We shouldn't let Russia pick each of our countries off separately

By Anne Applebaum, Columnist, The Washington Post

Washington, D.C. , Tuesday, August 19, 2008; Page A13

By John Thornhill and Stanley Pignal in Brussels

Financial Times, London, UK, Wednesday, August 20, 2008

Nato warned Russia on Tuesday that it could not draw a “new line” in Europe preventing Georgia and other countries from joining the western military alliance if they wished to do so.

Meeting in emergency session in Brussels, the western military alliance’s 26 foreign ministers also suspended regular top-level ties with Russia, saying that “business as usual” could not continue while Russian troops remained in Georgia.

Expressing their strong support for Georgia’s independence in one of the most serious disputes between the west and Russia since the end of the cold war, Nato members agreed to establish a permanent commission with the embattled Caucasian country, which is desperate to join the western alliance. Nato is also sending 15 civil emergency experts to Georgia to ease conditions for an estimated 150,000 refugees.

Condoleezza Rice, US secretary of state, insisted that Moscow could not divide those countries that had already entered Nato from those that still aspired to do so.

“There will absolutely be no new line. Nato does not accept that there is a new line, and we are acting as if there is no new line,” she said, evoking the Iron Curtain that divided Nato from the Soviet bloc during the cold war.

“Nato intends to support the territorial integrity, independence and sovereignty of Georgia and to support its democratically-elected government, and to deny Russia the strategic objective of undermining that democracy and making Georgia weaker,” she said.

Earlier, Jaap de Hoop Scheffer, Nato’s secretary-general, called on Moscow to withdraw all its military forces in Georgia to the positions they occupied on August 6, the day before the military confrontation erupted.

A Nato statement added that Russian military action had been “disproportionate and inconsistent with its peacekeeping role” in parts of Georgia.

Russia began withdrawing military units from parts of Georgia on Tuesday in accordance with a six-point ceasefire agreement brokered by the European Union. However, Russian officials reacted furiously to Nato’s criticisms and its declaration of support for Georgia’s eventual membership.

Dmitry Rogozin, Russia’s representative to Nato, said that the west was hypocritical in condemning Moscow for its aggression while supporting Mikheil Saakashvili, Georgia’s president. Mr Rogozin condemned Mr Saakashvili as a “war criminal” who had bombarded civilians and Russian soldiers in South Ossetia, provoking Moscow’s intervention.

Mr Rogozin added that if Nato had already accepted Georgia as a full member, then the western alliance and Russia would now be at war.
“Are you ready to risk your prosperity and risk your lives and the lives of your children for the sake of Saakashvili?” Mr Rogozin asked correspondents in Brussels.

Ms Rice said the US – and Nato – had no desire to isolate Russia. But she added that Russia’s incursion into Georgia and the bombing of civilian targets was isolating Russia from the world. “There can be no business as usual with Russia while this kind of activity goes on,” she said.

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LINK: http://www.ft.com/cms/s/0/0091248e-6e19-11dd-b5df-0000779fd18c.html

OPINION: By Ronald D. Asmus, The Wall Street Journal Europe
New York, New York, Monday, August 18, 2008

BRUSSELS
Russia's invasion of Georgia is a game changer. This war is part of a Russian strategy of roll-back and regime change on its borders. The more evidence that comes in, the clearer it is becoming that this is a conflict Moscow planned, prepared for and provoked -- a trap Tbilisi unfortunately walked into. A core Western assumption since 1991 -- that Moscow would never again invade its neighbors -- has been shattered.

As Moscow basks in its moment of nationalistic triumphalism, the West needs to take steps to prevent further Russian moves from spreading instability to others parts of Europe.

If they want to contain this crisis, NATO foreign ministers meeting here tomorrow need to focus on two strategic imperatives. The Alliance must take steps to reassure those members fearing Russian pressure that NATO's mutual-defense commitments are credible and real. And ministers must consider speeding up enlargement plans to lock in stability in the Balkans and bring in Ukraine and the southern Caucasus.

The Alliance can start with a very simple but clear statement declaring that Moscow's operation was an act of aggression incompatible with international law and the United Nations Charter, fundamental principles of security and cooperation in Europe as reflected in the Charter of Paris, and even the founding principles of the NATO-Russia Founding Act in 1997.

But strong words are only a first step. So the Alliance should also reassure current members who feel threatened by Russia's move and, above all, Moscow's rationale for action. Since the Alliance began enlarging a decade ago, it has not conducted any defense planning against a possible Russian military threat to new members in Central and Eastern Europe or the Baltic states.

We have unilaterally refrained from such steps partly as a confidence-building step toward Russia. New members have complained bitterly about this. It is why the Alliance is seen by many in the region as hollow. It is time to take this step as a prudent part of Alliance defense planning.

Furthermore, we need to back up such planning by making our security guarantees to existing NATO members more credible. In the NATO-Russia Founding Act, the Alliance undertook a political pledge to carry out commitments under Article 5 -- which stipulates that an attack on one NATO ally is an attack on them all -- by relying on building military infrastructure in the new member states and sending reinforcements to defend that country in a crisis, as opposed to the permanent forward deployment of large numbers of combat troops.

We did this, again, to reassure Russia and because our military commanders believed we could afford this given Western military superiority. This commitment was political, not legal, and was contingent upon the maintenance of a benign security environment -- diplo-speak for a peaceful Russia.

NATO, however, unilaterally decided not to seriously develop that infrastructure or reinforcement capability. It is time to put into place the infrastructure, reinforcement capabilities and symbolic deployments we are fully entitled to as a stabilizing and confidence-building measure for new allies.

NATO also needs to reassure those partners likely to be the next targets of Russian pressure and possible aggression, first and foremost Ukraine. This means rethinking NATO's enlargement strategy. In the mid-1990s, NATO adopted an enlargement strategy based on integration and not as a strategic response to Russia.

We consciously raised the bar and requirements for new members. Our focus was less on protection than on democratic reforms to help anchor these countries to the West. But we also consciously left ourselves the option of lowering the bar in the future if the security environment took a turn for the worse. It now has done just that, and we need to shift our criteria again.

Strategic reassurance should now come first. This means more robust NATO outreach and a fast-track approach to enlargement in the Balkans, Ukraine as well as the southern Caucasus. Ukraine is likely to be Moscow's next target along with Azerbaijan, which holds the key to the viability of Europe's trans-Caspian energy corridor.

While many of these countries might not qualify under the criteria of the 1990s, they are strategically important for the West and at risk. We need to embrace them quickly in spite of their imperfections. That means granting them so-called Membership Action Plans and moving toward fast-track enlargement. We should not give up our goal of pushing for democratic reform in these countries. But let's first help make them safe.

Leaders in these partner countries also have big decisions to make. In Ukraine, the NATO issue is part of the domestic battle for power. But it is time to put politics aside and be serious. European Union association agreements currently under debate are good for the country but will not shield Ukraine from Russian pressure and aggression.

Opposition leaders publicly oppose NATO to score points, but in private many say they want it. They must now decide if they want to be part of the West.

