Daily Archives: October 4, 2007

AUR#875 Oct 4 President Shocks & Surprises; Forming A Coalition?; Gazprom Threat; Putin’s Power Play; Orange Revolution Reloaded; 1930’s Famine; Babi Yar

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The president on Wednesday shocked many observers
By Conor Humphries, Agence France-Presse (AFP)
Kiev, Ukraine, Thursday, October 4, 2007
By Peter Finn, Washington Post Foreign Service
Washington, D.C., Thursday, October 4, 2007; Page A22

Press office of President Victor Yushchenko
Kyiv, Ukraine, Wednesday, October 3, 2007


Associated Press, Kyiv, Ukraine, Thu, Oct 04 2007

By Catherine Belton in Moscow and Roman Olearchyk in Kiev
Financial Times, London, UK, Thu, October 4 2007

By Quentin Peel, Financial Times, London, UK, October 4 2007

Dispute between Ukraine and Russia over payments for gas
By Ed Crooks Financial Times, London, UK, Thu, October 4 2007

Analysis & Commentary: By Vladimir Socor
Eurasia Daily Monitor, Volume 4, Issue 184
Jamestown Foundation, Wash D.C., Thu, October 4, 2007

By Catherine Belton, Neil Buckley, Roman Olearchyk and Stefan Wagstyl
Financial Times, London, United Kingdom, Wed, October 3 2007

Editorial: Financial Times, London, UK, Wed, October 3 2007

EDITORIAL: Financial Times, London, UK, Wed, October 3 2007


Review and Outlook: The Wall Street Journal
New York, New York, Wednesday, October 3, 2007

Commentary: By Taras Kuzio, The Wall Street Journal Online
New York, New York, Tuesday, October 2, 2007

Review & Outlook, The Wall Street Journal
New York, New York, Tuesday, October 2, 2007

By Marc Champion, The Wall Street Journal,
New York, New York, Tue, October 2, 2007; Page A8

Letter-to-the-Editor: Mr Illya Rozenbaum, Brussels, Belgium
Financial Times, London, UK, Wed October 3 2007

Have investors got too used to political uncertainty in Ukraine?
Commentary: Financial Times, London, UK, Tues, Oct 2 2007

Opinion & Analysis: Yevgeny Kozhokin for RIA
RIA Novosti, Moscow, Russia, October 3, 2007

RIA-Novosti, Moscow, Russia, Tuesday, October 2, 2007

Editorial: The Guardian, London, UK, Tuesday October 2, 2007

Ukrainians know very well their election has been hijacked again
Commentary: By Adam Swain, The Guardian
London, UK, Wednesday October 3, 2007
Letter-to-the-Editor: From Askold Krushelnycky, UK
Action Ukraine Report (AUR) #875, Article 22
Washington, D.C. Thursday, October 4, 2007
By Patrick Worsnip, Reuters, New York, NY, Wed, Oct 3, 2007
By Dmitry Solovyov, Reuters, Wednesday, September 26, 2007
By Dmitry Shlapentokh, The Moscow Times
Moscow, Russia, Thursday, October 4, 2007. Issue 3757. Page 8.
The Associated Press, Kiev, Ukraine, Saturday, September 29, 2007

By Angela Charlton, Associated Press, Paris, France, Wed, Oct 3, 2007
By Laurence Lee, Al Jazeera, Doha – Qatar, Friday, Sep 28, 2007
By Sebastian Alison, Bloomberg, Sevastopol, Ukraine, Sep 28, 2007
The president on Wednesday shocked many observers

By Conor Humphries, Agence France-Presse (AFP)
Kiev, Ukraine, Thursday, October 4, 2007

KIEV – Political parties in Ukraine began tense talks on Thursday after
President Viktor Yushchenko called for a unity government following
parliamentary polls that gave pro-Western forces a slim majority.

Near final results gave a narrow lead to an alliance of Yushchenko’s Our
Ukraine party and the opposition Yulia Tymoshenko Bloc, raising the
possibility of a reunion of the team that lead the 2004 pro-democracy

Orange Revolution.

The president on Wednesday shocked many observers in a national address

by calling for coalition talks to also include the pro-Russian Regions Party
led by Yushchenko’s bitter rival, Prime Minister Viktor Yanukovych.

He later noted that Our Ukraine and the Tymoshenko bloc had won the votes

to form a governing coalition but said that the Regions party should also be
given senior posts.

“If the results of the election give the democratic forces a majority — and
this is the case — the relationship between the authorities and opposition
should be constructive,” Yushchenko said.

“If for this we have to provide the opportunity for the opposition to work
in relevant posts in parliament … then we need to give them these posts,”
he added in comments that also referred to possible government posts.

The Regions party quickly accepted the president’s offer and has sent Our
Ukraine a list of subjects for discussion, Anna German, a member of
parliament for the party, said Thursday.

Consultations between Our Ukraine and the Regions party were due to start
Thursday, she said.

But the party of fiery reformist Yulia Tymoshenko rejected the possibility
of a coalition with the Regions party. A spokeswoman said it was already
holding talks — but only with Our Ukraine.

A parliamentary deputy with Yushchenko’s Our Ukraine, Yury Pavlenko, said
Wednesday that the party had already decided to form a coalition government
with Tymoshenko’s bloc, Interfax reported.

Yushchenko did not mention who he wanted as premier but aides, including a
senior official in the presidential administration on Tuesday, made clear
that he aims to change Yanukovych for Tymoshenko.

She is popular among Ukrainian nationalists and those supporting efforts to
wrest Ukraine from Russia’s centuries-old dominance.
However, expectations that she would become prime minister raised fears of
difficult relations with Moscow — an issue highlighted by threats of a new
gas dispute this week between Russian giant Gazprom and Ukraine.

Yushchenko and Tymoshenko shot to worldwide fame when they led the

2004 Orange Revolution to overturn a rigged presidential election victory by
Yanukovych. Yushchenko won the fresh polls and launched a pro-Western

For the last 11 months, however, Yushchenko was forced to deal with his
bitter rival Yanukovych as prime minister, a chaotic period that forced the
calling of Sunday’s early election — the third national poll in as many

The strong performance of Yulia Tymoshenko Bloc in Sunday’s poll allowed

a revival of her on-off alliance with Yushchenko.
With 99.93 percent of ballots counted, their Orange coalition had won just
under 45 percent of the vote, while the Regions Party has 34.3 percent on
its own.

After the final count, votes for parties that do not pass a three-percent
threshold for entering parliament will be divided up, giving the Orange
coalition a majority.

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

By Peter Finn, Washington Post Foreign Service
Washington, D.C., Thursday, October 4, 2007; Page A22

MOSCOW, Oct. 3 — The supposedly reconstituted alliance of the personalities
who led Ukraine’s Orange Revolution nearly three years ago seemed on the
verge of securing a tiny majority in parliament Wednesday but quickly
started feuding with each other.

With 99.59 percent of the votes in Sunday’s election counted, the party of
former prime minister Yulia Tymoshenko and another party allied with
President Viktor Yushchenko had secured a total of 44.93 percent of the

If they formed a government, they would have a handful more seats than
any other combination of parties in parliament.

But the political squabbles that have dogged the two leaders’ relations
resurfaced as they argued over the merits of bringing their rival, outgoing
prime minister Viktor Yanukovych, into a future government.

Yanukovych’s Party of Regions got 34.31 percent of the vote, the largest of
any party. But even in combination with his Communist Party partners and
another smaller group that might ally with him, he appears to have fallen
just short of returning to power.

In late 2004, Tymoshenko galvanized the crowds that ultimately forced a
rerun of fraudulent presidential elections and secured victory for
Yushchenko over his rival, the Russian-oriented Yanukovych.

Western governments welcomed the change, but in ensuing years, they have
expressed frustration over the Orange coalition’s inability to remain united
and establish a stable pro-Western government in the former Soviet republic.

Yushchenko and Tymoshenko had a falling-out in 2005 when Yushchenko
dismissed a government led by Tymoshenko because of fierce infighting,
opening the way for Yanukovych to reemerge as prime minister after
parliamentary elections in March 2006.

The pair made a show of reconciling before Sunday’s vote and had seemed
set to form a government with her as prime minister.

But on Wednesday, Yushchenko, who is backed by the Our Ukraine party,
called on the three major parties to begin negotiations toward what is known
in parliamentary systems as a “grand coalition,” an alliance of all major
parties in a legislature.

“We cannot get real political stability unless the three main parties agree
on how the coalition and the cabinet must be formed and what relations must
be between the ruling coalition and the opposition,” Yushchenko said in
televised remarks. “We cannot let talks last long.”

Speaking in Berlin, Yushchenko said an “Orange coalition” with a slim
majority will “not bring stability to the country,” the Ukrainian newswire
UNIAN reported. He said the opposition should be given some cabinet and
parliamentary posts to ensure stability.

Tymoshenko said in a statement on her Web site that sharing power with the
Party of Regions was out of the question. Such a deal would force her into
the opposition, she said.

Yushchenko’s declaration, while appearing to be the action of a president
above partisan politics, may in fact be a negotiating gambit, analysts said.
Tymoshenko, whose votes jumped dramatically in Sunday’s election, is
buoyant, and Yushchenko may wish to rein in her ambitions by holding out
the prospect of an alliance with the Party of Regions.

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

Press office of President Victor Yushchenko
Kyiv, Ukraine, Wednesday, October 3, 2007

Dear fellow citizens,

Votes cast in Ukraine’s snap parliamentary election have almost been
counted. Of course, it will be possible to assess the election only after
all the ballots have been counted. However, today we can speak about its
preliminary results.

According to preliminary assessments released by foreign observers, the
September 30 poll in Ukraine was held mostly in line with the obligations
assumed before the OSCE and the Council of Europe and other standards
of democratic elections.

I am convinced that democracy has won. Ukraine has won. I welcome the
choice made by the Ukrainian people. I am conscious that the results of this
election reflect their opinions and moods.

I want to stress that we have no right to waste even one hour.  I expect the
Party of Regions, BYuT, Our Ukraine-People’s Self-Defense and the Lytvyn
Bloc to demonstrate political wisdom and take steps aimed at consolidating
Ukraine around national priorities.

The political forces in the newly elected parliament must formulate a model
of cooperation between government and opposition on the basis of their
common Ukrainian agenda.

I think a coalition that will soon be formed should:

[1] adopt an economic program of the country’s development, stop price
hikes, equalize and optimize the incomes of the citizens through market
means. A new government should demonstrate new quality of social policy
in the country;

[2] cancel legislative immunity and privileges;

[3] draft and adopt next year’s state budget and include the Ukrainian
president’s social initiatives in it.  I will not consider a budget in which
the money from the abolishment of the privileges will not be used to
increase social benefits;

[4] pass a package of anti-corruption bills and establish a national
anti-corruption bureau. I stress that there will be one law for all;

[5] ensure the country’s energy security.

I would also like to remind you that the detonator of the political crisis
was 2004 political reform. So it will be difficult to preserve political
stability without reforming the constitution, and so the year 2008 should be
devoted to new constitutional process and to revising the constitution.

This is the main – official – part of the statement I want to make before

Now let me make a few comments. 99.25% of the ballots have been counted
so far. Five political forces have made it to parliament: the Party of
Regions, BYuT, Our Ukraine-People’s Self-Defense, the Lytvyn Bloc and
the Communists.

I have held political consultations with the political winners over the past
two days and today I commission the Party of Regions, BYuT, Our
Ukraine-People’s Self-Defense and the other winners to start preliminary
political consultations to form a majority in Ukraine’s parliament and form
a Ukrainian government.

I would like to emphasize that the Party of Regions, BYuT and Our Ukraine
have garnered the support of 80% of voters over the past year and a half.

This shows the exceptional responsibility these three political forces bear
for stabilizing the political situation in Ukraine’s parliament, the
fundamental rules to form a majority and a government on its basis and the
principles of relations between government and opposition.

I am deeply convinced the premier’s job, other governmental posts or posts
in the Verkhovna Rada committees will not help stabilize the political
situation. We will have true political stability when the three key
players – the Party of Regions, BYuT and Our Ukraine – make compromises.

So my key message to these political forces is that they must start
political talks to formulate basic rules of forming a majority in Ukraine’s
parliament and Ukraine’s government and building relations between those
political forces that represent government and opposition.

