KIEV, Ukraine -- The deputy head of Ukraine's state veterinary committee said on Monday the country had banned the import of live pigs and pork from Mexico, Canada, the U.S. and New Zealand as fears grew of a swine flu pandemic.
He said the ban concerned all products imported from these states since April 21."Such shipments will not be received or unloaded on Ukrainian territory," Yuriy Satvary said.Ukrainian Prime Minister Yulia Tymoshenko said on Monday a special group had been established in the former Soviet republic to study issues connected with swine flu. There have so far been no reported cases in Ukraine.The virus is suspected to have killed over a hundred people in Mexico, although only 20 cases have been confirmed. Over a 1,000 people have been infected with the virus in the Latin American country.Forty cases of swine flu have been confirmed in the United States and six in Canada, although there have been no fatalities. The United States has declared a public health emergency. One case of swine flu has also been confirmed in Spain. A number of cases of possible swine flu have also been reported in the U.K.World Health Organization director general Margaret Chan warned on Sunday that the outbreak had "pandemic potential", and urged governments to improve measures to monitor the virus.
Thursday 30 April 2009
EU Studying Mission To Ukraine, Steinmeier Says
BERLIN, Germany -- The European Union could send a mission to Ukraine to help the country deal with a political deadlock hindering the country’s response to the economic crisis, German Foreign Minister Frank-Walter Steinmeier has said.
The fact-finding mission would be aimed at establishing how the 27-nation bloc can help the country from sliding further into political and financial instability, Steinmeier told journalists after talks with EU counterparts in Luxembourg on Monday."Developments there are worrying ... We must try such a mission to help find the national consensus needed to overcome the crisis in Ukraine," he said.He said there was "a broad consensus" among EU states for such a move, which was proposed jointly by Germany and Poland, and that EU foreign policy chief Javier Solana would now discuss the idea with Kiev."It is timely to explore how we can best assist the country in tackling its current difficulties," Steinmeier said.Earlier, the top adviser to President Viktor Yushchenko said Ukraine's economy would likely shrink by 8-10 percent ths year, rather than the 0.4 percent growth forecast by his government, Reuters news agency reported.Divided UkraineSweden's foreign minister, former premier Carl Bildt, said the EU was deeply concerned by the ongoing feud between Ukraine's president and prime minister, which has blocked the country's bid to bring in reforms demanded by the International Monetary Fund in return for a massive bail-out."There's every reason to be worried. They have a very major economic crisis ... On top of that, we've got the political divisions in the country," he said.The country's inability to agree on IMF-mandated reforms is "more than regrettable, that is bordering on the dangerous for the country," he said.Ukraine is one of six former-Soviet states that the EU has invited to join its "Eastern Partnership" cooperation group, which will be launched at a summit in Prague on May 7.Ahead of the launch, concerns in Europe have grown over the threat of instability in Ukraine and Moldova, the state of democracy in Belarus and unresolved conflicts in Georgia, Armenia and Azerbaijan.Bildt said that those problems make the partnership "more needed than ever.""I don't think anyone (in the EU) is under the illusion that we are entering into relations with a couple of Switzerlands," he said.
The fact-finding mission would be aimed at establishing how the 27-nation bloc can help the country from sliding further into political and financial instability, Steinmeier told journalists after talks with EU counterparts in Luxembourg on Monday."Developments there are worrying ... We must try such a mission to help find the national consensus needed to overcome the crisis in Ukraine," he said.He said there was "a broad consensus" among EU states for such a move, which was proposed jointly by Germany and Poland, and that EU foreign policy chief Javier Solana would now discuss the idea with Kiev."It is timely to explore how we can best assist the country in tackling its current difficulties," Steinmeier said.Earlier, the top adviser to President Viktor Yushchenko said Ukraine's economy would likely shrink by 8-10 percent ths year, rather than the 0.4 percent growth forecast by his government, Reuters news agency reported.Divided UkraineSweden's foreign minister, former premier Carl Bildt, said the EU was deeply concerned by the ongoing feud between Ukraine's president and prime minister, which has blocked the country's bid to bring in reforms demanded by the International Monetary Fund in return for a massive bail-out."There's every reason to be worried. They have a very major economic crisis ... On top of that, we've got the political divisions in the country," he said.The country's inability to agree on IMF-mandated reforms is "more than regrettable, that is bordering on the dangerous for the country," he said.Ukraine is one of six former-Soviet states that the EU has invited to join its "Eastern Partnership" cooperation group, which will be launched at a summit in Prague on May 7.Ahead of the launch, concerns in Europe have grown over the threat of instability in Ukraine and Moldova, the state of democracy in Belarus and unresolved conflicts in Georgia, Armenia and Azerbaijan.Bildt said that those problems make the partnership "more needed than ever.""I don't think anyone (in the EU) is under the illusion that we are entering into relations with a couple of Switzerlands," he said.
Ukraine Airport Arrivals To Walk Mats Soaked With Disinfectant
KIEV, Ukraine -- Air travelers arriving in Ukraine from countries hit by the swine flu virus must exit their plane across mats saturated with disinfectants, according to Health Ministry instructions going into effect on Tuesday. The anti-virus pathways are to be at the exits of aircraft arriving from Mexico and the US, government officials said.
All plane arriving on Ukrainian soil from Central and North America will receive "intensified health inspections," government spokesman Mykola Kornienko said, according to Fakty newspaper.Ukraine's leading airline Aerosvit on Tuesday issued medical masks and gloves to air crew traveling on routes linking with the US and Mexico, to be used in assisting passengers showing signs of flu infection.Air crew working Aerosvit's popular New York-Kiev route by government order must indentify to authorities at Kiev's main airport Boryspil the names of all passengers aboard displaying symptoms including fever or chronic cough, Kornienko said.Similar measures will go into effect in other Ukrainian airports servicing international routes, said Vasyl Kniazevich, Ukraine's Health Minister, at a Kiev press conference.A total ban on import into Ukraine of live pigs from any country and of raw pork products from Mexico, New Zealand, Canada, and some US states also was in effect, Sehodnia newspaper reported.Ukraine's government had no supplies of swine flu vaccine, and so was recommending increased vitamin C intake, non-consumption of imported pork products, and avoiding crowds, as the best ways for Ukrainians to avoid infection, said Oleh Nazar, a Kiev city health official.
All plane arriving on Ukrainian soil from Central and North America will receive "intensified health inspections," government spokesman Mykola Kornienko said, according to Fakty newspaper.Ukraine's leading airline Aerosvit on Tuesday issued medical masks and gloves to air crew traveling on routes linking with the US and Mexico, to be used in assisting passengers showing signs of flu infection.Air crew working Aerosvit's popular New York-Kiev route by government order must indentify to authorities at Kiev's main airport Boryspil the names of all passengers aboard displaying symptoms including fever or chronic cough, Kornienko said.Similar measures will go into effect in other Ukrainian airports servicing international routes, said Vasyl Kniazevich, Ukraine's Health Minister, at a Kiev press conference.A total ban on import into Ukraine of live pigs from any country and of raw pork products from Mexico, New Zealand, Canada, and some US states also was in effect, Sehodnia newspaper reported.Ukraine's government had no supplies of swine flu vaccine, and so was recommending increased vitamin C intake, non-consumption of imported pork products, and avoiding crowds, as the best ways for Ukrainians to avoid infection, said Oleh Nazar, a Kiev city health official.
Poland Fears Losing Influence In Ukraine
WARSAW, Poland -- Ukrainian Secretary of the National Security Council Raisa Bohatyriova will visit Poland today to meet with President Lech Kaczynski, head of the National Security Office, Foreign Minister and Minister of Defense.
The politicians will discuss security strategies drawn up at the NATO Summit in Strasbourg, the European Union’s European Partnership that Poland and Sweden have initiated and prospects of integrating energy security policies.Meanwhile, former political rivals, President Lech Kaczynski and former president Aleksander Kwasniewski met two weeks ago to discuss current political crisis in Ukraine, Dziennik reveals. Ukrainian President Viktor Yushchenko, strongly supported by Polish political elites during the so called Orange revolution in 2004, will soon step down. The parliament in Kiev has set the next presidential election for October.Yushchenko has declared, however, that he is ready to resign even sooner, if early parliamentary elections were held simultaneously.Opinion polls show clearly that both Yushchenko and his party has little chance to win a ballot held in the near future.. Polish politicians are worried, because Ukraine led by a new government will probably be more pro-Russian and less pro-European.The meeting between Kaczynski and Kwasniewski took place on 14 April, just a day before Kwasniewski’s visit to Kiev. The former president was invited by the Open Ukraine Foundation of Arseniy Yatsenyuk, a former Ukrainian head of diplomacy.Kwasniewski made a speech on strategic perspectives of Ukraine and met with leading Ukrainian politicians, Dziennik reports.
The politicians will discuss security strategies drawn up at the NATO Summit in Strasbourg, the European Union’s European Partnership that Poland and Sweden have initiated and prospects of integrating energy security policies.Meanwhile, former political rivals, President Lech Kaczynski and former president Aleksander Kwasniewski met two weeks ago to discuss current political crisis in Ukraine, Dziennik reveals. Ukrainian President Viktor Yushchenko, strongly supported by Polish political elites during the so called Orange revolution in 2004, will soon step down. The parliament in Kiev has set the next presidential election for October.Yushchenko has declared, however, that he is ready to resign even sooner, if early parliamentary elections were held simultaneously.Opinion polls show clearly that both Yushchenko and his party has little chance to win a ballot held in the near future.. Polish politicians are worried, because Ukraine led by a new government will probably be more pro-Russian and less pro-European.The meeting between Kaczynski and Kwasniewski took place on 14 April, just a day before Kwasniewski’s visit to Kiev. The former president was invited by the Open Ukraine Foundation of Arseniy Yatsenyuk, a former Ukrainian head of diplomacy.Kwasniewski made a speech on strategic perspectives of Ukraine and met with leading Ukrainian politicians, Dziennik reports.
Russia, Ukraine Move To Ease Energy Tensions
MOSCOW, Russia -- Russia and Ukraine moved Wednesday to repair their strained relations, pledging cooperation on energy and a range of other issues that have plagued ties between the two ex-Soviet neighbours.
Ukrainian Prime Minister Yulia Tymoshenko said her country had asked Russia to help upgrade its gas transit system, after Moscow complained of being left out of a deal between Kiev and the EU on upgrading Ukraine's ageing pipelines."We have invited Russia as one of the main partners to modernise the Ukrainian gas transportation system," Tymoshenko said at a joint press conference with her Russian counterpart, Vladimir Putin.Putin said Moscow deserved a role in upgrading Ukraine's pipeline network, which handles the majority of Russian natural gas exports to Europe."We are not seeking to manage, but we are the main and only supplier to the Ukrainian pipeline system," he said, following talks with Tymoshenko.Putin added that Russia would not demand billions of dollars in fines from Kiev -- a possibility that had been raised after Ukraine, hit hard by the economic crisis, purchased less gas from Russia than required by contract."These sanctions are not being applied," Putin said, estimating that the possible fine could have been as much as two billion dollars.Apart from any specifics Putin and Tymoshenko discussed, however, it was the sight of the two of them sitting side by side and holding forth calmly before a packed press conference that carried at least as much weight as their words.Putin afterwards described his daylong discussions with Tymoshenko as "businesslike and open."In January relations between Moscow and Kiev plummeted to such a low that gas supplies to and through Ukraine were cut off, leaving a string of European countries temporarily without gas in the middle of winter."It is good that our cooperation is being fine-tuned.... The times when a certain confrontation was felt are becoming a thing of the past," Tymoshenko said."The system of gas supplies in Ukraine has fully stabilized," she said.For his part, Putin said: "What very much pleases me is that cooperation between certain rather sensitive and important industries and enterprises is not being destroyed but deepened."Despite the friendly atmospherics, Putin made clear however that Russia had not yet agreed to a request from Ukraine for a five billion-dollar loan."We don't have a final decision today," Putin said.Tymoshenko also sent a Moscow-friendly signal on another issue that hugely angered Russia last year: Ukrainian arms sales to Georgia, which fought a brief war with Russia last summer."There are no arms sales to Georgia, nor will there be in the future," Tymoshenko said in response to a reporter's question about whether Kiev was still selling arms to Tbilisi.Tymoshenko also offered Ukraine's help in setting up an international centre for uranium enrichment, a project led by Kazakhstan and Russia with the aim of supplying third countries with enriched uranium for civilian nuclear power.Following the talks with Putin, Tymoshenko said Ukraine would by July 15 prepare a long-term contract with Russia on nuclear energy cooperation.Putin and Tymoshenko were initially due to meet in early April, but Russia postponed the visit after the Ukraine-EU deal on gas infrastructure cooperation sparked an angry reaction from Moscow.Tymoshenko's visit comes as European Union Energy Commissioner Andris Piebalgs is also due in Moscow for talks on the bloc's gas trade with Russia.
Ukrainian Prime Minister Yulia Tymoshenko said her country had asked Russia to help upgrade its gas transit system, after Moscow complained of being left out of a deal between Kiev and the EU on upgrading Ukraine's ageing pipelines."We have invited Russia as one of the main partners to modernise the Ukrainian gas transportation system," Tymoshenko said at a joint press conference with her Russian counterpart, Vladimir Putin.Putin said Moscow deserved a role in upgrading Ukraine's pipeline network, which handles the majority of Russian natural gas exports to Europe."We are not seeking to manage, but we are the main and only supplier to the Ukrainian pipeline system," he said, following talks with Tymoshenko.Putin added that Russia would not demand billions of dollars in fines from Kiev -- a possibility that had been raised after Ukraine, hit hard by the economic crisis, purchased less gas from Russia than required by contract."These sanctions are not being applied," Putin said, estimating that the possible fine could have been as much as two billion dollars.Apart from any specifics Putin and Tymoshenko discussed, however, it was the sight of the two of them sitting side by side and holding forth calmly before a packed press conference that carried at least as much weight as their words.Putin afterwards described his daylong discussions with Tymoshenko as "businesslike and open."In January relations between Moscow and Kiev plummeted to such a low that gas supplies to and through Ukraine were cut off, leaving a string of European countries temporarily without gas in the middle of winter."It is good that our cooperation is being fine-tuned.... The times when a certain confrontation was felt are becoming a thing of the past," Tymoshenko said."The system of gas supplies in Ukraine has fully stabilized," she said.For his part, Putin said: "What very much pleases me is that cooperation between certain rather sensitive and important industries and enterprises is not being destroyed but deepened."Despite the friendly atmospherics, Putin made clear however that Russia had not yet agreed to a request from Ukraine for a five billion-dollar loan."We don't have a final decision today," Putin said.Tymoshenko also sent a Moscow-friendly signal on another issue that hugely angered Russia last year: Ukrainian arms sales to Georgia, which fought a brief war with Russia last summer."There are no arms sales to Georgia, nor will there be in the future," Tymoshenko said in response to a reporter's question about whether Kiev was still selling arms to Tbilisi.Tymoshenko also offered Ukraine's help in setting up an international centre for uranium enrichment, a project led by Kazakhstan and Russia with the aim of supplying third countries with enriched uranium for civilian nuclear power.Following the talks with Putin, Tymoshenko said Ukraine would by July 15 prepare a long-term contract with Russia on nuclear energy cooperation.Putin and Tymoshenko were initially due to meet in early April, but Russia postponed the visit after the Ukraine-EU deal on gas infrastructure cooperation sparked an angry reaction from Moscow.Tymoshenko's visit comes as European Union Energy Commissioner Andris Piebalgs is also due in Moscow for talks on the bloc's gas trade with Russia.
Wednesday 29 April 2009
All quiet on the Chechen front
The end of anti-terrorist operations in Chechnya is either a happy conclusion to a bitter conflict or a final concession to Chechen President Ramzan Kadyrov as he cements his position as feudal chief of the fractious territory. Or perhaps it's simply an anti-crisis measure aimed at plugging a fiscal black hole as the petrodollars start to dry up.
Russian papers took a mixed view of the government's decision to end the raft of legal, economic and travel restrictions on Chechnya and withdraw federal forces charged with stamping out terrorism and insurrection.
In Izvestia, it was down to cold, hard cash. Anton Zaritovsky said his contacts "indirectly confirmed" that the end was partly "to save budget funds", while providing a powerful stimulus to the local economy.
But the figures didn't add up for other papers, with Nezavisimaya Gazeta pointing out the financial savings but warning: "The fight between local clans for budget money is another matter. The situation here is much more serious."
