[Ohio UZO News] Ukraine: WSJ; NYT; WoE; KP

[Deychak, Orest]

The Wall Street Journal

http://online.wsj.com/home-page

 

World News: Ukraine Offers Russia Gas Deal 

By Richard Boudreaux and James Marson 

26 March 2010

A13

MOSCOW -- Ukraine offered Russia a share in the management of a network
of pipelines that carry Russian gas westward across its territory, a
move that could head off midwinter price disputes and gas cutoffs that
at times leave European homes without heat.

As the two countries' prime ministers met on Thursday to open talks on
the offer, Russia indicated it would consider giving Ukraine what it
wants in return: a lower price for its own gas imports.

"We agreed that no issue is closed to us," Russian Prime Minister
Vladimir Putin told reporters after a meeting with his Ukrainian
counterpart, Mykola Azarov.

Mr. Putin called the two countries' gas contract "balanced" and
profitable for Russia but agreed it could be reviewed.

"If we aim to reconsider the price, the question is what we will get in
return," Mr. Putin said. "It would be fair to consider our relations in
the energy sphere as a whole."

Officials of both countries say tough negotiations lie ahead, despite
warmer ties ushered in by Ukraine's election last month of President
Viktor Yanukovych, who is friendlier toward Moscow than his predecessor.
Mr. Yanukovych takes over after years of sparring between the Kremlin
and pro-Western leaders of Ukraine's 2004 Orange Revolution.

Those tensions led to three "gas wars" between Russia and Ukraine and
disruptions of supplies to Europe, which gets about one-fifth of its gas
through Ukraine.

Russian officials welcomed Mr. Yanukovych's election while defending a
10-year gas pricing agreement that he has vowed to undo. The 2009 accord
phased out subsidies and now obliges Ukraine to pay European prices,
$305 per 1,000 cubic meters, for Russian gas.

It is a burden that Mr. Yanukovych says Ukraine's economy, which shrank
15% last year, cannot bear.

Mr. Yanukovych is seeking a one-third reduction in that price, which
would save Ukraine about $3 billion a year. He campaigned on the promise
that he could achieve a lower price by giving Russia a stake in its
pipeline network.

The plan would bring in Russia's gas monopoly OAO Gazprom and a European
company, as yet undesignated, to pay for upgrading the network.

Each company would get a one-third share of a management consortium that
would operate the pipelines under a Ukrainian government concession.

Russia and Ukraine explored a similar arrangement in 2002, but the idea
died when the Orange Revolution leaders came to power and balked at
giving Russia control of the Ukrainian pipelines.

In reviving the idea, Ukraine's new leaders have emphasized that the
state would retain ownership of the pipelines. But the issue of Russian
influence is sensitive in a country mindful of its long domination by
Moscow.

"Handing over management of the gas-transport system is the same as
handing over management of Ukraine," said former Prime Minister Yulia
Tymoshenko, who lost the election to Mr. Yanukovych.

Such opposition in Ukraine makes Russian officials wary, said Alexander
Burgansky, head of oil-and-gas research at Renaissance Capital in
Moscow. "They have a huge interest in Ukraine's pipelines, because they
want to make sure their customers in Europe get their gas," Mr.
Burgansky said. "But they are cautious because Ukraine proved in the
past to be an unreliable partner."

Valery Yazev, Russia's deputy parliament speaker and also Gazprom's
chief lobbyist, said the company was interested in managing Ukraine's
pipelines but was reluctant to agree to price reductions that would
cause the company to incur losses.

---

The New York Times

www.nytimes.com

 

Seeking Lower Fuel Costs, Ukraine May Sell Pipelines 

By ANDREW E. KRAMER 

25 March 2010

Late Edition - Final

14

MOSCOW -- In recent years, state-owned natural gas pipelines in Ukraine
have been the source of such tension that a midwinter fight between
Russia and Ukraine over pricing -- often leading to Russia's shutting
the valves and leaving people in Europe freezing -- has become an annual
ritual.

To prevent such blowups in the future, Ukraine's new Moscow-friendly
president, Viktor F. Yanukovich, has proposed an improbable solution.
This week he opened negotiations with the Kremlin to sell control over
the pipelines' operations to a consortium including Ukraine's usual
antagonist in these disputes, Russia's natural gas giant Gazprom, and an
unspecified European company.

Russia has already negotiated similar agreements with Belarus and
Armenia, where Gazprom owns stakes in the pipeline systems with implied
vetoes over strategic energy decisions and in exchange sells gas at
steep discounts. Belarus, for example, now pays $168 for 1,000 cubic
meters of gas compared with $305 in Ukraine.

If Ukraine had the lower price, it would save about $3.7 billion a year,
supporters of Mr. Yanukovich's proposal say.

>From Russia's perspective, the deal would be a coup in the long-running
quest for supremacy of the Eurasian pipeline network, sometimes called a
modern version of the Great Game, after the 19th century struggle
between Russia and Britain for colonial possession in Central Asia.

