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Action Ukraine Report

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

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

"THE ACTION UKRAINE REPORT - AUR" - Number 477
E. Morgan Williams, Publisher and Editor
morganw@patriot.net, ArtUkraine.com@starpower.net
Washington, D.C. and Kyiv, Ukraine, THURSDAY, May 5, 2005

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

1. WILL UKRAINE MOVE FORWARD OR BACK?
Question of Investigating Former Asset Sales Splits an Uneasy Coalition
WORLD NEWS: By Alan Cullison, Staff Reporter
The Wall Street Journal, New York, NY, May 4, 2005; Page A17

2. UKRAINE MEDIA POSITIVE ON YUSHCHENKO'S 100 DAYS IN OFFICE
BBC Monitoring research in English 4 May 05
BBC Monitoring Service, UK, Wed, May 4, 2005

3. UKRAINIAN PRESIDENT PROUD OF FIRST 100 DAYS RECORD
"One Hundred Days After Maydan" TV Documentary
UT1, Kiev, in Ukrainian 1635 gmt 4 May 05
BBC Monitoring Service, UK, in English, Wed, May 4, 2005

4. UKRAINIAN PRESIDENT YUSHCHENKO DECORATES HIS OFFICE
Ukrainian antiques, paintings, tapestry, Easter eggs, chests
Office has a decidedly more Ukrainian style look
"How the first office of Ukraine looks"
By Dmytro Lykhoviy and Lesya Shovkun
Ukrayina Moloda, Kiev, in Ukrainian 28 Apr 05, p 7
BBC Monitoring Service,UK, in English, Tue, May 03, 2005

5. UKRAINE: PRES SLAMS BELARUS FOR NOT FREEING PROTESTERS
Associated Press (AP), Kiev, Ukraine, Wed, May 4, 2005

6. UKRAINIAN MAGNATE RINAT AKHMETOV PROMISES TO HELP
USA FUNDED RADIO LIBERTY BROADCAST IN EAST
Ostrov web site, Donetsk, Ukraine, in Russian, Wed, 4 May 05
BBC Monitoring Service, UK, in English, Wed, May 4, 2005

7. DONBAS: WE'LL CHANGE OFFER ONCE WE RECEIVE EXCLUSIVITY
Polish News Bulletin, Warsaw, Poland, Thu, May 05, 2005

8. UKRAINE: DONBAS INDUSTRIAL UNION (DBU) TAKES LEAD OVER
MITTAL STEEL IN BUYING POLAND'S HUTA CZESTOCHOWA
DIU is one of the largest companies in Ukraine, established in 1995
REPORT: By Andrey Voltornist, Ukraine Analyst
IntelliNews - Ukraine This Week
Kyiv, Ukraine, Wed, May 4, 2005

9. CANADA-UKRAINE BUSINESS FORUM IN KYIV - MAY 11 & 12
Stephen Bandera, Four Freedoms
Kyiv, Ukraine, Wed, May 4, 2005

10. U.S. DEPARTMENT OF COMMERCE INITIATING A REVIEW TO
DETERMINE WHETHER UKRAINE SHOULD BE CONTINUE
TO BE TREATED AS A NON-MARKET ECONOMY
COUNTRY FOR ANTIDUMPING DUTY LAW
U.S. DEPARTMENT OF COMMERCE
International Trade Administration (ITA) (A-823-812)
Washington, D.C., 70 FR 21396, April 26, 2005

11. U.S. HOUSE BILL TO AUTHORIZE THE EXTENSION OF
NONDISCRIMINATORY TREATMENT (NORMAL TRADE RELATIONS)
TO THE PRODUCTS OF UKRAINE
Jim Gerlach, Member of U.S. Congress
Sixth District, Pennsylvania (R-PA)
U.S. House of Representatives
Washington, D.C., March 2, 2005

12. UKRAINE COMMUNISTS TO PROTEST AGAINST VETERAN STATUS
FOR PARTISANS WHO FOUGHT BOTH NAZIS AND SOVIETS
Associated Press, Kiev, Ukraine, Thu, May 5, 2005

13. BUSH TO REMIND PUTIN OF SOVIET BALTICS OCCUPATION
Thanks Lithuania for its support of democracy in Ukraine
Associated Press (AP), Vilnus, Lithuania, Thu, May 5, 2005

14. STILL THE TYRANT, STALIN REFUSES TO BE WISHED AWAY
LETTER FROM EUROPE: By Steven Lee Myers
The New York Times, New York, NY, Wed, May 4, 2005

15. THE MEDIA: LOOKING BACK IN ANGER
The Holocaust and America's Most Important Newspaper, NY Times
Book Review by Peter Novick
Book World, The Washington Post
Washington, D.C., Sunday, May 1, 2005; Page BW06
=============================================================
1. WILL UKRAINE MOVE FORWARD OR BACK?
Question of Investigating Asset Sales Splits an Uneasy Coalition

WORLD NEWS: By Alan Cullison, Staff Reporter
The Wall Street Journal, New York, NY, May 4, 2005; Page A17

Four months after it swept to power promising Ukraine a future closer to the
West, the government of Viktor Yushchenko is torn over how deeply to probe
the past -- and reverse a host of allegedly crooked asset sales under former
President Leonid Kuchma.

The question is splitting Mr. Yushchenko's cabinet, an uneasy coalition of
socialists, agrarians and pro-business politicians who led protests last
fall that helped bring his government to power. The uncertainty over who
will be allowed to own what in the coming years has put a crimp on
investment, and threatens to hobble Ukraine's economy, which last year
was the fastest-growing in Europe.

Mr. Yushchenko's handling of the problem could have ramifications well
outside this France-size nation of 48 million between Russia and Europe.
In nearby states of the former Soviet Union, oppositionists are watching
whether Ukraine's Orange Revolution fosters prosperity, or turns to
recriminations and revenge.

Worries about nationalization in Ukraine have in part been heightened by the
experience in Russia, where a government attack on oil company OAO Yukos
has hurt investor confidence and slowed economic growth. Fearing the same
could happen in Ukraine , Mr. Yushchenko last week ordered his cabinet to
put
an end to uncertainty about how many companies might be nationalized, and
submit a final list of privatization deals next week that might be reviewed
by the government. "We need to finish the evaluation of property in the near
future," he said.

Diplomats and analysts, however, think it may take longer, because
disagreements run deep. Earlier this year Mr. Yushchenko's prime minister,
Yulia Tymoshenko, said the number of companies to be reviewed could be
as high as 3,000. Mr. Yushchenko contradicted her and said the number is
closer to 30. "There are a lot of contradictory messages coming from the
government," said Hartmut Jacob, head of Renaissance Capital Ukraine,
an investment bank. "It creates all kinds of uncertainty."

Although some cases are already in the courts, Ms. Tymoshenko has said
she wants to pass a law that will spell out how privatizations will be
reviewed.

The government, she said in a magazine interview last month, should hold a
new round of auctions in which many of the old owners will probably just
reacquire their companies after making "a payment for what the country
gave them for free some time ago."

Some of the turmoil over privatization stems from the fact that the
government is uncovering corruption scandals far larger than anyone
predicted. In previous years, much of the country's power and property fell
under the control of regional clans who supported Mr. Kuchma, the former
president. Many of the privatization deals now being scrutinized involved
the groups, which are now being broken up by government pressure and,
in some cases, arrest.

