Ukrainian News Agency, Kyiv, Ukraine, Friday, February 20, 2009

KYIV - President Viktor Yuschenko has approved the introduction of a temporary surcharge of 13% on the import duty on several products. The presidential press service announced this in a statement.

Yuschenko signed the relevant law adopted by the parliament, which is entitled "On Amendments to Certain Laws of Ukraine with the Aim of Improving the State of Ukraine's Balance of Payments in Connection with the Global Financial Crisis."

At the same time, Yuschenko said that certain provisions of the law violated the Constitution and did not fully take account of his proposed changes. In particular, the law grants the Cabinet of Ministers the right to make decisions on extending the temporary surcharge to the existing rates of import duty on certain products by adopting the relevant Cabinet of Ministers resolutions.

Yuschenko said that this violated the Constitution, which stipulates that taxes and duties are to be set exclusively through adoption of laws.

Yuschenko intends to ask the Constitutional Court to rule on the constitutionality of the law's provision that grants this right to the Cabinet of Ministers.
The press service stressed that Yuschenko signed this law because of the negative state of Ukraine's balance of payments and the significant fall in industrial output in the past few months.

As Ukrainian News earlier reported, the parliament introduced a temporary surcharge of 13% on the import duty on several products on February 5.
The parliament introduced a temporary additional surcharge of 13% on all imported goods, excluding critical goods, in late December 2008. Yuschenko vetoed the relevant law in early 2009.

AUR FOOTNOTE: Most business analysts believe this is a major move in the wrong direction for Ukraine. The parliament passed this bill and then President Yushchenko vetoed it. The parliament then passed it again by a wider margain and the President ends up signing it. Bad legislation, bad business at the wrong time. The law most likely violates Ukraine's agreement with the World Trade Organization (WTO).
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13. US AMBASSADOR WILLIAM TAYLOR HOPES POLITICAL FORCES

Ilona Yarmoliuk, Ukrainian News Agency, Kyiv, Ukraine, February 22, 2009

KYIV - When speaking to news reporters, Ambassador of the United States of America to Ukraine William Taylor has said he hopes that the economic crisis will consolidate the political forces in Ukraine. "I hope an expect that the current scale of the economic downturn will make politicians understand that they have no other choice than work together," he said.

In Taylor's opinion, discrepancies in the views of Ukrainian politicians should not be a barrier for settling the economic crisis problems. The Ambassador expects political elites of Ukraine to realise the economic threat posed to Ukraine and join efforts to get over it.

As Ukrainian News earlier reported, US Ambassador William Taylor hopes that near USD 0.5 billion of foreign investments be raised for Ukraine in 2009.

Secretary-General of the Council of the European Union Javier Solana thinks that political stability is required in Ukraine to withstand the financial-economic crisis.
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14. ZBIGNIEW BRZEZINSKI: US SHOULD DEFEND GEORGIA,

UKRAINE AND AZERBAIJAN

Three countries should not become victims of US-Russia dialogue

APA, Baku, Azerbaijan, Friday, 20 February 2009

WASHINGTON - “We should work so that Georgia, Ukraine and Azerbaijan do not become victims of US-Russia dialogue. If we sacrifice these republics, Russia’s integration into the world will slow.

We should do everything to defend these countries,” Zbigniew Brzezinski, former US National Security Adviser under Jimmy Carter, said, APA reports quoting Georgian media. Zbigniew Brzezinski, who is foreign policy adviser of the new administration, considers that the United States should strengthen cooperation with Europe.

“If Germany’s affair with Russia deepens, it may impede integration in Europe. Germany is a very strong and influential state and unlike Russia drew right conclusions from its history. But other European countries would better tell Germany: make your priorities clear to everybody.”

