EU Stalls Ukraine Trade Deal Over Tymoshenko Treatment

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Progress needed

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

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

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

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

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

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

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

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

Is Ukraine Heading East?

MOSCOW, Russia -- On the eve of an EU-Ukraine summit on December 19, Ukraine’s relations with Brussels are deteriorating.


EU officials have warned that the detention of opposition leader Yulia Tymoshenko is damaging Kiev’s hopes of signing an Association Agreement by the end of the year.

Meanwhile, Ukraine is considering relinquishing a 50%-share of its pipelines to Russia for cheaper gas.

David Marples looks at the possible political direction Ukraine is headed for in 2012.

As Ukraine’s relationship with the EU continues to flounder over human rights issues, the imprisonment of former Prime Minister Yulia Tymoshenko and the lengthy detention of former Interior Minister Yuri Lutsenko, there are signs that the government is prepared to flout existing laws to gain closer association with Gazprom and the Customs Union of Russia, Belarus, and Kazakhstan.

The consequences could be not only the loss of links with the European Energy Community (EEC) but also the undermining of Ukraine’s sovereignty.

On December 4, Russia’s Ambassador to Ukraine Mikhail Zurabov announced that the new gas agreement between the two states would have the status of an international agreement, rather than a business arrangement between the two responsible companies, Gazprom and Naftohaz.

The evident tolerance of the EU for the abuses of power in Kiev is, perhaps, even more important for the ruling party’s survival. Ukraine has not been subject to the kind sanctions the EU has applied in Belarus.

Russia is evidently responding to the EU’s plans for closer integration with Ukraine and greater transparency in the transit of gas from Russia to Western Europe.

Analyst Maksim Alinov argues that the results of the inter-state agreement proposed by the Russian ambassador would override current Ukrainian laws, which make it illegal to transfer Ukraine’s transit system to Russian control.

A similar sale to Gazprom occurred recently in Belarus.

In the Ukrainian weekly, Zerkalo Nedeli, Alinov writes that the flouting of the agreement in place would also give Russia significant influence over the internal economic and political situation in Ukraine.

In the same paper, analyst, Maksim Honchar, goes further, maintaining that Kiev’s apparent reversal of policy on the EEC would violate Article 7 of a 2010 legislation, which stipulates that Ukraine’s oil, gas, and electricity networks should operate in accordance with EU rules.

In his view this indicates a willingness to surrender national interests, which would be an even more serious threat to Ukraine’s pro-European policy than the imprisonment of Tymoshenko.

It would also strengthen considerably the position of Gazprom, a monopolist enterprise that seeks to deploy energy as an instrument of political control.

Honchar predicts that Ukraine could acquire cheap gas but at the price of gradually losing its sovereignty and the Association Agreement with the EU.

This, Honchar believes, would lead to an inevitable defensive alliance with Russia.

Meanwhile, the EU continues to demand the release of Tymoshenko as a prequel to the initializing of the Association Agreement, though with diminishing hopes and growing frustration.

Ukraine’s leaders are posing serious threats to the sovereignty of Ukraine, relinquishing hard-won rights for the immediate prospect of cheap gas and permitting a much more powerful role for Russian agencies like Gazprom to step in and purchase Naftohaz.

Wilfred Martens, President of the European People’s Party, stated that Ukraine, like Poland, could be an important EU player, and that without it, the EU project could not be complete.

He insisted, however, that as a prerequisite to the start of the process leading to the Agreement, Ukraine’s Party of Regions must release Tymoshenko, Lutsenko, and other political prisoners.

Foreign Minister Kostyantyn Hryshchenko has demurred, stating that Tymoshenko could not be used as a bargaining chip in trade relations and that her situation was a matter for the Ukrainian Judiciary.

He recently wrote, in the Ukrainian paper, Unian, that to do so would be tantamount to indicating that the latter is not an independent body.

Although Ukraine’s leadership faces several serious economic problems and recently, for a second time, rejected the IMF’s demand to raise energy prices, it does not seem to be facing a serious threat from the opposition.