The happiest faces outside of the Kadyrov family were to be found on Russia Today, the English-language TV channel, which hailed a "great success" for Kadyrov and an "indicator of stability" in the republic.
Others were alarmed at the increase in power for Kadyrov - who recently told a BBC reporter he had wanted to pursue a blood feud against assassinated ex-warlord Sulim Yamadayev. Vadim Rechkalov wrote in Moskovsky Komsomolets: "Since midnight on 16 April someone who cannot be trusted has become the sole master of Chechnya. If he was an enemy, everything would be much simpler. But Ramzan is a Hero of Russia and a dangerous friend."
Former Russian soldier Arkady Babchenko, writing in Britain's Guardian newspaper, criticised it as a "purely populist" move, and warned that for Chechnya's population Kadyrov's "word is law". That may be news to the rebels who were reportedly planning a new wave of assaults on Grozny within days of the end of the military operation.
Seaside shenanigans
The Sochi election campaign turned into the final straight, with the handful of remaining riders jolted by claims of sabotage as the polling booths came into view.
According to local security chief Alexander Birillo, an unnamed candidate had invited "bandits" from far-flung parts of Russia to stir up trouble in the final days before Sunday's vote, RIA Novosti reported.
Most people suspected it was an attempt to nobble Boris Nemtsov, seen as the only opposition to United Russia's Anatoly Pakhomov.
Naturally Nemtsov turned down the Dick Dastardly role in this particular Wacky Race, urging Birillo to go and catch the bad guys instead of issuing media statements. Those so-called "bandits", he said, were electoral monitors called from out of town because the locals had been "intimidated".
And, with Kommersant reporting that Pakhomov was in line for about 60 per cent of the vote, Nemtsov - tipped to get 25 per cent - failed in his efforts to remove the acting mayor from the race with a protest to the courts about excessive campaign spending.
At the same time FSB agents uncovered a Georgian spy in the Black Sea resort. Mamuka Maisuradze will be expelled from Russia.
Russian papers took a mixed view of the government's decision to end the raft of legal, economic and travel restrictions on Chechnya and withdraw federal forces charged with stamping out terrorism and insurrection.
In Izvestia, it was down to cold, hard cash. Anton Zaritovsky said his contacts "indirectly confirmed" that the end was partly "to save budget funds", while providing a powerful stimulus to the local economy.
But the figures didn't add up for other papers, with Nezavisimaya Gazeta pointing out the financial savings but warning: "The fight between local clans for budget money is another matter. The situation here is much more serious."
The happiest faces outside of the Kadyrov family were to be found on Russia Today, the English-language TV channel, which hailed a "great success" for Kadyrov and an "indicator of stability" in the republic.
Others were alarmed at the increase in power for Kadyrov - who recently told a BBC reporter he had wanted to pursue a blood feud against assassinated ex-warlord Sulim Yamadayev. Vadim Rechkalov wrote in Moskovsky Komsomolets: "Since midnight on 16 April someone who cannot be trusted has become the sole master of Chechnya. If he was an enemy, everything would be much simpler. But Ramzan is a Hero of Russia and a dangerous friend."
Former Russian soldier Arkady Babchenko, writing in Britain's Guardian newspaper, criticised it as a "purely populist" move, and warned that for Chechnya's population Kadyrov's "word is law". That may be news to the rebels who were reportedly planning a new wave of assaults on Grozny within days of the end of the military operation.
Seaside shenanigans
The Sochi election campaign turned into the final straight, with the handful of remaining riders jolted by claims of sabotage as the polling booths came into view.
According to local security chief Alexander Birillo, an unnamed candidate had invited "bandits" from far-flung parts of Russia to stir up trouble in the final days before Sunday's vote, RIA Novosti reported.
Most people suspected it was an attempt to nobble Boris Nemtsov, seen as the only opposition to United Russia's Anatoly Pakhomov.
Naturally Nemtsov turned down the Dick Dastardly role in this particular Wacky Race, urging Birillo to go and catch the bad guys instead of issuing media statements. Those so-called "bandits", he said, were electoral monitors called from out of town because the locals had been "intimidated".
And, with Kommersant reporting that Pakhomov was in line for about 60 per cent of the vote, Nemtsov - tipped to get 25 per cent - failed in his efforts to remove the acting mayor from the race with a protest to the courts about excessive campaign spending.
At the same time FSB agents uncovered a Georgian spy in the Black Sea resort. Mamuka Maisuradze will be expelled from Russia.
Bakhmina parole may come with strings
The drama surrounding Svetlana Bakhmina, a former Yukos lawyer who gave birth to her third child while still in prison, has come to a head after a Moscow court granted her parole.
Her release on Tuesday has raised hopes of the change in the judicial climate that President Dmitry Medvedev has been advocating. It could also affect the second trial against her former boss, ex-Yukos chief Mikhail Khodorkovsky.
While the court's decision to free Bakhmina may indicate a softer line in the Khodorkovsky trial, it could indicate that she could be called to give testimony against him.
Lawyers have suggested Bakhmina was somehow a hostage in the Yukos affair, while the drawn-out hearings into her parole last year illustrated indecisiveness on the part of the authorities. Regional courts in Mordovia, where Bakhmina was serving her 6 1/2-year term for embezzlement, twice refused to parole her.
In late October, just a month before giving birth to a daughter, Bakhmina requested a pardon from the Kremlin, a move that sparked widely-publicised campaigns involving public figures petitioning Medvedev to release her. But it was later reported that Bakhmina had withdrawn her request just five days after filing it.
Bakhmina's lawyer Roman Golovkin said that he did not know Bakhmina's motives for withdrawing the petition because her defence was barred from seeing her at that time. But others believe the hasty withdrawal was evidence that Bakhmina had come under pressure from investigators.
"The fact that, under these conditions, she was forced to withdraw her request for a pardon - this is a significant moment in this whole story," said Lev Ponomaryov, a human rights activist who has been watching the highly-politicised Yukos affair. "She was pressured.
Perhaps there was a trade-off, perhaps there were threats."
It was tempting to see the decision to parole Bakhmina - the first release of a Yukos-connected convict - as a positive signal for the trial of Khodorkovsky and his business partner Platon Lebedev. The two men this week pleaded not guilty to charges of stealing 350,000 tons of oil worth $25 billion. In Bakhmina's case, the fact that even the prosecution backed freeing her and pledged not to appeal the ruling suggested a turnabout in the handling of the Yukos case.
But Yury Shmidt, a lawyer for Khodorkovsky, said Bakhmina's release would not help Khodorkovsky in his trial.
"The decision cannot be positive for the Yukos case because these figures occupy different positions," he said. "Bakhmina has always been a hostage, and investigators were not interested in her. She was pressured to provide testimony against Khodorkovsky and Lebedev. We cannot say there can be a trend where, for instance, first Bakhmina is released, and now Khodorkovsky may be released.
"For several months I have suspected that there is some sort of unwholesome game going on around this poor woman. The refusals to grant her parole sounded too contrived. I cannot rule out that all this time, Bakhmina was pressured, and it is easy to pressure a pregnant woman and a nursing mother."
Asked if Bakhmina would be testifying in the Khodorkovsky case, Golovkin said that she was currently not among the list of witnesses.
"We do not expect at this point that she will be a witness in the case," said Golovkin. Shmidt explained: "I do not rule out that using promises of early parole, investigators pressured her into giving evidence against Khodorkovsky. Even though she is currently not a witness in the case, the prosecutors can call her as a witness any time. I do not want to accuse her of making this deal, but knowing what they are capable of and her condition,
I cannot rule out that she has given evidence. These people have many unfinished cases, and she may have given evidence in other cases, and the evidence can be used in this case."
Asked what the chances were that Bakhmina could be called as a witness in the second Khodorkovsky trial, Shmidt said his estimate was 50 per cent.
Lawyers stressed that there was nothing legally unusual in a pregnant woman being granted parole if she has not been convicted of a severe crime. "We were expecting this ruling in May, it was a matter of common sense," Golovkin said. "Why the regional courts didn't grant parole is a mystery to me."
Tuesday's ruling may still be evidence of a changing political tide, some lawyers said.
"This was a humane step, all the conditions to grant parole were there," said Anatoly Kucherena, a prominent lawyer who heads a Public Chamber commission on oversight of law enforcement and justice reform. "We can only regret that the procedure took a whole year. This does not add authority to the courts that issued different rulings."
Shmidt suggested that Medvedev may have backed the decision to free Bakhmina on humanitarian grounds.
"I cannot rule out that the president, after the questions he was asked by Novaya Gazeta and by human rights advocates, could have said something to his aides, to the effect of, ‘What's going on? Please sort this out.' I cannot rule out that such a conversation with aides played a role in this."
A representative of Medvedev's press service declined to comment, but did not rule out future statements from Medvedev's press secretary, Natalya Timakova.
Her release on Tuesday has raised hopes of the change in the judicial climate that President Dmitry Medvedev has been advocating. It could also affect the second trial against her former boss, ex-Yukos chief Mikhail Khodorkovsky.
While the court's decision to free Bakhmina may indicate a softer line in the Khodorkovsky trial, it could indicate that she could be called to give testimony against him.
Lawyers have suggested Bakhmina was somehow a hostage in the Yukos affair, while the drawn-out hearings into her parole last year illustrated indecisiveness on the part of the authorities. Regional courts in Mordovia, where Bakhmina was serving her 6 1/2-year term for embezzlement, twice refused to parole her.
In late October, just a month before giving birth to a daughter, Bakhmina requested a pardon from the Kremlin, a move that sparked widely-publicised campaigns involving public figures petitioning Medvedev to release her. But it was later reported that Bakhmina had withdrawn her request just five days after filing it.
Bakhmina's lawyer Roman Golovkin said that he did not know Bakhmina's motives for withdrawing the petition because her defence was barred from seeing her at that time. But others believe the hasty withdrawal was evidence that Bakhmina had come under pressure from investigators.
"The fact that, under these conditions, she was forced to withdraw her request for a pardon - this is a significant moment in this whole story," said Lev Ponomaryov, a human rights activist who has been watching the highly-politicised Yukos affair. "She was pressured.
Perhaps there was a trade-off, perhaps there were threats."
It was tempting to see the decision to parole Bakhmina - the first release of a Yukos-connected convict - as a positive signal for the trial of Khodorkovsky and his business partner Platon Lebedev. The two men this week pleaded not guilty to charges of stealing 350,000 tons of oil worth $25 billion. In Bakhmina's case, the fact that even the prosecution backed freeing her and pledged not to appeal the ruling suggested a turnabout in the handling of the Yukos case.
But Yury Shmidt, a lawyer for Khodorkovsky, said Bakhmina's release would not help Khodorkovsky in his trial.
"The decision cannot be positive for the Yukos case because these figures occupy different positions," he said. "Bakhmina has always been a hostage, and investigators were not interested in her. She was pressured to provide testimony against Khodorkovsky and Lebedev. We cannot say there can be a trend where, for instance, first Bakhmina is released, and now Khodorkovsky may be released.
"For several months I have suspected that there is some sort of unwholesome game going on around this poor woman. The refusals to grant her parole sounded too contrived. I cannot rule out that all this time, Bakhmina was pressured, and it is easy to pressure a pregnant woman and a nursing mother."
Asked if Bakhmina would be testifying in the Khodorkovsky case, Golovkin said that she was currently not among the list of witnesses.
"We do not expect at this point that she will be a witness in the case," said Golovkin. Shmidt explained: "I do not rule out that using promises of early parole, investigators pressured her into giving evidence against Khodorkovsky. Even though she is currently not a witness in the case, the prosecutors can call her as a witness any time. I do not want to accuse her of making this deal, but knowing what they are capable of and her condition,
I cannot rule out that she has given evidence. These people have many unfinished cases, and she may have given evidence in other cases, and the evidence can be used in this case."
Asked what the chances were that Bakhmina could be called as a witness in the second Khodorkovsky trial, Shmidt said his estimate was 50 per cent.
Lawyers stressed that there was nothing legally unusual in a pregnant woman being granted parole if she has not been convicted of a severe crime. "We were expecting this ruling in May, it was a matter of common sense," Golovkin said. "Why the regional courts didn't grant parole is a mystery to me."
Tuesday's ruling may still be evidence of a changing political tide, some lawyers said.
"This was a humane step, all the conditions to grant parole were there," said Anatoly Kucherena, a prominent lawyer who heads a Public Chamber commission on oversight of law enforcement and justice reform. "We can only regret that the procedure took a whole year. This does not add authority to the courts that issued different rulings."
Shmidt suggested that Medvedev may have backed the decision to free Bakhmina on humanitarian grounds.
"I cannot rule out that the president, after the questions he was asked by Novaya Gazeta and by human rights advocates, could have said something to his aides, to the effect of, ‘What's going on? Please sort this out.' I cannot rule out that such a conversation with aides played a role in this."
A representative of Medvedev's press service declined to comment, but did not rule out future statements from Medvedev's press secretary, Natalya Timakova.
Tsar’s tipple faces vodka challenge
From paranoid Tsars to hip-hop stars, Cristal Champagne has been the tipple of choice for anyone with money to burn.
But the distinctive see-through bottles could be set to disappear from Moscow's high-end hotels and decadent nightspots thanks to a ruling from Rospatent this week.
Russian booze company Soyuzplodoimport has won a battle claiming that Louis Roederer's Cristal brand infringes the copyright of its Kristal vodka - and now has the potential to force the deluxe brand from the Russian market.
The perhaps surprising element to the story is that Soyuzplodoimport doesn't actually produce any Kristal vodka at the moment.
A Soyuzplodoimport spokeswoman explained that this was a tit-for-tat measure in response to the French firm's efforts to bar Kristal vodka from European markets. She added that it was now up to the luxury vineyard to decide whether to get a license for their product here in Russia.
In France, staff at Louis Roederer Vineyards said that the company would not be making any decisions for another week or two.
Ironically, the court ruling could oust Cristal from the country for which it was originally created. Legend has it that Tsar Alexander II, fearing traditional green champagne bottles could be used to hide an assassin's bomb, commissioned a brand in a crystal-clear carafe.
Thus Cristal Champagne, with its distinctive flat-bottomed design, was born - though it failed to save the monarch from an explosive end. He survived four assassination attempts but was killed when his carriage was attacked on the streets of St. Petersburg in 1881.
Cristal - which costs at least 20,000 roubles ($600) a bottle - has a devoted celebrity fanbase, seducing many pop stars, actors and oligarchs with its exclusive design and price tag.
But while foul-mouthed Hollywood director Quentin Tarantino once opined that "everything else is piss" in his 1995 film Four Rooms, Moscow's Knights of the Vine group of winetasters has found a local alternative which outranked its illustrious rival in a blind taste test.
Comparing top champagnes from France, Russia and Ukraine, they ranked Cristal down in fifth place, with a little-known Crimean wine, Novy Svet's 2002 Pinot Noir Rose, taking top spot despite a piffling price tag of 550 roubles a pop.
"The tasting that we had, completely blind with a certified top wine expert from London, speaks for itself on quality," said Charles Borden, of Knights of the Vine.
Typically international trademarks are protected under the Paris Convention for the Protection of Industrial Property, but this does not automatically take precedence over national laws.
And the decision of Russian courts this week could open the way for other Russian companies to remove foreign competitors from the shelves.
Similar cases in the past have seen Mexican beer Corona attempt to stop the production of Russia's Sibirskaya Korona, while the Smirnov vodka brand was also subject to a long legal battle with Smirnoff.
However, Borden does not fear for the future of other premium wines.
"This is a very specific name issue," he said. "I doubt that some of the other top Champagne brands such as Dom Perignon would have a conflict with a Russian vodka brand."
But the distinctive see-through bottles could be set to disappear from Moscow's high-end hotels and decadent nightspots thanks to a ruling from Rospatent this week.
Russian booze company Soyuzplodoimport has won a battle claiming that Louis Roederer's Cristal brand infringes the copyright of its Kristal vodka - and now has the potential to force the deluxe brand from the Russian market.
The perhaps surprising element to the story is that Soyuzplodoimport doesn't actually produce any Kristal vodka at the moment.
A Soyuzplodoimport spokeswoman explained that this was a tit-for-tat measure in response to the French firm's efforts to bar Kristal vodka from European markets. She added that it was now up to the luxury vineyard to decide whether to get a license for their product here in Russia.
In France, staff at Louis Roederer Vineyards said that the company would not be making any decisions for another week or two.
