[Ohio UZO News] Ukraine: Amb. Tefft statement; AP; FT; WoE (2); Youtube

[Deychak, Orest]

 Statement of John F. Tefft 

Ambassador-Designate to Ukraine 

October 8, 2009 

Senate Foreign Relations Committee 

 

Madam Chair and Members of the Committee, 

 

I am honored to appear before you today as President Obama's nominee to
serve as the next Ambassador of the United States to Ukraine. I am
grateful to the President and Secretary Clinton for their support and
for the confidence they have placed in me. I look forward to working
with the members of this committee and its staff to build the
relationship between the United States and Ukraine. 

 

I have had the privilege of serving my country for nearly 38 years as a
Foreign Service Officer, much of it in Eastern Europe. Twice I have
served as a U.S. Ambassador-most recently in Georgia, and previously in
Lithuania. I have also served as Deputy Chief of Mission in Moscow - for
10 months of my assignment I was Charge d'Affaires at the Embassy. From
2004 to 2005 I was Deputy Assistant Secretary in the Bureau of European
and Eurasian Affairs and had responsibility for overseeing our bilateral
relations with Russia, Ukraine, Moldova and Belarus. During this period,
Ukraine experienced the Orange Revolution, which transformed the
political dynamics of the country. I believe that this broad experience
working in Eastern Europe, and on Ukraine in particular, has prepared me
for the important task of advancing U.S. relations with Ukraine. 

 

If confirmed, I will focus on further strengthening the already close
strategic partnership between our two countries. In December 2008, the
U.S.-Ukraine Charter on Strategic Partnership, which codified the goals
and plans we have jointly made with our Ukrainian partners, was signed
in Washington. During the recent visit of Vice President Biden to
Ukraine, our governments agreed to create the Strategic Partnership
Commission to help implement this Charter. The Commission will convene
here in Washington later this year. This mechanism will cover not only
high-level foreign policy issues but also economic cooperation, energy
security, non-proliferation, democracy, the rule of law, and people to
people exchanges. 

 

I think Vice President Biden summed up succinctly the approach of this
Administration toward Ukraine, which follows on the overall approach
taken by every U.S. Administration since 1991. The United States
supports Ukraine's sovereignty, independence and territorial integrity.
Our friendship is based on a shared belief that democracy is the chief
guarantor of security, prosperity and freedom. Cooperation between our
countries is essential to strengthen peace and security. A strong,
independent and democratic Ukraine contributes to the security and
prosperity not only of its people, but of a Europe whole, free and at
peace. The Vice President emphasized in Kyiv in July that the United
States will stand by Ukraine as it continues on the path to freedom,
democracy, and prosperity. The reset of our relations with Russia will
not come at the expense of Ukraine; the United States does not recognize
spheres of influence. 

 

The depth of our relationship is clear from the size of our assistance
program--$120 million this year to bolster peace and security,
strengthen democratic institutions, promote economic growth, and fight
diseases like tuberculosis and HIV/AIDs. This includes an additional $30
million that Congress provided as part of a package designed to
strengthen our relationships throughout the region in the aftermath of
the conflict in Georgia. Our assistance is designed not only to advance
bilateral relations, but to improve the daily lives of average
Ukrainians, especially during this difficult period in which the economy
has contracted significantly. We also aim to promote greater energy
efficiency and to lessen Ukraine's energy dependency on others. 

 

Support for Ukraine serves America's interests because Ukraine has
become a key component of European security. This was true even in
Ukraine's early years, when it took the historic decision to transfer
its nuclear weapons to Russia. As we look to the post-START era, we
commend this courageous step, and we stand by the security assurances
provided in 1994, assurances that will remain valid after the START
Treaty expires. 

 

Ukraine has participated in many NATO missions, including the
International Security Assistance Force in Afghanistan and the NATO
Training Mission in Iraq. Ukraine has established an Annual National
Program with NATO, and we support its future membership in NATO, as it
chooses. Ukraine's alliances are for Ukraine to choose. Ukraine has
participated in multilateral efforts to build security by preventing the
proliferation of weapons, including through its membership in the
Wassenaar Arrangement, and by working against transnational crime and
money laundering, through its membership in the Egmont Group. 

