ACTION UKRAINE REPORT - AUR
An International Newsletter, The Latest, Up-To-Date
In-Depth Ukrainian News, Analysis and Commentary

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

ACTION UKRAINE REPORT - AUR - NUMBER 723
Mr. E. Morgan Williams, Publisher and Editor
PUBLISHED IN WASHINGTON, D.C., TUESDAY, JULY 4, 2006

-------- INDEX OF ARTICLES --------
Clicking on the title of any article takes you directly to the article.
Return to the Index by clicking on Return to Index at the end of each article

1. U.S. AMB WILLIAM TAYLOR: "WE ARE READY TO COOPERATE
WITH ANY COALITION RESULTING FROM A DEMOCRATIC PROCESS"
INTERVIEW: With William Taylor, U.S. Ambassador to Ukraine
By Yulia Mostovaya, Journalist and Chief Editor
Zerkalo Nedeli On The Web, Mirror Weekly (No. 25, 604)
International Political Social Weekly
Kyiv, Ukraine, Monday, Saturday, July 1 - 7, 2006

2. "EVERYTHING IS ALL MIXED UP IN THE UKRAINIAN HOUSE"
INTERVIEW: With Petro Poroshenko and Commentary
By Yulia Mostovaya, Journalist and Chief Editor
Zerkalo Nedeli On The Web, Mirror Weekly (No. 25, 604)
International Political Social Weekly
Kyiv, Ukraine, Monday, Saturday, July 1 - 7, 2006

3. U.S. POSITION ON UKRAINE'S ACCESSION TO NATO
Excerpts of Remarks By David Kramer
Deputy Assistant Secretary, U.S. Department of State
U.S-Ukraine Security Dialogue II, June 22, 2006
Cannon House Office Building, Washington, D.C.
Voice of America (VOA), Washington, DC, June 26, 2006

4. UKRAINIAN OPPOSITION CONTINUES PARLIAMENTARY SIT-IN
RIA NOVOSTI, Moscow, Russia, Monday, July 3, 2006

5. TURKMENISTAN ASKS UKRAINE TO REVIEW GAS PRICE
Ukrinform, Kyiv, Ukraine, Monday, July 3, 2006

6. MINISTER OF AGRICULTURE FORECASTS ESCALATION
OF CRISIS IN AGRO-INDUSTRIAL COMPLEX IF TYMOSHENKO
IS APPOINTED PRIME MINISTER OF UKRAINE
Ukrainian News Agency, Kyiv, Ukraine, Friday, June 30, 2006

7. UKRAINE'S UNEXPECTED MIRACLES
OP-ED: By Oksana Bashuk Hepburn
Kyiv Post, Kyiv, Ukraine, Wednesday, Jun 28 2006

8. UKRAINE'S ORANGE COALITION SLAMS OPPOSITION
PARTY OF REGIONS FOR IRRESPONSIBILITY
RIA Novosti, Moscow, Russia, Monday, July 3, 2006

9. UKRAINE OPPOSITION PRESENTS DEMANDS TO COALITION
RIA Novosti, Moscow, Russia, Monday, July 3, 2006
========================================================
1. U.S. AMB WILLIAM TAYLOR: "WE ARE READY TO COOPERATE
WITH ANY COALITION RESULTING FROM A DEMOCRATIC PROCESS"

INTERVIEW: With William Taylor, U.S. Ambassador to Ukraine
By Yulia Mostovaya, Journalist and Chief Editor
Zerkalo Nedeli On The Web, Mirror Weekly (No. 25, 604)
International Political Social Weekly
Kyiv, Ukraine, Monday, Saturday, July 1 - 7, 2006

"We handed our open letter regarding the broadcasting situation with UT-1 TV
over to William Taylor, the new US Ambassador to Ukraine, and sent it to the
CE Monitoring Committee."

The Ukrainian public would not be surprised by a statement of this kind, had
it been made by a representative of "Our Ukraine" or the YTB, who are known
for their pro-Western sentiments. Coming from MP Anna German, who is a
member of the Party of Regions and still de facto press secretary to Viktor
Yanukovych, it sounds unexpected and paradoxical, to put it mildly.

Wouldn't the Party of Regions be more consistent if it addressed the letter
to Viktor Chernomyrdin and the CIS Monitoring Committee instead?

Yet the root of the paradox should be looked for in Ukrainian politics.
Here, contacts with the East help to make money, while contacts with the
West help to protect it, together with trampled rights (even if the
trampling on rights is questionable).

Thus the Party of Regions - sponsor of the Crimean "crocheted helmets" that
bullied American reservists in Feodosiya - turned for justice and protection
to the American Embassy. In fact, this will be the plight of any
marginalized opposition in Ukraine until the society, powers that be and
opposition learn to respect one another's rights.

Ambassadors of Germany, France, the UK and the USA play a dual role in
Ukraine. For one thing, they listen to the opposition's grievances. For
another, they provide Ukrainian authorities with good governance benchmarks
based on current international practices.

New US Ambassador William Taylor will also have to operate in this twofold
capacity in the next few years. He has replaced John Herbst, whose critical
role in at least two episodes in Ukraine's recent history (the non-use of
force against the Maidan demonstrators and the explicit support for Ukraine
in the Tuzla conflict with Russia) can hardly be overestimated.

Mr. Taylor has been an ambassador for a fairly long time now, but it is his
first assignment as an Extraordinary and Plenipotentiary Ambassador to a
specific country. During our brief interview, I had the chance to appreciate
the Harvard University graduate's intellect and to notice the bearing of a
US Military Academy alumnus.

Fifty-eight -year-old William Taylor alarmed some experts with his strong
comments in Washington on the security of energy supplies to Ukraine and
Europe. Upon taking up his duties in Kyiv, the new Ambassador has softened
his rhetoric, which does not mean that he will not articulate his position
unequivocally once he studies the situation on the ground.

What does the Vietnam veteran think of the prospects of deploying a
Ukrainian military contingent in Afghanistan? Does NATO intend to set up its
bases on Ukraine's territory? Has Washington been supporting Tymoshenko
as a prime ministerial candidate?

Will Ukraine gain access to the WTO by the end of the year? How will
America assist Ukraine if the latter nullifies its gas agreements with
Russia?

William Taylor answers these and other questions in his first (and,
therefore, most cautious) interview to the Ukrainian press.

[Yulia Mostovaya] Your Excellency, allow me to start with a formal question:
what guidelines did you get from President Bush and the Senate before
heading to Ukraine? What will your priorities be in this country?

[Ambassador Taylor] - The guidelines that I received from the US President
and Secretary of State, at the Senate hearings and at a series of
discussions at the House of Representatives were that I should keep
improving and enhancing relations between the USA and Ukraine. All four
players mentioned above voiced their unconditional support to a democratic
and prosperous Ukraine.

[Yulia Mostovaya] - I hoped you would say something like that. It is
noteworthy that, less than three years ago, the Republican Administration in
Washington would not even consider Ukraine's special role in this part of
the world. Russia seemed the only strategic partner of interest.

Many in America would turn a blind eye to violations of human rights and to
the curtailing of freedom of expression here. It was not until Russia showed
its teeth in its power supply policy and refused to side with the USA in
such sensitive matters as Iraq, Iran, Afghanistan, etc, that relations with
Russia were revised. Then, Ukraine's status as a buffer country between the
civilized and semi-civilized worlds was upgraded.

[Ambassador Taylor] - I think this is true. Of late, interest in Ukraine has
grown significantly for a number of reasons - of which you are well aware.
Some time ago, the whole world closely followed the events on the Maidan.

The United States was among the most ardent supporters of this democratic
movement toward Ukraine's prosperity and wellbeing. Over the last 18-20
months, relations between the USA and Ukraine have been developing much
more dynamically and comprehensively than ever before.

Our interest in Ukraine stems from Ukraine's own strengths, from the
realization of its value as a nation and of the significance of its
objectives. It would also be fair to say that the success of Ukrainian
democracy, its secure borders and its growing economy will set a good
example, a model case for the entire region.

The US President and Secretary of State agree regarding the great importance
that the US attaches to success stories of democratic choice made by people
in different countries. It is well manifested in Ukraine, whose experience
is most valuable for Ukrainians and the international community-at-large.