Mr. Yushchenko so far is determined to reverse one privatization: the sale
of the country's largest steel plant, Kryvorizhstal, to a consortium of
business leaders that included the president's son-in-law, Viktor Pinchuk.
Mr. Pinchuk, who says he is being persecuted in a Yukos-style confiscation
of his property, has taken the case to the European Court of Human Rights.

Last month, one of Mr. Pinchuk's partners, Rinat Akhmetov, left the country
after police arrested his main business partner on charges of extortion and
attempted murder. Before leaving Mr. Akhmetov took $153 million, or about
?119 million, in cash from his holding company, System Capital Management,
which controls a host of businesses in the eastern part of the country, near
the industrial city of Donetsk, Ukrainian news services reported. Mr.
Akhmetov hasn't been charged with anything; a spokeswoman for Mr.
Akhmetov said she doesn't know where he is.

The government has also been rocked by scandals in Kiev. In March the
government's transportation minister announced that more than $300 million
of a loan from Deutsche Bank to the former government had gone missing. It
was supposed to go to construction of a railroad bridge across the Dnipro
River in Kiev. The minister said the bridge would be finished, but it wasn't
clear on "exactly what terms."

The disappearance of the loan may be the reason the last transportation
minister shot himself in the head in December, police said. Investigators
are looking into whether he helped divert the money to last year's
unsuccessful government-backed candidate for president, former Prime
Minister Viktor Yanukovych. Mr. Yanukovych hasn't been charged with
anything in connection with the case.

Pressure on the government is also mounting thanks to a postelection bout of
inflation that has angered consumers and sparked protests in Kiev. In a vain
attempt last year to win voters, Mr. Yanukovych doubled pensions before the
November vote. The wash of money into the economy set off price rises
beginning late last year.

Mr. Yushchenko's government has responded with even more pension
increases this year. To help control the inflation, Ms. Tymoshenko ordered
fuel companies to hold prices steady. When they resisted, she accused two
major foreign oil companies that dominate the market, BP PLC's Russian
joint venture, TNK-BP, and Russia's OAO Lukoil, of fixing prices. Ukrainian
prosecutors hinted they could lose their refineries, bought in the 1990s
during controversial privatization auctions.

The oil companies caved in, but TNK-BP officials say they may take their
business elsewhere if the price controls cut too deeply into profits. A
company official said there was "a pinch of politics" in the government's
treatment of the companies.

For now, Russian investors appear to be the most alarmed by talk of
nationalization in Ukraine . Russians have been the biggest investors in
Ukraine and hence have most to lose. Many had ties with the government
or clans who have dominated the Ukrainian economy.

Igor Yurgens, a top official at Russia's leading business group, the Russian
Union of Industrialists and Entrepreneurs, said a lot of Russian investors,
big and small, looked to invest in Ukraine after the Orange Revolution. "But
Tymoshenko's comments really scared them and now they're thinking twice,"
he said.

Ukraine's stock market is 20% off its January peak, but still up nearly 200%
from before the Orange Revolution. Demand for steel, the country's main
export, is surging, fueling a huge trade surplus.

The government is forecasting growth of more than 8% this year, still robust
after last year's 12% surge. The tide of investor money into Ukraine's bond
market has put pressure on the dollar. Last week Ukraine's National Bank
gave up on intervention, and the national currency, the hryvna, rose nearly
3% in one day.

But Anders Aslund, an analyst at the Carnegie Center in Washington, said
sentiment can turn quickly. "The members of this government right now are
going in very different directions," he said. "Something must be done about
it." -30- [The Action Ukraine Report Monitoring Service]
---------------------------------------------------------------------------------------------------------
Write to Alan Cullison at alan.cullison@wsj.com
=============================================================
2. UKRAINE MEDIA POSITIVE ON YUSHCHENKO'S 100 DAYS IN OFFICE

BBC Monitoring research in English 4 May 05
BBC Monitoring Service, UK, Wed, May 4, 2005

KYIV - Ukrainian media comment on President Viktor Yushchenko's
100 days in office has been mostly positive. Commentators say that
while there are obvious problems and disappointments, much progress
has also been made, and the new administration has not squandered
the credit of people's trust.

Recent polls indicate that Yushchenko's and Tymoshenko's high
approval ratings have either edged up or fallen very slightly since they
came to power.

The problems highlighted most often in the media include:

--- controversial personnel policy, with some regional appointments
raising many questions; government figures are accused of failing to
divest themselves of business interests, though no specific malfeasance
allegations so far apart from the Justice Minister Roman Zvarych oil affair,
which has now died down;

--- slowing GDP growth and higher inflation. Many commentators suggest
the government's social spending is responsible for this, though some point
out that those figures reflect the trends that developed under the previous
government. Prime Minister Yuliya Tymoshenko recently said inflation was
down to 0.8 per cent in April;

--- sharp appreciation of the hryvnya, which hit many Ukrainians who keep
savings in dollars. Most commentators agree that while the appreciation
was probably a good thing it should have been done much more gradually;
--- sharp rise in meat and petrol prices. Prices at the pump are now back to
more or less what they were before the crisis, but doubts remain as to how
long they'll hold. Meat prices have fallen recently after government
intervention on the market, but are still higher than before;

--- concerns about the plight of exporters and domestic manufacturers
after the cancellation of tax privileges, reduction of import tariffs and
appreciation of the hryvnya;

--- bickering among ministers; reported tension between Tymoshenko
and National Security and Defence Council secretary Petro Poroshenko;
uncoordinated government reaction to the hryvnya move;

--- accusations in opposition media that the fight with corruption is
selective as it is mostly figures in the former regime who are at the
receiving end. Arrest on extortion charges of Donetsk regional council
chairman Borys Kolesnykov, a key ally of defeated presidential candidate
Viktor Yanukovych, has attracted much criticism in the opposition media;

--- some commentators point out the lack of specific foreign policy
achievements such as cancellation of Jackson-Vanik amendment or
obtaining market economy status; the EU is said to be cool to the idea
of Ukraine's eventual membership;

--- accusations that Yushchenko was too optimistic when he declared the
Gongadze case solved; charges that the investigation is being mishandled
peaked after the death of former Interior Minister Yuriy Kravchenko on the
day he was due to be questioned, but have since died down;

--- continuing uncertainty over the government's reprivatization policy is
said to be scaring off investors;

However, most commentators agree that there have been notable
achievements such as:

--- substantial rise in wages, pensions and social spending;

--- the government is said to be much more open, honest and
democratic, with Yushchenko himself being held in especially high
regard;

--- healthy current account, higher budget receipts, lower customs
tariffs that are expected to lead to lower price of imported goods;
progress towards creating a level playing field for businesses;

--- "breakthrough" in foreign policy; general acceptance that Ukraine's
international reputation has been transformed. Relations with Russia,
while obviously cooler than before, are not said to be a particular cause
of concern. Yushchenko's approach to Moscow has often been praised
as measured and pragmatic.