 

This is a key moment in Ukraine's post-Communist history. Since gaining
its independence just two decades ago, the Ukrainian people have
achieved a tremendous amount-freedom of speech is respected, political
competition is vibrant, and Ukrainian citizens can democratically change
their government through periodic, free, and fair elections. Ukraine is
one of the most free and democratic nations in the post-Soviet region
today. Its economic relations with the rest of the world are on sound
footing, especially since Ukraine joined the World Trade Organization in
2008. 

 

However, as Vice President Biden emphasized in Kyiv, much of the promise
of the Orange Revolution has yet to be achieved. Political infighting
has stalled 

political and economic reforms. The Ukrainian people are suffering the
effects of the world economic downturn, and assistance from
international financial institutions has played a crucial role in
Ukraine's ability to deal with the crisis. The United States supports
the International Monetary Fund's program with Ukraine and urges the
Ukrainian government to fulfill its commitments to the Fund and to other
multilateral financial institutions. 

 

Ukraine's economic prosperity depends on reform of its energy sector, an
area in which both the United States and Europe are willing to help.
Energy security can come only through comprehensive reform in the gas
industry and through far greater efficiency in the consumption of gas.
We know that these steps are difficult, but they are necessary to
Ukraine's future. Energy is an area of growing U.S.-Ukraine cooperation.


 

If confirmed, I will encourage Ukraine's progress on the path of
economic and political reform; continue our contribution to building
democracy and prosperity, help in the fight against corruption; and
facilitate Ukraine's participation in meeting global security
challenges. I will ensure that our Embassy in Kyiv and its highly
professional and motivated American and Ukrainian staff are fully
engaged in building our strategic partnership with Ukraine. And if you
choose to place your confidence in me as U.S. Ambassador to Ukraine, I
will ensure that we conduct our business in a manner that is fully
consistent with American values. 

 

Finally, Madam Chair, I would like to recognize my wife Mariella, who
has been my indispensable partner in this career from the very
beginning. In addition to her own professional accomplishments as a
biostatistician and a nurse, she has made her own unique contributions
to representing our country in every post in which we have served. I
know she will bring her invaluable experience to bear in Kyiv. I would
also like to thank my daughters Christine and Cathleen, who are also
present, as well as my son-in-law, Andrew Horowitz. They make me proud
every day, and have been supportive of my work throughout my career. 

 

Thank you for the privilege of appearing before the Committee. I am
prepared to answer any questions you might have 

 

AP

Ukraine parliament confirms foreign minister 

9 October 2009

KIEV, Ukraine (AP) - Ukraine's parliament has confirmed an ally of
President Viktor Yushchenko as the country's foreign minister.

Legislators in the 450-seat Verkhovna Rada voted 240-0 Friday to approve
Yushchenko's appointment of Petro Poroshenko, a millionaire businessman
and former top security and central bank official.

The vote is a small victory for Yushchenko, who is locked in a power
struggle with Prime Minister Yulia Tymoshenko ahead of January
presidential elections in which both are running.

The foreign minister's job has been vacant since lawmakers loyal to
Tymoshenko ousted another Yushchenko ally in March.

Poroshenko has vowed to improve badly strained ties with Russia. Moscow
accuses Yushchenko of pursuing anti-Russian policies.

AP

Ukraine holds naval exercises in Crimea

By MARIA DANILOVA
The Associated Press
Thursday, October 8, 2009 

KIEV, Ukraine -- Ukraine sent hundreds of troops, five ships and 15
aircraft into the Black Sea region Thursday for day-long military drills
off its Crimean peninsula, a potential flashpoint with Russia. 

The exercises commenced just as a Russian state news agency said Russian
drills in the same body of water were coming to a close. 

