US-Ukraine Business Council

"THE ACTION UKRAINE REPORT"
An International Newsletter
In-Depth Ukrainian News, Analysis, and Commentary

"The Art of Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World"

MAY 9, 1945
On that day we traded Hitler for Stalin

But Adamkus does not view May 9, 1945, as a day of liberation for his tiny
country and its Baltic neighbors. "On that day we traded Hitler for Stalin,
and we should not celebrate it," he tells visitors. Most Lithuanians, proud
of their central role in breaking up the Soviet Union in 1991, agree. But
Putin seems almost desperate to have all the former Soviet republics honor
Russia on May 9; he has even used his most potent threat, hinting that if
Adamkus does not go, it could affect Russia's shipments of oil and gas.
[article eighteen]

"THE ACTION UKRAINE REPORT" - Number 432
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, FRIDAY, February 18, 2005

-----INDEX OF ARTICLES-----
"Major International News Headlines and Articles"

1. "A THAW"
It looks like US-Ukraine relations are heading for a genuine thaw.
COMMENTARY: by Serhiy Solodky
The Day Weekly Digest in English
Kyiv, Ukraine, Tuesday, February 15, 2005

2. BUSH ASKING US CONGRESS TO APPROPRIATE AN ADDITIONAL
USD 60 MILLION IN SUPPORT OF REFORMS IN UKRAINE
Ukrainian News Agency, Kyiv, Ukraine, Wed, February 16, 2005

3. "THE PRICE OF LAND"
Land can still be obtained, but not bought
ANALYSIS: By Natalia Huzenko, The Day
The Day Weekly Digest In English, #5
Kyiv, Ukraine, Tuesday, 15 February 2005

4. AGRICULTURAL POLICY MINISTRY TO EMBARK ON BIOLOGICAL
DIESEL FUEL PRODUCTION PROGRAM
Ukrainian News Agency, Kyiv, Ukraine, Wed, February 16, 2005

5. UKRAINE: MONTHLY ECONOMIC REPORT JANUARY 2005
Ukraine Macroeconomic Situation
By Iryna Piontkivska and Edilberto L. Segura
SigmaBleyzer Equity Banking Group, SigmaBleyzer Foundation
Kyiv, Ukraine, Thursday, February 17, 2005

6. YUSHCHENKO SAYS DEFENSE MINISTRY'S PRIORITY TASK
IS TO WITHDRAW PEACEKEEPERS FROM IRAQ
Ukrainian News Agency, Kyiv, Ukraine, Thu, February 17, 2005

7. UKRAINIAN DEPUTY PRIME MINISTER RYBACHUK TO SEEK
EUROPEAN SUPPORT FOR OIL PIPELINE PROJECT AND INVESTMENTS
UNIAN news agency, Kiev, in Ukrainian 1738 gmt 17 Feb 05
BBC Monitoring Service, UK, in English, February 17, 2005

8. UKRAINIAN WEEKLY PROFILES DEPUTY PRIME MINISTER
FOR EUROPEAN INTEGRATION OLEH RYBACHUK
Zerkalo Nedeli, Kiev, in Russian 5 Feb 05
BBC Monitoring Service, UK, in English, Tue, Feb 15, 2005

9. YUSHCHENKO APPOINTS RYBACHUK AND TOMENKO CO-CHAIR
OF ORGANIZATIONAL COMMITTEE FOR EUROVISION-2005
Ukrainian News Agency, Kyiv, Ukraine, Wed, February 16, 2005

10. YUSHCHENKO INSTRUCTS CABINET OF MINISTERS TO
FINANCE PREPARATION AND CONDUCT OF EUROVISION 2005
Ukrainian News Agency, Kyiv, Ukraine, Wed, February 16, 2005

11. UKRAINIAN PRESIDENT ASSURES IMF OF PLANS
TO ADDRESS FISCAL PROBLEMS
ITAR-TASS news agency, Moscow, in English 1608 gmt 17 Feb 05
BBC Monitoring Service, Thu, February 17, 2005 (16:08)

12. UKRAINE: OMBUDSMAN KARPACHOVA ASKING YUSHCHENKO
TO GIVE LIFE STIPEND TO MOTHER OF GONGADZE
Ukrainian News Agency, Kyiv, Ukraine, Thu, February 17, 2005

13. LVIV TO REACH 750TH ANNIVERSARY IN 2005
By Igor Balchenkov, The Ukrainian Times, Kyiv, Ukraine, Thu, Feb17, 2005

14. UKRAINIAN TV EXAMINES "CORRUPTION" VERSIONS
BEHIND JUSTICE MINISTER'S RESIGNATION
Inter TV, Kiev, in Ukrainian 1900 gmt 17 Feb 05
BBC Monitoring Service, in English, Thu, February 17, 2005 (19:00)

15. UKRAINIAN WEEKLY PROFILES NEW JUSTICE MINISTER
ROMAN ZVARYCH
Zerkalo Nedeli, Kiev, in Russian 5 Feb 05, p 6
BBC Monitoring Service, UK, in English, Wed, 16, 2005

16. "SAVE OUR CHURCHES!"
Transcarpathia is writing a letter to the president
By Bohdan Barbil, Transcarpathia
The Day Weekly Digest in English, #5
Kyiv, Ukraine, Tuesday, 15 February 2005

17. YUSHCHENKO INITIATING NEGOTIATIONS BETWEEN FIGHTERS
OF OUN-UPA AND SOVIET ARMY ON RECONCILIATION
Ukrainian News Agency, Kyiv, Ukraine, Wed, February 16, 2005

18. "THE END OF THE ROMANCE"
By Richard Holbrooke, Columnist
The Washington Post, Washington, D.C.
Wednesday, February 16, 2005; Page A19

19. "WESTERN STRATEGY FOR UKRAINE"
OUTSIDE VIEW: By F. Stephen Larabee
Outside View Commentator, United Press International (UPI)
Kiev, Ukraine, Thursday, February 10, 2005

20. UKRAINE, RUSSIA AGREE TO BUILD JOINT PORT ON BLACK SEA
Creation of a joint container terminal in Illichivsk
UNIAN news agency, Kiev, in Ukrainian 1243 gmt 16 Feb 05
BBC Monitoring Service, UK, in English, Wed, February 16, 2005
=========================================================
1. "A THAW"
It looks like US-Ukraine relations are heading for a genuine thaw.

COMMENTARY: by Serhiy Solodky
The Day Weekly Digest in English
Kyiv, Ukraine, Tuesday, February 15, 2005

On February 11 a high-level delegation of US Congress members paid a one-
day visit to Ukraine. Among the visitors were such key figures as Senators
John McCain and Hillary Clinton. Sen. McCain is a well-known and influential
figure in US politics: a Vietnam War veteran, he ran unsuccessfully for the
presidency in 2000 (George Bush Jr. was nominated and then elected
president). Last year the senator was at the center of a debate over whom he
would back in the last US presidential elections - George W. Bush or John
Kerry; he opted for Bush.

The great popularity of Mrs. Clinton, the former first lady, who is a likely
Democratic candidate for the presidency as well as a senator highly esteemed
by the electorate, is undeniable. In 2003 she successfully tried out her
writer's skills by publishing a best-selling memoir called Living History.
Mrs. Clinton instantly became a model public figure, a wise and courageous
woman who can keep a stiff upper lip in the most difficult minutes. (Anyone
will come to this unambiguous conclusion after reading about the ex-first
lady's feelings about the Monica Lewinsky scandal.)