Holding consultations with the political leaders of the aforementioned and
other parties, I am ready to act as guarantor of the fulfillment of all
agreements that will be reached during their preliminary negotiations.

I am convinced we have a wonderful chance today to review the mistakes of
the past, form a dialogue involving the key political players and propose a
model of political stability on the basis of the election results.

I pursue one goal: Ukraine should emerge united after the election. The
election must not split Ukraine. I want to call on my political colleagues
not to be guided by personal visions and personal interests but to
consolidate their cooperation around national priorities.

You, esteemed colleagues, have received everything from the Ukrainian
people today and the most important thing is a mandate to form Ukraine’s
government. Do not be guided by personal interests and… this will be the
best present for the Ukrainian society.

I am convinced Ukraine’s political forces are facing a difficult challenge,
given our recent history and other things that were lost in the past.

But, on the other hand, I am optimistic and convinced that these election
results will give us a chance, perhaps for the first time, to speak about
the essence of political consensus and about a new political dialogue which
will lead Ukraine to many years of political stability.

Thank you for your attention.
LINK: http://www.president.gov.ua/en/news/data/1_19529.html

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

Associated Press, Kyiv, Ukraine, Thu, Oct 04 2007

KYIV – Allies of Ukraine’s President Viktor Yushchenko said Thursday,
Oct. 4 their intention was still to form a coalition government with his
Orange Revolution partner.

A statement a day earlier from the president has raised questions about
whether his party would stick to that course. In his remarks, Yushchenko
called for cooperation with his main political rival, Prime Minister Viktor

Yuiry Pavlkeno, a senior member of the pro-Yushchenko party, said the
president’s statement signaled only that he wanted better dialogue with his
political opponents and did not call for forming a governing team with

After Sunday’s parliamentary election, Yushchenko was expected to tap Yulia
Tymoshenko, an important figure in the Orange Revolution that brought him to
power three years ago, for the premiership. Near-final results showed
Tymoshenko’s bloc and the pro-presidential party had enough seats to forge a
ruling coalition.

The two parties had agreed earlier on forming a Cabinet and unseating
Yanukovych, whose party won the most votes but lacks a strong enough

partner to assemble a governing administration.

In his remarks Wednesday, Oct. 3, Yushchenko reached out to all three

major political forces, urging them to exercise “political wisdom” and work
together for the sake of national unity and stability.

“I have one goal: Ukraine must emerge united following the elections; there
must not be two Ukraines,” Yushchenko said in a televised speech.

Speaking later in Berlin, Yushchenko suggested that if his party and
Tymoshenko’s bloc secure a majority in parliament, they should consider
giving Yanukovych’s forces Cabinet posts, the Interfax news agency reported.

Yushchenko appeared to be concerned about the prospect of instability if the
country – already polarized by regional, historical and linguistic
divisions – is governed by one political side. But the statement opened the
door to the kind of paralyzing standoff that led him to call the early

But Pavlenko said Thursday that the pro-Yushchenko party would make good

on its agreement to form a coalition with Tymoshenko. “Our decision … is
unchanged,” he said, according to the party’s website.

Analysts said Yushchenko may be reluctant to invest too much power in
Tymoshenko, a potential rival for the presidency in 2009.

Yushchenko and Tymoshenko were the linchpins of the 2004 upheaval, when
hundreds of thousands of people poured into the streets of Kyiv claiming
fraud in the presidential election.

Yanukovych was initially declared the winner, but Yushchenko won a new vote
after a court threw out the initial results. He then named Tymoshenko his
prime minister.

He fired her after seven months; their bickering helped bring Yanukovych
back to power as prime minister last year.

Yanukovych, who was backed by Moscow in 2004, has taken a more neutral
stance since then, pledging to integrate with the rest of Europe, but is
still seen as more Russia-friendly.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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By Catherine Belton in Moscow and Roman Olearchyk in Kiev
Financial Times, London, UK, Thu, October 4 2007

Gazprom, the Russian state-controlled energy group, yesterday said it had
secured an agreement from Ukraine’s current government to pay $1.3bn
(euro921m, £639m) in natural gas arrears by November 1, thus avoiding
potential cuts in supplies.

Dmitry Medvedev, the Gazprom chairman and Russia’s first deputy prime
minister, said that following talks with Yury Boiko, Ukraine’s energy
minister, “we have reached agreement to avoid such problems in the future”.
He added: “European consumers won’t suffer. European consumers are in
an absolutely comfortable situation.”

But despite his assurances, confusion remained about the exact nature of the
agreement reached in Moscow, with analysts suggesting it might be only an
initial step towards resolving a standoff that has rekindled fears over
possible shortages in gas supplies to Europe.

Nikolai Azarov, Ukraine’s finance minister, disputed the size of the debt,
while the question of who would lead future negotiations with Gazprom
remained in doubt as talks over forming a new coalition government in Kiev
following weekend elections looked set to drag on.

President Viktor Yushchenko of Ukraine went further: “The Ukrainian state
and [the state gas distributor] Naftogaz Ukrainy have no debts to Gazprom.”
He also raised doubts about the timing of the dispute that erupted days
after the elections. “I don’t think that . . . this statement was formulated
in such a way and at such a time so as to be constructive for our
relations,” he said.

Even a spokesman for Gazprom later conceded it was too early to say a deal
had been reached. “I would not say this is an agreement. The current
[Ukrainian] government has said it will take control of the problem,” said
the spokesman, Sergei Kupriyanov. He added that the standoff would only be
solved once payment had been made.

Analysts said Mr Boiko’s hasty departure to Moscow for talks looked like an
attempt by the pro-Russian government of Viktor Yanukovich, prime minister,
to seize the initiative in the debt talks while back in Kiev his position
appeared under threat following the elections in which his party failed to
win a majority.

“It seems Yanukovich is going to fight to the end,” said Valery Nesterov
from the Troika Dialog brokerage.

Mr Yushchenko earlier this week looked poised to resurrect his partnership
with opposition leader Yulia Tymoshenko in forming a coalition that would
have probably seen Ms Tymoshenko replace Mr Yanukovich as prime minister.

Ms Tymoshenko has promised to clean up the involvement of intermediaries in
the gas trade between Ukraine, Russia and Central Asia.

The European Commission, which said it considered Gazprom a “reliable
supplier”, has invited Russia and Ukraine to talks in Brussels later this
month about energy security.

But yesterday Mr Yushchenko called, in a televised address to the nation,
for Kiev’s leading politicians to put differences aside in forming a
coalition of “unity”.

Mr Yanukovich interpreted the president’s words as a signal that he favoured
a broad coalition government including his faction. Ms Tymoshenko’s bloc,
meanwhile, said they would not enter into a coalition with Mr Yanukovich’s
Regions party. Formal coalition talks are expected to start later this week.

Ms Tymoshenko yesterday said the debt must be settled but also called for an
investigation into how it had built up. “We will not leave Ukraine with such
debts, not even for two months,” she said.

“We need to find out where this debt came from, where the money was divided,
who made the decision not to pay Gazprom on time, and to take the money out
of the shadow sector.”

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

By Quentin Peel, Financial Times, London, UK, October 4 2007

All politics is business in Russia today, and all business is acutely
political. There is no dividing line between the two. Gazprom, the giant
state-controlled gas monopoly, is the perfect example.

Take its dramatic announcement on Tuesday, warning gas customers in the
European Union that a dispute over unpaid debts with Ukraine might force it
to start reducing gas supplies to that country – the main transit route for
Russian gas to central and western Europe.

The statement came just as the counting of election votes seemed to indicate
that the next Ukrainian government would be a pro-western coalition, to
replace the outgoing Russia-friendly regime. “We are not dealing on behalf
of the [Russian] government,” a spokesman said. “This is a purely commercial
issue. Gazprom is a commercially driven company.”

Another official admitted the company held off making any announcement
during the election campaign for fear of being accused of political
interference. Its very silence was political.

If Gazprom wanted to be seen to be totally even-handed, it should have
announced that Ukraine owed it more than $1bn (euro710m, £490m) in unpaid
gas bills at the same time it accused neighbouring Belarus of owing $456m,
says Christopher Granville, Russia analyst at Trusted Sources.

That was at the end of July. Alexander Lukashenko, the Belarus president,
rapidly paid up. But the timing might have been embarrassing for Viktor
Yanukovich, the outgoing Ukrainian prime minister, two months before the
poll. So Gazprom said nothing.

Yet it is hard to fathom what purely political purpose is served by landing
an incoming government in Kiev with such a hot potato. If anything, it seems
likely to get anti-Moscow forces to close ranks.

Given the bitter relations between Viktor Yushchenko, the president, and
Yulia Tymoshenko, his erstwhile ally in the Orange Revolution, that would be
no mean achievement.

Let us assume for a moment that Gazprom was driven entirely by commercial
motives. Any company would naturally want to collect a debt running at
$1.3bn, by Gazprom’s account. But who allowed it to reach such a huge
amount, and why?

The behaviour of the Russian supplier reminds one of the detested “gombeen
man” in colonial Ireland, a sort of rural loan shark who allowed his
customers to run up big debts at usurious interest rates, which could be
paid off only by selling him their land.

Gazprom has been trying to gain control of the pipelines through Belarus and
Ukraine to western Europe.

It has succeeded in taking 50 per cent ownership of the line through Belarus
but has failed in Ukraine. Could that be the motive in allowing the debts to

The pipeline is on the books of Naftogaz Ukrainy, the state gas distributor
whose financial plight is behind the non-payment of debt to its supplier
Ukrgazenergo, which in turn owes RosUkrEnergo, which owes Gazprom.

Naftogaz has to supply municipal heating and housing bodies that are
themselves all but bankrupt, as well as individual consumers who are also
unreliable in paying their bills.

The Ukrainian parliament, however, passed a law last February forbidding the
sale of the pipeline to any foreign buyer, precisely in order to prevent
control passing to Gazprom. “They want to own the pipeline, but they know

it is not going to happen,” says Jonathan Stern of the Oxford Institute of
Energy Studies.

Instead, they may be looking for stakes in other Ukrainian assets.

Professor Stern admits Gazprom does not take any high-profile action
“without the OK of the Kremlin” but also wonders if western Europe is not
excessively suspicious of the company’s motives. “When you call in your
credit is a business question,” he says.

Some sort of deal seemed to have been reached yesterday, at least for the
Ukrainian government to take responsibility for the debt. But the detail of
any settlement is what matters. Gazprom’s aim may be commercial: to grab
control of a bit more of the Ukrainian economy. And that, of course, would
be supremely political. So watch the small print.
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Dispute between Ukraine and Russia over payments for gas

By Ed Crooks Financial Times, London, UK, Thu, October 4 2007

The dispute between Ukraine and Russia over gas supplies in the winter of
2005-06 was a wake-up call to European consumers that the energy supplies
they took for granted could not always be relied on. The latest disagreement
does not look like having the same shock value.

Warm weather, high levels of gas storage in the European Union, and hopes
that the dispute will soon be resolved are all encouraging expectations that
the dispute will have no impact on European supplies.

Gas prices in the EU have not so far been affected. But if the row were to
drag on as the weather worsens, European consumers could feel the effects,
with Italy the country most at risk.

Gazprom, Russia’s state-owned energy group, has been working hard to reduce
its dependence on Ukraine as a transit country. For now, though, it retains
its central strategic importance. About 80 per cent of Gazprom’s exports to
the EU pass through Ukraine.

At the beginning of January 2006, when Gazprom restricted supplies to exert
pressure in negotiations over how much Ukraine paid for its gas, the price
soared in the UK, Europe’s most liquid spot market.

Later in the month, when strong demand in bitterly cold weather prompted
Gazprom to impose further supply restrictions, there was chaos in other
European markets, particularly Italy. On both occasions, Ukrainians were
suspected of taking gas that was intended for EU markets.

Gazprom insisted yesterday that European customers would not be hurt by any
supply cuts imposed on Ukraine, but its reassurances were not entirely
convincing. There is nothing Gazprom can do to guarantee that the gas will
pass through.

The weather reports are more comforting: temperatures across Europe are
balmy, limiting the demand for gas.

Strong supplies from Norway, boosted by the Ormen Lange field coming on
stream, have helped gas stocks in storage build up to above normal levels.

Gazprom itself has plenty of stored gas. Chris Weafer, chief strategist at
Uralsib investment bank, said: “As last winter was much lighter than usual,
[Gazprom] has a lot of gas already under the ground in eastern European
countries beyond Ukraine.”