Crimea, Ukraine's only autonomous republic, is a focus of rising
tensions between Russia and Ukraine. The peninsula hosts Ukrainian ships
and Russia's Black Sea fleet. Moscow has sternly objected to Ukrainian
President Viktor Yushchenko's plans to evict the Russian navy when the
lease agreement expires in 2017. 

Russia's relations with its formerly subordinate Soviet states are
growing increasingly fraught. Tensions with Georgia erupted last year
into war over a separatist-held Georgian republic, South Ossetia. 

There are growing concerns that disagreements over Crimea could also end
in military conflict as Russia looks to reassert its authority over what
it considers its rightful sphere of influence. 

Russia has protested vociferously over the possibility that NATO could
accept Ukraine and Georgia as new members. 

Russian President Dmitry Medvedev announced last month that he was
severing communications with Yushchenko, in part over what he called
"obstacles" Yushchenko was creating for Russia's Black Sea military
operations. 

Russia is using its Black Sea fleet to patrol the coast of the
separatist Georgian region of Abkhazia, which claimed independence after
the war in Georgia. Russia accuses Ukraine of supporting Georgia in the
conflict. 

Ukrainian navy spokesman Yuriy Kirik said the drills included simulated
operations to disarm rebel groups and rescue civilians from a battle
zone. Kirik said the maneuvers were routine and that similar exercises
was conducted earlier this year. 

Russia's RIA Novosti reported that Moscow had just ended three days of
live-fire, anti-submarine exercises. It is unclear how close the
respective exercises were. 

Long part of the Russian empire, Crimea was ceded to Ukraine in the
Soviet era. Today, a majority of the 2 million residents of Crimea are
ethnic Russians, many of whom feel close to Moscow. 

Financial Times

www.ft.com

Naftogaz close to $500m bond restructuring

By Roman Olearchyk in Kiev 

Published: October 9 2009 

Naftogaz, the cash-strapped Ukrainian energy giant, announced on Friday
that 92 per cent of note holders have agreed to restructure a $500m
eurobond issue that matured on September 30.

The vast majority of note holders accepted restructuring by an October 8
"early bird" cut-off deadline that included incentives. 

The development provides a huge boost to the state-owned company in its
efforts to avert default and restructure nearly $1.7bn in debt. Final
approval is scheduled for October 19. 

"This will help keep Naftogaz afloat in the near term," said Alexander
Valchyshen, head of research at Investment Capital Ukraine.

"But, as Ukraine's biggest company in revenues, it still faces big
challenges which reflect the overall tough situation in the country."

Naftogaz is seeking to swap all of its foreign debts, including loans
provided by European banks, for a new five-year issue with a coupon of
9.5 per cent. 

Unlike the matured eurobond, the new issue will be backed by a sovereign
guarantee. 

A company representative said that restructuring talks with banks,
including Deutsche Bank and Credit Suisse, "is also going well".

The restructuring has, however, left a bad taste in the mouths of
eurobond investors. Many felt Naftogaz forced them into accepting it
despite having enough resources to pay the bonds.

Naftogaz's talks with investors are being closely watched by European
officials and banks. 

With its debts considered quasi-sovereign by many, Naftogaz came close
to becoming the first sizeable state company to default in eastern
Europe during this year's recession.

Successful restructuring of its debts is also seen as a way of boosting
the energy security of Europe, which saw its gas supplies cut off last
January during a three-week price dispute between Naftogaz and Gazprom,
Russia's gas giant. 

The European Union has in recent years received about a quarter of its
gas needs from Russia, with most pumped down Ukraine's vast pipeline
system. 

Deeply battered by a recession that saw gross domestic product shrink by
18 per cent in the first half of this year, Ukraine finds its finances
stretched, and has struggled to pay for increasingly expensive Russian
gas imports.

Interactive map showing countries at greatest vulnerability to a
cessation of gas supplies through the Ukraine

Victor Chernomyrdin, a special representative of Russia's president to
CIS countries, said in late September that Moscow and Kiev would likely
"celebrate the new year normally", avoiding a repeat of the energy
standoff earlier this year.

Yet tensions remain high and both countries have yet to finalise supply
arrangements ahead of a December 31 deadline.