Ironically, the court ruling could oust Cristal from the country for which it was originally created. Legend has it that Tsar Alexander II, fearing traditional green champagne bottles could be used to hide an assassin's bomb, commissioned a brand in a crystal-clear carafe.
Thus Cristal Champagne, with its distinctive flat-bottomed design, was born - though it failed to save the monarch from an explosive end. He survived four assassination attempts but was killed when his carriage was attacked on the streets of St. Petersburg in 1881.
Cristal - which costs at least 20,000 roubles ($600) a bottle - has a devoted celebrity fanbase, seducing many pop stars, actors and oligarchs with its exclusive design and price tag.
But while foul-mouthed Hollywood director Quentin Tarantino once opined that "everything else is piss" in his 1995 film Four Rooms, Moscow's Knights of the Vine group of winetasters has found a local alternative which outranked its illustrious rival in a blind taste test.
Comparing top champagnes from France, Russia and Ukraine, they ranked Cristal down in fifth place, with a little-known Crimean wine, Novy Svet's 2002 Pinot Noir Rose, taking top spot despite a piffling price tag of 550 roubles a pop.
"The tasting that we had, completely blind with a certified top wine expert from London, speaks for itself on quality," said Charles Borden, of Knights of the Vine.
Typically international trademarks are protected under the Paris Convention for the Protection of Industrial Property, but this does not automatically take precedence over national laws.
And the decision of Russian courts this week could open the way for other Russian companies to remove foreign competitors from the shelves.
Similar cases in the past have seen Mexican beer Corona attempt to stop the production of Russia's Sibirskaya Korona, while the Smirnov vodka brand was also subject to a long legal battle with Smirnoff.
However, Borden does not fear for the future of other premium wines.
"This is a very specific name issue," he said. "I doubt that some of the other top Champagne brands such as Dom Perignon would have a conflict with a Russian vodka brand."
Monday 27 April 2009
Ukraine Marks Battle Between Liberation Army, Soviets
RIVNE, Ukraine -- Ukrainians have marked the 65th anniversary of the largest battle between the Ukrainian Liberation Army (UPA) and Soviet troops during World War II, RFE/RL's Ukrainian Service reports.
At a place called Hurbi, near the town of Rivne, 5,000 UPA fighters from the Bohun division clashed with 30,000 Soviet Red Army and Interior Ministry troops (NKVD) from April 22-25, 1944.A special commemoration ceremony was held in Hurbi on April 21.UPA veteran Dmitro Avdeev told RFE/RL that thousands of soldiers from both sides were killed during the fighting, including his two brothers and several friends.He was wounded and was later sentenced to 25 years in jail by the Soviets.The UPA fought against Nazi German forces, the Polish underground army, and Soviet forces. It was disbanded in 1949 but some units continued operations until 1956.
At a place called Hurbi, near the town of Rivne, 5,000 UPA fighters from the Bohun division clashed with 30,000 Soviet Red Army and Interior Ministry troops (NKVD) from April 22-25, 1944.A special commemoration ceremony was held in Hurbi on April 21.UPA veteran Dmitro Avdeev told RFE/RL that thousands of soldiers from both sides were killed during the fighting, including his two brothers and several friends.He was wounded and was later sentenced to 25 years in jail by the Soviets.The UPA fought against Nazi German forces, the Polish underground army, and Soviet forces. It was disbanded in 1949 but some units continued operations until 1956.
Ukraine Marks Battle Between Liberation Army, Soviets
RIVNE, Ukraine -- Ukrainians have marked the 65th anniversary of the largest battle between the Ukrainian Liberation Army (UPA) and Soviet troops during World War II, RFE/RL's Ukrainian Service reports.
At a place called Hurbi, near the town of Rivne, 5,000 UPA fighters from the Bohun division clashed with 30,000 Soviet Red Army and Interior Ministry troops (NKVD) from April 22-25, 1944.A special commemoration ceremony was held in Hurbi on April 21.UPA veteran Dmitro Avdeev told RFE/RL that thousands of soldiers from both sides were killed during the fighting, including his two brothers and several friends.He was wounded and was later sentenced to 25 years in jail by the Soviets.The UPA fought against Nazi German forces, the Polish underground army, and Soviet forces. It was disbanded in 1949 but some units continued operations until 1956.
At a place called Hurbi, near the town of Rivne, 5,000 UPA fighters from the Bohun division clashed with 30,000 Soviet Red Army and Interior Ministry troops (NKVD) from April 22-25, 1944.A special commemoration ceremony was held in Hurbi on April 21.UPA veteran Dmitro Avdeev told RFE/RL that thousands of soldiers from both sides were killed during the fighting, including his two brothers and several friends.He was wounded and was later sentenced to 25 years in jail by the Soviets.The UPA fought against Nazi German forces, the Polish underground army, and Soviet forces. It was disbanded in 1949 but some units continued operations until 1956.
Sunday 26 April 2009
Despite Dismal Standings In The Polls, Yushchenko Keeps Fighting
KIEV, Ukraine -- President Viktor Yushchenko is aiming to remain in office, despite facing the lowest approval rating in the country's history.
“I will run. It's so clear and obvious,” the Ukrainian president announced, while calling for early presidential elections in October if they are held at the same time as the parliamentary elections. “It is not important how many months earlier they [the elections] will be held, in October or in September.”Earlier, he insisted the elections be delayed until January 2010. But now he believes early elections would help Ukraine overcome political and economic crisis that has been tearing the country apart. Then, Yushchenko evoked the ‘reset’ word that has become a catchphrase of US-Russian relations."We also need a reset. It should be done by re-electing the parliament and forming a new majority and the government," he said.Yushchenko quickly dismissed Prime Minister Yulia Timoshenko's proposal to empower the parliament with the ability to appoint the president, claiming that this might lead Ukraine to some form of tyranny.The opposition has already labeled the president’s announcements “completely predictable.”Close margin of error“He [Yushchenko] wants to make sure the orange line would be prolonged and he wants to do it himself,” says political expert Vadim Karasyov. “This announcement was his inauguration for running the campaign.”Yushchenko is about to run for a new term with the worst approval rating recorded for the president at any time in Ukraine’s history, with only 2.9 percent of the people expressing support in him, according to Kiev's International Institute of Sociology research.His popularity sharply decreased following the financial and political crisis, which started five years ago. Yet the political theater doesn't expect any big changes of the main characters, even though their popularity has dramatically suffered as a result of the crisis.This time around, Yushchenko’s habitual contender, Viktor Yanukovich, who enjoys the support of 37.9 the respondents, according to the research, seems to be the most favored politician.Ukrainians think he has the most positive effect on the domestic situation. Meanwhile, Timoshenko's rating is at 21.3 percent and pro-Western Front for Change leader, Arseny Yatsenyuk, has the support of 20.1 percent of the voters.Early electionsEx-president of Poland Aleksander Kwasiewski thinks the whole design of the Ukrainian political elite should be changed and mistakes admitted.“Only when the failings in the architecture of the Ukrainian state are adequately addressed will Ukrainians enjoy the full benefits of the Orange Revolution. That architecture is making a bad economic situation even worse and is jeopardizing Ukraine’s integration into the European family. The design of the Ukrainian state must be corrected and strengthened, now,” he said.In the fall of 2008, Yushchenko dissolved The Ukrainian Rada and announced early parliamentary, but his decisions was rejected two weeks later.There have been a total of five presidential elections in Ukraine since its independence from the Soviet Union in 1991, while three of its five parliamentary elections have taken place in the last five years.Orange historyYushchenko took part in Leonid Kuchma's successful presidential campaign in 1999 and became Ukrainian prime minister the same year. But after several years of conflict with the president, Yushchenko was forced to resign in 2001. Some experts argue that was due to Yushchenko's growing popularity and political influence on the domestic situation.In 2005, Yushchenko gained the support of Yulia Timoshenko, thus being elected president after a fierce contest against Yanukovich.Meanwhile, Timoshenko has served as the country's prime minister on several occasions. Her first appointment came in January 2005, but she was ousted in September. She served in the post again in December 2007.“Ukraine has made a great deal of political progress. The Orange Revolution made Ukrainians free. They can say and read and watch what they like. Elections are fair and reflect the popular will. But even Ukraine`s closest friends cannot pretend that its politics as usual,” Alexander Kwasiewski wrote.Yushchenko's policy is generally described as pro-Western, as he mostly supports the EU and welcomes U.S. support. Today, most of the support is associated with the political and economic crisis in the Ukraine.Yushchenko continues to express hope for the results of the future elections, but the polls show many people are disappointed with the direction of the country and the fruit of the so-called Orange revolution that dramatically brought him to power in January 2005.
“I will run. It's so clear and obvious,” the Ukrainian president announced, while calling for early presidential elections in October if they are held at the same time as the parliamentary elections. “It is not important how many months earlier they [the elections] will be held, in October or in September.”Earlier, he insisted the elections be delayed until January 2010. But now he believes early elections would help Ukraine overcome political and economic crisis that has been tearing the country apart. Then, Yushchenko evoked the ‘reset’ word that has become a catchphrase of US-Russian relations."We also need a reset. It should be done by re-electing the parliament and forming a new majority and the government," he said.Yushchenko quickly dismissed Prime Minister Yulia Timoshenko's proposal to empower the parliament with the ability to appoint the president, claiming that this might lead Ukraine to some form of tyranny.The opposition has already labeled the president’s announcements “completely predictable.”Close margin of error“He [Yushchenko] wants to make sure the orange line would be prolonged and he wants to do it himself,” says political expert Vadim Karasyov. “This announcement was his inauguration for running the campaign.”Yushchenko is about to run for a new term with the worst approval rating recorded for the president at any time in Ukraine’s history, with only 2.9 percent of the people expressing support in him, according to Kiev's International Institute of Sociology research.His popularity sharply decreased following the financial and political crisis, which started five years ago. Yet the political theater doesn't expect any big changes of the main characters, even though their popularity has dramatically suffered as a result of the crisis.This time around, Yushchenko’s habitual contender, Viktor Yanukovich, who enjoys the support of 37.9 the respondents, according to the research, seems to be the most favored politician.Ukrainians think he has the most positive effect on the domestic situation. Meanwhile, Timoshenko's rating is at 21.3 percent and pro-Western Front for Change leader, Arseny Yatsenyuk, has the support of 20.1 percent of the voters.Early electionsEx-president of Poland Aleksander Kwasiewski thinks the whole design of the Ukrainian political elite should be changed and mistakes admitted.“Only when the failings in the architecture of the Ukrainian state are adequately addressed will Ukrainians enjoy the full benefits of the Orange Revolution. That architecture is making a bad economic situation even worse and is jeopardizing Ukraine’s integration into the European family. The design of the Ukrainian state must be corrected and strengthened, now,” he said.In the fall of 2008, Yushchenko dissolved The Ukrainian Rada and announced early parliamentary, but his decisions was rejected two weeks later.There have been a total of five presidential elections in Ukraine since its independence from the Soviet Union in 1991, while three of its five parliamentary elections have taken place in the last five years.Orange historyYushchenko took part in Leonid Kuchma's successful presidential campaign in 1999 and became Ukrainian prime minister the same year. But after several years of conflict with the president, Yushchenko was forced to resign in 2001. Some experts argue that was due to Yushchenko's growing popularity and political influence on the domestic situation.In 2005, Yushchenko gained the support of Yulia Timoshenko, thus being elected president after a fierce contest against Yanukovich.Meanwhile, Timoshenko has served as the country's prime minister on several occasions. Her first appointment came in January 2005, but she was ousted in September. She served in the post again in December 2007.“Ukraine has made a great deal of political progress. The Orange Revolution made Ukrainians free. They can say and read and watch what they like. Elections are fair and reflect the popular will. But even Ukraine`s closest friends cannot pretend that its politics as usual,” Alexander Kwasiewski wrote.Yushchenko's policy is generally described as pro-Western, as he mostly supports the EU and welcomes U.S. support. Today, most of the support is associated with the political and economic crisis in the Ukraine.Yushchenko continues to express hope for the results of the future elections, but the polls show many people are disappointed with the direction of the country and the fruit of the so-called Orange revolution that dramatically brought him to power in January 2005.
Ukraine Marks Chernobyl's 23rd Anniversary
KIEV, Ukraine -- Ukraine paid homage to victims of the Chernobyl catastrophe 23 years after the worst nuclear accident in history.
"Today we remember with profound sadness those heroes who fought against the nuclear storm and sacrificed themselves for us and our children," President Viktor Yushchenko said in an address published by his press service.Some 100 Ukrainians, including Yushchenko and other top officials, laid wreaths overnight before the monument to Chernobyl's victims in Kiev and lit candles during a religious service dedicated to the tragedy, an AFP photographer reported.The "liquidators" -- men who took part in cleaning the site after the catastrophe -- in their turn wound a long fir-tree wreath around the monument, many unable to keep back tears.In Slavutich, a small town 50 kilometers (30 miles) away from the accident's site where many of the power station's personnel used to live, the night vigil gathered many hundreds who brought flowers and candles to the Chernobyl victims' monument, according to another AFP photographer.The disaster occurred on April 26, 1986 at 1:23 a.m., when one of the reactors exploded -- contaminating the Soviet states of Ukraine, Russia and Belarus with the fallout also spreading to other parts of Europe.Over 25,000 people known as "liquidators" -- most of them Ukrainians, Russians and Belarussians -- died getting the accident under control and constructing a concrete shield over the wreckage, according to Ukrainian official figures.A United Nations toll published in September 2005 set the number of victims at just 4,000, a figure challenged by non-governmental organisations.In Ukraine alone, 2.3 million people are designated officially as "having suffered from the catastrophe."Some 4,400 Ukrainians, children or adolescents at the time of the accident, have undergone operations for thyroid cancer, the most common consequence of radiation, the health ministry says.Chernobyl nuclear power station was finally closed in 2000 after one reactor had continued producing electricity.But the dead power station remains a threat because the concrete cover laid over 200 tonnes of magma, consisting of radioactive fuel, is cracking.A new steel sarcophagus is due to cover the seal hurriedly flung over the reactor in the immediate aftermath of the disaster.Internationally funded construction of the new steel cover is due to be launched this year or early next year and completed by 2012 by the Novarka consortium including France's Bouygues and Vinci companies.
"Today we remember with profound sadness those heroes who fought against the nuclear storm and sacrificed themselves for us and our children," President Viktor Yushchenko said in an address published by his press service.Some 100 Ukrainians, including Yushchenko and other top officials, laid wreaths overnight before the monument to Chernobyl's victims in Kiev and lit candles during a religious service dedicated to the tragedy, an AFP photographer reported.The "liquidators" -- men who took part in cleaning the site after the catastrophe -- in their turn wound a long fir-tree wreath around the monument, many unable to keep back tears.In Slavutich, a small town 50 kilometers (30 miles) away from the accident's site where many of the power station's personnel used to live, the night vigil gathered many hundreds who brought flowers and candles to the Chernobyl victims' monument, according to another AFP photographer.The disaster occurred on April 26, 1986 at 1:23 a.m., when one of the reactors exploded -- contaminating the Soviet states of Ukraine, Russia and Belarus with the fallout also spreading to other parts of Europe.Over 25,000 people known as "liquidators" -- most of them Ukrainians, Russians and Belarussians -- died getting the accident under control and constructing a concrete shield over the wreckage, according to Ukrainian official figures.A United Nations toll published in September 2005 set the number of victims at just 4,000, a figure challenged by non-governmental organisations.In Ukraine alone, 2.3 million people are designated officially as "having suffered from the catastrophe."Some 4,400 Ukrainians, children or adolescents at the time of the accident, have undergone operations for thyroid cancer, the most common consequence of radiation, the health ministry says.Chernobyl nuclear power station was finally closed in 2000 after one reactor had continued producing electricity.But the dead power station remains a threat because the concrete cover laid over 200 tonnes of magma, consisting of radioactive fuel, is cracking.A new steel sarcophagus is due to cover the seal hurriedly flung over the reactor in the immediate aftermath of the disaster.Internationally funded construction of the new steel cover is due to be launched this year or early next year and completed by 2012 by the Novarka consortium including France's Bouygues and Vinci companies.
Ukraine's Yushchenko Demands Poland Ease Border Lorry Delays
Ukrainian President Viktor Yushchenko on Friday demanded Poland's government act to reduce massive lorry queues on their border, the Interfax news agency reported.