If parts of the opposition join a bipartisan consensus, the Alliance should move quickly to embrace Ukraine. In Azerbaijan, presidential elections are approaching. Azerbaijan is not a democracy and has its own "frozen conflict" with Armenia in Nagorno-Karabakh. If Baku conducts free and fair elections and moves toward a democratic opening, and makes credible moves to make peace with Armenia, we should also be prepared to embrace Azerbaijan.

That of course leaves Georgia. Following this war, it will be years before Georgia again reaches NATO's current criteria for new members. Here, too, we need to change our approach and embrace a country whose survival is at stake, too. These new commitments, if undertaken, must be backed up by credible military planning and defense arrangements that deter Russia.

Last but not least, we should freeze the NATO-Russia dialogue in Brussels for the foreseeable future. If we are honest, this relationship has never become what we wanted: a channel for consultation and real cooperation. Moscow has walked away from many of its commitments in the Founding Act.

It treats the NATO-Russia Council as yet another platform for its anti-Western strategy. Russian NATO Ambassador Dimitry Rogozin behaves like an old-style propagandist seeking to sow dissension in the ranks of allies. We have lots of channels to talk to Moscow. Let's shut this one down until Moscow gets serious about doing business and not spreading anti-NATO propaganda.

The stakes are high. It is time for the kind of leadership and trans-Atlantic unity that will preserve our values, interests and security in a more dangerous world.

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NOTE: Mr. Asmus is executive director of the Brussels-based Transatlantic Center and in charge of strategic planning at the German Marshall Fund of the United States. These views are his own.

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LINK: http://online.wsj.com/article/SB121900703869747813.html

By Roman Olearchyk in Kiev and David Oakley in London
Financial Times, London, UK, Wednesday, August 20 2008

The cost of insuring Ukraine's debt against restructuring or default rose to its highest since the 2004 Orange Revolution yesterday, as investors fretted that the Kremlin's spat with the west could spill over into a vast country of 46m people that straddles the divide between a resurgent Russia and the European Union.

Worries about the debt intensified after a dispute over Russian warships' use of the Ukrainian Black Sea port of Sevastopol highlighted tensions between Russia and Ukraine, which became independent from Russia following the collapse of the Soviet Union.

Dmitry Medvedev, Russia's president, sent a warning to Ukraine's pro-western leadership on Monday not to restrict Moscow's use of naval bases on the Crimean peninsula.

"Nobody should be telling us how we should behave . . . interference [by Ukraine] will not lead to anything good," he told reporters in the Russian city of Vladikavkaz.

Five-year credit default swaps rose six basis points from Monday's close to 467 basis points, Commerzbank said. Ukraine's CDS have risen sharply since August 8, the day when fighting broke out between Russia and Georgia.

Paul Biszko, senior emerging market strategist at RBC Capital Markets, said: "The market has become increasingly nervous as the Russians have refused to budge from Georgia. As the crisis has dragged on, the intransigence of the Russians has suggested to many investors that Ukraine could be next on the hit-list as they have the key strategic asset of the Crimea, where the Russian fleet is based in the Black Sea.

"Could the Russians decide to take back the Crimea from Ukraine? It is possible. That's why we have seen the cost to insure Ukraine debt rise sharply."

Kiev has been a vocal supporter of Georgia and in a bid to tie its defence policy more closely with its western allies, Viktor Yushchenko, president, last week offered Nato use of Ukraine's early warning radar system.

That move could inflame suspicions in Moscow that Ukraine plans to join a US- led anti-missile defence system along with Poland and the Czech Republic.

Another potential flashpoint is a sizeable Russian minority in the Crimea, where more than 100,000 of the region's 2m population have Russian citizenship.

Leonid Kravchuk, the first elected president of Ukraine after it declared its independence from the Soviet Union, urged the present leadership to be cautious with Russia. "We should not give any grounds for a forceful or conflict scenario of settling both country's differences, starting with the question of Russia's Black Sea fleet," he said.

Kiev worries that Moscow may refuse to remove its Black Sea fleet from Sevastopol when a lease agreement expires in 2017. More disturbing is the prospect of Russian support for separatists in the Crimea, with the aim of annexing it in much the same way Georgia claims Moscow plotted with Abkhazia and South Ossetia to wrest them from Tbilisi.

Proryv, a pro-Russian organisation that operates in Abkhazia and South Ossetia, is also active in Crimea. Nadyezhda Polyakova, leader of the group in Crimea, says "heightened tensions" in connection with events in Georgia and persecution of pro-Russian organisations by Ukraine's authorities could "spark serious escalation and conflict as seen in Georgia".

Influential Russians such as Yuri Luzhkov, the Moscow mayor, have repeatedly questioned Ukraine's territorial rights over Crimea, which was administered as part of Russia until 1954. The Kremlin has not publicly questioned Kiev's rights but Ukrainian officials fear it could have ambitions to reclaim the peninsula.

Kiev also accuses Russia of dragging its feet on agreements to demarcate borders on the Azov Sea. At stake, in addition to a strategic naval base, are potentially vast untapped oil and gas reserves.

Mr Yushchenko has urged Ukrainians to support his bid to join Nato as soon as possible, arguing that Kiev desperately needs foreign security guarantees.
However, two-thirds of Ukrainians fear it will upset Russia. Ukraine's armed forces are much bigger than Georgia's, but are dwarfed by the might of Russia.

Mr Yushchenko hopes fears that Ukraine might suffer the same fate as Georgia will bolster support for Nato. "What happened in Georgia is the best example [of] how easily military actions, and questions of territorial integrity, can in today's conditions be forced upon a country that does not have collective security guarantees," he says. If Ukraine's borders are "questioned", as happened to Georgia, "then that means we are on verge of deep and serious military actions".

President Victor Yushchenko has vowed to give strong moral support to pro-western allies in Tbilisi. Ukraine and Georgia, independent since the collapse of the Soviet Union, have angered Russia by seeking membership of Nato.

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LINK: http://www.ft.com/cms/s/0/8be1892a-6e50-11dd-b5df-0000779fd18c.html

By Sebastian Tong, Reuters, London, UK, Monday August 18 2008

LONDON - The refinancing of the debt of Ukraine's highly leveraged banks is at risk if foreign investors take fright from worsening relations between the country and Russia, Standard & Poor's said on Monday.

The ratings agency also said an escalation in tensions between Ukraine and Russia would lead to a drop in foreign direct investment into Ukraine, shutting down a key source of funding to cover the country's widening current account deficit.

"Ukraine's banking sector is highly leveraged and dependent on foreign investors to refinance existing debt. Western investors already have less appetite for Ukrainian risk than they did two weeks ago," Frank Gill, S&P director of European sovereign ratings, told Reuters.

S&P estimates that foreign debt of Ukrainian banks reached more than $35 billion as at mid-2008, representing 28 percent of the banking sector's total liabilities.

As a row continues over the use of a Ukrainian Black Sea port by Russian warships, the cost of insuring Ukraine's debt against restructuring or default rose on Monday to its highest levels since Ukraine's "Orange Revolution" of 2004. For more see [ID:nLI728791].