We in the United States believe that democratic governments are much more
effective than non-democratic ones in expediting their national interests
and establishing good relations with their neighbors.

[Yulia Mostovaya] - President Yushchenko's Secretariat underscores that the
arrangement of George Bush's visit to Kyiv is still on its agenda. Do you
think it is realistic? If yes, what are the prerequisites for the visit?

[Ambassador Taylor] - President Bush is willing to come to Ukraine. He had
plans before but he would like to make sure he visits a country with an
established government. I am optimistic about developments in Ukraine and I
believe the Cabinet will be formed soon. That fuels my optimism about Mr.
Bush's paying a visit to President Yushchenko. It could happen later this
year.

[Yulia Mostovaya] - Could the US President's visit be timed to coincide with
the anniversary of the Babiy Yar tragedy?

[Ambassador Taylor] - No visit has been designed yet. I hope the parties
will be able to agree on the dates, as I said, later this year.

[Yulia Mostovaya] - The United States of America is allocating over USD 40
million to Ukraine for an anti-corruption program. If I am not mistaken, it
is the first initiative of this kind. What sectors will this anti-corruption
effort target as priorities?

[Ambassador Taylor] - This program will be funded from an absolutely new
source of financial assistance to foreign countries, including Ukraine. The
decision to provide Ukraine with USD 45 million in donor assistance for two
years was made in a competitive process.

[Yulia Mostovaya] - . in which our corruption outperformed the others?

[Ambassador Taylor] - Oh no. Let's not put it like that. The decision-maker
in this case was a new organization called "Millennium Challenge." Decisions
on a broad range of countries are made following a thorough analysis of
their education and public health policies, efficiency of public
administration and introduction of democratic principles and practices.

In its decision-making, "Millennium Challenge" relies on NGO and World
Bank data. As a result, the countries with the best indicators in these
three areas are selected and granted fairly large funds for the implementation
of narrowly focused projects conducive to effective poverty alleviation.

We are speaking hundreds of millions of dollars. Some countries were
allocated up to USD 200 or even 500 million to invest in road construction,
infrastructure development, school construction, computerization of selected
economy sectors, etc.

Ukraine has a high rating in meeting the above indicators, with the only
exception - level of corruption. The "Millennium Challenge" Corporation has
envisioned so-called "threshold programmes" for countries like Ukraine.
Through their successful implementation, countries can get access to more
extensive targeted projects.

Ukraine is one of the countries receiving "threshold" assistance. I do not
rule out a possibility that in the autumn it will be able to qualify for
larger funding from the Corporation, provided it shows tangible and
measurable progress in combating corruption.

I think the allocated USD 45 million will be spent to educate prosecutors,
judges, NGOs and the press in order to raise public awareness of corruption
and its implications, identify the most affected sectors, and publicly
discuss the issue in the mass media, which will allow for a reduction of
corruption.

[Yulia Mostovaya] - USD 45 million is a big amount of money but it is meager
compared to the "pro-corruption" funds existing in Ukraine. Is it wise to
disperse these dollars to many users? Wouldn't it be more effective to
channel them into one specific sector or sphere - for example, customs or
courts or local governments or police?

[Ambassador Taylor] - I understand that this is a modest amount compared to
the money circulating "in the shadow." However, the idea is to concentrate
these funds on improving governance mechanisms, on making them more
transparent and efficient in targeting corruption through prosecution and
the courts.

[Yulia Mostovaya] - In a few weeks, the G-7, excuse me, G-8 Summit is
scheduled to take place. May I ask how you feel about this name? The G-7
used to unite the seven most economically powerful democracies of the world.
Then Russia joined the club. They could have admitted United Arab Emirates
and nobody would see any difference.

[Ambassador Taylor] - I am not expert on the G-8. Nor have I ever cooperated
or had any contacts with this organization. A gradual transformation of the
G-7 into the G-8 started ten years ago when the world's leading economies
believed that the new member was making headway towards democracy. We
still hope all members of this alliance will develop as democracies.

Yet you are right; opinions in the United States differ and a public debate
is underway about the next G-8 summit. President Bush is, nonetheless,
planning to attend the summit and present the US stance on all issues to be
discussed. He thinks the summit has sense.

[Yulia Mostovaya] - The US has repeatedly stated its commitment to support
Ukraine, should the latter decide to rescind the gas agreements with
RosUkrEnergo, and has sharply criticized Russia's policy in the energy
sector.

What is your major concern in this situation; dubious intermediary, Russia's
gas pricing policy, monopolization of the Asian gas supplies or something
else? In your opinion, which country is delaying a revision of the gas
agreements: Moscow or Kyiv?

[Ambassador Taylor] - As I said, the United States is interested in
Ukraine's development as a sovereign democratic country. The 4 January
agreements concern two, or rather, three parties. The two key parties are,
naturally, Russia as a gas supplier and Ukraine as a gas transporter. There is,
however, a third party to this arrangement; it is Europe as a gas consumer.

The USA, for its part, stands for transparent, open and publicly negotiated
contracts. That is why we cannot understand the role of an intermediary
provided for in the 4 January agreements.

Some explained it to me as that of a buffer established by a private entity
to cushion relations between the Russian and Ukrainian governments. And
yet I fail to understand the rational for creating this buffer, all the more
so given that the intermediary's structure and ownership are vague.

In any case, it is up to Russia and Ukraine to make a relevant decision. We
believe, though, that both countries will benefit from transparency at the
contract preparation stage and openness of all relating schemes to the
market.

We also believe that the market-driven pricing policy is the best option
and minimizes corruption in the sphere of power supplies and distribution.
Under-pricing is as damaging for economic development as over-pricing.

Natural gas is a commodity, the price of which is difficult to set, unlike
oil for which spot prices are established. Yet it is clear that the price
should be more than USD 50.

Gradual price rise is less painful for the economy than a one-time upward
jump. Sharp increases in gas prices will have dire consequences for
industrial enterprises and commercial companies, but it will hit the
low-income population most of all, which is unfair.

Therefore, the policy of raising gas prices slowly but steadily would allow
both the population and the economy to get adjusted to the new conditions,
and give the government a lead time to protect the most vulnerable groups.

It is difficult for me to say which of the parties contributes more to
delaying the revision of the gas agreements. I think the Ukrainian party
should appoint a new negotiating team, which is hardly possible prior to
he new government formation.

In my opinion, though, the agreements should be revised sooner rather than
later, because it is one thing to negotiate the terms, volumes and cost of
gas supplies during the summer, but it is an absolutely different thing to
do so in winter.

I am positive that the G-8 Summit you mentioned above will be focused, among
other issues, on power supplies. I think the participants will discuss the
principles of secure energy supplies that Americans and Europeans approved
at the recent US and EU Summit in Vienna. These principles emphasize the
importance of transparent market relations and the trustworthiness of
contracts signed by suppliers, transporters and consumers.

[Yulia Mostovaya] - I often hear people say that Washington has the
Ukrainian President under its control. It is a myth, and I have most unusual
evidence to prove it is a myth. I know your predecessor, John Herbst, met
with our President eight times to discuss challenges to Ukraine's energy
sector. Mr. Herbst spoke openly of the US skepticism about the January
2006 gas agreements.

The fact that the President still argues the January agreements are optimal
for Ukraine testifies that the American influence on Yushchenko is a myth.

[Ambassador Taylor] - ?!

[Yulia Mostovaya] - Nobody promised to ask easy questions, sir.

[Ambassador Taylor] - Neither did anybody promise I would be asked to
make assumptions about the Ukrainian President's train of thought. Why
don't you ask him about it?

[Yulia Mostovaya] - Unfortunately, he avoids talking to reporters conversant
in this sphere. I'd rather ask you whether you discussed the gas matters
with the President and whether Viktor Yushchenko changed his mind
afterwards.

[Ambassador Taylor] - After I had presented my credentials to President
Yushchenko we had a long conversation covering a wide range of issues,
including the gas situation. I made an offer to him and I'll tell you what
it was about. We have experts. We can give technical advice. We run
efficient gas consumption projects that we can share with Ukraine.

However, I will repeat, it is up to the President and the Cabinet to make
decisions on the gas agreements. We are ready to provide assistance, should
the President, new Prime Minister or Minister for Fuel and Energy require
it.