Yushchenko, in a message to Poland's Foreign Ministry, called the current waits of more than 24 hours for lorry drivers attempting to enter Poland due to customs formalities 'unacceptable.'Ukraine's border police will monitor the situation and will report to the president 'personally,' according to the report.Queues at heavily-trafficked crossing sites such as along the Warsaw-Kiev highway often extend two or more kilometres, according to Ukrainian television reports.Frequent vehicle searches, and the small number of Polish customs staff, are the main cause of the delays, Ukraine's 1+1 television said.Lorry traffic jams on the Polish-Ukrainian border during the summer of 2007 caused difficulties in Ukrainian frontier, as lorry drivers ran out of food and water, while waiting for inspections.Polish officials at the time said they were processing the Ukrainian vehicles as quickly as possible, but were not capable of handling large volumes of lorries each needing detailed inspections as per EU rules.
Yushchenko, in a message to Poland's Foreign Ministry, called the current waits of more than 24 hours for lorry drivers attempting to enter Poland due to customs formalities 'unacceptable.'Ukraine's border police will monitor the situation and will report to the president 'personally,' according to the report.Queues at heavily-trafficked crossing sites such as along the Warsaw-Kiev highway often extend two or more kilometres, according to Ukrainian television reports.Frequent vehicle searches, and the small number of Polish customs staff, are the main cause of the delays, Ukraine's 1+1 television said.Lorry traffic jams on the Polish-Ukrainian border during the summer of 2007 caused difficulties in Ukrainian frontier, as lorry drivers ran out of food and water, while waiting for inspections.Polish officials at the time said they were processing the Ukrainian vehicles as quickly as possible, but were not capable of handling large volumes of lorries each needing detailed inspections as per EU rules.
Sunday Marks 23-Year Anniversary Of Chernobyl Nuclear Accident
On April 26, 1986, the world's worst nuclear power disaster took place at the Chernobyl electrical generating plant in Ukraine. Radiation from a reactor explosion there spread over a broad area of northern and central Europe.
The accident caused the creation of a 30-kilometer-wide "no-entry" zone around Chernobyl, sealing off a city built to house plant workers and their families. Despite the concrete entombment of the destroyed reactor, on the 23rd anniversary of the disaster, the plant remains a radiation hazard today.Pripyat, Ukraine. A dead city. Homes, schoolrooms, playgrounds, and other places are crumbling as wild nature reclaims the land.Pripyat once had some 50,000 residents. Now they are gone, perhaps forever. Only the artifacts of their lives remain behind, rotting to dust.Pripyat died because of the deadliest nuclear power accident in world history. Chernobyl.Early on April 26, 1986, reactor Unit Four at Chernobyl was put through an experimental test of its cooling system. The reactor overheated and exploded from steam pressure, ripping the roof off the power plant. Nuclear radiation spewed into the night sky. And, as people slept, it spread throughout Pripyat, just north of Chernobyl.In reactor four, the nuclear fuel and the graphite surrounding it were on fire. Authorities sent helicopters to fly over the reactor to dump sand and other materials to try to stop the fire. But, it burned for days.The wind carried radioactive particles from the fire over a wide area. Ukraine, Belarus, Russia. Then, Scandanavia, Britain, and other parts of Europe. As the wind shifted direction, so did the radiation.Finally, a day and a half after the explosion, an evacuation of Pripyat was ordered. People were told they would only be gone for several days, so they left nearly everything behind. They never returned.Despite the wide spread of radiation, Soviet officials at first said very little publicly about what happened at Chernobyl. Many people believed their leaders rather than outside reports about the disaster.It was radiation detectors in other countries, many hundreds of kilometers away, that forced the Soviets to admit to Chernobyl's accident.Thousands of people were sent to Chernobyl to clean up debris from the blast. They also built a structure, called a sarcophagus, to cover the shattered reactor and its radioactive fuel. The workers' equipment became so contaminated that it had to be abandoned. The workers became contaminated as well. Many became ill.The Soviet government said at least 31 fatalities at the Chernobyl plant were directly linked to the reactor explosion. The World Health Organization says another 2,200 deaths can be expected among those who took part in the cleanup. The WHO report added that, in all, Chernobyl could result in 4,000 fatalities from cancer and other radiation-linked causes.Radioactivity forced officials to create a 30-kilometer-wide no-habitation zone around Chernobyl, sealing off Pripyat. Still, the power plant continued to generate electricity until it was finally shut down in December, 2000.The Chernobyl nuclear plant's Soviet RBMK [type design] reactors were not encased in thick concrete structures called containment vessels that are standard in the West. At the International Atomic Energy Agency in Vienna, Nuclear Installation Safety Director Philippe Jamet stresses their importance."The containment vessels are very, are one of the barriers. We have to protect the environment and people against radioactivity in case of an accident," he said.Russia, incidentally, still operates 11 RBMK-type reactors. The worst nuclear power accident in U.S. history, at Three Mile Island, Pennsylvania, on March 28, 1979, caused no fatalities and much lower impact to the surrounding area. A reactor containment vessel here remained intact despite a nuclear fuel partial meltdown.
The accident caused the creation of a 30-kilometer-wide "no-entry" zone around Chernobyl, sealing off a city built to house plant workers and their families. Despite the concrete entombment of the destroyed reactor, on the 23rd anniversary of the disaster, the plant remains a radiation hazard today.Pripyat, Ukraine. A dead city. Homes, schoolrooms, playgrounds, and other places are crumbling as wild nature reclaims the land.Pripyat once had some 50,000 residents. Now they are gone, perhaps forever. Only the artifacts of their lives remain behind, rotting to dust.Pripyat died because of the deadliest nuclear power accident in world history. Chernobyl.Early on April 26, 1986, reactor Unit Four at Chernobyl was put through an experimental test of its cooling system. The reactor overheated and exploded from steam pressure, ripping the roof off the power plant. Nuclear radiation spewed into the night sky. And, as people slept, it spread throughout Pripyat, just north of Chernobyl.In reactor four, the nuclear fuel and the graphite surrounding it were on fire. Authorities sent helicopters to fly over the reactor to dump sand and other materials to try to stop the fire. But, it burned for days.The wind carried radioactive particles from the fire over a wide area. Ukraine, Belarus, Russia. Then, Scandanavia, Britain, and other parts of Europe. As the wind shifted direction, so did the radiation.Finally, a day and a half after the explosion, an evacuation of Pripyat was ordered. People were told they would only be gone for several days, so they left nearly everything behind. They never returned.Despite the wide spread of radiation, Soviet officials at first said very little publicly about what happened at Chernobyl. Many people believed their leaders rather than outside reports about the disaster.It was radiation detectors in other countries, many hundreds of kilometers away, that forced the Soviets to admit to Chernobyl's accident.Thousands of people were sent to Chernobyl to clean up debris from the blast. They also built a structure, called a sarcophagus, to cover the shattered reactor and its radioactive fuel. The workers' equipment became so contaminated that it had to be abandoned. The workers became contaminated as well. Many became ill.The Soviet government said at least 31 fatalities at the Chernobyl plant were directly linked to the reactor explosion. The World Health Organization says another 2,200 deaths can be expected among those who took part in the cleanup. The WHO report added that, in all, Chernobyl could result in 4,000 fatalities from cancer and other radiation-linked causes.Radioactivity forced officials to create a 30-kilometer-wide no-habitation zone around Chernobyl, sealing off Pripyat. Still, the power plant continued to generate electricity until it was finally shut down in December, 2000.The Chernobyl nuclear plant's Soviet RBMK [type design] reactors were not encased in thick concrete structures called containment vessels that are standard in the West. At the International Atomic Energy Agency in Vienna, Nuclear Installation Safety Director Philippe Jamet stresses their importance."The containment vessels are very, are one of the barriers. We have to protect the environment and people against radioactivity in case of an accident," he said.Russia, incidentally, still operates 11 RBMK-type reactors. The worst nuclear power accident in U.S. history, at Three Mile Island, Pennsylvania, on March 28, 1979, caused no fatalities and much lower impact to the surrounding area. A reactor containment vessel here remained intact despite a nuclear fuel partial meltdown.
The Viktor And Yulia Show, Continued
KIEV, Ukraine -- A country in default, engulfed by social protests and political chaos, crumbling to bits. This has been the West’s nightmare image of Ukraine. It was the first country to ask the IMF for a bail-out, its currency was in free fall, its economy is contracting at an annual rate of 9%.
Yet the main activity in Kiev today seems to be putting up summer terraces outside cafés, not tents for demonstrators. In front of the main government building, a dozen bored protesters call on Yulia Tymoshenko, the prime minister, to come out “to the people”. Even in the industrial east, where output has fallen by as much as a third, the mood is subdued.One reason is that trust in the government is so low and the experience of crisis so extensive that Ukrainians see little point in taking to the streets. At a time of hardship, working on a vegetable patch is preferable. A protest called by Viktor Yanukovich, leader of the opposition Party of the Regions, attracted relatively few people. There is no money to pay demonstrators. Stirring up his eastern heartland could annoy Mr Yanukovich’s business backers, who have been cutting jobs and wages.Another reason for relative calm is that after several years of growth many Ukrainians have enough savings to get by for a few months. Some unemployment has been avoided by involuntary holidays and pay cuts. And though the main exporting industry, steel, is struggling, farming (which employs a quarter of the workforce) is doing well. Petro Poroshenko, a businessman, suggests that food production could become an engine of growth.“Either the country is more resilient or the adjustment started earlier than we thought,” says Ceyla Pazarbasioglu, head of the IMF mission visiting Kiev. After a 40% devaluation, the hryvnia has stabilised. The trade balance went briefly into surplus for the first time in years. The rate of economic decline has slowed. “There is a feeling that we have touched the bottom,” Viktor Yushchenko, Ukraine’s president, says in an interview. On April 17th the IMF mission said it would recommend the release of the second tranche of Ukraine’s $16.4 billion loan.The banks have undergone a stress test and the biggest will be recapitalised. For all the political cacophony, the government has pushed through the fiscal measures required by the IMF, including increased duties on alcohol and tobacco and higher gas tariffs for rich households.In the short term, Ukraine needs to cut its budget deficit. In the longer term its big problem is the structure of public spending rather than low tax revenues, argues Pablo Saavedra, an economist at the World Bank. Its unreformed social system and its red tape, both inherited from Soviet days, are crushing burdens.Ukraine devotes a third of GDP to social spending. Less than 2% of GDP goes to infrastructure investment. It takes 47 permits to open a business and three years to close it. All Ukrainian politicians, including Ms Tymoshenko, Mr Yanukovich and Mr Yushchenko, admit to corruption and lack of structural reforms in Ukraine—and blame each other. “We have been engaged with elections rather than with reforms,” says Anatoly Kinakh, who has served in several governments.Now Ukraine is in the middle of a new election cycle. Mr Yushchenko’s presidential term expires in January and the campaign is under way. Political turmoil is nothing new in Ukraine, but when commodity prices were high and foreign credit cheap it had little impact on the economy.No longer. Ukraine nearly botched its agreement with the IMF partly because some members of Mr Yushchenko’s Our Ukraine block refused to vote for fiscal cuts. Mr Yushchenko says that “half of my own block has been bought by Ms Tymoshenko, while the other half cannot support her economic methods”. He blames Ms Tymoshenko for sacrificing the ideology of the 2004 orange revolution to political expediency and populism. She says that he has sold out to vested interests.Mr Yushchenko certainly has ideology and vision. He talks of building a nation-state and taking Ukraine into NATO and the European Union. “Six times in the 20th century we have declared our independence and five times we have lost it.” Yet on vision, rhetorically at least, there is little difference between Ukrainian politicians. Ms Tymoshenko talks eloquently of European integration and the need to consolidate a country historically divided between east and west.“First of all we need to build Europe in Ukraine, because a country can only enter the EU if it has the same blood group, otherwise it will get rejected as an alien body,” she says in an interview. Even Mr Yanukovich, once backed by Moscow, now subscribes to the notion of European integration.In truth, none of Ukraine’s politicians has risen to the promise of the orange revolution. Ms Tymoshenko’s actions sometimes smack of populism. When inflation rose last year, she imposed temporary controls on grain exports, for example. She has done little to promote long-term reforms.But it was thanks to her intervention both that the IMF loan was unblocked and that a breakthrough was made in the gas-price stalemate with Russia in January. In contrast, Mr Yushchenko’s influence has been mostly disruptive despite his avowed liberalism. He has vetoed many government plans, including privatisations.The problem goes deeper than animosity between two old allies. It is rooted in a flawed change to the constitution in 2004 that reduced the power of the president but stopped short of turning Ukraine into a parliamentary republic, fudging the responsibilities of president and prime minister. “Whoever wins the presidential election will next day run into the same problems,” says Ms Tymoshenko.Inevitably, all three main leaders insist they will run for president, including Mr Yushchenko, despite a poll rating in low single digits. But Ms Tymoshenko’s popularity has also suffered recently. Even Mr Yanukovich, who now leads in the polls, has seen his popularity dented. Many Ukrainians feel that none of the three familiar faces is capable of taking the country forward. Tired of the mudslinging, 20% would either vote against all candidates or simply not turn out.To hedge their bets many businessmen are now betting on other candidates, including Arseniy Yatseniuk, a 34-year-old who has already served as foreign minister, economics minister and central-bank governor. Mr Yatseniuk’s rating has doubled in a few months and he is now catching up with Ms Tymoshenko.Her preferred option would be to change the constitution before the election and choose the next (symbolic) president in parliament. But she does not mind if Ukraine reverts to full presidential rule. “It does not matter to me what the head of the executive power is called: a prime minister, a chancellor, a president or a hetman.”A bigger question is what kind of Ukraine will emerge from the crisis. And that will be determined not by elections, but by the willingness of political leaders to push through structural reforms.