Yulia Tymoshenko, the Ukrainian prime minister, said this week that her
country would cut Russian gas imports next year amid waning demand. But
Alexey Miller, Gazprom's CEO, said Ukraine would have to import the
volumes obliged by contract.

Ukrainian officials say rolling over Naftogaz's debts should free up
finances to reform the country's debt-laden and murky gas sector.
Naftogaz resells gas to households lower than the price it pays for
Russian imports.

Nearly $11bn in aid from the International Monetary Fund has kept Kiev
afloat this year. 

Kiev officials say they need a fourth IMF disbursement of $4bn to help
cover a budget gap. Analysts say the IMF could delay it after Kiev
failed to meet key conditions, including increases on gas prices for
households towards market levels.

 

Window on Eurasia: As CIS Enters Its 'Death Agony,' Moscow Reprises
Another Tactic against Ukraine

 

Paul Goble

 

            Vienna October 8 - Over the last decade, the Commonwealth of
Independent States has been reduced to little more than a club of
presidents of the 11 and now, after Georgia's withdrawal, 11 former
Soviet republics. But so few presidents are slated to attend the CIS
session in Chisinau tomorrow that many are suggesting it is entering its
final "death agony."

            And perhaps because the organization that the Russian
government had hoped would be central mechanism for ensuring Moscow's
continuing dominance of the region is passing into eclipse, the Russian
government is not only relying more heavily on sub-groups of these
states such as the Organization of the Collective Security Treat but
also dusting off some older tactics.

            Among the latter are efforts to reduce the significance of
borders between the Russian Federation and its neighbors and thus
increase Moscow's leverage, efforts very much on public view this week
when Russian Foreign Minister Sergey Lavrov travelled to Kharkhiv to
promote cooperation between regions on both sides of the
Russian-Ukrainian frontier.

            Tomorrow, the CIS is to have a summit meeting in the
Moldovan capital, and four of the presidents of the Central Asian
countries - Kazakhstan, Tajikistan, Turkmenistan and Uzbekistan - have
already indicated that they will not attend, announcements that have led
Aleksandr Rahr, a Berlin expert on Russia, to suggest that "it is
possible to speak about the funeral" of the CIS.

            And the absence of so many leaders who are identified as
Russia's closest allies in Chisinau, Aleksey Malashenko of the Moscow
Carnegie Center added, suggested to him that if he were in Russian
President Dmitry Medvedev's place, he would not take part in this
session (www.ng.ru/cis/2009-10-08/1_sng.html?mthree=1).

            As the Moscow paper notes, Medvedev is unlikely to follow
that suggestion, but the meeting in the Moldovan capital is unlikely to
be a happy one: Not only are there tensions between Medvedev and
Ukraine's Viktor Yushchenko, but the leaders of Armenia and Azerbaijan
have indicated they don't expect much progress on Karabakh during their
session.

            Since the CIS was created in December 1991, many people have
predicted its demise. Indeed, as "Nezavisimaya" noted, "the CIS was
thought up" as a kind of "divorce" court, an organization that would
help the post-Soviet states simultaneously unpack the connections
created in Soviet times and lay the groundwork for a new relationship.

            But the comments this time not only in "Nezavisimaya" but in
other publications such as "Svobodnaya pressa"
(svpressa.ru/politic/article/15169/) and Internet portals like
Kasparov.ru (www.kasparov.ru/material.php?id=4ACDBB367E2C8) have been
far more uniformly negative in their assessment of the CIS as an
organization without a future.

            Moscow's increasing reliance on subgroups of these state,
including in particular the Organization of the Collective Security
Treaty, suggest that an increasing number of officials in the Russian
government share that assessment.  And that in turn makes what the
Russian foreign minister said in Kharkhiv far more important than might
otherwise be the case.

            In the early 1990s, the Russian government sought to promote
expanded contacts between regions of the Russian Federation that had
acquired border status because of the independence of neighboring
states. But that effort had been largely on the back burner until
relatively recently. 