LINK: http://en.apa.az/news.php?id=97496

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16. GERMANY'S SOCIAL DEMOCRAT STEINMEIER TAKES HARD LINE
Expresses concern at the political deadlock in Ukraine that has delayed implementation
of an economic rehabilitation programme required by the International Monetary Fund

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17. EASTERN EUROPE CRISIS POSES RISKS FOR WESTERN FIRMS
Wide range of industries exposed to region that could be on brink of collapse

Emerging Markets Report: By Polya Lesova, MarketWatch
New York, New York, Friday, February 20, 2009

NEW YORK - Eastern Europe was once a dream come true for Western corporations hungry for new markets, but the most fragile region in the emerging world could now become a nightmare for companies like Telekom Austria and German retailer Metro AG.

A prolonged economic crisis in Eastern Europe would hurt a wide range of Western European companies with heavy exposure to the region, in sectors from banks and telecommunications to retailers and auto makers.

"To us, the Eastern European situation appears worse than the Asian crisis [of 1997-1998]," said Andrew Garthwaite, a global equity strategist at Credit Suisse, in a report drawing attention to risks from the collapse in Eastern European economies to name-brand Western European companies such as Renault, Allied Irish Banks and France Telecom.

Western European banks are already suffering from their exposure to their Eastern counterparts. Earlier this week, Moody's Investors Service highlighted the growing risks faced by Western banks supporting subsidiaries in Eastern Europe, triggering a steep sell-off in European banking shares, as well as Eastern European stock markets and currencies. Many industries, such as telecoms and banks, are exposed to a region that could be on the brink of collapse.

"The economies in the region are already in free fall, and at least one country -- Ukraine -- is dangerously close to sovereign default," said analysts at Denmark's Danske Bank. "Rapidly rising concerns have led policy makers across Europe to call for immediate action to avoid a dangerous collapse that potentially could spill into the euro zone," they said.

Several Western European telecom companies are heavily exposed to Eastern Europe. One of them is Norway-based Telenor Group (NO:TEL: news , chart , profile ) , which earned 20% of its 2007 revenues in Central and Eastern Europe. Telenor has a presence in Russia, Ukraine, Serbia, Montenegro and Hungary.

Telenor is the majority owner of Kyivstar, the largest mobile operator in Ukraine. The Norwegian firm is "one of the biggest Western investors in Ukraine and the only Western European telecom operator with long-term ambitions in the country," according to the company's Web site.

"Some might say this is a fact best kept under wraps given that Ukraine is the riskiest name in Europe," said Gavan Nolan, vice president of credit research at Markit, in a research note.

Ukraine's credit default swaps are currently trading at over 50 basis points upfront, Nolan said. Rising CDS spreads indicate that investors see a greater risk of sovereign default.

Telenor is also the second-largest mobile network operator in Serbia. The Balkan nation, like Ukraine, was bailed out by the International Monetary Fund, but it recently asked for additional financing, citing its deteriorating economy.

Other large investors in the Balkans are Telekom Austria and Greece's Hellenic Telecommunications Organization SA. In Bulgaria, for instance, the two companies respectively own Mobiltel and Globul, the country's major mobile operators.

TeliaSonera, Sweden's largest telecommunications company, also has a strong presence in the Baltic region as well as Eurasia, including Russia, Turkey, and Kazakhstan. TeliaSonera has 39% sales exposure to Eastern Europe, while France Telecom has 17% sales exposure to Emerging Europe and Africa, according to Credit Suisse.

Garthwaite of Credit Suisse is "very bearish" on Eastern Europe because of the high levels of foreign debt in the region as well as the ongoing pressure on local currencies. The crisis in Eastern Europe is worse than the Asian crisis of 1997 and 1998, he said.

"The Asian economies were more flexible and there was much less of a synchronized downturn across the global economy than there is now, and thus the Asian countries could export their way out of trouble," Garthwaite said.

During the Asian crisis, GDP fell by 5% to 10% in the countries affected, while most currencies depreciated sharply. A comparison of Eastern Europe now with Asia in 1997 and 1998 indicates that the drop in economic activity has actually been sharper and deeper in Europe than in Asia, according to research by Danske Bank.

Among European companies with more than 7% of sales exposure to Emerging Europe are Telekom Austria, Telenor, Allied Irish Banks, carmakers Renault and Volkswagen AG, as well as Belgian banking group Dexia, according to Credit Suisse.