Yet the main activity in Kiev today seems to be putting up summer terraces outside cafés, not tents for demonstrators. In front of the main government building, a dozen bored protesters call on Yulia Tymoshenko, the prime minister, to come out “to the people”. Even in the industrial east, where output has fallen by as much as a third, the mood is subdued.One reason is that trust in the government is so low and the experience of crisis so extensive that Ukrainians see little point in taking to the streets. At a time of hardship, working on a vegetable patch is preferable. A protest called by Viktor Yanukovich, leader of the opposition Party of the Regions, attracted relatively few people. There is no money to pay demonstrators. Stirring up his eastern heartland could annoy Mr Yanukovich’s business backers, who have been cutting jobs and wages.Another reason for relative calm is that after several years of growth many Ukrainians have enough savings to get by for a few months. Some unemployment has been avoided by involuntary holidays and pay cuts. And though the main exporting industry, steel, is struggling, farming (which employs a quarter of the workforce) is doing well. Petro Poroshenko, a businessman, suggests that food production could become an engine of growth.“Either the country is more resilient or the adjustment started earlier than we thought,” says Ceyla Pazarbasioglu, head of the IMF mission visiting Kiev. After a 40% devaluation, the hryvnia has stabilised. The trade balance went briefly into surplus for the first time in years. The rate of economic decline has slowed. “There is a feeling that we have touched the bottom,” Viktor Yushchenko, Ukraine’s president, says in an interview. On April 17th the IMF mission said it would recommend the release of the second tranche of Ukraine’s $16.4 billion loan.The banks have undergone a stress test and the biggest will be recapitalised. For all the political cacophony, the government has pushed through the fiscal measures required by the IMF, including increased duties on alcohol and tobacco and higher gas tariffs for rich households.In the short term, Ukraine needs to cut its budget deficit. In the longer term its big problem is the structure of public spending rather than low tax revenues, argues Pablo Saavedra, an economist at the World Bank. Its unreformed social system and its red tape, both inherited from Soviet days, are crushing burdens.Ukraine devotes a third of GDP to social spending. Less than 2% of GDP goes to infrastructure investment. It takes 47 permits to open a business and three years to close it. All Ukrainian politicians, including Ms Tymoshenko, Mr Yanukovich and Mr Yushchenko, admit to corruption and lack of structural reforms in Ukraine—and blame each other. “We have been engaged with elections rather than with reforms,” says Anatoly Kinakh, who has served in several governments.Now Ukraine is in the middle of a new election cycle. Mr Yushchenko’s presidential term expires in January and the campaign is under way. Political turmoil is nothing new in Ukraine, but when commodity prices were high and foreign credit cheap it had little impact on the economy.No longer. Ukraine nearly botched its agreement with the IMF partly because some members of Mr Yushchenko’s Our Ukraine block refused to vote for fiscal cuts. Mr Yushchenko says that “half of my own block has been bought by Ms Tymoshenko, while the other half cannot support her economic methods”. He blames Ms Tymoshenko for sacrificing the ideology of the 2004 orange revolution to political expediency and populism. She says that he has sold out to vested interests.Mr Yushchenko certainly has ideology and vision. He talks of building a nation-state and taking Ukraine into NATO and the European Union. “Six times in the 20th century we have declared our independence and five times we have lost it.” Yet on vision, rhetorically at least, there is little difference between Ukrainian politicians. Ms Tymoshenko talks eloquently of European integration and the need to consolidate a country historically divided between east and west.“First of all we need to build Europe in Ukraine, because a country can only enter the EU if it has the same blood group, otherwise it will get rejected as an alien body,” she says in an interview. Even Mr Yanukovich, once backed by Moscow, now subscribes to the notion of European integration.In truth, none of Ukraine’s politicians has risen to the promise of the orange revolution. Ms Tymoshenko’s actions sometimes smack of populism. When inflation rose last year, she imposed temporary controls on grain exports, for example. She has done little to promote long-term reforms.But it was thanks to her intervention both that the IMF loan was unblocked and that a breakthrough was made in the gas-price stalemate with Russia in January. In contrast, Mr Yushchenko’s influence has been mostly disruptive despite his avowed liberalism. He has vetoed many government plans, including privatisations.The problem goes deeper than animosity between two old allies. It is rooted in a flawed change to the constitution in 2004 that reduced the power of the president but stopped short of turning Ukraine into a parliamentary republic, fudging the responsibilities of president and prime minister. “Whoever wins the presidential election will next day run into the same problems,” says Ms Tymoshenko.Inevitably, all three main leaders insist they will run for president, including Mr Yushchenko, despite a poll rating in low single digits. But Ms Tymoshenko’s popularity has also suffered recently. Even Mr Yanukovich, who now leads in the polls, has seen his popularity dented. Many Ukrainians feel that none of the three familiar faces is capable of taking the country forward. Tired of the mudslinging, 20% would either vote against all candidates or simply not turn out.To hedge their bets many businessmen are now betting on other candidates, including Arseniy Yatseniuk, a 34-year-old who has already served as foreign minister, economics minister and central-bank governor. Mr Yatseniuk’s rating has doubled in a few months and he is now catching up with Ms Tymoshenko.Her preferred option would be to change the constitution before the election and choose the next (symbolic) president in parliament. But she does not mind if Ukraine reverts to full presidential rule. “It does not matter to me what the head of the executive power is called: a prime minister, a chancellor, a president or a hetman.”A bigger question is what kind of Ukraine will emerge from the crisis. And that will be determined not by elections, but by the willingness of political leaders to push through structural reforms.
EU-Ukraine Gas Deal Is No Pipe Dream
BRUSSELS, Belgium -- One could have been forgiven for suspecting that this month's deal for the European Union to help reform Ukraine's gas market was just more political window dressing.
It is true that the scale of the incompetence, double-dealing and corruption in the Ukrainian gas market is enormous. However, this time the EU and Ukraine may have achieved a breakthrough.For the first time, a reform plan for the Ukrainian gas sector is backed up by a detailed, stage-by-stage program to fundamentally reform the market. If this program is implemented, it would not only drive out the corruption and opacity in the market.It would also provide a basis for increased revenues for Ukraine while enhancing EU energy security. What Europe needs to do now is work with Ukrainian politicians to implement the deal while taking parallel measures to ensure it really does work on the ground.The core of the deal is a pledge by Ukraine to adopt EU energy legislation and to make this law binding by joining the European Energy Community. Under the agreement, the Ukrainian national gas company, Naftogaz, will turn its transmission subsidiary, Ukrtransgaz, into an independent operator.Full legal unbundling will follow, allowing Ukrtransgaz to offer access to the network to all potential gas suppliers on transparent and commercial terms. Tariffs will reflect actual costs and will be levied on a nondiscriminate basis. Equally, there will be third-party access to gas-storage facilities, again on transparent and commercial terms.On its own, this first part of the deal would raise much skepticism with most commentators. It amounts to no more than another pledge to comply with EU rules. What distinguishes this deal from Kiev's previous pledges is the extremely detailed master plan for renovating the Ukrainian gas pipeline network. The plan shows the Ukrainians are serious this time.The master plan provides a network-by-network, section-by-section analysis and costing for what needs to be done to restore the network, what is technically involved, and the potential for enhancing network capacity. Under the master plan foreign investors, together with the World Bank, the European Bank for Reconstruction and Development, and the European Investment Bank, would provide capital to renovate the network.This renovation proposal is vital. The Ukraine network delivers 80% of Russia's European exports. Even if Nord Stream and South Stream -- two Russian projects to deliver gas straight to Western Europe, skirting Ukraine and other transit countries -- are actually completed, Ukraine will still deliver significantly more gas to Europe than these two pipelines.The Ukrainian domestic gas incumbent cannot afford to pay for the gas it needs for the Ukrainian economy as well as maintain the pipeline network. The renovation proposal, if implemented, will ensure the continued flow of gas into the EU and provide the capacity for more gas to flow -- at least an additional 20 billion cubic meters (bcm) and perhaps as much as 60 bcm. The total cost is approximately between $2.5 billion and $3 billion.Given the economic crisis, it is unlikely that Gazprom will be able to afford the $20 billion South Stream project, and Nord Stream is also under financial pressure. Hence both Europe and Gazprom should welcome the funding of additional capacity via the Ukrainian pipeline network at a relatively modest cost.Taken together, the liberalization of the Ukrainian gas sector and the renovation of the network should enhance EU energy security. Liberalization will root out most of the Ukrainian sector's opacity and corruption. Renovation and additional capacity will also ensure that the gas will flow securely and that more gas can be made available.Furthermore, as Ukrainian President Viktor Yushchenko has pointed out, "a single, competitive gas market would help depoliticize the EU-Russia gas relationship." The EU-Ukrainian deal, together with the extension of the European Energy Community to Ukraine, will help create a single European gas market in which commercial, not political, principles will prevail. This will reduce the scope for politics in gas supply.The EU and the international institutions need to do more, however, to ensure that the deal is implemented in practice. We already know from our experience of energy liberalization in the EU that energy companies backslide when it comes to market-opening measures.For instance, subsidiary companies that own networks have a habit of swinging preferential deals to their holding companies which supply gas. The EU and international institutions such as the EBRD and EIB could insist that Ukraine significantly upgrade the powers and resources of its antitrust agency so that it can effectively police liberalization.A further consideration for the EU, Ukraine and the international institutions is Russia. Prime Minister Vladimir Putin has indicated he very strongly opposes the EU deal. The facts, however, plainly stand against him. Two-thirds of Gazprom's revenues come from European sales.Given that its market capitalization has fallen by more than 70% since January 2008, that its gas revenues have collapsed, and that it has accumulated more than $35 billion of debt, Gazprom can barely afford to build Nord Stream, never mind South Stream. If there is additional Russian gas available for sale to Europe, it needs a cheap supply route. The Ukraine/EU deal can provide that route.There is another consideration. Given Gazprom's lack of capital, the company will need significant foreign investment into its gas fields and its own gas network infrastructure. Foreign capital is easier to raise if there is a comprehensive, legally binding regime that applies to your principal route to market. In other words, the Ukraine/EU gas deal should make it easier for Gazprom to obtain foreign investment for its gas fields and pipeline network.The plan provides for initial funding and due diligence to be carried out in the next couple of months, and for Ukraine to take practical steps toward the liberalization agenda. So we will soon see if the promise of the Ukraine/EU deal is delivered. But of all the deals that have been done between the EU and Ukraine over the last few years, this one appears to be the most promising.
It is true that the scale of the incompetence, double-dealing and corruption in the Ukrainian gas market is enormous. However, this time the EU and Ukraine may have achieved a breakthrough.For the first time, a reform plan for the Ukrainian gas sector is backed up by a detailed, stage-by-stage program to fundamentally reform the market. If this program is implemented, it would not only drive out the corruption and opacity in the market.It would also provide a basis for increased revenues for Ukraine while enhancing EU energy security. What Europe needs to do now is work with Ukrainian politicians to implement the deal while taking parallel measures to ensure it really does work on the ground.The core of the deal is a pledge by Ukraine to adopt EU energy legislation and to make this law binding by joining the European Energy Community. Under the agreement, the Ukrainian national gas company, Naftogaz, will turn its transmission subsidiary, Ukrtransgaz, into an independent operator.Full legal unbundling will follow, allowing Ukrtransgaz to offer access to the network to all potential gas suppliers on transparent and commercial terms. Tariffs will reflect actual costs and will be levied on a nondiscriminate basis. Equally, there will be third-party access to gas-storage facilities, again on transparent and commercial terms.On its own, this first part of the deal would raise much skepticism with most commentators. It amounts to no more than another pledge to comply with EU rules. What distinguishes this deal from Kiev's previous pledges is the extremely detailed master plan for renovating the Ukrainian gas pipeline network. The plan shows the Ukrainians are serious this time.The master plan provides a network-by-network, section-by-section analysis and costing for what needs to be done to restore the network, what is technically involved, and the potential for enhancing network capacity. Under the master plan foreign investors, together with the World Bank, the European Bank for Reconstruction and Development, and the European Investment Bank, would provide capital to renovate the network.This renovation proposal is vital. The Ukraine network delivers 80% of Russia's European exports. Even if Nord Stream and South Stream -- two Russian projects to deliver gas straight to Western Europe, skirting Ukraine and other transit countries -- are actually completed, Ukraine will still deliver significantly more gas to Europe than these two pipelines.The Ukrainian domestic gas incumbent cannot afford to pay for the gas it needs for the Ukrainian economy as well as maintain the pipeline network. The renovation proposal, if implemented, will ensure the continued flow of gas into the EU and provide the capacity for more gas to flow -- at least an additional 20 billion cubic meters (bcm) and perhaps as much as 60 bcm. The total cost is approximately between $2.5 billion and $3 billion.Given the economic crisis, it is unlikely that Gazprom will be able to afford the $20 billion South Stream project, and Nord Stream is also under financial pressure. Hence both Europe and Gazprom should welcome the funding of additional capacity via the Ukrainian pipeline network at a relatively modest cost.Taken together, the liberalization of the Ukrainian gas sector and the renovation of the network should enhance EU energy security. Liberalization will root out most of the Ukrainian sector's opacity and corruption. Renovation and additional capacity will also ensure that the gas will flow securely and that more gas can be made available.Furthermore, as Ukrainian President Viktor Yushchenko has pointed out, "a single, competitive gas market would help depoliticize the EU-Russia gas relationship." The EU-Ukrainian deal, together with the extension of the European Energy Community to Ukraine, will help create a single European gas market in which commercial, not political, principles will prevail. This will reduce the scope for politics in gas supply.The EU and the international institutions need to do more, however, to ensure that the deal is implemented in practice. We already know from our experience of energy liberalization in the EU that energy companies backslide when it comes to market-opening measures.For instance, subsidiary companies that own networks have a habit of swinging preferential deals to their holding companies which supply gas. The EU and international institutions such as the EBRD and EIB could insist that Ukraine significantly upgrade the powers and resources of its antitrust agency so that it can effectively police liberalization.A further consideration for the EU, Ukraine and the international institutions is Russia. Prime Minister Vladimir Putin has indicated he very strongly opposes the EU deal. The facts, however, plainly stand against him. Two-thirds of Gazprom's revenues come from European sales.Given that its market capitalization has fallen by more than 70% since January 2008, that its gas revenues have collapsed, and that it has accumulated more than $35 billion of debt, Gazprom can barely afford to build Nord Stream, never mind South Stream. If there is additional Russian gas available for sale to Europe, it needs a cheap supply route. The Ukraine/EU deal can provide that route.There is another consideration. Given Gazprom's lack of capital, the company will need significant foreign investment into its gas fields and its own gas network infrastructure. Foreign capital is easier to raise if there is a comprehensive, legally binding regime that applies to your principal route to market. In other words, the Ukraine/EU gas deal should make it easier for Gazprom to obtain foreign investment for its gas fields and pipeline network.The plan provides for initial funding and due diligence to be carried out in the next couple of months, and for Ukraine to take practical steps toward the liberalization agenda. So we will soon see if the promise of the Ukraine/EU deal is delivered. But of all the deals that have been done between the EU and Ukraine over the last few years, this one appears to be the most promising.
Thursday 23 April 2009
Ingosstrakh Notes Skyrocketing Fraud
Insurance fraud hit a high in the first quarter as a growing number of individuals felt compelled to take criminal measures to avoid paying off loans, Alexander Grigoryev, chairman of insurer Ingosstrakh, told journalists on Wednesday. Grigoryev said arson property-loss claims are up fivefold this year and estimated that 80 percent of them are fraudulent. "If we used to receive claims for one burned-down warehouse, now we are receiving five," he said. In almost all instances of fraud, the insured property was bought on credit, and the borrower likely couldn't handle the payments, Grigoryev said. A devalued ruble, climbing unemployment and salary cuts have caused loan-default rates to mushroom in the first quarter. The country's top banks are forecasting a second wave of banking defaults, as overdue loans are expected to constitute 10 percent of banks' portfolios by the end of the year. "If a guy has a car that's three years old and he has a car loan in dollars, well, if the car 'burns up' it's an insured accident. The insurer pays the bank for the remainder of the loan and the owner is off scot-free," Grigoryev said. "Later, he can apply for another loan because his credit history is unscratched." And it's not only cars going up in flames this year. "Most interesting," he said, was the spike in arson claims for insured freight and other retail goods. "There was a refrigerating unit that stored frozen meat products. It burned up, burned to the ground," Grigoryev said, adding that the refrigerating unit was set to minus 18 degrees Celsius. "Tell me, how can a freezer set at this temperature just burn up on its own? It can't. It's impossible, there isn't enough oxygen for anything to burn, but somehow it did." Grigoryev also said Ingosstrakh should be valued at $4 billion to $5 billion if its majority shareholder, Oleg Deripaska, were to consider selling his stake in the company. He dismissed comments by the director of Generali, an Italian firm that owns 38 percent of Ingosstrakh, who said the company would pay 300 million euros ($388.4 million) if it decided that it wanted a controlling interest. "This is a ridiculous figure ... and it does not reflect reality," Grigoryev said. "[Generali] needs to understand how to go about negotiations with a serious majority shareholder and understand the real value of the company." In a recent interview, Pyotr Aven, the head of Russia's largest private lender Alfa Bank, said the bank is ready to restructure Deripaska's $800 million of debt if the businessman puts up his stake in Ingosstrakh as collateral.
Gazprom Neft Buys Italy Assets
Gazprom Neft extended a Russian push into European refining and marketing on Wednesday by buying Italian oil operations from U.S. oil major Chevron. Gazprom Neft will buy a plant in Bari, in southern Italy, which produces 30,000 tons of oil and 6,000 tons of lubricants a year for cars, trucks and other industrial uses, and fuel marketing and sales operations in Rome, the companies said. The plant produces 150 types of oils used in cars and commercial transport as well as industry including drilling, according to the statement. Gazprom Neft will also get the right to use the Texaco brand in the Italian market until 2010. Chevron, the second-largest U.S. oil company, and Gazprom Neft, Russia's fifth-largest oil producer, did not reveal the price of the deal. Gazprom Neft said in a statement that it expected production and marketing synergies between the Chevron assets and the Serbian oil refiner NIS, which it took control of earlier this year. Chevron said last month that it would push ahead with streamlining its lubricants product line and would exit retail markets. Russian oil companies' push into downstream activities in Europe reflects Gazprom's own effort to acquire gas distribution and power-generation assets across the continent and consolidate control of the country's domestic assets. Rival LUKoil bought a 49 percent stake in ERG's Isab di Priolo refinery on Sicily last year and held talks to buy a large stake in Spanish oil company Repsol, which has a large refining portfolio. Last month, Russian oil producer Surgutneftegaz agreed to buy 21 percent of Hungarian oil refiner MOL. Earlier this month, Gazprom spent $4 billion to buy back a 20 percent stake in Gazprom Neft from Italy's Eni, which had picked up the stake at a 2007 auction of the assets of bankrupt oil firm Yukos.