The country that may be most vulnerable is Italy, according to Louise Boddy
of Heren Energy, the gas market analysts.

One of its main gas storage sites has been restricted by failing to receive
all the permits it needs from the government.
“Italy could be in trouble if we have a very cold winter,” Ms Boddy said.

Gazprom’s strategy is to reduce its reliance on transit countries even
further. It has proposed two new pipelines – Nord Stream, which would run
under the Baltic to Germany, and South Stream, under the Black Sea to
Bulgaria and beyond – to deliver gas direct to EU markets.

In 10 years’ time, if there is a dispute between Ukraine and Russia, EU
consumers may not notice at all.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
NOTE: Send in a letter-to-the-editor today. Let us hear from you.

Eurasia Daily Monitor, Volume 4, Issue 184
Jamestown Foundation, Wash D.C., Thu, October 4, 2007

On October 2 Gazprom warned Ukraine via mass media that it would reduce gas
deliveries from November onward, unless Ukraine pays $1.3 billion worth of
arrears to Gazprom. According to company spokesman Sergei Kupriyanov, these
arrears accumulated for gas supplied during the nine months since January 1,

The timing of Gazprom’s warning seems designed for leverage on Ukraine’s
political situation after the September 30 parliamentary elections.

Characteristically, Gazprom resorted to the media weapon before informing
the Ukrainian government or presidency. Kyiv had not yet been officially
notified by October 3, when Prime Minister Viktor Yanukovych dispatched Fuel
and Energy Minister Yuriy Boyko to Moscow for emergency talks with Gazprom.

There they agreed that Ukraine would pay those arrears until November 1 to
avoid a cut in supplies. Whether Kyiv can pay that cash amount by that date
seems doubtful.

This situation reactivates a threat to Ukrainian ownership of the
gas-transit network. The accumulation of Ukrainian debts to Gazprom in 2007
was predictable early in the year (see EDM, February 7, 21, 28).

Indeed, Gazprom with its middleman firms and elements in the Ukrainian
government had set up a mechanism for debt-accumulation through the January
4 and February 2, 2006, gas supply agreements.

That mechanism has pushed the state company Naftohaz Ukrainy toward de

facto insolvency in 2006-2007, leaving it open to Russian demands for joint
control of the gas transit system in lieu of debt repayment.

That mechanism has operated from 2006 to date essentially as follows.
Gazprom, monopoly buyer of Turkmen gas for Ukraine, sells those volumes — 
along with some additional Russian-produced volumes — to Gazprom’s proxy
RosUkrEnergo, the monopoly intermediary between Gazprom and Ukraine.

RosUkrEnergo is a parity joint venture of Gazprom with two allied Ukrainian
businessmen, the notorious Dmytro Firtash being a key figure.

RosUkrEnergo sells that gas at the Ukrainian border to its proxy within
Ukraine, UkrGazEnergo, a parity joint venture of RosUkrEnergo with
Gazprom-friendly elements in Naftohaz and other Ukrainian offices.

UkrGazEnergo has been awarded the lucrative Ukrainian market of industrial
consumers of gas, whereas Naftohaz itself has been left with the barely
solvent or insolvent “social market” for gas — that is, mainly municipal
utilities and the residential consumers — where gas prices are regulated
below the actual costs.

These arrangements have drastically cut Naftohaz’s income while enriching
Gazprom’s proxies in Ukraine. Moreover, transit and storage service fees for
Russian gas passing through Ukraine westward were fixed at deeply discounted
levels by the 2006 agreements, thus cutting Naftohaz’s income even further.

Last year already, the company was no longer in a position to carry out
necessary modernization work. It then went into debt — to Gazprom-friendly
banks to be sure — in order to refinance its arrears to Gazprom. The $1.3
billion now claimed by Gazprom comes on top of the 2006 debts, by

Gazprom’s reckoning.

At present, Gazprom is farcically turning to RosUkrEnergo to pay that
amount; RosUkrEnergo equally farcically points a finger to UkrGazEnergo to
pay; and UkrGazEnergo claims that Naftohaz Ukrainy is the ultimate debtor,
which is actually the result that the Kremlin-driven 2006 arrangements were
designed to achieve.

In the international debate that is now developing over this situation,
Gazprom — and behind it the Kremlin — will undoubtedly portray their
debt-collection claims as market-determined, and any dispute as purely
commercial. The background to this situation should disprove that pretense,

The political link is also apparent between Gazprom’s sudden announcement
and the outcome of Ukraine’s September 30 parliamentary elections. Russia’s
ambassador to Ukraine — and former Gazprom chief — Viktor Chernomyrdin
warned during a Kyiv conference on September 27 that talks were ongoing on
the gas price and “everything will depend on who will come into the
Ukrainian government” after the elections.

Alluding to debt settlement, he served notice that joint control of Ukraine’s
gas transit system is more in Ukraine’s than in Russia’s interest; that it
is “first of all a matter of state interest”; and that, should Ukraine
decline to settle the debts by sharing control of transit pipelines, Russia
would switch its gas export routes to seabed pipelines [i.e., Baltic and
Black Sea], leaving Ukraine “with scrap metal: there will be the pipeline,
but what will it carry?” (Channel Five TV [Kyiv], UCIPP Ukraine Monitoring,
Interfax-Ukraine, September 27).

While this latter part of the warning involves an element of bluff, the
state-driven policy approach can hardly be clearer. Russian Deputy Prime
Minister Sergei Naryshkin also unveiled a Kremlin-driven approach when
discussing gas deliveries to Gazprom by Turkmenistan on October 3 in

Naryshkin “drew attention to the order given by the Presidents of both
countries, to Russian companies first of all, to carry out active work” on
that issue  (Interfax, October 3).

In light of Chernomyrdin’s warning, it seems that Gazprom’s sudden
debt-collection demand represents an instant response to the Yulia
Tymoshenko Bloc’s electoral success and the prospect of her playing a
leading role in the Ukrainian government During her two years in the
opposition, Tymoshenko has vowed to clean up the gas business in Ukraine.

She is seen as a threat to Gazprom’s and RosUkrEnergo’s interests, and she
is also as a major obstacle to any handover of control on Ukraine’s gas
transit system to Russia.

Earlier this year Tymoshenko shepherded through parliament legislation that
bars such handovers (see EDM, February 7); but elements in the government
such as Boyko make no secret of their search for ways to circumvent that

Negotiations over the price for gas supplies in 2008 are now starting in
earnest and may complicate the situation even further.
(Interfax-Ukraine, UNIAN, October 2-4)
[return to index] [Action Ukraine Report (AUR) Monitoring Service]


By Catherine Belton, Neil Buckley, Roman Olearchyk and Stefan Wagstyl
Financial Times, London, United Kingdom, Wed, October 3 2007

Gazprom likes to present itself as a purely commercial company. But
yesterday the Russian state-controlled gas group gave a spectacular
demonstration of its political clout.

Its decision to threaten to cut supplies to Ukraine just as pro-western
parties were poised to win power in Kiev struck observers outside Russia
as clearly political.

The group, which has close links to the Kremlin, could have made its
announcement about pursuing its $1.3bn (£637m, euro918m) debt a week
or two before or well after the poll.

But it came just as it became clear that Viktor Yanukovich, the
Russia-friendly prime minister, appeared to face defeat in the polls and
could be replaced by Yulia Tymoshenko, the fiery opposition leader, who
has repeatedly attacked the non-transparent arrangements surrounding the
Russia-Ukraine gas trade.

“This is a welcome mat for Tymoshenko ahead of her return as premier,” said
one Ukrainian official speaking on condition of anonymity. A spokesman for
Andris Piebalgs, European Union energy commissioner, urged the two sides to
find a solution.

While the news caused consternation in Europe, it could help Ukraine by
fuelling the European Commission’s campaign for greater solidarity among the
continent’s gas buyers.

The move will do nothing to improve Gazprom’s hopes of securing wider access
to the EU, as one of the main concerns of its EU-based critics is about
political influence at Gazprom.

Gazprom yesterday denied playing politics. “We tried not to push this issue
during the Ukrainian election, otherwise there would have been the immediate
accusation that Gazprom is using this as an attempt to influence the outcome
of elections,” said an official from Gazprom’s export arm. “But with autumn
approaching we need to settle all the issues related to non-payments. There
is never a good time.”

However, industry analysts in Moscow said the timing smacked of a political
warning for Kiev just as it looked as if the western-leaning coalition of Ms
Tymoshenko and President Viktor Yushchenko were about to return to power.

“This statement is connected to the results of parliamentary elections and
the upcoming change of government,” said Valery Nesterov at Moscow brokerage
Troika Dialog.

“Yulia Tymoshenko almost immediately brought up the problem of gas supplies
. . . It comes just as it looks that Russia will have to start up
negotiations over supplies with Ukraine from a clean slate and as doubts
appeared that the current arrangement could continue.”

Ms Tymoshenko has pledged to clean up the “corrupt” multi-billion dollar
natural gas trade between Ukraine, Moscow and Turkmenistan. She blamed the
preceding government of Mr Yanukovich for the debt.

“We now see how dishonest Yanukovich’s government was,” she said. “We will
do everything necessary to ensure there will be no gas cut-offs. But let it
be known, that the politics of Yanukovich led to such hazards.”

Ukraine’s domestic gas monopoly Naftogaz Ukrainy has been under financial
stress as it struggles to cope with Russian gas price increases and
competition from Gazprom affiliates. Gazprom raised prices in early 2006
after a stand-off in which it cut off gas supplies to Ukraine and imposed a
further increase in January 2007.

Ukraine, which pumps the lion’s share of gas to Europe, now pays $130 per
thousand cubic metres. But Gazprom intends to raise prices from the start of
next year. Gazprom supplies Ukraine through a Swiss-based trader called
Rosukrenergo, half-owned by Gazprom.

Rosukrenergo said yesterday the $1.3bn debt was owed to it by a distribution
company, Ukrgazenergo, making it unclear what role Gazprom had in the debt
negotiations. Ukrgazenergo is jointly owned by Rosukrenergo and Naftogaz

Jonathan Stern from the Oxford Institute for Energy Studies said he
suspected Gazprom had stepped in to prevent Rosukrenergo from becoming
Reporting by Stefan Wagstyl in Budapest, Roman Olearchyk in Kiev, and
Catherine Belton and Neil Buckley in Moscow.

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

EDITORIAL: Financial Times, London, UK, Wed, October 3 2007

President Vladimir Putin keeps the surprises coming. Last month he suddenly
promoted a grey apparatchik, Viktor Zubkov, to prime minister.

Now he says he will head the parliamentary list of United Russia, the main
pro-Kremlin party, in elections this December, and that he may even become
prime minister himself after he leaves the presidency next March.

He thereby gives every appearance of wanting to use the machinery of
democracy to consolidate his near-total dominance of Russian politics. That
will be a neat trick – if it works.

The Zubkov appointment wrongfooted neo-Kremlinologists, who then concluded
Mr Putin must be lining up this former courtier from the Russian leader’s St
Petersburg days as a temporary stand-in as president before Mr Putin himself
returned to the top job.

Apparently not. It is beginning to look as though the master of the Kremlin
not only wants to observe the constitutional niceties preventing him from
standing for a third term as president, but to change the structure of
Russian power.

That structure has always had a clearly dominant figure and, if Mr Putin
pursues what he calls his “entirely realistic” idea, it means the powers of
Russia’s prime minister will have to be enhanced at the expense of the

President Putin commands the support of a good 70 per cent of Russians
and he could probably lift the numbers of United Russia to the two-thirds
majority in the Duma needed to change the constitution and redistribute

Under that scenario, United Russia, hitherto an ideas-free Putin vehicle,
would transmute into a ruling party with long-term tenure – not so much a
Communist-style one-party set-up as like an Institutional Revolutionary
party, which ruled Mexico for most of the last century.

If Mr Putin intends to run things – and clearly, he does – then it is
arguably better that he rules through institutions than from behind the
scenes as, say, head of an arm of the state such as Gazprom. Yet even for
someone so clearly in control, it is not easy to rejig the sources of real
power. This transition is not over yet.

Addressing his United Russia followers on Monday, Mr Putin reminded them
how he had pulled Russia out of the shambles of the post-Soviet 1990s and
restored its pride and place in the world (where its belligerent swagger was
again on show yesterday with Gazprom’s threat to cut off gas to Ukraine).