This is Mrs. Clinton's third visit to Ukraine. "This is the happiest visit I
have ever had," she told journalists last Friday. "I have seen the result of
the people's struggle for democracy and Ukraine: they have won." She
wished the Ukrainian people and the new leadership every success in
achieving high social standards. "The US will be your partner in achieving
this goal," she emphasized.

The US senators held top-level discussions with the President Yushchenko,
the prime minister, and the parliamentary speaker. Following these talks,
the American visitors stressed that the US Congress will soon begin a debate
on repealing the Jackson-Vanik Amendment with respect to Ukraine (a Cold
War-era legislative amendment linking U.S. trade benefits to the emigration
and human rights policies of Communist or formerly Communist countries).

According to Sen. McCain, the Kyiv talks focused on economic aid to
Ukraine, reducing the consequences of the Chornobyl disaster, and supporting
Kyiv's bid for membership in the WTO, the EU, and other international
organizations. In particular, the negotiating parties broached the subject
of NATO accession.

President Yushchenko noted that the Ukrainian people need a proper
explanation about NATO's activities. He stressed that Ukraine is doing a lot
to develop relations with the alliance, but ordinary people are poorly
informed about the purpose and functions of this organization. During the
talks the head of state expressed a hope that other countries would
understand and support Ukraine's Euro-Atlantic aspirations. This was
President Yushchenko's first more or less clear statement about NATO.

Earlier, he avoided the subject, preferring to discuss EU matters. The
president will be meeting with the NATO leadership on February 22 in
Brussels, which has long been waiting for Mr. Yushchenko's proposals
about the NATO's future relations with Ukraine.

Last Friday Deputy-Prime Minister for European Integration Oleh Rybachuk
announced that President Yushchenko will visit the US in early April. It
looks like US-Ukraine relations are heading for a genuine thaw. -30-
----------------------------------------------------------------------------
LINK: http://www.day.kiev.ua/132381
==========================================================
2. BUSH ASKING US CONGRESS TO APPROPRIATE AN ADDITIONAL
USD 60 MILLION IN SUPPORT OF REFORMS IN UKRAINE

Ukrainian News Agency, Kyiv, Ukraine, Wed, February 16, 2005

KYIV - US President George W. Bush has asked the US Congress to
appropriate USD 60 million in support of reforms in Ukraine. This is stated
in a statement released by the White House's press service, the text of
which Ukrainian News has obtained.

"The President's [Bush] request includes USD 60 million in order to support
the capability of the new government [of Ukraine] consolidate the
achievements that have been accomplished by Ukraine, to establish the
supremacy of the law, fight with corruption and speed up economic reforms,"
it is mentioned in the statement.

According to the text of the statement, the recent historical presidential
elections afford an unprecedented opportunity to help strengthen and build
on the victory of democracy in Ukraine, thereby making Ukraine a more
reliable and capable partner for the United States.

It is mentioned in the statement that President Bush made a request to
Congress on February 14 for an additional of USD 82 billion to combat
terrorism, support Iraq and Afghanistan and to support the US' key partners.
As Ukrainian News reported earlier, the US is also prepared to render other
forms of support for reforms in Ukraine. -30-
========================================================
3. "THE PRICE OF LAND"
Land can still be obtained, but not bought

ANALYSIS: By Natalia Huzenko, The Day
The Day Weekly Digest In English, #5
Kyiv, Ukraine, Tuesday, 15 February 2005

The adoption in 1992 of a Land Code to regulate private and communal
ownership, alongside state ownership of land, marked the beginning of a
long transition of former state farmlands into private ownership by
Ukrainian citizens.

"We have a law on the redistribution of plots, but it is not used
effectively enough. For the time being all land ownership matters are
regulated by the Land Code. It is now essential to inform citizens about the
ways in which they can obtain land," says Alla Kalnychenko, head of the
legal department at the State Committee for Land Resources, who appeared
at a recent seminar on "Land Regulations in Ukraine: Analysis of Current and
Prospective Legislation."

Every citizen of Ukraine has the right for once-in-a-lifetime privatization
of land free of charge. However, this right does not necessarily guarantee
that you will establish ownership of this land. Under Article 121 of the
Land Code, everything depends on whether local self-governing or executive
bodies have available plots that they can distribute among those who wish to
obtain them.

The more claimants there are, the higher the probability that they will
obtain much smaller plots than envisaged by law. For example, while the
law provides for a two-hectare plot for private use, in reality people get
between 1 and 1.5 hectares. Meanwhile, residents of oblasts close to the
Carpathians can obtain several plots in different locations, and all
transactions with individuals are recorded in a single deed.

In addition, the plot must be used for its intended purpose. That is, if you
have obtained land to build a private cottage, you may not build a store or
car wash; otherwise you will face sanctions from the tax authorities, who
will levy different taxes on private property and profit-generating
property. Still, if you have decided to use your own home for commercial
purposes, the only way is to reregister some part of your plot officially,
according to its new purpose.

Aside from obtaining land through privatization, you may buy it from other
individuals or entities, or from the state. Purchase and sale transactions
are based on a lifetime ownership contract, when one person transmits his
land ownership rights to another person. However, as long as the land
grantor is alive, the grantee may not dispose of this land freely.

Similar restrictions are in place for land bought on the installment plan,
except in this case they are cancelled not after the seller's death but
after the balance has been paid in full. In the case of purchases by
installments, buyers often face problems establishing their right of
ownership. A person is considered a full owner of purchased land after
establishing the boundaries and receiving an official land ownership deed
that is subject to registration.

Yet sellers often refuse to issue this deed in the case of purchases on the
installment plan as a safeguard against unscrupulous buyers who, after
becoming full owners, might sell the land without paying off the debt in
full. According to Kalnychenko, such fears are unfounded, since no one
prevents sellers from stipulating preventive sanctions in the contract.

In addition, starting in 2005 the land resources committee has instituted a
register of real estate rights and restrictions. Every plot of land is
assigned a cadastral number. Where land has been sold under an installment
contract, any operations with this land are banned until it has been paid
for in full.

According to Kalnychenko, legal entities face a much more difficult
situation. The Land Code classifies them into several groups, only some of
which may obtain land. This unconditional right belongs to legal entities
established by Ukrainian citizens who intend to use land as part of their
business operations. Thus, those who wish to privatize land to build a
daycare center have to obtain permits from the land authorities.

Foreign entities may secure the right to own land only on condition that
they have permanent operations in Ukraine, and only if this land is occupied

by the immovable property of this legal entity or it has been offered for
sale by tender for a construction project. The sale of land to foreign
entities within city or village limits must be approved by the Cabinet of
Ministers and land outside populated areas, by the Verkhovna Rada, which
is virtually impossible. The same restrictions apply to joint ventures.

Notably, no one has been able to buy agricultural land in Ukraine since 2000
because the ban on the sale of arable land is in place until the beginning
of 2007. This means that plots distributed among members of collective state
farms may not be sold. The only type of land that can be sold, and hence
bought, is land intended for personal use. But a legal entity may obtain
land only if it quickly changes the intended purpose of such a plot from
"for personal use by the village population" to "private land plot."
------------------------------------------------------------------------
LINK: http://www.day.kiev.ua/132387
==========================================================
4. AGRICULTURAL POLICY MINISTRY TO EMBARK ON BIOLOGICAL
DIESEL FUEL PRODUCTION PROGRAM

Ukrainian News Agency, Kyiv, Ukraine, Wed, February 16, 2005

KYIV - The Ministry of Agricultural Policy is going to embank on the
program for production of biological diesel fuel in April. Agricultural
Policy Minster Oleksandr Baranivskyi made this statement to the press. This
production will require rapeseeds and ethanol (a high-octane additive made
of grain and sugar beet molasses alcohol). According to Baranivskyi, the
program will involve all spirit plants in processing molasses.

