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Books on Ukraine
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Update No: 313 - (25/01/07)
Events in Ukraine strongly indicate that the reach out to the
west signalled by the Orange revolution is now over. The European Union failed
to encompass a long view and extend a concrete programme of involvement with
this potential candidate nation. Uplifting words but little action are about the
measure of how close they came to detaching this nation of 48.5 million from the
Russian empire, to whose sphere of influence it inevitably will now drift back.
NATO too, although for many years much advertised, is now unlikely to happen
here in any form - although it's hard to see that objectively as any kind of
disaster. Moscow has played its cards intelligently. The EU hasn't picked up a
hand in the game and the US, anyway at embassy level, is probably a deeply
frustrated spectator.
The one random card in the game is that of Yulia Timoshenko whose opposition
party commands a significant vote, and who might pick up more of the old Orange
support from President Yushchenko's smaller party, if he is really as sidelined
as he appears to be.
There has been a three-person struggle going on in Ukraine, involving two former
allies and their ostensible opponent. The two former allies hate each other's
guts and have successively done a deal with the 'enemy.'
President side-lined
The man who led Ukraine's orange revolution two years ago has been transformed
into a lame-duck president following a humiliating parliamentary vote that
effectively strips him of all powers. Viktor Yushchenko, Ukraine's opposition
leader turned president, no longer has the power to veto the choice of prime
minister or foreign minister. Lawyers for President Yushchenko said on January
16th that they were preparing to appeal, describing the move as
"unconstitutional".
However, Mr Yushchenko appears to be the big loser in Ukraine's latest
constitutional battle, which has paralysed the country over the past year
because of vicious internal power struggles. The president lost his
responsibilities after his ally-turned-rival Yulia Timoshenko decided to vote
with the party of Ukraine's pro-Russian prime minister, Viktor Yanukovich.
In late 2004, Mr Yushchenko and Ms Timoshenko led the popular orange uprising
against a rigged presidential election. Mr Yushchenko duly beat Mr Yanukovich as
president. However, last August the president was forced to appoint Mr
Yanukovich as prime minister after his own allies, including Ms Timoshenko,
failed to form a government. Mr Yushchenko and Ms Timoshenko had fallen out
spectacularly a few months earlier, each accusing the other of corruption.
One of Ms Timoshenko's closest advisers shrugged off the suggestion that she had
betrayed the orange revolution by siding with Mr Yanukovich, her former enemy.
"This is an absurd argument," Hryhoriy Nemyria told the Guardian.
"We have never signed any kind of pact with Yanukovich." He added:
"Ukraine's constitution doesn't function properly. Voting with Yanukovich
was the lesser of two evils. We now want early elections."
However, Russian newspapers noted that Ms Timoshenko has changed her famous
peasant plait hairstyle - a sign, they said, of her own ruthless presidential
ambition, although thanks largely to her, power now resides not in the
presidency, but in leading the Parliament.
Last Friday MPs summoned 366 votes to override Mr Yushchenko's veto of a bill
outlining the powers of the cabinet - well above the 300 needed. They also shot
down 42 other proposals by the president to amend the bill.
Officials from Mr Yushchenko's Our Ukraine party described the vote as
unconstitutional. They were preparing a challenge before Ukraine's
constitutional court, they said.
Analysts said that Mr Yushchenko - who is supposed to keep his presidential job
until 2009 - had seen his powers steadily "whittled away". "He's
been a potential lame duck since last year," Andrew Wilson, a Ukraine
specialist at University College London, said, adding that "this is his
last throw of the dice". Although Mr Yushchenko appeared to be nearing the
end of his political career, yesterday's events did not mean Ukraine's orange
revolution was finished, Mr Wilson said. "The rules in Ukraine are
different from the rules before the revolution. The media is freer. And this is
very much the cut and thrust of normal politics."
The new Entente Cordiale?
Ukraine has a very special relationship with Russia. Kiev after all was the
original capital of Russia.
President Yushchenko knows this all too well. He opted for Viktor Yanukovich as
his premier rather than former ally, Julia Timoshenko, knowing that the former
would ease relations with Moscow, being premier under former president Kuchma, a
pro-Russian stalwart of yore, whereas Timoshenko is (theroretically) even being
sought out by investigators for alleged offences against Russian justice. Now
she has taken her opportunity for revenge.
The choice was made easier for him because he cordially detests her - and she,
him. She was "the only man at the helm", she averred at the time of
the Orange Revolution in October through to December, 2004. A slur on his
manliness when he was down with a nasty bout of poisoning, which tends to show
that even if true, she is not a gentleman.
The pay-off is warmer relations with Moscow. The metaphor is appropriate because
it means that, unlike last year, there was no New Year cut-off of gas supplies.
Putin made a point of going to Kiev before Christmas to indicate the new Entente
Cordiale.
Putin: Warm welcome in Kiev
Actually, the Russian President's visit to Ukraine was anything but
"the beginning of a new stage" or a "breakthrough" in
Russo-Ukrainian relations, as official reports characterized it at the time.
