AUR#894 Apr 1 President Bush in Kyiv Today; Ukraine, The Main Battlefield of Cold War II; Germany Blocks Ukraine & Georgia; Bush & Putin Clash

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

Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World       
                        
ACTION UKRAINE REPORT – AUR – Number 894
Mr. E. Morgan Williams, Publisher and Editor, SigmaBleyzer
WASHINGTON, D.C., TUESDAY, APRIL 1, 2008
 
INDEX OF ARTICLES  ——
Clicking on the title of any article takes you directly to the article.               
Return to Index by clicking on Return to Index at the end of each article
1.  PRESIDENT BUSH IN KYIV, SCHEDULE FOR TUESDAY, APRIL 1
Action Ukraine Report (AUR), Kyiv, Ukraine, Tuesday, April 1, 2008
 
2BUSH STARTS EUROPE TOUR IN NATO ASPIRANT UKRAINE
By Nick Coleman, Agence France-Presse (AFP)
Kiev, Ukraine, Monday, March 31, 2008

3BUSH’S TOUR OF EASTERN EUROPE TO FOCUS ON DIPLOMACY
By Brian Knowlton, International Herald Tribune (IHT)
Paris, France, Monday, March 31, 2008

4UKRAINE TREADS CAREFUL DIPLOMATIC PATH
By Roman Olearchyk in Kiev and Stefan Wagstyl in Moscow
Financial Times, London, UK, Monday, March 31 2008

5U.S. AMBASSADOR WILLIAM TAYLOR: BUSH VISIT WILL
BOLSTER UKRAINE’S CASE FOR NATO

The Associated Press, Kiev, Ukraine, Monday, March 31, 2008

6PRO-RUSSIA ENEMIES OF NATO GIVE BUSH A MIXED
RECEPTION IN UKRAINE

By Tony Halpin in Kiev, London Times, London, UK, Mon, Mar 31, 2008

7BUSH SEES UKRAINE’S MEMBERSHIP OF NATO AS POSITIVE
FOR THE ALLIANCE 

Ukrainian News Agency, Kyiv, Ukraine, Monday, March 31, 2008

8BUSH RECOMMENDING UKRAINE DIVERSIFICATION OF
ENERGY DELIVERIES FOR MAINTENANCE OF STABILITY 
Ukrainian News Agency, Kyiv, Ukraine, Monday, March 31, 2008

9UKRAINE, U.S. SIGN INTERGOVERNMENTAL AGREEMENT

ON SPACE COOPERATION
Interfax Ukraine, Kyiv, Ukraine, Monday, March 31, 2008

10UKRAINE, UNITED STATES SIGN INTERGOVERNMENTAL

Interfax Ukraine, Kyiv, Ukraine, Monday, March 31, 2008
 
11ECONOMY MINISTER AND U.S. AMBASSADOR DISCUSS
PROBLEM OF U.S. OVERSEAS PRIVATE INVESTMENT
CORPORATION (OPIC) BEING CLOSED FOR UKRAINE
Ukrainian News Service, Kyiv, Ukraine, Saturday, March 15, 2008

12UKRAINE, THE MAIN BATTLEFIELD OF COLD WAR II
Geopolitical Diary: Stratfor, Strategic Forecasting, Inc.
Austin, Texas, Friday, March 28, 2008

13OUTSIDE VIEW: OLD, NEW EUROPE CLASH
By Taras Kuzio, UPI Outside View Commentator
United Press International (UPI), Wash, D.C., Mon, Mar 31, 2008

14GERMANY BLOCKS UKRAINE & GEORGIA REGARDING

NATO MEMBERSHIP ACTION PLAN (MAP)
By Hugh Williamson in Berlin, Financial Times
London, United Kingdom, Tuesday, April 1 2008

15BUSH, PUTIN SET TO CLASH AT NATO
Russia Seeks to Stop Georgia, Ukraine From Joining Group
By John D. McKinnon, The Wall Street Journal,
New York, New York, Tuesday, April 1, 2008

16NATO HOLDS KEY TO EUROPEAN CLUB FOR GEORGIA & UKRAINE
By Ron Popeski & Margarita Antidze, Reuters, Kiev/Tbilisi, Mon, Mar 31

17U.S TO RUSSIA:NATO SHOULDN’T BE “FOUR-LETTER WORD”
By James G. Neuger, Bloomberg, Kyiv, Ukraine, Friday, March 28, 2008

18NATO-RUSSIA BREAK: A SIGNIFICANT POSSIBILITY
By Georgeta Pourchot, Director, OLMA/NCR, Political Science, Virginia Tech;
Fellow, Center for Strategic and International Studies, Washington DC
Eurasian Home, Moscow, Russia, Monday, March 31, 2008

19TAKING OFF THE GLOVES
OP-ED: John Marone, Columnist, Eurasian Home website, Kyiv, Ukraine
Eurasian Home, Moscow, Russia, Monday, March 31, 2008

20100 HEAD-OFF STEPS, FIRST 100 DAYS OF NEW GOVERNMENT
Authors: Yelena Boltushkina, Inna Vedernikova, Yulia Mostovaya,
Serhii Rakhmanin, Yuriy Skolotiany, Nataliya Yatsenko
Mirror-Weekly # 12 (691), Kyiv, Ukraine, 29 March – 5 April 2008

 
U.S.-Ukraine Business Council (USUBC), Wash, D.C., Jan 2008
 
Interfax Ukraine, Kyiv, Ukraine, Monday, March 31, 2008
 
U.S.-Ukraine Business Council (USUBC), Wash, D.C., Jan 2008
 
Interfax Ukraine, Kyiv, Ukraine, Monday, March 31, 2008
 
25DIPOL CHEMICAL INTERNATIONAL INC. JOINS THE
U.S.-UKRAINE BUSINESS COUNCIL (USUBC)
U.S.-Ukraine Business Council (USUBC), Wash, D.C., Jan 2008

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1
 PRESIDENT BUSH IN KYIV, SCHEDULE TUESDAY, APRIL 1

Action Ukraine Report (AUR), Kyiv, Ukraine, Tuesday, April 1, 2008

KYIV – The reported schedule for the U.S. President and Mrs. Bush
during their visit in Kyiv on Tuesday, April 1 is as follows:

April 1, 9.00 a.m. 11 Bankova St. the yard in front of the Secretariat of
the President of Ukraine
Official meeting ceremony of the President of Ukraine Victor Yushchenko
and President of the USA George W. Bush.

According to an UNIAN correspondent, Ukrainian President’s Press
Secretary Iryna Vannikova, said the so-called “salute of nations”, which
consists of 21 salvoes, will be fired during the official ceremony of
meeting George Bush in the morning of April 1.

“It is an ancient tradition: when ships entered a friendly port, they fired
to show that they have friendly intentions, that they do not want to insult
people they visit. That is why during visits, which have a “state” status,
the artillery volley is fired”, I.Vannikova said.

She also informed that G.Bush was met at the airport on Monday by 

the President’s Chief of Staff Victor Baloha, Foreign Minister Volodymyr
Ohryzko, Kyiv Mayor Leonid Chernovetskiy, and U.S. Ambassador to
Ukraine William Taylor and Ukraine’s Ambassador to USA Oleh Shamshur.

April 1, 9.20 a.m. 10 Bankova St. Horodetsky House
Meeting between the President of Ukraine Victor Yushchenko and
President of the USA George W. Bush.

April 1, 10.10 a.m. 10 Bankova St. Horodetsky House
Ukrainian-American formal talks in expanded format headed by
the two Presidents.

April 1, 10.50 a.m. Bankova St. Horodetsky House
Ukrainian-American bilateral documents signature ceremony.

April 1, 11.20 a.m., 10 Bankova St. Horodetsky House
Joint press conference of the President of Ukraine and the President
of the USA

April 1, 12.50 p.m. 10 Bankova St. Horodetsky House
Official Lunch by the President of Ukraine for President of the USA.

U.S. President George Bush will be entertained in Ukraine with chicken
Kyiv and cherry vareniks [national curd or fruit dumpling] with cherry.
According to an UNIAN correspondent, Ukrainian President’s Press
Secretary Iryna Vannikova claimed this to a news conference in Kyiv.
 
I.Vannikova also disclosed that the Yushchenko couple is going to
present the Bush couple a big wooden plate, painted by Petrykivsky
manner masters. Members of the American delegation will also receive
Ukrainian national souvenirs.
MONUMENT TO HOLODOMOR VICTIMS

April 1, 13.35 p.m. Mykhaylivska Square
Flower laying ceremony by the two Presidents near the Monument
to Holodomor victims
(Mrs. Kateryna Yushchenko and Mrs. Laura Bush will also take part
in the ceremony)

April 1, 14.35 p.m. Sofiyvska Square
Visit by the two Presidential Couples to Kyivan Sofiya National
preserve

April 1, 15.10 p.m. 19a Prorizna St.
Visit to the School #57
(President of the USA George W. Bush and Mrs. Laura Bush)

April 1, 15.55 p.m. Park of Glory
Flower laying ceremony near the Tomb of the Unknown Soldier
(President of the USA George W. Bush and Mrs. Laura Bush)

April 1, 16.50 p.m. Boryspil airport, military transport terminal
Departure of the President of the USA from Ukraine

 
TYMOSHENKO, YATSENIUK, YANUKOVYCH

There also have been reports by the Offices of Prime Minister Yulia
Tymoshenko, the Speaker of the Parliament Arseniy Yatseniuk and
the leader of the opposition Viktor Yanukovych that these three
leaders will also be meeting with President Bush.
 
U.S. President George W. Bush and Ukrainian Prime Minister Yulia
Tymoshenko will discuss Ukraine’s plans to join NATO and deepening
bilateral trade and economic cooperation. Deputy Prime Minister
Hryhoriy Nemyria told this to journalists on Monday.
“I confirm that President Bush will meet with the Ukrainian Prime Minister
tomorrow. They will touch upon NATO issues and focus on deepening
of trade and economic cooperation between Ukraine and the United States,”
Nemyria said.
 
Verkhovna Rada Chairman Arseniy Yatseniuk will hold a tet-a-tet meeting
with U.S. President George Bush. Yatseniuk told journalists about the
meeting on Monday, asked whether the leaders of parliamentary factions
will also participate in the meeting.
“A tet-a-tet meeting with the U.S. president is foreseen. The tet-a-tet
meeting will be held in the format of the Verkhovna Rada chairman and the
U.S. president,” he said, adding that he would speak with Bush “on behalf
of the whole of the Ukrainian parliament.”
 
US President George Bush will meet with Regions Party Leader Viktor
Yanukovych on Tuesday, according to Regions Party MP Hanna Herman.
“This will be an eye-to-eye meeting,” Herman told Interfax-Ukraine on
Monday.  The times for these meetings have not been announced.
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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2.  BUSH STARTS EUROPE TOUR IN NATO ASPIRANT UKRAINE

By Nick Coleman, Agence France-Presse (AFP)
Kiev, Ukraine, Monday, March 31, 2008

KIEV – US President George W. Bush arrived in Ukraine Monday at the start of
a tour to push NATO allies for more support in Afghanistan and to reach a
compromise with Russia on defence plans.

At talks scheduled for Tuesday with Ukraine’s pro-Western President Viktor
Yushchenko, Bush was expected to stress US support for the country’s plans
to join the NATO military alliance.

Bush will also be “pushing hard” for the alliance to embrace both Kiev and
Georgia as potential members during a NATO summit that starts Wednesday,

US National Security Advisor Stephen Hadley said.

“We think it’s very, very, very important that, Georgia and Ukraine, that we
welcome their aspirations to be part of NATO, that we have an active
engagement in helping them move in that direction,” Hadley said aboard Air
Force One as Bush flew to Europe.

“I believe that NATO benefits and Ukraine and Georgia benefit if and when
there is membership,” Bush said ahead of his visit to Ukraine, where he
touched down late Monday evening.

Analysts predicted however that neither country would be allowed to start
the formal accession procedure at the April 2-4 meeting of alliance leaders
in Romania.

Ahead of Bush’s arrival, protesters demonstrated against accession both on
Ukraine’s politically sensitive Crimea peninsula on Saturday and in Kiev on
Monday.

The protests underlined significant opposition to membership in Ukraine and
by its giant neighbour Russia, whose president Vladimir Putin has been
invited to the Bucharest meeting.