"It will allow us to process molasses. And if molasses is processed, there
is an impetus for sugar producers," the minister said. The ministry is going
to spend little time on solving the problem of ethanol imports by producers
of fuel and oils at the expense of ethanol producers. Baranivskyi has
calculated that this year the budget may receive from UAH 700 to 800 million
from the program provided it is launched on April 1. "Yuschenko backed this
proposal [on launching the program] and we are working on this program," he
added.

Data of the Agricultural Policy Ministry indicate that Ukraine spends USD
500 million per year to purchase ethanol. Ethanol is added to fuel and oils
in proportion of 2% per ton. As Ukrainian News earlier reported, the
Agricultural Policy Ministry already stated its intention to promote
production of biological diesel fuel and gas.

Conditions in the Polissia region - Volyn, Rivne and Zhytomyr regions - are
especially favorable for cultivation of rapeseed, which is used in the
production of biological diesel fuel. -30-
==========================================================
5. UKRAINE: MONTHLY ECONOMIC REPORT JANUARY 2005
Ukraine Macroeconomic Situation

By Iryna Piontkivska and Edilberto L. Segura
SigmaBleyzer Equity Banking Group, SigmaBleyzer Foundation
Kyiv, Ukraine, Thursday, February 17, 2005

HIGHLIGHTS
(1) Sharp acceleration in industry, agriculture and trade supported robust
gross domestic product (GDP) growth in 2004, which increased 12%
year-over-year (yoy).

(2) Concerns over the substantial fiscal loosening during the pre-election
period in the last quarter of 2004, which resulted in a fiscal deficit of
3.3% of GDP compared to the planned 1.7% deficit.

(3) Fiscal outlook for 2005 uncertain because of the resources required
to finance the commitments made by the previous government on social
security payments

(4) End-of-period (eop) inflation reached about 12.3%, exceeding the
official target rate of 8.5%.

NOTE: To read the entire economic report click on the following link:
http://SigmaBleyzer.com/files/Ukraine_Ec_Situation_02_05.pdf

Contact: Iryna Piontkivska: ipiontkivska@SigmaBleyzer.com.ua

SIGMABLEYZER MONTHLY MACROECONOMIC REPORTS
http://www.SigmaBleyzer.com/index.php?pid=532
==========================================================
6. YUSHCHENKO SAYS DEFENSE MINISTRY'S PRIORITY TASK
IT TO WITHDRAW PEACEKEEPERS FROM IRAQ

Ukrainian News Agency, Kyiv, Ukraine, Thu, February 17, 2005

KYIV - President Viktor Yuschenko believes that the priority task of the
Defense Ministry is to withdraw the Ukrainian peacekeeping contingent from
Iraq. Yuschenko expressed this belief in an address at the Defense Ministry
during presentation of Anatolii Hrytsenko as the defense minister. "We have
put withdrawal of the peacekeepers from Iraq on the agenda today. It is the
number one task for the defense agency," Yuschenko said.

He noted that when the parliament adopted a decision on participation of
Ukrainian peacekeepers in the United Nations' mission in Iraq, his team
supported this decision based on the fact that Iraq is in Ukraine's sphere
of interest. "Iraq is the second [country] ... in the world after Saudi
Arabia in terms of gas; it is a colossal reserve of crude oil," Yuschenko
said. He also noted that over 60 countries are participating in the effort
to resolve the conflict in Iraq.

Yuschenko said that if a straight line were drawn from Iraq to Europe, the
line would pass through Ukraine. However, according to Yuschenko, the
situation in Iraq has now changed and the issue of the necessity of the
presences of Ukrainian peacekeepers in Iraq is being raised. "My conviction
[is that] the military has excellently performed its function. Next is the
work of diplomats," Yuschenko said.

At the same time, he said that the withdrawal of Ukrainian peacekeepers from
Iraq should be effected in agreement with Ukraine's partners in the
coalition forces in Iraq. Yuschenko stressed that the lives of the
Ukrainian peacekeepers in Iraq must be preserved at all cost. He noted that
in the days of the Ukrainian Cossacks, the Cossack Rada removed Hetmans
if Cossacks died in military operations.

As Ukrainian News earlier reported, the Foreign Affairs Ministry and the
Defense Ministry have started drafting proposals on withdrawal of Ukrainian
peacekeepers from Iraq. Ukraine presently has about 1,600 peacekeepers in
Iraq. They are stationed in the province of Wasit, 120-140 kilometers
southeast of Baghdad, which is in Poland's zone of command. The Ukrainian
peacekeepers started their peacekeeping mission in Iraq on August 28, 2003.
Eighteen Ukrainian peacekeepers have died during the course of service in
Iraq. -30- [The Action Ukraine Report Monitoring Service]
==========================================================
7. UKRAINIAN DEPUTY PRIME MINISTER RYBACHUK TO SEEK
EUROPEAN SUPPORT FOR OIL PIPELINE PROJECT AND INVESTMENTS

UNIAN news agency, Kiev, in Ukrainian 1738 gmt 17 Feb 05
BBC Monitoring Service, UK, in English, February 17, 2005

KIEV - The deputy prime minister for European integration, Oleh Rybachuk,
will hold talks with the EBRD management in the middle of March. Rybachuk
was speaking in an interview with the UNIAN news agency. "On 15-16
March, I will head a delegation which will take part in a conference in
London on attracting investment in Ukraine. In the framework of the
conference, I will hold one-day talks with the EBRD," he said.

He confirmed the bank's readiness to take part in financing a project to
extend the Odessa-Brody pipeline. "But we have to combine three things: we
have a buyer - it is Europe, we have to extend the pipeline up to Gdansk
[Poland] and find somebody to carry this out. Negotiations are under way.
When we combine these three components, the project will become simply
unbeatable," Rybachuk said.

"The matter is that the shortest way from the producer - be it Arab
countries, Kazakhstan or Russia - to Europe is through the territory of
Ukraine. We have a colossal advantage, and we have to take advantage of
it. The president has a better understanding of this than any of the
previous energy ministers," Rybachuk said.

The deputy prime minister is confident that Ukraine can make its
contribution to collective security and energy security, as Europe has to
find ways to diversify its energy sources.

[UNIAN reported at 1742 gmt that Rybachuk also said Ukraine can submit
an application for joining the European Union in six months' time. He said
that "to make Ukraine's position stronger, we have to work at least for half
a year". Rybachuk believes "the new establishment has to prove that in six
months it will be able to talk about certain achievements".] -30-
==========================================================
8. UKRAINIAN WEEKLY PROFILES DEPUTY PRIME MINISTER
FOR EUROPEAN INTEGRATION OLEH RYBACHUK

Zerkalo Nedeli, Kiev, in Russian 5 Feb 05
BBC Monitoring Service, UK, in English, Tue, Feb 15, 2005

Newly-appointed Deputy Prime Minister for European Integration Oleh
Rybachuk is an ardent proponent of Ukraine's integration with the EU, the
Ukrainian analytical weekly Zerkalo Nedeli has said. Rybachuk is trusted by
Ukrainian President Viktor Yushchenko and his wife, the weekly added.