Prosecutors Taking a Harder Line on Wage Arrears
Prosecutors are under orders to bring the maximum possible charges against corporate executives who are delaying salary payments amid a sharp rise in labor law violations, a source in the Investigative Committee said. The Prosecutor General's Office has been told to take a harder line on labor violations, including wage arrears, and some directors have already been arrested and punished. Prosecutors should threaten managers with the maximum possible punishments — from fines to being banned from managerial posts, and if warranted, criminal charges, the source said. The situation with wage arrears is not improving, and the Prosecutor General's Office is stepping up its efforts to investigate such claims, spokeswoman Marina Gridneva said. In March, according to figures from the State Statistics Service, wage arrears rose 8.3 percent to 8.75 billion rubles ($258 million), with about 500,000 people not receiving their full salaries. According to figures from the prosecutor's office, in February two criminal cases were opened because of delayed wages; in March, five criminal cases were filed and eight directors were banned; in April, eight cases were filed, with two directors found guilty and six were banned. According to figures given to Vedomosti by the Federal Labor and Employment Service, 34 executives were prohibited from holding management posts in the first quarter of 2009, and one was found guilty of criminal labor violations. In all of 2008, complaints over wage arrears led to 23 criminal cases, eight convictions and 149 disqualified mangers. Prosecutors in the Yamal-Nenets autonomous district are looking into a major case, in which a court ordered that Sergei Stepanov, the former deputy general director of Severnaya Ekspeditsiya, be held in custody. He is suspected of not paying 70 million rubles in salaries because of pecuniary self-interest. Investigators suspect that Stepanov, who was acting as general director and knew of the unpaid wages, paid out more than 100 million rubles to suppliers. Court bailiffs froze company property worth that much to protect the employee's rights. Larisa Yeropkina, a spokeswoman for the Yamal-Nenets branch of the Investigative Committee, said Stepanov was the first corporate director arrested there for not paying wages and that while other cases have since been opened his is unprecedented because of the amount of arrears. Proceedings over wage arrears at the idling BasElCement Pikalevo factory have also gone to court. Prosecutors in Boksitogorsk on April 15 filed a suit on administrative charges against the plant's director, Anatoly Maslikov, who faces disqualification for 2009 arrears of around 17 million rubles. Maslikov is trying to find the funds, but not everything is within his powers, said city prosecutor Fyodor Piryatinsky, adding that the arrears were more the problem of BasElCement shareholders. Piryatinsky said all available cash at the business was going toward salaries and that so far criminal charges have not been filed against Maslikov. BasElCement Pikalevo spokeswoman Svetlana Andreyeva said staff were paid 37 percent of their March salaries and that there was no debt for February. The punishment for executives depends on the length of delays, said Dmitry Kofanov, a lawyer at NS Consulting. If the arrears are for more than a month, executives can be banned from working for up to three years; if it is more than two months, they face a ban of up to five years or jail time. To avoid delays, a manger can halt production, reduce working hours for no more than half a year, fire staff or file for bankruptcy. Andreyeva said her company was a vitally important employer in the city, making layoffs extremely troublesome. Management is in constant talks with unions on job cuts, and the general director signed an order halting the firing of 200 workers. Now management is trying to operate at zero profit.
Central Bank Cuts Refinancing Rate
The Central Bank announced Thursday that it would cut its key refinancing rate to 12.5 percent, from 13 percent, as the government grows more confident that it has brought inflation and the volatile ruble under control. The reduction, which will also see the repo and Lombard rates cut to 11.5 percent, takes effect Friday. The decision comes a day after Prime Minister Vladimir Putin appeared to suggest at a government meeting that lowering inflation should bring an interest rate cut. "According to Economic Development Ministry forecasts, April inflation will be 1.1 to 1.2 percent. That means we can expect a reduction of the Central Bank's refinancing rate. Isn't that so, Sergei Mikhailovich?" Putin said, addressing Central Bank Chairman Sergei Ignatyev. "Of course, we understand that this issue is within the exclusive competence of the Central Bank's board," he added, without waiting for Ignatyev's response. Two weeks ago, Ignatyev said the Central Bank would consider lowering the refinancing rate "as long as inflation decreases," just a week after Putin told a group of coal miners in Novokuznetsk that cutting it below 13 percent, then the inflation rate, would "destroy" the economy. The Central Bank raised rates in November to prevent speculation against the ruble, but it has since faced pressure from bankers, who argue that lending rates have grown too high. Among the most vocal has been Alfa Bank president Pyotr Aven, who predicted last month that high lending rates would push hundreds of banks into bankruptcy by the third quarter. The morning after Aven's comments, Central Bank First Deputy Chairman Alexei Ulyukayev hinted of an impending rate cut, albeit a small one. "It'll be a little step, but it's important for us to define the tendency," .
U.S. Owner of Siberian Pizza Chain Detained
A Novosibirsk court on Wednesday released on bail a U.S. businessman who has operated a chain of pizza restaurants in Siberia for more than a decade and is suspected of tax evasion, regional authorities said Wednesday. Eric Shogren, owner of the New York Pizza chain, is accused of failing to pay more than 9 million rubles ($263,900) in taxes, Novosibirsk regional police spokeswoman Tatyana Bukova told Interfax. Shogren is also being investigated in connection with other criminal cases, Bukova said, though she did not specify what the accusations in those cases entail. If charged and convicted of large-scale tax evasion, Shogren, a well-known figure in the foreign business community, could face up to seven years in prison. Shogren was detained Tuesday in connection with the tax evasion case, regional police spokesman Anton Surnin said by telephone. Novosibirsk's Leninsky District Court on Wednesday declined to place Shogren under arrest, releasing him on 1 million ruble ($29,500) bail on the condition that he not leave the city, regional court spokeswoman Marianna Glushkova told The Moscow Times. Investigators had asked the court to place Shogren in a pretrial detention facility, saying he was a flight risk. The director of Shogren's company Top Shelf, Yevgenia Golovkova, was released on 800,000 ruble ($23,000) bail, Glushkova said. Shogren remained in detention Wednesday and was to be released at 9 a.m. Thursday, his wife, Olga Shogren, said in a telephone interview from Novosibirsk. Shogren's company has about 50 million rubles ($1.5 million) in debt and fell behind on its taxes and payments to suppliers after it was unable to refinance its loans, his wife said, speaking in fluent English with an American accent. "Banks were already in crisis in May, and so they were calling back credit and weren't giving any more," she said. "That's when we acquired most of the debts." Employees and suppliers of New York Pizza picketed in Novosibirsk in February over delays in payments, Kommersant reported. In September, court marshals raided Shogren's restaurants, confiscating money from the registers to cover debts, Vedomosti reported. More than 90 complaints have been filed against New York Pizza in the Novosibirsk Regional Arbitration Court since last year, including by tax and pension authorities, according to the court's web site. The company hopes to pay off its debts, Olga Shogren said. "We're working on attracting investment groups and some investment capital, but it's very difficult," she said. Shogren is also being investigated on suspicion of fraud, Kommersant reported in March, citing police investigators. A native of Minneapolis, Shogren started up a joint car business with a Novosibirsk partner in the early 1990s. He moved to Novosibirsk a few years later and founded New York Pizza in 1996. The chain consists of 15 restaurants, according to its web site. The web site says Shogren also runs five other restaurants, a cinema and a bakery. It also says Shogren has set up a farm business called Siberian Frontier Farms, whose board includes James Collins, a former U.S. ambassador to Russia. Reached by telephone Wednesday at the Carnegie Endowment for International Peace in Washington, Collins said he had heard that Shogren had been detained. Collins said he was not familiar with the details of the case and declined to comment. He said, however, that he is "part of a board related to all [of Shogren's] businesses." The U.S. Embassy in Moscow said it could not comment on the case because of privacy laws. The Moscow Times interviewed Shogren in Novosibirsk in 2002. At that time, he said, New York Pizza was making several million dollars annually. Shogren has dual U.S. and Russian citizenship, his wife said.
TNK-BP Bids for Minority Sibir Stake
TNK-BP began a blitz bid Wednesday to buy a minority stake in smaller rival Sibir Energy, offering an impressive £4.30 per share, 2 1/2 times more than its last closing price. Credit Suisse International said it was ready to buy a "significant minority stake" in the company on behalf of TNK-BP until Thursday. TNK-BP, the country's third-largest oil producer, may gain up to 35 percent of Sibir Energy -- all that is not owned by two private Russian shareholders and the Moscow city government. It is unusual for a major oil company like TNK-BP, half owned by BP, to settle for the role of a minority shareholder unless it hopes to build up the stake to gain control of the company later. "TNK-BP ... has not reached any agreement to acquire shares from the controlling shareholders," Credit Suisse said in a statement that announced the bid Wednesday afternoon. The bank set the purchase price at £4.30 ($6.26) a share, valuing the entire London-listed company with assets in Russia at $2.4 billion. TNK-BP may end up paying as much as $842 million for 35 percent of Sibir Energy, said Svetlana Grizan, an analyst at VTB. Sibir Energy said TNK-BP had not approached the company to discuss a stake purchase. Another company, however, was interested in possibly making an offer for Sibir, Sibir said in a statement, without identifying the company. "Discussions with that party are at a very preliminary stage, and there can be no guarantee that an offer for Sibir will be forthcoming," it said. State-owned Rosneft has contacted Sibir to discuss a potential bid for the company, The Times of London reported Monday. A TNK-BP spokeswoman declined to comment, but a BP spokesman said his company supported the bid. "We are quite behind TNK-BP on this sort of activity," spokesman Toby Odone said. "We have a good track record in Russia, and we are very keen to deepen our investment." Sibir suspended trading in its shares in February after it learned that one of its major shareholders, Shalva Chigirinsky, owed the company $325 million. Sibir sued Chigirinsky and former chief executive Henry Cameron to recover "funds that were taken from the company," it said earlier this month. The company has a 50-50 oil-producing venture with Royal Dutch Shell in Siberia, owns a refinery in Moscow jointly with Gazprom Neft, an oil arm of Gazprom, and runs filling stations. Chigirinsky and another Russian businessman, Igor Kesayev, each own slightly more than 23 percent of Sibir, but Sberbank now holds their stakes as collateral for loans. The Moscow city government holds 18 percent of the oil company. TNK-BP is likely betting that it will be able to acquire a controlling stake at some point, Grizan said. "The most unusual thing is that TNK-BP agreed to a minority stake," she said. "They are probably hoping to buy out either Chigirinsky's or Kesayev's stake afterward."
Putin to End Rule On Cash Registers
The government will ease life for small businesses by simplifying their taxes and ditching a requirement that they must all use cash registers, Prime Minister Vladimir Putin said Wednesday. The cutoff level for small businesses to get access to the simplified tax system will be raised to 60 million rubles ($1.77 million) in annual revenues from the current 30 million rubles, Putin told the All-Russia Forum on Small and Middle-Sized Businesses. The government will lose more than 100 billion rubles in taxes as a result, the Finance Ministry estimated. The simplified tax regime envisages an entrepreneur paying only one tax -- either 6 percent of revenues or 5 to 15 percent of the net profit. Most small and middle-sized businesses currently pay taxes on imputed income, which means that the tax inspector calculates their taxes with a complicated formula. Under the common tax system, companies pay revenue tax, property tax, unified social tax and value-added tax. Putin said smaller businesses would get relief with a decision to scrap cash registers, which became mandatory in all shops in 2003 amid a state effort to boost tax collection. "The cash registers are often more expensive than the goods that are sold in the shop," Putin said. Entrepreneurs use 2 million tax registers, which cost an average of 15,000 rubles ($442) each, Putin said. Overall sales rung up on them amount to 30 billion rubles per year, plus an additional 10 billion rubles to service them over the same period, he said. "With that, the amount of [sales] revenue doesn't matter when one pays taxes on imputed income," Putin said. Legislation on the cash registers will be drafted by July 1, Putin said. The measure was welcomed by businessmen at the conference, who said cash registers have become a nightmare for them. "You first have to buy the machine for 15,000 rubles, then regularly change the flash memory device, which costs 9,000 rubles -- and pay for servicing it all the time," Volgograd businessman Andrei Udakhin said on the sidelines of the conference. "The data registered by the machine has never been used, because the amount of taxes we pay does not depend on that," said Udakhin, who owns two minimarts employing 35 people. Udakhin called the new tax measures "very useful and logical," but he said small businesses still needed a lot of changes to the Tax Code. "It is very hard for small and middle-sized businesses to switch to the simplified tax system that, for one thing, requires you to have more than 150 square meters of commercial space," Udakhin said. "Most small businesses don't have that much." Business confidence is at a four-year low now, Economic Development Minster Elvira Nabiullina told the conference. Forty-four percent of small businesses call high taxes their biggest problem, she said. Putin said an extra 15 billion rubles would be earmarked for regional funds that offer state guarantees as collateral for small businesses. The funds have received 2.5 billion rubles so far. In another measure of support, at least 20,000 microloans of up to 1 million rubles each will be given out this year, Putin said. Sberbank chairman German Gref said Tuesday that the state-controlled bank would introduce a microloan program, under which borrowers could obtain the funds in two to five days. The state's bailout of banks will be tightly connected with the number of loans they issue to small and middle-size businesses, Putin said. The government has earmarked 10.5 billion rubles to support small businesses this year. Small businesses will receive 100 billion rubles through state banks in 2009, Vneshekonombank chairman Vladimir Dmitriyev said on the sidelines of the conference. Vneshekonombank, or VEB, has said it will hand out loans for 30 billion rubles to small businesses this year, up from 9 billion rubles in 2008. The European Bank of Reconstruction and Development and Deutsche Bank are ready to give out loans worth 1 billion euros to Russian small businesses with VEB guarantees, Dmitriyev said. Although regional banks are growing plump with state cash, the situation has not improved for entrepreneurs, Udakhin of Volgograd said. "The interest rates at the banks are still high, from 28 to 40 percent, which we could never afford," he said. He said the average before the crisis was 16 percent.
Wednesday 22 April 2009
Ukraine Above The Rest In Crisis Management
KIEV, Ukraine -- A month ago, a column was written about Russia's return to sane economic policy, but Ukraine has undertaken an even more impressive turnaround. Few countries have been more misunderstood than Ukraine, which has been particularly hurt by the global financial crisis.
