[Ohio UZO News] Ukraine: AP,FT (VP Cheney visit); Economist; RFE/RL

[Deychak, Orest]

Associated Press

Cheney: Ukrainians should be able to live without threat of "invasion or
intimidation." 

By MARIA DANILOVA 

Associated Press Writer

5 September 2008

KIEV, Ukraine (AP) - The United States is committed to Ukraine's
security and freedom, U.S. Vice President Dick Cheney pledged Friday,
suggesting that Russia was posing a "threat of tyranny, economic
blackmail and military invasion" to its neighbor.

During a closely watched trip to the ex-Soviet republic, Cheney also
repeated that Ukraine would eventually join NATO, despite fierce
resistance from Moscow.

The strong words from Cheney -- the Bush administration's most visible
hawk -- signaled that the United States was intent on cultivating closer
ties with Ukraine and its neighbors even after Russia showed it was
willing to use military force against countries along its border.

"The United States has a deep and abiding interest in your well-being
and security," Cheney said following talks with President Viktor
Yushchenko. "We believe in the right of men and women to live without
threat of tyranny, economic blackmail and military invasion or
intimidation."

The show of support was important for Yushchenko's Western-leaning
government, which has become increasingly nervous about its relations
with Moscow. Yushchenko has pushed strongly for closer ties with the
European Union and NATO, upsetting both the Kremlin and Ukraine's large
Russian-speaking minority.

There are concerns the Kremlin might seek to squeeze Ukraine as it tries
to reclaim dominance in former Soviet republics. Ukraine, a
strategically located country of 46 million, has pipelines that carry
Russian gas to European consumers and a Black Sea port that hosts a key
Russian naval base.

The president also lamented that Russia had used its ships at the
Ukrainian port of Sevastopol in the fighting with Georgia -- a Ukrainian
ally. He said only NATO could guarantee Ukraine's independence.

The Georgian war, he said, showed that that "the single, only model for
a reliable defense of the territorial integrity of ... Ukraine is
joining the all-European, pan-European, North Atlantic system of
collective security."

Cheney also met separately with Prime Minister Yulia Tymoshenko, whose
aides said they discussed security and energy issues.

Cheney's trip comes at a difficult time in Ukrainian politics:
Yushchenko and Tymoshenko are fighting bitterly, setting the government
on the verge of collapse. The two are also fierce rivals before the 2010
presidential election.

Prior to Ukraine, Cheney visited oil-rich Azerbaijan and then Georgia,
where Russia has recognized the independence of two breakaway Georgian
regions: South Ossetia and Abkhazia. Washington also offered Georgia a
$1 billion aid package to help it recover from the short but damaging
war with Russia over the separatist regions.

Angry Russian officials have repeatedly said U.S. military aid was
instrumental in emboldening Georgia to try to retake South Ossetia by
force on Aug. 7. The attack sparked five days of fighting and resulted
in Russian forces driving into South Ossetia and on into Georgia.

Konstantin Kosachyov, head of the foreign affairs committee in Russia's
lower house of parliament, accused Cheney of trying to forge an
"anti-Russian axis."

"It's Cheney who was behind all recent events on the former Soviet
turf," Kosachyov said Thursday.

Financial Times

www.ft.com

Cheney backs Ukraine Nato bid

By Roman Olearchyk in Kiev 

Published: September 5 2008 14:38 

Dick Cheney, the US vice-president, expressed strong US backing for
Ukraine on Friday as he visited Kiev in show of support in the wake of
last month's conflict between Russia and Georgia. 

Ukraine sided with the US over Georgia and is wary of Russia's
intentions in the region. Like Georgia, Ukraine is an aspiring member of
Nato, in the face of Russian opposition. 

After a meeting with Ukraine's president, Viktor Yushchenko, Mr Cheney
pledged the US would support Ukraine's efforts to join Nato, saying that
Russian opposition to further eastward expansion of the bloc should not
influence this decision. He said "no outside country gets a veto''
adding that the commitment made in April "stands today".

Stopping off in Kiev after visiting Georgia and its energy-rich
neighbour, Azerbaijan, Mr Cheney discussed energy diversification and
regional stability 

The US has backed existing and planned energy transit routes for oil and
gas in the region to bypass Russia, including projects in Ukraine, which
is itself deeply vulnerable to energy imports from Russia. Next year
Moscow is expected to impose a fourth stiff natural gas price rise on
Kiev in as many years.

Ukraine's efforts to break from Moscow's grip have been hampered by
domestic crises sparked by relentless political rivalries.

Mr Cheney's visit was clouded by the latest moves in the escalating
power struggle between the country's pro-western president and prime
minister. 