Rybachuk is a highly talented man, a skilled banker and good PR-man,
but his new cabinet colleagues may find him difficult to get on with, it
concluded. The following is an excerpt from the profile of Oleh Rybachuk by
Tetyana Silina, entitled "The president's man" and published in the Zerkalo
Nedeli weekly on 5 February:

Oleh Rybachuk has quickly broken into the group of Ukrainian European
integrators, and, to the surprise of many, immediately become its head.
Regardless of his stormy work over the last few months, presence in public
and constant presence in the country's information sphere, he still
continues to be called "a dark horse" and his work in the extraordinarily
important state post of deputy prime minister for European integration is
awaited with great interest.

The country's main European integrationist is 46 years old and has two
higher educations behind him, namely, at the Roman-German Faculty of
Languages at the Taras Shevchenko University in Kiev and the National
Economic University in Kiev. Later, whilst working at the National Bank of
Ukraine, Rybachuk underwent training in the US and Britain. Whilst
discussing his work history in published interviews, he mentions five years
of work in India under a contract with Zakordonnaftobud [Overseas Oil
Construction] and working for Kievbirzhbank. After this period his biography
can be followed in official sources. Whilst Vadym Hetman was head of the
National Bank of Ukraine, Rybachuk headed the department for international
relations at the National Bank of Ukraine. Hetman acquainted Rybachuk with
Viktor Yushchenko 13 years ago.

Since then the paths of these two men have remained virtually inseparable.
When Yushchenko was prime minister [December 1999-April 2001]
Rybachuk headed the prime minister's service, and after the sacking of the
Yushchenko cabinet he worked as the vice president of the Black Sea Trade
and Development Bank but soon returned from Salonika to Ukraine to take
part in the 2002 parliamentary elections. In the Ukrainian parliament the
unaffiliated Rybachuk was elected on the Our Ukraine bloc list at no 29.
He headed the Razom [Together] group in the Our Ukraine bloc, worked
in the parliamentary Committee for Finance and Banking as the head
of the sub-committee for banking activity and currency regulation.

During the recent presidential election he was the head of
Yushchenko's office and carried out a lot of work in the area of ties with
the Western world. In the heat of the orange revolution he was rarely seen
at Independence Square in Kiev, though he was noticed on the street among
ordinary orange protesters whilst actively helping people to organize the
passage of columns of blue and white opponents [supporters of presidential
candidate Viktor Yanukovych].

Rybachuk is very communicative, erudite, self-confident, democratic,
liberal in his views and outspoken in his public statements. Sometimes even
overly. This gives grounds to suspect that he does not yet fully understand
that in his new, high-ranking post every single word is received a lot more
seriously and with greater weight.

Those who know him confirm say there is very little which is Soviet
about him but a great of deal of him is European. Just one example: people
say that he was the first in the cabinet to switch off the loud ring of his
mobile phone and began to walk around with an ear-piece so as not to disturb
other people around him from working.

He is a born PR-man - that is him, but a good manager - well, you'd be
talking about someone else. However, his dislike of organizational issues is
completely compensated for by his extraordinary creativity. If we take into

account the fact that the new cabinet has at least two other creative people
with broad powers - Yuliya Tymoshenko and Mykola Tomenko - then we
can expect a few surprises in the near future.

Rybachuk is not connected to any party and does not belong to any
financial and political group. At the present time he does not have his own
strong team. He is not a person of the "president's entourage" but rather
the president's man. He is a family friend: Rybachuk is trusted very highly
by Viktor Yushchenko as well as by Kateryna Chumachenko [Yushchenko's
wife]. The fact that Rybachuk himself named his future post a long time ago
is grounds to believe that (and Zerkalo Nedeli has written about this in the
past) in the Tymoshenko government he will not only be a deputy prime
minister but the "cabinet's eye". Having created, as he plans, a department
for European integration in every ministry, Rybachuk shall remain at the
information crossroads and will have quite complete information as to what
is happening in each ministry.

It is unlikely that he will have warm ties with his cabinet colleagues. He
does not feel any pietism towards any of the members of his team and
can be harsh and stubborn. And, if he is certain that he is right, then he
will stick to his guns right to the end. And his main argument will be:
"That is what the president said"..[Passage omitted: two experts comment]
==========================================================
9. YUSHCHENKO APPOINTS RYBACHUK AND TOMENKO CO-CHAIR
OF ORGANIZATIONAL COMMITTEE FOR EUROVISION-2005

Ukrainian News Agency, Kyiv, Ukraine, Wed, February 16, 2005

KYIV - President Viktor Yuschenko has appointed Deputy Prime Ministers Oleh
Rybachuk and Mykola Tomenko as co-chairmen of the Organizational Committee
for preparation and holding of the song competition Eurovision-2005. This
was disclosed in the Yuschenko's Decree of February 8 "On Urgent Measures
for Preparation and Holding of the Song Contest Eurovision-2005, the text of
which Ukrainian News obtained. Yuschenko determines the competition in his
Decree as especially important cultural and foreign political event in
Ukraine.

The President instructed Rybachuk and Tomenko to coordinate work of the
ministries, other central and local bodies of executive power in preparation
and holding of Eurovision. The president approved the new composition of
the Organizational Committee.

Yuschenko canceled articles 1 and 2 of the Decree of ex-President Leonid
Kuchma of May 26, 2004 "On Holding Eurovision Song Contest -2005".
According to these articles, Kuchma took charge of Eurovision-2005 and
created the Organizational Committee with then-Prime Minister Viktor
Yanukovych at the head.

As Ukrainian News earlier reported, Eurovision-2005 is slated for May.
The Cabinet of Ministers has approves a plan of measures for preparing for
and holding the 2005 Eurovision song contest. Kyiv will host the 50th
Eurovision Song Contest in May of this year. The Cabinet of Ministers
approved a plan of measures for preparing for and hosting the 2005
Eurovision song contest on January 21. The fiftieth Eurovision song contest
will take place at the Palace of Sports in Kyiv in May this year.

Ukrainian singer Ruslana Lyzhychko won last year's Eurovision song contest,
which was held in Istanbul (Turkey). According to Eurovision rules, this
year's Eurovision song contest will be held in the country of the winner of
last year's contest. The supervisory board of Eurovision has decided that
the 2005 Eurovision song contest will be held in Kyiv's Palace of Sports.

At least 40 delegations from various European countries and about 2,000
journalists are expected to travel to Ukraine for the contest with expected
television audience of about 100 million in Europe.

According to the requirements of Eurovision, the city hosting the Eurovision
song contest should have at least 2,000 hotel rooms and the hall that will
host the Eurovision song contest should not be farther than 45 minutes'
travel from a hotel. -30- [Action Ukraine Report Monitoring Service]
==========================================================
10. YUSHCHENKO INSTRUCTS CABINET OF MINISTERS TO
FINANCE PREPARATION AND CONDUCT OF EUROVISION 2005

Ukrainian News Agency, Kyiv, Ukraine, Wed, February 16, 2005

KYIV - President Viktor Yuschenko has instructed the Cabinet of Ministers
to ensure financing of expenses for preparing and conducting the
Eurovision-2005 song contest. This is stated in Yuschenko's decree of
February 8 entitled "On Urgent Measures for Preparation and Conduct of the
Eurovision-2005 Song Competition," the text of which Ukrainian News has
obtained.