In Kiev, a few thousand protesters on Monday set up tents and hurled abuse
at Bush and NATO. “NATO is war, death and tears,” read one banner, while
another suggested Yushchenko and Prime Minister Yulia Tymoshenko leave the
country.

Amid a delicate patch in relations between Washington and Moscow, Bush is
also to hold weekend talks with Putin in Russia.

Moscow-based defence analyst Pavel Felgenhauer said wider strategic
considerations meant Georgia and Ukraine would not gain an immediate green
light from NATO.

He said Bush was seeking a softening of Russian opposition to US plans to
set up missile defence sites in the Czech Republic and Poland, as well as
Russian agreement to allow NATO supplies to transit through Russia to
Afghanistan.

In part, Bush wants to prove the success of his Republican party’s policy on
Russia and thus support the Republican candidate John McCain in the US
election period, Felgenhauer said. “It’s a grand deal that involves a lot of
things outside — not only Ukraine and Georgia.”

On the presidential plane Air Force One, Hadley expressed hope that Bush and
Putin would resolve their differences over the missile shield during their
weekend talks.

“I think we’re moving in a direction… where Russia and the United States
could have missile defence as an area of strategic cooperation,” he said.

Another theme of Bush’s tour is to persuade NATO states to commit more
troops for Afghanistan, where failure would be seen as a personal blow.
“Part of our collective mission… for the NATO meeting is to encourage
people to take our obligations seriously,” Bush said on the subject.

Hadley returned to the theme.  “We’ve been saying for some time that all of
us need to do more in Afghanistan, and I think you’re going to see countries
coming up and doing more,” he told reporters.

Ahead of Bush’s arrival here, Ukraine’s desire for NATO membership was
stressed by Yushchenko’s chief spokesman, Alexander Chaly.

“We hope the United States will clearly support our ambition to join the
membership action plan,” a formal step towards membership, Chaly said.

Georgia’s President Mikheil Saakashvili was more strident. He warned NATO
against “appeasing” Russia and drew historical comparisons with the
appeasement of Nazi Germany, in an interview with The Financial Times daily
in Britain.

Several NATO states oppose giving Georgia and Ukraine the go-ahead, notably
Germany, which has sought close ties with Putin and Russia’s president-elect
Dmitry Medvedev.

In Kiev, analyst Vladimir Fesenko said Ukraine would not be deterred by
Western hesitancy.  “Ukraine is interested in the process more than the
final result… NATO membership is a pretext for integration with Europe,”
said Fesenko, who heads the Centre for Applied Political Research.
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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3.  BUSH’S TOUR OF EASTERN EUROPE TO FOCUS
ON DIPLOMACY

By Brian Knowlton, International Herald Tribune (IHT)
Paris, France, Monday, March 31, 2008

WASHINGTON: President George W. Bush will be battling this week at the
NATO summit meeting in Romania against Russia’s opposition to eventual
alliance membership for Ukraine and Georgia. And he will be pressing for
greater help in Afghanistan from allies who are weary of the war there and
inclined, in some cases, to put off tough decisions in hopes that the next
American president will be more flexible.

Bush left Washington early Monday for Ukraine, which has been pressing to be
included in a round of NATO accessions following the candidates leading the
queue – Albania, Croatia and Macedonia, whose applications will be decided
at the summit meeting.

He then flies to Bucharest for the NATO meeting on Wednesday and Thursday,
before traveling briefly to Croatia, and then to Sochi, a Russian city on
the Black Sea, for talks with President Vladimir Putin on U.S. plans for a
missile-defense system based in Eastern Europe.

The rancorous disputes over Ukraine and Georgia, over greater troop
contributions for Afghanistan, and over the missile-defense plan – which
Bush sees as a cornerstone of his legacy but which Putin strongly opposes –
all point to a fairly extraordinary week of diplomacy for a president who at
times has seemed almost allergic to foreign travel.

Bush signaled Monday that he was prepared to compromise on one of the
tougher aspects of the Afghan issue, even as the NATO chief executive, and
officials in Ukraine and Georgia, employed tough tones in warning that
Russia should not be allowed to dictate NATO’s membership decisions.

Asked in an interview in the German daily Die Welt whether he would ask
Berlin to send troops to southern Afghanistan, where the fighting is
toughest, Bush made a surprising concession, saying, “No, that won’t
happen.” He said it was important for the summit meeting to have outcomes
that Chancellor Angela Merkel could live with.

Opinion in Germany is strongly against the deployment in Afghanistan.

But as recently as February, Defense Secretary Robert Gates had warned that
NATO risked becoming a two-tiered alliance, with “some allies willing to
fight and die to protect people’s security, and others who are not.” He had
called for Germany to send ground troops to southern Afghanistan.

Canada, which bears much of the burden of fighting in southern Afghanistan,
has threatened to pull its troops out unless it gets help. But France, which
under President Nicolas Sarkozy has said it is considering rejoining the
military wing of NATO, has indicated that it may send an additional 1,000
troops.

The United States, with 26,000 troops in Afghanistan, plans to send an
additional 3,200 marines.

On Monday, NATO’s secretary general, Jaap de Hoop Scheffer, said that Russia
could not stop Ukraine and Georgia from joining the alliance, The Associated
Press reported from Brussels. But he added that, given Russia’s opposition,
the decision to put the former Soviet republics on a track to membership
might be delayed.

“In my opinion, it is not a matter of whether, but when” the two countries
join the alliance, he told news agencies.

De Hoop Scheffer said that Putin, who will meet with the alliance leaders in
the margins of the NATO meeting, could not veto Georgia and Ukraine’s
applications, but he did acknowledge that Russian opposition “was a factor”
affecting the debate.

Earlier, de Hoop Scheffer told the Financial Times that the “pieces are
coming together” for a bolstered Afghanistan contingent. He said he was
confident that the French would announce a fresh troop contribution and that
Canada, which had threatened to leave Afghanistan unless other countries
provided sufficient back-up, would “get the support they have asked for.”

In Georgia, President Mikhail Saakashvili warned NATO against “appeasing”
Russia. Failure to move forward on membership for Georgia and Ukraine, he
said, would be taken by the Russians “as a signal that they should act even
tougher, and they will be even tougher, and they will be even more
aggressive and provocative.”

In Kiev, where a few thousand leftists demonstrated against Bush and NATO
just hours before his arrival there, Ukrainian officials expressed
confidence on Monday that they would win approval this week for the first
step in a bid to join NATO, Reuters reported.

Ukraine and Georgia are hoping to secure a so-called Membership Action Plan,
the first step in a candidacy for full membership. Ukraine’s top foreign
policy adviser, Oleksander Chaliy, predicted a “positive reply” from NATO.

But Bush, referring to both Georgia and Ukraine, told Die Welt that he
supported their eventual membership, even though he declined a chance to
predict that their candidacies would be advanced in Bucharest.

“I believe it is in our interest to give Georgia and Ukraine a clear
perspective,” he said. His comments were translated from the German; the
White House said no English-language translation was immediately available.
Bush has seemed of late to modulate his comments on Georgia and Ukraine.

Asked about reported comments from the man set to succeed Putin in the
presidency, Dmitri Medvedev – that Medvedev opposed Ukraine’s membership in
NATO because it enjoyed little support among Ukrainians and because no
country wanted to share borders with a foreign military bloc – Bush replied
that for a country to share borders with democracies was “good and not bad.”
And people in other countries, he said, had moved from initial doubts about
NATO membership to strong support.

The president emphasized that no NATO troops would be permanently based in
Ukraine.

It remained unclear whether Bush’s bid to leave a trans-Atlantic legacy by
helping usher Albania, Croatia and Macedonia into NATO would be able to
overcome internal divisions, including a dispute with Greece over
Macedonia’s name and questions about the readiness of the three for
membership.

Bush announced Wednesday that he had accepted an invitation from Putin to
visit Russia, probably April 5 and 6, in what was seen as an effort to avoid
a public clash over NATO and missile defenses during Bush’s European
travels.

The administration wants to base parts of a missile defense system in Poland
and the Czech Republic, but Russia strongly opposes the plan. White House
advisers suggested last week that greater efforts to make the installation
“transparent” to Russia might help overcome that opposition. Bush said last
week that he was “cautiously optimistic.”
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LINK: http://www.iht.com/articles/2008/03/31/europe/kiev.php?page=1
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]

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4.  UKRAINE TREADS CAREFUL DIPLOMATIC PATH

By Roman Olearchyk in Kiev and Stefan Wagstyl in Moscow
Financial Times, London, UK, Monday, March 31 2008

When US President George W. Bush stops off in Ukraine on Tuesday he will
hope to leave a better impression than his father, George H.W. Bush, who in
1991 visited Kiev to warn the republics emerging from the collapsing Soviet
Union against “suicidal nationalism”.

Four months after he delivered what was quickly dubbed the “Chicken Kiev”
speech, Ukrainians voted for independence and the Soviet Union rapidly
passed into history.

Although Mr Bush Sr later explained that he had been trying to stop
Ukrainians from doing “something stupid”, his words were widely seen
as a futile attempt to prop up Soviet leader Mikhail Gorbachev.

Mr Bush Jr arrives in less apocalyptic times but still faces a difficult
challenge. He must demonstrate Washington’s support for Ukraine on the eve
of a Nato summit even though the summit later this week is likely to reject
or delay Kiev’s bid for a membership action plan – a Nato pre-accession
agreement.

While Washington backs Ukraine’s Map application – and a similar bid from
Georgia – leading European states are opposed for fear of provoking Russia,
which is furious about what it sees as the alliance’s advance into its
neighbourhood.

Before leaving Washington, Mr Bush made clear the US was committed to
drawing Ukraine and Georgia into Nato, even though he was unable to make
concrete announcements. He said: “I do know that one of the signals we’re
going to have to send, and must send, is there is a clear path forward for
Ukraine and Georgia.”

The Ukraine that he visits on Tuesday is quite different from the country
his father saw 17 years ago. Then, Ukraine was on the threshold of its
biggest upheaval since the second world war, with independence followed
by the disintegration of the planned economy and of communist power.

There were sighs of relief when the new country voluntarily gave up its
post-Soviet nuclear arsenal. But Ukraine suffered years of political turmoil
and economic dislocation before it recovered its stability in the late 1990s
under authoritarian President Leonid Kuchma, who tried to steer a course
between Russia and the west.

In the 2004 Orange Revolution Ukrainians revolted against Mr Kuchma’s
oppressive rule and backed the western-oriented Viktor Yushchenko for
president. The past three years have seen a ceaseless power struggle between
Mr Yushchenko and his rivals, but multi-party democracy has taken root,
bolstered by a surge in economic growth and unprecedented foreign
investment.

Mr Yushchenko has resolutely pursued membership of Nato and the European
Union, despite divisions at home and considerable caution among his would-be
western partners.

Leonid Kravchuk, chairman of Ukraine’s Supreme Soviet in 1991 and later the
first democratically elected president, said Ukraine today was a far cry
from 17 years ago.

“Bush Sr was aiming to preserve the USSR to maintain stability, his biggest
concern being the fate of the nuclear arsenal. Bush Jr has a completely
different view of Ukraine than his father.” Mr Kravchuk said the visit’s aim
was to bolster support for Nato in Ukraine, which was now recognised as a
viable independent state and partner.

However, in one respect Ukraine is still in the same position as in the
early 1990s – it remains subject to the competing pulls of Moscow and the
west. While support for future EU accession is high, public backing for Nato
is low, at about 30 per cent.

Mr Yushchenko has battled to increase support and convince Moscow his
country will not become an anti-Russian border post.

Ahead of Mr Bush’s visit, Mr Yushchenko told the Financial Times his country
would not house foreign military bases as a Nato member and, thus, pose no
threat to Russia.

Kiev had proven its dedication to collective security in giving up its
nuclear arsenal and in peacekeeping missions, Mr Yushchenko said.

Mr Kravchuk predicted Ukraine would eventually join both Nato and the EU,
despite the uncertainty on timing. “The process has been difficult, painful
and longer than expected, but we are no doubt set on this course.”

Mr Kravchuk, who has opposed swift Nato entry, was concerned about souring
relations with Moscow. He said that by joining Nato and the EU, Ukraine
would shed its role as a geopolitical chip manipulated by Washington and
Moscow. “Then nobody will be able to push Ukraine around.”