--- successful campaign against smuggling;

--- campaign against corruption, with many former and current officials
questioned and some arrested, has attracted lots of positive comment;
--- undisputed progress in terms of media freedom; progress in the
Gongadze investigation, with high-ranking police officers suspected of
killing the journalist already in custody

--- government is said to be on track to pulling out troops from Iraq; term
of army service has been cut, as promised by Yushchenko during the
election

Below is a selection of quotes from the media on the government's
performance so far:

[1] Inter television

The main change has been in the level of honesty rather than
professionalism. The president and prime minister now behave as
people who understand that the main thing is the support of their
voters, not of the people who count the votes. A 60-per-cent rise in
wages in the budget sector, 20-per-cent rise in pensions, lower
customs tariffs, attempts to bring down meet prices this is the
behaviour of a government that intends to win the 2006 parliamentary
election, not rig it.

[2] Korrespondent newspaper

The president has given his cabinet an A for performance in the first
quarter. The people's grade is not quite so unambiguous some have started
to earn more, some have seen the value of their [dollar] savings fall after
the appreciation of the hryvnya. The opposition has given the government
an F,but Ukrainians don't seem to agree, judging from the poor attendance
of protest actions staged by the government's opponents. Many people are
worried about rising prices. But these concerns have not affected the credit
of people's trust Yushchenko and Prime Minister Yuliya Tymoshenko still
enjoy.

[3] One Plus One television

"Bandits to prison!" is one of the election slogans that the president has
not yet been able to realize in full. The only well-known representative of
the old authorities to have been detained and jailed is Borys Kolesnykov,
the head of the Donetsk regional council and a representative of [defeated
presidential candidate Viktor] Yanukovych's blue-and-white camp. Orange
representatives have also been called in for questioning, but none of them
is currently behind bars.

[4] UT1 television

Nominal incomes are up 40 per cent in the first quarter. The fight with
corruption has helped to increase budget receipts by 62 per cent. But GDP
growth is slowing, prices are rising, and the opposition says the government
cannot afford higher social spending. The promised economic miracle has
not yet materialized, but it is too early to judge the government.

[5] Stolichnyye Novosti newspaper

It is too early to speak about the results of the government's 100 days in
power they will only become obvious in a couple of months. This period has
been the government's honeymoon with the people, but love boats often
crash against reality. And however huge the credit of people's trust, people
start criticizing the government if they don't see the results.

[6] Glavred.info web site

In foreign policy, the Yushchenko team has been more successful than in
other areas largely thanks to Yushchenko's personal efforts. The Orange
Revolution has changed the world's attitude to Ukraine for the better.
After 100 days of the new administration, the Western direction has
become a priority in Ukraine's foreign policy, for the first time ever.

[7] Korrespondent newspaper

Former Prime Minister Viktor Yanukovych's criticisms of the new govern-
ment are no different from the criticisms he himself faced six months ago
while still in office. But many voters actually like the government's tough
methods of dealing with economic problems. The "strong hand" policy is
popular with Ukrainians. According to the recent survey, current Prime
Minister Yuliya Tymoshenko's popularity rating has even edged up since
she took office - from 50.4 to 50.5 per cent... The president and prime
minister certainly have no reason to worry about their personal approval
ratings, although the prospects of the political forces they lead are not
so cloudless. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
3. UKRAINIAN PRESIDENT PROUD OF FIRST 100 DAYS IN OFFICE

"One Hundred Days After Maydan" TV Documentary
UT1, Kiev, in Ukrainian 1635 gmt 4 May 05
BBC Monitoring Service, UK, in English, Wed, May 4, 2005

KIEV - Ukrainian President Viktor Yushchenko has said he is proud of his
first 100 days in office. Speaking in a TV documentary, Yushchenko praised
successes in the international arena and said that Russia should stop
viewing Ukraine as "a vassal and a province".

Speaking about controversial amendments to the constitution approved in
late 2004, Yushchenko said he "would not be very surprised" by possible
moves to annul some of them. He also admitted that some of his
appointments were misguided.

The following is an excerpt from the documentary entitled "One hundred
days after Maydan" broadcast by Ukrainian state-owned television UT1
on 4 May; subheadings have been inserted editorially:

[Yushchenko, speaking in his office] As long as there are people out there,
I will go out to them. I remember what we said at Maydan [Independence
Square in Kiev, the focal point of the Orange Revolution] and what we
promised. This is the sort of communication which always gives you an idea
of where you should be. [Passage omitted: clips of Yushchenko talking to
crowds of protesters, speaking about his openness to the public, describing
his office]

Of course, I was not aware of many things. Back when I was prime minister
in 2000-2001, there was a lot I did not know about what was going on in the
government system, particularly in relations between the uniformed
ministries. Not because I did not want to know, but because the prime
minister did not have access to this sort of knowledge or information. I am
discovering bits which give me great knowledge, on the one hand, as well
as great worry and responsibility.

Several things that have been going on in the past three or four years are
horrible. We are working to reduce the risk of destroying or damaging
Ukraine's reputation, starting from the security theme. A lot of things have
been sold, in the literal and figurative sense, to devalue the independence
and the defence capability of this country.

Even judging from things that are well known to the average citizen, like
those missiles [reportedly sold to Iran and China]. How could missiles
have been stolen in Ukraine, where there is a full-fledged security service,
counter intelligence and a special closed state body, Ukrspetseksport
[arms exporter]?

We cannot live in peace until we tell the truth to the world and to
ourselves. Particularly because all this happened in these offices. This is
it. More details emerge every day about who played which role. [Passage
omitted: defeated presidential candidate Viktor Yanukovych, his wife,
former Kharkiv governor Yevhen Kushnaryov, Donetsk Region council
Borys Kolesnykov, former President Leonid Kuchma speak against
Yushchenko's supporters and in favour of an autonomy in eastern Ukraine,
Yushchenko shown handing out symbolic bread to supporters, saying that
he misses his late mother.]

CALLS FOR ETHNIC TOLERANCE

Do you know why I feel comfortable in any region? I do not take any
projects with me for which I would be ashamed, be it language, church
or history issues. I am ready to declare my position on these issues
publicly and honestly. On language problems - friends, we will speak
not only Ukrainian or Russian, but a couple dozen other languages too.

This is the way it is going to be. Let us put an end to discussions about
what we should learn, Ukrainian or Russian. If we want to live in the third
millennium, let us learn Ukrainian quickly, because we live in Ukraine.

Let those who need it, quickly learn Russian, because we have unique
old traditions - I'm not saying they are good or bad, I'm just stating the
fact - deep, family, ethnic, Slavic, etc., traditions. This obliges us to
speak and respect the Russian language. I am convinced that we, not
Russians, will benefit if we know the Russian language and literature.
[Passage omitted: more on tolerance, veterans who fought for opposing
sides in World War II should reconcile]

RELATIONS WITH RUSSIA CHANGED

I am ready to set aside all private and personal problems, let them recede
into the past. The most important thing is that the Ukrainian nation
benefits. This is the point. If something benefits Ukraine, I am ready to
turn over something from my history or my troubles and say, you know,
I am ready to forgive this. This is not so important to me in the context of
Ukraine's interests.

[Video shows Yushchenko's meeting with Russian President Putin.]

I understand that for very many generations of Russian politicians -
especially politicians, not for the people of Russia or business people, but
for this cohort at the top political establishment - for a long time to come
they will see Ukraine as a vassal and a province. However, I am sure that
the trends in the highest echelons show that sober-minded politicians
have to get used to absolutely different principles of relations and to a
different model of relations, including at a personal level.