Yuschenko instructed the Cabinet of Ministers to reconsider within a week
the plan of measures regarding preparation and conduct of Eurovision-2005,
as well as to make the necessary changes to this plan and to ensure its
implementation. He instructed the Cabinet of Ministers to ensure financing
for preparation and conduct of the competition with account of the proposals
of the National Television Company. In case of necessity the Cabinet of
Ministers should submit a draft bill on changes to the state budget for the
consideration of the Verkhovna Rada.

The president also instructed ministries, other central and local organs of
the executive branch of government to facilitate the implementation of
measures on preparation for the competition and its conduct. Yuschenko
ordered the National Television Company of Ukraine to ensure organization
and conduct of the competition according to the requirements of the European
Broadcasting Union.

As Ukrainian News reported previously, Yuschenko appointed with this decree
Deputy Prime Ministers Oleh Rybachuk and Mykola Tomenko as co-chairmen
of the Organizing Committee for preparation and conduct of Eurovision-2005.
Eurovision-2005 is planned for May. The 50th Eurovision song competition
will take place in Kyiv in May of this year. Ukrainian singer Ruslana
Lyzhychko took first place at last year's Eurovision song contest. -30-
==========================================================
11. UKRAINIAN PRESIDENT ASSURES IMF OF PLANS
TO ADDRESS FISCAL PROBLEMS

ITAR-TASS news agency, Moscow, in English 1608 gmt 17 Feb 05
BBC Monitoring Service, Thu, February 17, 2005 (16:08)

KIEV - Ukrainian President Viktor Yushchenko said on Thursday [17 February]
that the Ukrainian state authorities were ready for a full revision of the
economic situation in the country. In order to solve those issues in the
best possible way, Kiev will keep cooperating with the International
Monetary Fund, Prime-TASS quoted the president as saying at a meeting
with the director of the IMF's European Department, Michael Deppler.

According to Yushchenko, "Ukraine is already now ready to reconsider all
processes which don't meet the demands of an open economy in the budget,
fiscal and monetary spheres, as well as to introduce necessary programmes
which will ensure equal conditions of competition". Focusing on economic
problems in the country, the president noted that "unfortunately, the
Ukrainian people have inherited from the previous authorities a heavy
baggage of disorders, one of which is a conflict between power and
business".

"It cannot be destroyed in just one day," Yushchenko added. According to
him, such shadow processes result in a growing budget deficit. He said:
"Ukraine will do everything possible to secure itself against budget losses
as soon as possible." Deppler, for his part, said the IMF was ready to
cooperate with Ukraine and would like to see Ukraine meeting it halfway.
According to him, positive dynamics can be seen in Ukraine's economic
processes, but certain problems need to be solved urgently. He listed the
situation with the country's budget as one of them. Ukraine joined the IMF
on 3 September 1992. -30- [The Action Ukraine Monitoring Service]
==========================================================
12. UKRAINE: OMBUDSMAN KARPACHOVA ASKING YUSHCHENKO
TO GIVE LIFE STIPEND TO MOTHER OF GONGADZE

Ukrainian News Agency, Kyiv, Ukraine, Thu, February 17, 2005

KYIV - Verkhovna Rada human rights commissioner Nina Karpachova has
sent a request to President Viktor Yuschenko asking him to assign a
president's state life stipend to the mother of killed journalist Georgy
Gongadze, Lesia Gongadze. Ukrainian News learned this from the press
service of Karpachova.

According to the presidential decree No.24 of January 16, 2004, a
president's stipend is assigned to outstanding people working in the
information sector. Gongadze was entitled to such benefit and it can be
given to his mother who lost her only breadwinner, the ombudsman maintained.

"To grant a maximum possible support to the mother of the killed journalist
who deserves special merits from the society is a matter of honor of the
State of Ukraine," the press service quoted Karpachova as saying. The press
service reported that the President responded positively to the request
during a telephone conversation with Karpachova.

As Ukrainian News earlier reported, Yuschenko has promised to ensure the
speedy transfer of the case into journalist Gongadze's murder to court.
Gongadze disappeared in September 2000, and two months later his corpse
was found in a forest in the Tarascha district of Kyiv region. In the
aftermath of his disappearance a political scandal erupted in Ukraine over a
possibility of involvement of ex-President Leonid Kuchma in his killing.
==========================================================
13. LVIV TO REACH 750TH ANNIVERSARY IN 2005

By Igor Balchenkov, The Ukrainian Times, Kyiv, Ukraine, Thu, Feb17, 2005

KYIV - It is stipulated that national budget allocations worth about 114
million hryvnias shall be made to prepare for the celebration of the 750th
anniversary of Lviv next year. Celebration expenses are supposed to exceed
a total of 400 million hrn, the lion's share of them falling on the coffers
of this city founded by King Danilo.

Lviv mayor Lyubomir Bunyak has dreams of restoring the High Castle to its
former grandeur. However, archaeological research alone requires around
1.5 million hrn.

The program of preparation for the 750th anniversary of Lviv provides for
renovation of several streets, waterworks, lighting and sewer systems as
well as the improvement of parks. Special attention will be paid to the
restoration of the Pototskie Palace, the Maria Zankovetskaya Theater, the
museum of natural history and the historico-architectural complex Citadel.
The format of the celebration is expected to include the international art
festival Lviv Forever. -30-
==========================================================
14. UKRAINIAN TV EXAMINES "CORRUPTION" VERSIONS
BEHIND JUSTICE MINISTER'S RESIGNATION

Inter TV, Kiev, in Ukrainian 1900 gmt 17 Feb 05
BBC Monitoring Service, in English, Thu, February 17, 2005 (19:00)

KIEV - [Presenter] Today Ukraine was about to lose its justice minister. The
president and members of the Cabinet of Ministers had to comment on reports
about Roman Zvarych's resignation. [Passage omitted: comments by the
Ukrainian government officials and the president's press service - see UNIAN
news agency, Kiev, in Ukrainian 1130 gmt 17 Feb 05.]

[Correspondent] Roman Zvarych has been justice minister for exactly 17 days.
But today he made everyone believe that he could resign from the post and
would not go quietly. The Justice Ministry's press service confirmed this
morning that their boss had written a letter of resignation. The minister
did not take phone calls and resigned himself to offering his comments to
the 5 Kanal [TV channel]. [Passage omitted: Zvarych's comments to 5 Kanal -
see TV 5 Kanal, Kiev, in Ukrainian 0800 gmt 17 Feb 05.]

The minister's colleagues also link the justice minister's demarche with oil
and politics, but in a different way. Deputy prime ministers, Mykola Tomenko
and Roman Bezsmertnyy, told journalists that Zvarych was the only member of
the cabinet who yesterday opposed the government's decision to ban re-export
of oil. [Passage omitted: Bezsmertnyy's comments - see TV 5 Kanal, Kiev, in
Ukrainian 1500 gmt 17 Feb 05.]

So the question is - why is Zvarych so categorical if he is responsible for
justice, not for the energy sector. The Obozrevatel web site alleges that
there was a reason for mentioning his family. His wife, Svitlana, is a
deputy general director of the Oil Transit company, which was involved in
the re-export of Russian oil. We could not get a confirmation of this
information from Zvarych so far.

The version that the minister has not yet separated business from politics
is not the only one. The aforementioned Oil Transit company has released an
open letter today, which alleges that when the company faced the problems
with re-export, it was approached by the leader of the parliamentary
Agrarian faction [of the People's Party led by the parliamentary speaker
Volodymyr Lytvyn], Ihor Yeremeyev, who proposed pumping oil through the
Halychyna oil refinery and other smaller firms, which would create grounds
for him to claim a VAT refund.