Standing alongside Mr Cheney, Ukraine's president called for fresh talks
to preserve his party's coalition with Yulio Tymoshenko, the prime
minister. He stressed, however, that any compromise deal would need to
include the passage of a resolution in parliament upholding Georgia's
"territorial integrity."

On Wednesday, Mr Yushchenko's party backed out of a coalition with his
erstwhile ally accusing her of betrayal and softness in support for
Georgia. 

The Ukrainian president has accused Ms Tymoshenko's party of dragging
its feet on a parliament resolution on the issue. She has voiced
solidarity with Georgia, but her party wants the resolution to be
discussed in a parliament commission before a vote.

While Ukraine's economy has done well this year, economists are
concerned that its impressive 8-year growth spurt could be dented by
this, its third political crisis in as many years. Ukraine's small and
illiquid stock market has been sinking for months along with global
peers. 

Alexander Valchyshen, head of research at Investment Capital Ukraine, a
private asset management and investment banking firm, said the country's
economy in the next few months will experience a "cooling connected with
the global economic situation."

"Factors in play could weaken the local currency, but we don't expect a
tumble. Commodity prices are falling, including Ukraine's main export,
steel. The prospect of higher natural gas import prices next year will
possibly further increase Kiev's current account deficit. In light of
this, the political crisis poses a risk of curtailing foreign direct
investments, which have been strong thus far this year with some $7bn
coming in," he said.

The Economist

An Orange divorce?

Sep 4th 2008 
>From The Economist Intelligence Unit ViewsWire


Ukraine's pro-Western coalition is unravelling



Ukraine's government, comprising the allies from the Orange Revolution,
is poised to collapse after the prime minister, Yuliya Tymoshenko,
allied with the opposition to strip the presidency of its powers. It is
not clear whether Ms Tymoshenko has done this to pressure the president
to back her policies, to boost her power as an alternative to seeking
the presidency herself, or to trigger her departure from government
ahead of tough economic times-and with an eye on the 2010 presidential
election. The coalition could yet be saved, or a new one established;
failing that, a parliamentary election must be held. With political
tensions high in the wake of Russia's attack on Georgia, the timing
could hardly be worse.

Falling out

On September 2nd the pro-presidential Our Ukraine-People's Self-Defence
(OU-PSD) voted to leave its coalition with the Yuliya Tymoshenko Bloc
(YTB), bringing the "Orange" government, which was only formed in late
2007 following an early parliamentary election, to the verge of
collapse.

Amid an increasingly acrimonious conflict between the president, Viktor
Yushchenko, and the prime minister, Yuliya Tymoshenko, the break-up of
the coalition government has long been on the cards, especially after
the loss of its slim two-seat majority in June. The Economist
Intelligence Unit's assumption for several months has been that the
coalition would formally dissolve after parliament reconvened from its
summer break, most likely leading to another pre-term election. The
political struggle between the two former allies has intensified of
late, as a result of allegations from the presidential administration
that Ms Tymoshenko has committed treason by not condemning Russia's
military intervention in Georgia. Then, on September 1st, the YTB formed
an ad hoc alliance with the main opposition party, the Party of Regions
(PoR), to push through parliament a number of measures that weaken the
president. These include measures that limit the president's influence
over the government and facilitate the process of impeachment. Mr
Yushchenko has denounced the move as amounting to a "constitutional coup
d'etat".

Although the coalition's latest troubles are not unexpected, the trigger
for them-the YTB's temporary alliance with the PoR on weakening the
presidency-was. Ms Tymoshenko's attempt to weaken the presidency puts
into question the widespread assumption that she is preparing to contest
the presidential election due in early 2010. If the post of prime
minister becomes the pre-eminent one in Ukrainian politics, Ms
Tymoshenko would presumably want to keep her current job rather than
seek the presidency.

Murky motives

Ms Tymoshenko's move can be interpreted in one of three ways. First, she
is indeed seeking to make the prime minister Ukraine's most powerful
political figure in order to advance her political ambitions. This,
however, would surely bring to an end the Orange coalition, and she has
no guarantees that she would be able to continue as prime minister
either by forming a coalition with the PoR or as a result of fresh
elections.

Second, Ms Tymoshenko has supported the legislation as a tactic in her
power struggle with Mr Yushchenko, presumably on the calculation that
this will force the president to back government policies he has until
now opposed, for instance on the acceleration of privatisation-that
initiative is crucial if Ms Tymoshenko is to pay for some of her
populist spending programmes. Once a deal is done on policy
co-operation, the YTB would not seek to override a presidential veto of
the legislation to weaken the presidency.