“In the past, when the US made a major decision on Ukraine, they first
looked to see what the reaction of Russia would be. This is still happening,
but now world leaders see Ukraine as a future Nato and EU member,” Mr
Kravchuk added.
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http://www.ft.com/cms/s/0/98ad23da-ff6f-11dc-b556-000077b07658.html
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
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5.  U.S. AMBASSADOR WILLIAM TAYLOR: BUSH VISIT
WILL BOLSTER UKRAINE’S CASE FOR NATO

The Associated Press, Kiev, Ukraine, Monday, March 31, 2008

KIEV – U.S. President George W. Bush’s visit to Ukraine will bolster this
ex-Soviet republic’s chances of starting the process toward NATO membership,
American Ambassador William Taylor said Monday.

Bush arrived in Kiev late Monday for a two-day visit aimed at showing U.S.
support for Ukraine’s membership bid.

After Kiev, Bush travels to Bucharest, Romania, for a NATO summit that is
turning into a critical test for the alliance, which is split on the issue
of Ukraine and Georgia.

Ukrainians are also split on the prospect of joining NATO. Hours before Bush
was to arrive, several thousand protesters rallied outside the U.S. Embassy,
shouting “Yankee, go home” and burning his effigy.

The United States, Canada and Eastern European members back the two
ex-Soviet republics. Germany is leading Western European opposition and
warns that granting the membership plan would torpedo hopes of improving
relations with Russia, which fiercely opposes NATO’s further eastward
expansion and has been lobbying NATO members.

Taylor told reporters that during his visit, Bush will seek to convince
skeptics in the alliance that Ukraine deserves an initial welcome.

“Strong statements coming from the leadership, the government of Ukraine are
very useful in that regard,” Taylor said.

“President Bush is also eager to talk himself with these leaders and with
other people in this city so that he can go to Bucharest with even stronger
arguments,” he said.

Moscow has threatened to target nuclear weapons at Ukraine if it joins NATO
and accepts the deployment of anti-missile defenses on its territory. Moscow
also has warned it could recognize two Georgian breakaway provinces –
Abkhazia and South Ossetia – if Georgia is given membership.

“The sharpest problems are Georgia and Ukraine. They are being impudently
drawn into NATO. Even though, as is known, the overwhelming majority of
Ukrainians are against this and in Abkhazia and South Ossetia they won’t
even hear of it,” Russian Foreign Minister Sergey Lavrov said in an
interview published Monday in the Russian daily Izvestia.

“We honestly say that this cannot but have consequences, first of all in
geopolitics but also economically,” he said.

Meanwhile, President Mikhail Saakashvili of Georgia – a strong U.S. ally
visited by Bush in 2005 – again made his case for joining NATO. In an
interview published Monday in the Russian daily Kommersant, he said bowing
to Moscow’s threats would further destabilize the Caucasus.

“All these statements aren’t just words after all, it’s playing with fire,”
Saakashvili was quoted as saying. “In the Caucasus there isn’t much distance
between statements and automatic weapons and mortar fire. You have to
remember this.”

Even as he pushes for NATO membership, Saakashvili has struggled to bring
South Ossetia and Abkhazia back under government control. Their autonomy is
supported by Russia, which has drawn parallels between their status and that
of Kosovo.

In the interview, Saakashvili also said that during his most recent meeting
with Russian President Vladimir Putin, “it was clearly promised to me that
Russia would never recognize Abkhazia and South Ossetia.”

Kremlin spokesman Dmitry Peskov, in a conference call with journalists,
declined to say whether such a promise had been made, but said: “President
Putin has stated numerous times that he stands for the territorial integrity
of Georgia.”

Asked whether alliance membership for Georgia and Ukraine would undermine
the NATO-Russia Council, to which Putin is to speak the day after the
summit, Peskov said: “Let’s not speak of any red lines.”

Russia also has offered more cooperation with NATO in Afghanistan in
exchange for shutting Georgia and Ukraine out of the alliance.

Taylor condemned that offer, saying the two matters are unrelated. “It is
impossible to compare or bargain about the sovereignty and independence of a
country – no linkage between that and some logistical benefits having to do
with Afghanistan,” Taylor said.

More than 1,000 protesters rallied in central Kiev to protest Bush’s visit
and Ukraine’s efforts to join NATO. They waved Communist red
hammer-and-sickle flags and held anti-Bush posters, including many obscene
ones.

“People have the right to express themselves in a democracy,” Taylor said.
“If they do it in a tasteless way – that says more about them than anything
else.”

The crowd swelled to several thousand and marched to the U.S. Embassy.
Authorities closed several central Kiev streets to traffic and some 5,000
police flooded the city to ensure security during Bush’s visit.
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Correspondents Olga Bondaruk in Kiev and Jim Heintz in Moscow

contributed to this story.
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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6.  PRO-RUSSIA ENEMIES OF NATO GIVE BUSH A MIXED
RECEPTION IN UKRAINE

By Tony Halpin in Kiev, London Times, London, UK, Mon, Mar 31, 2008

As workmen painted fresh lines on the road from the airport to the centre of
Kiev to welcome President Bush to Ukraine yesterday, diehard opponents of
Nato were staging their own reception party.

About 3,000 Communist and Socialist party supporters rallied in Independence
Square, the scene of the pro-Western Orange Revolution in the capital,
carrying Soviet-era flags and banners that read “Ukraine against Nato” and
“Nato is worse than the Gestapo”, while an effigy of Mr Bush was set on
fire.

Mr Bush arrives for his first visit to Kiev, before tomorrow’s opening of
the Nato summit in Romania, determined to show his support for Ukraine’s
ambition to join the alliance despite strong opposition from Russia.
However, Nato membership is controversial here, with many in the pro-Russian
east of the country opposed to joining what they consider to be an enemy
organisation.

“Nato is fascism – look how they bombed Yugoslavia. They are occupying
Afghanistan, and America has destroyed Iraq,” Vasily, 70, who served in the
Soviet Army for 27 years, said. “We want nothing to do with it; we are for
Russia and Russia is for us.”

Mikhail Toporov, 70, said that he supported Nato membership. He told The
Times: “During the war I ate American bread and they helped us a lot, but
everybody has forgotten that now. Nato is not our enemy.”

President Yushchenko and Yuliya Tymoshenko, the Prime Minister and his ally
in the 2004 revolution, regard Nato membership as a key to Ukrainian
security and independence. Russia, however, views Nato expansion as a threat
and President Putin said recently that Moscow would aim its nuclear missiles
at Ukraine if it joined the alliance.

Despite Mr Bush’s support, Nato is split over offering an action plan to
Ukraine and Georgia setting out the steps necessary for membership.
President Basescu of Romania has urged members to give them “the chance to
accomplish their wish”, but invitations must be offered unanimously, and
Germany, Spain and Italy are among the opponents.

Angela Merkel, the German Chancellor, said: “A country should become a Nato
member not only when its temporary political leadership is in favour but
when a significant percentage of the population supports membership,”
Georgia has offered to send a 500-strong force to join Nato’s operations in
Afghanistan, an unnamed source in the Defence Ministry said yesterday. It
has contributed no troops to Afghanistan, although 2,000 are serving in Iraq
as part of the USled coalition.

Mr Putin will attend the Romania summit and hold further talks with Mr Bush
at the Russian resort of Sochi afterwards. Russia is offering increased
cooperation with Nato over Afghanistan provided its security interests are
taken into account
————————————————————————————————
http://www.timesonline.co.uk/tol/news/world/europe/article3656272.ece
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7.  BUSH SEES UKRAINE’S MEMBERSHIP OF NATO AS

POSITIVE FOR THE ALLIANCE 
 
Ukrainian News Agency, Kyiv, Ukraine, Monday, March 31, 2008

KYIV – U.S. President George Bush has said Ukraine’s membership of

NATO will benefit the alliance. Bush gave his position in an interview with
the Inter TV channel.

He said his opinion was that Ukraine’s aspiration to join NATO was good both
for Ukraine and for NATO. Ukraine’s joining NATO is a good policy, he said.

Bush said he did a lot of work so that Ukraine and Georgia would receive
specific perspectives at the NATO summit in Bucharest.

He said he really thought it was important that the future of Ukraine and
Georgia be outlined clearly after the NATO summit in Bucharest where the
decision was to be made.

Bush said he had made his intentions clear on the question and worked on the
matter and the result would be seen on the day of the summit in Bucharest.

Bush noted that the NATO Membership Action Plan was not the same as the
membership of NATO, but it would be only the right to join the process of
submission of an application for membership.

The Ukrainian people are to make a final decision whether or not Ukraine
will join NATO, Bush said.

If the Ukrainian people say “no” by the end of the process, this will be the
decision of the Ukrainian people, Bush said.

He noted, however, that NATO should consider attentively the position of
Ukrainian officials that were elected by people.

As Ukrainian News earlier reported, President Viktor Yuschenko will visit
Romania to take part in the Bucharest NATO summit on April 2-4. Yuschenko

hopes Ukraine will join the NATO Membership Action Plan at the summit.
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========================================================
8.  BUSH RECOMMENDING UKRAINE DIVERSIFICATION OF
ENERGY DELIVERIES FOR MAINTENANCE OF STABILITY 
 

Ukrainian News Agency, Kyiv, Ukraine, Monday, March 31, 2008

KYIV – US President George Bush is recommending that Ukraine diversify

the delivery of energy carriers for the maintenance of its stability. He said
this in interview with TV channel Inter. It is important to diversify the
deliveries in order to avoid dependence on one country, Bush said.

He exemplified the US, which receives crude oil from Canada and Mexico,

as well as from other countries. In the opinion of Bush, it is also important
for stable supplies to make relevant contracts transparent.

The US President recommended that Ukraine use different energy carriers

and show interest in new technologies enabling this country to become less
dependent on specific kinds of fuel.

Ukraine has nuclear power industry often receiving materials for it from one
source, when diversification is needed there, Bush said adding that nuclear
power industry makes one less dependent on hydrocarbons.

As Ukrainian News reported, in early February President Viktor Yuschenko
ordered the Cabinet of Ministers to start talks on diversification of
natural gas supplies to Ukraine.  In February, Yuschenko ordered the Cabinet
of Ministers to guarantee diversification of nuclear fuel supplies before
2009.

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9.  UKRAINE, U.S. SIGN INTERGOVERNMENTAL AGREEMENT
ON SPACE COOPERATION

Interfax Ukraine, Kyiv, Ukraine, Monday, March 31, 2008

KYIV – Ukraine and the United States have signed a new framework agreement
on cooperation in the exploration and use of space for peaceful purposes.

Head of the National Space Agency of Ukraine Yuriy Alekseev and U.S.
Ambassador to Ukraine William Taylor signed the document in Kyiv on

Monday, an Interfax-Ukraine correspondent has reported.

The document, which was signed ahead of U.S. President George W. Bush’s
official visit to Ukraine, sets out the legal base for developing space
cooperation between Ukrainian and U.S. companies.

The agreement is expected to favor the overall development of long-term
space cooperation between Ukraine and the United States and to ensure the
possibility of the proper implementation of joint projects and initiatives
representing mutual interest for the countries’ scientific, technical,
industrial and investment activities.

As reported, the new agreement was drawn up because the validity period of a
similar document, signed in November 1994, has expired, and there are also
new opportunities to extend partnership between the countries.
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10.  UKRAINE, UNITED STATES SIGN INTERGOVERNMENTAL

AGREEMENT ON TRADE, INVESTMENT COOPERATION
 
Interfax Ukraine, Kyiv, Ukraine, Monday, March 31, 2008

KYIV – Ukraine and the United States signed an intergovernmental agreement
on trade and investment cooperation at Ukraine’s Foreign Ministry on Monday,
the ministry’s press service has reported.  Ukrainian Economy Minister
Bohdan Danylyshyn and U.S. Trade Representative Susan Schwab signed

the agreement.

The main goal of the document is extending and strengthening economic
relations between the countries upon Ukraine’s accession to the World Trade
Organization.  The signed agreement will deepen trade and investment
cooperation between Ukraine and the United States.

The document also foresees the creation of the permanently operating
Ukrainian-U.S. council on trade and investment.

