Dialogue Of The Deaf: Ukraine And The EU Talk Past Each Other

KIEV, Ukraine -- On March 20, the Ukrainian parliament voted to accept a report by its Temporary Investigative Commission that looked into the January 2009 gas contract signed by Prime Ministers Yulia Tymoshenko and Vladimir Putin.
Parliament voted by 266 deputies to accept the report accusing Tymoshenko of “treason.”

The report claimed that Tymoshenko was blackmailed by Russia into accepting gas prices that were disadvantageous to Ukraine because United Energy Systems, which she ran in the mid-1990s, owed Russia $400 million.

Bizarrely, on the same day the Ukrainian parliament issued a lengthy resolution calling on the EU to “demonstrate political will and ensure the speedy signing of the association agreement between Ukraine and the EU”.

Earlier this month, President Viktor Yanukovych issued detailed instructions “On the working out and affirmation of plans toward the integration of Ukraine to the European Union in 2012”.

During an official meeting in Germany, the head of the Presidential Administration’s department on international relations, Andriy Honcharuk, said that European integration remains Ukraine’s main foreign policy goal.

“Our main aim in 2012 is the signing of the Association Agreement with the European Union,” he said.

This affirmed what President Yanukovych told the January Davos World Economic Forum:

“Ukraine sees its future in the European Union. 2011 was a constructive year for Ukraine’s European integration. Membership of the European Union is the basis for the democratic development of Ukraine, improvement of its economy, personal freedoms and well-being of every citizen”.

To prove their case, the Party of Regions has launched and is financing the European Centre for a Modern Ukraine (ECMU) in Brussels.

The ECMU board includes three Party of Regions deputies and three Western Europeans with links to the Socialist political group in the European Parliament.

In 2010, the Party of Regions signed a cooperation agreement with the Socialist political group and the main lobbyist was Ion Iliescu, a Romanian MEP.
Since summer 2011, cooperation has waned and the Socialist Group refused to send greetings to the Party of Regions March congress.

Today, Viktor Yanukovych’s party has no ties with European or North American political parties and the greetings to its March congress that it did receive were indicative of how bad the Party of Regions’ reputation is.

The only greetings that were sent were from the Bulgarian Socialist Party, the Communist Party of China, the Communist Party of the Socialist Republic of Vietnam, the Political Council of the ruling Azeri Party “Yeni Azerbaijan,” the United Russia party, and from Gagik Tsarukyan, the oligarchic leader of the “Prosperous Armenia” party.

The greetings are a better reflection of the reality facing President Yanukovych and the Party of Regions than its statements, presidential instructions and parliamentary resolutions.

In an interview with the news outlet Den, the Czech Ambassador to Ukraine Ivan Pochukh said that: “it is necessary to tell Ukrainian citizens that the process of the completion of the Association Agreement and Free Trade Zone have been curtailed”.

This re-affirmed what has been repeatedly said – but ignored by Kiev – by EU leaders. Swedish Minister of Foreign Affairs Carl Bildt told the same Davos summit attended by Yanukovych that:

“The question stands as follows: can Ukraine return to the path of European integration, or will Ukraine be stuck on what is its de facto departure from the path of European integration?”.

On March 4, Bildt, William Hague, Karel Schwarzenberg, Radoslaw Sikorski and Guido Westerwelle, the foreign ministers of Sweden, Britain, the Czech Republic, Poland and Germany, signed a joint opinion article in The New York Times that lambasted democratic regression in Ukraine.

They said, “Today, however, we are at an impasse in the association process. While negotiations on the association agreement were successfully concluded in December 2011, the way forward – through signing and ratification of the agreement – has in effect been blocked by Ukraine’s actions”.

The five foreign ministers continued, “The reason for this is simple: Developments in Ukraine in the last two years have caused us to question Kiev’s intentions with respect to the fundamental values that underpin both the agreement and our relations in a broader sense.”
The response from Ukraine’s Minister for Foreign Affairs Kostyantyn Gryshchenko was published in The New York Times on March 20, not coincidentally the same day as parliament voted on the temporary commission report into the 2009 gas contract that denounced Tymoshenko’s “treason”.

Gryshchenko claimed that: “Ukraine is committed to European values. We are not sliding but striding toward full integration into the European Union.”

His statement blatantly contradicted European and American government opinions of Ukraine’s recent track record, as well as that of international organizations and human rights groups.

With such a dialogue of the deaf, it is highly surprising that some seasoned US and European diplomats and ex-Ambassadors to Ukraine were saying right up until summer 2011 that the Yanukovych administration was listening to Western criticism.

Former US Ambassadors to Ukraine Steven Pifer and William Taylor were willing to believe that: “If President Yanukovych is committed to European integration and EU membership, his administration’s domestic actions make achieving that goal much tougher.

Yanukovych declares, like former President Leonid Kuchma, that he seeks EU membership.

But this declaration means little if the political culture underpinning his administration seeks a monopoly of power at home and builds an authoritarian system.

Until the summer of 2011, Western policymakers mistakenly took at face value Yanukovych’s and Gryshchenko’s pro-European rhetoric, similar to that quoted above, when they should have been highly skeptical.

The reality facing Ukraine is three-fold:

Firstly, the EU will initial the Association Agreement on March 30, a technical step that signals the end of negotiations and which should have taken place at the December 2011 EU-Ukraine summit in Kiev.

The EU has stated, as quoted above, that the next two steps will not take place until Kiev no longer undertakes a selective use of justice against the political opposition.
These next two steps are the signing of the Association Agreement by the European Council (EC) and the EC’s recommendation for ratification to the European parliament and EU member state national parliaments.

Secondly, the EU has stated it will not recognize Ukraine’s October parliamentary elections as having been undertaken in accordance with democratic standards if opposition leaders are in jail and not permitted to participate in them.

In such a situation, visa black lists and sanctions could follow in 2013 – the same year Ukraine is set to hold the rotating chairmanship of the OSCE.

Thirdly, Ukraine’s relations are frozen with the IMF at a time when Ukraine’s financial situation is deteriorating as seen on March 15 when the S&P downgraded Ukraine’s credit outlook to “negative.”

This year Ukraine has to cover or rollover $6 billion in external and $3 billion in domestic debt obligations.

Yanukovych cannot fulfill the EU’s demand and release Tymoshenko as he then would likely be criminally charged and the Party of Regions would lose this year’s elections.

Although Ukraine loses out from its frozen integration into the EU this is of less strategic importance to the Yanukovych administration than its maintaining a monopoly of power coupled with its ability to continue travelling, working and playing in the EU.

Ukraine’s elites have long been integrated into Europe and do not care if they deny this possibility to their Ukrainian citizens.

Ukraine, EU Initiate Association Agreement

KIEV, Ukraine -- Ukraine and the European Union have initiated an association agreement, putting Kiev one step closer to membership in the bloc.
European officials have referred to Friday's proceeding as a technical measure similar to proofreading the lengthy document, which is the product of five years of negotiations.

The accord must now be translated into more than 20 EU languages and approved by all members before it can move forward, a process that is expected to take months.

The association agreement is not expected to be signed until after Ukraine holds parliamentary elections in October 2012.

EU officials have said they will not sign the document until they see improvements in Ukraine's adherence to the EU's "core values," which include an independent judicial system, free and fair elections and constitutional reform.