[Yulia Mostovaya] - If Ukraine insists on signing direct contracts with
Turkmenistan and GASPROM with no intermediaries, the gas price could
skyrocket. The United States has pledged assistance to Ukraine in the event
the gas agreements are revised. Will your country be able to help Ukraine
with loans or grants that would fill in gaps in Ukraine's state budget?

[Ambassador Taylor] - I have not come to Ukraine with pockets stuffed with
dollars that can help pay your gas debts. We have expertise, experience,
energy-saving technologies, projects on alternative energy sources,
subsurface hydrocarbons prospecting and exploration in Ukraine. And of
course, we are ready to provide political and diplomatic support to Ukraine.

[Yulia Mostovaya] - Is it true that the United States of America insisted on
the "orange coalition" because it regards Yuliya Tymoshenko as the only
person capable, if appointed prime minister, of changing the terms of gas
supplies, and of building new gas relationships with Moscow and Ashgabat?

[Ambassador Taylor] - No, it is not. Let me make it clear: The coalition,
membership of the Cabinet, distribution of posts and the prime minister
appointment are Ukraine's internal affairs.

We expressed interest in a coalition that would work toward reforms, be
committed to democracy and pursue the course leading Ukraine to
rapprochement with Europe and Euro-Atlantic institutions in the best
interests of Ukrainian people.

We are ready to cooperate with any government, any coalition resulting
from a democratic process.

[Yulia Mostovaya] - What do you think of Viktor Yanukovych's latest
statement to the effect that the gas agreements cannot be rescinded and
if this happens Ukraine will rise up?

[Ambassador Taylor] - I read this commentary of his and was surprised. As
far as I can remember he used to oppose those agreements. That is why I
would like to meet with him in the near future and find out what made him
change his mind.

Generally speaking, I would like to have contacts with the whole spectrum
of Ukrainian politicians. But my priority for today is meeting with
Mr.Yanukovych to discuss his statement and some other issues.

[Yulia Mostovaya] -When the RosUkrEnergo scandal erupted, the Security
Service of Ukraine asked its American counterparts and colleagues for
information about the company. However, the request was rejected,
reportedly, on the grounds that the US special services were going to send
all available data directly to President Yushchenko.

Was it because they did not trust the Ukrainian investigators or because the
information was of personal importance for the President and, thus, strictly
closed to any outsiders?

[Ambassador Taylor] - I'd rather not discuss intelligence matters in public.

[Yulia Mostovaya] - Your Excellency, Ukraine is a transit territory for
80-85% of Russian and Asian gas, which turns Ukraine into a Eurasian throat
of sorts. If Russia has our transit pipelines, it will take Europe by the
throat and dictate its own terms and conditions. If the roles reverse,
Europe will dictate its conditions to Russia.

Hence a question: Are there any plans to create a pipeline-controlling
consortium with the powerful participation of European, American and
Ukrainian private businesses?

[Ambassador Taylor] - I know this idea has a long history. It was first
aired when Carlos Pascual was the US Ambassador to Ukraine. He made
several proposals regarding the establishment of such a consortium. The
topic has been discussed for four or five years now but, again, it is up to
Ukraine, Russia and Europe to make decisions and to take practical steps
to make it happen.

As for who outplays whom having control of the pipeline, I can visualize a
third scenario. On the supply side, there are Russia and Asian countries. On
the consumption side, there is Europe. Yet, I would not forget about
Ukraine, which plays a key transit role. In the next four to five years your
country will have a very effective negotiating lever.

[Yulia Mostovaya] - Did I take it right that the USA will not try to become
a shareholder in the potential consortium?

[Ambassador Taylor] - I know nothing about such plans, but I an sure that
American private businesses would respond with interest if they were invited
to participate in a consortium established as a transparent private entity.
As for the US government, it has neither tools nor organizational experience
for participating in private entities like consortia. I do not think it aims
to do so in the future.

[Yulia Mostovaya] - Now that we have started talking about American private
businesses, let me ask you the following question. A contract was recently
signed with the American Shell Company without any preliminary tender or
competition. According to the contract, Shell undertakes to invest USD 100
million into subsurface prospecting in Ukraine.

However, our legal experts who saw the document argue that under the
contract the Ukrainian party transfers almost all gas deposits presently
controlled by the state to the company for 35 years. How would you qualify
it? As creating enabling investment environment?

[Ambassador Taylor] - I don't know. I need some time to study the issue. I
hope the next time we meet I will be better prepared to discuss this
contract and its terms.

[Yulia Mostovaya] - At your press conference, you were asked a lot of
questions about NATO. The US' favorable attitude to Ukraine's membership in
the Alliance is commonly known. I would like to tackle this issue from the
"person in the street" perspective. Suppose Ukraine joins the Alliance. Does
NATO, in particular the US as its most powerful member, plan to set up a
military base in Ukraine or deploy nuclear weapons on its territory?

[Ambassador Taylor] - There are no grounds whatsoever for such concerns.
The situation you depicted implies than the Ukrainian people and authorities
have previously achieved a consensus and decided that Ukraine should be an
integral part of NATO. This is a key decision to be made by Ukrainians.

My firm belief is that this decision should be based on complete and
unbiased information about the Alliance, exhaustive political debate and
public consultation processes. I have often heard question similar to yours,
which means that Ukraine still lacks an adequate understanding by the
majority of its people of NATO's true nature and objectives.

[Yulia Mostovaya] - Quite recently Montenegro held a referendum on
independence from Serbia which resulted in its declaration of sovereignty.

The Kremlin approved of this technique to resolve disputes and safeguard
nations' right to self-identification, stressing, at the same time, that a
similar approach should be taken to settling conflicts in Kosovo,
Transdnistria, South Ossetia, etc. Do you think a referendum mechanism can
be equally effective and appropriate in all cases - a sort of a universal
solution?

[Ambassador Taylor] - Each of these complex regions has its own history and
unique situation. Therefore, problems in each of them should be addressed on
an individual, case-by-case basis. South Ossetia, Kosovo, Chechnya, Wales -
all have their own specifics and considerable differences. And solutions
should be tailored carefully to match those specifics and accommodate
differences.

[Yulia Mostovaya] - Rumor has it that the US insists on Ukraine's deploying
a military unit, preferably a large one, in Afghanistan. Is it true?

[Ambassador Taylor] - No, it is not true. I have worked in both Afghanistan
and Iraq. I was in Iraq when Ukraine decided to withdraw troops from that
country. All related activities were coordinated with American politicians
and military authorities, well-organized and caused no trouble to the rest
of the contingent.

There is a broader coalition that helps Afghanistan to become a democratic
nation. It embraces more countries than in Iraq, mostly because the reason
for intervention in Afghanistan was less controversial. Participation in
this mission is voluntary; governments and people of the coalition
member-countries took relevant decisions with no pressure from either
NATO or any other influential player.

NATO has, indeed, played a crucial role in the fight for a democratic
Afghanistan, but not all of the Alliance member-states sent their troops
there. Each national government independently decided whether to take part
in the mission or not.

[Yulia Mostovaya] - You know, I have interviewed a lot of people from the
non-governmental sector in the USA, including very influential ones. They
are most outspoken about their disappointment in Ukrainian developments
of the last year and a half. How accurately does this sentiment reflect
official Washington's attitude?

You say Ukraine has potential and a responsibility to the international
community to become a model of successful democratic development. Yet,
in order to live up to the international community's expectations, it takes
more than conducting democratic elections and turning the media into a
mouthpiece of all political forces.

The legislative and executive authorities should operate effectively to
ensure economic growth, improved living standards, practical anti-corruption
activity, strategic vision and capacity to translate it into large-scale
comprehensive reforms.

[Amb William Taylor] - I am sure Ukraine has the necessary capacity to
become an inspiring and convincing role-model in the region. Understandably,
there was a pause in the nation's advancement to the set aim during the
parliamentary campaign and right after the elections. The longer the pause,
the more time it will take to resume the motion, the greater harm will be
done to the country.

No matter what forces form the parliamentary coalition and the Cabinet, it
is clear that the issue of their top priority should be the adoption of a
law allowing international military exercises to be conducted on Ukraine's
territory. You know better than I do that, in the past, similar laws created
no strife in Parliament.

Furthermore, in the Autumn, Ukraine could be invited to join the World
Trade Organization. Almost all relevant requirements have been met. One
remaining item is for the Supreme Rada to adopt a package of 17 laws. -30-
----------------------------------------------------------------------------------------------
WILLIAM B. TAYLOR, JR.