Even partial control of the Ukrainian pipelines, which carry about 80
percent of Gazprom's exports to Europe, could eliminate the need for
Russia to build a costly new pipeline under the Black Sea from Russia to
Bulgaria around Ukraine, called South Stream.

But the idea -- illegal under existing Ukrainian law -- is controversial
even though it would help put debt-strapped Ukraine back on its feet.
Kiev spends billions every year subsidizing gas prices for consumers,
and the International Monetary Fund has made reducing such outlays a
condition for resuming lending halted last fall.

Ukrainians now pay about 30 percent of the true cost of heat and
electricity, according to Olena Bilan, chief economist for Dragon
Capital, a Kiev investment bank. The I.M.F. has suggested a variety of
austerity measures, including politically unpopular steps like raising
fees for residential heating. That would not be necessary, however, if
Mr. Yanukovich could swiftly close a deal with Moscow to lower the gas
price.

The idea of transferring pipeline control to a Russian-European
consortium may comfort some European consumers, but it sends chills
through many Ukrainians, who remain fearful of creeping Russian
influence after spending centuries as part of Moscow's empire.

''When the Kremlin loans money, it doesn't want interest, it wants
political concessions,'' Sergiy Terokhin, a former minister of the
economy, said in a telephone interview from Kiev.

Iryna M. Akimova, Mr. Yanukovich's chief economic adviser, said Mr.
Yanukovich was merely fulfilling a campaign promise by negotiating with
the Russians on gas, and if it helped meet international lending
requirements, all the better.

''The new president considers it very important to build good economic
relations with partners in the West and the East,'' Ms. Akimova said.

 

Window on Eurasia: Ukraine Needs a Russia that is a Country like Any
Other - and so Do the Russians, Kyiv Analyst Says

 

Paul Goble

 

            New York, March 26 - Both in the course of the Ukrainian
elections and following the victory of Viktor Yanukovich, Russian
commentators have discussed what kind of a Ukraine Russia needs,
commentaries that have not only implied that only Ukraine needs to
change but also have defined how many analysts elsewhere see the issue.

 

            But in an essay posted online yesterday, Olesya Yakhno, a
commentator for the Ukrainian portal Glavred, argues that this is the
wrong or at least not the only question. And she insists that an equally
or even more important issue for Ukrainians and Russians alike is "what
kind of Russia does Ukraine need?"
(glavred.info/archive/2010/03/25/185832-7.html).

 

            Her answer is that both need Russia to become for Ukraine a
country like any other rather than revisionist state which seeks to
dominate or even absorb its neighbors, thus threatening not only more
conflicts in the future but rendering it almost impossible for Russia
itself to make the transition to a modern, free and democratic country.


 

            Since Yanukovich's victory, she notes, "Russia has hurried
to make a number of acts of obeisance of a public character toward the
new Ukrainian leadership" in order to show that "the period of
Russian-Ukrainian alienation is in the past," that these past
difficulties were the fault of President Viktor Yushchenko, and that
"life is becoming better, life is becoming happier."

 

            At the same time, she notes, Russian commentators have
hurried to specify "what kind of a Ukraine Russia needs," arguing that
Moscow needs a Ukraine which is "predictable" both at home and abroad,
"semi-authoritarian" for whom "'stability' is a euphemism for reform,
and which makes Russian the second state language and the Moscow
Patriarchate the main church.

 

            Moreover, these Russian commentators have said, Russia needs
a Ukraine which will not join NATO but will allow Russia's fleet to
remain in Crimea after 2017 and will meet the "business needs" of the
Russian political elite, needs, which remain largely "outside of the
framework of public discussions."

 

            And at the most general level, the Glavred commentator says,
Russians "consider (or give the impression they do) that for effective
cooperation and the conduct of a friendly policy between Russia and
Ukraine, the preeminent factor is the level of loyalty of the Ukrainian
president to Moscow."

 

            But in all these discussion, Yakhno continues, one question
is missing: "what kind of Russia does Ukraine need?"  And behind that
question, for which Russian commentators have failed to provide any
answer, is "another question," one that if anything is more fateful:
"What kind of Russia does Russia itself need?"

 

            It is clear, the Glavred writer says, that "the format of
bilateral Russian-Ukrainian relations depends more on Russia than it
does on Ukraine," something that is not a source for optimism because
"even with friendly countries" like Belarus and Kazakhstan,  Russia has
difficulties maintaining close ties.

 

            The situation with Ukraine in this regard is especially
important, she says.  While relations between Russia and Ukraine under
Yushchenko were not especially good, "however paradoxical it may sound,
his presidency despite all the anti-Yushchenko rhetoric of Russian
politicians, had its benefits for the ruling Russian tandem."