The two sides are also at odds over Ukraine's jailing of former Prime Minister Yulia Tymoshenko for abuse of power.

The EU has called for her release, saying the charges against her are politically motivated.

Ms. Tymoshenko is a political rival of Ukrainian President Viktor Yanukovych.

The former prime minister and opposition leader was convicted and sentenced to seven years in jail in October for abusing her authority in a 2009 gas deal with Russia that her opponents say was too beneficial to Russia.

She denies any wrongdoing, and has described her trial as "a political lynching" aimed at allowing President Yanukovych to rid himself of a political rival. He denies the accusation.

European Parliament demands perfect democracy from Russia

The European Parliament adopted an ambiguous resolution on the presidential elections in Russia. The resolution serves two masters, as they say. On the one hand, the European Parliament described the electoral process in Russia as "not free and unfair." On the other hand, the parliament is optimistic about the future and the further dialogue with Russia.

However, Russia could expect nothing else from Strasburg, which has been trying to put pressure on Moscow over its stance on Syria. Practically all world leaders - from Merkel and Cameron to Obama - congratulated Vladimir Putin on his victory.

The European officials particularly believe that the Russian voters had been given a "limited choice," because the Central Electoral Commission refused to register the candidate of Yabloko party, Grigory Yavlinsky. The Commission denied registration to Yavlinsky after it had rejected, about 25% of signature sheets in his support (that were actually photocopies).

European MPs called on the Russian authorities to "thoroughly and openly" investigate the violations, which observers, including OSCE/ODIHR representatives, pointed out. However, the MPs called upon themselves to look into the future, rather than the past. The European deputies also stated that the European Union was determined to continue the development of the strategic partnership with Russia.
The European resolution pleased the co-chairman of People's Freedom Party (known for the Russian initials as PARNAS), Mikhail Kasyanov. Upon his return from Strasbourg, the politician told Interfax that he was "satisfied with the fact that European politicians open their eyes wider to the deteriorating situation with human rights and political freedoms in Russia. This political assessment coincides with both my position and that of PARNAS," the opposition politician stated. It appears that Mr. Kasyanov has decided to ignore the other side of the story.

The Executive Director of the Russian Foundation for Free Elections, Igor Bogdanov, expressed his opinion about the European resolution in an interview with Pravda.Ru. According to him, "the Russians elected their new president in a unique, well-organized and well-conducted election." "It was unique because so many web-cameras have never been used at poll stations anywhere in the world before," he added.

According to the expert, the presidential election campaign had certain violations and drawbacks. "But it's a natural process that accompanies any election campaign," said Bogdanov. "Assessing any campaign in Europe or in the U.S., one can find even a larger number of drawbacks," he said. "And it is not objective to question the election, which took place in our country, especially if it is being done by the people, who have never been here, but who instead listen those who scream and shout about mass violations," says Bogdanov.

A recent poll conducted by the All-Russian Public Opinion Center showed that only a third of respondents admitted "minor fraud" which did not eventually affect the outcome of the vote (34%). Those who do not believe in the announced victory of Vladimir Putin are in the minority (14%). Moreover, according to sociologists, only 2 percent of respondents said that they had noticed violations with their own eyes. On the whole, 78 percent of voters do not doubt the legitimacy of the elected president.
The head of the Russian Public Institute of the Electoral Law, Igor Borisov, said that the European Parliament resolution "had nothing to do with reality." "Official representatives of the European Parliament (it goes about the delegation), were not observing the elections in Russia. They make their statements from the words of Russian politicians - the losers, who reside in Europe and who constantly tell some sort of horrible things about the Russian elections," Borisov told Pravda.Ru.

"We had five European MPs working at the independent group of international observers. They were present here and could personally observe all of the voting and counting procedures," Igor Borisov added. "All of them highly estimated the voting process and the counting of votes. Moreover, they recommended to use some elements of the electoral system for the elections to the European Parliament. I would like to see the transparency of the procedures, through which the European Parliament is formed," concluded the expert.

Indeed, one may assume that the elections in the EU or in the United States are perfect in contrast to the "dirty Russia." In France, for example, the candidate of the National Front far-right party, Marine Le Pen, did not have the right to participate in the presidential campaign just before March 15. And all of her appeals to the Constitutional Court were wasted. In Estonia and Latvia, the so-called non-citizens have no voting rights at all.

Do we need to say anything about the manipulations with voting lists or about the use of administrative resources in the United States? Democrats still accuse Florida governor Jeb Bush of giving decisive help to his brother during the presidential campaign in 2000.

There are no perfect democracy role models. However, the European Parliament does not want to understand that.

EU expert: Schultz not to influence struggle in Ukraine

Brussels – The newly elected president of the European Parliament, Socialist leader Martin Schulz, will not influence the political struggle in Ukraine in general, but he could change its tone, European expert Ina Kirsch has said.

He said in an interview with Interfax-Ukraine in Brussels, while speaking about possible changes in the European Parliament related to Schultz's election as its president that Schulz had clearly outlined the priorities of his work in the post. "He said that he intends to make clearer the position of the European Parliament in its relations with other EU institutions. Therefore, his activity, at least, at the beginning of his mandate, will be more oriented towards the EU's internal policy and less towards its external policy," she said. But the expert categorically rejected the possibility that the European Parliament would forget about Ukraine during Schulz's presidency. "The Eastern Partnership and partnership with the EU's neighboring countries play a significant role in the European Parliament. Schultz represents the interests of the whole parliament, and therefore, the struggle that is going on in the European Parliament with respect to Ukraine will continue, but will, perhaps, change in its tone," the expert said. In addition, she said that the tone of statements and assessments made with respect to Ukraine "was not set by the president." "The leading forces were the factions that will remain: the faction of the [European] People's Party will continue to support [former Ukrainian Prime Minister] Yulia Tymoshenko, and cooperation will continue between the European Socialists and [Ukraine's] Regions Party. The tone of this struggle will not change," Kirsch said. She also said that Schultz would not use his levers of influence as president of the European Parliament. "The president represents the interests of the whole parliament, and he, as president, will represent the interests of all parliamentary groups - both the Populists and Socialists," she said. Kirsch also stressed the important role of the European Parliament in connection with the upcoming initialing and signing of the EU-Ukraine Association Agreement. "We hope that the association agreement will be initialed soon, and then it will be important whether the EP is ready to support the signing of this document and its ratification – much depends on the EP. Therefore, they are unlikely to forget Ukraine, and they might not remember only Tymoshenko, but also other important issues," Kirsch said. Schultz was elected president of the European Parliament on January 17, 2012 by a majority of parliament. The post of EP president was earlier held by Jerzy Buzek, a representative of the European People's Party

Irish bank foiled in attempt to recoup Ukraina mall for debt

Kyiv’s lucrative Ukraina shopping mall is on the verge of forever falling out of the reach of foreign shareholders following a court ruling on Dec. 23 that could render it bankrupt.

An Irish bank’s attempt to collect on debts by taking control of Kyiv’s landmark Ukraina shopping mall is being frustrated at every turn by a mysterious company whose representatives evidently wield strong influence in Ukraine.

On Dec. 23, a Kyiv court granted a $45.2 million claim filed by a British Virign Islands-registered firm against the property, putting the shopping mall on the verge of bankruptcy.

The ruling was just the latest move in a grueling battle over control of the 45,000 square-meter property.