The letter further alleges that the company had to agree to sell 35,000
tones of oil, while this very MP was the one who actively lobbied for the
government's decision to ban the re-export of oil. All our attempts to get
Yeremeyev's comments today failed. He did not take phone calls either. It
became known that in the evening the leader of the Agrarian faction has to
meet the president.

As for the Cabinet of Ministers decision, the draft was prepared by
Economics Minister Serhiy Teryokhin. He also talked about corruption
today, not in Kiev, but in Moscow. The minister said this is exactly what a
decision taken by a Russian fuel and energy deputy minister should be
called. According to Teryokhin, he [the deputy minister] authorized the
resale of 3m tonnes of oil, which was allocated by Russia for Ukraine,
although an intergovernmental agreement prohibits re-export. Teryokhin
maintained that if the oil was sold abroad, it would not only destabilize
the internal market, but would also lead to an international scandal.

It seems to be much easier to play down the internal scandal, as well as
"destabilization" in the government. In the afternoon, Roman Zvarych said
that the president did not accept his resignation and refused to provide any
further details. -30- [The Action Ukraine Report Monitoring Service]
=========================================================
15. UKRAINIAN WEEKLY PROFLIES NEW JUSTICE MINISTER
ROMAN ZVARYCH

Zerkalo Nedeli, Kiev, in Russian 5 Feb 05, p 6
BBC Monitoring Service, UK, in English, Wed, 16, 2005

The Ukrainian legal community is likely to welcome the appointment of
Roman Zvarych as justice minister since he is widely seen as capable of
pushing through radical reform of the judiciary, the Ukrainian analytical
weekly Zerkalo Nedeli has said. Zvarych is a talented professional who
knows legislation and the court system well, it added. Zvarych is systemic,
a strong communicator and prepared for the challenges ahead, but clashes
with his subordinates are likely, it concluded.

The following is an excerpt from the profile of Roman Zvarych by the
Ukrainian weekly Zerkalo Nedeli on 5 February:

Roman Zvarych is the minister of justice. Roman Zvarych's professional
qualities and his list of achievements give grounds for one to say that that
this is the correct choice. Oleksandr Lavrynovych, Mykola Katerynchuk and
Serhiy Holovatyy were among the candidates who were also considered for the
post, but Zvarych could not be touched by the competition. At least that was
[Ukrainian President] Viktor Yushchenko's view. Many people from the legal
community received this appointment, which was talked of as the strongest
option for a long time, very positively. Like him or not, but there are
virtually no doubts now that he is capable of handling the tasks ahead of
the Justice Ministry today, first and foremost, reform from its very roots.

Roman Zvarych was born in the USA in 1953. He graduated from the Philosophy
Faculty at Columbia University (New York) and later became a professor at
the same university. His dissertation was called "The ontological
foundations of Plato's ethics". He is the author of some 30 academic works.

He has been in Ukraine since 1991. Of course, there were problems with him
obtaining Ukrainian citizenship, as our officials were very dubious of such
an unusual desire. He only received Ukrainian citizenship in 1995, two years
after giving up his US citizenship. And the subsequent blitzkrieg is worthy
of any James Bond of jurisprudence. His ideological opponents simply call
him "the American spy". In the American diaspora he is regarded as
anti-American.

You could not say that Roman Zvarych is incapable of "planting roots" in a
foreign environment, not simply adapting, but actually occupying a notable
position in society. In fact, 10 years after naturalization he has not only
got one of the senior state officials, but, in the view of many colleagues,
found himself in this seat quite logically and deservedly.

He is a Ukrainian MP and deputy head of the People's Movement of
Ukraine party since 2003.

Zvarych is a multi-faceted professional. He knows constitutional and
electoral legislation well, and feels at home with issues connected with the
functioning of the court system. He shows a systemic and global approach to
any problems of a legal nature, is clear thinking and an articulate speaker.
His style is speed and, in the main, a proper reaction, as well as
pragmatism and toughness - within sensible limits. According to some
assessments, he is one of the strongest lawyers of the Our Ukraine bloc.
He looks convincing in legal as well as political battles.

Apart from everything else, Zvarych is, shall we say, well dressed and
presentable, which is important for the justice minister of a state
positioning itself as a European state. He has a real idea about the legal
system based on precedent and has knowledge of issues regarding
international law. Of course he knows English and is no stranger to European
organizations. He is the deputy head of the committee for European
integration, a member of the permanent Ukrainian parliamentary delegation
at the Parliamentary Assembly of the Council of Europe.

He possesses the most important and quite rare feature for a representative
of the domestic political scene, as he has the ability, in a manner which is
clear and easy to understand to a western colleague, any domestic problem
with all of its national features, which is often difficult for a westerner
to understand.

Apart from the fact that he dresses in a quite relaxed manner, he clearly
stands out from the mass of mean-looking state officials, who are "buttoned
up in full" and cannot imagine themselves without a tie. He does not have to
be told that white socks do not go with a smoking jacket.

Perhaps Zvarych is capable of breathing new life into all of the best ideas
of one of his predecessors - Serhiy Holovatyy, whose attempts to clear the
Justice Ministry of "cobwebs" was appreciated by the majority only,
unfortunately, after his dismissal.

Of course, it will not be easy for Zvarych, who has come to one of the areas
of state activity most riddled with people in deputy posts [for example,
deputy prosecutor]. First and foremost, with subordinates. And, judging by
everything, it will also be difficult for subordinates. It cannot be ruled
out that the "clash of outlooks" will be a harsh one. There are grounds to
believe that Zvarych will come out of this test with honour and, perhaps,
with a much smaller team. [Passage omitted: tasks and role of Justice
Ministry]

The tasks ahead of the Justice Ministry are huge. From simplification of
registration of businesses, as announced by President Yushchenko, right to
bringing order to legislation on the security forces and law-enforcement
agencies which were made confidential in an illegal manner, and which
directly relate to human rights and freedoms and which, as a rule, restrict
them. Then there is the taking away from the Justice Ministry of totally
illegal, but real and very effective levers of influence over the court
system and deep-rooted stereotypes of the omnipotent Ukrainian
bureaucratic system. -30- [Action Ukraine Report Monitoring Service]
=========================================================
16. "SAVE OUR CHURCHES!"
Transcarpathia is writing a letter to the president

By Bohdan Barbil, Transcarpathia
The Day Weekly Digest in English, #5
Kyiv, Ukraine, Tuesday, 15 February 2005

Transcarpathia still has 118 wooden churches that were built over the past
five centuries. Forty-eight of them are registered as architectural
monuments. By contrast, Slovakia has only 27 wooden churches, but they all
function normally and are reliably protected by the state. In Transcarpathia
dozens of wooden churches are in deplorable condition.

The area's cultural figures and journalists, who have created the Cultural
Brotherhood and New Form civic organizations, and professors from the
Uzhhorod College of Arts claim that the regional authorities' campaign
called "Save the Wooden Churches of Transcarpathia," which was launched
three years ago, has boiled down to holding run-of-the-mill concerts and
failed to provide at least minimal protection for these holy places.

Activists are now drawing up a message urging President Yushchenko and the
new prime minister to adopt a government program to preserve and restore
hundreds of old wooden churches in the Ukrainian Carpathian region.