I'd say these sort of relations are much more pleasant and more interesting
than having as a partner someone who is suppressed and lacking in
initiative, and never has a position of his own. This sort of partner will
never bring stability. Why was our policy towards Russia in the last
eight-10 years a losing one? We approached the EU four or five times, but
then ran over to Russia. We sowed the seeds after which serious Russian
politicians cannot view Ukraine as a stable partner.

The same goes for Brussels, by the way. I do not think that the Ukrainian
authorities or the Ukrainian president were able to formulate a well-defined
and stable interest backed by the Ukrainian polity, in terms of a policy
towards either Brussels or Russia. We should not be making a secret of
our specific interest in Russia. It is being formed by specific political
efforts. I will do everything so that we win, not lose, this interest. But I
do understand that we will win this interest only when Russia wins as much
from us on a parity basis.

We are interested in integration with Russia because Ukraine's economic
interests, which are worth billions, are formed on the Russian market. It
would be a great stupidity to give them up. On the other hand, what is the
price? On the basis of which principles? We have said the following. Point
number one - this should be in line with Ukraine's economic interests. We
are not playing with political projects here. We are not mixing politics
with this.

Why did I vote against the Single Economic Space [a Moscow-backed union
involving Russia, Ukraine, Belarus and Kazakhstan]? When the issue was
debated in the Ukrainian parliament, [First Deputy Prime Minister] Mykola
Yanovych Azarov did not give a single figure showing where Ukraine's or
Russia's benefits lie, this is where we win, and here we are on parity
basis. In other words, Ukraine needs this project. These arguments were
not presented. We voted against.

However, we are not withdrawing from the [Single Economic Space] treaty.
We are saying that we will support any format for consolidation of interests
or their formalization at the level of bilateral or multilateral accords.
The most important thing is that these principles do not run counter to the
principles on whose basis we are going to build our relations with the
European Union. We should not implement two contradictory models for
Ukrainian interests.

Ukraine has a unique strategic interest in the East, and we will continue
moving along this path regardless of who is president in this country. We
have a unique interest in the West, and we will continue moving along this
path regardless of who is president in this country. Parliament voted by an
overwhelming majority of votes in favour of the EU, NATO and the Single
Economic Space. These are the things where we should introduce a new
art of Ukrainian foreign policy so that we win on each of these fronts.

At my first meeting with Mr Putin I said, please accept this as a position
with which I will live, I will not change it. We walked on very thin ice.

BORDER, BLACK SEA FLEET ISSUES WITH RUSSIA
NEED TO BE RESOLVED

The topic of the border between Ukraine and Russia. The two states have
been independent for 14 years. As long as there is the issue of delimitation
and demarcation of our borders, of recognizing the border in the Kerch
Strait and the Azov Sea [changes tack] if we respect the spirit and the
letter of the big agreement. We noted this in the 2005 road map, that
the two president devote their activities in this field to a full resolution
of these issues.

Another topic is the Black Sea Fleet [of Russia, stationed in Ukraine's
Crimea]. I am convinced that any foreign military presence on Ukraine's
territory is a project which can be implemented exclusively if approved by
the people. There is history behind this issue. There is an agreement
which says that the current military contingent will temporarily be based in
Ukraine until 2017. We proceed from the fact that this accord is a
commitment undertaken by the Ukrainian side. It needs to be confirmed,
and we do confirm it.

But if the current state of affairs is at odds with the framework of this
accord, let us analyse it and say the following. Not all navigation
[equipment] in Crimea has been handed over to Ukraine. Is this correct in
our relations? Of course not. Seventy land plots are misused and have not
been handed over to Russia. Is this correct in our relations? Of course not.
Over 170 pieces of real estate are misused. I am glad that, you know, we
have agreed that the Ukrainian National Security and Defence Council and
Russia's Security Council will tackle these sensitive issues and suggest
ways of solving them to the presidents in three months' time.

SUCCESS ON INTERNATIONAL SCENE

[Passage omitted: clip of Yushchenko addressing US congress,
Yushchenko says it is "fashionable" to have ties with Ukraine.]

In the USA, we reached the figure of 500m [dollars in aid], but this is a
revolving regime which will not end at 500m. The dialogue in the USA
produced things like, well, such a dear name to Ukraine as Sikorsky and
his [helicopter] firm coming back to Ukraine and building a helicopter
factory. Reviving the memory of Igor Sikorsky in the 1920s-30s [when
he was based in Kiev] - I think this was a glorious era.

Talks with Boeing's top managers were successful. The company is
coming back to the Ukrainian market in terms of aircraft construction. There
is a special missile construction project. We want Ukraine to have a firm
place among the world's top 10 aircraft manufacturing countries. But if
we sell 20 machines a year, the way it is now, believe me, it is stagnation
which sooner or later will see us thrown out of the market.

[Video of German Chancellor Gerhard Schroeder welcoming Yushchenko
in Germany]

I remember how we agreed in Germany about the whole complex of geology,
exploration, extraction, reconstruction, modernization and construction of
new gas, oil and electric power lines. When we received a 2bn [dollar]
credit line, this is about as much as had been achieved in the previous five
years. We achieved this in two months. I think that each visit brings in at
least 1bn dollars.

And then, friends, there is a different point. We are talking about
Ukraine's political capital. Tell me please, when was Ukraine received in
Germany, the USA or Brussels? A visit to France will take place in two-
three weeks. When was Ukraine last received in France? There was even
no Ukrainian ambassador there for three years.

Ukraine was seen as a source of problems for Europe, for morals, etc.
This is what brings Ukraine strategic dividends. Therefore, I think that the
breakthroughs we have achieved in Western Europe, America [changes
tack] We are now putting an emphasis on Central Asian countries. Trips
will be made to Kazakhstan.

[Passage omitted: Yushchenko says that Ukraine loses millions because
of the conflict in Moldova's separatist region, that the strong hryvnya
should be applauded, that the investigation of the case of murdered
journalist Heorhiy Gongadze will be completed.]

SOME APPOINTMENTS A "MISTAKE"

In these 60 [as heard] days, we had to change the essence of what is
called the new staffing policy. I do not rule out the possibility that
mistakes have been made there, including in the highest echelon. I
appointed [Oleksandr] Tretyakov [who is shown sitting next to Yushchenko]
my first aide anyway. I will say honestly that I should not have signed some
[appointments]. But it depends on how you look at it. You know, a total of
16,000 appointments at various levels have been approved in the past
two months.

Look, when did Ukraine's top leadership tackle this issue in the past 14
years? Never. When we made a mistake [changes tack] On several
occasions, I had to correct the actions by the prime minister [Yuliya
Tymoshenko], several ministers and regional governors. Well, sorry,
the wrong person was appointed to the post. We made a mistake. What
should we do? I come to those people and say sorry. This afternoon, I
will sign a new decree on an appointment.

For instance, this is what we did about the head of the Dnipropetrovsk
regional administration [Serhiy Kasyanov, who was dismissed a month
after being appointed following mass protests against him.] This was a
mistake.

However, rather senior figures advocated his appointment, including
justifying it by political expediency. But it was a mistake. Despite
criticism, I do not think we lost anything by dismissing this person days
later. I think this showed that if the prime minister or a minister or the
president make a mistake, they are ready to correct it.

[Passage omitted: Yushchenko tells Tretyakov to leave the room after
he told the president that interview time was running out, praises the
cabinet members, Finance Minister Viktor Pynzenyk and Economics
Minister Serhiy Teryokhin.]