One player is the Irish Bank Resolution Corporation, a state-owned Irish financial institution which had lent money with the mall used as collateral. Some say that another group involved is Irish citizen Sean Quinn and his family, the former beneficiary owners of the estimated $50 million shopping center, who seem to be attempting to halt the transfer of properties to the lender.

Their legal duel is being fought in Ukraine’s notoriously corrupt judicial system, among other places.

Quinn and his family had borrowed heavily from IBRC – formerly known as Anglo Irish Bank – to amass a global business empire that included concrete factories, hotels, wind farms and the Ukraina department store, as well as other international properties.

Just under four years ago, Forbes magazine ranked Quinn as Ireland’s richest man with a fortune estimated at $6 billion. But his riches dissipated in the wake of the 2009 global economic recession.

And when Quinn’s conglomerate collapsed, his banker, IBRC, began collecting what remained of his assets.

Yet IBRC’s global fishing expedition has largely come up short in trying to recover Quinn’s $675 million worth of far-flung properties in India, Russia, Cyprus and Ukraine.

Quinn’s bankers suspect he and his family are still in control of these assets and are keeping them beyond their reach, including the Ukraina shopping mall.

Altogether, IBRC is trying to recoup $4 billion in alleged losses from Quinn Group, now in bankruptcy receivership, the holding company once controlled by Quinn and his family.

On Jan. 10 a Northern Ireland court denied Quinn's recent bankruptcy application.

Thus far, it appears IBRC has the weaker position, at least in its attempt to seize and access the estimated $10 million annual rent roll of the Kyiv property.


Just days before the New Year, Kyiv Commercial Court Judge Maria Litvinova granted a $42.5 million claim against Ukraina by a mysterious company named Lyndhurst Development Trading, which is based in the British Virgin Islands,

The amount is remarkably close to the estimated market value of Ukraina, which was built in 1963 and refurbished in 2003.


The shopping mall has more than 50 shops and an entertainment complex that includes bowling, a nightclub, cafes and movie theaters.

IBRC called the ruling “legalized robbery” and an unprecedented “cynical deprivation of property.”

A spokeswoman for Quinn Group denied any involvement in the dispute, which was even raised during talks between President Viktor Yanukovych and Irish Prime Minister Enda Kenny when the two met in Warsaw on Sept. 29.

However, The Irish Times reported that Quinn’s 30-year old daughter, Aoife, has said in an affidavit that the family is seeking to protect its international properties from being seized by IBRC and that the family disputes the bank’s right to the properties.

Since April, Ukraina’s former Quinn-backed management launched at least seven court cases in Kyiv courts, all of which have successfully thwarted IBRC from seizing the shopping mall. The mortgage loan’s validity is in dispute.

The 92.75 percent shares in Ukraina that belong to a Quinn Group subsidiary in Sweden have been frozen, and successive court injunctions have delayed the installment of a new company director, amid additional litigation.

To add a bizarre twist to an already complicated court fight in Ukraine, the shopping mall was represented in the Dec. 23 hearing by Larysa Yanez Puga, the director who had been ousted earlier by a newly appointed supervisory board.

The newly appointed director, Rostyslav Levinzon, was barred from participating in the legal proceeding.

In addition, the ousted supervisory board members -- on which Sean Sr. and Peter Quinn sat – miraculously reinstated Puga as director on Dec. 19 with the government registrar. Peter Quinn’s signature, as head of the former supervisory board appears in the registration file, a lawyer with Magisters, which is representing the Irish bank, told the Kyiv Post.

IBRC now expects the Quinn-backed manager of the Ukraina shopping mile to file a bankruptcy application that would deny the state-owned financial institution money owed to it.

The Irish bank’s efforts to claim and manage other foreign properties that formerly belonged to the Quinn family have also been met with stiff resistance.



The scope of the effort involves a portfolio that stretches over 70 companies in 14 countries. IBRC has so far failed to gain control of a $5 million site for a hotel in India, according to a recent news report. A court injunction there blocked the bank and the company behind the move is based in the United Arab Emirates, where registered corporate directors are kept confidential.

In another strikingly similar scenario, the $180 million Kutuzoff Tower in Moscow has also been kept out of the hands of IBRC. It has an estimated rent roll of $19 million. Courts in Moscow recently recognized a debt claim worth $100 million against Finansstroy, the company that operates Kutuzoff. The company behind the debt claim is registered in Belize.

The Irish Times recently uncovered an apparent link between the Belize and British Virgin Islands companies with Quinn’s nephew and son-in-law.
“We have no idea who the brain is,” Robert Dix, director of Quinn Holdings, Sweden told the New York Times.

His company is the nearly 93 percent shareholder in Ukraina. It was established by Quinn in order to minimize taxes and enable his five adult children to control his global portfolio. “But it has to be somebody very clever because it’s very consistent,” Dix told the newspaper.

After the court hearing in Ukraine on Dec. 23, IBRC swiftly moved to counter-attack. The High Court in Belfast has barred the debt claim against the Ukraina shopping mall and Kutuzoff Tower in Moscow. IBRC also secured mirror orders from the courts in the British Virgin Islands and Belize, a person with knowledge of the case said.

The Irish bank has also launched a public campaign and has called on Prime Minister Mykola Azarov to look into the situation.

According to The Irish Times, the court injunctions prohibit the Belize and British Virgin Island offshore companies from spending any money remitted to them as a result of the loan agreements.

IBRC has also threatened to disclose evidence of fraud as part of its efforts to seize the Kyiv and Moscow properties. The bank has already secured a court order in Belize to uncover the beneficiary owners of the company there and is seeking a similar order in the British Virgin Islands

The East-To-West Pipeline Game

The early opening of the Nord Stream pipeline is the latest gambit in the geopolitical chess match between Russia and Europe.

Pipelines connect the energy rich with the energy poor, essentially tying them together forever and in the process giving the transited lands a crucial role to play.

In the gas pipeline game being played by Russia, the former Soviet satellite states and Europe, everyone appears set on upping the stakes this winter.

Which explains why the ubiquitous Vladimir Putin, the Russian Prime Minister and, as now announced, the certain, again, next President of Russia, officiated on September 6 as the Nord Stream pipeline started pumping “technical gas” (necessary to build pressure) in advance of pumping gas directly from Russia to its German destination via a route that bypasses troublesome former Soviet states like the Ukraine.

The pipeline achieved this feat by being laid offshore and traversing the Baltic Sea.

It is hardly surprising that the Russian premier should take such interest in the project given the fact that foreign gas sales account for about 20 percent of the country’s income.

In Russia, as Steve LeVine noted in Foreign Policy, “control of the flow of hydrocarbons means raw power.”

With Putin, as we have written in From Soviet to Putin and Back, power is the seminal quality.

With European gas consumption expected to grow by a further 50 percent over the next decade, it is set to remain a highly lucrative market for Russia’s most important export and a necessary element of the very real goal coveted by that country: control over Europe.

The early opening of Nord Stream was surprising, and it represents the latest throw of the dice in the pipeline game.
Running under the Baltic past Finland, Sweden and Denmark, Nord Stream achieves two goals in just one play.

First, it eliminates any chance of a repeat of previous years’ interruptions in gas supply to Europe, the result of ongoing market skirmishes between Russia and one of the transit countries – Ukraine.