The regional Cultural Heritage Conservation Department has begun to certify
and register wooden churches in Transcarpathia. There are still about 70
non-registered, mostly Orthodox, churches in the area, built in the 1920s.
The cash- strapped department has to beg national and foreign charities for
funds to renovate and restore them. A few local masters recently helped
launch the production of roofing shingles. Hennady Moskal, former head of
the oblast administration, helped to repair the roof of a church in the
village of Huklyvy.

The Museum of Transcarpathian Folk Architecture and Folkways recently
managed to acquire a six- sided Hutsul belfry from Rakhiv district. It now
stands near the Shelestiv church, the area's only classic Lemko church that
dates back to the 18th century. The museum has also been trying to move an
old chapel from Mizhhirsk district to Uzhhorod, but the village parish keeps
setting new financial conditions, although the chapel has long been closed.
In many Transcarpathian villages wooden churches become redundant once
a new brick church has been commissioned.

In Kobyletska Poliana parishioners simply burned down the wooden church.
In Neresnytsia and Steblivka a bolt of lightning struck a couple of wooden
churches, while in Vodytsia and Kostylivka they were simply dismantled. In
the years of Ukrainian independence, ten ancient temples have vanished in
Transcarpathia.

This type of sacrilege must stop, says Milan Shashyk, the new bishop of the
Mukachiv Greek Catholic Diocese, who is a citizen of Slovakia. Restoration
work will start in the coming spring at the Strukove church in the village
of Yasinya, where 14,000 shingles have already been delivered.

Transcarpathia has five styles of wooden churches: Lemko, Boiko, Hutsul,
baroque, and Gothic. The oldest ones are 15th-century churches in Serednie
Vodiane and Kolodne. Art specialist Mykhailo Syrokhman told The Day,
"Several churches badly need funds for renovations from this spring onwards:
a church in the village of Roztoka, Mizhhirsk district, and one in Kolodne.

The latter is in appalling condition: the wood is rotting and the frescoes
and wood paintings are severely damaged. There are only ten churches in
all of Ukraine that have interior wood paintings, and five of them are in
Transcarpathia." -30- [The Action Ukraine Report Monitoring Service]
----------------------------------------------------------------------------
LINK: http://www.day.kiev.ua/132401
==========================================================
17. YUSHCHENKO INITIATING NEGOTIATIONS BETWEEN FIGHTERS
OF OUN-UPA AND SOVIET ARMY ON RECONCILIATION

Ukrainian News Agency, Kyiv, Ukraine, Wed, February 16, 2005

KYIV - President Viktor Yuschenko is initiating negotiations between
fighters of the Organization of Ukrainian Nationalists and the Ukrainian
Insurgent Army (OUN-UPA) aimed at attaining reconciliation. The
president made the comment during the time of his visit to Lviv.

"There is one idea today, which is being worked out that is in the
assignment. We started negotiations with fighters of the Soviet Army and the
OUN-UPA on reconciliation," the president said. Yuschenko promised to
do everything in order that dialogue would take place. The president also
expressed the hope that not only success would be attained by May 9, but
also the conflict would completely be resolved.

As Ukrainian News has reported, the Ukrainian People's Party had urged
President Viktor Yuschenko and Prime Minister Yulia Tymoshenko to support
the recognition of the OUN-UPA as war participant. UPP's leadership board
is proposing to put to the consideration of parliament in a plenary regime
during the period running up to the start of the Verkhovna Rada's work the
corresponding governmental draft law.

In the opinion of the UPP, since the 60th anniversary of the victory over
Fascism would be marked in 2005, this year should become the year for
national reconciliation and restoration of historical justice relating to
all Ukrainians who fought at the fronts during the Second World War.

In July 2003, the Council of Veterans of the Great Patriotic War in the
Luhansk region demanded of then President Leonid Kuchma, ex-Prime
Minister Viktor Yanukovych and Verkhovna Rada Chairman Volodymyr
Lytvyn to condemn the actions of fighters of the OUN-UPA as terrorist
actions and therefore they are not subject to rehabilitation.

Verkhovna Rada deputies Borys Bespalyi and Valerii Alioshyn had earlier
called on parliament to recognize fighters of UPA as participants of combat
actions against the German Fascist invaders. -30-
==========================================================
18. "THE END OF THE ROMANCE"

By Richard Holbrooke, Columnist
The Washington Post, Washington, D.C.
Wednesday, February 16, 2005; Page A19

Valdas Adamkus has a problem. The 79-year-old president of Lithuania has
been invited -- personally, persistently, even threateningly -- by Russian
President Vladimir Putin to an event that he really, really doesn't think he
should attend: the May 9 celebrations in Moscow marking the 60th anniversary
of the Soviet Union's victory over Adolf Hitler. It's a real A-list affair:
President Bush, Tony Blair, Jacques Chirac, Gerhard Schroeder, Silvio
Berlusconi, the presidents of other former Soviet republics, and a cast of
thousands.

Of course, as U.S. Ambassador to Lithuania Steve Mull has said, it does not
matter to the United States whether Adamkus attends. What makes this more
than a social problem is that it is symptomatic of a disturbing trend in
Russian behavior toward the area where the Soviet Union once reigned
supreme. And it poses to the Bush administration a dilemma far greater than
the one Adamkus faces.

I am neither predicting nor advocating a return to the bad old Cold War
days. Those are, thank God, gone forever. Russia, although much-diminished,
is now an important and legitimate part of the international system. The new
security architecture of Europe, worked out in the Clinton and Bush
administrations with Boris Yeltsin and Putin, is no longer about containing
Russia but about including it, and it has produced some historic
achievements and cooperation.

But the continuation of those productive policies is endangered by events
over the past year that the West can no longer ignore. Putin is rattled by
the growing independence of some of the former Soviet republics, most
notably Georgia and Ukraine. But his inept meddling, which failed to prevent
democratic popular uprisings last year in both countries, has only weakened
him.

One of Russia's most serious actions has been ignored by Washington and the
European Union: the continued presence of Russian troops in neighboring
countries without their permission. In 1999 Russia promised to gradually
withdraw troops stationed in parts of Georgia and Moldova -- troops
supporting destabilizing separatist movements.

Six years later Russian troops are still in these "frozen conflict" zones.
At a conference in Munich last week, Russian Defense Minister Sergei Ivanov
said that Moscow had never made such a commitment -- a view of recent
history that Clinton and Bush administration officials firmly reject.

Simultaneously, Putin's internal performance has veered toward what one
might call "soft authoritarianism": Provincial governors are now appointed
by the Kremlin, not elected; press restrictions are growing; and the Yukos
Oil affair amounts to state-sponsored theft. Meanwhile, the war in Chechnya
defies solution and Chechnya has become a notorious sanctuary for
terrorists.

So one must ask what the United States got for its "blank check" policy
toward Russia in the past four years. Cooperation on terrorism would surely
have happened anyway, and Russian acquiescence on the U.S. missile defense
system has hardly strengthened our homeland security when the primary threat
is from terrorists. In fact, Washington and the European Union have given
Putin the impression that he can do almost anything he wants in his "near
abroad."

Only George W. Bush knows what he saw when he famously looked into
Putin's soul in 2001, but it was not worth the price. Russia also opposed us
on Iraq, taking the same positions as France and Germany (indeed, openly
coordinating with them). And now it is engaged in a little-noticed charm
offensive to woo our all-important (but deeply alienated) ally Turkey into a
new special relationship that would extend Russia's influence in that
volatile region. Putin has also joined China in calling for the removal of
all U.S. troops from the Central Asian republics. Now Moscow has vetoed
the continuation of a small border monitoring team in Georgia from the
Organization for Security and Cooperation in Europe, and it seems intent
on weakening that important organization.