OFFICIAL SHOULD NOT CRITICIZE EACH OTHER IN PUBLIC

I know you can engage in polemics with these people, but on one
condition - that the polemics are intellectual. I am not in favour of this
sort of public discussion, because it devalues my friends and partners,
both [National Security and Defence Council Secretary Petro] Poroshenko
and Tymoshenko [seen by many as rivals]. I am sure of this. This is a
defect in upbringing, a lack of political experience or anything.

This should not be done in public. This is the first thing. They are two
able and talented individuals. I would not like to make an emphasis on any
peculiarities of relations between them. The National Security and Defence
Council secretary has a huge field of his own to look after. Go on, apply
yourself. The prime minister has a no smaller field to look after.

I think all these problems should be solved behind closed doors. I do
everything so that scandals within the government and outside of it, in
relations between other institutions, are solved at National Security and
Defence Council meetings or at cabinet meetings held behind closed
doors.

Each minister has the right to behave in a special way and to have a
personal view of various issues. This is looking at it from the professional
point of view. In terms of politics, this person can favour this or that
view. But if cabinet members, ministers, criticize each other for their
views - I do not think this is acceptable in one team.

I will not allow this to happen. This is a formative period. I told this to
my colleagues at a meeting behind closed doors. These tricks and shows
only degrade our common authority. If there are differences and you want
to be critical, tender your resignation to the president, go to Bankova
Street [where the presidential secretariat is located] and shout there from
morning till night that you disagree with the policy pursued by Yushchenko,
Tymoshenko, Poroshenko and all the others. [Passage omitted: more
in the same vein]

CONSTITUTION AMENDMENTS CRITICIZED

How was political reform [controversial constitutional amendments handing
over much of the presidential powers over to the cabinet and parliament]
approved? How many members of the public know at least one article put to
the vote? Very few. It was put to vote as a package, including many things
the nation was not aware of. I am sure this is a second step which is not
correct with regard to the position of 48m people.

Let us not say that there are 450 wise people in parliament, who can trade
in the nation's fate from morning till night. This is a different matter.
As regards the constitution, I would like to say the following - human
rights should not be treated like this. If we respect the nation and its
basic law, the law should not be treated like this. Therefore, this process
is questionable in legal terms.

Third, its contents. Tell me please, is it possible to admit even within our
circle that the imperative mandate [banning MPs from swapping factions]
is a good thing? You can't have a position of your own within a faction. If
you are a politician, you function is to hold debates, voice your political
point of view through political networks, projects and parliament's
legislative decisions. But you're told that, listen, you have to give up
your point of view. What your boss says is the only thing that is right.

Tell me please, who is going to support this sort of contents? Or who
wants the Prosecutor-General's Office to retain the function of general
supervision? Why should we need 1936-37 [years of Stalin's fiercest
repression]? Is this sort of experience present in Ukraine? [Passage
omitted: more in the same vein]

I do not rule out the possibility that concerns and opinions voiced [at a
meeting of representatives of local government] at Ukrayina Palace a few
days ago about the electoral system - especially at the level of village,
district or regional councils - that they will take the form of someone's
initiative. I do not rule out the possibility that the initiatives dealing
with the imperative mandate or general supervision by the
Prosecutor-General's Office will take the shape of a strict political
initiative which will be submitted to the Constitutional Court for
consideration.

I do not rule out the possibility that several lawyers will turn up who will
have something to say about the very procedure of amending the
constitution, that our constitution was treated not entirely correctly. In
other words, I would only like to say that I definitely will not initiate
these things, so as to keep the public order. But I will not be very
surprised if these initiatives are put forward by political forces.
[Passage omitted: The president, the prime minister and
parliamentary speaker will remain key figures.]

YUSHCHENKO PROUD OF HIS FIRST 100 DAYS IN OFFICE

I am proud of these 100 days, I really am. I think my team and I have
done something that allows me not to look down or aside if before me is
a mother, a teacher, a doctor, an invalid, a child, a pensioner, a soldier,
an officer, anyone. I think the nation is convinced that in these 90 [as
heard] days we have not betrayed Maydan, we have not betrayed any
of our words. We are trying to do what we promised, and we are
successful.

Each Ukrainian will feel this with his pocket and his standard of living in
2005. This is my word. There is no doubt that we will retain economic
stability, we will do all this. But, on the other hand, there are beacons
which make you move on forward. This is not the limit.

Of course, I would like to see Ukraine in the EU. I am a European, the
same as those 48m Ukrainians. I am not someone who is going to try
and convince anyone that we are Europeans. This is an axiom for me
and my nation. [Passage omitted: Yushchenko says democracy has
strong roots in Ukraine.] -30- [Action Ukraine Report Monitoring Service]
=============================================================
4. UKRAINIAN PRESIDENT YUSHCHENKO DECORATES HIS OFFICE
Ukrainian antiques, paintings, tapestry, Easter eggs, chests
Office has a decidedly more Ukrainian style look

"How the first office of Ukraine looks"
By Dmytro Lykhoviy and Lesya Shovkun
Ukrayina Moloda, Kiev, in Ukrainian 28 Apr 05, p 7
BBC Monitoring Service,UK, in English, Tue, May 03, 2005

KYIV - While Ukrainian president Viktor Yushchenko's office at the
presidential secretariat still holds traces of its previous occupant,
former President Leonid Kuchma, it has a decidedly more Ukrainian
style, a Ukrainian progovernment daily has said. The authors describe
the antique furniture and interior of the presidential study.

Yushchenko tells them he wants to move his office from the former
presidential administration in Bankova Street to another location in
Mariyinskyy Park. The building in Bankova Street could house the
Foreign Ministry.

The following is the text of the article by Dmytro Lykhoviy and Lesya
Shovkun, entitled "How the first office of Ukraine looks", published in the
newspaper Ukrayina Moloda on 28 April; subheadings have been inserted
editorially:

The president re-outfits an interior which he will take with him to a new
office in Mariyinskyy Park, and [former President Leonid] Kuchma's office
will be redone in its "original" look as a museum.

A NEW INTERIOR

Just as a theatre begins with the cloakroom, the president begins with his
office. The decor of [Ukrainian President] Viktor Yushchenko's place of work
has always eloquently characterized him, and legends have been told about
the Ukrainian flavour of the offices of the leader of Our Ukraine
[parliamentary faction].

But you have to see it. It is rare for a person of such high position to
have such a beautiful hobby, and one which can be seen and sometimes
even touched at his place of everyday work.

Yushchenko collects Ukrainian antiques and objects from his large collection
please the eyes not only at his home and dacha, but actively surrounded him,
for example, at his office on Borychevyy Tik. And now it turns out he has
brought some of it over to the office on Bankova Street, the same office
which earlier belonged to Kuchma.

Last week, these apartments underwent radical redecoration. Thanks to
many things in Yushchenko's "natural habitat", the premises on the fourth
floor of the former presidential administration (and now the state
secretariat) have become significantly more comfortable and have turned
into truly human premises. Viktor Yushchenko, who has taken a stand
against "Byzantine" politics, has with this same view got rid of many
elements of "Byzantium" in decorating his new office.