Ambassador William B. Taylor was confirmed by the U.S. Senate as U.S.
Ambassador to Ukraine on May 26, 2006. Until February 2006 he was the
U.S. government's representative to the Quartet's effort to facilitate the
Israeli disengagement from Gaza and parts of the West Bank, led by Special
Envoy James Wolfensohn in Jerusalem. The Quartet Special Envoy was
responsible for the economic aspects of this disengagement.

Prior to this assignment, he served in Baghdad as Director, Iraq
Reconstruction Management Office (2004-2005), in Kabul as coordinator
of USG and international assistance to Afghanistan (2002-2003) and in
Washington with the rank of ambassador as coordinator of USG assistance
to the former Soviet Union and Eastern Europe (1992-2002).

He previously served in Brussels as deputy defense advisor at the U.S.
Mission to NATO, in Washington on the staff of Senator Bill Bradley, at
the National Defense University and in the U.S. Department of Energy.

As an infantry officer in the U.S. Army, he served in Vietnam and Germany.
He graduated from the U.S. Military Academy at West Point and Harvard
University's Kennedy School of Government. He is married with two children.
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LINK: http://www.mirror-weekly.com/ie/show/604/53836/
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FOOT NOTE: The names before the questions and answers were
inserted editorially by the Action Ukraine Report (AUR). AUR EDITOR
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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2. "EVERYTHING IS ALL MIXED UP IN THE UKRAINIAN HOUSE"

INTERVIEW: With Petro Poroshenko and Commentary
By Yulia Mostovaya, Journalist and Chief Editor
Zerkalo Nedeli On The Web, Mirror Weekly (No. 25, 604)
International Political Social Weekly
Kyiv, Ukraine, Monday, Saturday, July 1 - 7, 2006

Neither national interests of Ukraine, nor gas problems, nor the need to
save the image of the state, nor interference of external forces, could make
Ukraine's parliamentary deputies complete the process of establishing a
coalition. However, there are unavoidable circumstances that will compel
them to do so in the nearest future. It is the holiday season.

The political show is currently taking place on two stages. The Party of
Regions, which is now in the opposition, has taken the parliamentary stage,
while the coalition majority has secured the corridors of power for itself.

A tragicomedy is being presented on both stages. We will outline a brief
summary of both of the plays to save the audience from fatigue.

Two weeks ago, Roman Bezsmertny submitted two packages of documents to
the President. [1] The first one contained a proposition for a coalition
between Our Ukraine and the Party of Regions. [2] The second one suggested a
coalition with BYuT and SPU. The President has chosen the second one, which
came as a complete surprise to the Party of Regions on June 22 [the day the
coalition was announced].

The Party of Regions, which was in close contact with Yekhanurov, Baloha,
Poroshenko and Zvarych [of Our Ukraine], had every reason to consider itself
an essential component of the future Ukrainian government. It was not the
announcement of the Orange coalition, but the 239 signatures under it that
became a real shock for the Regions.

Having recovered from this shock, the party convened a congress, which
resulted in an ultimatum. The ultimatum became another extreme in terms of
reaction to the actions of the Orange. This document was produced by joint
efforts: Anna Herman proposed the word "ultimatum," Serhiy Larin - the
paragraph on MPs who hold more than one government post. Everyone put
forward their proposals and, after the review, there were five of them. We
will analyze those that have caused major discussion.

[1] First, the Regions are against the election of the parliamentary speaker
and prime minister in one package. They insist that the coalition has
submitted such a proposal for the Verkhovna Rada's review. The coalition
flatly denies the very existence of such a project.

Yet it does not deny the fact that they had such an idea and it is clear to
everyone why they had it - the degree of trust among the coalition members
is extremely low, so they take precautions.

[2] According to the letter of the law, or rather the Verkhovna Rada
regulations (since the Constitution provides only that the speaker is
elected by the Verkhovna Rada), the Verkhovna Rada speaker is elected by
secret ballot, while the prime minister by open voting. The Regions are
right.

The coalition acknowledges their correctness and asserts nervously that it
is ready to comply with all parliamentary regulations. To tell the truth,
the orange coalition displays heroism by making statements that it is able
to elect the parliamentary and cabinet leadership in compliance with the
regulations. They do stand a chance of this, but it is far from being a
certainty.

As a matter of fact, if the coalition had a strong majority, it could: a)
comply with all the rules and forget about package voting, or b) change the
regulations, and hold the voting as they need it.

[3] There is also a third option in case the procedures forbid the use of
the second scenario. They could use the article of the regulations providing
for an ad-hoc, one-time complete violation of the procedure. The regulations
provide for such an opportunity, but nobody uses it.

Last Friday, we asked Petro Poroshenko, a person who is currently in the
epicenter of all the events, to cast light on the key issue: What are his
prospects of being elected as Speaker?

[Yulia Mostovaya] - Petro Oleksiyovych [Poroshenko], are you sure that your
candidacy for the Speaker's post will be supported by the required number of
the votes?

[Petro Poroshenko] - There are signatures of the members of three factions
under the coalition agreement. They are the guarantee that the candidacy for
the Speaker's post, proposed by Our Ukraine, will be supported by the
required number of the votes.

Moreover, according to the coalition agreements, the decision of the joint
meeting of the coalition when all three factions supported the candidacies
of Poroshenko and Tymoshenko for the posts of Speaker and Prime Minister
is compulsory for all the deputies who are the coalition members.

If we imagine that someone will be dishonest to their partners during the
very first serious voting, then who needs such a coalition? Will it have any
future?

[Yulia Mostovaya] - Is it possible that the ballots will be collected by
faction and submitted to the representative of the candidate running for
Speaker?

[Petro Poroshenko] - The members of the coalition are experienced political
forces. Their leaders will come up with a method that will guarantee the
fulfillment of all commitments. In case the voting procedure is to be
approved by all five parliamentary factions, they are ready to undergo the
trial of roll-call vote.

[Yulia Mostovaya] - Will you reject your nomination if you feel that your
candidacy will not pass?

[Petro Poroshenko] - Back in 2002, our political force chose the unity of
words and acts as its motor and the principle of its activities. If the
words of the coalition members contrast with their acts, then we have
nothing to do with them. I'd like to emphasize that my nomination for the
post of Speaker is a collective decision of the party Peoples' Union Our
Ukraine, bloc and faction Our Ukraine and finally of the coalition of
democratic forces.

[Yulia Mostovaya] - Then why doesn't the coalition, which holds a majority,
make amendments to the Verkhovna Rada regulations or resort to the ad-hoc
procedure?

[Petro Poroshenko] - Amendment to the Verkhovna Rada regulations should be
made through a corresponding resolution of the Verkhovna Rada, signed either
by all members of the Interim Presidium of parliament or by the elected
Speaker of the Verkhovna Rada. Any other way is dubious in terms of its
legitimacy and, as a result, unacceptable, as I said in my statement on TV.

One must not violate procedures for the sake of minimization of personal
risks for Poroshenko or Tymoshenko. In this case, we would not be any
different from Kuchma's majority and Medvedchuk's jurisprudence.

[Yulia Mostovaya] - Obviously, there is a high level of mistrust within the
coalition. Are you ready to step down from the Speaker's post if
Tymoshenko is not elected to the Prime Minister's post?

[Petro Poroshenko] - Of course, it is not so easy to develop trust in each
other after 10 months of pre and post-election speeches, which were
unfortunately aimed not at the opponents but at potential partners. That is
why, after the elections, we believed that it was unacceptable to sign a one
page memorandum to distribute posts and insisted on the development and
signing of a coalition agreement, which would provide guarantees that all of
its participants meet their political commitments.

This agreement states that, if the coalition ceases to exist, the prime
minister and speaker will file their resignations. Our agreement does not
provide for any other statements, including the previous.

I believe that the democratic coalition has potential and that it will be
able to demonstrate it during the next five years in parliament, and bear
personal responsibility for any moves aimed at its destruction. We will not
tolerate any further lies or attempts to discredit one's partners in order
to gain political standing for oneself. We have provided for preventive
measures in the coalition agreement.

[Yulia Mostovaya] - Do you have any reasons to believe that the SPU is
conducting negotiations with the Party of Regions?