In the retail sector, Germany's Metro AG has an extensive presence in Eastern Europe, with a particularly large concentration of stores in Russia and Poland.

In Russia, Metro has about 70 stores. It was one of the first international retailers to venture into the country, according to its Web site. Metro's shares fell earlier this week on concerns over slowing consumer spending in Eastern Europe.

In addition to its established business in United Kingdom and France, British home-improvement retailer Kingfisher (UK:KGF: news , chart , profile ) has moved aggressively into developing countries such as Poland and Russia. In Poland, Kingfisher is market leader, with a 13% market share, according to its Web site.

"The outlook for France and, more obviously, Poland is deteriorating, and we see the progression at these operations as significant catalysts," said analysts at Numis Securities, who have a "sell" rating on Kingfisher.

Analysts at Investec Bank Plc echoed those concerns: "Our greater caution applies mainly to Poland and France, which have been the recent mainstays of Kingfisher's declining profit base."

The depreciation of the Polish zloty against the euro drives a substantial downgrade to the Polish operating profit forecast next year, according to Investec, which also has a "sell" rating on Kingfisher.

'SYSTEMIC RISK'
The vulnerability of Western banks, particularly those based in Austria and Sweden, was highlighted by Moody's this week. Banks headquartered in Austria, Italy, France, Belgium, Germany and Sweden account for 84% of the total Western European bank claims on Eastern Europe, according to the ratings agency.

Austria is most vulnerable, since the Eastern European exposure of Austrian banks is about 68% of Austrian GDP. Little wonder then that Austrian officials are lobbying hard for a coordinate European-wide response to the crisis in Eastern Europe.

Among individual banks, particularly vulnerable are Austria's Erste Bank and Raiffeisen International, as well as Italy's UniCredit Group controls Bank Austria. On its Web site, UniCredit boasts of being "the clear number 1" in Central and Eastern Europe.

Other banks with Eastern European exposure include Belgium's KBC Bank, Italy's Intesa Sanpaolo, France's Societe Generale, and Germany's Bayern LB through its subsidiaries Hypo Group Alpe Adria as well as MKB Bank. Scandinavian banks -- particularly Sweden's SEB and Swedbank -- dominate the banking systems in the Baltic countries.

"Austrian and Swedish banks are most exposed to the 'high risk' countries in Emerging Europe," said Neil Shearing, Emerging Europe economist at Capital Economics. These high-risk countries include Hungary, Ukraine, Romania, Latvia, Lithuania, and Estonia.

"A relatively short back-run of data, which is clouded by the effects of ongoing structural reforms, means that it is difficult to judge just how far bad debts in Emerging Europe could rise and what impact this could have on western banks' balance sheets," Shearing said. However, if only one bank in Austria or Sweden ran into serious trouble, "this could pose a systemic risk to the entire banking sector," he said.

NOTE: Polya Lesova is a New York-based reporter for MarketWatch.

LINK: http://www.marketwatch.com/news/story/eastern-europes-crisis-threatens-big/story.aspx?guid=%7b7B3EFD27-8F01-4CB5-9B0A-6AA8F5E933FA%7d&dist=msr_4&print=true&dist=printMidSection

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18. FINANCIAL CRISIS SPURS CALL FOR BIGGER BAILOUTS
Western Europe Leaders Want to Double IMF Fund to Help Eastern Neighbors

By Sebastian Moffett & Marek Strzelecki in Warsaw & Marcus Walker in Berlin
The Wall Street Journal, New York, NY, Monday, February 23, 2009

WARSAW/BERLIN - European leaders called for doubling the International Monetary Fund's war chest to $500 billion for bailing out financially stricken nations, amid new signs that Europe's former Communist east is sliding into a full-blown crisis.

Europe's developing economies are facing their worst economic trauma since the fall of the Berlin Wall 20 years ago. Capital is fleeing Europe's east, sending currencies sliding and threatening the region with deep declines in output and employment, and a deluge of debt defaults. Poland's industrial output in January fell at a painful 15% annual rate; its currency last week hit an all-time low against the Swiss franc.