It is true that the establishment of the Yushchenko-Putin Interstate Commission
was a rare case in Russo-Ukrainian relations where one side's achievement was
not the other side's loss. It took more than eighteen months to build this
"mechanism of bilateral cooperation" that is supposed to benefit both
nations.
Hopefully, it will, although sceptics remind us that many such
"mechanisms" and "instruments" of cooperation with other
countries, which Ukraine has built over 15 years of independence, have not
worked effectively or at all. One of the examples is the mixed Ukrainian-Russian
commission for cooperation: it was established in 1996 as pompously as the
Yushchenko-Putin commission, and was liquidated very quietly recently.
Optimists are sure that the new interstate commission will facilitate and
systematize bilateral contacts and discipline the negotiators at all levels. The
commission has a secretariat, committees, and subcommittees. During the three
months prior to Putin's visit, they held numerous meetings, preparing the ground
for the Yushchenko-Putin Commission's maiden session.
Although the new mechanism might be short-lived (because the term of Putin's
presidency is running out and so is Yushchenko's power), there is a hope that it
can "clean up the heaps of problems", as the Ukrainian President has
put it.
Yushchenko and his chancellery definitely wanted to leave out Prime Minister
Viktor Yanukovich, who had seen Putin more often in five months of his
premiership than Yushchenko had in twenty-three months of his presidency. The
Foreign Ministry exerted a maximum effort to keep Yanukovich as far from the
meeting as possible.
******
The following is a shrewd assessment of the situation from a Russian viewpoint;-
Ukraine - the view from the Kremlin
Walter Parchomenko
Vladimir Putin's Orange nightmare is over. The Russian leader can now sleep
soundly. Premier Viktor Yanukovich and the Party of Regions are clearly in
charge in Ukraine and, in their own words, are cleaning house and restoring
order. Putin's Dec. 22 visit to Kiev to meet with Ukrainian President Viktor
Yushchenko was an opportunity to observe firsthand the situation on the ground,
and to quietly revel in the defeat of the Orange Revolution and its once
worshipped hero.
Putin's visit to Kiev has received increasing attention from Ukrainian and
Western political observers. Prediction, in a highly dynamic political
environment such as Ukraine's, is always hazardous. Consequently, it is not
surprising that much of the available commentary offers sweeping generalizations
and often idle speculation about the possible results of this meeting. Rather
than add to this growing mountain of largely trivial speculation, it may be more
instructive simply to highlight several key but generally inadequately grasped
facts - essential background about recent Ukrainian-Russian relations. Doing so
may shed light on Putin's true intentions in visiting Kiev and on his preferred
vision for Ukraine.
Fact 1: President Putin has been and continues to be Viktor Yanukovich's most
loyal foreign benefactor. He has never hidden his support for the fraud-marred
premier. His public expressions of support have been deftly adjusted since
Ukraine's 2004 presidential election to meet the country's changing political
landscape, but his allegiance to Yanukovich and his Party of Regions remains
unswerving. Amazingly, after blatantly fraudulent rounds of that election, Putin,
like a brash schoolboy, rushed not once but twice to prematurely congratulate
Yanukovich on victory. Learning from experience, he subsequently adopted a more
circumspect but no less active role in supporting Yanukovich and his Party of
Regions in the 2006 parliamentary election. Significantly, in the short period
since becoming premier, Yanukovich has already met with Putin on several
occasions, in Moscow and Sochi, to discuss bilateral cooperation.
Fact 2: Yanukovich and the Regions-led majority in parliament have unabashedly
rushed to demonstrate their profound gratitude to Putin for his faithful support
in shaping the Ukrainian political scene. Their conspicuous haste to deliver
major political dividends to their Kremlin sponsor, although tactically
imprudent because it diminishes their already low credibility at home and in the
West, tellingly reflects their steely determination to quickly and steadily
repay their enormous political debt to Putin. In just over 100 days, they have
begun to synchronize important Ukrainian security policies with those of their
northern neighbour. And in the words of ordinary citizens here in Ukraine:
"They are firing Orange-leaning Cabinet ministers and delivering their
heads on a platter to Vladimir Putin."
Fact 3: In Brussels last September, Yanukovich did much more than close the door
on a NATO Membership Action Plan in 2006. Although only dimly perceived in the
West, he also effectively placed a cross on any future Ukrainian membership in
NATO. To the great delight of the Kremlin and members of Ukraine's so-called
Anti-Crisis coalition in parliament, he rested the issue squarely on a future
national referendum. It is no secret that Yanukovich's Regions party adamantly
opposes Ukrainian membership in NATO and relishes today's harsh realities:
Ukrainian public support for NATO today is low and declining, anti-NATO
activities have increased over the past year, and the Ukrainian government's
support for a NATO information campaign remains scant. Moreover, Moscow, as in
the past, stands ready to resort to active measures in Ukraine to support
anti-NATO forces, should the need arise. To believe that this decidedly negative
trend line on Ukrainian membership in NATO can be easily reversed is, indeed, a
pernicious myth.