Although of course, it would be difficult to get rid of all the gilt. It
remains on the luxurious chandeliers "from the palace" with numerous
crystal "dangles", and on the walls...[ellipsis as published] But Yushchenko
took care of the furniture in a pretty radical way. When Ukrayina Moloda
journalists asked him about changes to the interior, Yushchenko answered:
"The only thing left from Kuchma is that telephone table there (the
president points out an "add-on" on the right side of his working table -
author) and these two chests (he points out two high cabinets on four legs
which, like the telephone table are liberally adorned along the edges with
gilded designs - author)."

THE FORMER OCCUPANT

There are two telephones on the telephone table with antediluvian
"selectors", which would be most becoming on the table of the director of
Pivdenmash in the 1970s [an allusion to Kuchma who was the director of
the Pivdenmash rocket-design bureau in the 1970s]. And the table itself
with all its gilt is a hot topic: it cost a whole 10,000 dollars. Like the
other pieces of "Byzantine" furniture, it was bought by the former
Department of State Affairs [DSA].

The "golden" tables, chairs, chests and couch in Kuchma's working
apartments overall cost 2.6m dollars, although the new leadership of the
DSA suspects that since even prestigious furniture cannot be purchased
for so much, money was simply laundered through the accounts of a few
firms close to Kuchma and [former head of the presidential administration
Viktor] Medvedchuk.

And now Yushchenko is washing the image of the "first office of the state".
A few old things are still left. For example, judging from the old
photographs of Leonid Kuchma at his working table, the pen-holder is of
a bright green colour, which looks like marble, has gone to Yushchenko.
Some of the chairs are new, but many of them have the same "lion's paw"
legs as did Kuchma's. They stand on a soft beige carpet.

There is no trace of "Melnychenko's sofa" [a sofa in Kuchma's office under
which former presidential bodyguard Maj Mykola Melnychenko claims to
have placed a recording device, capturing the conversations of high-ranking
officials in the presidential office], or of a long table for counsel (it
cost Kuchma 34,000 dollars). In their place two dark-green sofas have
appeared in Yushchenko's office,, one leather and one textile, both of them
not so much office as home in appearance, old-style and with high backs.
And the new head of state holds meetings using small book tables, no matter
how many ministers, MPs and prosecutors come to talk.

By the way, there is one more manifestation of democracy here: while talking
to your Ukrayina Moloda journalists, besides the traditional coffee and milk
next to the president, there was a dish with dried apricots, hazelnuts and
small Ukrainian bread-rolls. A bit farther over was President-brand, of
course, yoghurt and bottles of Morshchynska mineral water.

ACCESSORIES IN THE INTERIOR

At Yushchenko's left behind the working table there hangs a political map
of Europe, testimony to the geostrategic choice. On the visitor's table,
which stands perpendicular to the [president's] working table, there is no
gilding, but there is a pile of red binders with titles like "Budget",
"Local self-government" and "Oil and Gas Complex". And there is a pile
of newspapers, where one sees the front page of the Donetsk-based
Ostrov.

On the table further back, between the state flag and the presidential
standard, there is a mace on a stand, an icon, and there are also icons on
the chest of drawers and the writing table, which stand along the wall
across from the window. On one of the chest there is even a fair-sized
Buddha sculpture. Probably not a Ukrainian antique, but spiritual anyway.

Yushchenko has already brought several of his favourite paintings to work,
one with Cossacks, and another, famous one with Maksym Kryvonis on a
horse, slicing Yarema Vyshnevetskyy in battle. In an prominent place,
tucked into the frame of a large painting is a photo with small Taras
[Yushchenko's baby son]. On the wall across there is a framed portrait
of the big Taras, Shevchenko [Ukrainian 19th-century poet and painter].

It is just under this painting that the new authorities hold meetings.
[Parliamentary Speaker Volodymyr] Lytvyn, [State Secretary Oleksandr]
Zinchenko, [Prime Minister Yuliya] Tymoshenko and others have to look at
a huge tapestry on the other side, from which Cossack Mamay and five
hetmans (Khmelnytskyy, Sahaydachnyy, Mazepa, Bayda-Vyshnevetskyy
and another one, not so easy to identify) look back at them.

In the corners of the tapestry of 1990 lines of poetry are embroidered:
"The hetmans will come alive in golden attire, fate will awake and the
Cossack will sing", "And the good glory of Ukraine will awake" and so on.

Between the chests of drawers, in the same way as between the windows,
there are sculptures of Moses with the Table of Commandments, saints,
angels and so on. They seem to be wooden, but they are pretty. On the
windowsills are simple vases. And among the books for some reason
there is a folio with the title "Russia - a great destiny". But on the old
clock with a pendulum and gong, there is a whole string of Ukrainian
Easter eggs. And once again they convince the visitor: this is the
working office of the UKRAINIAN president.

COLLECTING ANTIQUES

[Viktor Yushchenko about his office] "This version is not final, but what is
important is that my contents have been brought in here. The furniture here
is mainly from the 1850s. And among them are some chests that are 300
years old. There is furniture which belonged to one of our great church
activists of the 20th century.

The idea is as follows: the president's office should reflect the epoch.
Right now we are still forming just a part of the future office, which I
will take with me to the new place. So here I have brought a few paintings,
sculptures and the photograph of Taras...[ellipsis as published] These
things which illustrate my imagination, but the interior is not fully
outfitted. Although I know for sure there will not be a single spot of gold
in my new office, not on the ceiling or on the furniture. But that will be
when we get to the new place, to Mariyinskyy Park.

By the way, when we move, I intend to put back the furniture which was
here, on Bankova Street under Kuchma. Let it be something of a
museum. But personally, it is hard for me to work here now.

For example, a "Kuchma-time" painting is still hanging here, they haven't
taken it away yet. (He points to the wall. A small painting in dark tones
shows autumn trees in poor weather, a muddy road, a bit of a field and a
lonesome figure - author). What is it saying? Some guy is going somewhere.
Is that the place it should hang? I suspect that earlier there was a much
more costly painting here that someone took away. And they hung up this
one...[ellipsis as published]

PLANS FOR THE FUTURE

[Correspondents] Viktor Andriyovych, what will be in this building when you
move to Mariyinskyy Park?

[Yushchenko] There are plans to put the Foreign Ministry in here.

[Text] The president goes up to the window which overlooks the Building of
Chimeras, points to the square below and says, like a professional designer:

[Yushchenko] Here it would not be bad to put in a driveway, make a nice park
area, a little square for official ceremonies...[ellipsis as published] And
to join this with the other level, there at the foot of the Building with
Chimeras. To make a winter garden...[ellipsis as published]

[Text] It appears Viktor Yushchenko is serious about the aesthetic view from
the Bankova Street windows, because he speaks animatedly even about the
type of trees which it would be good to plant in this quarter all the way to
Lyuteranska Street. The president, who is collector, designer and architect
rolled into one, continues:

[Yushchenko] A so-called "government quarter" would be good to make not
too far away, next to parliament. First, we have to put Mariyinskyy Palace
back in its original appearance. You know, now official delegations and
participants in other ceremonies enter through the back door. But we plan to
make it so the entryway was like it was before, from the side of the current
Cabinet of Ministers. The State Secretariat will be where the Health
Ministry is now, in the park across from Mariyinskyy [Palace]. And you can
add that building a bit down the hill or Park Alley to the complex. And that
will be the president's representative [quarters].

[Correspondents] Will it be possible to picket it, like now?