Russia's military intervention in Georgia's breakaway region of South Ossetia has inflamed tensions among former Soviet countries, with Russia seen to be taking a harder stance against neighbours such as Ukraine and Georgia which aspire to NATO membership.
PARTY POLITICS
Gill said the Georgian crisis would probably lead to further political polarisation in Ukraine, cementing divisions between existing political parties, such as the pro-Russian Party of Regions and pro-Western parties associated with President Viktor Yushchenko and Prime Minister Yulia Tymoshenko.

"Those opposed to NATO entry will be more vehemently so, while the pro-Western side will redouble efforts to gain membership to NATO and other Western multilateral organisations," Gill said.

Earlier in the day, Yushchenko's office accused Tymoshenko of betraying national interests by not backing Georgia in its conflict with Russia.

Gill said Ukraine's "B+" credit rating was not under pressure as the ratings agency had already taken into account Ukrainian political risk arising from Russia's tendency to intervene in the politics of its neighbours.

"There is a recognition among Ukrainian leaders of Russia's importance to its economy. In terms of trade flows, Ukraine's economy is more integrated into Russia's versus Georgia," Gill said, adding that Tymoshenko has shifted to a "more nuanced and pragmatic approach" towards Russia.

"There is always a risk of some kind of conflict between the two countries, but this is not part of our core expectations at this moment," he said.
Ratings agency Moody's also said the tensions were not likely to have an immediate impact on Ukraine's B1 rating with positive outlook.

"Geopolitical issues are among the things we look at," said New York-based Ukraine analyst Jonathan Schiffer. "We would probably wait and see what Ukraine's response is, what the EU, U.S. and NATO's response is. Then we would try to draw up a new balance sheet which takes these things into consideration." Schiffer said the risks of an overheating economy in Ukraine were hindering the country's chances of a near-term ratings upgrade.

Ratings agency Fitch said last week that Ukraine faced greater risks to its BB- debt rating from the current account deficit, rising external debt levels and inflation than from tensions with Russia.

Ukrainian annual consumer price inflation stood at 26.8 percent in July. (Additional reporting by Carolyn Cohn; Editing by James Dalgleish)

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[return to index] [Action Ukraine Report (AUR) Monitoring Service]

Washington, D.C. , Tuesday, August 19, 2008; Page A13

Forty years ago this week, on the night of Aug. 20-21, 1968, thousands of tanks and hundreds of thousands of Soviet and Warsaw Pact soldiers entered Czechoslovakia. The goal of the invasion was straightforward: to prevent a Soviet satellite from carrying out democratic reforms that, had they been allowed to succeed, could have threatened the legitimacy of the governments of other Soviet satellites and, indeed, of the Soviet Union itself.

Superficially, it has to be said, the events of August 1968 do bear some resemblance to the events of August 2008, as Secretary of State Condoleezza Rice has observed.

For yes, not only are tanks with Russian commanders again rolling over the territory of another sovereign country, the invaders' intentions are in some ways similar: Once again, Russians are punishing a former satellite whose reforms, if successful, could challenge their own political system.

True, Russia is no longer Soviet. But its ruling clique, led by former president and current Prime Minister Vladimir Putin, remains steeped in the paranoid, highly controlled, conspiracy-obsessed culture of the old KGB. Putin and his entourage are not communists, but neither do they believe in free markets or free societies.

Instead, all important decisions must be made in Moscow, by a small, unelected group of people who know how to resist sabotage organized from abroad. Events cannot be allowed to just happen; they must be controlled and manipulated. Elections cannot just take place; their outcomes must be determined in

advance.

The Russian state's open hostility toward not only Georgia but also Ukraine and the Baltic states is, in this sense, partly ideological. Genuine elections have taken place in those countries; people who have not been preselected by a ruling oligarchy do sometimes gain wealth or power. Georgia's Rose Revolution and Ukraine's Orange Revolution even involved street demonstrations that helped unseat more oligarchic regimes.

Thus it is not pure nationalism, or mere traditional great-power arrogance, that makes the Russian leadership disdainful of Georgia and Ukraine: It is also, at some level, fear that similar voter revolutions could someday challenge Russia's leaders, too.

Nevertheless, the word "superficial" is worth repeating: As I've written before, I don't really like historical analogies, which can conceal as much as they reveal. For one, the ethnic conflict that sparked the Georgian president's foolhardy response and the Russian invasion two weeks ago has been twisted and manipulated, but it nevertheless involves real people.

Any long-term solution to the current crisis has to find some accommodation for the South Ossetians whose homes and livelihoods have been destroyed in the exchange of fire.

More important, the international situation is utterly different. Despite some misty-eyed memories of alleged Cold War decisiveness, we did not, back in 1968, have the will or the ability to help the victims of Soviet expansionism.

Our only real response to the Soviet invasion was a bit of public spluttering. Most of Europe was still recovering from the "events of 1968," the student uprisings celebrated across the continent this year in a haze of post-radical nostalgia.

Today's Russian leaders, despite the paranoia they learned in KGB training, have far more profound relationships with Western institutions, not only the Group of Eight and the Council of Europe but also with the Western banks and companies that invest their money and manage their property. Today's Europe is theoretically better prepared to engage Russia, too, though it has not been engaged until now.

After the invasion, I wrote that the West, which failed for many years to address the security vacuum in the Caucasus, would have no influence over Russia, and in the short term this has proved true. Despite a cease-fire brokered by France, Russian troops are withdrawing very slowly, if at all; we have no military means to force them and should not pretend otherwise.

But if this becomes a long-term conflict, if the Russian military remains in Georgia proper, if this turns out to be only the first of several incursions into other neighboring states, there are relationships we have and meaningful levers we can use, whether over Russian membership in international institutions or Russian leaders' luxury apartments in Paris -- if, of course, we are willing to use them.

The critical question now is whether the West is prepared to behave like the West, to speak with one voice and create a common transatlantic policy.

In recent years, Russia has preferred to deal with Western countries and their leaders one by one. Just last week, an affiliate of Gazprom, the Russian state-dominated gas company, added a former Finnish prime minister to its payroll -- which already includes former German chancellor Gerhard Schroeder. If we hang together instead of allowing Gazprom to pick us all off separately, there is at least a chance that this mini-chill won't last another 40 years, too.

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applebaumletters@washpost.com; http://www.washingtonpost.com/wp-dyn/content/article/2008/08/18/AR2008081801852.html

By Olga Bondaruk, Associated Press (AP), Kiev, Ukraine, Tuesday, August 19, 2008

KIEV, Ukraine - Russia's foreign minister warned Ukrainian leaders Tuesday against trying to restrict the Kremlin's use of a Crimean naval base it leases from Ukraine, adding to tensions that have heated up since Russian troops invaded Georgia.

Ukraine's pro-Western president, Victor Yushchenko, has sided with Georgia and moved last week to restrict Russian warships at the leased military base at the Black Sea port of Sevastopol, saying the vessels' movements were subject to Ukrainian approval.