Third, the prime minister has provoked a crisis in order to move into
opposition, to help her prepare for the 2010 presidential election.
Ukraine's economy is slowing dramatically, inflation remains very high
at 26.9% year on year in July, and it is probable that gas import prices
will double from the start of 2009; if so, this would amount to an
eight-fold increase since 2005. Potentially this could cripple swathes
of Ukrainian industry, as well as triggering fresh inflationary
pressures. Facing this prospect, arguably it is advantageous for Ms
Tymoshenko to leave the government before the end of the year, or
perhaps before the 2009 gas price is set.

Awful timing

Ukraine's latest political turmoil comes at a crucial time for the
country. In the wake of the Georgia-Russia conflict, Ukraine's
perception of insecurity is at the highest level in at least a decade.
Relations with Russia are fraught and there are fears that Ukraine's
territorial integrity might come into question. Continued political
uncertainty in Ukraine will make it more difficult for the US and its
allies to support Ukraine through closer NATO ties; already this was
looking very difficult, given the reservations of Germany and other
European states about the risk of closer NATO-Ukraine ties provoking
Russia. Efforts to boost stability in Ukraine via EU engagement could
also be stymied.

On the economic front, investor sentiment has worsened on fears that
Russia might seek to stoke separatist sentiment in the Crimea. Very high
inflation and a widening current-account deficit already present key
risks to macroeconomic stability. These will increase substantially if
Ukraine is unable to negotiate a staged transition towards the gas price
paid by EU customers, and must instead pay the full rate from the start
of 2009. Its chances of success, already fairly slim, will probably
narrow further if Ukraine is without a government, or rather is being
run by a caretaker administration, when negotiations are held.

Ways out

There are several possible outcomes to the current turmoil. First, the
coalition could regroup. The OU-PSD has 10 days in which to reverse its
decision to leave the coalition, leaving scope for intensive
behind-the-scenes negotiations. Publicly, the YTB has said that it sees
no alternative to the current coalition. Any such agreement on
continuing with the coalition would be likely to require concessions
from both sides: the presidential administration has demanded that the
coalition adopt a unified position on the Georgia crisis, and that the
YTB not side once again with the PoR to override Mr Yushchenko's
anticipated veto of the legislation to weaken the presidency. The YTB
for its part is demanding backing for its key policies and has accused
the presidential administration of systematically sabotaging the
government's activities.

Alternatively, if the Orange parties do not manage to save their
coalition, Ukraine's political parties will have 30 days in which to
form an alternative coalition. Until recently, the only viable
alternative coalition had appeared to be one between the OU-PSD and the
PoR-an outcome that is believed to be favoured both by the presidential
administration and the liberal wing of the PoR led by Rinat Akhmetov,
Ukraine's richest businessman. However, the recent co-operation between
the YTB and the PoR has raised the possibility of a more formal alliance
between these two parties. On balance, the Economist Intelligence Unit
continues to believe that a formal alliance between the YTB and the PoR
is unlikely, even though their positions on Russia appear to be moving
closer. In particular, it would be a risky venture for Ms Tymoshenko
politically, given that she has based much of her appeal on her strident
opposition to the PoR and its links with big business. A coalition
between OU-PSD and the PoR, meanwhile, still looks doubtful: Mr
Yushchenko could lose at least half of his party if he did a deal with
the PoR leader, Viktor Yanukovych.

The final possibility is another early election, which Mr Yushchenko
will have the right to call should an alternative coalition not emerge
within 30 days of the official break-up of the existing coalition. Given
the economic and political challenges now facing Ukraine, the
distraction of an election would be the worst outcome. And the election
itself could take an unexpected turn, given the highly sensitive state
of relations with Russia.

 

Radio Free Europe/Radio Liberty

www.rferl.org

 

September 04, 2008 

Has Ukraine's Orange Coalition Reached Point Of No Return? 

by Jan Maksymiuk 

In announcing the collapse of the coalition government formed by the
Yulia Tymoshenko Bloc and the Our Ukraine-People's Self-Defense bloc,
Ukrainian President Viktor Yushchenko accused his Orange Revolution ally
of joining forces with rival parties, while some of his aides suggested
that Prime Minister Yulia Tymoshenko might have even betrayed national
interests.

Yushchenko's September 3 statement, accompanied by a warning that he
would call new parliamentary elections, came in response to a vote the
same day in the Verkhovna Rada, in which the Yulia Tymoshenko Bloc
(BYuT), the Party of Regions, the Lytvyn Bloc, and the Communist Party
joined forces to pass a bill on the cabinet of ministers and other
legislation that strengthens the executive power of the government at
the expense of the president.

Yushchenko branded these votes as a "political and constitutional coup
d'etat," charging that the bill on the government upsets the balance of
power in the country.

"This law establishes a dictatorship of the prime minister. It puts the
head of the government above the constitution," Yushchenko said.

"Presidential decrees and decisions of the National Security and Defense
Council are ignored completely. The changes to the law on the
Constitutional Court make it impossible to appeal an unconstitutional
ruling of the court. The government is outside any control, and the
basic balance of government is ruined."