[Petro Poroshenko] - I am respectful of the Socialist Party of Ukraine, who
is our partner, and will meet all the commitments and ethical rules laid
down in the coalitional agreement. I would not even surmise the possibility
of any political agreements between the socialists and the Regions. We will
know the answer to our question after personal voting in the Verkhovna Rada.
We should pass all the trials with dignity.

[Yulia Mostovaya] - On what conditions will Our Ukraine resume negotiations
with the Party of Regions and form a different coalition?

[Petro Poroshenko] - Only as a result of the actions of one or another
political force that would destroy the coalition of three. I assure you that
Our Ukraine will not be such a force.

WE NOW RETURN TO OUR REVIEW OF THE SITUATION
Having learned the opinion of Petro Poroshenko, who is obviously ready for
any possible development of the situation, we will return to our review of
the situation.

Perhaps the coalition should have immediately started negotiations with the
Party of Regions, which is currently blocking the rostrum in parliament.
This could have lead to the establishment of an orange coalition in the
executive government and a broader coalition in parliament. Or the coalition
should have talked to the Regions in the language that they understand best
of all - the language of force.

We do not mean physical removal of the deputies from the session hall. We
mean strong, consolidated actions within the legal framework. For example,
convocation of the parliamentary session outside the session hall, election
of the parliamentary leadership and committees, approval of the Prime
Minister and the Cabinet. The main thing is to stay within the legal
framework.

For the time being, the coalition is unable to act according to either the
first or the second scenario. Blocking the parliament, the Regions caused a
deadlock and started looking for new methods of pressure on the President
and parliamentary half-leadership. These methods are irresponsible and could
possibly destabilize the society.

The coalition, it its turn, engaged itself in its favorite pursuit -
fiddling about in internal problems. Their statements, similar to those of
the Regions, reveal a lack of consistency. At one moment, the Socialists are
ready to vote for anyone as a speaker, at another, part of them do not like
Poroshenko, yet at another, all of them are against Poroshenko, and still at
another, all of them are ready to vote for him.

As a result, the picture is as follows: The Regions look like a caricature
of the former opposition, Tymoshenko stands up for Poroshenko's rights,
Moroz's right-hand states his intention to leave the party if the Socialists
take part in a non-orange coalition.

Yet the coalition is absolutely right to ask, "Why do the Regions concern
themselves so much with elections of the speaker by secret ballot?" "On whom
do they pin their hopes? The group of Rudkovsky - Mendus, or of
Kinakh-Yekhanurov or of Feldman?" We are not talking, of course, about
bribery of deputies. We are talking about strong political aversions that
could influence voting.

If Poroshenko does not get 226 votes, a bone would be thrown to the
opposition, which would start a new round of fights without rules. A secret
ballot could be an effective means of ruining the coalition. There are means
to avoid this situation, but is there any readiness to use them?

The next point of the Regions ultimatum is the demand to give them key
parliamentary committees, which the orange majority has entirely left for
itself. The Party of Regions is right in this case as well. Parliamentary
regulations are on their side since they clearly lay down that the
committees should be divided between the factions in proportion to the
number of deputies in them.

Consequently, the Regions should hold more than one third of the committee
seats. There is no universal rule in international practice. In some
countries, the ruling coalition takes all the seats in the legislature and
in the executive government, in others, there are certain posts assigned to
the opposition.

Ukraine has only its historic experience -- the experience of the
Communist's Kryuchkov, who headed the security and defense committee
under Kuchma, the experience of Yulia Tymoshenko, Oleksandr Turchynov
and Petro Poroshenko, who headed the budget committee under Kuchma.
Georgiy Korneevich Kryuchkov was a staunch NATO critic.

Nevertheless, the committee he headed passed many laws useful for the army
and armed forces in general. So, the Regions should be given a certain
number of committees in respect to justice and for the sake of creating a
mechanism of checks and balances, which is essential to Ukraine.

However, there are two snags to it.

[1] First, the orange coalition is as stable as a house of cards. If several
cards are pulled out of any of the factions, not only the entire house will
fall down, but also there will be major problems within the factions
themselves - including a possible split within the factions.

This situation, of course, does not do any credit to the coalition; it makes
one think about the methods of including persons on the party lists, since
many of them went to parliament not because of the idea but due to a
business quota.

Now the political leaders should take the situation as it is and try either
to give plausible reasons of sequestration of the committee rights of the
opposition or share the committees and use this authority to suppress the
grumble within the factions.

[2] Second, the Regions do not have any moral right to raise the issue of
the committees for the opposition. From this point of view, there was simply
a political genocide in the regions where the Party of the Regions won a
strong majority. In several city and oblast councils, as well as in the
Verkhovna Rada of the Crimean Autonomous Republic, the members of the
opposition factions were not even included in the commissions as ordinary
members, to say nothing about giving them committees.

The representatives of the Party of Regions, to put it mildly, misrepresent
the situation when they say that the parties that were in the opposition at
the local levels refused to negotiation. That is why Moroz, who insists on a
comprehensive division of the committees, is absolutely right.

In addition, the president's idea of a round table (supported by the three),
where the principle of distribution of responsibilities between the
government and the opposition, and the mechanisms of their control, should
be laid down once and for all, is correct in this case.

Another item of the ultimatum is the immediate settlement of the issue of
people's deputies who also hold other government posts.. I dare to assume
that this demand is not of fundamental importance; it is yet another attempt
to either cut down the numbers of the coalition or to create a greater
destabilization of the work of current government.

If the Regions are sincere in their desire for the "purity" of the deputies'
body, [1] first they should know that it makes no sense to adopt any
decisions regarding this point prior to the election of the Verkhovna Rada
leadership.

[2] Second, they should realize that they have the right to raise this issue
only after their faction member Nina Karpacheva has resigned from the post
of commissioner for human rights, their faction member Oleksiy Kostusev has
left the post of the head of the Antimonopoly Committee and Dimtro Prityka -
the head of the Supreme Economic Court.

Further, according to the ultimatum, the governors of the oblasts where the
Party of Regions has won a convincing victory (which means not 32 percent
but more than 50 percent), should represent the Party of Regions.

We may even not discuss this item, since there is no law that would give the
Regions the right to demand this. In practice, however, this principle has
already been implemented to some extent and will possibly be implemented in
the future even under the orange coalition.

At least, Yuriy Yekhanurov made such an attempt when the candidacy of
Mr.Nadraha for the post of the governor of Luhansk oblast was submitted for
the Cabinet's approval. It was not approved, but this does not mean that in
the future there won't be any consensus in this field. Currently, the
chaotic demands of the Regions have mixed up the righteous and the sinful.

There is one more point requiring explanation. The statement of Mykola
Azarov, who said that the Party of Regions is ready to give up 150 mandates
at any moment, thus leading to early parliamentary elections, made us
investigate the feasibility of such a move. We know that BYuT, which does
not have a sufficient number of votes to undermine the Rada, was also
examining this maneuver. What did we find out?

It turned out that the situation is not as simple as Azarov imagines.

[1] First, to cut the Verkhovna Rada of 150 votes, one has to force 150
people's deputies to file their resignations, which is not an easy job even
in such a disciplined faction as the Party of Regions.

[2] Second, it is necessary to hold a party congress to eliminate the end of
the party list, because the places of those who resign are taken by those
who are the next on the list.

[3] Third, one should have 226 votes in parliament. What for? In order not
to repeat the Deputy Zubanov situation. In the previous, Rada Deputy Zubanov
used various pretexts to give up his seat for Viktor Yanukovych, who had
lost his deputy's immunity.

He repeatedly filed a petition and even spoke from the rostrum, yet the
Verkhovna Rada realized the whole truth and did not let him resign. Getting
226 votes would not be a big problem for the Party of Regions during
peacetime, but if there is a real prospect of early parliamentary elections
it would not be that easy.

In general, all this fight, which takes place on the two stages, is
illogical and reflexive, cynical and hysterical. Everybody is sick and tired
of this fight for power, [which will give money I DON'T UNDERSTAND
THIS. GIVE WHAT MONEY? TO WHOM? WHAT WILL GIVE
MONEY? SHOULD IT BE "WHICH IS A FIGHT FOR MONEY"].