In the wake of the Lehman Brothers bankruptcy, international finance froze throughout the world. Ukraine suffered from an underlying problem -- its high dependence on steel exports, whose prices and demand collapsed in fall 2008. In the first half of 2008, steel accounted for no less than 42 percent of Ukraine's exports. This year all of Ukraine's exports are likely to drop by almost 50 percent, but imports even more, so the current account deficit will become insignificant.Ukraine's Central Bank made one serious policy mistake. It insisted on maintaining a fixed peg of the hryvna to the U.S. dollar. Because of the apparent safety and obvious profitability, foreign banks transferred short-term, speculative funds to Ukraine, which expanded the domestic money supply as the exchange rate was fixed and boosted inflation similar to what happened in Russia but worse.In 2007, Ukraine's money supply surged by 51 percent and inflation peaked at 31 percent in May 2008. The speculative currency inflow widened the current account deficit to 7 percent of gross domestic product in 2008. This was not tenable, although Ukraine's budget deficit was minimal and its public foreign debt was only 12 percent of GDP in 2007.What ultimately scared foreign investors was Ukraine's open political feuding. International investors are a strange anti-democratic lot who get worried by open arguments between politicians. They prefer strict authoritarian regimes like in China, Azerbaijan and Kazakhstan.By Oct. 1, the Ukrainian economy suddenly halted. Steel production, mining and construction plummeted by about 50 percent in no time. The largest harvest ever could not salvage the economy. Astoundingly, industrial production contracted by more than 30 percent in the first quarter of 2009 over the same time one year earlier, and GDP probably plunged by 20 percent in this period. In addition, the stock market dropped by 90 percent from its peak last year.Fortunately, the Ukrainian government acknowledged its crisis in early October and asked for help from the International Monetary Fund. Within four weeks, Ukraine concluded a deal with the IMF -- a large, strong two-year standby agreement with $16.4 billion of credits.The IMF program was standard with three key demands: a nearly balanced budget, a floating exchange rate and bank restructuring. Ukraine has delivered. After some hesitation, the country's Central Bank let the exchange rate float. Although it depreciated by about 50 percent, it has since stabilized, giving Ukraine a new cost competitiveness.Together with the international financial institutions, the Central Bank has examined all of Ukraine's banks and quantified their bad debt. Compared to the West, Ukraine's share of toxic debt is small.Seventeen Western banks have committed themselves to recapitalizing their subsidiaries in Ukraine with $2 billion this year. In addition, it is estimated that two-thirds of the country's refinancing needs this year will be met. Most of this is done by European banks. So far, not a single foreign bank has withdrawn from Ukraine. Their prospects are just too attractive. Similarly, the three big Russian banks --VEB, VTB and Sberbank -- have increased their activity in Ukraine despite the crisis.The Ukrainian authorities have taken seven private Ukrainian-owned banks under administration, and they have mobilized $2.6 billion for their recapitalization from the World Bank, the European Bank for Reconstruction and Development and the European Investment Bank. All of them understand Ukraine's financial dilemma. The IMF assesses the total need for recapitalization of no more than $5 billion.Yet the Ukrainian government had problems receiving its second tranche of the IMF loan because GDP declined much more than expected, and thus state revenues. The IMF assessed the budget deficit would be untenable at 6 percent of GDP, even leaving a possible public bank recapitalization of 4.5 percent of GDP aside.The Ukrainian parliament agreed to increase excise taxes on alcohol, tobacco and diesel, and the prime minister decreed further revenue measures to reduce the budget deficit by 2 percent of GDP. With substantial financing from various international financial institutions, the IMF mission considered that the shortfall was almost covered and recommended a second enlarged tranche.At the same time, the Ukrainian government has made a break with nontransparent gas-trading arrangements through the gas agreement with Russia on Jan. 19 and the agreement on the gas transit system with the European Union on March 23. These two decisions might belong to Ukraine's most fortuitous reforms. Fortunately, it joined the World Trade Organization in May last year, securing reasonable market access.On April 1, the Ukrainian parliament voted by an overwhelming majority to hold the next presidential election on Oct. 25, which will help the country to clarify the political situation. The fundamental political problem, however, lies in the confusing constitutional compromise of December 2004, which was one of the most significant results of the Orange Revolution. Now all major parties demand a transition to a purely parliamentary system that would make it impossible for a president to block all decisions. They also call for open-party lists to make it impossible for wealthy businesspeople to purchase seats in parliament.Ukraine has not faced the level of social unrest that other countries have experienced, despite the serious blows to its economy. During television talk shows, both the government and opposition speak their minds freely, and the people hear their arguments until they are satisfied -- or bored.Thanks to early and resolute anti-crisis actions, international reserves remain reassuring at $25 billion, or eight months of imports. Industrial production increased in both February and March over the preceding month, suggesting that Ukraine might already have turned the corner (although GDP will probably still decrease by 8 percent to 10 percent this year). Even the bond and stock markets have soared in the last month.Ukraine has shown exemplary crisis management thanks to a few Ukrainian top officials --notably Prime Minister Yulia Tymoshenko -- and a good job by the international financial institutions.
In the wake of the Lehman Brothers bankruptcy, international finance froze throughout the world. Ukraine suffered from an underlying problem -- its high dependence on steel exports, whose prices and demand collapsed in fall 2008. In the first half of 2008, steel accounted for no less than 42 percent of Ukraine's exports. This year all of Ukraine's exports are likely to drop by almost 50 percent, but imports even more, so the current account deficit will become insignificant.Ukraine's Central Bank made one serious policy mistake. It insisted on maintaining a fixed peg of the hryvna to the U.S. dollar. Because of the apparent safety and obvious profitability, foreign banks transferred short-term, speculative funds to Ukraine, which expanded the domestic money supply as the exchange rate was fixed and boosted inflation similar to what happened in Russia but worse.In 2007, Ukraine's money supply surged by 51 percent and inflation peaked at 31 percent in May 2008. The speculative currency inflow widened the current account deficit to 7 percent of gross domestic product in 2008. This was not tenable, although Ukraine's budget deficit was minimal and its public foreign debt was only 12 percent of GDP in 2007.What ultimately scared foreign investors was Ukraine's open political feuding. International investors are a strange anti-democratic lot who get worried by open arguments between politicians. They prefer strict authoritarian regimes like in China, Azerbaijan and Kazakhstan.By Oct. 1, the Ukrainian economy suddenly halted. Steel production, mining and construction plummeted by about 50 percent in no time. The largest harvest ever could not salvage the economy. Astoundingly, industrial production contracted by more than 30 percent in the first quarter of 2009 over the same time one year earlier, and GDP probably plunged by 20 percent in this period. In addition, the stock market dropped by 90 percent from its peak last year.Fortunately, the Ukrainian government acknowledged its crisis in early October and asked for help from the International Monetary Fund. Within four weeks, Ukraine concluded a deal with the IMF -- a large, strong two-year standby agreement with $16.4 billion of credits.The IMF program was standard with three key demands: a nearly balanced budget, a floating exchange rate and bank restructuring. Ukraine has delivered. After some hesitation, the country's Central Bank let the exchange rate float. Although it depreciated by about 50 percent, it has since stabilized, giving Ukraine a new cost competitiveness.Together with the international financial institutions, the Central Bank has examined all of Ukraine's banks and quantified their bad debt. Compared to the West, Ukraine's share of toxic debt is small.Seventeen Western banks have committed themselves to recapitalizing their subsidiaries in Ukraine with $2 billion this year. In addition, it is estimated that two-thirds of the country's refinancing needs this year will be met. Most of this is done by European banks. So far, not a single foreign bank has withdrawn from Ukraine. Their prospects are just too attractive. Similarly, the three big Russian banks --VEB, VTB and Sberbank -- have increased their activity in Ukraine despite the crisis.The Ukrainian authorities have taken seven private Ukrainian-owned banks under administration, and they have mobilized $2.6 billion for their recapitalization from the World Bank, the European Bank for Reconstruction and Development and the European Investment Bank. All of them understand Ukraine's financial dilemma. The IMF assesses the total need for recapitalization of no more than $5 billion.Yet the Ukrainian government had problems receiving its second tranche of the IMF loan because GDP declined much more than expected, and thus state revenues. The IMF assessed the budget deficit would be untenable at 6 percent of GDP, even leaving a possible public bank recapitalization of 4.5 percent of GDP aside.The Ukrainian parliament agreed to increase excise taxes on alcohol, tobacco and diesel, and the prime minister decreed further revenue measures to reduce the budget deficit by 2 percent of GDP. With substantial financing from various international financial institutions, the IMF mission considered that the shortfall was almost covered and recommended a second enlarged tranche.At the same time, the Ukrainian government has made a break with nontransparent gas-trading arrangements through the gas agreement with Russia on Jan. 19 and the agreement on the gas transit system with the European Union on March 23. These two decisions might belong to Ukraine's most fortuitous reforms. Fortunately, it joined the World Trade Organization in May last year, securing reasonable market access.On April 1, the Ukrainian parliament voted by an overwhelming majority to hold the next presidential election on Oct. 25, which will help the country to clarify the political situation. The fundamental political problem, however, lies in the confusing constitutional compromise of December 2004, which was one of the most significant results of the Orange Revolution. Now all major parties demand a transition to a purely parliamentary system that would make it impossible for a president to block all decisions. They also call for open-party lists to make it impossible for wealthy businesspeople to purchase seats in parliament.Ukraine has not faced the level of social unrest that other countries have experienced, despite the serious blows to its economy. During television talk shows, both the government and opposition speak their minds freely, and the people hear their arguments until they are satisfied -- or bored.Thanks to early and resolute anti-crisis actions, international reserves remain reassuring at $25 billion, or eight months of imports. Industrial production increased in both February and March over the preceding month, suggesting that Ukraine might already have turned the corner (although GDP will probably still decrease by 8 percent to 10 percent this year). Even the bond and stock markets have soared in the last month.Ukraine has shown exemplary crisis management thanks to a few Ukrainian top officials --notably Prime Minister Yulia Tymoshenko -- and a good job by the international financial institutions.
Manhunt For Ukraine-Based Hackers
The US Federal Bureau of Investigation and UK’s Metropolitan Police are hunting a gang of six hackers based in the Ukraine who have hijacked 1.9m computers around the world, including machines at hundreds of large corporations and 77 government departments.
It is the largest network of hijacked computers – or botnet – to have been discovered. to date. It is at least four times larger than botnets that have been discovered in the past, which have tended to include 200,000 to 500,000 computers.In the UK alone, more than 500 companies were caught in the network of infected machines, including both large and small businesses. Six UK local government computers were compromised, while in the US, computers at both federal and local government level were infiltrated, said Yuval Ben-Itzhak, chief executive of Finjan, the IT security company that discovered the network. He declined to name any of the businesses that were affected, but said they included some of the largest global corporations.“With this many computers affected, everyone was there on the list – the US Federal government, big universities, very large public companies,” Mr Ben-Itzhak said.Finjan has provided the FBI and Metropolitan Police with information about the network but there has been no update on whether the law enforcement agencies have been able to track down the criminals. The server from which the botnet was run is no longer in operation, but if the hackers are still at large, they will be able to set a new one up again very quickly.The 1.9m computer botnet was created in a very short time, between February and March this year. Hackers can infect computers in different ways – by sending e-mails containing viruses or by taking over legitimate websites so that they transmit malicious software code to everyone that visits.“The speed at which they were able to infect so many people was astounding. If these people are still out there, they can start all over again very quickly,” Mr Ben-Itzhak said.Criminals can use botnets for a number of different things. They can steal personal details and account information stored in the machines. Or they can control the machines remotely, instructing them to send out spam e-mails and viruses.They could also be used to mount a “denial of service” attack, where a large number of computers all try to contact a company or country’s computer systems at the same time, causing the system to crash. In May 2007, several Estonia government websites were brought down this way, making it difficult for the country to function. The Ukraine-controlled network would have easily been able to bring down any website it targeted.
It is the largest network of hijacked computers – or botnet – to have been discovered. to date. It is at least four times larger than botnets that have been discovered in the past, which have tended to include 200,000 to 500,000 computers.In the UK alone, more than 500 companies were caught in the network of infected machines, including both large and small businesses. Six UK local government computers were compromised, while in the US, computers at both federal and local government level were infiltrated, said Yuval Ben-Itzhak, chief executive of Finjan, the IT security company that discovered the network. He declined to name any of the businesses that were affected, but said they included some of the largest global corporations.“With this many computers affected, everyone was there on the list – the US Federal government, big universities, very large public companies,” Mr Ben-Itzhak said.Finjan has provided the FBI and Metropolitan Police with information about the network but there has been no update on whether the law enforcement agencies have been able to track down the criminals. The server from which the botnet was run is no longer in operation, but if the hackers are still at large, they will be able to set a new one up again very quickly.The 1.9m computer botnet was created in a very short time, between February and March this year. Hackers can infect computers in different ways – by sending e-mails containing viruses or by taking over legitimate websites so that they transmit malicious software code to everyone that visits.“The speed at which they were able to infect so many people was astounding. If these people are still out there, they can start all over again very quickly,” Mr Ben-Itzhak said.Criminals can use botnets for a number of different things. They can steal personal details and account information stored in the machines. Or they can control the machines remotely, instructing them to send out spam e-mails and viruses.They could also be used to mount a “denial of service” attack, where a large number of computers all try to contact a company or country’s computer systems at the same time, causing the system to crash. In May 2007, several Estonia government websites were brought down this way, making it difficult for the country to function. The Ukraine-controlled network would have easily been able to bring down any website it targeted.
Tuesday 21 April 2009
FSB Busts Sochi Spy Ring
SOCHI, Krasnodar Region — A businessman running an Internet cafe in Sochi has been exposed as the leader of a Georgian spy ring, the Federal Security Service said Tuesday. The suspect, identified as Ukrainian citizen Mamuka Maisuradze, has admitted to collecting information about the political situation in the region, including preparations for the 2014 Winter Olympics in Sochi, the FSB said in a statement carried by Interfax. An FSB spokesman confirmed the statement but said he could not comment further because the information had not been spread by his agency's press office. He refused to elaborate. The Georgian government denied the accusation. Eka Tkeshelashvili, head of the country's Security Council, said the man had never served in Georgian intelligence. “I assume this is just a tit-for-tat arrest” after Georgia arrested four Russians in 2006 over spying allegations, she said, Bloomberg reported. The allegations come at the height of an unusually heated campaign for Sochi's mayoral election next Sunday. It was unclear whether the purported spy was in custody or whether any charges had been brought against him. Nor was it clear when Maisuradze was detected. The FSB statement said he had been declared persona non grata because his activities posed a real threat to Russia's defense capacities and security. "His testimony confirms that Georgia attempted to set up a regional intelligence network," an unidentified FSB official told Interfax. The statement said Maisuradze had provided the FSB with the names of Russian citizens who maintained contacts with Georgian intelligence. It also said Georgia's foreign intelligence service had helped Maisuradze obtain Ukrainian citizenship and set up private businesses in Sochi, including an Internet cafe, through which he communicated with his superiors. The Ukrainian Foreign Ministry had no comment on the claim, a spokeswoman said by telephone from Kiev. The FSB began watching the suspect in 2000 because of his alleged connections to leaders of separatist groups in Chechnya and other republics in the North Caucasus, Interfax reported. The FSB said that before arriving in Sochi in 2007, Maisuradze held executive posts in Georgian government agencies where he maintained contacts with Chechen separatists, including former Chechen President Zelimkhan Yandarbiyev, who was killed in a car bombing in Qatar in 2004. Qatar convicted two Russian intelligence officers in the slaying. Meanwhile, Sochi's police chief warned that one of the six candidates running for mayor was planning to spread public unrest in the city. "Plans for a series of provocations are being worked out in one of the candidates' campaign headquarters," police chief Alexander Birillo said, RIA-Novosti reported. "People from other regions who have taken part in Dissenters' Marches and in the Orange Revolution are coming" to Sochi, he said. Birillo did not identify the candidate, but the race now amounts to a showdown between United Russia's candidate, acting Sochi Mayor Anatoly Pakhmonov, and outspoken Kremlin critic Boris Nemtsov. Ukraine's 2004 Orange Revolution swept President Viktor Yushchenko to power. Nemtsov was a vocal Russian supporter of the upheaval, and he served as an adviser to Yuschenko after he took office in early 2005. Russian-Ukrainian relations have been deeply troubled ever since, as have relations with Georgia, which fought a brief war with Russia over its separatist province of South Ossetia last summer. Earlier this month, the Georgian government paraded an activist of the pro-Kremlin youth group Nashi in Tbilisi, claiming that he had admitted to planning a provocation along the demarcation line with South Ossetia.
What's The Difference After Five Years?
KIEV, Ukraine -- It sometimes seems difficult to believe, but it's been almost five years since Ukraine underwent its Orange Revolution - an event that for many put the country on the world map. For others, however, the heady days of late 2004 were a big show that has ended in even bigger disappointments.