Representatives of the Ukrainian Economy Ministry and the Office of the
United States Trade Representative will head the council.  Another goal of
the document is a start of talks on signing a free trade agreement with the
United States.
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11.  ECONOMY MINISTER AND U.S. AMBASSADOR DISCUSS
PROBLEM OF U.S. OVERSEAS PRIVATE INVESTMENT
CORPORATION (OPIC) BEING CLOSED FOR UKRAINE
 
Ukrainian News Service, Kyiv, Ukraine, Saturday, March 15, 2008

KYIV – Economy Minister Bohdan Danylyshyn and U.S. Ambassador to

Ukraine William Taylor have discussed questions related to the revival
of the Overseas Private Investment Corporation (OPIC) in Ukraine.

Ukrainian News learned this from a statement by the press service of the
Economy Ministry, the wording of which was made available to the agency.

“Danylyshyn voiced hope that the settlement of the relations of Ukraine with
the Overseas Private Investment Corporation will improve the investment
environment in Ukraine and attract private investment,” the statement reads.

As Ukrainian News earlier reported, in 2007, the Overseas Private Investment
Corporation offered that the Ukrainian government pays USD 34 million

[USD 34 million is not correct, the number is more like USD 17 million –
AUR Editor] as reimbursement for losses of Alliant Techsystems which
with Alliant Kyiv serving as intermediary was engaged in recycling of
Ukrainian ammunition from 1993 to 1999 when it left the Ukrainian market
following business disagreements with the Ukrainian side.

The money invested by Alliant Techsystems into the project had an insurance
cover from OPIC.  OPIC has for a long time requested the Ukrainian
government to compensate for these losses.

OPIC is an independent agency of the federal government of the United States
that provides commercial services, including insurance of American companies
operating abroad against political and economic risks.
————————————————————————————————

NOTE:  Reliable sources in Kyiv say the problem of the U.S. Overseas
Private Investment Corporation (OPIC) being closed for Ukraine will not
be resolved during the visit of President Bush. This problem has existed
since 1999 and the government of Ukraine has not been willing to assume
responsibility for resolving the issue and enter into serious negotiations
to reach a settlement and then implement the agreement.  A real opportunity
to resolve the OPIC issue has now been lost.  AUR Editor
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========================================================
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========================================================
12.  UKRAINE, THE MAIN BATTLEFIELD OF COLD WAR II

Geopolitical Diary: Stratfor, Strategic Forecasting, Inc.
Austin, Texas, Friday, March 28, 2008

Ukrainian President Viktor Yushchenko said on Thursday that no NATO
bases would be deployed in his country in the event that Kiev became a
member of that organization.

Citing Ukraine’s Constitution, which forbids the establishment of foreign
military bases in the country, Yushchenko said, “Some people are spreading
the fable that there will be a NATO military base in Sevastopol. There will
be no base.” This statement comes within three weeks of Kiev saying it had
abandoned its bid for membership in the Western military alliance.

This is not the first time Ukraine has done such a flip-flop. On the
contrary, this oscillation between aligning with the West and placating
Russian concerns has been the hallmark of the country’s behavior for some
years now – if not historically.

Structurally, Ukraine is divided between the people in the western part of
the country, who want to align with the United States and Europe, and the
people in the eastern part, who are looking eastward toward Moscow.

The ill-fated Orange Revolution of late 2004/early 2005 – which failed to
bring the country under Western influence — complicated things. It
exacerbated the divisions within the country, creating a stalemate between
the two sides.

Ukraine’s geopolitical position has failed to allow the country to break its
dependence on and past with Russia. As a result, on a larger geopolitical
scale, the United States and Russia are locked in a long-term tug-of-war
over Ukraine.

In fact, Ukraine represents the major arena in which Cold War II is being
played out between Washington and Moscow. Ukraine is of critical importance
to both sides. For the United States, a successful extraction of the country
from the influence of Moscow – not to mention NATO’s arrival on Moscow’s
doorstep – means relegating Russia to the status of a declining regional
power.

Conversely, and more importantly, for Russia, it is not just about its
efforts to revive the bipolar world, but it is an issue of survival.

The loss of Ukraine could critically weaken the Kremlin. It is not merely a
buffer separating Russia from the West; it is integrated into the Russian
industrial and agricultural base. This is why Moscow has been using the tool
of natural gas cutoffs and coercion by the FSB to keep Ukraine’s leadership
in check.

Moreover, Moscow has laid out the consequences of Kiev teaming up with
NATO, saying it will point missiles at its neighbor if it were part of the
alliance.

Moscow, however, can take comfort from the fact that there is no consensus
within the West regarding Ukraine’s entry into NATO. The Europeans,
particularly Germany, do not share Washington’s level of enthusiasm for
Kiev’s assimilation into NATO.

Uninterrupted supply of Russian gas via Ukraine is of far greater value to
the Central and Eastern Europeans than any grandiose plans to secure the
downfall of Russia. It isn’t that Germany is against Ukraine joining the
West, but that it would rather pick that fight another day – preferably when
Europe wasn’t so dependent on Russia for energy.

But it is Ukraine that is being tugged and pushed from all sides, leaving it
to balance precariously between surviving with a very aggressive Russia to
its east, ambivalence to its west and a Washington eager to use Kiev as its
pawn to stick it to Moscow.

For the next week, Ukraine will toe the line – not accepting or rejecting
the other and waiting for the United States and Russia to decide how far
this battle will go.

In short, Ukraine is not just the premier battlefield of Cold War II, but a
more-or-less permanent standoff arena — unless, of course, one side
decides to back off, which isn’t about to happen anytime soon.
——————————————————————————————
LINK: www.stratfor.com
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13.  OUTSIDE VIEW: OLD, NEW EUROPE CLASH

By Taras Kuzio, UPI Outside View Commentator
United Press International (UPI), Wash, D.C., Mon, Mar 31, 2008

WASHINGTON – President Bush’s two-day visit to Kiev on the eve of
NATO’s April 2-4 summit in Bucharest, Romania, is his first visit to Ukraine
and therefore long overdue. His predecessor, Bill Clinton, visited Ukraine
on three occasions. Bush’s visit to Ukraine ahead of the NATO summit is
seen as a strong show of U.S. support for NATO enlargement to Ukraine
and Georgia.

Bucharest will be dominated by two issues, NATO’s ongoing difficult military
operation in Afghanistan and NATO enlargement. Both issues divide
trans-Atlantic relations at a time when relations between Old and New Europe
have only partially recovered since their nosedive five years ago this month
during the run-up to the invasion of Iraq.

At the center of both issues is Germany’s newly assertive nationalism that
first found widespread public expression during the summer 2006 World Cup.
Divisions over Afghanistan and NATO enlargement reflect an organization
fundamentally divided between Old Europe led by Germany and New Europe
led by the United States.

Standing behind Germany is Russia in a new pact that has historic precedents
and opens up strategic questions for the future of European security. German
Chancellor Angela Merkel held two days of talks with Russian President
Vladimir Putin in Moscow on March 8, two days after NATO’s meeting of
NATO ministers of foreign affairs. Germany’s opposition to NATO
enlargement to Ukraine and Georgia perceptibly hardened.

ISAF includes 43,250 troops from 40 countries. In addition to most NATO
members, four countries seeking NATO membership (Albania, Croatia,
Macedonia, Georgia) have also contributed forces. While France contemplates
increasing its troops in Afghanistan, and even re-joining NATO’s military
arm, Germany continues to reject calls to increase its troop size and deploy
it to the south where NATO forces are battling Taliban forces.

Dwarfing Afghanistan are divisions between Old and New Europe over NATO
enlargement. While Albania, Croatia and Macedonia’s membership of NATO is
uncontroversial within Old Europe, and they are therefore likely to receive
invitations to join NATO in Bucharest, NATO enlargement to Ukraine and
Georgia has revealed deep divisions.

The United States has lobbied intensely within NATO for Membership Action
Plans, widely understood to be the preparatory stage for NATO membership, to
be offered in Bucharest to Ukraine and Georgia. A letter backing MAPs for
Ukraine and Georgia was sent to NATO last week signed by Canada and nine New
Europe members of NATO that joined the organization during two earlier waves
of enlargement in 1999 and 2004.

Germany is Old Europe’s chorus leader within NATO against inviting Ukraine
and Georgia into MAPs. Looking toward Ukraine, Merkel has argued that low
popularity is a major problem while in the case of Georgia she has pointed
to two frozen conflicts in Abkhazia and South Ossetia. Both issues are red
herrings that merely seek to mask Germany’s real motives for opposing
NATO’s fourth enlargement since the end of the Cold War.

During Ukraine’s 17 years of independence, popular support for joining NATO
has fluctuated between one-third and one-quarter. A large number of
Ukrainians remain undecided and as a swing group could be persuaded to
support NATO aspirations ahead of a referendum that is traditionally held
many years after entering a MAP on the eve of joining NATO.

Ukraine’s support for NATO membership is no lower than most post-communist
states that joined in earlier enlargements. Of NATO’s 10 new members, only
Poland and Romania had high levels of support while the remainder had levels
reminiscent of Ukraine before their governments launched information
campaigns. Georgia’s 72 percent high support for NATO membership is
therefore akin to Poland’s and Romania’s.

Ukraine’s Russian-speaking population, often touted by Old Europe as another
obstacle to Kiev’s NATO aspirations, is the same size as that of Estonia and
actually far smaller than that of Latvia. Riga, like Kiev, is a
Russian-speaking city. NATO already includes two countries with large
Russian-speaking populations and four countries that border Russia.

Ukraine’s 14-year record of cooperation with NATO is extensive. Ukraine
joined NATO’s Partnership for Peace in 1994 and has been one of the most
active members. Three years later NATO and Ukraine signed a Charter on
Distinctive Partnership in Madrid.

Ukraine outlined its intention to join NATO in July 2002, two years ahead of
the election protests that came to be known as the Orange Revolution.
President Viktor Yushchenko has relied on legislation introduced under his
predecessor, Leonid Kuchma, who together with Prime Minister Viktor
Yanukovych laid out Ukraine’s goal of achieving NATO membership by 2006.

In diplomatic language reminiscent of Old Europe’s opposition to Turkish
membership in the EU, Germany seeks to offer Ukraine and Georgia an unclear
compromise that would be allegedly less provocative to Russia than a MAP.
Germany, like France and Austria, is supportive of only offering Turkey a
vacuous “Enhanced Agreement” rather than EU membership.

Any new initiative less than a MAP will only sow further confusion as a
compromise has already been in place for the last five years, the annual
Action Plan developed by NATO for Ukraine that is little different from a
MAP.

Former U.S. Ambassador to Ukraine Steven Pifer said, “We told Ukrainian
officials in early 2003 that the NATO-Ukraine Action Plan agreed at the
November 2002 Prague summit was 90-95 percent of a MAP. The main
difference was in the title.” Ukraine has already successfully completed
five Action Plans.

Both Ukraine and Georgia are young democracies that see the future of their
countries in the Euro-Atlantic community of nations. Their democratic
progress is far greater than Romania or the three Western Balkan states when
they were invited into MAPs at the end of the 1990s.

Not extending MAPs to Ukraine and Georgia, after they have already
successfully passed most of the required stages, would be widely seen as
generating doubts over NATO’s longstanding open-door policy and would
deepen divisions within the Alliance that is still recovering from the Iraq
crisis.

In deferring a decision on MAPs for Ukraine and Georgia, NATO will have
served to move its goalposts for geopolitical ends and in doing so show that
Russia does indeed have a veto that is delivered through Berlin.
————————————————————————————————
Taras Kuzio is a research associate at the Institute for European, Russian
and Eurasian Studies at George Washington University and a former head
of the NATO Information and Documentation Office in Kiev.
———————————————————————————————–
United Press International’s “Outside View” commentaries are written by
outside contributors who specialize in a variety of important issues. The
views expressed do not necessarily reflect those of United Press
International. In the interests of creating an open forum, original
submissions are invited.
———————————————————————————————–
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14.  GERMANY BLOCKS UKRAINE & GEORGIA REGARDING

NATO MAP

By Hugh Williamson in Berlin, Financial Times
London, United Kingdom, Tuesday, April 1 2008

Leaders of Nato were last night seeking a face-saving compromise over the
organisation’s possible enlargement after Germany insisted it was “not the
right time” to allow Ukraine and Georgia to take a significant step towards
membership.