With this formally democratic power play, Mr Putin is signalling he still
craves legitimacy for himself and Russia’s political system.

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

EDITORIAL: Financial Times, London, UK, Wed, October 3 2007

Even before the dust had settled in Ukraine’s parliamentary election,
Russia’s mighty Gazprom gave notice of its intent to demand payment of its
outstanding gas bills from any new government.

It held back from an earlier announcement that might have embarrassed the
outgoing Russia-friendly prime minister, Viktor Yanukovich. It will have no
such scruples now.

Voters have, by a narrow margin, given their backing to the pro-western
parties headed by Viktor Yushchenko, the state president, and Yulia
Tymoshenko, the opposition leader, former allies who led the 2004 Orange
revolution. That much is clear.

What is less clear is whether Mr Yushchenko and Ms Tymoshenko will now
be able to capitalise on their success.

The two leaders loathe each other. The fragile alliance they struck in 2004
survived only a few months until disputes drove the president to sack his
prime minister. Then, Mr Yushchenko was the dominant partner.

Now it is Ms Tymoshenko who has the political initiative, after her BYuT
bloc won more than double the votes of the president’s Our Ukraine grouping.

Coalition negotiations will be very delicate. But both must try to find a
modus vivendi. They could appoint a technocrat as prime minister to mediate.
Whatever they do, they should put their country before their egos.

There is much they agree on – including bringing Ukraine closer to the
European Union, integrating the country into the world economy, reducing
dependence on Russia and ensuring poor Ukrainians share in the nation’s
growing prosperity.

Yet the two leaders face formid-able difficulties. Mr Yanukovich’s Regions
party remains the largest parliamentary group. It speaks for eastern
Ukraine, the country’s richest region. It is backed by business people such
as Rinat Akhmetov, Ukraine’s wealthiest billionaire.

The new government must not alienate the powerful east. Indeed, it must deal
with the economic power of oligarchs. To confront them would be to risk
destabilising the country.

Ms Tymoshenko, who has previously launched populist assaults on big
business, must swallow her pride and follow Mr Yushchenko’s conciliatory
line. The oligarchs want global integration as much as the government.

Even more difficult may be dealing with Russia, as Gazprom’s instant demands
demonstrate. Moscow cannot have a veto on Kiev’s decisions. But Ukraine
must pay its energy bills to guarantee its independence. Whoever is prime
minister must learn to reconcile east and west.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
If you are receiving more than one copy of the AUR please contact us.
Review and Outlook: The Wall Street Journal
New York, New York, Wednesday, October 3, 2007

Vladimir Putin has announced that he will remain active in Russian politics,
probably as prime minister, after his second presidential term expires next
year. The sorry news in this is that it surprises no one.

It has now been eight years since the world first learned of Mr. Putin, a
KGB man vaulted almost overnight from municipal obscurity into the
presidency by an ailing Boris Yeltsin.

Mr. Putin made his political mark by initiating a second war against the
breakaway province of Chechnya, using the pretext of a series of alleged
terrorist bombings in Russia.

According to Alexander Litvinenko, the one-time spy who became an
opponent of the Putin regime before his murder last year, these bombings
were orchestrated by the Russian secret services.

By January 2000, the Chechen capital of Grozny resembled Dresden in 1945.
Yet Western leaders did not turn away from Mr. Putin.

On the contrary, they feted him as an “flawless democrat” (Gerhard
Schröeder) and a man “deeply committed [to the] best interests of his
country” (President Bush). He has been helped by the tripling of oil prices,
a gift in part of Alan Greenspan’s easy money Federal Reserve policy.

The petrorubles have allowed Mr. Putin to service Russia’s debts, build up
its foreign-currency reserves, pay its miners, soldiers and civil servants,
and turn Moscow and St. Petersburg into showcase cities; his job approval
rating is near 70%.

They have also helped obscure his policy of repression in the Caucasus, his
attacks on independent media and domestic human rights organizations, and
his appointment of KGB cronies to key positions of power.
More difficult for the world to overlook has been Mr. Putin’s meddling in
the politics of Russia’s neighbors: the oil and gas pipelines turned off in
the dead of winter; the effort to steal Ukraine’s 2004 election; the 2006
embargo imposed on tiny Georgia; this year’s cyberwar against Estonia.

The murder a year ago of crusading journalist Anna Politkovskaya and the
polonium poisoning of Mr. Litvinenko were notable for the studied
indifference they inspired in the Russian government. Mr. Putin eulogized
Ms. Politkovskaya with the remark that her influence “was minimal.”

All of this has coincided with an increasingly assertive Russian foreign
policy that often seeks to undermine U.S. interests. Most notably, a Russian
veto threat continues to limit U.N. sanctions designed to stop Iran’s
nuclear program.

Mr. Bush’s restraint in criticizing Mr. Putin’s domestic crackdown has been
partly in the service of winning the Russian’s cooperation on Iran — to
little effect.

Given this career arc, it comes as no surprise that Mr. Putin now seeks to
hold on to power, despite his previous Julius Caesar-like avowals to the
contrary, and despite a constitutional limitation on remaining president for
more than two successive terms.

Coming on the heels of his surprise appointment of aging apparatchik Viktor
Zubkov as prime minister, it seems Mr. Putin intends either to rule Russia
from his parliamentary office or, using a constitutional loophole, perhaps
return to the presidency after a decent interval.

No doubt Mr. Putin will get away with this, given his control over the media
and other levers of power. But he will still have to observe the formalities
of a presidential election next year, and former chess champion Garry
Kasparov has said he intends to lead the political opposition.

The West needs to put Mr. Putin on notice that if Mr. Kasparov suffers some
“accident” — if, say, he is hit by a car — the world will not look the
other way.

Bill Clinton made the mistake of welcoming Mr. Putin into the G-8, and
Western leaders lack the will to expel him now. But his current maneuvering
to retain power should make clear beyond doubt that Mr. Putin has ransacked
the hopes the world once had for post-Soviet Russian democracy.

He is reviving Russian authoritarianism, and the world’s democracies need to
prepare for its consequences.
LINK: http://online.wsj.com/article/SB119137825763247310.html
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Send in a letter-to-the-editor today. Let us hear from you.

COMMENTARY: By Taras Kuzio, The Wall Street Journal Online
New York, New York, Tuesday, October 2, 2007

KIEV — Not since the heady days of the Orange Revolution has the atmosphere
in Kiev been so electric. At the newly completed Hyatt, this city’s only
five-star hotel, the gathered journalists, international observers and
Western political consultants awaited the arrival on Sunday evening of the
woman who has changed the rules of Ukraine’s political game.

Yulia Tymoshenko strode into her election headquarters surrounded by a
throng of bodyguards to a receptive welcome. Her bloc has become the
pivotal political force in Ukraine.

Kiev is ripe with expectation that Ms. Tymoshenko is set to return as prime
minister of a rejuvenated Orange coalition with President Viktor
Yushchenko’s Our Ukraine-People’s Self-Defense party.

If so, she will have saved the Orange Revolution and Mr. Yushchenko. He
would have become a lame-duck president had the governing Party of Regions
won. Now he can even dream of a second term.

More importantly, the relaunch of the Orange coalition would give the
country another chance to introduce the reforms that millions of Ukrainians
fought for three years ago, when they stood on the freezing Independence
Square for 17 long days. If Mr. Yushchenko fails to seize this moment he’ll
be a spent force and few people will attend his political funeral.

Counterintuitively, the election result is also good news for Prime Minister
Viktor Yanukovych’s Regions party and the broader political culture in
Ukraine. Only in opposition can Regions develop to a normal, democratic
party for all Ukrainians. If it had managed to stay in power, it would most
likely have continued its corrupt ways and remained a party that exploits
the country’s linguistic divide instead of bridging it.

Ms. Tymoshenko has done the unthinkable by challenging Regions even in what
it considered its Eastern Ukrainian fiefdom. There Ms. Tymoshenko’s party
got a respectable 15%-20% outside of the two traditional Regions strongholds
of Donetsk and the Crimea. Regions garnered 50%-60% of the votes there. Her
success in breaching traditional Regions territory in Russian-speaking
Eastern Ukraine makes her party the country’s only all-national political

Country-wide, Ms. Tymoshenko’s bloc came in a remarkably close second.
Having had a slim lead after the early returns came in, her party stood at
31.8%, compared to 32.6% for the Regions party, with 80% of the vote
tallied. Mr. Yushchenko immediately ordered an investigation into the vote

But even with this slightly diminished outcome, the Orange coalition should
still have a comfortable majority in parliament. It remains a remarkable
comeback given that in last year’s elections, Ms. Tymoshenko’s party came in
10 percentage points behind Regions.

Mr. Yushchenko has nobody but himself to blame that his party only
marginally improved its 2006 result of 14% to now 15%. As president, he was
supposed to stand above the political fray and abstain from intervening in
the elections. The Central Election Commission though was forced to
reprimand him for campaigning on behalf of his party.

In many of Ukraine’s regions the local governors, who are appointed by the
president, also worked for Our Ukraine. Mr. Yushchenko’s unconstitutional
election interfering turned voters off. Orange supporters disillusioned by
Mr. Yushchenko’s failure to act as a harbinger of revolutionary change
turned to Ms. Tymoshenko.

Without her support, Mr. Yushchenko — with approval ratings of less than
20% — cannot hope to be re-elected for a second term in two years time. Mr.
Yushchenko now has the opportunity to rectify his biggest strategic mistake
when he dismissed the Tymoshenko government in September 2005 after only
eight months in office. The dismissal led to an 18-month split in the Orange
camp and the return from political oblivion of Viktor Yanukovych and his
Party of Regions.

The renewal of the Yushchenko-Tymoshenko alliance is not without its
potential pitfalls. President Yushchenko has found it difficult to work with
two strong prime ministers — Ms. Tymoshenko and Mr. Yanukovych. That
cooperation is only going to be more difficult since last year’s
constitutional reforms increased the powers of the parliament and the
government vis-à-vis the president.

Mr. Yushchenko can no longer simply remove the prime minister, as he did in
2005. Some in Mr. Yushchenko’s entourage therefore prefer a grand coalition
with Regions but with a technocrat at the helm, such as Yuri Yekhanurov,
prime minister from 2005 to 2006, instead of Mr. Yanukovych.

But those in the Yushchenko camp who favor shunning Ms. Tymoshenko still
fail to understand the ramifications of Sunday’s elections. They can either
choose between Ms. Tymoshenko as an ally and prime minister now or as a
competing Orange presidential candidate in 2009.

With her support, he’ll probably stand a good chance of being re-elected for
a second term. If he has to compete against her, she’d almost certainly
eliminate him in the first round of the presidential elections and probably
defeat any Regions candidate the opposition could possibly field in the next
round. Reviving the Orange coalition is Mr. Yushchenko’s safest bet.

Ukraine’s second free and fair election in less than two years demonstrates
a level of maturity of its democratic culture that has still not been fully
recognized abroad. Western journalists in Kiev note the absence of
anti-Western xenophobia they encounter in Moscow.

Ukrainian voters have held politicians accountable for their actions. The
attempt by Regions to mobilize Russian-speakers for a referendum to make
Russian an official language and forswear future NATO membership failed to
resonate with voters.

But despite these achievements, the pro-reform forces are not powerful
enough to successfully complete the postcommunist transition. They need
outside support.

In that respect, Ukraine is similar to other swing countries in Eastern
Europe. It is unlikely that Romania would have been able to overcome the
Ceaucescu legacy without the carrot of European Union membership.

Sunday’s election results have provided a new lease of life for the Orange
Revolution. They also give the EU a second opportunity to replace its
passivity toward Ukraine with true leadership.

Ukraine deserves the same EU membership lifeline that was so instrumental
in cementing Eastern Europe’s new democracies in the early 1990s.
Mr. Kuzio is a research associate and former visiting professor at the
Institute for European, Russian and Eurasian Studies, George Washington
LINK: http://online.wsj.com/article/SB119127608438245593.html

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

Review & Outlook, The Wall Street Journal
New York, New York, Tuesday, October 2, 2007

Another election in Ukraine, another marvel of post-Soviet democracy. We’ll
get to the outcome in a moment. Far more important was the spirited
campaign, the free choice among various parties, high turnout and a result
no one dare call illegitimate.