Russian Foreign Minister Sergey Lavrov dismissed that argument in a sharply worded barb Tuesday, saying Russia's ships don't need any permission to use the port. The lease agreement says "nothing about us needing to explain to someone why, where to and for how long the Black Sea Fleet ships are leaving their walls," Lavrov was quoted as saying by Russia's state-controlled ITAR-Tass news agency.

Ukraine's Defense Ministry said it was considering Russia's request to allow four Russian warships to enter Sevastopol on Wednesday, but declined further comment.

However, Foreign Minister Volodymyr Ohryzko sought to cool tensions, saying his country wouldn't physically prevent Russian ships from entering or leaving the naval base. "Without a doubt, there won't be any mine fences or military collisions; one shouldn't even talk about that," Ohryzko said in Kiev, the Interfax news agency reported.

Many Ukrainians worry that after dealing with Georgia, the Russians might set their sights on Ukraine, which like Georgia is a former Soviet republic government that has angered by Moscow by seeking closer ties with the West and membership in the NATO military alliance.

Russia's critics say the conflict in Georgia heralds a new, worrying era in which an increasingly assertive Kremlin has shown itself ready to resort to military force outside its borders in pursuing its goals.

Many Ukrainians fear the Kremlin's fierce opposition to Ukraine's drive to join NATO and Moscow's desire to regain control of the palm-lined Crimea peninsula and the Sevastopol naval base might put Ukraine at a risk of a military conflict with its giant neighbor.

Moscow Mayor Yuri Luzhkov has warned Ukraine that it still isn't too late to return "what doesn't belong to it" — a reference to Crimea.
Ukraine is also important to Russia because its pipelines carry Russian oil and natural gas westward. The country also has a huge Russian-speaking population in its east and south that wants to remain linked with Russia.

While siding with Georgia, Ukrainian officials have acknowledged that Moscow's quick military victory exposed their nation's own vulnerability.
"I think that Russia is looking for a reason to have a serious conflict with Ukraine," said Iryna Mezentseva, a 21-year-old secretary in Kiev.

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Associated Press writer Maria Danilova in Moscow contributed to this report.

Action Ukraine Report (AUR), Wednesday, August 20, 2008

Thanks you for the recent postings re: Georgia-Russia. (I thought that you were permanently dormant) I'm heartened to read there are knowledgeable and influential people who rose to the occasion to condemn Russia's attempt at annexation.

A number of writers made reference to Ukraine and Crimea. One or more allowed that there was a 'Russian' majority; hence laying open the possibility of further Russian adventures. While I'm not a historian I have a recollection that in 1954 Crimea joined Ukraine as a result of a plebescite.

I also have a recollection that when Ukraine with Crimea left the USSR, Russia demanded that a special plebescite be held in Crimea to ascertain whether or not Crimea wished to stay with Ukraine. Moscow packed Crimea's electoral list with USSR military personnel and despite this, they still lost!

I would appreciate that this fact be known: That the people of Crimea voted to join Ukraine in 1954 and voted again to stay with Ukraine in 1992; despite Moscow's rigging of the vote. Unfortunately none of your writers pointed out this most salient fact.
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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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Appeal from the European Movement Ukraine, Kyiv

Letter-to-the-Editor, Action Ukraine Report (AUR)

Washington, D.C., Wednesday, August 20, 2008

We call upon all of you to support the Georgian people who are at this very moment spilling their blood in defense of their homeland's territorial integrity.

By violating Georgia's territorial integrity, Moscow has started to realize its global geopolitical project of renewing and consolidating its political and economic hegemony over the territories of the former USSR. The primary goal of the new geopolitical strategy is the horrific symbiosis of Russian imperialism and Stalinist totalitarianism.

In realizing this new geopolitical strategy, the Kremlin's use of military aggression serves a twofold purpose. The first is to strengthen Moscow's influence over the countries that were once part of the Soviet Union. The second is to frustrate the Euro-Atlantic aspirations of those nations who gained their liberty with the USSR's demise.

The seriousness of the current situation dictates the need to adopt urgent measures in order to ensure that human history's most horrific episodes are not repeated. The international community's reaction should be proportionate to the cynical violation of international law.

Strict sanctions should be adopted against Moscow as an aggressor for "no territorial acquisition or special advantage resulting from aggression is or shall be recognized as lawful" (UN Resolution 3314).

The European Movement Ukraine calls upon our friends and colleagues in the European Union to display civil valor and honesty.

We believe that the time-honored European values of solidarity, justice and rule of law are more than just empty phrases and that together we will do everything required of us to stop the aggressor and help the courageous Georgian people in their battle for freedom and their homeland's territorial integrity.

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NOTE: European Movement Ukraine: euromovement@ukr.net

Re: The bully is back, Aug. 13., The Ottawa Citizen

Ottawa, Ontario, Canada, Monday, August 18, 2008

Thank you to the Citizen for doing the right thing by lending support to Georgia in its David and Goliath fight.

I have been reminded that Russia, the repeat offender, is still out there. In the last 50 years alone, countless Ukrainians, Poles, Hungarians, Czechs and Slovaks, Afghans, Chechens, have lost their lives to Russia's oppressive governments. Some say the count stands at around 40 million dead in the former Soviet Union alone.

Its current government is denying Russia a chance to become a modern, civilized nation. It needs to apologize for past wrongs and thus start a road to redemption and deserved respect rather than demand the world listen to its mutterings about wounded pride over its lost bloody empire and watch its attempts to recreate it with new human sacrifices.

I am proud of the positions taken by Canada and other western countries. Thank you to the United States, to Prime Minister Stephen Harper for articulating strong support for little Georgia; thank you for President Nicolas Sarkozy for his efforts.

And to the five other presidents, friends of Georgia, in the Baltic states, Poland and Ukraine -- all of whom have experienced Russia's tyranny. They know Russia holds life, freedom, sovereignty and peace in disregard. Fortunately, they do not. Georgia's fight against oppression is our fight. I, too, am a Georgian.
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FOOTNOTE: I [Oksana Bashuk Hepburn], encourage all of us to keep actively engaged in this matter. The Russians are counting on the fact that we will let their invasion of Georgia fade from our TV sets and then into oblivion. Just like Chechnya. Then, they will do what thy have done endless times before destroy and control. Please do something: write or call your politicians; call the Russian Embassy and express your disdain; organize a demo; letters to editors; emails to blogs; etc.. Please feel free to distribute further.
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http://www.canada.com/ottawacitizen/views/story.html?id=1f10c7f1-3829-4d8e-ac18-9df752da95cf&k=76907

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[return to index] [Action Ukraine Report (AUR) Monitoring Service]
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14. RUSSIA’S INVASION OF GEORGIA, THE EVIL EMPIRE

NEVER REALLY WENT AWAY

Published in Den and other newspapers

Action Ukraine Report (AUR), Wash, D.C., Wed, August 20, 2008

When Russian Dictator Vladimir Putin ordered his storm troopers to invade Georgia last week, he was doing far more than simply propping up a pro-Russian wannabe puppet government in a Georgian province long ago seeded for the purpose with Russian nationals and KGB operatives. The game thus begun and how the West responds to it will write history as inevitably as did Hitler’s march into Czech Sudetenland.