Indeed, the political situation seems relatively unaffected by the Tymoshenko saga.

Analyst Kost Bondarenko maintains that the population has lost interest in the struggle between Tymoshenko and the ruling elite, while Vadim Karasev considers that the apparent lack of public sympathy for Tymoshenko reflects the general perception of her as a former representative of the political establishment.

This has proven to be a positive sign for the authorities and shows that the arrest of Tymoshenko has not affected ratings for the president and The Party of Regions.

Ratings polls show that Yanukovych remains the leading individual politician with ratings between 17.4 and 20.7%, whereas the ratings of Tymoshenko, the only serious contender, range from 13 to 14.1%.

Yatsenyuk in third place has, at most, 9.9% support. In short, with Tymoshenko out of the picture, there is no longer a serious contender from the opposition.

The ruling party seems to be calculating each step in a cynical fashion, taking action and then monitoring the response.

Vadim Karasev points out that the leadership thinks the release of Tymoshenko would be seen as a sign of weakness.

Ukrainian leaders are closely watching political events in Russia, where the rise of oppositional activities could have a domino effect in Ukraine.

Ratings polls show that Yanukovych remains the leading individual politician with ratings between 17.4 and 20.7%, whereas the ratings of Tymoshenko, the only serious contender, range from 13 to 14.1%.

Yatsenyuk in third place has, at most, 9.9% support.

In short, with Tymoshenko out of the picture, there is no longer a serious contender from the opposition.

The ruling party may also consider that in 2011 popularity might have been expected to drop because of the introduction of unpopular measures such as pension and taxation codes.

The party can expect even better fortune in the New Year, not least because Ukraine will host the UEFA Championship, Euro-2012.

The evident tolerance of the EU for the abuses of power in Kiev is, perhaps, even more important for the ruling party’s survival.

Ukraine has not been subject to the kind sanctions the EU has applied in Belarus.

Ukraine has moved rapidly from one of the most democratic of post-Soviet states to a position well down the scale.

At the same time the corruption that has long pervaded the Ukrainian economy has not diminished.

In a foreign policy report for the Brookings Institute, Former US ambassador to Ukraine, Steven Pifer observed that the United States is preoccupied with other issues and unlikely to engage with Ukraine at the highest level until after the 2012 presidential election.

Thus Yanukovych and The Party of Regions effectively have carte blanche to continue their current path.

The EEC agreement appears to have been jettisoned.

For the second time since the January 2010 election (the first being the Kharkiv Accords on the Black Sea Fleet), Ukraine’s leaders are posing serious threats to the sovereignty of Ukraine, relinquishing hard-won rights for the immediate prospect of cheap gas and permitting a much more powerful role for Russian agencies like Gazprom to step in and purchase Naftohaz.

The next logical stage would be for Ukraine to join the Customs Union (with Russia, Kazakhstan, and Belarus).

Only a year ago that would have been unthinkable, but it is now a serious possibility.

Gazprom: No New Year's Gifts For Ukraine

BRUSSELS, Belgium -- Ukraine has long been seeking to alter the terms of the 2009 gas deal it signed with Russia.

The deal ties the price of gas to oil prices, which have risen strongly since 2009, boosting Ukraine's gas bill.

The contract says Ukraine must import no less than 33 billion cubic metres of gas from Russia, but Kiev is insisting on reducing both the price and the volume of gas imports.

Ukrainian Premier Mykola Azarov has stated that Kiev is ready to pay $400 per 1,000 cubic metres of gas if it fails to agree with Moscow on better terms for gas supplies.

"If we have to pay $400 for gas, we will pay it – we have no other choice," Azarov told reporters in Kiev on 13 December.

The government cannot delay the drafting of the 2012 national budget any longer, because it has to be adopted by the New Year, he said.

Azarov added that Ukraine-Russia negotiations had been going on in Moscow for two days.

Gazprom CEO Alexei Miller announced earlier last week, however, that "no New Year's presents" should be expected in bilateral talks on the reduction of the price for Russian natural gas.