The administration must reevaluate its Russian relationship. Ignoring
Putin's behavior would make a mockery of Bush's inaugural rhetoric about
freedom and democracy. But it will not be easy to restructure a relationship
that has been so personal to two powerful and self-confident leaders.

Is Washington's romantic period with Moscow truly over? The first test comes
next week, when Bush and Putin meet in Bratislava, Slovakia. Then, of
course, there is that anniversary party on May 9, which Putin would like to
expand into a NATO-Russia summit the next day -- an unthinkable event
under present circumstances.

Russia suffers from what Strobe Talbott, the former deputy secretary of
state and a Russia expert, calls the "Rodney Dangerfield" effect: It gets no
respect. But Putin's way will not win it back. The United States and the
European Union must set clear markers, starting with a new emphasis on
honoring the 1999 troop withdrawal commitments. If this is not done, an
issue ignored too long will move to the front burner soon. But by then it
will be too late. -30- [The Action Ukraine Report Monitoring Service]
----------------------------------------------------------------------------
Richard Holbrooke, an ambassador to the United Nations during the
Clinton administration, writes a monthly column for The Post.
----------------------------------------------------------------------------
http://www.washingtonpost.com/wp-dyn/articles/A27622-2005Feb15.html
==========================================================
20. "WESTERN STRATEGY FOR UKRAINE"

OUTSIDE VIEW: By F. Stephen Larabee
Outside View Commentator, United Press International
Kiev, Ukraine, Thursday, February 10, 2005

KIEV - U.S. President George W. Bush has a valuable opportunity to help
carry out his inaugural pledge to make promotion of democracy the
centerpiece of U.S. foreign policy by making support for democracy in
Ukraine a key priority on his February trip to Europe.

Backing Ukraine's Orange Revolution is in America's strategic interest. A
democratic Ukraine would help stabilize Europe's eastern periphery and would
give an important impulse to democratic reform throughout the post-Soviet
space. It could also give impetus to reform in Russia. Seeing the benefits
enjoyed by their Ukrainian neighbors, many Russians could be encouraged to
push more boldly for greater democracy in Russia.

Promoting reform in Ukraine could also help overcome the lingering strains
in trans-Atlantic relations caused by the war in Iraq. Unlike Iraq, the U.S.
and European approaches to Ukraine are in broad harmony. Both want to see a
democratic Ukraine closely tied to Euro-Atlantic institutions. Thus a
coordinated U.S.-European support package for Ukraine could provide a means
of strengthening transatlantic cooperation -- one of the main aims of Bush's
trip to Europe.

Domestically, a tangible demonstration of U.S. and European support for
Ukrainian reform early on is critically important. At the moment, public
expectations in Ukraine are high. But public support for reform may begin to
wane as the tough sacrifice required by reform begins to kick in.

Ukraine faces parliamentary elections in early 2006. By then, newly elected
President Viktor Yushchenko needs to be able to show that his reforms have
brought important benefits to the average Ukrainian. Otherwise the internal
balance of power could shift in favor of the opponents of reform.

Russia may also seek to undercut Yushchenko's reform efforts, either through
using its extensive economic leverage or fomenting tension among the
Russian-speaking areas of the Eastern Ukraine that voted overwhelmingly for
Viktor Yanukovich in first rounds of the election. U.S.-European support
could help provide a cushion against that possibility.

Key elements of an effective U.S. support package for Ukraine should
include:
-- An invitation to Yushchenko to meet with Bush at the White House soon.
Bush could also consider a short stopover in Kiev during his European trip.
These actions would be a highly important symbolic demonstration of U.S.
support for Ukrainian democracy and could give important impetus to reform
in Ukraine.
-- Financial assistance designed to support economic reform, as well as
measures to strengthen the independent media and civil society.
-- Support for Ukrainian membership in the World Trade Organization. Among
other benefits, this could allow Ukraine to create a free trade zone with
the European Union.
-- Support for a NATO Membership Action Plan for Ukraine. Such a plan would
officially recognize Ukraine's aspirations for NATO membership and lay out
concrete steps that Ukraine needed to take to achieve membership. Ukraine's
NATO membership should not be artificially pushed or accelerated. But
Ukraine needs to be given a clear perspective of membership if it proceeds
down the path of reform.
-- Encouraging the EU to develop a more ambitious and forward-looking
approach to Ukraine. The EU's New Neighborhood policy -- which includes
Ukraine -- was devised before the Orange Revolution. The policy needs to be
revised to take into consideration the new situation in Ukraine. If Ukraine
does implement a serious reform program, the EU can adopt a more open
attitude toward Ukrainian membership. What is needed is a clear roadmap that
lays out the concrete steps that Ukraine would need to take in order to be
considered for membership down the line.

Given all the other big issues that the EU has on its plate at the moment --
ratification of its constitution, digesting 10 new members, Turkish
accession and integrating the Western Balkans -- some members of the EU
may be reluctant to take on another major challenge. But this is a time for
vision not timidity or hesitation. For reform to succeed, Ukraine needs a
clear and unambiguous signal that both the EU and the United States support
its integration into Euro-Atlantic institutions, and Bush should send that
signal during his European trip. -30-
-------------------------------------------------------------------------
(F. Stephen Larrabee served on the National Security Council in the Carter
administration and holds the corporate chair in European security at the
nonprofit RAND Corporation.)
==========================================================
20. UKRAINE, RUSSIA AGREE TO BUILD JOINT PORT ON BLACK SEA
Creation of a joint container terminal in Illichivsk

UNIAN news agency, Kiev, in Ukrainian 1243 gmt 16 Feb 05
BBC Monitoring Service, UK, in English, Wed, February 16, 2005

KIEV - During his visit to Moscow, Ukrainian transport and communications
minister, Yevhen Chervonenko, reached agreement with Russian Transport
Minister Igor Levitin on the building of a joint port for Ukraine and Russia
on the Black Sea. Chervonenko also said that agreement has been reached
on the creation of a joint container terminal in Illichivsk [Odessa Region,
Ukraine].

Chervonenko stressed that "nothing generates movement forward like the same
interests of two countries". Chervonenko made a working visit to Moscow
today where he met with Russian Transport Minister Igor Levitin. -30-
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Zenia Chernyk, Chairperson; Vera M. Andryczyk, President;
Huntingdon Valley, Pennsylvania.
B. UKRAINIAN AMERICAN COORDINATING COUNCIL,
(UACC), Ihor Gawdiak, President, Washington, D.C., New York, NY
C. U.S.-UKRAINE FOUNDATION (USUF), Nadia Komarnyckyj
McConnell, President, Washington, D.C., Kyiv, Ukraine.
6. UKRAINE-U.S. BUSINESS COUNCIL, Washington, D.C.
7. ESTRON CORPORATION, Grain Export Terminal Facility &
Oilseed Crushing Plant, Ilvichevsk, Ukraine
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Mr. E. Morgan Williams, Director, Government Affairs
Washington Office, SigmaBleyzer Investment Banking Group
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Senior Advisor; Ukrainian Federation of America (UFA)
Coordinator, Action Ukraine Coalition (AUC)
Senior Advisor, U.S.-Ukraine Foundation (USUF)
Advisor, Ukraine-U.S. Business Council, Washington, D.C.
Publisher, Ukraine Information Website, www.ArtUkraine.com
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