For Hitler, Chamberlain’s infamous appeasement became a green light to take what he wanted in Europe, marking the start of WWII. For Putin, anything short of strong and united international action to force Russia to cease and desist and immediately.

Withdraw All Russian forces from All of Georgia will be read by Putin as yet another green light – future license to proceed against his ultimate goal – to seize control of the last major oil pipelines to Europe not yet under Russian control and restore the Russian Empire by conquering Ukraine and Moldova. The resulting domino effect on Europe and the West will be catastrophic.

It is now urgent and critical for all people to call on their government officials and representatives to demand:

1) Immediate withdrawal of All Russian forces from All Georgian territory;
2) Immediate replacement of Russian so-called “Peacekeeping” Forces in South Ossetia, a province of Georgia, with a neutral multinational

peacekeeping force and if necessary, a NATO peacekeeping force;
3) Immediately sending a substantial U.S./NATO Naval presence for permanent station in the Black Sea;
4) Immediate granting of NATO MAP status to Georgia and Ukraine;
5) Reconfirmation of the inviolability of international borders;
6) Rejection of all “breakaway provinces” as acts of war;
7) Condemnation of Russia’s efforts to dismember Georgia to suit its own ends;
8) Specific and severe trade and diplomatic sanctions against Russia including expulsion from the G8, the WTO and the IOC;
9) Senior Russian Government and Military Officials be individually listed as Terrorists and their assets in U.S. Banks be seized and frozen;
10) Prosecution of Senior Russian Government and Military Officials as War Criminals for the wanton slaughter of Georgian civilians.

Our brave new world has shown it will not tolerate toothless mini-tyrants like Saddam Hussein. Now the question is whether the world has the courage to face down Maxi-Tyrants like Putin, savage heir to Stalin’s blood-drenched legacy, the same legacy from which Hitler learned there are few limits to the horrors civilized nations will tolerate just to be left alone, even if just for a while.

Russia does not understand diplomacy and protests. Putin responds only to brute force and raw power. Short of a military reaction, the only alternative is to make it brutally clear to Russia that as a Rogue Sate the same harsh diplomatic and financial sanctions we apply to International Terrorists will now apply to Russia and individually to Russia’s leaders. We need a Dirty Dozen List of Russian Leaders whose assets are seized and who are banned from business and travel in the civilized world.

Russia and its leaders must be made to understand – “If you behave like a Terrorist, you will be treated like a Terrorist.”

Tragically, Russia’s invasion of Georgia was enabled by the self-centered shortsightedness of both European and U.S. governments and politicians. Among the enabling acts were:

1) Allowing Russia to be the official United Nations Peacekeeping Force in Ossetia – a move on par with letting Bin Laden guard U.S. nuclear

warheads;

2) European leaders’ succumbing to Russian bullying and gas bribery to stop Georgia and Ukraine from starting NATO Membership Accession Plans

this past spring; and, most recently –

3) The U.S. and Europe’s failure to reject the Schumer Appeasement Doctrine.

First declared by New York Senator Charles Schumer this summer, the Schumer Appeasement Doctrine (SAD) proposes the U.S. yield to Russian Hegemony in Eastern Europe in exchange for Russian support against Iran and help to lower crude oil prices.

Where President Reagan said, “Mr. Gorbachev, Tear Down This Wall!” Senator Schumer seems to be saying, “Mr. Putin, Put Back Your Iron Curtain – It’s O.K.”

The crucial question is whether Schumer is just a Times Square Aberration or if his proposed Appeasement Doctrine foreshadows a quantum shift in U.S. foreign policy.

Since Schumer is a prominent Democrat, failure by the Democratic Party and by Presidential Candidate Obama to reject the Schumer Appeasement Doctrine has led the Russians to expect they will not be vigorously challenged by the U.S. in the event Obama wins the November election.

A parallel failure by the President Bush to reject the Schumer Appeasement Doctrine has led to Russian suspicions about his resolve as well. Although Republican Presidential Candidate McCain has taken a strong position on Russia’s invasion of Georgia, it remains to be seen to what extent this will influence President Bush.

For reasons perhaps best attributed to simple lack of courage to acknowledge reality, the West has consistently failed to respond in a timely fashion to Russian tactics – tactics that should be familiar to us by now as they not changed much in the last century.

Russia’s basic steps are:

1) Seed the desired territory with Russian nationals and agents;
2) These agents, supported by Russian nationals and whatever local fellow travelers they can recruit, start complaining they are being mistreated by the

local people and government;
3) Russian agents provoke armed conflicts with the local population;
4) Russian agents call for Russia to protect them against – persecution, aggression, mistreatment, etc. (pick whatever works at the moment);
5) Or, Russian agents declare themselves to be the “true representatives” of the people of the desired territory and call on their brethren to help them

drive out the “usurpers” (i.e., the locals);
6) Russia sends in armed forces to – protect its local nationals, secure strategic assets, fight terrorists, etc. (again, pick whatever works at the moment);
7) Russia slaughters the opposition and grabs what it wants.

These same tactics were used successfully starting with Ukraine in 1918, then on to Latvia, Lithuania and Estonia in ‘46, Hungary in ‘56, Czechoslovakia in ‘68, and Afghanistan in 1980. In the ‘90s, Russia took a time out to change costumes. They flushed the worn out Marxist “USSR” façade and put on the current, more marketable “Russian Federation” façade. And then – Here we go again – Georgia in 2008.

If not stopped by the West, Ukraine and Moldova will follow in short order. Russia’s tactics in Ossetia are virtually identical to those currently being staged in the Crimea and Transdnistra, Putin’s next “breakaway provinces.” Russia’s Dictator is not just seriously intent on restoring Stalin’s Russian Empire – He’s Doing It!

And, sometimes, the other guys are just so inept, they give Russia gifts they wouldn’t have dreamed of asking – like letting Russians be appointed United Nations Peacekeepers in Ossetia!!! What next? How about getting Al Qaeda to handle Security for Washington D.C. and Hamas for the Wailing Wall? Russian “Peacekeepers” in Ossetia! When the definitive guide to stupidity (or treachery) in diplomacy is finally written, this one will need its own chapter.

Equally disturbing is the West’s failure to acknowledge that Russia’s policy towards Ukraine has not changed in the 350 years since Peter I decided to make himself an empire by slaughtering and devouring his neighbors. The most fundamental requirement for Russia to have a credible empire was then and is today … Ukraine.

Without Ukraine, Russia is little more than Asian tundra, armed to the teeth and with lots of money – a kind of frozen Saudi Arabia with nukes. To be credible as an empire, or even simply European, Russia needs Ukraine – her land, her soil, her faith, Church, culture, traditions and industry – her natural cornucopia of God’s Bounty.

The only thing Russia does not need is the Ukrainian people, whom Russia has worked for centuries to kill off and destroy, most recently with 26 years of ongoing genocide in the first half of the 20th Century, which culminated in the Holodomor, when 10 million innocent Ukrainians, the majority elderly and women and children, were killed in the Genocide of 1932-33. No one doubts there is any shortage of Russian leaders who are ready, willing and able to complete the job.

