that all was not lost.

Vowing to remain in Moscow, Stalin suddenly took charge again, reverting to
the tactic he had always relied on-brute force. He declared martial law on
Oct. 19, and NKVD units were ordered to shoot looters along with almost
anyone who looked suspicious.

Surviving members of those patrols, such as Yevgeny Anufriyev, are cautious
in describing what they actually did. “We had an amazing order to shoot
spies and deserters on the spot,” he said. “But we didn’t know how to figure
out who was a spy.” However many Muscovites were shot, the looting and the
unrest stopped.

But the memories of the breakdown of law and order, and how close Moscow
came to falling, remain sensitive to this day. Stalin’s mistakes were never
mentioned in the official histories.

Nor do those accounts admit that if it weren’t for Hitler’s even greater
mistakes, Stalin wouldn’t have been able to save his capital-and, quite
possibly, might never have prevailed in the larger struggle.
————————————————————————————————
NOTE: “The Greatest Battle,” a new release by NEWSWEEK International’s
Senior Editor Andrew Nagorski, provides a thorough account of this battle
based on recently declassified Soviet documents.
LINK: http://www.msnbc.msn.com/id/20546330/site/newsweek/
——————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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