            Yesterday, Russian Foreign Minister Lavrov travelled to
Kharkhiv in Ukraine to meet with the leaders of regions on both sides of
the Russian-Ukrainian border in order to do what he could, in the words
of "Rossiiskaya gazeta" to ensure that "political disagreements [between
Moscow and Kyiv] stop being a break for economic cooperation."

            This is the second such meeting of these regional heads in
recent years - the first took place in Belgorod in October 2007 - and
allowed the Russian diplomat to play up the notion that economic
cooperation should take precedence over political disagreements and that
regional leaders are interested in "concrete actions"
(www.rg.ru/2009/10/08/harkov.html).

            At the sessions, it was pointed out that the 20 Russian
regions closest to the Ukrainian border account for 80 percent of
Russian-Ukrainian trade, a pattern that makes such a message of
cooperation especially attractive during the economic crisis. Lavrov for
his part acknowledged that Moscow's relations with Kyiv were not good
but said he hoped better times were coming. 

            In his speech there, Lavrov insisted that "the defining
factor of relations of the two countries was and remains economics," a
view Moscow has often insisted upon as a way of avoiding political
issues and exploiting its own position as the larger of the two economic
systems.

            To enhance that "economic" relationship, he proposed
expanding all kind of economic ties, developing "inter-regional
ecological programs, and organizing a special Union of Leaders of Border
Oblasts in a tripartite fashion, that is, including not only Russian and
Ukrainian regions but Belarusian ones as well.

            In addition, the Russian diplomat called for expanding "the
possibilities of Euroregions" in this area in order to increase
investment and for setting up an Association of Industry and Trade
Houses of the Border Regions of Russia, Belarus and Ukraine," an idea
that he suggested was not political at all but one that many in Kyiv and
elsewhere will see as precisely that.

 

Window on Eurasia: Despite 'Spectre of War' Few Ukrainians Think Moscow
Will Attack, Kyiv Analyst Says

 

Paul Goble

 

            Vienna, October 5 - "Before the beginning of every war," a
Ukrainian commentator says, "there are many in society who do not
believe it will happen," however many signs there may be that point to
the opening of hostilities. But then, once the guns begin firing, they
are "quickly forced to change their point of view." 

            In an article published in Kyiv today, Aleksandr Tolkachov
notes that Ukrainians today are in this position, frequently receiving
warnings of one kind or another from Western journalists or even
anti-Moscow Russians but preferring to believe that despite everything
there will not be a war
(www.pravda.com.ua/ru/news_print/2009/10/7/99858.htm).

            While the opinion of the majority of Ukrainians may prove
correct and that Moscow's threatening posture will not lead to war,
Tolkachov's enumeration of recent events seems to fully justify the
title he has given his article, "The Spectre of an Approaching War," and
the chance he could be right is reason enough to recount the arguments
he makes.

             Recently, Tolkachov writes, Mikhail Khomyakov, a Russian
political exile in Ukraine, reported that broadsides with the words "A
War with Ukraine Will Begin in the Near Future," and the respected Swiss
newspaper "Neue Zuercher Zeitung" said that Moscow was violating
international law and threatening Ukraine just as it did before invading
Georgia last year.

            That paper and other Western news outlets have pointed to
the mass distribution of Russian passports in Crimea just as Moscow did
in Abkhazia and South Ossetia, to Moscow's open support of pro-Moscow
organizations in Crimea and other parts of Ukraine, its economic and
political pressure on Kyiv, and especially its propaganda efforts.

            "For five years," Tolkachov writes, "the
information-propaganda machine of Russia has not ceased to lay on
Ukraine blame for the deterioration of bilateral relations," an effort
that means many in Russia new view Ukraine as "an enemy of Russia - and
one that is in the same rank with Georgia," with which Russia has fought
a war.

            The last two months have featured even more moves that point
to the danger of a beginning of hostilities.  On August 11, Russian
President Dmitry Medvedev delivered an "unprecedentedly harsh" attack on
Ukraine, one that leaves little room for a peaceful resolution of
differences barring a complete capitulation by Kyiv to all Russian
demands.