Russia’s invasion of Georgia immediately endangers Georgia’s survival as a free and democratic nation. It is the first step to brazenly reconstitute the Russian Empire.

Russian’s invasion of Georgia foreshadows a similar military invasion of Ukraine and Moldova in the near future, perhaps as early as 2009.

Russia’s invasion of Georgia sets the stage for a future where Russia effectively controls virtually all energy supplies to Europe. Such European dependence on Russia for energy will effectively destroy the North Atlantic alliance, thus paving the way for subordination of the United States as well as Europe to Russian Hegemony.

Russia, master of the world’s energy routes, fearing no nation’s military – suddenly unchallenged as the New Supreme World Power, and all in the hands of a ruthless Stalinist Dictator – Now That is an Evil Empire.
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15. TIES WITH RUSSIA ARE REASSESSED

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16. WHO MADE RUSSIA ATTACK?

COMMENTARY: By Reno Domenico, Courier-Post

South Jersey, New Jersey, Friday, August 15, 2008

The current crisis between Georgia and Russia has serious consequences for the Caucasus region, the European states of the former Soviet Union, and the entire Euro-Atlantic alliance.

The genesis of this hot war in a formerly frozen conflict can be found in the incoherent foreign policy of the United States as pursued by both the current Bush administration as well as the former Clinton administration.

Whereas the policy toward the former Soviet Union pursued by President Clinton resulted in the dismal privatization programs that impoverished millions while creating the oligarch class that now dominates those nations, the Bush administration's cowboy approach fanned the flames of nationalism that has sparked the current crisis resulting in the death of thousands.
NATO push
While ignoring the serious economic dislocation caused by the breakup of the Soviet Union, and not recognizing the nationalistic reemergence of the Russian Federation as a result of its petroleum-fueled economy, the Bush administration embarked on a policy of integrating former Eastern Bloc republics into NATO.

Part of this policy was the abrogation of the Anti-Ballistic Missile (ABM) Treaty, and the push to place ABM batteries and radars on the border with Russia. This was viewed as directly provocative by the Russian government.

The push for Georgian and Ukrainian membership in NATO failed at the last summit. In Ukraine, the question of NATO membership is very controversial, with less than 50 percent of the population supporting the idea. In Georgia, having ongoing conflicts with Russia, support for NATO membership was higher.

Additionally, Georgia and the United States have cooperated on a series of military projects, including a significant number of Georgian troops in Iraq, and a robust US training program for the Georgian military.
Emboldened
This military cooperation and the prospect of NATO membership in the future clearly emboldened the Georgian government to challenge Russia by attempting to reoccupy South Ossetia. The result has been catastrophic for the people who live in South Ossetia, as well as for the Georgian military. However, the danger is really a regional one.

There are some in the Ukrainian government who would like to deny the Russian navy the right of return to its Black Sea fleet headquarters in Sevastopol, Crimea. Sevastopol, and the Autonomous Republic of Crimea, is a very Russian leaning region of Ukraine, with significant Russian linguistic, historical and cultural ties. Having divided the Black Sea fleet when the Soviet Union dissolved, Russia still has treaty rights to its base in Sevastopol until 2017.

Eyewitness accounts on Wednesday night in Kiev, the capital of Ukraine, reported the movement of several brigades of fully armed Ukranian tanks and troop carriers toward the railway station in the city center. It can be speculated that those brigades are southbound for deployment in Crimea. The question is, for what purpose? Unfortunately, the answer to that question is not a good one.

There are also rumors circulating that Ukranian forces may be inserted into Georgia as peacekeepers.

If the mission is to deny the Russian fleet's return to Sevastopol, this could clearly expand the conflict across the Black Sea. If that happens, what will be the reaction of the essentially Russian population of Crimea?

All this has transpired against the backdrop of the Olympics, where nationalism plays itself out in the spirit of sporting competition and mutual respect. When the conflict in Georgia started I watched what appeared to be a "Katrina" moment, when President Bush, obviously enjoying himself, was sitting in support of American athletes at the games.

Simultaneously, Russian Prime Minister Vladimir Putin put on his coat and rushed out of the stadium to take control of the Russian forces on the Georgian frontier.

Not until Wednesday did President Bush and Secretary Rice finally take some kind of decisive action in support of the European Union mediation efforts. Once again, as it has been U.S. policy since the fall of Soviet Union, it's too little, too late.

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LINK: The writer is the president of Sterling Business School in Ukraine (www.sbs-ua.com) and former chairman of the Camden City Democratic Committee. He has made more than 50 trips to Ukraine and Russia since 1989. Contact him at renodomenico@sbs-ua.com.

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LINK: http://www.courierpostonline.com/apps/pbcs.dll/article?AID=2008808150320
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18. WITHDRAWAL SYNDROME

COMMENTARY: By Patrick J. Buchanan, Information Clearing House

Imperial Beach, California, Friday, August 15, 2008

Mikheil Saakashvili's decision to use the opening of the Olympic Games to cover Georgia's invasion of its breakaway province of South Ossetia must rank in stupidity with Gamal Abdel-Nasser's decision to close the Straits of Tiran to Israeli ships.

Nasser's blunder cost him the Sinai in the Six-Day War. Saakashvili's blunder probably means permanent loss of South Ossetia and Abkhazia.

After shelling and attacking what he claims is his own country, killing scores of his own Ossetian citizens and sending tens of thousands fleeing into Russia, Saakashvili's army was whipped back into Georgia in 48 hours.

Vladimir Putin took the opportunity to kick the Georgian army out of Abkhazia, as well, to bomb Tbilisi and to seize Gori, birthplace of Stalin.

Reveling in his status as an intimate of George Bush, Dick Cheney and John McCain, and America's lone democratic ally in the Caucasus, Saakashvili thought he could get away with a lightning coup and present the world with a fait accompli.

Mikheil did not reckon on the rage or resolve of the Bear.

American charges of Russian aggression ring hollow. Georgia started this fight -- Russia finished it. People who start wars don't get to decide how and when they end.

Russia's response was "disproportionate" and "brutal," wailed Bush.

True. But did we not authorize Israel to bomb Lebanon for 35 days in response to a border skirmish where several Israel soldiers were killed and two captured? Was that not many times more "disproportionate"?

Russia has invaded a sovereign country, railed Bush. But did not the United States bomb Serbia for 78 days and invade to force it to surrender a province, Kosovo, to which Serbia had a far greater historic claim than Georgia had to Abkhazia or South Ossetia, both of which prefer Moscow to Tbilisi?

Is not Western hypocrisy astonishing?

When the Soviet Union broke into 15 nations, we celebrated. When Slovenia, Croatia, Macedonia, Bosnia, Montenegro and Kosovo broke from Serbia, we rejoiced. Why, then, the indignation when two provinces, whose peoples are ethnically separate from Georgians and who fought for their independence, should succeed in breaking away?

Are secessions and the dissolution of nations laudable only when they advance the agenda of the neocons, many of who viscerally detest Russia?