And, at the same time, the opening of Nord Stream leaves Ukraine – a country without significant energy reserves of its own – even more vulnerable to having its gas supplies cut off this winter.

A spat over prices and an outstanding bill have already seen the Ukrainian government threatening unspecified “consequences” if Russia’s gas prices aren’t lowered.

Alyona Getmanchuk, Director of Kiev’s World Policy Institute, has complained about Gazprom’s policy that ties its contract gas prices to the world oil price.

Given that the impact of U.S. shale gas is keeping gas prices down, Getmanchuk wants to sever the link between world gas and oil prices, much as companies in Germany and Italy are trying to do.

The partnership between Russia’s Gazprom and Germany’s E.ON and BASF-Wintershall anticipates that the 1,220-kilometer Nord Stream pipeline will deliver up to 55 billion cubic meters (just about 2 Tcf) of gas per year to Europe when it reaches capacity in 2013.

This is a sizeable chunk of Russia’s current total exports to both Eastern and Western Europe of 4.5 Tcf.

In a pre-launch television address, Putin spelled out how it would also offer Russia a freer “local” hand in future negotiations, stating, “Gradually, in a calmer manner we are departing from the diktat of the transit states” – a dark allusion to dealings with the Ukraine, in particular.

Not that Ukraine is about to repeat the mistakes of 2006 and 2009.

Talks between Kiev and Moscow may be currently deadlocked, but Ukraine’s President Victor Yanukovych has already rebuffed both an offer to join the Russian-dominated Customs Union and a Gazprom-dangled carrot of an $8 billion discount on its outstanding invoice, the latter amounting to an effective buyout of the Ukrainian national oil and gas company, Naftohaz Ukrainy.

Instead, Yanukovych has threatened to take Russia to “international arbitration” over the terms of its contractual agreement with Gazprom while, at the same time, resuming attempts to buy direct from gas-rich neighbor Turkmenistan, as it did in 2003.

But the plain fact is, in an energy-starved country, Ukraine may not have a lot of choices and could well be facing yet another cold winter of discontent over gas imports from Russia.

And the tangled web of Eurasian pipeline politics doesn’t stop there.

Europe, Nabucco & South Stream

While the EU will no doubt welcome its states avoiding being caught up in the spat between former Soviet allies, an online Nord Stream creates as many political problems as it solves.

Within days of the Nord Stream launch, Russia was back-slamming the EU over its offer to broker talks between energy-rich Azerbaijan and Turkmenistan – which, traditionally, have not enjoyed good relations – with the aim of constructing a trans-Caspian pipeline supplying Turkmen gas to the gas-starved EU-backed southern corridor Nabucco project.

A Caspian-Nabucco pipeline link-up would not only bypass Russian territory but would fulfill Europe’s strategy of diversifying away from its current reliance on Russian gas imports.

Nabucco is thus the chief rival to the other Russian-backed southern corridor pipeline, South Stream, which would provide a direct link with southern Europe via the Black Sea.

South Stream could be pumping gas before 2017 – ahead of Nabucco and precisely why, in May 2011, a Russian Gazprom-led “charm offensive” saw all of South Stream’s operators, including representatives from Germany’s BASF and Italy’s ENI, wining and dining EU Energy Commissioner Günther Oettinger in Brussels.

Leaving aside the murky geopolitics that sees German and Italian companies effectively co-operating in undermining the EU-backed Nabucco project, South Stream could still fall afoul of EU rules that would force Gazprom to open South Stream to independent suppliers.

That’s something Gazprom would be loath to do.

Meanwhile, there is also an intriguing sub-plot for European geopolitics.

While Nord Stream diminished any immediate concerns over gas supply interruptions as a result of tensions between Russia and its former satellite states, the EU energy minister currently wants European governments to give him a mandate to speak with “one voice,” not only in negotiations over the Caspian pipeline link for Nabucco but also its political corollary – the power to block individual EU states from cutting bilateral energy deals without close scrutiny by Brussels.

But a mandate effectively devolving power over national energy security matters to Brussels is likely to test the resolve of leaders in most European capitals, especially Berlin.

A Tangled Geopolitical Web

The Russo-German “special relationship,” as we have noted elsewhere, remains the Grand Narrative underlying Eurasian pipeline politics.

And that means two things.

First, Russia will hold the strong regional hand for years to come.

And second, Germany, for all its EU rhetoric, will, as the involvement of its national companies and former leaders with the Russian-backed Nord and South Stream pipelines reveals, continue to undermine the attainment of a “one voice” EU energy policy.

Moreover, these words concluding our year-ago article, “Turkmen Gas: ‘Anywhere but Europe,’ Urges Russia,” may seem, in light of recent developments, ominously prescient for Caspian geopolitics generally:

A Kremlin security document, approved by President Dmitry Medvedev and published by the Russian Security Council in May 2009 has already sanctioned the use of military force to protect Russia’s post-Soviet return to “energy superpower” status, specifically citing the Caspian as an area of potential conflict.

The invasion of Georgia in 2006 – does anyone really think it was all about South Ossetia? – is powerful testimony that Russia’s foreign policy “tank” is still fuelled by oil, or gas.

EU-Ukraine Pact Finalized But Won’t Be Ratified Because Of Former PM Tymoshenko Case

KIEV, Ukraine -- The European Union on Monday balked at signing a landmark cooperation agreement with Ukraine over the jailing of former Prime Minister Yulia Tymoshenko, in a move that could push Kiev back into Russia’s orbit as it lobbies Moscow for cheaper gas prices.
EU President Herman van Rompuy said that the long-awaited deal outlining political and economic cooperation between Kiev and Brussels has been finalized, but its signing hinges on Tymoshenko’s fate.

“We want to take steps to sign and ratify the agreement as soon as we can, but this would depend on political circumstances,” van Rompuy said at the end of an EU-Ukraine summit.

“In this regard, a number of recent domestic developments in Ukraine have led to a difficult atmosphere between the European Union and Ukraine.”

“Our strong concern is primarily related to the politically motivated justice in Ukraine and the Tymoshenko case.”

The EU and the United States have strongly condemned the October sentencing of Tymoshenko, now the top opposition leader, to seven years in prison on charges of abuse of office as politically motivated and demanded her release.

Tymoshenko, who became an opposition leader after losing the premiership in 2010, was found guilty of overstepping her authority while negotiating a natural gas import contract with Russian in 2009.

She charges that her longtime foe, President Viktor Yanukovych, has ordered her imprisonment in order to bar her from elections.

Yanukovych has defied Western pressure to release Tymoshenko, saying prosecutors and courts acted independently in her trial.

Moreover, Tymoshenko has been charged and investigated in scores of new criminal cases since her imprisonment and a court ordered her indefinite arrest as part of new probe, even if her current jail term is overturned.

Ukrainian and EU officials had long planned to sign the agreement during Monday’s summit.

Yanukovych expressed hope on Friday that the deal would be signed.

The failure to sign it comes as major disappointment for Yanukovych, who has made membership in the 27-nation bloc a top priority.

Tymoshenko’s jailing has presented the EU with a dilemma.

Some experts believe the bloc should not be partners with a government that throws opposition leaders in jail.

Others say that snubbing Ukraine would push it back under Russia’s influence as Kiev is courting Moscow for cheaper natural gas.