Yet it is not coming to an end. This is not only the formation of the
government. If this stage is passed, there would be contradictions between
the ministers and their deputies, between the ministries and committees, and
it is to awful to think about Poroshenko and Tymoshenko.

The position taken by the Regions may unite the orange coalition to a
certain degree. Yet there is a good chance that the craving for power of the
Regions will speed up the fiasco of the registered coalition. In the long
run, everything is now in the hands of three political leaders, who will
either insure unity of their own political forces or will fail to do so.

This is their chance to prove their competence and ability to reach
agreements. It is great if they prove it; if not they should to step down
and give others their place. Ukraine is waiting.

Yet holidays are first. -30-
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LINK: http://www.mirror-weekly.com/ie/show/604/53844/
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FOOTNOTE: A subheading was inserted, a few minor edits were
made and the names before the questions and answers were inserted
editorially by the Action Ukraine Report (AUR). AUR EDITOR
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
3. U.S. POSITION ON UKRAINE'S ACCESSION TO NATO

Excerpts of Remarks By David Kramer
Deputy Assistant Secretary, U.S. Department of State
U.S-Ukraine Security Dialogue II, June 22, 2006
Cannon House Office Building, Washington, D.C.
Voice of America (VOA), Washington, DC, June 26, 2006

Excerpts of Remarks by Deputy Assistant Secretary of State David Kramer
Delivered on June 22, 2006, at the US-Ukraine Security Dialogue II at the
Cannon House Office Building in Washington, DC.

I have been asked to talk about the US relationship as it relates to
Ukraine's NATO aspirations, and I'm happy to do so. And let me start
by noting that Ukraine's aspirations to join NATO predate the current
government, the current president - President Yushchenko.

In fact, it was President Kuchma and people in his government who as far
back as 2002 articulated Ukraine's goal to integrate into Euro-Atlantic
institutions, including, most notably, on this particular occasion, NATO.
The current government and the new president - President Yushchenko have
reaffirmed their commitment.

We're actively engaged at NATO to help Ukraine achieve its NATO goals,
including, I should note, support for [the] Membership Action Plan that
Ukraine is interested in. Ukraine's government, of course, should be in the
driver's seat, and allies will look to the government, the Ukrainian
government, for positive progress on reform, and to reaffirm Ukraine's
interest in joining NATO.

Without a doubt, the United States sees Ukraine's future as an integrated
member of all Euro-Atlantic institutions. And assuming that the new
government that eventually emerges continues to pursue NATO membership
as a goal, the United States will offer support and encouragement for as long
as it takes. We are in this for the long haul. But again, let me stress that
Ukraine must drive this process.

The tone, the pace and the intensity of Ukraine's relationship with NATO
depend on the Ukrainian government and the Ukrainian people, and on
Ukraine's ability to meet NATO's performance-based standards and criteria.
And assuming Ukraine steps up to the plate and increases the tone, pace and
intensity, the United States will do likewise.

Ukraine has to do the difficult work - implement the reforms that are
required and necessary in order for consideration to be given for
membership. There are no shortcuts to NATO membership. Nor are there any
guarantees. We can help, but we can't and we should not try to do the heavy
lifting and hard work for Ukraine.

One major hurdle Ukraine will have to overcome to be considered for
membership is the low level of public support for joining NATO. This is an
issue that does not apply to the MAP - the Membership Action plan.

When I was in Ukraine recently, as well as in March, the numbers I was
hearing for support for NATO were about 18-20% -- very low numbers
suggesting that there is a lot of work to be done. And due to the political
uncertainty from the elections Ukraine has yet to launch a large-scale
public information campaign about NATO and the benefits of NATO
membership. That's work that still remains to be done.

There has been an extensive and robust cooperative relationship that exists
currently between NATO and Ukraine, notwithstanding the political
uncertainty that we have had over the past few months. At the working level
Ukraine and NATO have a very healthy relationship.

So there has been very significant and very impressive progress made on a
practical level between NATO and Ukraine. And it augurs well for future and
deeper relations that Ukraine wants to have with NATO. And we value this
practical cooperation, and we view Ukraine's efforts to strengthen its ties
with NATO and seek membership in the alliance as a benefit for NATO, for
Ukraine, for the United States and for all of Ukraine's neighbors.

And despite the continuing progress at the practical level, the political
level remains a challenge, and it remains a challenge as allies wait for
Ukraine to form a government and for that government to state clearly its
intentions with regard to NATO, and to continue on the reform track that has
been launched over the past few years.

Defense reform continues on a good pace, the political reform has changed in
light of the revolution in 2004, but the economic reform is lagging and
needs to be addressed.

To be perfectly honest, the positive atmosphere at NATO after the successful
conduct what were the freest and fairest elections in Ukraine this past
March for the Rada has dissipated in the face of several factors - the
continued infighting within the democratic circles in Ukraine, the delays
and inability to form a government and, perhaps most troubling, most
recently, the difficulty in conducting marine operations and exercises amid
the troubles and anti-NATO protests in Crimea.

Hopefully, the welcome news out of Kyiv that a coalition agreement has been
reached will lead to the formation of a new government quickly that can
rededicate Ukraine to its Euro-Atlantic integration course. When Ukraine is
ready, the United States stands ready to help, and the United States will
help with whatever government emerges from the coalition agreement.

We stand ready to work with Ukraine. And we urge this new government to
assemble a coherent, committed, democratic and reformist team to regain the
momentum on important domestic and foreign policy priorities, such as
deepening ties with NATO.

Now Russia, obviously, has a keen interest in Ukraine's relationship with
NATO, and we will continue to talk with the Russians and stress to them that
closer ties between Ukraine and NATO need not come at the expense of
Russia. No country, it's worth remembering, has a veto over Ukraine's
NATO aspirations.

The United States, working closely with our allies, will make sure that the
enlargement process is transparent and that Russian concerns are heard, but
won't become an obstacle for what Ukraine wants to accomplish. We firmly
believe that a prosperous, democratic and sovereign Ukraine, integrated into
Euro-Atlantic institutions, is in everyone's interest, including in Russia's
interest.

Ukraine has to do the hard work to tackle the reforms, and convince its
public of the benefits of NATO membership, and the US and all of our allies
in NATO are doing what we can to help, but Ukraine's future in NATO is truly
in Ukraine's own hands.

QUESTIONS AND ANSWERS (Q&A)

[1] On NATO protests in Crimea -----

I will be perfectly honest with you and say that we were very disappointed
by what happened and that the exercises were curtailed, the operations were
curtailed was a reflection of the disappointment over what happened. We are
still planning to move ahead with the Sea Breeze exercise, but that will be
determined in large part by what happens with the legislation that's
necessary for any aspects of that.

It is important that the Ukrainian government demonstrate its interest and
seriousness in pursuing a deeper relationship with NATO not simply through
rhetoric, but through action. And the actions in Crimea did not help. It was
by no means an irreversible setback, but certainly not a positive step along
the way.

[2] On US-Ukraine-Russia triangle -----

We don't view our relationship with Ukraine through a Russia prism. We
view our relationship with Ukraine as an important matter in and of itself.

We view the success of Ukraine in becoming a vibrant, democratic,
market-oriented member of the international community, fully integrated with
the international community as a goal in and of itself. And Ukraine, as I
mentioned before, will decide its own future including which organizations
it wishes to join.

Obviously, it will be up to those organizations to make that ultimate
decision, but if Ukraine is interested in joining at least those
organizations that the United States is a member of, we will be strongly
supportive.

We obviously do also want to have good relations with Russia, and the
relationship with Russia has been marked by a combination of a pursuit of
common interests, one of which you mentioned - the war against terrorism as
well as non-proliferation, is also marked by some challenges in areas of
concern that we have.

And two broad areas, two main areas that we have deal with the internal
trends in Russia, but also Russia's policy toward the neighbors - Ukraine
being the biggest of course. And where we thing we need to stand up and
speak out and push back, we will.

And we did follow quite closely what was happening in Crimea and did notice
in fact that there were a few people involved that came from Russia. It did
not go unnoticed. -30-
=====================================================
Website: http://www.voanews.com/english
=====================================================
AUR FOOTNOTE: The US-Ukrainian Security Dialogue Series intends
to track the progress of Ukraine's professed "Euro-Atlantic" ambitions
in the realm of "security affairs."