[Text] Yushchenko frowns; he is obviously dissatisfied with such constant
and tiresome "manifestations of democracy". He says it would be good if it
did not hinder the functions of the president and did not look like paid-for
PR actions over the most petty of things. There, he says, for three weeks
people have been standing with megaphones over some small holograms
on excise duty stamps...[ellipsis as published] -30-
=============================================================
5. UKRAINIAN PRES SLAMS BELARUS FOR NOT FREEING PROTESTERS

Associated Press, Kiev, Ukraine, Wed, May 4, 2005

KIEV - Ukrainian President Viktor Yushchenko accused Belarus of
employing double standards Wednesday after a court released 14
Russian pro-democracy activists who were detained during an
opposition rally in Minsk, but refused to let five Ukrainians go.

The comments were likely to further strain relations between Ukraine - now
headed by Yushchenko, a pro-Western former opposition leader - and
Belarus, still under the harsh control of President Alexander Lukashenko
and his authoritarian government.

Pro-democracy activists and their supporters rallied outside the Belarusian
embassies in Kiev and Moscow Wednesday to protest the continued
detention of the five National Alliance youth movement activists.

The five were among more than three dozen Belarusians, Ukrainians and
Russians arrested April 26 by Minsk riot police during an opposition-
organized rally to mark the anniversary of the Chernobyl nuclear
disaster.

In Kiev, about 40 National Alliance members protested outside the Belarusian
Embassy, beating drums and sounding sirens to mark every hour that their
comrades had spent in the Belarusian jail. The group also sent up a small
tent camp.

In Moscow, police broke up a rally by demonstrators in front of the
Belarusian Embassy, dragging protesters into a bus as they shouted "No to
Fascism!" The activists earlier tried to hand over a prison robe and a bowl
of soup - symbolizing what they said were harsh conditions in Belarusian
jails.

Saturday, a Minsk city court freed all the arrested Russians. Despite
repeated appeals by Ukraine , the same court Tuesday declined to free
the five Ukrainians, who were sentenced to jail terms of up to 15 days.

Yushchenko told reporters Wednesday he would raise the issue of the
detained Ukrainians at a summit of ex-Soviet republics in Moscow Sunday.
"Of course, I will propose that we come to a joint conclusion about this
annoying incident and not let it cast shadows and change our good-
neighborly relations into any other type of relations," Yushchenko said.

Lukashenko's authoritarian rule has made him a pariah in the West and
led to calls from the European Union and the U.S. for a change in power.
Russia, however, has remained one of the ex-Soviet republic's few
remaining allies. -30- [The Action Ukraine Report Monitoring Service]
=============================================================
6. UKRAINIAN MAGNATE RINAT AKHMETOV PROMISES TO HELP
USA FUNDED RADIO LIBERTY BROADCAST IN EAST

Ostrov web site, Donetsk, Ukraine, in Russian, Wed, 4 May 05
BBC Monitoring Service, UK, in English, Wed, May 4, 2005

DONETSK - [Donetsk-based magnate] Rinat Akhmetov has promised to
cooperate in providing resources for the broadcasting of [US-funded]
Radio Liberty in Donetsk Region.

Akhmetov said this on 3 May at a reception in honour of Joan Dine, the
wife of Thomas Dine, the president of Radio Liberty/Radio Free
Europe (RFE/RL), who celebrated her birthday on 3 May.

The reception was held at the Donbass-Palats hotel in Donetsk [said to
belong to Akhmetov]. Other people present included the rector of the
Donetsk National University, Volodymyr Shevchenko, and the deputy
head of the Donetsk regional administration, Yuriy Hrymchak, and his
wife.

Ostrov learnt from someone who was present at the reception that
Akhmetov denied rumours that he is selling his assets and said that,
on the contrary, a recent overseas business trip was tied to him
broadening his businesses.

Akhmetov revealed plans to make Donetsk as open as possible for
foreign guests and will try to facilitate this in various ways. [Passage
omitted: Thomas Dine and other officials from Radio Liberty began
visit to Donetsk on 2 May] -30- [Action Ukraine Report Monitoring]
=============================================================
7. DONBAS: WE'LL CHANGE OFFER ONCE WE RECEIVE EXCLUSIVITY

Polish News Bulletin, Warsaw, Poland, Thu, May 05, 2005

WARSAW - Ukraine's Donbas steel company expects to obtain exclusivity
for negotiations regarding the privatisation of Huta Czestochowa (HCz)
steel mill, as only then it will consider changing its offer, announced the
company in its communique. Last Friday, when the exclusivity granted to
Mittal Steel expired, the Treasury said it would consider the Donbas offer,
if it was raised.

Currently, Mittal Steel has offered ZL1.251bn for HCz , the Ukrainian
investor - ZL1.108bn. In an interview for TVN24 information channel,
Deputy Treasury Minister Stanislaw Speczik did not rule out the possibility
of granting exclusive negotiation rights to Donbas. "We are seriously
thinking about it," he said. According to Donbas, since the Treasury has
not signed preliminary agreements with Mittal Steel, there are two options
left: either to abandon the negotiations or start them with Donbas. -30-
=============================================================
8. UKRAINE: DONBAS INDUSTRIAL UNION (DBU) TAKES LEAD OVER
MITTAL STEEL IN BUYING POLAND'S HUTA CZESTOCHOWA
One of the largest companies in Ukraine, established in 1995

REPORT: By Andrey Voltornist, Ukraine Analyst
IntelliNews - Ukraine This Week
Kyiv, Ukraine, Wed, May 4, 2005

MITTAL STEEL FAILS TO BUY POLAND'S HUTA CZESTOCHOWA
NOW DIU TO START NEGOTIATIONS

On Apr 29, Polish government rejected Mittal Steel's offer for Huta
Czestochowa steel plant, the biggest producer of prefabricated elements,
welded constructions, and various machine parts in the country, and asked
Donetsk-based Donbas Industrial Union (DIU) to confirm its offer for the
plant. As Mittal Steel failed to finish negotiations on purchasing Huta
Czestochowa within the established period (by Apr 29), government made
a decision to address DIU.

To remind you, Mitall Steel secured the right to hold exclusive talks on the
purchase of Huta Czestochowa from the Polish Treasury Ministry in late
February. Mittal Steel was required to hold initial agreements with the
sellers: state-owned Silesia, which owns Huta Czestochowa; Huta Stali
Czestochowa, which manages the plant's property; the company's
creditors, and its trade unions.

Treasury Ministry warned that the right to acquire the plant would be
transferred to DIU in May, if the deal is not finished. In 2004 DIU appealed
to court against the granting of exclusive rights to buy Huta Czestochowa to
LNM company (which later became Mittal Steel). However, DIU withdrew its
appeal, when government decided to hold a new tender. Worth noting, the
process of restructuring and privatization of Huta Czestochowa should end
by Aug 7 this year.

AFTER MERGER BETWEEN LNM AND ISPAT, MITTAL STEEL
APPEARS---IS MOST GLOBALIZED STEEL MAJOR IN THE WORLD

Mittal Steel is considered to be the largest steel producer in the world
with revenues of USD 22.2bn in 2004. Mittal Steel's shipments reached
42.1mn tons. The company was established in Oct 2004 after the merger
between British-Indian LNM Holdings and US Ispat International.