 

            Ukraine, second only to Georgia, played the chief "anti-hero
in the Russian public space." And the existence of that image obviated
the need for "real policy" and even "allowed the Russian powers that be
to hide Russia's lack of a serious strategy relative to the CIS
countries in general and Ukraine in particular."

 

            In fact, Yakhno continues, it allowed Moscow the chance to
"project Russia on a blank screen as a giant of geopolitics."  

 

            There is no doubt that relations between Moscow and Kyiv
will improve now that Yanukovich is president. But "in order that
cooperation bear a real and not exclusively declarative character, it is
obvious that there will have to developed an integral and internally
consistent philosophy of these relations," a challenge above all for
Russia.

 

            That is because, Yakhno suggests, "the position of Ukraine
through the period of independence was and is unchanged."  Yanukovich
has "reaffirmed that the strategic goal of the foreign policy of Ukraine
is European integration, alongside effective cooperation with Russia and
the US."

 

            Given that "multi-vector approach," she writes, "where
Europe is conceived of as a political partner and model of the future,
and Russia as above all an economic counter-agent and 'reliable rear,'
inherited from the past," Kyiv's choice will remain with the future, and
"therefore, there will not be a cardinal turn of Ukraine toward the
Russian Federation."

 

            And what that means, Yakhno says, is that "the real test for
Russian-Ukrainian relations did not end with the departure of Yushchenko
but only began with the installation of Yanukovich in office" because
Moscow can no longer avoid facing the need to develop a real policy
toward Kyiv rather than hide behind denunciations of the Orange
Revolution.

 

            Whether Moscow is up to that task is unclear, she writes.
Not only does Russia face a broad range of economic and political
problems at home, but the regime itself is divided about what it wants
and will do next. President Dmitry Medvedev clearly wants to see some
kind of modernization, although "today few people in modernization
Kremlin-style."

 

            As for Prime Minister Vladimir Putin, Yakhno continues, he
has talked about three "possible variants of the development of the
political system on the post-Soviet space:" 

Ukrainianization, which Russians understand to mean "political
instability and a lack of control," "harsh authoritarianism"
(Turkmenistan), and semi-authoritarian Putinism as in Russia.

 

            Putin clearly wants the third to continue in Russia, "even
if this directly contradicts modernization," as it almost certainly
does.  That is because, Yakhno insists, "modernization is possible only
under conditions of 'Ukrainianization' or 'authoritarianism," the one
allowing messy competition and the other marching forward under tight
control.

 

            The tension between the requirements of modernization and
the needs of the members of the current set of powers that be in Moscow
to remain in office, the Ukrainian analyst continues, are creating
conditions for the rise of "subjectivism in politics," a term taken from
the Khrushchev period.

 

            It refers, Yakhno says, to an approach which rejects
"institutional forms of control" and thus opens the way for actions
"which do not take into account the objective patterns of history and
the real circumstances of the contemporary development of the country."
In short, it leads to decisions "based on faith in the all powerful
nature of administrative and force decisions."

 

            Such an approach, now very much in evidence in Moscow, does
not create the kind of Russia that Ukraine needs, Yakhno says.  She then
gives a list of six qualities that she argues Russia needs to develop if
it is to have good relations with its neighbors and to develop and
modernize at home.

 

            First, she writes, Ukraine needs a Russia "which clearly
understands its place in the contemporary world: a major, economically
powerful and rich country with enormous natural resources and human
potential but not a global or even a regional power."

 

            Second, Ukraine needs a Russia which "is not an empire but a
contemporary nation state." Third, it needs a Russia which "at least
approximately believes in what it officially proclaims." Fourth, it
needs a Russia "which thinks in the categories of politics and not
business camouflaged as politics.

 

            Fifth, it needs a Russia which "decides above all its state
tasks and not the tasks of big business." And sixth, it needs a Russia
"which can once and for all formulate an exhaustive list of its
expectations from Ukraine," thus allowing Kyiv to respond positively to
those it agrees with and negatively to those it does not.

 

            In sum, Yakhno says, "Ukraine needs a Russia will simply be
another country, important and strong to be sure, but one of the other
countries and not the boss, not the elder brother, and what is the most
important thing, not an eternal factor in Ukrainian domestic politics."

 

            That will benefit both countries because "when the policy of
Ukraine in the Russian direction finally becomes a foreign and not a
domestic manner, then will take place the psychological liberation of
Ukraine and its elite from Russia, and Ukraine finally will acquire its
independence."

Kyiv Post

Jackpot

2010-03-26

Peter Byrne 

As new political cartel forms, nation will retest adage that absolute
power corrupts absolutely. 

With the executive and legislative branches of government firmly in his
grasp, Ukrainian President Viktor Yanukovych is now moving loyalists to
key leadership positions in the nation's notoriously corrupt judicial
system. ...

Complete article:  http://www.kyivpost.com/news/nation/detail/62564/

 

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