The organizers hope to annually examine and evaluate, through the use
of symposia on the Hill, Ukraine's attempts to deepen "strategic" bilateral
ties with the United States as well as monitor the pace of Ukraine's NATO
accession process.

The four sponsors of series are: the American Foreign Policy Council,
Washington, D.C.; the Center for US-Ukrainian Relations, New York
City; the Embassy of Ukraine to the United States, Washington, D.C.;
and the Congressional Ukrainian Caucus, Washington, D.C.

This year's Dialogue had four patrons: AFPC, CUSUR, Antonov ASTC
and Delta Air Lines. Delta's generosity earned it a special distinction:
Principal Dialogue Patron.

The contact person is Walter Zaryckyj, Executive Director, Center for
US-Ukrainian Relations who serves as the UA-US Security Dialogue
Series Program Coordinator, New York, NY, 212 473 0839;
e-mail: waz1@nyu.edu. AUR EDITOR
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
4. UKRAINIAN OPPOSITION CONTINUES PARLIAMENTARY SIT-IN

RIA NOVOSTI, Moscow, Russia, Monday, July 3, 2006

KIEV - Ukraine's opposition Party of Regions Monday is continuing a sit-in
of the country's parliament to prevent the start of a plenary session in
protest over a coalition formed by three other movements.

Following a similar move last week that paralyzed the legislature for a few
days, about 15 party members settled in the Supreme Rada in the morning
to stop anyone approaching the rostrum or the presidential seat.

The pro-Russia party decided to take this course of action after the
"orange" trio of the pro-presidential Our Ukraine bloc, the Yulia Tymoshenko
Bloc and the Socialists had formed a coalition and agreed on nominees for
the posts of prime minister and parliamentary speaker.

The Party of Regions gained the most seats in the Rada (186) after the
March 26 elections, but was frozen out of negotiations between the three
Western-leaning parties, which have an overall 243 seats.

Ukrainian parliamentarians also shunned Monday a roundtable initiated by
the president to end the three months of political wrangling in the ex-Soviet
republic.

President Viktor Yushchenko had put forward an idea to summon
representatives of parties that made it into parliament in the March 26
elections but Communist leader Petro Symonenko was the only one to
attend.

He left after waiting for his colleagues for 30 minutes and said the no-show
signaled their lack of respect. "Let them speak about their future
participation in negotiations now," he said.

The Party of Regions, which is led by President Yushchenko's former rival in
the 2004 presidential race Viktor Yanukovych, said it was too early to hold
such a meeting.

If Ukraine's parliament fails to start work in the next three weeks, or
fails to elect a prime minister and speaker, the president is entitled to
dissolve it and call early elections. -30-
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LINK: http://en.rian.ru/world/20060703/50827590.html
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========================================================
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5. TURKMENISTAN ASKS UKRAINE TO REVIEW GAS PRICE

Ukrinform, Kyiv, Ukraine, Monday, July 3, 2006

KYIV - Turkmenistan has proposed that Ukraine review the price of natural
gas, Fuel and Energy Minister Ivan Plachkov said at a press conference at
the Boryspil airport on Friday upon his return from Turkmenistan.

According to Mr. Plachkov, Turkmenistan proposed delivering 11 billion cubic
meters of natural gas to Ukraine in the fourth quarter of this year at the
price of US$ 100 per 1,000 cubic meters, reports Trend.

He said that Ukraine is insisting on delivery of natural gas at the price of
US$ 60 per 1,000 cubic meters that is stipulated in the current agreement.

He said that Ukraine did not accept the proposed price change and that it
intends to continue consultations on the volume of Turkmen gas deliveries to
Ukraine and the delivery price.

He also said that he and Turkmenistan's minister of Oil & Gas Industry and
Mineral Resources agreed on transition to exclusively cash settlements for
the investment projects that Ukrainian contractors are implementing in
Turkmenistan.

Turkmenistan previously delivered natural gas to Ukraine in payment for
such projects.

Moreover, Ukraine and Turkmenistan agreed a timetable for settling
Turkmenistan's debt of US$ 50 million to Ukraine's Frunze scientific
production association (Sumy) for reconstruction of two gas compressor
stations.

Regarding Ukraine's debt to Turkmenistan, which amounts to about US$ 64
million, agreement was reached to deliver Ukrainian large-diameter pipes
worth US$ 59.5 million as well as other equipment worth US$ 4.7 million in
payment of the debt

Ukraine's The Naftohaz Ukrainy national joint-stock company and
Turkmenistan's Turkmengaz state concern signed an agreement in December 2005
on delivery of 40 billion cubic meters of gas to Ukraine at the price of US$
per 1,000 cubic meters in the first half of 2006 and US$ 60 per 1,000 cubic
meters in the second half of the year.

However, Turkmengaz stopped delivering natural gas to Naftohaz Ukrainy on
January 1, 2006, despite the existence of this agreement.
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
6. MINISTER OF AGRICULTURE FORECASTS ESCALATION
OF CRISIS IN AGRO-INDUSTRIAL COMPLEX IF TYMOSHENKO
IS APPOINTED PRIME MINISTER OF UKRAINE

Ukrainian News Agency, Kyiv, Ukraine, Friday, June 30, 2006

KYIV - Acting Agricultural Policy Minister Oleksandr Baranivskyi is
forecasting an escalation of the crisis in the Ukrainian agro-industrial
complex if the Yulia Tymoshenko Bloc's leader Yulia Tymoshenko is
appointed as prime minister. Baranivskyi announced this to journalists.

Baranivskyi said that the period when Tymoshenko was the prime minister -
from February to September 2005 - was a period of escalation of several
crises in the agro-industrial complex because of insufficient provision of
fuel to agricultural enterprises and a sharp increase in the prices of
sugar, among other reasons.

Baranivskyi also noted that farmers brought pigs to the Cabinet of Ministers
building when Tymoshenko was prime minister in order to draw the
government's attention to the problems of the livestock industry.

Moreover, Baranivskyi said that the situation in the agro-industrial complex
stabilized and that the sowing campaign was conducted without any crises
after Tymoshenko was removed from the post of prime minister.

As Ukrainian News earlier reported, Baranivskyi said in April that he
believed it would be impossible for him to take up any post in a Cabinet of
Ministers led by Tymoshenko.

Baranivskyi was the minister of agricultural policy in the Cabinet of
Ministers led by Tymoshenko in 2005, but he clashed with Tymoshenko
several times, particularly on issues involving export of agricultural products.

The parliamentary coalition approved Tymoshenko's candidacy for the post
of prime minister and the candidacy of the Our Ukraine bloc's representative
Petro Poroshenko for the post of parliament speaker on June 27.
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7. UKRAINE'S UNEXPECTED MIRACLES

OP-ED: By Oksana Bashuk Hepburn
Kyiv Post, Kyiv, Ukraine, Wednesday, Jun 28 2006

Last week, Ukraine was a country of miracles. Its national football team
came back from a humiliating loss to Spain to win against Saudi Arabia
and then Tunisia in the World Cup. In politics, the Orange forces signed
a coalition government agreement.

The political miracle is very significant. Until it happened on June 22,
Ukraine was in a mess, and its president Viktor Yushchenko, the former
hero of the Orange Revolution, was blamed for it. His popularity was at an
abysmal 12 percent, and his country without a government, despite the fact
that the elections had given the Orange forces the numbers to form a
coalition some three months ago.

The coalition squabbling broke off last week, while the president's Our
Ukraine party continued negotiations with it's former arch-enemy, the Party
of Regions, a pro-Russia, oligarch-loaded entity that ran two fraudulent
presidential elections against Yushchenko in the late months of 2004.

What precipitated the political miracle? And why was there a political mess
in the first place?

It is not clear what brought the Orange forces to their senses. Perhaps the
criticism of the president's stalling got to him. Or, the constant reminder
that the political mess is betraying the Orange Revolution. The media was
attacking him for not honoring the will of the people as made clear during
the March 26 elections to the Verkhovna Rada, Ukraine's parliament.

Moreover, the economy was on a downturn. Opponents of democracy were
taking advantage of the rudderless situation. There was open revolt against
the
president in some regions, and Russia was fanning anti-Western sentiments in
Crimea. The people's anger was palpable. Perhaps this, more than any other
factor, drove the Orange parties to coalesce. Given the odds of this not
happening, it was a political miracle; one to be proud of.