As Nato prepares to convene for its annual summit in Bucharest tomorrow,
Angela Merkel’s government made clear that it would veto a US drive to allow
both former Soviet republics to join the defence alliance’s membership
action plan (Map).

As a result, Nato must now find a formula in its summit communiqué that does
not embarrass Georgia and Ukraine but that also avoids angering Russia,
which has made clear that it is opposed to Map being offered to the two
states.

Germany’s insistence on blocking Map status now means the 26-member alliance
will be engaged in some tricky diplomacy at Bucharest. In an interview with
the FT this week, Mikhail Saakashvili, Georgia’s president, said that he
would not accept any of the numerous compromises being drafted: “Anything
that is not Map is a great Russian victory.”

Ms Merkel’s spokesman said internal factors – political unrest in Georgia
and divisions over Nato membership in Ukraine – meant they were “not yet
ripe” to gain Map status, the final step before becoming an alliance member.

Russia’s “legitimate security concerns” regarding Nato’s possible eastward
enlargement must be considered by the alliance. He rejected suggestions by
Georgia, Estonia and others that denial of Map status would amount to giving
Russia a huge say in Nato’s internal affairs. “There is certainly no Russian
veto.”

Germany has previously signalled its concerns over Georgia and Ukraine
winning Map status, but this is the first time Berlin has explicitly ruled
out backing the two countries this week.

Ms Merkel had discussed her position with US President George W. Bush,
but had not changed her stance in spite of his opposing view. “Mr Bush
knows our position,” the spokesman said.

Among the European Union’s larger member states, Germany has been
most willing in recent years to take into account Russia’s security worries.

German officials were sceptical yesterday about the US view that Nato
membership for Georgia and Ukraine would help bring stability and added
security to the region.

“We have to weigh up how much security we will win and how much we will
lose,” one person familiar with Berlin’s stance said. Berlin fears that a
deal on Map status would lead to Russia being less willing to find accords
with the US and Nato on key missile defence and disarmament issues.

Compromises could include the upgrading of a Nato commission on Ukraine
into a Nato-Ukraine council to meet in Ukraine, according to German
officials.

Germany opposes Georgia’s Map application both because of problems
surrounding the country’s two disputed territories of Abkhazia and South
Ossetia and because of the repression of opposition movements.

In the case of Ukraine, Germany did not see the cross-party or public
support for Nato membership Berlin believed was necessary.
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http://www.ft.com/cms/s/0/b8e516c0-ff84-11dc-b556-000077b07658.html
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========================================================

Ukraine Monthly Macroeconomic Report From SigmaBleyzer:
http://www.sigmableyzer.com/index.php?action=publications 
========================================================
15.  BUSH, PUTIN SET TO CLASH AT NATO
Russia Seeks to Stop Georgia, Ukraine From Joining Group

By John D. McKinnon, The Wall Street Journal,
New York, New York, Tuesday, April 1, 2008

KIEV, Ukraine — This week’s NATO summit is shaping up as a showdown
between President Bush and Russian President Vladimir Putin.

Mr. Putin plans to come to the meeting in Bucharest, Romania, hoping to
defeat a U.S.-backed initiative to give Georgia and Ukraine inside tracks to
membership in the North Atlantic Treaty Organization. A Russian official
suggested the plan would amount to “destroying” the strategic balance of
power in Europe.

.  The Situation: NATO leaders gather this week to consider a U.S.-backed
plan to give Georgia and Ukraine inside tracks to NATO membership.

.  The Hitch: Russia says that would upset the balance of power in Europe.

.  The Fallout: Lower expectations for Bush’s meeting this weekend at
Putin’s Black Sea resort home.Kremlin spokesman Dmitry Peskov pleaded
for flexibility from Western nations, telling reporters, “You cannot make it
a single-way road. Generally, it takes two to tango.”

The Russian comments also appeared to diminish some expectations for a
one-on-one meeting this weekend between Messrs. Bush and Putin at the
Russian president’s Black Sea resort home in Sochi.

The White House hopes to work out a framework at that meeting for resolving
a number of issues between the two countries, particularly a U.S.-designed
missile-shield system to be built in Poland and the Czech Republic.

Russia views that proposed system with suspicion, fearing it could
eventually be used to undermine its own security.

But Mr. Peskov said Russia was in no hurry to reach a deal with Mr. Bush on
missile security. “The work [on missile defense] is very complicated, and we
are not going to…set any deadlines,” he said. “We still believe the best
way to solve problems is to get rid of [the] plans… . But we appreciate
the effort…from our dancing partners.”

White House national security adviser Stephen Hadley said the Sochi meeting
might not produce an immediate agreement on the missile-shield issue. “It
may not get done by Sochi,” he conceded. “But, hey, if we don’t have it by
Sochi, we’ll keep working it.”

The NATO membership issues are to be discussed at Bucharest along with
renewed commitments to the conflict in Afghanistan. Georgia and Ukraine have
been loyal supporters of Mr. Bush, and Georgia is expected to be among the
nations adding troops to the conflict in Afghanistan later this week.

Mr. Hadley suggested that in addition to more troops, NATO would begin to
focus more on counterterrorism and economic development in Afghanistan —
in effect settling in for a long struggle.

“I think what people are recognizing is this is…going to take us a pretty
long while to get this done,” he said. Until Afghanistan can better wage its
own fight, “we’re going to have to have more of a counterinsurgency focus,
which means an issue about levels of troops, what those troops do and how
to link them up with the civilian assets — institution-building,
reconstruction, economic assistance, jobs that are required — to stabilize
that situation over the long-term. And that’s the thing I think you’re going
to see the Alliance beginning to step up and grapple with.”

Even Russia has suggested that it would be willing to consider some form of
assistance for the NATO effort. The offer has been perceived as a way of
softening its hard-line opposition to further NATO expansion.

But with Russia’s influence on the rise, many Western European countries
that are dependent on Russia for energy are reluctant to oppose it over the
NATO membership issues.
———————————————————————————————–
Write to John D. McKinnon at john.mckinnon@wsj.com
LINK: http://online.wsj.com/article/SB120700769687978677.html
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16.  NATO HOLDS KEY TO EUROPEAN CLUB FOR

GEORGIA & UKRAINE

By Ron Popeski & Margarita Antidze, Reuters, Kiev/Tbilisi, Mon, Mar 31

KIEV/TBILISI – The former Soviet republics of Georgia and Ukraine hope to
put themselves on the road to closer links with the West at a NATO summit
this week despite opposition from Moscow.

Their leaders will go to the summit, starting on Wednesday in Romania, to
join Croatia, Macedonia and Albania in asking the alliance for a Membership
Action Plan (MAP) — a roadmap to eventual entry.

But one of the crucial differences between the two former Soviet republics
and their fellow aspirants in the Balkans is that former imperial master
Russia resolutely opposes them joining and has warned of grave consequences
if they do.

That dispute could cause a distinct chill in the air at Bucharest’s vast
Parliament Palace, venue for the summit, when Russian President Vladimir
Putin arrives as guest of honour.

Putin said in February that if Ukraine joined NATO and accepted foreign
military bases which threatened Russia’s security, Moscow would re-target
its missiles at the country.

But for both Georgia and Ukraine, pursuing NATO membership is important
enough to risk incurring Russia’s wrath.

Led by pro-Western leaders, Kiev and Tbilisi see NATO as a guarantee of
their security and a badge of their progress towards integration with the
club of European democracies.

“My dream is a prosperous and united Georgia,” Georgian President Mikhail
Saakashvili said in an interview in Russia’s Kommersant newspaper on Monday.
“NATO is one of the stages to implementing that.”
BREAKAWAY REGIONS
More than that though, Tbilisi wants NATO’s security guarantees to help it
feel safer from its big neighbour Russia.

When a one-tonne missile landed in a farmer’s field an hour’s drive from
Tbilisi last year, Georgia accused Russia of an act of aggression. Moscow
said Tbilisi had staged the incident, and an international inquiry did not
apportion blame.

Tbilisi also sees Moscow’s hand behind the pro-Russian Georgian breakaway
regions of South Ossetia and Abkhazia, where separatist forces regularly
skirmish with Georgian troops.

Georgians say that Russian peacekeeping forces there provide military
assistance to separatist troops. Russia provides financial aid to the
breakaway regions, and has issued most residents with Russian passports.

“Georgia wants to join NATO because this organisation provides security
guarantees which we trust more than any other security organisation,” Georgy
Baramidze, Georgia’s state minister for European integration, told
reporters.

But the instability that is driving Georgia to seek NATO membership is also
the reason some alliance members, led by Germany, are against granting it
MAP status in Bucharest.

They say having Georgia in NATO will mean importing its separatist conflicts
too. Saakashvili’s crackdown on an opposition protest last year has also led
some members to question if Georgia has the democratic credentials to join.

“Georgian membership in NATO would mean crossing a red line for Russia,”

one Western ambassador in Moscow said. “If that happens, Russia will send
extra troops into Abkhazia and recognise its independence.”
SPLIT DECISION
For Ukrainian leaders, seeking NATO membership is part of the same drive
towards Western institutions as its long-term policy of joining the European
Union.

The letter to apply for MAP was signed in January by President Viktor
Yushchenko, Prime Minister Yulia Tymoshenko and parliamentary speaker
Arseniy Yatsenyuk — all Western-leaning politicians who see Ukraine’s
future with Europe.

“NATO membership is a political choice made by the country’s political
elite,” said Volodymur Fesenko, an analyst at Ukraine’s Penta think-tank.
“It could boost the country’s stature in international affairs.”

The challenge for the Ukrainian leadership is convincing a sceptical public
that joining NATO is a good idea. A poll released this month showed only 30
percent of Ukrainians back it, and that for most people, the issue is not a
priority.

Opposition leader Viktor Yanukovich, who draws most of his support from
Russian-speaking areas, blocked parliamentary business for three weeks in
protest at the MAP request.

Around 5,000 protesters rallied in the Crimean city of Simferapol on
Saturday to demonstrate against NATO membership.

Kiev’s leaders say they can win over voters, and promise a referendum before
committing to joining the alliance. But lukewarm public opinion — along
with Russia’s hostile stance — has cooled support for Ukraine’s bid among
some NATO states.
———————————————————————————————–
(Additional reporting by Michael Stott in Moscow; Writing by Christian

Lowe; Editing by Alison Williams)
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17.  U.S TO RUSSIA:NATO SHOULDN’T BE “FOUR-LETTER WORD”
 

By James G. Neuger, Bloomberg, Kyiv, Ukraine, Friday, March 28, 2008

KYIV- NATO’s embrace of former Soviet republics will bolster stability
in a trouble-prone region and shouldn’t be seen by Russia as a threat,
said Victoria Nuland, the U.S. ambassador to the alliance.

Russia has nothing to fear from North Atlantic Treaty Organization moves
toward closer ties with Ukraine and Georgia, including a possible
decision next week to put both countries on the path to future
membership, Nuland said in a Bloomberg Television interview in Brussels
yesterday.

“It’s time for Moscow to stop thinking of NATO as a four- letter word,”
Nuland said. “It’s based on outdated thinking about yesterday’s NATO as
the Cold War military bloc that was formed to deal with the Soviet
Union. Those days are long gone.”

Russian President Vladimir Putin has threatened to aim missiles at
Ukraine if it joins NATO and hosts bases. Russian lawmakers are using
Georgia’s bid for membership to give further encouragement to
ethnic-Russian separatist movements in two Georgian regions.

Western European countries such as Germany and France are the leading
opponents of declaring the ex- Soviet republics eligible for membership
at a NATO summit April 2-4, partly out of fear of frostier relations
with Russia.

We are not happy about the situation around Georgia and Ukraine, Putin’s
successor Dmitry Medvedev said in an interview this week with the
Financial Times, adding that their potential membership of NATO “is
extremely troubling for the existing structure of European security.”

President George W. Bush, heading for his last NATO meeting, hasn’t
indicated how hard he will push for pre- membership plans for Ukraine
and Georgia, once in the Soviet heartland.

Bush “feels quite strongly that both Ukraine and Georgia deserve a clear
path forward toward achieving their Euro- Atlantic aspirations”, Nuland
said.

Russia opposed — and was powerless to halt — the first two rounds of
NATO’s post-Cold War expansion, which brought onetime Soviet satellites
in eastern Europe and the Baltics into the alliance between 1999 and
2004.