Yanukovych reiterated Monday that Kiev is seeking a lower price and expressed hope that a new deal would be reached soon.

High-level talks between Russian and Ukrainian officials are expected this week.

Von Rompuy also called on Ukraine to implement legal reforms, ensure media and civic freedoms and conduct a clean parliamentary election next year.

“The key to strengthening our relations is in the hands of the Ukrainian authorities,” European Commission President Jose Manuel Barroso said at a joint press conference at the end of the summit.

EU Stalls Ukraine Trade Deal Over Tymoshenko Treatment

BRUSSELS, Belgium -- The European Union will not formalise any deal it reaches with Ukraine at a summit on Monday, EU diplomats said on Friday, even as the country’s president expressed confidence that an agreement would in fact be signed.

At stake for Ukraine is an association agreement, a broad framework for relations that encompasses a free trade deal with the EU.

But this appears likely to be derailed by the EU’s dismay at the treatment of opposition figures in Ukraine, including jailed former Prime Minister Yulia Tymoshenko.

EU diplomats said it remained unclear if the text of the agreement would be concluded, and EU ambassadors had agreed at a meeting on Thursday they would not initial the deal even if it were finalised.

The two sides had concluded an integral text for the agreement but were still haggling over a clause in the preamble of the deal, said one EU official.

Ukraine wants this to confirm its identity as a European country and thus its eligibility for eventual EU membership, the EU diplomats said.

However, the EU wanted to see evidence of improvement in Ukraine’s treatment of political opponents.

“We have seen...a number of shortcomings throughout the whole cycle of the judicial process,” said one of the EU officials.

“It’s a systematic problem for which Yulia Tymoshenko has become a symbol.”

Any deal would still need to be ratified by parliaments of all the 27 EU states and the European Parliament before if could be implemented, a process that at the best of times can take many months.

However, President Viktor Yanukovich said Monday’s summit marked the culmination of four years negotiations and he expected it to be a success.

“We are geared up for the signing of the agreement on association with the European Union, which has recognized Ukraine’s right to become a full-fledged member of the European community,” he told the diplomatic community in Kiev on Friday.

Earlier this year, the two sides had looked to Monday’s summit to showcase the agreement.

But the EU side has recently been offering an ambiguous construction merely “noting the importance Ukraine attaches to its European identity”.

“We will have to see if Ukraine can accept that,” one diplomat said.

“If they do, the initialling can be done, but not during the summit, because we do not want to make it look like business as usual. The initialling could take place some days afterwards and before the year-end, but the pre-requisite is an agreement on the preamble.”

Progress needed

Diplomats said Ukraine would have to show clear progress in political reform and its treatment of opponents for all member states to agree to ratification.

“For our government we do not want to ratify, or sign, unless there is change in Ukraine’s internal politics,” one EU diplomat said.

Diplomats said a joint statement from the summit simply acknowledging the talks had been formally concluded may be the best that can come from the summit — but this would be tantamount to a diplomatic failure.

And it would come despite the fact Tymoshenko and her daughter have called for the process of concluding and signing the agreement to go ahead.

On Wednesday, her daughter Yevgenia, told Reuters the EU should sign, but impose sanctions on Ukrainian leaders.

Tymoshenko was jailed for seven years in October on charges of abuse of office.

She called the verdict a “lynching” by Yanukovich, her old political enemy, and the EU said it was politically motivated.

Her family and defence counsel say her health in prison is deteriorating and she is suffering skin problems and serious back pain requiring treatment and physiotherapy.

Ukraine European Union Soup ‘Turns Toxic’

BRUSSELS, Belgium -- Ukraine’s European integration process may be derailed if the authorities continue to keep opposition leader Yulia Tymoshenko in jail, according to the European Policy Center, a Brussels-based think tank.

Ukraine and the European Union are due to hold a summit on December 19 in Kiev at which a political association and free trade agreement were supposed to be initialed.

“With just over three weeks until the EU-Ukraine Summit, the future of EU-Ukraine relations hangs in the balance,” Amanda Paul, an analyst at the European Policy Center, wrote for EU Observer.

“The trial and imprisonment of former prime minister Yulia Tymoshenko for abuse of power while in office has turned Ukraine’s EU soup toxic,” Paul said.

Ukraine has been a significant factor behind the EU’s progressively increased engagement in its eastern neighborhood, with Kiev repeatedly pushing the EU to bring more to the table.

While a clear EU membership perspective has been off the menu, Association Agreements, Deep and Comprehensive and Free Trade Areas (DCFTA) and visa liberalization have been proffered.

Indeed, all the other countries in the region have gained from Ukraine’s endeavors.

“Unfortunately, it would now seem there is a real possibility that while all the others (except Belarus) continue to have progressive relationships with the EU, Kiev's European integration process risks derailment,” Paul said.

Not only has it damaged Ukraine's image, it has given those that have always opposed Ukraine's further integration with the EU, ammunition to block Kiev.

The EU has always been adamant the Tymoshenko case is politically motivated and therefore linked signature of the Association Agreement to the case, signaling it expected Ukraine's President, Viktor Yanukovych, to find a way to release Tymoshenko and allow her to re-enter political life.

Yanukovych has claimed that if he pressures the judge he would directly violate independence of judiciary, although few believe in the independence of Ukrainian courts any way.

Moreover by doing this, the EU has contradicted itself by demanding independence of the judiciary while at the same time suggesting Yanukovych should intervene.

The Tymoshenko case is currently in the Court of Appeals.

While the court is due to give a verdict in December, it is unclear whether or not this will be before the December 19 summit.

Furthermore, it seems unlikely that Tymoshenko will be released, not least because of new charges brought against her for her involvement in the Scherban murder case.

However, in light of what is at stake in terms of the EU’s relationship with a key strategic partner, and more broadly for its entire Eastern Partnership policy, it seems that most member states are prepared to initial the agreement - signature will almost certainly not happen until after Ukraine's crucial Parliamentary elections in October 2012.

“However, while France is still wavering, Germany, which has recently been pushing for closer relations with Russia, is continuing to insist that Tymoshenko's release must be a pre-condition,” Paul said.

Moreover, the EU should take a look at the approach of its own institutions which often display an unprincipled approach, in particular in the European Parliament.

The European Peoples Party (EPP) seems to be demonstrating a policy of supporting its members.

“The EU will gain nothing from disengaging with Kiev other than helping to contribute to an increasingly unpredictable and unstable Ukraine, which will only serve to undermine its policy to increase democracy and freedoms in this region,” Paul said.

The EU should not delay the Association Agreement which ideally should also include a reference to Article 49, allowing Ukraine to join the EU in the future.

Indeed, the EU should create a specific monitoring instrument to ensure Kiev’s commitment in this area which could also be presented at the December summit.

“When real incentives are put on the table, progress usually happens,” Paul said.

Ukraine Leader Defends Straddling East, West In International Relations

KIEV, Ukraine -- Ukraine’s prime minister says he sees no conflict in his country’s pursuit of better relations with the market-diverse European Union, which has criticized the government’s jailing of a pro-democracy advocate, and oil-rich Central Asia, where authoritarian regimes remain strong since the 1991 fall of communism.

“Ukraine is in between these two blocs, and it is in our self-interest to live peacefully with both,” Mykola Azarov said

In a wide-ranging recent interview, Mr. Azarov discussed the abuse-of-power trial and sentencing of former Prime Minister Yulia Tymoshenko, Ukraine’s leading pro-democracy advocate, and his country’s energy future.