Kommersant reported on 13 December that Gazprom might lower the gas price for Ukraine to $210-220 per 1,000 cubic metres if Kiev sold part of its gas transportation system to Moscow.

A similar scheme was adopted by the gas monopolist in early December, when it announced that it took control of Beltransgaz as part of a revised energy deal with Belarus.

The Ukraine- Russia deal would exclude European participation.

Miller met Ukrainian Energy Minister Yury Boiko on 12 December, Gazprom said in a statement.

Joint control of the transit pipelines, which carry Russian gas to Europe through the territory of the former Soviet republic, is seen as a way to preclude their use as a bargaining chip in price conflicts between Russia and Ukraine, which depends on Russia for almost all of its gas.

Direct European participation in a pipeline deal had appeared possible.

Azarov said earlier that they had discussed a 40-40 division of control between Russia and Ukraine, with a European entity as a third party.

Russia annually pumps around 100 billion cubic metres of gas to European countries via Ukraine, which makes up 80% of its total gas supplies to Europe.

Meanwhile, Naftogaz Deputy CEO Vadym Chuprun was quoted as saying by the press that Ukraine needs guarantees from Russia and the EU regarding gas transit across Ukrainian territory.

"It is impossible to preserve and maintain our gas transport system without Russian gas. Our national property - Ukraine's gas transport system - must be preserved, so it needs guaranteed volumes of gas. We need guarantees from Russia and from the European Union," Chuprun said, adding that it was possible to use the Ukrainian gas transport system in full with the trilateral participation of Ukraine, Russia and Europe.

"It can be used only at the trilateral level, with Russia being a supplier, Ukraine a transit country, and the European Union as a consumer, on such a solid basis," Chuprun said.

He added that the construction of gas pipelines bypassing Ukraine - Nord Stream and South Stream - posed a direct threat to Ukraine's transit potential.

"We are surprised that European officials have not responded to [the construction of South Stream or Nord Stream. And silence is a sign of consent. This is a serious signal to Ukraine. This is a direct threat to Ukraine's gas-transport system."

Chuprun said that the Ukrainian gas transport system had a unique potential and that it was economically more profitable than the construction of pipelines bypassing Ukraine.

"The cost of [the construction of ] South Stream is $27 billion. For the sake of momentary gain, in order to get lower gas prices, certain EU countries forget that in five years they will have to pay for this," he concluded.

No Association Deal Expected At EU Summit

KIEV, Ukraine -- Ukraine and the European Union will probably not initial a political association agreement at their Kiev summit on December 19, Leonid Kozhara, a lawmaker from the governing Regions Party, said Thursday, citing an undisclosed communication from Brussels.

The development would be a major setback for Ukraine’s declared policy of European integration and may potentially tilt the country towards greater cooperation with Russia.

“That’s true: the association agreement will not be initialed at the summit,” Kozhara said in an interview with Channel 5.

“Today we have received such information. Not even today, it existed before.”

Relations between Ukraine and the EU strained after Kiev has refused to release opposition leader Yulia Tymoshenko, a former prime minister, who was arrested in August and sentenced in October to seven years in prison for abuse of office.

The EU said the arrest and the sentencing had been politically motivated and aimed against the opposition leader.

President Viktor Yanukovych on Thursday confirmed that the issue of Tymoshenko had been the main problem in relations between Ukraine and the EU.

“One of the issues that remain to be hot on agenda is the issue of former prime minister Tymoshenko,” Yanukovych said at a press conference in Kiev.

Ukraine and the EU were in talks for almost five years over the free trade agreement and the political association agreements, and both had been basically agreed upon except for the Tymoshenko issue.

Yanukovych said Thursday that Ukraine still hoped to achieve a “positive decision” at the summit in Kiev that would lead to singing of both agreements.

But not only the authorities refused to release Tymoshenko from jail, they moved last week to “re-arrest” her at a special court session from within her jail cell on other charges.

This makes her release impossible before the summit even if she wins an appeal against the seven-year verdict given her in October.

The “re-arrest” of Tymoshenko was sought by the security service SBU investigators and was based on the charges dating back more than 15 years ago.