The spreading trouble could force more countries on Europe's periphery to seek help from the international community. The IMF already has bailed out four ex-Communist countries, as well as Iceland and Pakistan in recent months. Latvia's economy alone could shrink by as much as 10% this year, according to some estimates; its government fell on Friday.

The brief proposal by European leaders, who met in Berlin Sunday, didn't say where funds to double the IMF's war chest would come from; the proposal also falls short of demands by the World Bank and some governments for Europe's wealthy West to go further to prop up the continent's vulnerable East.

Until the past couple of weeks, the turmoil mainly hurt Eastern Europe's most financially overstretched countries, including Latvia and Hungary. But collapsing currencies and markets even in previously robust economies, such as Poland and the Czech Republic, show that investors are fleeing the whole region.

The slump threatens to undermine years of work in former Soviet satellites to build a Western market economy and way of life. It could also sour the heavy investments by Western European banks in the region.

"There is no doubt that this is the biggest economic crisis in Central and Eastern Europe since the end of communism," says Lars Christensen, chief emerging-markets analyst at Danske Bank. Economies from the Baltic to the Balkans face contractions of up to 15% in gross domestic product, he says. That would be comparable to what Indonesia suffered in 1998, in the thick of the Asian economic crisis.

Poland and others in Europe's East emerged from massive economic contractions after the fall of communism in 1989. But by the late 1990s, much of the region had recovered and was growing robustly, thanks to exports and foreign investment, including by West European banks and carmakers.

From around 2003, the growth turned into a headlong boom as it became increasingly easy to borrow money cheaply. That cheap borrowing contributed to a flood of fresh investment in Eastern Europe's retail and property sectors. Governments in the region mostly failed to counter signs of a debt-fueled bubble.
"Policy makers in the region have been cheerleaders of the boom, rather than prudent guardians of growth," says Mr. Christensen of Danske Bank.

In much of Eastern Europe, individuals and businesses have sought to catch up with Western living standards by borrowing heavily from overseas. The implied stability of EU membership allowed East European firms and individuals to borrow in foreign currencies that offered lower interest rates than local currencies.

Eastern European borrowers need to repay about $400 billion in debt owed to Western banks this year. Much of that is denominated in foreign currencies, according to a report by Swiss bank UBS.

Rafal Lyczek did what seemed like a sensible thing last May: He converted the loan on his home in Poland into Swiss francs, using Switzerland's lower interest rates to cut his mortgage payments. But the zloty has weakened severely since July, and monthly repayments for the 31-year-old economist have jumped around 50% since last summer.

"I switched because everybody did it at the time," he says. Many Polish companies face heavy losses on currency options that they bought last year on the assumption that the zloty would keep strengthening. By some estimates, these losses alone could wipe out about 1.5% of GDP.

Federico Ghizzoni, manager of Italian bank Unicredit's central and east European operations (with regional loans totaling some 90 billion euros, or $115.5 billion), says Eastern European economies still have advantages."We have 1,000 companies from Western Europe" that have invested in the East he says. "There are a large number of long-term investors who will continue to stay during the crisis."

Poland's economy is in many ways sounder than more financially overstretched countries such as Latvia or Romania. It has relatively strong foreign-exchange reserves and its banks aren't as deeply in debt as in some neighboring countries.

But in a panicky market, even relatively strong economies such as Poland are taking a beating. Rising unemployment -- expected to reach more than 12% in mid-2009, from 9% in September -- will reduce spending. Last year's growth of 4.8% could easily be erased. Bankruptcies will rise by at least 20% this year, according to Euler Hermes, a unit of the Allianz insurance group.

Furniture maker Swarzedz Meble S.A., founded a century ago, survived war and communism and became one of Poland's first companies to list on the stock exchange. After several years of sharply declining sales, Lukasz Stelmaszyk, now 34, took over as CEO in October 2007 and embarked on an ambitious turnaround plan. Last year brought signs of success. Sales in the consumer division doubled in the first three quarters of the year, compared with the year-earlier periods, he says.