But he focused on his country’s relations with the West and the Commonwealth of Independent States (CIS), which is made up of former Soviet republics, like Ukraine itself.

If “we look ahead 10 or 20 years, I believe the European Union will have changed considerably, and the CIS countries will have changed as well, and that the basic principles that exist in the European Union, like freedom, human rights, and democracy will be more and more the same principles of the CIS countries,” he said.

Mr. Azarov, 63, mentioned a recent visit to the Yuzhmash machine-building plant in the city of Dnipropetrovsk.

During the Cold War, the top-secret plant had been used to build Soviet satellites and missiles.

Today, it is developing parts of the U.S.-led program to develop the Stanford Torus space station, he said.

“Twenty years ago, nobody would have been able to imagine that this facility that had been a classified military facility in Soviet times would be working on an important joint project with the United States,” Mr. Azarov said.

“That is why I am optimistic about the future. I believe the future will belong to all sorts of integration. I believe mankind will face difficult challenges that will require a high degree of integration to resolve.”

He said he sees Ukraine growing closer to EU and CIS countries, as well as those two blocs growing closer to each other.

“Yes, this will happen, and I believe Ukraine, which borders both groups, will play an important role in making that happen,” Mr. Azarov said.

Some of that integration is already taking place - at least with the CIS.

During an October summit in St. Petersburg, Russia, Ukraine signed a free-trade agreement that includes seven other former Soviet states and guarantees that gas from Central Asian republics such as Turkmenistan, Uzbekistan and Kazakhstan will soon make its way to Ukraine through Russian territory.

It is a deal Mr. Azarov said is key to ensure that Ukraine will have a diverse enough energy supply to avoid a repeat of the Russia-Ukraine gas crisis that had left Ukrainians freezing almost every winter since 2005.

Mrs. Tymoshenko’s seven-year prison sentence in connection with a natural-gas deal she signed with Russia is one of the obstacles in the way of Ukraine’s increased integration with the European Union.

EU leaders have condemned her sentencing as an example of a shoddy and unfair Ukrainian justice system.

But Mr. Azarov brushed aside those concerns, casting the Tymoshenko case as an example of the exercise of the rule of law.

“There is a lot of myth and a great deal of suspicion surrounding this case, but if one looks at the court documents, it is clear that she was sentenced for breaking the law during the course of concluding the agreements with Russia,” the prime minister said.

“She pushed through the controversial contract and said she had a decision from the government when it was her decision alone, with no support from lawmakers. This is the essence of the case, and to insist she should be freed is to say the law should not be followed.”

He declined to criticize the EU’s condemnation of the Tymoshenko case, saying the problem is a lack of understanding.

“Should a government official be allowed to act unilaterally, the way Tymoshenko did?” Mr. Azarov said.

“If those who have criticized the Ukraine believe the way Tymoshenko conducted herself was right, then that is one thing."

“But I do not believe that was the case, and I was surprised to note how quickly assessments were made with no attempt to understand the situation. Only the judicial system has the right to make such assessments about innocence and guilt.”

Due West: Ukraine Still At The Crossroads

MOSCOW, Russia -- Will Ukraine join NATO? This question seemed to have been buried last year with the election of Viktor Yanukovych to the presidency.

It seems to me now that the issue wasn't closed but rather put in a cold storage facility somewhere in the near proximity of the presidential chancery on Kiev's Bankovaya street.

I have just returned from the Ukrainian capital, where the first ever “Ukraine-Russia-NATO” conference took place.

North Atlantic Alliance officials, diplomats, experts and politicians met to discuss the present and try to chart the future of the relationship in the Moscow-Kiev-Brussels triangle.

Actually, what became quite clear to me is that there is indeed a triangle, in which both Russia's and Ukraine's links with the alliance are significantly influenced by what happens between the capitals of our two neighboring countries, which while having so much in common, still go their own ways.

The similarities were easy to agree upon for the Russian and Ukrainian participants alike.

Both countries suffer from a post-Soviet identity crisis.

Both are being governed by political classes which are selfish, corrupt and - twenty years after the death of the Soviet Union - unable to offer both nations a vision for the future, which would be inspiring and realistic at the same time.

Both peoples are cynical.

However here the similarities end and differences begin.

The main one is simple yet profoundly important: Ukraine does not have what could be called a “post-imperial hangover”.

Its identity crisis stems from the fact that it had little experience with independent statehood and was an integral part of Russia.

This definitely provides for a confused identity.

However Ukrainian politicians do not have to cater to the taste for imperial grandeur territorial expansion and fortress mentality.

This is exactly what their Russian colleagues are doing.

Partly because this is what an average Russian still longs for – a sense of being a citizen of a superpower that struts the world stage meting out patronage to friends and dependencies and rough justice to enemies.

But partly these stereotypes are perpetuated and nurtured by Russia's rulers themselves.

They find it convenient to govern a society that constantly looks back towards the past.

This helps them to avoid painful questions about the future, including the main strategic dilemma: whether Russia will join what could roughly be called the “global West” or start an inevitable slide towards becoming a vassal of rising China in all but name.

The first path would mean adopting a significant part of Western values, like transparency and accountability, real media freedom and rule of law.

It also means that a regular change of government and fair elections are to become the norm, rather than the exception.

This is not something that Russia's ruling elite is ready to contemplate, at least for now.

The second path is something it is not prepared to contemplate either, but in fact Russia's rulers are leading the country down this path through their inaction and corruption.

Russia remains suspended between the past it cannot pronounce a firm judgment on and a future that is hazy at best, and dark at worst.

Ukraine did not have the imperial demons to exorcise.

Because of this it feels more at ease with accepting advice from Europe and America and even states its Euro-Atlantic preferences as a matter of government policy.

This was actually done by President Leonid Kuchma more than ten years ago.

As opposed to Russia, Ukrainians have no problem with joining clubs in which they are not dictating the rules.

Since then, Kiev has been blowing hot and cold over NATO membership but the goal of joining the EU is still considered to be one of the national policy cornerstones.

Though NATO membership was officially taken off the agenda in Ukraine, a staggering 25 to 30 per cent of population supports it.

Even under Yanukovych, who muzzles the media and jails opponents, chances of closer relationship with the Euro-Atlantic community of nations remain fairly high.

“Yanukovych doesn't have the economic and political resources to resist Western pressure that Putin has,” a professor from the Ukrainian Diplomatic Academy told me, “that's why he will eventually have to release Yulia Timoshenko from prison. That's if the EU really chooses to lean on him.”

I must admit I am not so certain.

That Yanukovych wants to emulate some of the Russian examples in dealing with opponents is evident.

And for the time being he might succeed.

But in the long term the Ukrainian expert is probably right – the Euro-Atlantic game remains the only viable option unless the Ukrainian businessmen and politicians (these two words essentially mean the same in Ukraine) decide to opt to become Moscow's vassals – which is highly unlikely.

“The problem with the our rulers is that they are essentially business people, lacking in political thinking,” says Mykola Versen, one of Ukraine's most popular TV and radio hosts, “hence their inability to produce a blueprint for the country's future”.

I tend to agree with Mykola.

The Ukrainian elite uses relations with the EU and NATO as a bargaining chip in gas negotiations with Russia, and they play “the Moscow card,” when dealing with Brussels.