While Russia was “not happy” when NATO moved east, the new eastern
European allies “have actually ended up over time with better relations
with their Russian neighbor,” Nuland said.

NATO expansion “is about increasing democracy and stability inside these
countries that are in fact neighbors of Russia,” Nuland said.

Putin, meanwhile, has resumed the strategic competition with the West by
restarting Cold War-era bomber patrols, modernizing the Russian missile
fleet and staging naval war games off Spain and France.

Putin has also objected to U.S. plans to build missile- defense bases in
Poland and the Czech Republic as an insurance policy against long-range
attacks by “rogue” states such as Iran.

Nuland played down concerns that Putin – set to meet the 26 NATO leaders
at the summit in Bucharest – will launch another anti-U.S. tirade. Putin
showed his interest in better cooperation by inviting Bush to a
post-summit meeting at the Russian Black Sea resort of Sochi to discuss
missile defense, she said.

The U.S. has made a “broad, forward-reaching offer of cooperation” on
the missile shield and arms control. Putin’s decision to attend his
first NATO summit and the invitation to Bush “will allow all of us to
demonstrate the strength of our relationship,” she said.

Russia has been quieter about NATO plans at next week’s summit to
broaden its reach in southeastern Europe by admitting Croatia, the
Republic of Macedonia and Albania.

U.S. and European influence in the Balkans rose, and Russia’s fell, in
the 1990s when the collapse of Yugoslavia left Russian ally Serbia
surrounded by pro-Western republics, some of them guarded by NATO
peacekeepers.

Nuland expressed confidence that the main obstacle to a three-nation
expansion in southeastern Europe – Greece’s demand that Macedonia

change its name — will be cleared away. Greece has threatened to keep
Macedonia out of NATO, saying the country’s name implies a territorial
claim on the northern Greek province that gave birth to Alexander the
Great.

“We have a strong sense that both sides do want to solve this,” Nuland
said. “But it’s going to take political effort and political will in
both of those capitals.” The United Nations is brokering talks over a
last-ditch compromise before the summit.

NATO leaders will also take stock of the war in Afghanistan, where a
47,000-strong allied force is fighting against the resurgent Taliban,
the radical Islamic movement ousted by the U.S. after the September 2001
terrorist attacks.

A summit communique will spell out the rationale for the war and set “a
three- to five-year horizon for what we plan to do next,” Nuland said.

Nuland welcomed plans by French President Nicolas Sarkozy to bolster
France’s troop strength in Afghanistan, possibly by sending French
forces to the hard-fought south or east of the country for the first
time.

France’s 1,500 troops in Afghanistan now are mainly confined to the
relatively calm Kabul area or involved in training Afghan soldiers.

“We are quite optimistic that France and a number of other countries
will answer the commanders’ calls to fill the missing gaps,” Nuland said.

“That will give a boost particularly to our operations in the east and the
south where we face the biggest challenges”.

Sarkozy has also sent a “great signal” of his intention to bring France
back into the permanent NATO military coordination structure that it
left in 1966, Nuland said.
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18.  NATO-RUSSIA BREAK: A SIGNIFICANT POSSIBILITY

By Georgeta Pourchot, Director, OLMA/NCR, Political Science, Virginia Tech;
Fellow, Center for Strategic and International Studies, Washington DC
Eurasian Home, Moscow, Russia, Monday, March 31, 2008

The Bucharest NATO summit offers a significant possibility that NATO’s and
Russia’s positions on a variety of issues will further diverge, marking the
beginning of the end of this uneven relationship.

To begin with, Secretary General Jaap de Hoop Scheffer admits that it is
unclear what to expect from President Putin only a few days before the
summit. Such unknowns are unusual at summits. These events are prepared
months in advance, negotiations are held and agendas carefully drafted.

It is not the case that major decisions are negotiated at the summit.
Summits offer the opportunity to put a stamp of approval on decisions that
have been fully vetted with all the parties well in advance of the event. To
not know the intentions of a participant such as Russia is not a usual
occurrence, and as far as the Bucharest summit is concerned, it spells
trouble.

In short, NATO floated the possibility that Ukraine and Georgia would be
offered a Membership Action Plan [MAP] at the Bucharest summit; MAP is a
precursor to actual membership in the Alliance. Russia strongly opposes this
move and in the past, threatened aiming missiles at either Ukraine or
Georgia if either dared apply for membership.

Russia also opposes the U.S. planned missile defense site in Poland and the
Czech Republic, although progress seems to have been made in recent weeks.
It is unclear how serious this reported “progress” really is, with details
not disclosed to the public.

It does appear that the U.S. promised Russia freedom to monitor the
operations of the missile defense site, a provision that will be unhappily
received in both Warsaw and Prague. Russia also holds important cards in
its hands, with the U.S. and NATO needing its help for the air transit of
personnel, munitions and equipment to Afghanistan, in the continuous
campaign against terrorist groups.

In all, the Allies seem to need Russia more than Russia needs them, and the
Kremlin leverages this influence. Add to that the nervousness of European
countries over Russia’s gas supplies, on occasion interrupted by Moscow to
“discipline” transit countries such as Ukraine or Belarus, and a picture of
increasingly uncertain relations emerges.

Recent statements indicate that even NATO’s Secretary General understands
how close to the beginning of the end the relationship with Russia may be.

The Financial Times quotes de Hoop Scheffer who called on president Putin to
avoid the “unhelpful rhetoric” that “‘[Russia] will target missiles on
nations A, B and C,'” in case they are offered MAP. Such rhetoric, de Hoop
Scheffer continued, only “makes me remember a time when I was growing up,
when there was a Berlin wall and an Iron Curtain.”[i]

He also underscored that the patience of NATO member countries for Russia’s
tough talking is running thin. “My job of keeping the NATO allies together
does not become more complicated when Moscow hardens the tone.As soon
as [Russia] crosses a certain line in the rhetoric, things for me get
easier.”[ii]

In plain English, if Russia continues to talk tough, Allies may choose to
stop listening and act, whether Russia likes it or not.

Should that happen, a new era of relations will de facto start, and it will
no longer be marked by the sides politely trying to work together. In the
long run, it may involve membership for further former Soviet republics in
NATO, when they will be ready for such responsibility.

It may involve Russia acting on some of its threats by developing and/or
installing defense capabilities aimed at European countries. It could easily
involve a new arms race. And of course, it will mean a cooling of relations
reminiscent of the Iron Curtain times, as de Hoop Scheffer underscored.

The jury is out on Russia’s intentions, but if president-elect Medvedev’s
public statements are any indication, we can expect a continuation of the
foreign policy direction of recent years. As such, both the trans-Atlantic
allies and Moscow will adjust their positions, not closer to, but further
from one another.

Should Moscow act on its threats and aim missiles at European countries in
the event of NATO membership for former Soviet republics, a second Cold War
will have started. Should Moscow choose a more subdued, “We are offended”
type of response, a Cold Peace may start.

There is a third option: That the Kremlin accepts the Allied explanations
for the positioning of the third missile defense site without considering it
a threat to its own security. Defense and procurement specialists can
demonstrate why the proposed system does not pose a threat to Russia, and
Russia may choose to request sufficient proof until it is satisfied that the
system meets a legitimate security need.

The Kremlin could also accept that Ukraine, Georgia, and other former Soviet
republics may one day join whatever international institutions they choose,
without translating that membership into a personal affront and security
threat. After all, even president Putin admits that countries have their own
choices and Russia can do nothing to stop them.

Preemptive threats only harden positions and aggravate relations. For
perspective, an ‘unhelpful rhetoric’ was also used prior to the first
post-communist enlargement of NATO, with Russia trying hard to prevent it.
Many predicted that the sky would fall if the Czech Republic, Hungary and
Poland joined the Alliance.

The sky did not fall: At that time, the Allies worked diligently to respond
to Russia’s concerns by creating various channels of communication and
institutional negotiation. Nine years after the 1999 NATO enlargement to
former communist countries, there is no war between Russia and NATO, there
is no institutional break-down in communications, Europe is more secure, and
so is Russia.

The two even work on several projects together. It behooves on Russia to
accept the third option, as it did in the nineties, drop the tough talk and
continue to work with the Allies towards common goals. The alternatives are
not helpful to anyone.
———————————————————————————————-
[i] James Blitz, “NATO Tells Putin to Keep Calm at the Summit,”
Financial Times, March 28, 2008, p. 1.
[ii] James Blitz, “Man in the Middle Seeks Harmony,” Financial Times,
March 28, 2008, p. 3.
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19.  TAKING OFF THE GLOVES

OP-ED: John Marone, Columnist, Eurasian Home website, Kyiv, Ukraine
Eurasian Home, Moscow, Russia, Monday, March 31, 2008

The presidential campaign in America is still a three-way race between
Obama, Clinton and McCain. But in Ukraine, where the elections are still two
years off, it’s everyone against Yulia Tymoshenko.

Appearing before a government meeting on Wednesday, March 26, to mark
her first 100 days as prime minister, the fiery female politician said her
opponents had already begun attempts to undermine the fragile pro-Western
majority in parliament.

“They are not only talking about it, but taking steps every day to discredit
the government, to discredit the democratic coalition,” Tymoshenko said.

Tymoshenko’s adversaries include the Ukrainian parliament’s eastern-looking
opposition as well as President Viktor Yushchenko, whom she is expected to
challenge for the presidency in 2010.

Tymoshenko helped Yushchenko rise to power during the 2004 Orange
Revolution, but since then the two politicians have barely been able to mask
their enmity with the public proclamations of democratic unity that enabled
them to forge the current coalition.

More recently, rumors have abound in Kyiv that the presidential
administration is planning to marginalize Tymoshenko by creating a new
centrist party from the business elements of the opposition and the
pro-presidential elements of the Orange coalition.

On March 27, one day after Tymoshenko rang the alarm bell, the creation of
just such a party, called United Center, was announced.

The groundwork for United Center was laid by five pro-presidential lawmakers
in mid February, when they left the Our Ukraine party.

At the time, the maverick lawmakers assured Orange voters that they didn’t
plan to leave the Orange coalition in parliament.

Our Ukraine, which Yushchenko endorsed during the last parliamentary
elections along with a new party called People’s Self Defense, has long been
considered divided between the president and Ms. Tymoshenko.

Now that division might spread to the coalition. Altogether, the Bloc of
Yulia Tymoshenko and Our Ukraine-People’s-Self Defense hold only 228
out of the parliament’s 450 seat – a three-seat majority.

If Tymoshenko’s political enemies can get enough support from the business
elements of both Our Ukraine-People’s Self Defense and the opposition Party
of the Regions, they can try to create a new majority with or without new
elections.

The desired result of this plan, which analysts say originated in the
Presidential Administration, would be to push Tymoshenko, on the one hand,
and the neo-Soviet elements of the Donetsk-based Regions Party and their
Communist allies, on the other, to the fringes of Ukraine’s political
spectrum in time for the 2010 presidential elections.

The head of the new party, Ihor Kril, said during a March 28 press
conference that the head of Yushchenko’s Secretariat, Viktor Baloga, had
nothing to do with United Center.

Moreover, he denied that the new party was the brainchild of anti-Tymoshenko
oligarchs fearful of her rising popularity.

“We won’t take money from clans or [business] groups,” said Kril. However,
he added, the new party welcomes the addition of “strong people.” So far
United Center boasts only 35 members, including those who left Our Ukraine
in February.

But more influential support is on the horizon.

Yushchenko is already widely believed to have moved closer to Regions
moneybags Rinat Akhmetov, appointing one of his people to a key state post
earlier this year.

Then last week, in a rare media interview following in the wake of the
United Center announcement, Ihor Kolomoysky, one of Ukraine’s richest men
said his Privat business group supported Yushchenko “100 percent.”

The normally camera-shy Ukrainian oligarch said during the same interview to
the Internet publication Ukrayinska Pravda: “If Tymoshenko becomes president
I see myself emigrating.”

Tymoshenko blasted Kolomoysky for dirty business practices at around the
same time. Speaking to a press conference on March 28, the fiery female
premier also accused unnamed politicians of protecting Kolomoysky.

“What Private is doing today in Ukraine shows that they have the required
protection in the highest echelons of power,” Tymoshenko told reporters.

But the prime minister fell short of directly implicating President
Yushchenko, reiterating her conditional promise to support him during the
2010 elections.