The court session at bedside of Tymoshenko’s jail cell stunned many politicians and some alleged that the SBU may have been working to undermine the Ukraine-EU summit in order to change the country’s foreign policy towards Russia.

EU commissioner Stefan Fuele, the bloc's point man on Ukraine, was in Kiev on Tuesday to voice “serious concern” to Yanukovych over the jailing of Tymoshenko.

"I informed her about the EUs concerns regarding this process and assured her that we would continue to follow closely her appeal and would insist upon the need for her to benefit from of all her rights to defend herself in a fair process," Fuele said.

But the concerns expressed by the senior EU official did not stop the Ukrainian authorities from making just another controversial move against Tymoshenko, underscoring the lack of the rule of law and potentially undermining the summit.

Without her will, an undisclosed camera crew assisted by the authorities, filmed Tymoshenko lying in her jail cell bed and posted the controversial video on YouTube on Wednesday.

The leader of the camera crew introduced himself to Tymoshenko as the “colonel of SBU,” before he ordered the crew to continue shooting the video even as Tymoshenko had vehemently objected.

“I spoke with the Yulia Volodymyrivna today on this issue,” Serhiy Vlasenko, the leader of Tymoshenko’s defense team, said.

“She said the person had introduced himself as the colonel of SBU, and against her will they had started to film.”

Maryna Ostapenko, a spokeswoman at the SBU, on Thursday denied involvement of SBU agents in the filming of the video.

Weapons exports up by $1 billion

Russia’s weapons export via the state Rosoboronexport enterprise grew by about $1 billion to reach $9.7 billion,citing Viktor Komardin, Rosoboronexport representative at the Lima-2011 weapons expo in Malaysia. He added that last year Rosoboronexport signed contracts worth $9.5 billion and “this year we will sign more.” He added that the enterprise’s portfolio of orders amounted to $36 billion.

Russia faces nationwide vote protests

Voters took to the streets Saturday across Russia to protest elections they charge were rigged in favor of Vladimir Putin’s United Russia party, a mass demonstration of public anger not seen in years and a critical test for the country’s leadership.

The rolling, nationwide demonstrations came a day after Russian election authorities announced the final official results of legislative elections of December 4, giving United Russia 238 seats in the 450-seat State Duma with just under 50 percent of the popular vote.

Around 1,000 people rallied in the southern Siberian city of Barnaul while smaller crowds numbering in the hundreds turned out in the cities of Krasnoyarsk, Vladivostok, Chita and Khabarovsk in eastern Russia, RIA Novosti correspondents reported from those cities.

The largest crowd however was expected in Moscow, where city officials gave permission for several demonstrations including one by those angry over the results of the elections for up to 30,000 people. A demonstration was also planned for Russia's second largest city of St. Petersburg.

As of 2:30 p.m. Moscow time (10:30 GMT), according to police reports, 15,000 of the expected 30,000 protesters have so far gathered at the venue in downtown Moscow.

Security was tight in the Russian capital, where several hundred people had gathered on a square near the Kremlin and planned to make their way to a different location further from the center of the city where the largest demonstration was to take place.

Prime Minister Vladimir Putin said ahead of the demonstrations that all Russians had the right to assemble and express their political views publicly, but warned that security forces would use “all legal methods” to maintain law and order.

The December 4 vote polarized Russian society, with Putin and supporters describing the outcome as a “real” reflection of the mood in the country while others – both Russian political activists and international observers – saying the vote was slanted in United Russia’s favor.

Although United Russia won nearly half the popular vote, the election was a huge setback for the “party of power” and Putin directly accused the United States of seeking to stir up trouble in Russian politics after U.S. Secretary of State Hillary Clinton criticized the conduct of the vote.

"People in our country don't want the situation in Russia to develop like it did in Kyrgyzstan and, not so long ago, in Ukraine," Putin said Thursday. "Nobody wants chaos."

He was referring to popular uprisings, referred to in Russia as “color revolutions,” that led to the downfall of leaders in both former Soviet republics and another, Georgia, which he did not mention.