All that’s a far cry from the fledgling democracy next door in Russia, where
next year’s presidential election will almost certainly rubber stamp Vladimir
Putin’s choice.

Sunday’s election vindicates the Orange Revolution of 2004 — yet again.
Since millions of ordinary Ukrainians rose up peacefully and won the right
to choose their own leaders, it’s become fashionable to declare this color
revolution dead.

The villain of 2004, pro-Russian politician Viktor Yanukovych, came back
last year to become Prime Minister and led the polls ahead of Sunday’s
parliamentary polls. The popularity of 2004 hero, President Viktor
Yushchenko, is sinking. Some Orange partisans are aghast.

The hand-wringing misses the point. The dramatic events of 2004 were about
a lot more than particular personalities or policies. The Orange Revolution
changed the rules of the political game.

As we wrote then, Ukrainian rulers will think twice before daring to cheat
their people out of a free press, debate and ballot.

Nothing in the subsequent years and three elections makes us question this
judgment. Messy politics — also known as democracy — hasn’t made Ukraine
harder to govern or hurt its economy, which grows at 7% a year. (Nearby
Georgia, home to the rose revolution, is thriving as well.) No matter what
Mr. Putin might like to claim, stability and freedom aren’t mutually
exclusive in this region.

In free societies, political fortunes rise and fall, and as results trickled
in yesterday, neither Mr. Yanukovych nor Mr. Yushchenko appeared to have
won. Instead, Yulia Tymoshenko, the glamorous former oligarch who played a
big role in the Orange protests, emerged the clearest victor.

Her eponymous block gained 10 percentage points from the 2006 election,
claiming 31.4% of the vote with nine-in-ten counted, two points behind Mr.
Yanukovych’s Party of the Regions.

But Mr. Yushchenko’s Our Ukraine was also up from the last poll, at 14.6%,
setting the stage for the return of an Orange government.

After mending fences with the President in recent weeks, Ms. Tymoshenko
looks poised to form the next government, and Mr. Yanukovych may have to
come to terms again with life in opposition.

The country doesn’t lack for problems. The last time Ms. Tymoshenko held
the Prime Minister’s post, for less than eight months in 2005 before the
President sacked her, her chaotic governing style soured Ukrainians on the
Orange bloc.

Assuming the two parties together claim a majority of seats in parliament,
as looks likely, and are able to strike a coalition deal, a Prime Minister
Tymoshenko will be asked to manage the economy, implement her stated
anti-corruption and pro-Western agenda, and deal with a lingering
constitutional dispute.

The current constitution vaguely divides powers between the executive and
legislative branches; a referendum may be called to settle it.

Arguments over the constitution brought months of political deadlock this
year and forced the early election. Ukraine can’t afford more of the same.

Though its politics isn’t always pretty, Ukraine continues to mock its
obituarists. Divided between Russian- and Ukrainian-speakers in east and
west, the country was supposed to have split long ago, possibly violently,
as the CIA predicted in the early 1990s.

Its free-wheeling politics is, in fact, a source of strength. The U.S. and
particularly Europe can continue to lend a guiding hand for this new state,
with Brussels hopefully showing a bit more enthusiasm for Kiev’s aspirations
to join the bloc one day.

The hard work of building a functioning democracy is near complete in
Ukraine. Sadly, that’s yet to begin in Russia.
LINK: http://online.wsj.com/article/SB119127507001745546.html

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

By Marc Champion, The Wall Street Journal,
New York, New York, Tue, October 2, 2007; Page A8

Yulia Tymoshenko, the firebrand leader of Ukraine’s Orange Revolution,
emerged as the big winner in parliamentary elections, an outcome that could
bring fresh upheaval to relations with Russia.

It is unclear whether Ms. Tymoshenko will be Ukraine’s next prime minister,
but Sunday’s vote has confirmed her as the driving force among the country’s
westward-leaning parties, and it appeared to give them enough seats in
Parliament to form a government.

That would be a welcome result for Western leaders and Ukrainians who
supported the 2004 Orange Revolution, in which hundreds of thousands of
Ukrainians protested to overturn fraudulent elections.

At the time, it appeared that democracy movements were sweeping across
the former Soviet Union; they have become mired in infighting since then.

An Orange government would not likely be welcomed by Moscow, whose
favored candidate, Viktor Yanukovich, lost in 2004 but returned to power
as prime minister last year. As soon as Mr. Yanukovich took office, he
Ukraine’s bid to join the North Atlantic Treaty Organization, which Moscow

Ms. Tymoshenko has said she would seek to reopen negotiations with Russia
over the price at which it sells natural gas to Ukraine and to shut out
RosUkrEnergy, the opaque company half-owned by Russian state gas giant
OAO Gazprom that handles the trade.

Ukraine currently pays a little more than half the price some of its
neighbors pay for gas, a result of negotiations Mr. Yanukovich conducted
last year.

Ms. Tymoshenko’s party, Bloc Yulia Tymoshenko, increased its share of the
vote by 10 percentage points from the 2006 election to 32%, with
three-quarters of the ballots counted, Ukraine’s Central Election Commission

That put her half a percentage point behind the Party of the Regions, headed
by Mr. Yanukovich. Our Ukraine, the party of President Viktor Yushchenko,
placed third, with 15%.
Write to Marc Champion at marc.champion@wsj.com
LINK:  http://online.wsj.com/article/SB119128259953845785.html

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

Letter-to-the-Editor: From Mr Illya Rozenbaum, Brussels 1210, Belgium
Financial Times, London, UK, Wed October 3 2007

Sir, Indeed it is unlikely that a “three-way tussle in Ukrainian election”
(Report, October 1) between Viktor Yushchenko, Yulia Tymoshenko and
Viktor Yanukovich will break the prolonged political deadlock in Ukraine.

Ukrainians have long since dubbed the ongoing political squabble between
the three politicians as “the Swan, the Crab and the Pike” after the fable
by Krylov, the famous Russian writer.

Occupying different natural habitats, no matter how hard the animals try,
they fail in their collective pursuit of dragging the farm cart.

Alas, despite some concrete achievements in the spheres of democracy and
the rule of law, with noticeable growth and economic stability, Ukraine is
unstable politically. The governing elite will continue to apply power in
different directions without consulting one another (or indeed the ordinary

With or without an outright winner of the elections, the question of a
referendum about the most pressing issues currently tearing Ukraine apart is
yet to be floated.

Alternatively, the three main political forces have to find strong political
will and broad consensus, or else be faced with the destruction of
everything Ukrainians have achieved so far.

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
Have investors got too used to political uncertainty in Ukraine?

COMMENTARY: Financial Times, London, UK, Tues, Oct 2 2007

Have investors got too used to political uncertainty in Ukraine?

Preliminary results from last Sunday’s elections, the third ballot in three
years, suggest former prime minister Yulia Tymoshenko may be able to
form a coalition of so-called Orange parties,taking over from the previous
government headed by Viktor Yanukovich.

The outcome is not perhaps the one foreign investors would have chosen.
But they have proved increasingly resilient to frequent political turmoil in

Whether they are right to be so sanguine is questionable.

The economic policies of both the Orange bloc and its rivals are a mixed
bag. Ms Tymoshenko’s last stint as prime minister in 2005 was marked by
trade wars with Russia, although a Tymoshenko-led government and its
neighbours might now pursue a less confrontational course.

She is unlikely to reawaken the debate over illegal privatisations – while
the discussion was morally defensible, uncertainty over property rights
contributed to a severe economic slowdown under her watch. And the Orange
bloc’s desire for closer relations with the European Union could yield
beneficial results.

All the leading parties, however, are prone to unhelpful intervention in the

Ms Tymoshenko fought inflation with price controls, while Mr Yanukovich
dismantled civil service and fiscal reforms and engaged in fire sale
privatisations. And, whoever ends up forming a government, it is unlikely to
last long, given the constitutional framework.

That said, investors’ willingness to ignore the unsatisfactory political
environment in Ukraine has some support. Economic growth is running at
more than 7 per cent year-on-year and will remain strong if metals prices,
on which the economy depends, hold up.

The current account deficit may be widening, but is well financed by foreign
direct investment inflows.

Foreign exchange reserves, meanwhile, are at a high. Market participants may
well be right to focus on Ukraine’s economic fundamentals rather than the
antics of its politicians.

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Opinion & Analysis: Yevgeny Kozhokin for RIA
RIA Novosti, Moscow, Russia, October 3, 2007

MOSCOW – Contrary to expectations, the political landscape of post-election
Ukraine is not likely to be any smoother.

As soon as the votes are counted, Ukraine will have a hard time forming a
government. The ruling coalition will not take shape quickly despite the
Orange majority’s efforts to unite and put a good face on things.

Given the state of personal relations between Viktor Yushchenko and Yulia
Tymoshenko, and her excessive demands, any alliance they manage to form is
bound to be fragile and short-lived and, most probably, will not make
Ukraine any more tranquil.

At the same time, there is a good chance that the Orange leaders will fail
to strike a deal and that a future government will represent the same
powerful economic and political forces as the former coalition did before
the Rada’s dissolution.

Apart from the Party of Regions, the future coalition could include the
Communists and the Socialists if they manage to overcome the 3% threshold.

But these two scenarios are not exhaustive. Coalitions may take many and
varied forms, even ones incredible to the mind of any sensible analyst. In
Kiev non-stop talks are going on between all parties.

Allegiances and enmities change in the blink of an eye. The real bone of
contention is access to the resources of that rich country. Despite
traumatic political upheavals, Ukraine has been doing rather well

The unprecedented success of Yulia Tymoshenko’s bloc at the recent elections
deserves special mention. It came as a surprise to many people although it
has a logical explanation. The bloc fought a vigorous campaign, with
Tymoshenko playing the first fiddle.

She viewed these elections as the last and decisive battle. In a way, her
bloc had the advantage of not being responsible for Ukraine’s current

Not being associated with either the president or the government, Tymoshenko
could lash out with equal ferocity both at Yushchenko and his supporters and
Prime Minister Yanukovych’s Party of Regions.

It was an effective strategy; her energy helped her attract even hitherto
alien voters to her banner, and won over some of Yanukovich’s fans.

Regrettably, the Party of Regions failed to carry out some of the promises
it made during the previous election, such as to upgrade the status of the
Russian language and to hold a referendum on Ukraine’s entry to NATO.

The leaders of the party and the government often applied double standards
to key issues, losing the support of their voters as a result. For part of
Ukrainian society, Tymoshenko has appeared to be more outspoken and
appealing for that reason.

The results of the current elections are bound to affect Russian-Ukrainian
relations. If Our Ukraine-People’s Self-Defense and Tymoshenko’s bloc form
an Orange coalition, it will be more difficult for Russia to conduct
dialogue and have normal cooperation with Ukraine than it was when it was
under the Party of Regions and their allies.

It is too risky to make any forecasts before the final results are
announced, but whatever happens Russia should develop bilateral relations
with Ukraine, or at least maintain the status quo.

Being Ukraine’s next-door neighbor, we are linked by tremendous economic
interests. Nonetheless, we may have to face many complicated problems.

On the one hand, we cannot be indifferent to what is taking place in
Ukraine, on the other we should not interfere in its internal affairs.

To maintain a proper balance, we should try to preserve good neighborly
relations and partnership with Ukraine, and keep it away from NATO.
Ukraine’s entry into this alliance would have grievous consequences for our
two nations.

The parliamentary race in Ukraine is over. Could our own political elite
derive any lessons from it on the eve of the approaching elections to the
State Duma?

The situation in Russia is very different in many respects – the political
system, functioning of parties and conduct of voters. In this sense, it is
hard to draw any parallels with the Ukrainian campaign.

Yet, strange though it may seem, the Ukrainian Orange forces are similar to
the most radical Russian parties in their approach to political problems.
Though our respective political systems differ greatly, the basic political
cultures of our two countries are pretty much the same.

It makes no sense to try and determine which one of us is closer to the
democratic ideal, because both still have to go a long way to reach it.
Yevgeny Kozhokin is the director of the Russian Institute of Strategic
Studies and a member of the RIA Novosti Expert Council.
The opinions expressed in this article are the author’s and do not
necessarily represent those of RIA Novosti.