But in the final quarter, as the world economy began to stumble, consumer growth slowed, while business customers -- especially in Germany, Ukraine and Russia -- began to put off purchases being discussed. Things got so bad, so quickly, that a month ago, Mr. Stelmaszyk recommended the company be liquidated. "We were very optimistic about 2008 and 2009," he says. But, "every week as the crisis evolved, customers canceled discussions."

As the zloty rose last year, some companies tried to take advantage of the volatility to speculate -- and tripped up. Sfinks Polska SA, a restaurant chain, has almost no revenue in euros. But the company in August and October swapped some of its debt into euros. That contributed a loss of 8.8 million zloty ($2.4 million) by the end of the year.

The management was replaced in November, and last week the new management filed for bankruptcy. "In the opinion of the current management, these deals were speculative," wrote Mateusz Sielecki, the current Investor Relations Manager, in an email.

Many Polish borrowers are angry at the banks, who heavily advertised Swiss-franc loans. The trend had started in 2004, but gathered momentum with a real-estate boom from 2005 to 2007, as Poles rushed to buy their own homes. Banks put out posters offering rates as little as 3% for a franc-denominated loan, but included little clear information about the inherent risk of borrowing in another country's currency.

NOTE: Write to Sebastian Moffett at sebastian.moffett@wsj.com, Marek Strzelecki at marek.strzelecki@dowjones.com and Marcus Walker at marcus.walker@wsj.com.

LINK: http://online.wsj.com/article/SB123533869778943485.html

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19. UKRAINE MUST BE RESCUED FROM TRAGI-COMEDY FOR EUROPE'S SAKE
Ukraine is degenerating into tragi-comedy. The president and premier are at daggers drawn.

Comment: by Ambrose Evans-Pritchard, Telegraph, London, UK, Wed, 18 Feb 2009

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21. COLLECTIVE ENERGY SECURITY: A NEW APPROACH FOR EUROPE

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22. OH, WHAT A TANGLED WEB OF GAS PIPELINE PROJECTS!

ANALYSIS & COMMENTARY: By John Marone, columnist, Kyiv
Eurasian Home website, Moscow, Russia, Monday, February 9, 2009

One of the causes most often given for the start of World War One is the maze of bilateral treaties that had been signed between the European powers of the day. One country was obliged to declare war against another because it had signed a mutual defense pact to come to its ally’s aid in case of an attack.

Today, it’s not tangled defense treaties that threaten European stability but rather a web of gas pipeline projects – none of which addresses the real problem with the continent’s energy policy.

The Russians have at least two pipeline projects on the table, Nord Stream and South Stream, which would provide a direct connection to their two best European customers, Germany and Italy respectively.

Implicit in the acceptance of the Russian projects is that Ukraine, which transits 80 percent of Europe’s eastern gas supplies, is an unreliable partner.
Unfortunately, following the flare-up of another Christmas-time gas standoff between Ukraine and Russia, the Kremlin currently looks just as unreliable if not more in the eyes of its Western customers.

Even if one agreed that Ukraine hadn't been paying for the gas it imported from Russia, why did Moscow let the debt get out of hand? Why did it respond so harshly? Why was the whole business so shady and steeped in politics?

Ukraine, of course, has not come out of the affair unscathed either. Like Russia, it forfeited a load of badly needed revenues and further soiled its bid to integrate with Europe.

And also like Russia, Ukraine has its own pipeline project, White Stream, which as one might expect goes around Russia and through Ukraine to Europe.
Then there is the American favorite, the Nabucco pipeline, which goes around both Russia and Ukraine through the darling of the Bush Administration, Georgia, and then NATO member Turkey.

No one in Washington apparently wants to consider the possibility that the Turks will get sick of applying for EU membership and replace the country’s military elite with an Islamist regime.