They simply have no time, inclination or ability to formulate political strategy.

Eventually this will be done by a new generation of Ukrainian decision makers.

I have little doubt that their choice will be made in favor of integration with the EU, and, to the chagrin of the Russian political class, NATO.

Or, maybe, luckily for Russia by that time its own political leaders will have less time for Soviet nostalgia and more for doing what the Ukrainians will eventually do – finally join the “global West”.

EU demands Georgia let Russia into WTO

Russia is knocking at the door of the World Trade Organization (WTO) like never before, but American opponents are rocking the boat as Europe puts pressure on Georgia to accept Russia.

Europe came on side in a deal on Friday and is now lobbying Tbilisi to back down from its veto and accept Moscow’s bid to join. Russia is currently the only major economy not in the WTO.But while the US is on board for now strong voices of dissent are coming from Congress. Of the 153 countries in the WTO it takes just one to black ball Russia’s bid and Tbilisi has made it clear that Russia must drop its recognition of sovereignty for Abkhazia and South Ossetia if it wants to join the WTO club, egged on by some in Washington.

Gunnar Wiegand, EU top diplomat for Russia and Central Asia, met with Georgian counterparts Tuesday and told them that Georgia needs to toe the line and fast, the Wall Street Journal reported.

If the Georgians drag their feet then the EU would table an exemption in the WTO rule book, allowing Russia in by majority rather than by unanimous vote, a huge loss of face for Tbilisi.

But dissent could still come from other corners. John Boehner, Republican house speaker, is threatening to block Russia WTO legislation and calling for the much vaunted Russia-US reset to go on ice until Moscow cleans up its human rights act and recognizes the “territorial independence” of next door Georgia, he said in a speech to the Heritage Foundation, Bloomberg reported.

Brussels is currently drawing up formal plans for Russia to join the WTO between March and June next year.

Nor did the Democrat Oval Office give the Russians must cause for optimism. “The Obama administration remains unwavering in its commitment to Georgia’s territorial integrity,” White House spokesman Tommy Vietor said in a statement, WSJ reported.

All good between Russia and EU if internal directives don’t interfere

The European Union’s internal directives should not impede Russian-European energy cooperation, President Dmitry Medvedev said Thursday after talks with Dutch Prime Minister Mark Rutte in Moscow.

“In the energy field, everything is good and will be good, if certain directives within the EU do not interfere with the development of a full scale cooperation,” Medvedev said, RIA Novosti reported.

Earlier in October, Medvedev said that the EU’s Third Energy Package creates problems for gas cooperation between the EU and Russia.

The Third Energy Package demands production, transportation and sales of energy must be separated. The package affects Russian gas giant Gazprom’s operations in particular, as it produces and sells gas and owns transportation facilities.

In September, EU authorities initiated searches in Gazprom’s European units, which sells, pumps and stores gas in EU member states on suspicion of them being involved in anticompetitive practices, or having information relating to such practices.

EU Gets Tough With Ukraine

KIEV, Ukraine -- Following a trial that has dominated headlines for months, last week former Ukrainian Prime Minister Yulia Tymoshenko received a seven-year prison sentence for the abuse of power while in office.

Additionally she was banned from holding any government position for three years following the completion of her sentence and ordered to pay $189 million to the state for losses caused by the 2009 Russia-Ukraine gas deal, which she signed with Russian Prime Minister Vladimir Putin.

While this verdict may have come as no surprise to many people, it nevertheless still caused shock waves in the West, with the EU feeling particularly annoyed.

Brussels seemed to believe that it had convinced Ukrainian President Viktor Yanukovych to prevent the guilty verdict.

However, given that Yanukovych has always claimed he had nothing to do with the process and would not interfere with an independent judicial procedure, he clearly felt that to do so now may expose him as being behind the whole case.

The verdict was also not well received in Ukraine.

Not because Tymoshenko is particularly popular, because she is not.

Indeed recent polls show her still trailing behind Yanukovych, which is telling in itself, demonstrating that Ukrainians have still not forgotten her disastrous years in office, when she made a lot of promises but delivered nothing.

Rather, the concern is about Ukraine’s democracy.

While it is highly unlikely that another orange-like revolution will now occur in the streets, it may take place at the ballot box at the 2012 parliamentary elections.

Unless of course Yanukovych produces some outstanding results in terms of reforms improving the quality of peoples lives, including increasing money in people’s pockets, over the next 12 months.

The EU had given Yanukovych several warnings in the run-up to the court’s verdict.

Even Ukraine’s closest allies, such as Poland, had been pressing the president.

Indeed for Poland, which currently holds the EU’s rotating presidency, there is a big sense of disappointment.

Finalizing an Association Agreement, including a groundbreaking Deep and Comprehensive Free Trade Agreement (DCFTA), currently in the final stages of negotiation with Kiev, by the end of the year was a priority.

This agreement is now in jeopardy.

Furthermore, even if the agreement were to be initialed by year’s end, it is unlikely to be ratified by EU national parliaments or the European Parliament as long as Tymoshenko remains in prison.

On Oct. 17, the EU postponed Yanukovych’s Oct. 20 visit to Brussels.

Unfortunately, they decided to deliver this news on the very morning the Ukrainian parliament was due to start the process of debating amending the criminal code, which could eventually pave the way for the release of Tymoshenko.

This was not well received in Kiev, which saw it as yet another signal of the EU pushing Ukraine away, something the EU has been doing ever since Ukraine’s independence.

Even in the aftermath of the 2004 Orange Revolution, when Ukraine became a beacon of democracy in the region, the EU failed to change its policies, maintaining the same agreements negotiated with former autocratic President Leonid Kuchma, and advising Ukraine not to even think about applying for membership.

While the visit by Yanukovych has now been rescheduled for mid-November it would seem that whether or not it actually takes places depends on the next steps taken by Ukraine’s leadership.

The EU is still expecting the release of Tymoshenko and her return to normal political life, including participating in the 2012 parliamentary elections.

This can be achieved by amending the criminal code in parliament.

Tymoshenko’s lawyers are due to file a motion in the court of appeals this week.

Over the last days many different messages have been flying out of Ukraine.

Some have hinted at the Ukrainian side possibly delaying ratification of the Association Agreement while others are saying that Kiev is still hopeful of striking a bargain with the EU.

As usual Ukraine is being predictably unpredictable.

The stakes are very high, for both the EU and Ukraine.

Ukraine is a key strategic partner. Isolating Ukraine is not the answer.

What Ukraine needs is increased engagement and help in reforming its judicial and legal system.

By pushing Ukraine into a corner the EU is almost guaranteeing instability in the country.

As Ukraine is a direct neighbor, instability will have a direct impact on the EU on a whole range of issues, including human and drug trafficking and illegal migration.

There will be no winners in this situation other than Ukraine’s big neighbor Russia and those EU countries that never wanted closer integration with Ukraine in the first place.

Ukraine has been the lead country in the EU’s European Neighbourhood Policy and Eastern Partnership Initiative.

It was Ukraine that worked and pushed for Association Agreements, DCFTAs and visa liberalization for countries in the East.

All these countries have gained from Ukraine’s efforts.

Yes, Ukraine has made some mistakes but the EU has politicized the issue and lashed out particularly harshly.