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

RIA-Novosti, Moscow, Russia, Tuesday, October 2, 2007

MOSCOW – Out of all Ukrainian political leaders, (Yuliya) Tymoshenko is the
most suitable politician for the development of Russian-Ukrainian relations,
Stanislav Belkovskiy, the founder of the Russia -Ukraine Institute for
National Strategy, has said at a news conference in Moscow.

“Tymoshenko can find a common language with Russia better than any other
Ukrainian politician,” he said. Belkovskiy believes that trade and economic
relations between Russia and Ukraine will not deteriorate if Tymoshenko
becomes prime minister.

“The whole set of Russian-Ukrainian relations boils down to energy supplies
and in particular the gas issue. If Tymoshenko becomes prime minister,
RosUkrEnergo (Swiss-registered Gazprom-linked intermediary selling gas to
Ukraine) as the main gas supplier will disappear but the volume of supplies
to Ukraine will not change,” he believes.

At the same time Belkovskiy said that chances of creating an Orange
coalition (Our Ukraine -People’s Self-Defence bloc and Yuliya Tymoshenko
bloc) and a broad coalition (Party of Regions, Our Ukraine -People’s
Self-Defence bloc, Lytvyn bloc) were equal.

He believes that any developments are possible. However, he added that if a
broad coalition is set up and Tymoshenko does not manage to become prime
minister, she may provoke a sharp destabilization of the political situation
in Ukraine.

“Tymoshenko may leave parliament and try to trigger a preliminary
presidential election,” Belkovskiy said. At the same time he added that
Tymoshenko’s taking the prime minister’s post will mean a change of the
political system in Ukraine and a total failure of the previous political

Tymoshenko will try to set up a new hierarchy of power. Belkovskiy believes
that in these conditions the freedom of press and healthy political
competition will disappear in Ukraine.

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

Editorial: The Guardian, London, UK, Tuesday October 2, 2007

Three years after thousands of protesters braved the biting cold of Kiev’s
main square to launch the orange revolution, it is business as usual in

The country is deadlocked after its fourth national election since the
revolution. Viktor Yanukovich, who sparked the popular revolt by trying to
steal a presidential election, is a new man – or so he would have us

Once seen as Moscow’s loyal servant, Mr Yanukovich’s Party of the Regions
is still blue in colour and derives its support from the Russian-speaking
industrial east. But now a US firm of PR consultants helps him soften his
post-Soviet image, and he claims he is a Ukrainian nationalist.

His party is on course to win Sunday’s parliamentary election, although he
will need to form a coalition if he is to continue as prime minister.

The other winner is Yulia Tymoshenko, a neoliberal orange revolutionary, who
has harvested popular discontent against the rich and powerful, despite
being both herself. She, too, claims the right to form a new government.

The only undoubted loser is Our Ukraine, the party of President Viktor
Yushchenko. It was his pockmarked face from dioxin poisoning that
symbolised the dirty fight to wrestle Ukraine from the grip of authoritarian
government. But after three years of political chaos, his options have
narrowed considerably.

He either has to bury the hatchet with his former orange partner Ms
Tymoshenko (whom he sacked as prime minister two years ago amid bitter
recriminations) or he has to get into bed with Mr Yanukovich. Neither
appeals. Forget the sea of orange tents in Kiev three years ago.

Mr Yushchenko views his former partner Ms Tymoshenko as his nemesis and
would still do almost anything to prevent her becoming prime minister again.

It would be easier for him to form a coalition with his ideological foe Mr
Yanukovich. Moderate businessmen in both orange and blue camps pushed
their respective leaders to call this election, in the hope that the two
would go into a coalition as a result.

But Mr Yushchenko must also think about his prospects of being re-elected
president in two or three years time. His party is already trailing badly in
third place and could disappear altogether, after several years in
partnership with Mr Yanukovich’s professional party machine.

Much will depend on deals struck with the smaller parties – the communists,
the socialists and a party formed of people once allied to the former
president Leonid Kuchma.

There are some positives to be drawn from this. This was a fair election,
and there is now more democracy in Ukraine three years on.

But it is in a state of permanent political crisis, and for this it has its
inadequate leaders to thank.
LINK: http://www.guardian.co.uk/commentisfree/story/0,,2181702,00.html

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Ukrainians know very well their election has been hijacked again

Commentary: By Adam Swain, The Guardian
London, UK, Wednesday October 3, 2007

The deft way in which Vladimir Putin, the Russian president, is trying to
ensure he remains in power even after he has left the presidency will ensure
that Ukraine remains a recurring theme in US-Russian rivalry.

Its role in this geopolitical contest lessens further still the likelihood
that Sunday’s parliamentary elections will resolve the long-running power
struggle between the president, Viktor Yushchenko, and the prime minister,
Viktor Yanukovych.

It is a tangled, tense struggle. Yushchenko swept to power when the orange
revolution was triggered by the attempts of Yanukovych’s backers to rig the
2004 presidential election. But he was forced to nominate Yanukovych as
prime minister following the latter’s success in last year’s parliamentary

Yanukovych’s Party of the Regions will remain the largest force, but if, as
seems most likely, Yushchenko opts to enter into a coalition with Yuliya
Tymoshenko, his partner during the orange revolution, they could form a
government with a slim majority.

It’s no secret that Yanukovych regards this pre-term election as the
fraudulent outcome of a crisis manufactured by Yushchenko and his western
backers to shore up pro-western parties.

Fearing that Yanukovych’s coalition government was about to increase its
parliamentary majority to enable it to overrule the president and change the
constitution, Yushchenko controversially dissolved parliament in April.

There have been suspicions that elements in the west, fearing that the
Yanukovych government was endangering Ukraine’s drift to the west, helped
to conjure up a context in which Yushchenko could dissolve parliament.

During the crisis, the west’s promotion of democracy was certainly partisan
and designed to promote its geopolitical interests against a resurgent

Tymoshenko’s support for the transfer of powers from the president to the
prime minister in January appears to have been the first act in an elaborate
power play that was scripted in Washington, in which the two orange
revolutionaries have, perhaps unwittingly, been caught.

Yushchenko shouldered the responsibility for the unpopular decision to
dissolve parliament, while hinting at a possible post-election coalition
with the Party of the Regions to stop it boycotting the poll.

Tymoshenko distanced herself from the crisis, but once the election date
was set she ran a populist campaign that portrayed her as a democrat and
Yanukovych as little more than a post-Soviet mafia don. Tymoshenko and
Yushchenko campaigned independently until late last week, when they
announced they would seek to form a coalition government.

The election may be challenged in the courts, raising the spectre of a
protracted legal morass. Even the rapid formation of a new coalition may not
guarantee stable government. The Party of the Regions will feel aggrieved
that its pragmatic decision to participate in what it regards as an illegal
election has resulted in ejection from office.

As the resignation of 150 members of parliament was used as the final legal
justification for staging the early election, in the new parliament
Yanukovych and Tymoshenko will have an effective veto over its operation
and the formation of any new government.

Also a cabinet without any representation from the industrial and financial
heartland in the east of the country, where the Party of Regions is most
popular, will find it difficult to implement economic reform.

What will now be a three-way power struggle erodes the electorate’s faith in
their politicians and in their political parties, as a drop in turnout at
the weekend showed.

The political crisis, manufactured or otherwise, reinforces an east-west
electoral divide that undermines the legitimacy of the state, prevents good
governance and jeopardises economic development. Washington’s script may
have unfolded largely as directed so far, but the denouement has yet to be

Triggering an election that would inevitably be regarded as illegitimate by
many was bound to plunge the country into yet another spell of political

The intention is to postpone the final scene until the west can be certain
of the happy ending it seeks. It is not too late, however, for the country’s
politicians to ignore the self-interested overtures emanating from Russia
and the west, and recognise their potential, and their responsibility, to
become the authors of their own democratic future.
Adam Swain is a lecturer in the school of geography, University of
Nottingham. adam.swain@nottingham.ac.uk
LINK: http://www.guardian.co.uk/comment/story/0,,2182214,00.html

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Letter-to-the-Editor: From Askold Krushelnycky, UK
Action Ukraine Report (AUR) #875, Article 22
Washington, D.C. Thursday, October 4, 2007

Dear Morgan,

Greetings to you and thank you for all your continuing sterling work.
I am in Kyiv for the elections and hope we’ll be able to meet.

I see the UK’s Guardian newspaper has been behaving shamefully again
in its election coverage.  You may already know the Guardian behaved
in a disgraceful way towards the truth in the 1930s as the information
below shows.  Please free feel to use it if you feel it is of any

The seriously flawed election coverage by the British Guardian
newspaper, portions of which have been reprinted and mocked in a
condign way by some Ukrainian media for factual errors and
pro-Yanukovych bias, echoes the newspaper’s disgraceful behavior
during the 1933 Stalin-engineered Holodomor famine.

The publication was then called The Manchester Guardian and was know
for its left-wing sympathies which rendered some of its editors
particularly gullible to Stalin’s propaganda or willing to turn a
blind eye to the communists’ crimes, whose actions in the Holodomor
claimed the lives of millions who suffered the excruciating agony of
death by starvation.

An exception to that collaboration by stupidity or intent in covering
up Stalin’s crimes was the Guardian’s Moscow correspondent, Malcolm
Muggeridge.  At the time he was a committed Communist but he was also
a journalist of integrity who was disturbed by the rumors of mass
starvation reaching the western correspondents cocooned in the comfort
of Moscow.

At considerable personal risk, Muggeridge smuggled himself out of
Moscow and managed to get to the Ukrainian countryside where he was
horrified by the nightmarish scenes of dead and dying that greeted him

He returned to Moscow and wrote a series of stories exposing the use
of starvation by the communist as the terrible means to liquidate a
portion of society that was viewed as an enemy by the Moscow regime –
smallholder farmers who wanted to control their own lives and not be
subsumed into state or collective farms.  And although the farmers and
their families were not all ardent Ukrainian nationalists, the village
and countryside had always been a repository of Ukrainian culture and

But the Moscow sympathizers among the editors at the Manchester
Guardian’s offices in England tried to cast doubt on the validity of
Muggeridge’s stories.  In a shameful attempt to suppress their own
correspondent’s eye witness accounts of mass murder, the stories were
shrunk down in size and instead of being splashed on the front page,
hidden inside the newspaper.

The positioning of the story suggested to readers and other journalists,
who might have also pursued the story, that the paper itself thought the
reports unreliable.  So few followed up the story of this obscene crime
against humanity.

Muggeridge left the Guardian and the Communist Party and went on to
become one of Britain’s most respected and influential journalists,
known for his wit and moral clarity.

The present disgusting coverage of Ukraine by The Guardian is largely
driven by an un-reformed old communist hack, Jonathan Steele, who is
still smarting from getting the orange revolution coverage all wrong.

He was then responsible for assigning the actions of the Ukrainian
democratic camp to merely following a scenario prepared by the State
Dept and Langley.

He was stung by the criticism leveled by readers and journalists at
his ridiculous coverage.  He claims, for a change probably correctly,
that he received hate mail from Britons of Ukrainian origin. So a
wounded and vain Steele has relentlessly tried to pour cold water on
the Orange Revolution and the pro-democratic and pro-western political
forces in Ukraine.

He is regarded as a font of wisdom by some of his Champagne Socialist
colleagues who still justify the criminal idea of communism despite its
ejection by the people who actually had to live under it.

It is his influence that has led to the Guardian distorting much of its
Ukraine coverage in a very creepy way and making itself an apologist for
another Moscow driven travesty – Viktor Yanukovych’s Party of the

With my best wishes,

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

By Patrick Worsnip, Reuters, New York, NY, Wed, Oct 3, 2007

UNITED NATIONS – Ukraine called on the United Nations on Wednesday
to condemn publicly the man-made famine that killed millions of Ukrainians
during Josef Stalin’s forced collectivization drive more than seven decades

In a speech to the U.N. General Assembly, First Deputy Foreign Minister
Volodymyr Khandogiy also urged the assembly to establish an international
day to commemorate victims of genocides.

Khandogiy said such a day would help people to learn from the past and avoid
crimes against humanity being repeated.

Last November, Ukraine’s parliament formally denounced the 1932-33 famine
as “genocide of the Ukrainian people.” Khandogiy’s speech implied, but did
not specifically state, that the United Nations should also consider it

He said the famine — which historians estimate killed about 7.5 million
people — was “perpetrated by the Soviet totalitarian regime for the purpose
of annihilation of the rural population as the backbone of the Ukrainian

“This horrific crime, which ranks among the worst catastrophes ever
experienced by humankind, is still awaiting international condemnation,”
Khandogiy said.