Meanwhile, the Communist Party announced in a statement posted on its website Saturday that it does not recognize the results of the elections in many Russian regions, including the North Caucasus republics and the largest cities of Moscow and St. Petersburg, citing massive violations there.

“We consider the vote illegitimate from the moral and political points of view,” the party’s presidium said in the statement.

Another political party, the liberal Yabloko party, separately vowed to contest the results of the December 4 elections in court.

Disgruntlement over the polls saw some 5,000 protesters rally in central Moscow on Monday. Demonstrations continued across Russia, although on a smaller scale, for the next two evenings.

Some 1,000 people have so far been detained in protests, police said, including influential blogger and opposition activist Alexei Navalny.

Navalny, along with another opposition leader, Ilya Yashin, was jailed for 15 days on Tuesday as a result of their participation in Monday’s unsanctioned protest.

The protests have been largely ignored by state-run televisions channels, which chose instead to broadcast images of United Russia supporters parading near the Kremlin. Demonstrations have been organized via Facebook and Vkontakte, a popular internet social networking site. Vkontakte’s founder, Pavel Durov, said this week he had refused a request by the security services to deactivate accounts belonging to opposition groups.

Are post-poll protests a Russian Spring?

Are we witnessing a Russian Spring this winter? This is the question my US and European colleagues have been asking me over and over again in recent days.

I am not certain that developments in Russia will mirror those in the Arab world but one thing is certain - what we witnessed on 4 December was a return of live politics to Russia, a politics that everyone thought was comatose.

For a second day running, in Moscow and St Petersburg, we have witnessed the kind of pro-democracy rallies that the cities had not seen since the rough and tumble of the early 1990s. And, although the outcome is far from clear, a few things are already coming into focus.

This election turned out to be a de-facto referendum on Prime Minister Vladimir Putin's United Russia party and on his decade in power.

Even if we believe the official results to be without doubt - which they are definitely not - a very serious signal has been sent to the country's ruling class.

December's vote can be seen as a kind of "ground zero" for Russia's presidential elections, scheduled for March 2012.

Mr Putin is widely expected to be elected to his third term in power, but the Duma election has a cast a shadow.

If, in spring, Mr Putin goes into a kind of mock battle similar to those of most of the previous elections, he will lose even more credibility.

He could have gambled - opening the field to genuine competition and following a kind of Putin 2.0 strategy, a move his aides predict will happen eventually. However, if he does, he will have to opt for general liberalisation as opposed to cosmetic liberalisation, and be prepared to face a barrage of criticism.

Knowing the Russian leader, this is a very unlikely scenario. Mr Putin, it seems, will either have to crack down hard on dissent or face growing dissatisfaction among the masses and an increasing disappointment with his ability to control the situation from within the ruling class.

There are a few other new developments too. This was the final election in which state-controlled still TV has still played a decisive role. Internet penetration in Russia has already grown massively but, by 2016, when the next voting cycle starts, as much as 75% or 80% of voters will have online access.

And, although 80% or 90% of users surf the web in search of celebrity gossip, dating or bargains, politically-minded citizens now have a free platform to engage in debates and organise themselves.

Unmasking the vote-rigging would have been impossible without smartphones, Facebook and Twitter.

Online activism made offline self-organisation not only possible, but effective.

This is why it is possible that the government will attempt to introduce restrictive legislation around the internet - a development to watch in 2012.

This was also the first Russian election in which the country's nascent middle class - the self-sufficient, English-speaking, iPad-juggling 30-somethings - really went out to vote.

This is the generation which benefited from the oil boom of Mr Putin's presidency between 2000 and 2008.

But economic crisis, political stagnation and corruption has turned them against the regime.

These people are a minority, but an increasingly influential one in the big cities, which is where real politics happens in Russia.

These people are the future of Russia and the Kremlin has lost them, irrevocably.

While this may not be a Russian Spring quite yet, Russia's ruling class has been engulfed by a crisis of legitimacy and I cannot see it ending any time soon.