Fact 4: Vladimir Putin waged economic wars - gas, meat, and dairy notably, in
2005 and 2006 with the clear intention of destabilizing Ukraine's economy and
Yushchenko's Orange government. These "man-made crises,"
unquestionably, harmed Ukraine's economy and measurably influenced the political
scene. With his man, Viktor Yanukovych, now in power, Putin no longer needs to
wage economic wars.
Putin, strictly speaking, only seeks good partner relations with Yanukovich and
other Moscow-loyal members of the Regions-led parliamentary coalition.
Putin's aversion to colour revolutions and their leaders remains categorical.
His ongoing economic war with Georgia, home of the Rose Revolution and
reportedly 70 percent support for NATO membership, is compelling evidence of
this fact and a stark daily reminder.
At first glance, Putin's decision to end economic wars with Ukraine and help
stabilize its economy, if only to benefit Viktor Yanukovich, is welcome news.
The crucial question, however, is at what price to the nation?
Putin's preferred vision for Ukraine is a mirror image of what he has
accomplished in Russia during his presidency. Translated, this means total
control of the "commanding heights" by a Moscow-loyal Party of Regions
with the virtual monopolization of parliament by pro-Regions forces, the
consignment of any democratic opposition in parliament to the political
wilderness, and judicial attacks upon any uncooperative big business. It also
means that the future of Ukraine's budding NGOs and any genuine security sector
reform will be in grave jeopardy. It must be said that in Putin's Russia a
distinction is made between acceptable (government affiliated) and unacceptable
(state adversaries) NGOs, while security services unarguably function as a
political instrument.
To what extent do Yanukovich and Party of Regions leaders share such a vision?
Disturbingly, in just over 100 days in government, they have provided much
cogent evidence of their preference for Putin's authoritarian style of
leadership and model of government. Furthermore, their intent to gravitate
toward a Moscow-Donetsk vector in domestic and foreign policymaking is evident
almost daily.
Vladimir Putin will continue to view Ukraine through the prism of velvet
revolutions and their clear and present danger to Russia's influence in the
post-Soviet space. He will struggle unceasingly to ensure the demise of the
Orange Revolution and a Ukraine outside of NATO. Moreover, Putin and Party of
Regions leaders will likely remain loyal partners in this struggle.
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BANKING
Erste Bank acquires Ukraine's Bank Prestige
Erste Bank Austria has reached agreement with the shareholders of Kyiv-based
Bank Prestige to acquire 100 per cent of the bank for 79.1 million Euro, Erste
Bank said, Interfax News Agency reported on December 20th.
"Erste Bank has agreed with the shareholders of Bank Prestige to acquire
the full 100 per cent stake of the Bank (instead of 50.5 per cent as announced
in July 2006) for a total compensation of US$104.0 million," a release
said.
"Our decision was supported by the fact that the former owners will
continue to support Bank Prestige with their know-how and local expertise.
Additionally the established management team will stay on board. As a result,
our plans for Ukraine remain unchanged and we continue to target a market share
of four to five per cent by 2009," Andreas Treichl, CEO of Erste Bank,
said.
Completion was expected in January 2007, the release said. Erste Bank will
invest up to US$300 million (228.3 million Euro) in the bank's capital over the
next four years.
Once the transaction has been completed, Bank Prestige will be fully integrated
into Erste Bank Group and start to operate under the Erste Bank brand. The Bank
has a full service license and will operate as a universal bank, focusing on
both corporate and retail business, the release added.
Bank Prestige was the 59th biggest bank in Ukraine as of October 1, according to
the National Bank of Ukraine. Erste Bank was established in 1819 as a savings
bank and is one of the biggest banks in Austria. The bank works in the Czech
Republic, Slovakia, Hungary, Croatia and Slovenia.
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ENERGY
Ukraine to supply coal mining equipment to China
Ukraine's state-run machine builder, Malyshev Plant, based in Kharkiv, is
expected to deliver 100 BShK-2DM coal-mining complexes, valued at over US$40
million, to China during the next three years, the plant's first deputy
director, Vitaly Nemilostyvy, said, Interfax News Agecny reported.
The contract was signed in late December 2006. The equipment is intended to mine
coal from thin layers.
Malyshev Plant specialises in making armoured vehicles, diesel engines,
agricultural machinery and equipment for the oil, gas and coal industries.
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FOREIGN COOPERATION
Ukraine wants stronger and closer ties with Romania
On December 20th, the website en.for-ua.com reported that the head of the
President's Secretariat of Ukraine, Viktor Baloga, and the Romania's ambassador,
Trayan Hristia, discussed the prospects of further cooperation between frontiers
of two states in the scope of the visit in Kiev.
After Romania's joining the EU on Jan. 1, 2007, this cooperation would be
carried out within the European policy of neighbourhood. The head of the
Secretariat put a question on speeding up the inauguration the international
entry centre at the Ukrainian-Romanian state border "Solotvino-Sigetu-Marmatsiya."
Baloga also congratulated the ambassador on Romania's joining the EU. During the
meeting the parties discussed the meeting arrangement of the Presidents of
Ukraine and Romania at the beginning of the year 2007. Moreover, the matter
concerned the mutual Ukrainian-Romanian presidential commission.
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