“We sincerely hope that the United Nations as the collective moral authority
and effective instrument in safeguarding human rights and fundamental
freedoms, will raise its voice and denounce the horrendous disaster,” he

Russia, a veto-holder in the U.N. Security Council, has resisted Kiev’s
requests to acknowledge the tragedy as genocide, fearing that could fuel
anti-Russian sentiment in Ukraine, which has a substantial ethnic Russian

The famine was caused by the requisition of grain to break the spirit of
Ukraine’s farmers. The campaign was the worst of three famines that
gripped Ukraine under Soviet rule.

Never recognized by the Soviet Union, the famine was only commemorated
after the end of communism in 1991, which led to Ukraine and other Soviet
republics winning independence.

The issue remains politically controversial in Ukraine. Only a narrow
majority of Ukrainian parliamentarians approved last November’s bill, long
sought by President Viktor Yushchenko to press for world recognition of
the calamity.

The minister was speaking as a political deadlock gripped Ukraine following
inconclusive elections on Sunday.

During the famine, systematic confiscation of grain and livestock left
millions to die in their homes or in the street, with soldiers dumping
bodies into pits. Cannibalism became rife.

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

By Dmitry Solovyov, Reuters, Wednesday, September 26, 2007

MOSCOW – Former Soviet President Mikhail Gorbachev warned Russians on
Wednesday of the risk of a rebirth of Stalinism, saying their country was in
danger of forgetting its tragic past.

“We should remember those who suffered, because this a lesson for all of
us,” Gorbachev told a conference marking 70 years since the start of Soviet
dictator Josef Stalin’s Great Terror.

“We must squeeze Stalinism out of ourselves, not in single drops but by the
glass or bucket,” Gorbachev added. “There are those saying Stalin’s rule was
the Golden Age, while (Nikita) Khrushchev’s thaw was sheer utopia and
(Leonid) Brezhnev’s neo-Stalinism was the continuation of the Golden Age.”

During the Great Terror, 1.7 million Soviet citizens were arrested between
August 1937 and November 1938, of whom 818,000 were executed, the human
rights group Memorial said.

Historians estimate that up to 13 million people were killed or sent to
labor camps in the former Soviet Union between 1921 and 1953, the year
Stalin died.

Despite Stalin’s record, recent polls have shown many young Russians have a
positive view of the former Soviet leader and there have been attempts this
year to play down his excesses, which have found an echo among the country’s

Fifty-four percent of Russian youth believe that Stalin did more good than
bad and half said he was a wise leader, according to a poll conducted in
July by the Yuri Levada Centre.
A prime-time television documentary drama series at the start of this year
drew critical fire by attempting to portray Stalin in a new light, as a man
with a conscience who sought a relationship with God in his final days.

President Vladimir Putin has never praised Stalin. However, he stirred
controversy at a meeting with teachers when he appeared to play down the
Great Terror, saying Russia “must not allow others to impose a feeling of
guilt on us” and adding that the country had “not had such bleak pages (in
history) as was the case with Nazism.”

A new history teaching manual partly authored by Putin’s chief political
strategist Vladislav Surkov and unveiled in June described Stalin as brutal
but also “the most successful leader of the USSR.”

It gave few details of the Great Terror, instead emphasizing Stalin’s
achievements in rebuilding the Soviet economy after World War Two and
industrializing the country.

“It was namely during his leadership that the country’s area was expanded to
the borders of the former Russian empire (and sometimes beyond them),
victory was gained in the greatest war — the Great Patriotic War,
industrialization was achieved and cultural revolution accomplished,” the
textbook says.

Gorbachev, praised in the West as a man who ended the Cold War but vilified
by many Russians for presiding over the Soviet Union’s chaotic collapse,
triggered a heated discussion at the conference about the new history

“A massive campaign to revise the collective memory is under way,” said
Irina Shcherbakova, a Memorial project coordinator. “We plunge them
(Russia’s younger generation) into half-lies, half-truth, and in the end we
get ready-made cynics.”
LINK: http://uk.reuters.com/article/worldNews/idUKL268062220070926

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

By Dmitry Shlapentokh, The Moscow Times
Moscow, Russia, Thursday, October 4, 2007. Issue 3757. Page 8.

Constructing a new national identity often requires a new vision of the
past. In Ukraine, this phenomenon can be seen in several of Kiev’s museums.

Exhibits at the Museum of the Army of Ukraine show the Ukrainians as
European people who enjoyed monolithic unity while busily liberating
themselves from the “Asiatic” Russians.

Ukrainian history has emerged differently in the other major national
museum, the Museum of Ukrainian History. Russia is still seen as a major
problem, but the flavor of the museum is distinctly different. Russians
often disappear from sight, and Ukraine’s conflicts with everybody else are
also downplayed.

In fact, Ukrainians are presented as self-sustained, peaceful people who
preserve their distinct lifestyles despite being incorporated into a foreign
empire. It seems this image of Ukraine’s past — and implicitly, its
present — is what Ukrainian authorities have tried to develop and

The arrangement of the displays in the Museum of Ukrainian History was
markedly different from what I saw in my youth. There weren’t many changes
in the hall dedicated to the Stone and Bronze Ages, but later periods had
gaping omissions.

Events that were prominent in Soviet days disappeared or were marginalized.
There was practically nothing about the Mongols, presumably because
featuring the Mongol invasion and Mongol yoke would require elaborating
on Russia’s positive role in fighting the invaders.

The Treaty of Pereyaslav in 1654 — the lynchpin of Ukrainian history that
ultimately led to Ukraine’s incorporation into Russia — was reduced to a
marginal episode.

The famous painting depicting this event that had hung prominently in the
museum in Soviet times was taken away. A small note informed visitors that
there was no Ukrainian-Russian unification as such, but rather a Russian
“protectorate” in which Ukraine preserved independence — or some sort of
autonomy that was close to independence.

The reign of Peter the Great and his fight with the Swedes on Ukrainian
territory also posed a big dilemma for the exhibition organizers.
Celebrating Peter’s victories was out of the question.

One option for the museum was to stress the glory of Ivan Mazepa, the
Ukrainian noble who took the Swedish side in the battle and tried to save
his people from the rule of the brutal Asiatics.

The other option was to ignore the event entirely, which is precisely what
the organizers did. As a result, Peter the Great and the Battle of Poltava
disappeared from the exhibit.

In addition, the big hall dedicated to the War of 1812 with Napoleon, an
epic event in European history, also disappeared. Information about the war
was reduced to a picture of Russian general Mikhail Kutuzov and a few

When those who organized the museum moved to the 20th century, they faced
another problem — how to reconcile revolutionary violence with the theory
of national unity, the major premise of the political philosophy of
Ukraine’s elite.

In fact, there was no information whatsoever about the revolutionary
movement. The 1905 Revolution was ignored even though Ukraine was one
of the epicenters of the revolution, especially in cities like Odessa and

The February and October Revolutions of 1917 also disappeared. A typical
visitor to the museum might leave with the impression that the conflict was
not between the Whites and Reds at all but between an independent,
nationalistic Ukraine and the Russian state.

World War II was also marginalized, and nothing was displayed about postwar
Soviet history, implying that the war helped strengthen Ukraine’s
incorporation into a foreign empire — that is, the Soviet Union.

The 2004 Orange Revolution, however, was prominently displayed, suggesting
that it brought Ukraine closer to Europe — its historical destiny.
Incorporation into the European family implied the sacred notion of
“multiculturalism” and ethnic and religious tolerance.

The exhibit pointed out that Ukraine is populated not just by Ukrainians but
also by Tatars and Jews, and all nationalities live in apparent harmony.

There was no information about the Holocaust, possibly because it would
require elaboration on the unpleasant role many Ukrainians played in the
“final solution of the Jewish question.”

The vision of history as science was also quite different from what I
encountered in other museums. The Ukrainian officials all claimed that they
had presented history accurately, and they angrily rejected any notion that
history was arranged to suit current political needs.

The representatives of the Museum of Ukrainian History were much more
open in their views of history as the servant of political necessity. I
talked with an elderly woman who sat in the hall and watched over the visitors,
sharing my amazement at how displays of Ukrainian history had changed
radically since my last visit, more than 30 years ago.

The woman took note of my ironical smile and responded that I had a wrong
view of history. In my view, history is fixed. This is not the case, she
said, because history should follow the lead of current politics.

I told her that what she stated fit the postmodernist vision, which says
that there is no objective truth but just a construction of history, and
that there are only politically correct or politically incorrect views.

She responded that she had never heard of postmodernism or political
correctness, but she fully supported the idea nonetheless.

The presentation of Ukrainian history in the Museum of Ukrainian History
seems to be the image that the Ukrainian elite is trying to spread. It
involves emphasizing Ukraine as an independent political force and ignoring
or minimizing all events where Russia played a prominent and positive role.

I found the same version of history in the Museum of National Art. At one
exhibition dealing with modern art, the curator explained that after 1991,
the paintings dealing with the Great Patriotic War — which were used by
Moscow during the Soviet period to emphasize the unity of Ukrainians and
Russians — had been removed.

Instead, there was a big painting that displayed the entry into Kiev of
Bogdan Khmelnytsky, one of Ukraine’s greatest national heroes.

After my visit of Kiev’s museums, I became even more convinced of the
validity of the quote attributed to Gregory Bateson, the British
anthropologist, social scientist and linguist: “History is as unpredictable
as the future.”
Dmitry Shlapentokh is a professor of history at Indiana University
South Bend.

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

The Associated Press, Kiev, Ukraine, Saturday, September 29, 2007

KIEV, Ukraine: Ukraine on Saturday marked the 66th anniversary of the Nazi
massacre of tens of thousands of Jews and others at a Kiev ravine called
Babi Yar, with President Viktor Yushchenko vowing to promote tolerance and
stem xenophobia.

The Babi Yar massacre has come to epitomize the decimation of Ukraine’s

Jews and be seen as a precursor to the gas chambers of the Holocaust.

The Nazis began the killings on Sept. 29, 1941, and in the course of just
two days they machine-gunned at least 33,771 people, according to their own
records. Bodies of victims choked the ravine.

In the ensuing months, the number of people killed at Babi Yar grew to more
than 100,000, and included Roma, or Gypsies, as well as other Kiev residents
and Red Army prisoners.

A somber Yushchenko, flanked by other senior officials, laid a bouquet of
scarlet roses at the foot of a massive bronze monument commemorating the

“Ukraine will forever preserve the memory of the Babi Yar tragedy,”
Yushchenko said in an address posted on his Web site. “In our country there
is not and will not be a place for ethnic intolerance and enmity, and the
lawlessness of totalitarian regimes will never be repeated.”

Babi Yar was also a symbol of Soviet-enforced silence. For decades the
Soviet Union kept quiet about what happened, and a monument put up after
poet Yevgeny Yevtushenko drew international attention to the massacre with
his 1961 poem “Babi Yar” made no mention of Jews. It was not until 1991, as
the Soviet Union began to crumble, that Jews were allowed to erect a
memorial at the ravine.

Ukraine was once home to a thriving Jewish community; about 20 percent of
Kiev’s population of 875,000 was Jewish before the war. Today, there are
103,000 Jews in all of Ukraine, according to official data, although the
number is believed to be several times higher.

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

By Angela Charlton, Associated Press, Paris, France, Wed, Oct 3, 2007

PARIS – Who is to blame for the killing of 1.4 million Jews in Nazi-occupied
Ukraine? And what can be done now to dispel age-old anti-Semitism in
Ukraine, honor Jewish dead and move on?

For the first time, scholars from around the world shared documents and
knowledge about the Holocaust in Ukraine at a conference this week in Paris
dedicated to this poorly understood passage in Adolf Hitler’s torrent of
terror across the continent.

The talks were not easy, as resentment, frustration and emotion bubbled
repeatedly to the surface among the researchers from Israel, Ukraine,
Germany, the United States and elsewhere.

While no major surprises emerged, pieces of Ukraine’s Holocaust story came
together as never before: killings of Jews in western Ukraine before the
Nazis arrived, botched Soviet orders to evacuate Jews from the encroaching
Germans, mass grave sites only now being discovered – even as long-known
Jewish grave sites are being abandoned, razed or used as open-air markets.