'           Then in September, the Russian Duma approved an amendment to
the Russian law governing the military, pointedly specifying that Moscow
has the right to use its forces abroad for "the defense of citizens of
Russia on the territory of another state," thus legalizing what Moscow
in fact argued politically a year ago.

            Still more seriously, on September 1, Medvedev put the Black
Sea Fleet under the command of the North Caucasus Military District,
precisely the structure that conducted combined-force operations in
South Ossetia. And there have been reports that many or all of these
units are now on a continuing and heightened state of alert.

            And at the end of last month, Tolkachov continues, there
were numerous but naturally unconfirmed reports in the Ukrainian media
which cited sources in Russia's Black Sea Fleet that Moscow is engaging
in planning exercises for seizing Crimea on the basis of the experience
Moscow gained during its war with Georgia.

            According to the Kyiv commentator, "experts [whom he does
not name in this article] do not exclude" that Russian forces from the
Black Sea Fleet and the North Caucasus Military District could, in the
event of a military conflict, move "before the borders of the Crimean
peninsula" and ultimately occupy "Eastern Ukraine."

            Unlike most Ukrainians and Ukrainian officials, Tolkachov
continues, "the military command of Ukraine recognizes reality and the
closeness of the Russian threat," with some of its officers now rating
the likelihood of the outbreak of a war between the two Slavic countries
as high as 70 percent.

            Concerned that "the period of information, gas and
diplomatic hostilities is approaching an end," the Ukrainian military is
doing what it can to get ready. During the last week of September, it
conducted military maneuvers in Crimea and adjoining territories, but
its commanders recognize that they are vastly outmanned and outgunned.

            Indeed, Tolkachov says, the under-financing of the Ukrainian
army has "practically left it on its knees. Ukrainian soldiers lack
money for uniforms, food, and soap. But the military is prohibited from
complaining about its position," and consequently, many Ukrainians and
others do not recognize how dangerous the country's situation now is.

            In 1991, he suggests, Ukraine had sufficient military
capacity to support a five-million man army for three years of war. Now,
however, it is the conclusion of the local expert community that Ukraine
could "not withstand even a week of full-scale military actions" against
an aggressor. 

            Ukraine's current situation is made worse, Tolkachov says,
by internal political conflicts, the approaching presidential elections
and what is in effect "the absence of state power" in Kyiv.  "In the
Kremlin," he says, they could hardly dream about a better moment for the
resolution of the Crimean question by force."

            If a war is going to break out, he suggests, it will be
preceded by "a series of provocations, possibly, protests and risings of
pro-Russian organizations (with the active support of citizens of the
Russian Federation from among various Cossack organizations and people
with dual citizenship) in problematic regions of Ukraine."

            Unfortunately, Ukraine has few good options. The best is to
"launch a preventive information attack, warning the international
community about this threat." Indeed, Tolkachov says, "the only
possibility of preserving the status quo is to create conditions under
which aggression won't be profitable for Russia."

            If Ukraine succeeds in doing that, something Georgia was
able to do only in part, then any military move Moscow might make
against Ukraine, even if it were "a victory" on the battlefield would
turn out to be "a Pyrrhic one" in which the Russians would lose far more
than they would gain.

             Not surprisingly, the Moscow media features article
suggesting that hysteria over a supposed Russian military threat has
been whipped up by Kyiv for its own political gain, precisely the same
kind of charges the Russian media made a year ago about the reaction of
Georgian officials.

            One can only hope that Tolkachov proves to be wrong and that
Moscow is simply ramping up the pressure on Kyiv in order to secure more
concessions but that the Russian government will not use its forces in
Crimea or invade Ukraine as it did Georgia a year ago.  If those hopes
prove illusory, the resulting tragedy would be incalculably large.

 

--Pavel Korduban

A good news story out of Ukraine and small, practical example of U.S.
assistance at work: 

Effects of introducing Internet at a village public library in Ukraine

http://www.youtube.com/watch?v=a0tmJL_GIhQ

 

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