That Putin took the occasion of Saakashvili's provocative and stupid stunt to administer an extra dose of punishment is undeniable. But is not Russian anger understandable? For years the West has rubbed Russia's nose in her Cold War defeat and treated her like Weimar Germany.

When Moscow pulled the Red Army out of Europe, closed its bases in Cuba, dissolved the evil empire, let the Soviet Union break up into 15 states, and sought friendship and alliance with the United States, what did we do?

American carpetbaggers colluded with Muscovite Scalawags to loot the Russian nation. Breaking a pledge to Mikhail Gorbachev, we moved our military alliance into Eastern Europe, then onto Russia's doorstep. Six Warsaw Pact nations and three former republics of the Soviet Union are now NATO members.

Bush, Cheney and McCain have pushed to bring Ukraine and Georgia into NATO. This would require the United States to go to war with Russia over Stalin's birthplace and who has sovereignty over the Crimean Peninsula and Sebastopol, traditional home of Russia's Black Sea fleet.

When did these become U.S. vital interests, justifying war with Russia?

The United States unilaterally abrogated the Anti-Ballistic Missile treaty because our technology was superior, then planned to site anti-missile defenses in Poland and the Czech Republic to defend against Iranian missiles, though Iran has no ICBMs and no atomic bombs. A Russian counter-offer to have us together put an anti-missile system in Azerbaijan was rejected out of hand.

We built a Baku-Tbilisi-Ceyhan pipeline from Azerbaijan through Georgia to Turkey to cut Russia out. Then we helped dump over regimes friendly to Moscow with democratic "revolutions" in Ukraine and Georgia, and tried to repeat it in Belarus.

Americans have many fine qualities. A capacity to see ourselves as others see us is not high among them.

Imagine a world that never knew Ronald Reagan, where Europe had opted out of the Cold War after Moscow installed those SS-20 missiles east of the Elbe. And Europe had abandoned NATO, told us to go home and become subservient to Moscow.

How would we have reacted if Moscow had brought Western Europe into the Warsaw Pact, established bases in Mexico and Panama, put missile defense radars and rockets in Cuba, and joined with China to build pipelines to transfer Mexican and Venezuelan oil to Pacific ports for shipment to Asia? And cut us out?

If there were Russian and Chinese advisers training Latin American armies, the way we are in the former Soviet republics, how would we react? Would we look with bemusement on such Russian behavior?

For a decade, some of us have warned about the folly of getting into Russia's space and getting into Russia's face. The chickens of democratic imperialism have now come home to roost -- in Tbilisi.
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Mr. Buchanan is a nationally syndicated columnist and author of Churchill, Hitler, and "The Unnecessary War": How Britain Lost Its Empire and the West Lost the World, "The Death of the West,", "The Great Betrayal," "A Republic, Not an Empire" and "Where the Right Went Wrong."

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LINK: http://www.informationclearinghouse.info/article20522.htm

Washington, D.C., Wednesday, August 20, 2008; Page A15

The nation of Georgia is a place of inspiration and danger. I saw both in a single hour.

I was in Tbilisi's Freedom Square during President Bush's visit in May 2005, along with Secretary of State Condoleezza Rice and Assistant Secretary of State Daniel Fried. During the Georgian national anthem, the speaker system broke down and tens of thousands of Georgians movingly sang that song without music -- a song that had been illegal to sing under Soviet occupation.

It is shocking to imagine those joyful people now bombed, fearful and occupied.

At the same event, an assassination attempt was made against President Bush. A man threw a grenade wrapped in a handkerchief. Bush was behind a bulletproof shield but within the blast radius of the weapon. The grenade was live but did not explode -- or maybe the explosion in Georgia was just delayed.

A few days ago I spoke with Ambassador Fried -- one of America's finest diplomats -- on his way back from Georgia, after tense negotiations. Sounding exhausted from a "tough few days," he described the French-sponsored cease-fire as flawed but important.

He predicted that in 10 years the invasion would be seen as a strategic mistake because it will have branded Russia "as a rogue." Of the Russian government, he vented: "Picking on weak Georgia -- is this the thing that makes them proud?"

Georgia badly miscalculated in this crisis. President Mikheil Saakashvili believed he could quickly gobble up his breakaway provinces through military force, just as he did in Georgia's southwest four years ago. He is a hothead who acted against American advice.

But it was Russia that provoked this provocation, for which it was thoroughly prepared. In December 2007, Russia suspended its adherence to a treaty that required it to report the massing of its troops along borders. Two months before the invasion, hundreds of Russian engineers were engaged in repairing railroad bridges eventually used by Russian troops.

PUTIN ADOPTED TACTICS OF THE SCHOOLYARD BULLY

Vladimir Putin is a leader defined and consumed by his grievances, from European missile defense to Kosovo. And now he has adopted the ideology and tactics of the schoolyard bully -- trying to restore Russian self-respect by beating up the weak. It is pathetic and dangerous in equal parts. It has also been a military success. Bush administration officials are now debating how to turn Russia's tactical victory into a strategic defeat.

In the short term, this involves denying Russia some things it wants, such as a coup that deposes Saakashvili. It also involves achieving some things Russia doesn't want, particularly the deployment of international monitors and eventually peacekeepers in the breakaway regions. Russian troops, after all, are not peacekeepers but combatants.

But there also needs to be a broader strategic consequence for Russia. Russia is attempting to combine 19th-century adventurism with membership in 21st-century international institutions. America needs to prove that is not possible -- to demonstrate that there is no place for czarism in the Group of Eight or the World Trade Organization.

Few question this goal, but there are many questions about the method. Does a direct assault on Russia's prickly pride make things worse or better? Should America pick a bruising public fight over G-8 membership or simply begin acting through the G-7, as Secretary Rice has already begun to do? Should America announce its opposition to Russian WTO membership, or merely stop pushing for it?

The worst option would be to excuse Russia by blaming ourselves. NATO expansion did not cause Russian belligerence. The desire to be part of NATO in liberated Europe was fueled, in part, by a justified fear of Russian belligerence. Citizens of the Baltic states, for example, are now glad that NATO expanded with relative speed, or they might be next on Putin's list.

Again and again in European history, there has been a temptation to sacrifice the freedom of small countries to the interests of great powers. And it generally hasn't worked out very well, for them or for us.

UKRAINE HAS BEEN DEFIANT
Georgia has been foolish. But Russia's crude overreach has had one good effect -- revealing the courage of others. Poland has quickly upgraded its relations with America, even under nuclear threat from Russia.

Ukraine has been defiant, even though Russia still makes claims on Crimea. These nations have recent memories of Russian national "pride." And their courage should provoke our own. [michaelgerson@cfr.org]

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BUSINESS COUNCIL (USUBC)

U.S.-Ukraine Business Council (USUBC)
Washington, D.C., Wednesday, June 25, 2008

WASHINGTON, D.C. - The executive committee of the U.S.-Ukraine
Business Council (USUBC), on behalf of the entire membership, is most
pleased to announce that AeroSvit Ukrainian Airlines has been approved
for USUBC membership. The airline is USUBC member number 86.