“We cannot underestimate this. It is historic, it is history that … may be
changed based on new information,” said Mikhail Tyaglyy of the Ukrainian
Center for Holocaust Studies.

History books, too, may need to be changed – or written – to explain how an
estimated 1.4 million of Ukraine’s 2.4 million Jews disappeared in just
three years from 1941-1944. After repeated waves of emigration, only about
100,000 remain today, according to official figures.

While the Holocaust has been well-documented in Western and Central Europe,
few have studied what happened when the Nazis overran what is now Ukraine,
Belarus, Moldova and western Russia.

Soviet authorities discouraged such scholarship, content to keep history
books focused on the costly Red Army victory over Hitler’s forces.
State-condoned suspicion of Jews, meanwhile, continued to proliferate as it
had since the pogroms of pre-revolutionary times.

Official indifference continues today. Tyaglyy performed his research in
near-isolation in his native Black Sea peninsula of Crimea, while colleagues
worked in the capital Kiev or in Kharkiv in the east. Ukraine’s central
government has paid their studies little heed.

On Monday, they earned welcome recognition as they joined the dais at the
University of Paris IV-Sorbonne for two days of often electric, sometimes
heart-rending talks. Related discussions were continuing at other venues in
Paris throughout the week.

“This is two totally different universes coming together,” said the Rev.
Patrick Desbois, a French Roman Catholic priest from the Yahad-In Unum, a
Paris-based group documenting Jewish mass graves in Ukraine. He was
referring to the Ukrainian researchers long closed off from the rest of the
world and their well-equipped counterparts in the West.

It was Desbois’ recent work gathering testimonies from Ukrainian Holocaust
witnesses that helped inspire the idea for the conference. These
testimonies, including those of destitute villagers who had rarely, if ever,
spoken about what they saw and did during the war, formed the most powerful
evidence presented.

Some testimonies are on display at Paris’ Holocaust Memorial.
Omer Bartov, a renowned Holocaust expert and history professor at Brown
University, said such testimonies are only one step in understanding the
Holocaust in Ukraine.

He described, for instance, how Ukrainian police started rounding up and
killing Jews in the summer of 1941 in anticipation of the arrival of German
troops in an area of what is now western Ukraine. Little has been written
about these killings in the past.

The question of collaboration haunted this week’s talks. There was no
consensus reached, however, on whether the witnesses interviewed by
Desbois – as well as others since deceased – were willing participants or
were just following orders in whatever actions they took.

Bartov said the gathering was also an important tool for confronting the
apparent disregard for Jewish heritage in Ukraine today. He showed photos of
Jewish schools, synagogues and cemeteries crumbling into disrepair across
western Ukraine.

“I urge more money spent on preserving what there is,” he said. “That would
be a good start for a better relationship.”

He pointed to Poland as an example of a country that is coming to terms with
its role in the Holocaust and is revitalizing Jewish neighborhoods in cities
such as Krakow.

Paul Shapiro, director of the Center for Advanced Holocaust Studies at the
U.S. Holocaust Memorial Museum in Washington, urged Ukraine and the
conference participants to focus next “not just on commemorating Jewish
death but also on celebrating Jewish life” in today’s Ukraine.

Not everyone agreed. One participant asked why Jewish scholars should even
bother studying Ukraine, given its history of hostility toward Jews.

Most Ukrainian participants reveled in the opportunity to share with fellow
scholars, and their presence was crucial to the event. A few, however,
lamented that they were merely “invited to join” the conference and were not
asked to play a larger role in it.

Tyaglyy took a long-term view, saying the history of the Holocaust “is tied
to the history of Ukraine, the controversial, amorphous history of this
country that is still defining itself. That is why today’s leaders are not
touching this question. It is too difficult.”

[return to index] [Action Ukraine Report (AUR) Monitoring Service]
By Laurence Lee, Al Jazeera, Doha – Qatar, Friday, Sep 28, 2007

Ahead of key elections in Ukraine Al Jazeera reports from the region of
Crimea, scene of what some say was the world’s first “modern” conflict,

and now an election battleground as politicians argue over Ukraine’s
relationship with Russia.

If it was in a different place on the map, Sevastopol might be known more
widely as a tourist attraction.

If it was on a different place on the map, you might not see quite so many
memorials to the war dead here, they are everywhere.

Imperial Russia fought the British and French to a standstill on these
shores in the Crimean war.

A century later, Sevastopol became known for its proud resistance to the
Nazi invasion of the Soviet Union.  Hundreds of thousands have died around
here in the last two centuries and everyone, it seems, wants to own
You can see the reason for the current tension as you pass through the
harbour. Until ten years ago, the ships in its port were all part of the
same Soviet fleet.

Now they are divided under Ukrainian and Russian flags, and their respective
commanders must be wondering for how much longer they are likely to remain

If you accept that the current political crisis in Ukraine is an ideological
one, either to maintain historical ties with Russia, or to form new ones
with the West, then here is where you can see it being played out most

It is one thing for Ukrainian and Russian ships to coexist peacefully enough
for the moment. It is quite another, surely, for a future Nato fleet to sit
in the same harbour as a Russian one. Particularly given the current view of
Nato in Moscow.
There is lots about Crimea that is Russian through and through. The language
for one thing, the ways in which people look and behave.

No surprise then that the Party of Regions, which carries half of the vote
here, wants a referendum on keeping Russian as an official language, and
keeping Ukraine out of Nato.

Vadim Kolesnichenko, from the party’s Sevastopol branch, said: “It’s not the
matter of language, it’s a matter of human rights. Everyone has a right to
speak their own language and has a right to defend his culture and
communicate with his friends and relatives using their native language.”

If that sounds diplomatic, the blunter version is espoused by the
communists, still worth tens of thousands of votes, who accuse Nato of
causing disaster wherever it goes, and fear catastrophe if it got its claws
into Crimea.

“Are you ready to die for Nato?” reads one poster, “Not here”. “We don’t
want the Yugoslavian scenario to repeat here or [like in] Afghanistan or the
Caucasus,” Vasily Parkhomenko, of the Ukrainian Communist party, says.

“So we consider the presence of the Russian fleet a guarantor of peace here
in the south of Ukraine. “We know where Nato appears, the blood and
suffering appear as well.”

Even if one day the Russian fleet was forced out by the pro-European,
pro-Nato supporters of the Orange revolution in 2004 there is much else that
would be far harder to shift, a Russian installation cut under a mountain,
for one thing.  No-one here has any idea what it is for, and staying around
it is not a very good idea.

Still, some are prepared to suggest Nato might be a better option for
Crimea, as well as Ukraine in general. “When Ukraine is in Nato relations
with Russia will become more straightforward than they are now,” Sergei
Kluik, a military analyst, says. “There wont be as many arguments with
decision making.”
This time every year they hold a commemoration for the many thousands of
Russians who died in one particularly bloody battle of the Crimean war.

It was particularly special this year, as they found the remains of fourteen
Russian soldiers and gave them the full send off.

This weekend the voters of Crimea will join the rest of the country at the
polls, and a decisive vote one way or the other could lay the ground for
strategic alliances which could have consequences far beyond the horizon.

It is a point worth bearing in mind, since it is young men that tend to pay
the price when the great powers use foreign pieces of land for their great

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

By Sebastian Alison, Bloomberg, Sevastopol, Ukraine, Sep 28, 2007

SEVASTOPOL — For more than 200 years, Russia’s Black Sea fleet has
set sail from the Crimean port of Sevastopol to battle the motherland’s
adversaries — Turkish, British, French and German.

There’s just one problem: Since the collapse of the Soviet Union, Sevastopol
has been a part of an independent Ukraine whose president, Viktor
Yushchenko, wants to join the North Atlantic Treaty Organization. The issue
is central to parliamentary elections on Sept. 30.

The 2017 expiration of the fleet’s lease on its Sevastopol base has
implications for Russian President Vladimir Putin, who has been reasserting
his nation’s military might.

While Russia encourages support for Ukrainian Prime Minister Viktor
Yanukovych, who is seeking closer ties with Moscow, it is also planning for
a new warm-water home for the pride of its navy at Novorossiisk, an oil

Politicians aren’t the only ones grappling with the reverberations. So are
local residents. “It would definitely be a tragedy” if the fleet leaves,
said Vladimir Klyuyev, a retired naval captain who runs the Black Sea
Fleet’s museum in Sevastopol. “People have spent their whole lives here in
the service of the motherland.” Russia’s national pride will suffer if the
fleet goes, he said.

“We’re Russians, the fleet’s Russian, of course we feel badly,” said Irina
Vaskovskaya, who works at the museum and whose father served in naval
bases across Russia before settling in Sevastopol.
Throughout the communist years, the Black Sea was a buffer between NATO
and the Soviet-dominated Warsaw Pact. The politics of the countries
bordering the sea have been transformed since the Soviet Union broke up in 1991.

Romania and Bulgaria are members of NATO and the European Union; Georgia
wants to join both; Turkey, a NATO member since 1952, is a candidate for EU

With Ukraine and its Black Sea coast of 1,400 kilometers (875 miles)
possibly off-limits too, Russia might be relegated to its own 400-kilometer
coastline in a sea it once dominated.

The Russian presence is  “fundamental both to security and economic
stability,” said Andrei Krylov, the Russian Defense Ministry’s spokesman
for the Black Sea Fleet. There are about 5,000 Russian naval personnel in
the port and Russia pays Ukraine $98 million a year in rent. “Twenty
percent of Sevastopol’s budget comes from the fleet,” he said.
The fleet is a tourist attraction: Owners of small boats vie to persuade
visitors to cruise around the port, where more than 20 naval vessels
including destroyers, hospital ships and submarines were moored on a recent

A different bay houses the Ukrainian navy, which that day was hosting a U.S.
vessel. NATO’s presence in the Russian fleet’s home port isn’t a source of
tension, said NATO spokesman James Appathurai. “We cooperate just as
well with the Russian navy as with the Ukrainian one,” he said by

The fleet figures in the Ukrainian campaign. Defense Minister Anatoliy
Hrytsenko, loyal to Yushchenko, said Sept. 18 that the constitution bans
foreign forces on Ukrainian territory.

“The exception is only for the Russian fleet, but only until 2017,” he
said. Pro-Yanukovych Transport Minister Mykola Rudkovsky countered
on Sept. 17 that “if we have a new president after the 2009 elections, it
will be possible to prolong the agreement.”

The fleet’s military effectiveness won’t be much affected by a move, said
Jonathan Eyal, director of International Security Studies at the Royal
United Services Institute in London. “The strength of the Russian navy
should not be compromised,” he said.
The same may not be true for issues of Russian prestige and influence.
Putin, seeking to show Russia’s economic success is matched by political
and military clout, on Aug. 17 ordered the resumption of regular patrols by
strategic bombers, a practice halted in 1992.

Russia this month also tested what it called the world’s most powerful
air-delivered vacuum bomb.

The weapon is four times more powerful than the Massive Ordnance Air
Blast bomb tested by the U.S. military and known as the “Mother of All
Bombs,” according to a report by Russian state broadcaster Perviy Kanal.
This prompted the Russian designers to call their device “the Father of
All Bombs,” it said.

Russia’s commitment to the Black Sea is evident at the ancient, nearby
harbor of Balaklava. Here, in 1957, the Soviet Union built an underground
terminal, carved into rock and all but invisible from outside, as the main
base for the fleet’s submarines.
Secret Project

A 600-meter long tunnel runs from inside the harbor, allowing submarines to
sail straight in for maintenance and repairs. Seven submarines could be
accommodated there. So secret was the project, Balaklava disappeared from
official Soviet maps.

“In the case of a nuclear attack, the base could stand a direct hit by a
nuclear bomb,” reads a guide to the site. It’s now the Balaklava Naval
Museum Complex, for tourists who want to examine gigantic steel doors
and bulkheads designed to protect against fallout.

If tourism is all that remains of the fleet’s presence, neither the port nor
the nation where it’s located will be better off, museum director Klyuyev

“Practically all inhabitants of Sevastopol, and a very big proportion of
Ukrainians, hope common sense will prevail,” he said.
To contact the reporter on this story: Sebastian Alison in Sevastopol,
Ukraine via the Moscow newsroom at Salison1@bloomberg.net
[return to index] [Action Ukraine Report (AUR) Monitoring Service]

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