A similar law expanding the powers of the cabinet of ministers was
already passed by the BYuT and the Party of Regions in December 2006 and
reaffirmed, following a presidential veto, in January 2007. So, is this
just another example of Ukrainian deja vu? 

Tymoshenko's Strategy

Not exactly. The BYuT was in 2006-07 in opposition to the government of
Prime Minister Viktor Yanukovych, but Tymoshenko supported the bill in
the hope that an anticipated conflict between Yushchenko and Yanukovych
would return her to the chair of prime minister, from which she was
banished by Yushchenko in September 2005. 

Her expectations were vindicated. Yushchenko called for early elections
in April 2007; they took place in September 2007 and made Tymoshenko
once again the head of the government. So now, she hardly needs early
parliamentary elections to improve her political standing. As everyone
expected, now her coveted political goal is the presidential post, which
is to be contested in early 2010. To position herself comfortably for
that contest, she needs to stay in the post of prime minister as long as
possible.

The BYuT argues that the current bill is necessary because of the
constant meddling of the Presidential Secretariat and its head, Viktor
Baloha, in the government's prerogatives. BYuT lawmaker Volodymyr
Bondarenko told RFE/RL's Ukrainian Service on September 3 that the BYuT
passed the bill on the cabinet jointly with the opposition in order to
save the country from "being ruined."

"We do not have any [secret] arrangements with the Party of Regions.
These votes yesterday were oriented toward saving the state," Bondarenko
said.

"Because what is being done today -- when regional governors ask the
permission of [Presidential Secretariat deputy head] Roman Bezsmertnyy
before visiting the prime minister, and the vertical of power is being
ruined -- hardly makes a state [out of Ukraine]."

Political Maneuvers

Speaking on television late on September 3, Tymoshenko called on the Our
Ukraine-People's Self-Defense (NUNS) bloc to return to the ruling
coalition.

If within the subsequent 10 days the NUNS revokes its September 3
decision to leave the coalition, the government may continue to operate
as if nothing happened. If not, another parliamentary coalition needs to
be created within 30 days. If this fails to happen, the president has
the constitutional right (but not obligation) to dissolve parliament and
call for snap elections.

It seems than no political party in the current Verkhovna Rada is ready
or willing to participate in new preterm elections just one year after
the previous ones and two years after the regular ones. But what may
happen now is anybody's guess. 

Theoretically, the BYuT and the NUNS can make peace and continue running
the government for a while until the next row. The NUNS can also make a
coalition deal with the Party of Regions, as already occurred following
the parliamentary elections in 2006. A coalition contract between the
BYuT and the Party of Regions cannot be ruled out either, although it is
less probable than the other options.

NUNS legislator Yuriy Karamzin told RFE/RL's Ukrainian Service on
September 3 that there is no unity in the NUNS ranks as to the bloc's
formal decision to abandon the coalition. According to Karamzin, the
dispute can be quelled and the coalition with the BYuT restored.


"In such cases, when the future of the country is decided, we need to
convene a general meeting of the coalition. Unfortunately, this has not
been done," he said. "It is 32 degrees Celsius in Kyiv today and, in my
opinion, everybody has become overheated."

Karamzin may be right. Ukraine's domestic and foreign policies in the
past few years were dictated more by personal animosities and private
interests than truly national concerns.

Almost all analysts and commentators explain the uneasy relationship
between Yushchenko and Tymoshenko by their hidden rivalry over who is to
become the president in 2010. It appears that this rivalry is now coming
to a head.

Last month, in a move that is widely believed to have been masterminded
by Presidential Secretariat head Baloha, a presidential aide accused
Tymoshenko of betraying Ukraine's state interests to Russia. Details are
unknown, as the case is still being investigated by the Ukrainian
Security Service, but everything reportedly boils down to the accusation
that Tymoshenko promised Moscow to keep quiet about the recent
Russian-Georgian conflict in exchange for Moscow's support in the 2010
presidential ballot.

The accusation seems preposterous and, as recent polls suggest, a
majority of Ukrainians consider it a dirty PR trick against Tymoshenko
with an eye to the upcoming presidential election.

But if the Yushchenko camp has actually begun a presidential campaign by
portraying Tymoshenko as a pro-Moscow stooge and promoting Yushchenko,
who has given unambiguous support to Georgia, as an anti-Moscow
politician, then Ukraine is poised to plunge into even deeper political
turmoil than it experienced in 2004.

The evil spirits of the country's East-West civilizational divide may
again be called to work for private political interests. And the vision
of a united Ukraine, so passionately promoted by both Yushchenko and
Tymoshenko during the Orange Revolution, may once again fade away for
many years to come. 




 

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