AeroSvit is the leader of the national air transport industry in Ukraine and
is the only Ukrainian carrier directly connecting Ukraine with the United
States. This is through their non-stop flight from Kyiv to New York City.

AeroSvit is interested in the further development of Ukraine-U.S. relations
and in expanding their flight operations related to connecting Ukraine with
the U.S.

AeroSvit was founded in 1994 as a closed joint-stock company (CJSC).
In October 1994, AeroSvit leased its first Boeing-737, which was used
to perform flights from Kyiv to the capitals of Russia, Israel, and Greece
as well as to Larnaca (Cyprus) and Odesa.

In 2002-2004, the company opened five direct transcontinental flights
between the capital of Ukraine and Bangkok, New York, Toronto, Delhi,
and Beijing.

AeroSvit Ukrainian Airlines in 2007 signed an agreement with the Boeing
Company concerning purchase of up to 14 NG (next generation) Boeing
737's.

USUBC has been working with AeroSvit executives Aron Mayberg,
Director General, Kostadin Botev, Executive Director and with Yevgen
Treskunov, Deputy Director General for Strategic Development. Mr. Botev
attended a recent meeting in Kyiv with U.S. Ambassador William Taylor
sponsored by USUBC.

PASSENGER TRAFFIC EXCEEDED 2 MILLION IN 2007

In 2007, the total volume of passenger traffic on AeroSvit Ukrainian
Airlines exceeded the two million mark for the first time. The airline
carried 2,054,000 passengers by the end of the year, which is an increase
of 31.5% over 2006. AeroSvit's passenger turnover increased by 27.4%
to 4.5 billion passenger-kilometers.

Taking into account the dynamic growth of indicators following the results
of 2007, AeroSvit expects a further increase of its position in the most
prestigious aviation rating- the Top-200 list of the world's largest
airlines.

This list is updated each year based upon annual volumes of traffic
performed by the aviation market's leading players and is published
in several top industry journals. Based on the results of 2006, AeroSvit
rose by 20 positions in the Top-200 and was ranked 155.

Ukraine was included in the Top-200 for the first time three years ago when
AeroSvit was named on the list of air carriers for the first time. During
the past three years, the company has managed to advance by 45 positions.

AEROSVIT AND BOEING

AeroSvit Ukrainian Airlines signed an agreement with the Boeing Company
in 2007 concerning purchase of up to 14 NG (next generation) Boeing 737's.

The document stipulated the purchase of seven Boeing 737-800's in
2011-2012 the value of which according to the manufacturer's catalogue
reaches US$523 million as well as reservation of purchase rights for another
seven aircraft between 2008-2015. The contract price of the aircraft
delivery was not disclosed.

Boeing would also provide AeroSvit with technical training, marketing, and
financial assistance during aircraft commissioning. This support package
applies not only to the purchased aircraft but also to the NG Boeing
737's AeroSvit plans to lease.

This is the first direct contract for the delivery of such a large
consignment of next generation aircraft in the history of Ukraine.

"Fleet renovation and extension by means of Boeing 737 NG aircraft will
allow AeroSvit to implement its development strategy as well as raise its
competitiveness while preparing for future Ukrainian air space
liberalization," noted AeroSvit's Director General Aron Mayberg.

"I am sure that this contract will start the process of Ukraine's gradual
development into one of the world's leading aviation countries. I am glad
that we have the honor to make this first important step showing the high
potential of Ukraine as a competitive country with established market
relations to the entire world".

AeroSvit Ukrainian Airlines operates sixteen Boeing aircraft , including
thirteen middle-range Boeing 737's and three long-range Boeing 767's
(seventeenth B 737-300 is to be delivered within a couple of weeks).
The carrier serves more than 60 international routes to 33 countries as
well as 11 destinations within Ukraine.

AeroSvit is a member of many international organizations, namely:

. International Air Transport Association (IATA), including IATA
Clearing House and IATA Billing and Settlement Plans (BSP),
. US Airlines Reporting Corporation (ARC)
. Association of European Airlines (AEA)
. European Business Association (EBA)
. American Chamber of Commerce in Ukraine (AmCham Ukraine)
. International Chamber of Commerce (Ukrainian national committee)
. UK Flight Safety Foundation
. The Ukrainian Chamber of Commerce & Industry (UCCI)
. U.S.-Ukraine Business Council (USUBC)

Additional information can be found on the AeroSvit Airlines website:
http://www.aerosvit.ca/e_us.html.

"The U.S.-Ukraine Business Council (USUBC) is most pleased to have
AeroSvit Ukrainian Airlines join the rapidly expanding USUBC membership."
said Morgan Williams, SigmaBleyzer, who serves as President of USUBC.

USUBC MEMBERSHIP NOW TOTALS EIGHTY-SIX

AeroSvit Ukrainian Airlines is the 86th member for USUBC, the 34th new
member for 2008, and the 64th new member since January of 2007. USUBC
membership has nearly quadrupled in the past 18 months, going from 22
members in January of 2007 to 86 members in June of 2008. Membership
is expected to top 100 very soon.

The other new members in 2008 are MaxWell USA, Baker and McKenzie
law firm, Och-Ziff Capital Management Group, Dipol Chemical International,
MJA Asset Management, General Dynamics, Lockheed Martin, Halliburton,
DLA Piper law firm, EPAM Systems, DHL International Ukraine, Air Tractor,
Inc., Magisters law firm, Ernst & Young, Umbra LLC., US PolyTech LLC,
Vision TV LLC, Crumpton Group, American Express Bank, a Standard
Chartered group company, TNK-BP Commerce LLC, Rakotis, American
Councils for International Education, Squire, Sanders & Dempsey LLP,
International Commerce Corporation, IMTC-MEI, Nationwide Equipment
Company, First International Resources, the Doheny Global Group, Foyil
Securities, KPMG, Asters law firm, Solid Team LLC, R & J Trading
International and Vasil Kisil & Partners law firm.

The complete USUBC membership list and other information about
USUBC can be found at: http://www.usubc.org.

BUSINESS INVESTMENT DRIVES UKRAINE'S INTEGRATION

Ukraine's Euro-Atlantic integration is first and foremost today being driven
by the private business community in Ukraine, Europe, and the United States.

"Ukraine's aspirations for Euro-Atlantic integration, to be a major member
of the world's community of strong, democratic, independent, prosperous,
private business sector driven nations, will be realized largely through the
present leadership and investments from the business community and then
hopefully with some real support later from the politicians and government
leaders," wrote Morgan Williams, SigmaBleyzer, who serves as President
of USUBC, in a recent article published by the "Welcome to Ukraine"
magazine.

"While the politicians of many countries, including Ukraine, argue and debate
about whether Ukraine should ever be given a MAP for eventual NATO
membership and when, if ever, Ukraine will have the opportunity to join
the European Union the Ukrainian and international business communities
are moving rapidly ahead with large-scale economic and business
integration."

"This integration is being accomplished in spite of a general lack of new
reforms being implemented by the government and the high level of political
instability that has existed for the last several years which has hurt the
number of new jobs created, the level of wages, the development of a
modern business infrastructure and the creation of wealth, " according
to Williams.

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