For that matter, neither Russia, Ukraine, the United States or anyone else seem to want to consider the possibility that Central Asia will fall under a ‘non-European’ influence. But considering how the wars in Afghanistan and Iraq are going, is this really such a far-fetched scenario?

At the very least, the leaders of countries such as Turkmenistan must have realized long ago that they own the goose that lays the golden eggs. Neighbors such as China and India are also willing to pay for hydrocarbons to fuel their developing economies.

But that’s all down the road, along with American and European plans to invest in renewable energy. Solar shields, wind farms, etc. take a lot of long-term investment. And for the time being, there is lots of money to be made from selling gas and oil.

Instead, we are hearing the always progressive-minded Europeans talking about building new storage facilities so as not to be caught in a lurch again. This strategy, of course, completely ignores the root problem of 'unreliable' suppliers.

Putin’s Kremlin has never made it a secret that it intends to use the country’s position as a major gas supplier to extend its geopolitical influence.
This geopolitical influence includes preventing former Soviet republics like Georgia and Ukraine from joining NATO.

The recent gas war, which didn’t bring the Kremlin the results it expected, was actually the latest in a series of moves to increase Russian control over its immediate neighbors.

The Kremlin had previously been successful in keeping European energy policy divided by cutting deals with individual countries. It also had appeared to be reversing global condemnation of its short war against Georgia.

Indeed, it’s not difficult to believe that Moscow may eventually be able to gloss over its behavior during the recent gas war. A little money and time have a way of melting the iciest of criticism.

Ukraine, unfortunately, is short of both money and time. If the world’s rich countries are reluctant to invest in alternative fuels and greater efficiency, what can one expect from cash-strapped Kyiv?

Ukraine could open up its hydrocarbon fields to international investment. Prime Minister Yulia Tymoshenko has already managed to get rid of the shady intermediary companies that controlled gas imports from Russia.

However, it takes time for such measures to pay off. Which brings us back to Russia. Forget about the Kremlin's PR effort against Ukraine in Europe. The Ukrainians are already rolling over on their own.

Rumors about what Tymoshenko had to concede to the Kremlin in order to get rid of the intermediary companies and keep import prices low were still circulating when she announced during a trip to Germany last weekend that she was asking Moscow for a loan. Speaking to journalists, however, Tymoshenko denied media reports that she had agreed to sign an agreement yielding Soviet-era assets to Russia.

The list of other possible Ukrainian concessions is long: renewing the Russian Black Sea Fleet’s lease on its base in Crimea, making Russian an official language, connecting Crimea to southern Russia by a bridge, subordinating Orthodox churches in Ukraine to Moscow and refraining from joining NATO.
NATO membership for Ukraine has become all but a distant dream anyway, with even the Americans throwing in the towel for now.

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U.S.-Ukraine Business Council (USUBC): http://www.usubc.org

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23. GAS AGREEMENT WITH RUSSIA LED TO A NEW ROUND

OF POLITICAL STRUGGLE IN UKRAINE

Analysis & Commentary: By Stanislav Pritchin, Political Analyst, Research Fellow,

Sociology & Political Science Dept, Lomonosov Moscow State University, Moscow
Eurasian Home website, Moscow, Russia, Tuesday, February 17, 2009

The Russia-Ukraine gas conflict, which took place in January, is of great importance to Ukraine’s politics in 2009. The presidential election will be held at the beginning of 2010, so all the major Ukrainian policy-makers use the conflict and its settlement for the further political struggle.

Yuliya Tymoshenko will fight to the bitter end
At first sight, Prime-Minister Yuliya Tymoshenko turned out the winner after the gas row with Russia. Yuliya Tymoshenko showed that she was the main Ukrainian partner of the Russian authorities. This is of particular significance to her in terms of her popularity growth in Ukraine’s southern and eastern regions.

The second important psychological point for Yuliya Tymoshenko is removal of the mediator “RosUkrEnergo” from the scheme of gas supplies from Russia and Central Asia to Ukraine. Dmitry Firtash, its co-owner, is one of the financial backers of the Premier’s political opponents – President Viktor Yushchenko and the Party of Regions.