“If there is normal and harmonized cooperation between the president and me,
and we are able to work like a single team and show the public results, then
I will definitely make sure there is a single candidate put forward by the
democratic parties,” she said. Instead, Tymoshenko focused her attack on

presidential chief of staff Baloga.

“I think that the president should act as he thinks best for Ukraine. If
there are advisors capable of leading him astray, it would be better if he
got rid of them before it’s too late,” she added.

During a national television interview on March 27, Tymoshenko warned her
opponents that if BYuT were forced to go through early elections they would
do even better than last time.

Last September, during snap elections called by Yushchenko to keep Regions
and their leftist allies from usurping his executive power, BYuT improved
its showing by almost a third – largely at the expense of the president’s
waning popularity.

“I am certain that this government is here for the long term,” she said on
national TV, “even if these political forces are plotting something behind
our backs.”

But it’s precisely Tymoshenko’s rising political support that has earned her
so many enemies.

Besides Yushchenko, who appears to be garnering increasing support from
Ukraine’s powerful industrialists, including those who backed his political
nemesis Viktor Yanukovych up until recently, Tymoshenko is up against the
likes of the Kremlin, whose hopes of controlling Ukraine with gas imports
have been foiled by the fiery femme fatale.

The Kremlin had also backed Yanukovych’s long battle against Yushchenko, but
could be now placing its bets on Yushchenko, who is more cooperative than
Tymoshenko and a stronger candidate than Yanukovych.

Like Tymoshenko, the president can only lose by revealing the growing
antagonism between him and the premier to the public. However, Mr.
Yushchenko could hardly keep quiet during last week’s exchanges in the
media.

On the one hand, he told an audience in Kyiv that he would do everything to
keep the democratic majority together. But on the other, he warned against
political instability and political populism (the usual charges made by
Tymoshenko’s opponents against her).

“[Our] nation and society must come to the point where any political
destabilization will be seen as a policy against Ukraine,” he said, urging
his countrymen to keep “the wave of social populism from covering us and
throwing us back to 1993.”

And as both the president and the premier prepare the public for a possible
rift in relations, there are a host of thorny issues on the horizon that
could serve as the straw that broke the camel’s back.

For one, Tymoshenko’s team has accused Kolomoysky of using his control
over a major oil refinery to raise petrol prices and thus make her
government look bad.

Another is this year’s budget, which Tymoshenko is refusing to seriously
rework despite the president’s demands.

Whatever issue serves as the prelude to a break in relations, uncovering the
fierce battle for the presidency that has been in progress since Tymoshenko
retook the government late last year, the question is whether the premier’s
growing popularity among voters will be enough to defeat Yushchenko’s
growing reliance on eastern influence and money.
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20.  100 HEAD-OFF STEPS, FIRST 100 DAYS OF THE

NEW GOVERNMENT

Authors: Yelena Boltushkina, Inna Vedernikova, Yulia Mostovaya,
Serhii Rakhmanin, Yuriy Skolotiany, Nataliya Yatsenko
Mirror-Weekly # 12 (691), Kyiv, Ukraine, 29 March – 5 April 2008

Ukrainians traditionally celebrate the first 100 days of each government
like St. Valentine’s Day or Halloween – just a nice occasion with the gist
forgotten.

In 100 days no government has ever been able to fulfill its pre-election
promises, overcome corruption, improve legislation, or even help its
sponsors recoup their contributions to the election campaign.

Yet, it is conventionally believed that in the first hundred days a new
government enjoys its highest rating of popular trust and ought to use this
circumstance for reforms and innovations – often unpopular and painful –
that yield deferred positive effects. In this sense the new Ukrainian
leadership has simply wasted its first 100 days.

The word “leadership” is used here instead of “government” because the
Tymoshenko cabinet was formed by the democratic coalition, i.e. the
parliamentary majority. This coalition has been anything but a reliable
backup for the government. Besides, half the ministers were appointed
personally by the President, making him equally responsible.

So what have the political leaders been doing? Tied in a tight knot of
mutual dependence, they have been putting out fires, tripping up one other,
and meting out alms. Exhausted by chaos, this country needed radical and
painful treatment.

The clinical picture is clear: disseminated sclerosis of the executive
vertical; corruption phlebitis; gas drug dependence; epidemic of fake
private entrepreneurship; wage anemia, judicial impotence, land kleptomania,
asthma of small and midsize businesses, law enforcement dependence on
presidential medication, and so on and so forth. How do the leaders treat
these diseases?

They hand out benefits, competing with each other on TV, promising more
benefits and accusing each other of populism. “You have diabetes?’ asks
Tymoshenko, ‘You are tired of dieting? Here’s a kilo of candies for you.”
“You have fever?’ echoes Yushchenko, “Here’s a good draft – stand in it for
a minute and you’ll feel better.” The patients take this care with earnest
gratitude and next morning they take their temperature and sugar tests.

Actually, Tymoshenko and Yushchenko are acting the way they have to: there
can be only one head physician in this clinic. Both must be thinking: when I
win the race, I’ll cure the country. But do they know that after the
presidential election in 2009 there will be strict diets, splints, and
surgeries? Do they really know what they are going to cure and how?

So far, instead of a comprehensive course of therapy, the doctors have only
stopped hemorrhage or made anesthetic injections. And whenever either of
them prescribes something more radical, the other one immediately wakes up
the patient, “Look what’s going on! It’s going to hurt!” The patients are
naturally scared.

Most of them prefer shadow kickback schemes to transparent deductions to the
budget. Most of them are ready to trade the country’s independence for cheap
natural gas. Most of them are content with the miserable UAH 1,000 [equal to
$200, the standard reimbursement for lost deposits with the USSR Savings
Bank] instead of demanding indexation, let alone demanding their $150
billion from Russia.

Ukrainians are so undemanding! Old people are content with their UAH 1,000
and a kilo of buckwheat [traditional pre-election “graft rations”]. One part
of the intelligentsia is content that the Ukrainian language is still alive
and the other part is happy to be still able to use Russian. Millionaires
are content with the “tithe” they have to deduct for arts and charity.

Doctors are content with their commissions from “cooperation” with
pharmaceutical companies [for prescribing exclusively medications produced
by those companies]. Generals are content with their posts.

The Intelligence and other special services are content with the last
mythical remnants of their omnipotence. The public is content with political
shows. NGOs are content with grants. And that is how a Citizen turns into a
“little man”.

Ukrainians demand less and less from authorities. They only want their
favorite leaders to win and then, possibly, to help them solve their
personal problems. Some pay a bottle of vodka. Others pay millions.

Everybody demands to put an end to corruption in the highest echelons but
resist any attempts to fight it at the grassroots level: taxi drivers still
drive their passengers with the meter off; draftees’ parents still pay
conscription officers for exemption from military service; marketplace
vendors still give short weight; students still “buy” their test and exam
grades.

During the Orange Revolution Ukrainians demanded “jails for bandits”. Of
course, they meant “oligarchs”, not accoucheurs who would never even enter
the prenatal ward unless palmed with $300.

Authorities will never change until each and every citizen demands rules for
all instead of personal exceptions for himself, a rod to catch enough fish
for himself and his dependants instead of regular fish rations.

Those who rule Ukraine are not from Mars, Washington, or Moscow. They are
the very flesh of the flesh of those “little Ukrainians”, only vested with
authority. The symptoms are the same. The diagnosis looks very clear from
the figures below.
100 DAYS IN FIGURES
According to the State Statistics Committee, in January and February
practically all basic economic development indices increased (except
decreased milk production). The increase, however, barely exceeded last
year’s.

· GDP totaled UAH118,600M [$1 = UAH5.05]; corrected for inflation it totals
5.8% growth vs. January-February of 2007;

· Consumer prices grew by 5.7% (in January-February of 2007 they grew by
1.1%), having exceeded half the limit set by the government for 2008; at
such a rate the annual price growth index may well total 21.9%;

· Nominally, the average wage rose by 39.9% (vs. 27.4% in January-February
of 2007), but the real increment barely exceeded that of 2007 (15.5% vs.
13.2%);

· National industries sold UAH54,100M worth of products, works, and
services; considering the price hikes, the real sum exceeded last year’s by
8.8%;

· The agricultural sector sold UAH7,100M worth of products – a mere 0.7%
more than in January-February of 2007 when the increment versus the same
period of 2006 was 5.6%;

· Construction practically remained at the same level, real growth being
0.4% – even less than in the agricultural sector (last year’s growth rate
was far more impressive – 20.1%);

· What did grow more significantly in January and February was retail trade;
stimulated by increased social welfare outlays and bank loans, it reached
UAH56,200M (28.3% of real increment vs. 2007);

· According to the Finance Ministry, national exporters received UAH4,100M
in reimbursements for VAT, which was UAH900M more than planned and

UAH1,600M more than was reimbursed in January-February of 2007;

· By March 14 the State Customs Service had fulfilled the quarterly plan by
102%, having transferred UAH15,160M to the national budget – 70% more than
in the same period of last year.
STAFF COMB-OUT CONTINUES
Political instability boomerangs on the public service sector. The political
leadership never learned the lesson of 2005 when as many as 9,600 public
servants were fired for political reasons.

According to Tymofiy Motrenko, chief of the Main Public Service Department,
due to dismissals for reasons of “political expediency” the state loses the
most experienced and qualified public servants.

He notes the dangerously increasing outflow of young public servants: in
2004 young public servants made up 68% of the total number and in 2006 their
number reduced to 51%. Motrenko insists on separating administrative and
political posts in order to retain professionals in the public service
sector, enable their career growth, and keep the institutional memory of
executive bodies.
EXTENSIBLE PROCRUSTEAN BED
When the Tymoshenko government drafted the 2008 national budget (on the
basis of the one drafted by the previous government) and the parliament
adopted it, everyone was aware of the need to revise it by April at the
latest. However, it is already clear that a new budget can be adopted in May
at the earliest.

The “pie” is not too big. Having recalculated the predicted 2008 GDP, the
government plans to increase the revenue section of the consolidated budget
by UAH20 billion – up to UAH294 billion.

The government plans to distribute that surplus among central bodies of
authority and replenish the budget by cutting some “unjustified expenses”.
At the same time, according to Finance Minister Viktor Pynzenyk, the
ministries are requesting an additional UAH80 billion.

Besides, the revision of the 2008 budget involves “the problem of political
decision-making rather than technical problems”. The President demands an
additional UAH23 billion for humanitarian projects and defense, but didn’t
he say that he would not sign the 2008 budget bill if the budget deficit
exceeded 2% of GDP?
HARMONIOUS SLIPKNOT
Yulia Tymoshenko reiterates that her relations with the President are
“harmonious”. Viktor Yushchenko says that he is working day and night to
keep the democratic coalition together.

Yet, numerous statements by both political leaders and their teams leave no
doubt that they are waging a war for power and popularity rating. Any
political leader naturally wants to raise his or her rating but uses
different methods in competing with different rivals.

Although Yushchenko had as many as seven ministers in the Yanukovych
government, he never allowed himself to meddle in its work like he meddles
in the Tymoshenko government’s work. According to official information, in
its first 100 days the Yanukovych government received 88 directives from the
President and 143 tasks from his chancellery.

The Tymoshenko government received 621 and 260 directives, instructions, and
tasks respectively, which was 881 more than the previous government did –
almost nine per day.
LAWS AND FLAWS
The slogan “One Law for All” will be just hollow words as long as Ukrainian
politicians are guided by Franco’s motto “Everything to Friends, Law to
Enemies!” and as long as they interpret and use laws to their liking instead
of abiding by them.

Article 19 of the Constitution obliges all public servants, executive
officials, and bodies of authority to act in strict compliance with the
Constitution and laws, but it has never stopped Kuchma or Yushchenko,
Yanukovych or Tymoshenko. But for the opposition’s feeble efforts to play
the controlling role, Ukraine would hold the Guinness record for the number
of constitutional violations.

Yushchenko’s impetuous lawmaking activity was deterred when the parliament
and government were controlled by Yanukovych and other opponents (who were
far from law-abiding, either).

As soon as the tide turned and Yushchenko got a loyal majority in the
parliament and a more or less compliant government, he jumped at the
opportunity. In the first 100 days since the Tymoshenko government took
office he issued about 500 acts.