How come the bandits haven't been put in jail, as Viktor Yushchenko promised during his romantic rise to the presidency? Why is Ukraine still mired in petty clan politics, with state interests taking a back seat to those of businessmen with a voice in parliament? And, most recently, the country appears to be backsliding in the one area that has seemed promising and substantive, the economy. Is it possible that Ukraine will revert to a backwater buffer zone outside of Europe and out of favor with Russia?All of these concerns are nothing new in a fledgling democracy, which despite the protestations of its harshest critics, Ukraine can still claim to be.It's true that there wasn't a mass round up of thugs after Yushchenko took power, but to quote the Bible: "He who is without sin, throw the first stone." The point here is that since there wasn't much of a law in Ukraine, the majority of the country's population have probably been lawbreakers.As for those individuals with particularly ugly reputations for quashing the hopes of the people, abusing their positions in the police force or simply stealing more than is "decent', many have met their death in suspect suicides, hunting accidents or the like. This may not be justice in the legal sense, but we have come a long way since the eerie days of President Leonid Kuchma all the same.Yes, the country's courts are still corrupt, and murder hasn't disappeared as a means of settling business disputes, but no one can honestly compare today's comical top cop Yury Lutsenko to his Kuchma-era counterpart Yury Kravchenko. Abusing the law and abusing people under the law are different in practice.And yes, the corruption continues, but in an odd sort of Ukrainian way the venal are keeping each other in check, rather than jockeying for influence before a modern-day czar. Kuchma kept everything in his own hands, which meant all the other hands were empty and often pawing for what they could get.Viktor Yushchenko, for all his weaknesses, is a very different man. In fact, he was likely allowed to take power precisely because of his weaknesses, which are allowed and even cherished in a democratic country.The very fact that Ukrainians can talk and write about Mr. Yushchenko's flaws is proof enough in itself. His currents opponents for power have shown much less democratic credentials during the brief periods that they were allowed to head the government. Populism is the bridesmaid of a dictator, while trying to steal an election is far worse than the theft of state assets.Recently, with presidential and quite possibly parliamentary elections in sight, Yushchenko has been increasingly compared to his predecessor Mr. Kuchma.Like Kuchma, it is said, Yushchenko is trying to stay in power by changing the rules of the game. Again, we hear talk of a referendum to change the country's much-embattled constitution, proposals to create a bilateral legislature - only this time from the man who fought such initiatives tooth and nail during his rise to power: Yushchenko.Yushchenko has additionally called for yet another round of early parliamentary elections, to be held concurrently with the presidential ones.These proposals are indeed unorthodox and rightfully raise concerns. But to compare Yushchenko's initiatives to those of Mr. Kuchma is a gross exaggeration based on convenient historical amnesia.Yushchenko may want dual elections, but in fact he's gotten a shorter term, with presidential elections currently scheduled four months before his five years are up. Could it be that the mild-mannered president is simply trying to keep his opponents at bay?With single-digit approval ratings, a shrinking party in parliament and not many friends in the West or up north, can Yushchenko really be expected to take the country hostage in some sort of constitutional coup?Kuchma couldn't get away with it, and he had much more power and opportunity to do so. In fact, Mr. Kuchma knew full well that it was time to pass on the baton but he tried to do so underhandedly and in an eastward direction.Like Kuchma, Yushchenko also knows that he's on his way out, and therefore may be trying to soften the transition. If the president is really trying to create a bilateral parliament to have somewhere to go after electoral defeat, I say make him an honorary senator for life! Whatever his faults as head of state, he was the best man to choose at the time and paid a high price for his election.If, on the other hand, Yushchenko is trying to restrain the ambitions of his opponents - More power to him! The country can only benefit from this.It's economics that have brought Ukraine closer to Europe and its values - cash from industry and agriculture that has trickled down to a population that had never known what money, ownership, freedom of travel and information, etc, was.And whoever is elected to replace Mr. Yushchenko will face a population more used to freedom than ever before. If nothing else - and he did a lot more - Yushchenko has kept the expectation of democracy alive among his countrymen.The economy will pick up again, as economies do. Ukraine is a major exporter of steel, grain and chemicals. Under Yushchenko, it entered the WTO.Issues such as what percentage of the vote a party will need to get into the next parliament are indeed important. But a democratic system where the president isn't czar offers enough protection to balance interests among lawmakers, who with time should become increasingly sensitive to their constituents. With the continued accumulation of wealth and safeguards of free speech, the people will not stand for anything else.
How come the bandits haven't been put in jail, as Viktor Yushchenko promised during his romantic rise to the presidency? Why is Ukraine still mired in petty clan politics, with state interests taking a back seat to those of businessmen with a voice in parliament? And, most recently, the country appears to be backsliding in the one area that has seemed promising and substantive, the economy. Is it possible that Ukraine will revert to a backwater buffer zone outside of Europe and out of favor with Russia?All of these concerns are nothing new in a fledgling democracy, which despite the protestations of its harshest critics, Ukraine can still claim to be.It's true that there wasn't a mass round up of thugs after Yushchenko took power, but to quote the Bible: "He who is without sin, throw the first stone." The point here is that since there wasn't much of a law in Ukraine, the majority of the country's population have probably been lawbreakers.As for those individuals with particularly ugly reputations for quashing the hopes of the people, abusing their positions in the police force or simply stealing more than is "decent', many have met their death in suspect suicides, hunting accidents or the like. This may not be justice in the legal sense, but we have come a long way since the eerie days of President Leonid Kuchma all the same.Yes, the country's courts are still corrupt, and murder hasn't disappeared as a means of settling business disputes, but no one can honestly compare today's comical top cop Yury Lutsenko to his Kuchma-era counterpart Yury Kravchenko. Abusing the law and abusing people under the law are different in practice.And yes, the corruption continues, but in an odd sort of Ukrainian way the venal are keeping each other in check, rather than jockeying for influence before a modern-day czar. Kuchma kept everything in his own hands, which meant all the other hands were empty and often pawing for what they could get.Viktor Yushchenko, for all his weaknesses, is a very different man. In fact, he was likely allowed to take power precisely because of his weaknesses, which are allowed and even cherished in a democratic country.The very fact that Ukrainians can talk and write about Mr. Yushchenko's flaws is proof enough in itself. His currents opponents for power have shown much less democratic credentials during the brief periods that they were allowed to head the government. Populism is the bridesmaid of a dictator, while trying to steal an election is far worse than the theft of state assets.Recently, with presidential and quite possibly parliamentary elections in sight, Yushchenko has been increasingly compared to his predecessor Mr. Kuchma.Like Kuchma, it is said, Yushchenko is trying to stay in power by changing the rules of the game. Again, we hear talk of a referendum to change the country's much-embattled constitution, proposals to create a bilateral legislature - only this time from the man who fought such initiatives tooth and nail during his rise to power: Yushchenko.Yushchenko has additionally called for yet another round of early parliamentary elections, to be held concurrently with the presidential ones.These proposals are indeed unorthodox and rightfully raise concerns. But to compare Yushchenko's initiatives to those of Mr. Kuchma is a gross exaggeration based on convenient historical amnesia.Yushchenko may want dual elections, but in fact he's gotten a shorter term, with presidential elections currently scheduled four months before his five years are up. Could it be that the mild-mannered president is simply trying to keep his opponents at bay?With single-digit approval ratings, a shrinking party in parliament and not many friends in the West or up north, can Yushchenko really be expected to take the country hostage in some sort of constitutional coup?Kuchma couldn't get away with it, and he had much more power and opportunity to do so. In fact, Mr. Kuchma knew full well that it was time to pass on the baton but he tried to do so underhandedly and in an eastward direction.Like Kuchma, Yushchenko also knows that he's on his way out, and therefore may be trying to soften the transition. If the president is really trying to create a bilateral parliament to have somewhere to go after electoral defeat, I say make him an honorary senator for life! Whatever his faults as head of state, he was the best man to choose at the time and paid a high price for his election.If, on the other hand, Yushchenko is trying to restrain the ambitions of his opponents - More power to him! The country can only benefit from this.It's economics that have brought Ukraine closer to Europe and its values - cash from industry and agriculture that has trickled down to a population that had never known what money, ownership, freedom of travel and information, etc, was.And whoever is elected to replace Mr. Yushchenko will face a population more used to freedom than ever before. If nothing else - and he did a lot more - Yushchenko has kept the expectation of democracy alive among his countrymen.The economy will pick up again, as economies do. Ukraine is a major exporter of steel, grain and chemicals. Under Yushchenko, it entered the WTO.Issues such as what percentage of the vote a party will need to get into the next parliament are indeed important. But a democratic system where the president isn't czar offers enough protection to balance interests among lawmakers, who with time should become increasingly sensitive to their constituents. With the continued accumulation of wealth and safeguards of free speech, the people will not stand for anything else.
All The King’s Horses, And All The Kings Men*...
KIEV, Ukraine -- "Ukrainska Pravda" today reveals that the European People’s Party, the "largest European-level party on the continent", have been trying for some time to act as peacemaker between president Yushchenko and premier Tymoshenko.
EPP president, Wilfried Martens has even suggested assembling a heavyweight crew comprising former British PM Tony Blair, former Spanish PM Jose Maria Asnar, and former Polish president Alexander Kwasniewski to help bring Yush and Yulka together into some kind of working relationship again. Yushchenko has been against the idea all along, whilst Tymoshenko has been agreeable.Maybe its because just over a year ago, Martens, at a meeting with Yushchenko, blamed the president’s secretariat of criminal acts against the Tymoshenko government. Martens allegedly declared: "Mr Baloha is a criminal!" To which Yushchenko apparently replied, "Look into my eyes! Do you consider these to be the eyes of a criminal?" "No, you are not a criminal - but the head of your secretariat is!" continued Martens."Financial Times" reports that the Yulia Tymoshenko government had unilaterally adopted initiatives needed to unlock an International Monetary Fund loan after MPs failed to adopt the required conditions in parliament.It seems that the IMF Ukrainian mission head was OK with this, but, NUNS deputy, Ksenya Lyapina, who is one of Yushchenko’s closest confidantes, says lawsuits against the cabinet from entrepreneurs will follow and the resolutions will be eventually cancelled by the cabinet.* From an English nursery rhyme about a character normally portrayed as an egg sitting on a wall:Humpty Dumpty sat on a wall,Humpty Dumpty had a great fall.All the king’s horses,And all the king’s men,Couldn’t put Humpty together again.
EPP president, Wilfried Martens has even suggested assembling a heavyweight crew comprising former British PM Tony Blair, former Spanish PM Jose Maria Asnar, and former Polish president Alexander Kwasniewski to help bring Yush and Yulka together into some kind of working relationship again. Yushchenko has been against the idea all along, whilst Tymoshenko has been agreeable.Maybe its because just over a year ago, Martens, at a meeting with Yushchenko, blamed the president’s secretariat of criminal acts against the Tymoshenko government. Martens allegedly declared: "Mr Baloha is a criminal!" To which Yushchenko apparently replied, "Look into my eyes! Do you consider these to be the eyes of a criminal?" "No, you are not a criminal - but the head of your secretariat is!" continued Martens."Financial Times" reports that the Yulia Tymoshenko government had unilaterally adopted initiatives needed to unlock an International Monetary Fund loan after MPs failed to adopt the required conditions in parliament.It seems that the IMF Ukrainian mission head was OK with this, but, NUNS deputy, Ksenya Lyapina, who is one of Yushchenko’s closest confidantes, says lawsuits against the cabinet from entrepreneurs will follow and the resolutions will be eventually cancelled by the cabinet.* From an English nursery rhyme about a character normally portrayed as an egg sitting on a wall:Humpty Dumpty sat on a wall,Humpty Dumpty had a great fall.All the king’s horses,And all the king’s men,Couldn’t put Humpty together again.
Bringing Ukraine Into The European Club
MOSCOW, Russia -- Many of us who watched the Orange Revolution with admiration four years ago have become disappointed with its failure to usher in a period of democratic stability and sustained reform. Recent crises have strengthened this feeling.Nonetheless, there have been some clear improvements. Media censorship has ended, elections are free and fair, civil society is flourishing and the economy is more open. These are considerable gains, especially when compared to developments in Russia. But that is a very low benchmark to set.The Orange Revolution promised something more substantive -- an economic and political transformation that would put Ukraine firmly on the path to membership of the European Union.But this hasn't happened yet, and part of the responsibility for this lies with the EU itself. Europe's soft power proved remarkably effective in encouraging the transition from communism to democracy in Eastern Europe but only when the promise of full membership was the end goal.It was only the prospect of inclusion in the EU club that encouraged the emerging democracies to make the painful sacrifices required to get there. It also provided the financial support and political supervision needed to meet the immense legislative and administrative challenges involved.The problem with Ukraine is that it expected to achieve the same results without any support or a clear statement that membership is an achievable goal.Ukraine needs a clear signal that it is an integral part of the European-Atlantic community of democracies. U.S. President Barack Obama's desire for a new start in relations with Russia is understandable, as is German Chancellor Angela Merkel's recent call for Ukraine and Russia to work toward a new understanding.But Ukraine should not be regarded merely as a factor in relations between great powers. It is a sovereign country in its own right and deserves to be treated as such. Europe should not lose sight of its fundamental values by failing to respect the legitimate interests and aspirations of a major country like Ukraine.Yet the major reasons for Ukraine's disappointing progress are to be found in the deficiencies of its own political system. Without united leadership and effective political institutions, it is difficult for any country to chart a clear and consistent path.Unfortunately, the deal that allowed President Leonid Kuchma to step aside in 2004 also saddled his successor with constitutional restrictions that undermined his capacity to govern. By weakening the office of president and creating an unstable and ill-defined division of powers with the prime minister and the parliament, this created sharp division at a time when unity was most needed.The result has been a prolonged three-sided struggle for power leading to a series of serious political crises.The most recent crises were the gas dispute with Russia and a serious economic downturn. European countries and international organizations trying to assist Ukraine have often been confused about which leader they should be dealing with in Kiev.The International Monetary Fund's frustration over the terms of a badly needed loan package with the government is a case in point. President Viktor Yushchenko and the Central Bank were willing to agree on workable terms, but the second tranche of the package was held up because of irresponsible political bickering elsewhere.Agreement now appears to have been reached, but Ukraine's international credibility has again suffered in the process.The rest of Europe has little patience for dealing with leaders who put their own ambitions before the interests of their country. Yes, Ukraine has a presidential election in less than a year, and the potential candidates have a right to set out their positions.But most mature democracies are able to keep political competition within acceptable constitutional boundaries. This is true even in countries like Germany, where the main political rivals are in coalition together. Part of the answer for Ukraine centers on constitutional reform to create a clearer and more efficient political order.Another part of the answer is for Ukraine's political class to develop a culture of restraint and self-control in the national interest.The EU should be willing to do much more to help Ukraine through this crisis and beyond, but it also needs to feel more confident about the country's political direction. This once seemed clear, but now there is doubt. Efforts to secure a $7.4 billion loan from Russia appear odd coming so soon after a dispute in which Ukraine expressed concern about excessive energy dependence on the same country.A country committed to European integration should enjoy a close and intimate partnership with the EU, leading to eventual membership. A country seeking to exploit its intermediate position between Russia and the EU for short-term gain deserves a different kind of relationship.Ukraine is too important to be relegated to the sidelines of European policymaking. Ukraine's difficulties should galvanize the EU to develop new policies of engagement and assistance. This should be a pragmatic endeavour, focused on practical results and backed by adequate financial support and real political will.The agreement signed by Yushchenko and European Commission President Jose Manuel Barros on EU funding to increase safety and capacity of Ukraine's gas pipelines is an important step for future cooperation.There is only so much that can be done from Brussels. The leaders in Kiev have to meet their side of the bargain, too.
Finland Withholds Pipeline Backing
President Dmitry Medvedev didn't win firm backing for the Nord Stream gas pipeline from his Finnish counterpart Tarja Halonen in Monday talks, a signal that bargaining will continue in the next few months. Halonen said Finland was still studying the project in terms of its environmental safety and suggested that a decision might be coming in July, when the countries' prime ministers are scheduled to meet. "As Finns have said earlier, the gas pipeline is an ecological question," Halonen said, speaking at a joint news conference with Medvedev. "If it can be built in an ecologically safe way, then we think it's a good solution." Medvedev said simply that Russia would continue to promote the pipeline. In exchange for permission to lay the undersea pipeline off its coast, Finland may ask Russia for further changes in timber export policy and discounts for gas and electricity imports, said Dmitry Abzalov, an expert at the Center of Current Politics, a think tank. Russia is a major exporter of timber for Finland's sprawling forestry industry. "I think Helsinki is trying to bargain," Abzalov said. "They are first and foremost interested in timber." Gazprom, Germany's E.On and BASF and Holland's Gasunie expect all permits from Finland and four other littoral states for the pipeline's construction across the Baltic Sea by the end of the year. Gas shipments are scheduled to start in 2011. Prime Minister Vladimir Putin delayed the introduction of prohibitively high export duties for timber from last January by nine to 12 months after a meeting with his Finnish counterpart Matti Vanhanen in November. After those talks, an irritated Putin said the environmental impact study on Nord Stream was so extensive as to cover "stones, fur-seals, birds, shipping, cables laid on the bottom and ammunition left from World War II." As a return favor for the export-duty gesture, the Kremlin expected unconditional support for Nord Stream from Finland, a Kremlin source said ahead of Medvedev's visit. "We are hoping for Finland's active participation on the issue of the Nord Stream pipeline," the source said, Interfax reported. "We hope this participation will be as active as when Finland turns to us on timber supply-related issues." Nord Stream AG, the company set up to build the pipeline, in March presented Finland with a formal request to allow construction through two separate permits -- one in accordance with the Exclusive Economic Zone Act and the other under the Water Act. The company also needs permission from Russia and Germany, the countries that stand to gain from the pipeline, as well as Sweden and Denmark. Medvedev also said he would present new proposals for energy cooperation in an effort to offer an alternative to the European Energy Charter, which Moscow has refused to ratify. The alternative proposals, which will cover coal, nuclear fuel, oil and gas, aim to balance the interests of producers, buyers and transit states, Medvedev said.
Subscribe to:
Posts (Atom)