I wonder if it will have the same approach to other countries in this region that are also negotiating such agreements and are far from perfect democracies?

EU Still Interested To Sign Association Agreement With Kiev

KIEV, Ukraine -- The European Union still would like to sign an agreement of association with Ukraine, although the EU is unhappy with the sentence of ex-prime minister Yulia Tymoshenko and another criminal case recently initiated against her, EU Enlargement Commissioner Stephan Fule said on Saturday.

"No one from the European Union say that we are breaking off all contacts with Ukrainian officials. Our interest in signing an association agreement remains. The contract is important for Ukraine and important for the EU," Fule said in an interview to Svoboda radio station in Ukraine.

"However, there are certain conditions the EU and its member countries consider essential in order that we could make this last step in signing the agreement."

In mid-October, Tymoshenko was sentenced to seven years in jail on charges of abusing her power in the signing of a 2009 gas deal with Russia that Ukraine seeks to review.

Ukraine's security forces also filed a new criminal case surrounding a $405-million debt her former company owed to the Russian Defense Ministry.

The EU and the United States have described the case as politically motivated, and Moscow said it had a "clear anti-Russian subtext."

A week after Tymoshenko's sentence was announced, the EU has put on hold the visit by Ukraine's President Victor Yanukovych to Brussels to discuss outstanding details of an association agreement with Europe.

However, this Thursday, the sides succeeded to agree trading terms of the agreement providing a free trade zone between Kiev and the EU.

Fule said Tymoshenko's case was the last obstacle in signing the agreement.

"We have been discussing these conditions for a long time and talking about it very straightly. We also hear about it from the opposite side and I personally present at talks with the leaders of Ukraine, when we were assured that the situation is to be resolved."

"However, instead of the situation was resolved, we are witnessing the sentence of former prime minister Tymoshenko. And then we learn about one more criminal case initiated against her. Of course, it disappointed us," said Fule.

EU: Ukraine Deal Awaiting Action On Tymoshenko

BRUSSELS, Belgium -- The European Union said on Thursday it had reached a technical agreement with Ukraine on a free trade deal, but linked its implementation on Kiev's treatment of the jailed former prime minister and opposition leader, Yulia Tymoshenko.

EU Trade Commissioner Karel De Gucht said the agreement was reached during talks with Ukraine's Deputy Prime Minister Andriy Klyuyev, two days after a visit by President Viktor Yanukovych was indefinitely postponed when it became clear that Tymoshenko would not be immediately released.

"It is now up to the Ukrainian leadership to create the political conditions wherein this deal can materialize," De Gucht told a European Parliament committee.

He said the deal could be fully concluded by the end of the year "of course provided that the political conditions are created so that this deal can happen in practice."

Klyuyev told reporters that Ukrainian leaders were doing "everything to eliminate all obstacles" toward the association deal.

"The Ukrainian President together with parliament are now doing everything in order to solve this problem," Klyuyev said, in remarks confirmed by his press office.

The breakthrough was the latest development in a turbulent week of EU-Ukraine relations.

Tymoshenko was sentenced to seven years in prison last week on charges of abuse of office for her role in the signing of a natural gas import contract with Russia in 2009.

She dismissed her trial as Yanukovych's attempt to bar her from parliamentary elections next year.

The EU joined the United States in condemning the conviction as politically motivated and called for political and judicial reform to overturn the conviction and prevent similar cases in the future.

Despite the decision to call off the visit of Yanukovych, the EU kept stressing the importance of the free trade deal and said negotiations should not be held hostage by political events.

The EU has said it could greatly expand the euro28.7 billion ($39.6 billion) annual trade flow between the two.

The EU accounts for a third of Ukraine's exports and the agreement could boost that further.

"It would open each others' markets, it would modernize and diversify Ukraine's economy, and, most important of all, it would be a milestone in sharing our common European values," De Gucht said.

Kiev Should Be Considered As Future EU Member Says Azarov

YALTA, Ukraine -- Kiev's accession to the European Union in the future is inevitable and should be reflected in the political association agreement between Ukraine and the EU, Prime Minister Mykola Azarov said on Saturday.

Kiev intends to integrate with Europe and plans to sign a political association agreement by the end of 2011, which will lead off formation a free trade area with EU.

However, Europe still undecided whether to include the prospect of Ukraine's membership in the EU in the association agreement or not, which in fact is just a bureaucratic dispute, said Azarov.

"We definitely need to include, if we think about the future. Let's remember what China was 30 years ago, and then look for at least 10 years ahead. Ten years later, our current disputes would seem absolutely pointless. But we have to finish this discussion," said Azarov.

European Commissioner Fule to meet with Yanukovych and Azarov in Yalta

European Commissioner for Enlargement and European Neighborhood Policy Stefan Fule will meet Ukrainian leaders in Yalta to discuss urgent issues between Ukraine and the European Union.

Fule will visit Ukraine on September 15-17 to participate in the 8th Yalta Annual Meeting "Ukraine and the World: Common Challenges, Common Future" in the Livadia Palace in Yalta.

Ukrainian Foreign Ministry spokesman Oleksandr Dykusarov said during a briefing on Tuesday that the EU commissioner would meet Ukrainian delegation.

"During the meetings, the sides will discuss relations between Ukraine and the EU, in particular, within the context of the completion of talks on the signing of the Association Agreement, the creation of a free trade area, and the development of the dialogue on the visa-free regime," he said.

Tymoshenko Arrest 'Obstacle' To Ukraine's EU Bid

JURATA, Poland -- President Bronislaw Komorowski said after his meeting with Viktor Yanukovych in northern Poland, Tuesday evening, that the arrest and trial of Yulia Tymoshenko could be seen as “an obstacle” to Ukraine's further integration with the European Union.

The two leaders met in the presidential seaside retreat in Jurata on the Baltic coast, where talks ranged over issues connected with Ukraine's bid to complete negotiations on signing an Associate Agreement, free trade and visa waiver deals with Brussels.

President Komorowski told the TVP public broadcaster last night, however, that though Ukraine has made significant progress in some areas in recent years, "There are also obstacles”.

“Undoubtedly, the trial of Yulia Tymoshenko is an obstacle [which] spoils the image of Ukraine abroad and may constitute a major problem to the advancement of Ukraine to the Western world," the president said.

Poland remains a “good friend and role model” for Ukraine, Komorowski added, however, and Kiev's incorporation into the EU and western structures remains one of the priorities during Poland's six-month EU presidency, which began on 1 July.

The Ukrainian newspaper Kommersant writes this morning that President Yanukovich's trip to Poland is the first to a western country since former prime minister Tymoshenko's trial began in Kiev, where she is charged with abusing public office in 2009 when making gas deals with Russia during her term of office.

The newspaper writes that a source close to Yanukovich said that the arrest and imprisonment of Tymoshenko, after she called the judge a “puppet” of the president's regime, was brought up at the meeting with Komorowski.

Tymoshenko claimed yesterday in court that more than 200 pages are missing from a Russian natural-gas contract at the centre of her trial in Kiev.

"You have not provided access to the materials of the criminal case. You gave only 1 1/2, two days to review the materials when you had much more than two days," said one of the leaders of the 2004 Orange Revolution.

US Senator and former presidential candidate John McCain joined a growing list of politicians in America and Europe calling for the release of Tymoshenko amid concerns that the charges are politically motivated.