Many of them were questionable in terms of constitutionality. In accordance
with Article 118 of the Constitution, the President may appoint and dismiss
heads of region and district administrations exclusively upon the
government’s relevant decision.

Since the start of this year Yushchenko has decreed nine appointments and
dismissals in defiance of this norm. Besides, he has personally appointed 22
acting heads of local administrations, even though no normative act provides
for such appointments by presidential decrees.

Like his predecessor Leonid Kuchma, Viktor Yushchenko often meddles in the
economic sphere, trying to regulate issues that are in the government’s
exclusive competence. He has tried to influence the following:

– the activity of the national company Naftogaz;
– the use of energy resources;
– privatization mechanisms;
– development of roads;
– pricing in the public utility sector;
– extraction of amber.

Some legal experts call into question the legality of his recent decree on
reforming the law enforcement structure. According to the Constitution and
the Law on the Cabinet of Ministers (which he utterly dislikes but which is
still valid), this issue is beyond the presidential competence.

The same law vests in the Cabinet of Ministers the exclusive right to adopt
regulations for all ministries and other central executive bodies. However,
most of those agencies still function on the basis of presidential decrees.
The government has repeatedly requested the presidential chancellery to
abrogate those decrees as no longer valid and is still waiting for a reply.

As we could expect, the presidential structures are now pressing the Cabinet
of Ministers in all spheres. The most effective method of pressure is using
National Security and Defense Council’s decisions, with which they try to
substitute the Cabinet’s decisions – both acting and possible.

For instance, in February 2008, the National Security and Defense Council
forbade the Cabinet of Ministers to take issue with the state concern
Aviation of Ukraine. The actual plans of the government concerning this
enterprise are a topic for a separate discussion.

However, it is a direct function of the Cabinet of Ministers to manage the
object of the state property. Thus, with the help of the decisions made by
the National Security and Defense Council in March 2008, the President has
sufficiently reduced the influence of the government on the fuel-and-energy
sector, the privatization sphere and the land market.
100 DAYS – 100 LAWS
During 100 days of co-existing with the new government, the Verkhovna Rada
managed to hold only 16 plenary sessions. During this time, about one
thousand draft laws were introduced into the parliament. More than half of
those draft laws (562) were initiated by the coalition.

According to our sources, the parliament passed 100 laws during the period
from December 18 to March 26. 89 of them were initiated by the coalition.
However, we should note that 81 of 89 coalition’s laws are concerning early
elections of cities’, towns’ and villages’ heads. The last 8 are the acts on
early mayoral elections in Kyiv and the acts on Ukraine joining NATO.

Viktor Yushchenko appeared to occupy second place in the law-making
productivity ratings: his five laws were enacted. His laws are on changing
the minimal living wage, on overall strength of the military forces and on
ratification of the agreements between Ukraine and the EU regarding simple
visa registration.

The opposition is the next in our rating with three bills – on approving the
first session’s plan and on creation of committee to investigate the
activities of the head of the Interior Ministry and the head of Kyiv city
administration.

The Cabinet of Ministers of Ukraine is the last in our rating: it introduced
only one law – the law on the 2008 budget of Ukraine.

We should note that during these 100 days, our law-makers didn’t please us
with any bills which could sufficiently improve our lives today or in the
future. From this point of view, the productive capacity of the ruling
coalition is, to put it mildly, not very high.
———————————————————————————————
LINK: http://www.mw.ua/1000/1550/62561/
———————————————————————————————–
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========================================================
Please contact us if you no longer wish to receive the AUR.

========================================================
21.  BAKER & MCKENZIE, A LEADING GLOBAL LAW FIRM,
JOINS THE U.S.-UKRAINE BUSINESS COUNCIL (USUBC)
 
U.S.-Ukraine Business Council (USUBC), Wash, D.C., Jan 2008
 
WASHINGTON, D.C. – The executive committee of the U.S.-
Ukraine Business Council (USUBC) is pleased to announce that
Baker & McKenzie, a large, leading global law firm has been
approved as the second new member for 2008 and as the 54th
member of USUBC.

Baker & McKenzie was the first foreign law firm to open an office
in Ukraine and currently assist over 350 multi-national companies,
financial institutions and major Ukrainian enterprises in their
domestic and international operations.

USUBC has been working with James T. Hitch, Managing Partner,
Baker & McKenzie – CIS, Limited in Kyiv and Richard N. Dean,
Attorney at Law in Washington regarding the membership.

Baker & McKenzie has around 55 professional staff in Kyiv. A
majority of them have been trained in the United States or Great Britain.
They specialize in finance, corporate law, real estate and competition
law.

They have a network of more than 3,400 locally qualified, internationally
experienced lawyers in 38 countries and have more than 10,000 lawyers,
supporting professionals and staff worldwide. More information can be
found on their website: www.bakernet.com/.

 
“USUBC is most pleased to welcome the Baker & McKenzie law firm
into its rapidly growing membership,” said Morgan Williams,
SigmaBleyzer, who serves as USUBC president..
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
22.  ENERGOATOM’S WESTINGHOUSE DEAL POLITICAL,
MEANT TO DRIVE DOWN TVEL’S PRICES – EXPERTS
 
Interfax Ukraine, Kyiv, Ukraine, Monday, March 31, 2008

KYIV – The deal between Ukraine’s Energoatom, a nuclear monopoly,

and the U.S.’ Westinghouse on possible supplies of fuel for Ukrainian
nuclear power plants in 2011-2015 signed on March 30 has as its aim to
force Russia’s state nuclear corporation TVEL, a traditional nuclear fuel
supplier to Ukraine, to reduce its price, experts believe.

“Talks are under way between Russia and Ukraine over a long-term contract
for fuel supplies. We have already submitted our proposals to the
Ukrainians. Energoatom probably wants to drive our prices down,” head of

the nuclear fuel safety department at the Kurchatov Institute Alexei Ivanov
said, commenting on the above deal.

“From a technical viewpoint, it’s absolutely unclear why the Ukrainians have
decided to do this and why they need the Americans, since Ukraine’s nuclear
power units have been using our fuel for decades without complaints,” he
said.

“The signing of a contract between Energoatom and Westinghouse looks

like a purely political game,” the expert said. Head of the Scientific-Research
Institute of Electric Power Engineering (NIKIET) Boris Gabarayev shares
the same view.

“I have a feeling that this is more about politics than economics. Clearly,
our Ukrainian colleagues want to diversify sources of nuclear fuel, but
diversification should not be an end in itself,” Gabarayev said.

————————————————————————————————
NOTE:  Westinghouse is a long-time member of the U.S.-Ukraine
Business Council (USUBC).
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
U.S.-Ukraine Business Council (USUBC): http://www.usubc.org
========================================================
23.  OCH-ZIFF CAPITAL MANAGEMENT GROUP,
INSTITUTIONAL ALTERNATIVE ASSET MANAGERS,
JOIN U.S.-UKRAINE BUSINESS COUNCIL (USUBC)
 
U.S.-Ukraine Business Council (USUBC), Wash, D.C., Jan 2008
 
WASHINGTON, D.C. – The executive committee of the U.S.-Ukraine
Business Council (USUBC) is pleased to announce that the Och-Ziff
Capital Management Group, headquartered in New York City, has been
approved for membership. Och-Ziff is the third new member for 2008
and USUBC’s 55th member.

Och-Ziff is one of the world’s largest and most recognized institutional

alternative asset managers with offices in New York, London, Hong Kong,
Tokyo, Bangalore and Beijing.

Och-Ziff’s fund seeks to deliver consistent positive, risk-adjusted returns

with a strong focus on risk management and capital preservation.

Och-Ziff’s multi-strategy approach combines global investment strategies,
including merger arbitrage, convertible arbitrage, equity restructuring, credit
and distressed credit investments, private equity and real estate.

Och-Ziff has approximately $33.2 billion of assets under management for

over 700 fund investors as of January 1, 2008.

More information about Och-Ziff is available on the firm’s web site at
http://www.ozcap.com

 
Morgan Williams, SigmaBleyzer, who serves as USUBC president said,
“USUBC is pleased to welcome Och-Ziff into its rapidly expanding
membership.”
————————————————————————————————-
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
24.  MAXWELL CANCER & CARDIOLOGIC CENTER
OPENED IN KYIV
 
Interfax Ukraine, Kyiv, Ukraine, Monday, March 31, 2008
 
KYIV – The Maxwell cancer and cardiologic center has been opened in
Kyiv. The company’s president, Kenneth Alibek, said during the opening
of the center that the major goal of the institution is to prolong the life of
Ukrainians.
“Unfortunately, life expectancy in Ukraine is not so high as we wish it to
be,” he said, adding that Ukrainians live 10-15 years less than the world
average life expectancy.
 
The Maxwell center is the first such center in Ukraine and the most
specialized complex in the former-Soviet countries, uniting a clinic to
diagnose and cure cancer and cardiologic diseases, and a facility to
produce medicine. The center’s main office is located in the United States.
U.S. Ambassador to Ukraine William Taylor, who also attended the opening
ceremony, said this is an additional U.S. investment in Ukraine, as well as
a large contribution to developing the country’s healthcare sector.
———————————————————————————————-
NOTE:  Maxwell USA is a member of the U.S.-Ukraine Business
Council (USUBC).
————————————————————————————————
[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
25. DIPOL CHEMICAL INTERNATIONAL INC. JOINS THE
U.S.-UKRAINE BUSINESS COUNCIL (USUBC)
 
U.S.-Ukraine Business Council (USUBC), Wash, D.C., Jan 2008
 
WASHINGTON, D.C. – The executive committee of the U.S.-Ukraine
Business (USUBC) is pleased to  announce that the Dipol Chemical
International Inc., a U.S. company, has been approved as the fourth new
member for 2008 and as the 56th member of USUBC.
 
Dipol was established in 1994 in the United States as a chemical-consulting
firm. One year later, they expanded their activities to include plastics distribution,
chemical distribution with polystyrene and polyurethanes, and toll processing.
Dipol is now the leader in polymers and specialty chemicals distribution in the
Former Soviet Union (FSU).
 
USUBC has been working with Alfred Roth, Chief Executive Officer and
Dr. Irene Zaks-Roth, Chief Operational Officer of Dipol. They attended the
USUBC meeting held recently with U.S. Ambassador William Taylor in
Washington, D.C.
 
In 1996 Dipol established a presence in Ukraine and own a warehousing
facility there.  Today Dipol is a leading plastics distributor in Ukraine, where
they serve a variety of industries.
 
Dipol has three offices and warehouses in Kyiv, Riga and St. Petersburg
covering their distribution network in Ukraine, Belorussia, Moldova, Latvia,
Lithuania, Estonia and Russia.
 
Dipol’s customs bonded warehouse in Kyiv is a ISO 9001:2000 – certified
chemical warehouse. Its activity is strongly supported through long-term
consignment agreements with the supplies. In many cases it serves as a “one
stop shop” for the major Ukrainian packaging, civil construction, home
appliances and detergent manufactures.

As a leading plastics and chemicals distributor, Dipol represents the highest

quality plastics and chemicals manufacturers and their products.

Their supplier list includes: Dow Chemical; Innovene; Nova-Innovene; DSM;
Solway; DuPont; Cray Valley; Grain Processing; Surface Specialties; and

Stepan.

Dipol provides warehousing for the producers which wish to maintain a part of
inventory of chemicals and plastics in Ukraine, but who do not want to distribute

it themselves. Because Dipol owns the custom bonded warehouse the importers
can defer duties until time of sale. Dipol provides warehousing for both chemicals
and plastics, including temperature-sensitive, food-grade and flammable goods.

Dipol also provides customs and distribution services and have  compounding and
blending facilities. The offices in Kyiv are at: 42-44 Shovkovychna St. Horizon

Tower. More information about Dipol can be found on their website:
 
“USUBC is pleased to welcome Dipol International into its rapidly expanding
membership,” said USUBC president Morgan Williams.
———————————————————————————————–
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genocidal famine in Ukraine.’ Hollywood, CA, www.eugeniadallas.com.
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PUBLISHER AND EDITOR – AUR
Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer, The Bleyzer Foundation

Emerging Markets Private Equity Investment Group;
President, U.S.-Ukraine Business Council (USUBC)
1701 K Street, NW, Suite 903, Washington, D.C. 20006
Tel: 202 437 4707; Fax 202 223 1224
mwilliams@usubc.org; www.usubc.org
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