However the detailed analysis of the agreements with Russia makes it possible to express against the Prime Minister a lot of grievances concerning protection of national interests of Ukraine. Those include too high base price ($450 for one thousand cubic meters of gas), keeping the raw materials transit rate for 2009 with the gas price coming up as well as moving of “Gazpromsbyt Ukraina” into Ukraine’s domestic market – this company is going to occupy its 25%.

The Ukrainian Prime Minister’s opponents are making the most of those shortcomings. Dmitry Firtash became the most biting critic; he started the furious information attack on Yuliya Tymoshenko in the mass media, which he controls, above all, in “Inter”, the popular Ukrainian TV channel.

But, to all appearances, Yuliya Tymoshenko is not going to leave the Cabinet. The Premier’s opponents would have to form a new coalition and a new Cabinet to oust her. The Ukrainian experts believe that this is unlikely to be done today since the Party of Regions faction and the number of MPs, who are loyal to Viktor Yushchenko, are too small. However, Yuliya Tymoshenko’s being in office as Prime Minister during the extremely deep economic crisis is dangerous in terms of presidential prospects.

Vitaly Bala, director of the Situations Modeling Agency, thinks that “Yuliya Tymoshenko’s seeking to stay in office as Prime Minister in the pre-election year, while carrying the responsibility for the social and political situation in Ukraine that is worsening during the world crisis, means that she is a fighter by nature and will fight to the bitter end”.

Yuliya Tymoshenko follows the aggressive policy to keep her approval rating. Volodymyr Gorbach, analyst with the Institute of Euro-Atlantic Cooperation, believes that “the Premier’s immediate task is to get control over Ukraine’s National Bank in order to make up for the budget gap at the expense of public bonds issue”.

Viktor Yushchenko tries to worsen his rivals’ chances
Viktor Yushchenko has the weakest position. He has almost lost the chance to be elected for the second term. According to the public opinion polls, Mr. Yushchenko enjoys popularity ratings of around 3-4 percent and fights only for the place among the five most popular presidential candidates.

The gas conflict made the President and his team position themselves as the main political force in the country. On 20 January the President’s Secretariat joined the aggressive mass media campaign against Yuliya Tymoshenko. The Premier was accused of “betrayal of Ukraine’s national interests for the sake of her political purposes”.

In late January-early February the President’s team altered its grievances against Yuliya Tymoshenko, passing from criticism of the gas agreements to the Cabinet inability to overcome the grave financial crisis which the Ukrainian economy faces. Apparently, such a tactic is aimed at making Yuliya Tymoshenko’s rating as low as possible and at shifting the responsibility for the economic problems onto the Premier.

The Party of Regions keeps silent and loses
The Party of Regions and its leader Viktor Yanukovych seem to come off worst. During the gas crisis Party’s members made few statements in the mass media and Viktor Yanukovych himself appeared on television only when the agreement was signed. That’s why the traditional supporters of the Party of Regions were somewhat confused.

Such a passive position of the Party of Regions confirms once again that it is not very efficient opposition party. The party virtually lost its opportunity to single-handedly act as the major pro-Russian political force. More than that, removal of “RosUkrEnergo” company from the gas market has deprived the Party of Regions of important financing source, which is especially unwelcome now that there remains less than a year before the presidential campaign.

Viktor Yanukovych found himself in a complicated situation. Taras Berezovets, a political analyst, believes that “the Party of Regions leader has to maneuver between the two main party financial backers: Dmitry Firtash and Rinat Akhmetov. The former would like to cancel the agreements with Russia, to make his company sell gas again and to fire Yuliya Tymoshenko.

The latter is inclined to come to terms with the Premier and he will not clash with her on the threshold of the presidential election”. At the same time, Ukrainian political commentator Vitaly Kulik said that “neither Dmitry Firtash nor Rinat Akhmetov will favor Viktor Yanukovych in the coming election”.

For all that, Viktor Yanukovych enjoys the highest approval rating. It is higher than that of Yuliya Tymoshenko, Mr. Yanukovych’s main rival, by 4-5 %. Under the circumstances, many things will depend on Viktor Yanukovych’s actions and their results.