Under the Orange coalition agreement Yulia Tymoshenko becomes the prime
minister, a position rightfully hers after her bloc won the largest number
of votes among Orange parties last March. The president's Our Ukraine is to
get the speaker's position, one that Moroz, the leader of the third Orange
coalition member - the Socialists - had wanted for himself.

He would have made a good one. Kudos to him for forfeiting personal
interests for those of Ukraine. He will become deputy prime minister
instead. Close Yushchenko ally Petro Poroshenko has been slotted to head
the legislature.

Had the dishonorable rapprochement taken place between Our Ukraine and
the Party of Regions, Viktor Yanukovych or, more likely Donetsk-based
billionaire Renat Akhmetov, would have taken the post of prime minister.
Akhmetov is the richest man in Ukraine; one of the richest in the world. He
did not inherit this wealth.

There are several views for the president's reluctance to give Yulia
Tymoshenko her due: she's more competent, more charismatic, and a
better leader. Nor did the oligarchs want her. After she precipitated the
re-privatization of the fabulous economic steel powerhouse Kryvorizhstal,
bringing over $4 billion into the coffers of Ukraine last fall, they
demanded her head. And got it. The president fired her and things in
Ukraine went from bad to worse.

Nor did Russia want her in the PM's job. Her pro-Western sentiments
undermine its strategic interests of rebuilding a Russian empire. She does
not like Russia's arrogant insistence on Ukraine's exclusive oil and gas
dependency on Russia. What about the United States? Did they want her as
prime minister?

Recently, at a reputable Washington think tank, pundits opined that
Tymoshenko is dangerous because she is for state ownership and
anti-investment. She says that's not so. She only wants re-privatization of
several shamefully acquired properties as a means of replenishing state
funds and sending a message to criminal elements to stop exploitation. The
myth, nevertheless, was damaging to her.

It's hard to believe that the U.S. wanted anti-Americans running the
government. Some analysts believe Ukraine needs stability even at the
expense of an Orange coalition. Had it happened, the political configuration
would have been Our Ukraine with President Yushchenko and the Party of
Regions with the position of prime minister or speaker of the Rada.

To her credit, Tymoshenko would not negotiate with the fraudulent Party of
Regions, nor turn her back on the Orange Revolution or the people's votes.
Ukraine will have an Orange forces government. The Party of Regions will
be in opposition.

But the Orange coalition miracle will not make disparate interests go away:
The oligarchs will battle to keep acquired wealth, and Russia will attempt
rebuilding an empire. The road ahead for Ukraine's government is daunting.
However, some work has already begun.

The coalition agreement sets out initial priorities. It looks like land and
agricultural reform will be high on the agenda, as will the renegotiation of
the controversial oil and gas agreement signed with Russia last January.
Tymoshenko's people will head up these portfolios, as well as finance and
economy.

The agreement also serves notice on corruption: Legislation will be passed
to revoke Rada members' immunity from prosecution. This will be widely
cheered. Too many deputies have been accused of running for office merely
to protect themselves from the law.

Ukraine will need help in the new political game. Last week's miracle was a
huge endorsement for democracy. This needs to be recognized by the West.
Doors into the WTO, NATO and European unity need to be opened.

For the United States, it could be a positive moment too. Despite winning
the cold war, America's policy in Ukraine is too often muddled. Witness the
insistence that Russia maintain exclusive control of the nuclear capability
of the former USSR, or honoring its arrogant demand that Ukraine not be
allowed to join NATO a number of years back, or, as late as last week,
providing Russian-language instructions to its marines stationed in Crimea,
when language is a central symbolic issue in Ukraine's struggle with Russia.

The U.S. has another opportunity to decide clearly who its friends are in
that region and work with Ukraine to create an antidote to Russia's global
empire-building aspirations.

Ukraine's president also has much to correct. Having created the mess, he
gets points for finally dealing with it. Now, his role, together with a
coalition government, is to fulfill promises made during the Orange
Revolution, turning to the West and cleaning up corruption for the greater
wellbeing of Ukraine's citizens.

As Ukraine continues to stay in the World Cup, the whole world is watching
the games being played in Germany as well as Kyiv. -30-
-------------------------------------------------------------------------------------------------
Oksana Bashuk Hepburn, president of U*CAN Ukraine Canada Relations Inc.,
a consulting firm, is a three-time OSCE Ukraine elections observer writing a
book based on these experiences.
-------------------------------------------------------------------------------------------------
LINK: http://www.kyivpost.com/opinion/oped/24714/
=------------------------------------------------------------------------------------------------
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8. UKRAINE'S ORANGE COALITION SLAMS OPPOSITION
PARTY OF REGIONS FOR IRRESPONSIBILITY

RIA Novosti, Moscow, Russia, Monday, July 3, 2006

KIEV - The coalition majority in Ukraine's parliament criticized the
opposition party Monday for an irresponsible approach to the Supreme
Rada's activities, and rejected "the language of ultimatums".

The pro-Russian Party of Regions continued Monday its sit-in to prevent
the start of a plenary session in protest over the coalition formed by three
other movements, and presented a list of demands to the coalition.

Taras Chernovol, a member of the party, said the demands included the
election of the Supreme Rada speaker and the prime minister in line with
parliamentary regulations, and proportional representation of each party in
the election of committee heads.

Party leader Viktor Yanukovych, President Viktor Yushchenko's challenger in
the 2004 presidential race, has dismissed the idea of holding all-parliament
roundtable talks, called for by the president.

The coalition comprising the "orange" trio of the pro-presidential Our
Ukraine bloc, the Yulia Tymoshenko Bloc and the Socialist Party said in
statement, "If the faction of the Party of Regions refuses to make
constructive steps, we retain the right to take adequate steps that would
allow the Supreme Rada to start working, elect the parliament's leadership,
and form a new government."

The coalition said it was in favor of observing the country's laws and Rada
regulations and was ready to ensure the opposition's right to take key posts
in a number of parliamentary committees.

"The coalition of democratic forces understands its responsibility to the
Ukrainian people and declares that it is ready for constructive dialogue,
but rejects the language of ultimatums," the coalition statement said.

The parliamentary coalition called their opponents "an irresponsible
political force which is indifferent to the problems of Ukrainian citizens."
-----------------------------------------------------------------------------------------------
LINK: http://en.rian.ru/world/20060703/50847287.html
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
========================================================
9. UKRAINE OPPOSITION PRESENTS DEMANDS TO COALITION

RIA Novosti, Moscow, Russia, Monday, July 3, 2006

KIEV - Ukraine's opposition Party of Regions has presented a list of
demands to the parliamentary coalition, a party member said Monday.

Taras Chernovol said the demands included the election of the Supreme
Rada speaker and the prime minister under parliament's regulations, and
proportional representation of each party in the election of committee
heads.

He said the opposition wanted to control Rada committees for the budget,
the fight against organized crime, monitoring of law-enforcement agencies,
human rights, and the freedom of speech.

Earlier on Monday, the Party of Regions dismissed the idea of holding
all-parliament roundtable talks, called for by the president to end three
months of political wrangling in the ex-Soviet republic, and continued its
sit-in to prevent the start of a plenary session in protest over a coalition
formed by three other movements.

Viktor Yanukovych, President Viktor Yushchenko's challenger in the
2004 presidential race, said the problems that were to have been discussed
by the coalition majority and the opposition at the roundtable would be
better addressed through a conciliation board.

"If the 'orange' coalition is not capable of legally electing authorities, then
neither round nor square table talks will be of any help to them," he said.

Following a similar move last week that paralyzed the legislature for a few
days, about 15 party members of the pro-Russian party settled in the
Supreme Rada Monday to stop anyone approaching the rostrum or the
presidential seat. The move was a protest against a coalition deal by the
"orange" trio of the pro-presidential Our Ukraine bloc, the Yulia
Tymoshenko Bloc and the Socialists, and their nominations for the posts
of prime minister and parliamentary speaker.

The Party of Regions gained the most seats in the Rada (186) after the
March 26 elections, but was frozen out of negotiations between the three
Western-leaning parties, which have an overall 243 seats.

If Ukraine's parliament fails to start work in the next three weeks, or fails
to elect a prime minister and speaker, the president is entitled to dissolve it
and call early elections. -30-
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