LINK: http://www.eurasianhome.org/xml/t/expert.xml?lang=en&nic=expert&pid=1909

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24. PRES VIKTOR YUSHCHENKO VS PM YULIYA TYMOSHENKO:

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26. THE EUROPEAN UNION'S LOW-FLYING EASTERN PARTNERSHIP

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27. HISTORY BEGINS WITH DOCUMENTS
US Embassy in Ukraine hands over microfilms from the US National
Archives to the Central State Historical Archive of Ukraine

By Ihor Siundiukov, The Day Weekly Digest in English #5,
Kyiv, Ukraine, Tuesday, 17 February 2009

History becomes historical science when it transforms from a range of hypotheses, assumptions, and emotional statements into precise knowledge based exclusively on trustworthy sources and archival documents. In historical science these sources play the same role as experiments do in natural science. That is why every contribution to the Ukrainian National Archive is truly a good, early awaited event.

On February 10, in the building of Ukraine’s State Archive Committee, the US Embassy presented the Central Historical Archive of Ukraine with microfilms of documents from the US National Archives at a solemn ceremony. The gist is made up of seven rolls of microfilm containing 13 volumes of correspondence between the US Consulate in Odesa and the US Department of State from May 1831 until August 1906.

These archival documents cover some landmark historical events in the history of Ukraine and the Russian Empire: the Crimean War, reforms of the second half of the 19th century, and the revolutionary events of 1905, particularly the mutiny on battleship Potyomkin. In fact, they are not just memos, reports, and communiqu s about particular events, but also the American diplomats’ observations about some special aspects of Ukrainian and Russian history.

This collection of microfilms was presented as a gift to the Odesa Oblast State Archives in 2004. Now it has enriched the collection of our state’s supreme archival institution and will serve as a uniquely valuable historical source for the students of Ukrainian-American relations and the history of diplomacy.

The ceremony was attended by William Taylor, US Ambassador Extraordinary and Plenipotentiary to Ukraine, Olha Ginzburh, head of Ukraine’s State Archive Committee, Christopher Fitzgerald, US Embassy Counselor for Press, Cultural, and Educational Affairs, the administration and the staff of the State Archive Committee and other archival institutions, and other officials.

In his speech William Taylor stated that archives constitute the quintessence of a nation’s history whether it is the USA, Ukraine, or any other country. He quoted his wife, a historian by trade, who was also present at the ceremony: “History begins with documents. This is the only this way to restore the real, truthful picture of the past.”

“Notice how carefully and reverently,” continued the US ambassador, “the historic documents of America — the Declaration of Independence, the US Constitution, and major laws — are kept in the Library of the Congress and other archival institutions.” William Taylor said that the archives enable us to discover and restore our country’s history. However, that is not all. The approach to studying the materials of most recent history is not less democratic.

On Jan. 20, 2009, at 12:00 sharp, US president-elect Barack Obama assumed the office of the president, and precisely at that moment the US National Archives received all the documents on the eight years of the Ex-President George Bush rule. The future researchers will write the history of Bush’s administration relying on these documents. And then, one day, Barack Obama’s incumbency will be studied in the same way.

By the way, according to Olha Ginzburh, it was in 2008 that the Ukrainian archives started receiving certain materials on Ukraine’s political history since 1991. How much could historians learn by analyzing the archives of Leonid Kravchuk and Leonid Kuchma? The question is rhetorical.

Another crucial thing, both for the American and Ukrainian archives, is how accessible they will be. Time will tell.

LINK: http://www.day.kiev.ua/264639/
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28. LAND OF DILEMMAS: WOULD YOU RISK YOUR LIFE TO SAVE YOUR ENEMY?

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29. HOLODOMOR: A CRIME OF UNPARALLED BRUTALITY

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30. FAIRY TALES FROM A TIME OF EVIL
Jewish artist Bruno Schulz was ordered to paint a nursery for a Nazi officer before he was

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