Mittal Steel Growth Timeline
Year Event
1989 Acquisition of Iron & Steel Company of Trinidad & Tobago
1992 Acquisition of Sibalsa
1994 Acquisition of Sidbec-Dosco
1995 Acquisition of Hamburger Stahlwerke, Ispat International Ltd.
and Ispat Shipping formed, acquisition of Karmet
1997 Ispat International NV goes public
1998 Acquisition of Inland Steel Company
1999 Acquisition of Unim?tal
2001 Acquisition of ALFASID, acquisition of Sidex
2002 Business assistance agreement signed with Iscor
2003 Acquisition of Nova Hut
2004 Acquisition of Polski Huty Stali, acquisition of BH Steel,
acquisition of Macedonian facilities from Balkan Steel, creation of
Mittal Steel and proposed acquisition of International Steel
(Source: web-site of Mittal Steel}

The major runs metallurgic assets in 14 countries and employs over
160,000 people. After the merger the production capacities of the
company was boosted to 70mn tons per annum.

Mittal Steel's Structure:
---Europe: Poland, Mittal Steel Poland; Germany, Mittal Steel Germany;
Czech, RepublicMittal Steel Octrava; Bosnia: Mittal Steel Zenica;
France: Mittal Steel Gandrange; Romania: Mittal Steel Easi, Mittal
Steel Galati, Mittal Steel Hunedoara, Mittal Steel Roman; Macedonia:
Mittal Steel Skapje
---America: Mexico, Mittal Steel Cardenas; USA: Ispat Inland
Trinidad: Mittal Steel Point Lisas; Canada: Mittal Canada
---Rest of the World: Algeria: Mittal Steel Annaba; RSA: Mittal Steel
South Africa; Kazakhstan: Mittal Steel Temirtau
(Source: web-site of Mittal Steel)

DONBASS INDUSTRIAL UNION (DIU) IS ONE OF
UKRAINE'S LARGEST HOLDINGS

DIU, one of the largest companies in Ukraine, was established in 1995.
The corporation is a holding, which owns over 40 industrial assets in
Ukraine as well as in other countries. DIU is engaged in production and
realization of metal products, as well as supplying Ukrainian enterprises
with natural gas and power.

MAIN ASSETS OF DIU
---Metallurgy: Alchevsk metallurgic plant; Dnipropetrovsk tube plant
Dnipropetrovsk metallurgic plant; Dunaferr (Hungary)
DAM Steel (Hungary); Ukrainian metallurgic company
---Coke Chemistry:
Alchevsk coke chemistry plant
---Other Assets:
Kyivgorstroi-6; Consortium Ukrindustry
Duzhkovsky ceramic works
(Source: IntelliNews)

LNM, DIU ONLY CANDIDATES FOR BUYING HUTA CZESTOCHOWA

In late June 2004 LNM (Mittal Steel appeared later as we said before)
and DIUbecame the only competitors for the purchase of Huta
Czestochowa, said Polish deputy FinMin.

He specified that the privatization would be finished in 13-14 months (i.e.
in Jul-Aug 2005). In February, Polish ministry of state property declared
LNM Group the investor in Huta Czestochowa in spite of the tender
committee's decision to choose Ukrainian DIU. The Ukrainian side
found this decision discriminating.

DIU, MITTAL STEEL SUBMIT OFFERS IN EARLY FEBRUARY
AS GOVERNMENT DECIDES TO HOLD NEW TENDER

On Feb 6, DIU submitted an offer to Ministry of State Property of
Poland to buy the metallurgic plant. On Feb 3, Mittal Steel Company
also submitted an offer. The tender conditions included the
production property of the plant, shares in the company leasing the
property Huta Stali Czestochowa and several subsidiary companies.

Worth noting, the last tender for the sale of HutaCzestochowa ended
without a decision in April 2004. Exclusivity for negotiations for the sale
was obtained by Mittal Steel, despite the earlier selection of DIU as an
investor for the works.

The starting price in the coming tender for Huta Czestochowa is higher
than in the previous bidding from 2004, because subsidiary companies
are included now. In end-Apr 2004 Polish government before its
resignation abolished the tender on the plant's sale and decided to hold
a new one. This caused criticism from DIU. In May-start Polish court
admitted DIU's right to buy the plant and set a ban on selling the
enterprise and its subsidiaries.

DIU ASKS FOR TRANSPARENCY OF PRIVATISATION

In early March DIU representative in Poland Konstantin Lytvynov noted DIU
doubts the transparency and honesty of the tender. In his letter to Polish
Treasury Minister Jacek Socha, Lytvynov noted that DIU was not informed
about the grounds, on which the tender commission based declaring the bid
submitted by Mittal Steel as the best. By that moment DIU did not know the
price offered by Mittal Steel for the target. According to DIU, investment
commitments were one of the key elements in the DIU bid. These commit-
ments will be crucial in the future for Huta Czestochowa and its position on
the European steel market. Lytvynov also says that DIU was not informed
for how long the excusive talks with Mittal Steel will last.

Later, Treasury Minister Jacek Socha explained that Mittal Steel offered to
pay PLN 1.251bn (USD 376.8mn) for the takeover of Huta Czestochowa while
DIU wants to pay PLN 1.108bn (USD 333.8mn). The PLN 140mn difference
was the reason Mittal Steel was granted exclusive rights to negotiate the
purchase of the plant with Treasury Ministry.

MITTAL STEEL CLAIMS SUCCESSFUL PURCHASE OF HUTA
CZETOCHOWA

Mittal Steel was very eager to purchase the asset in Poland. On Apr 18, the
world major published press release, where it stated that the company
successfully completed negotiations relating the acquisition of Huta
Czetochowa and initialled all contracts relating this sale. Commenting,
Ondra Otradovec, corporate finance director of Mittal Steel, said the
company intends to sign all the contracts by Apr 29.

According to him, increased size and scale brings numerous advantages,
which Huta Czestochowa will be able to benefit from. Moreover, Otradovec
believed the purchase will further enhance the company's position as a
leading plate producer in Europe. By that moment, Mittal Steel continued
talks with trade unions of the Polish steel producer.

MITTAL STEEL ANNOUNCES PROPOSAL TO TRADE UNIONS.
HOWEVER, THEY REJECT OFFER

On Apr 26, following 7 weeks of intense negotiations Mittal Steel made its
final proposal to the trade unions of Huta Czestochowa and its subsidiaries.
According to its press release, the proposal covers a total of 4,390
employees and offers equal terms to all workers. It compares favorably with
the social package agreed with trade unions at the time of its privatization
in Feb 2004. Mittal Steel underlined the following key items of the offer to
trade unions and employees: (a) average privatization bonus of PLN 3,000
(USD 903), (b) employment guarantee of 5.5 years, and 10 years for
employees of 55 years and older, and (c) salary increase of PLN 150,
which would result in average monthly salary of approximately PLN 2,900
(USD 873).

The protest of employees of Huta Czestochowa deprived Mittal Steel of all
chances to buy the plant. Trade unions rejected its offer. They demanded a
privatization bonus of PLN 6,000, 2-fold more than Mittal Steel's offer, and
salary increase of PLN 400.

FUTURE: DIU BUYS HUTA CZESTOCHOWA?,
MITTAL STEEL BUYS- KRYVORIZHSTAL?

In our view, now DIU has a real chance to enrich its asset portfolio with
the Polish plant. By that, DIU will expand its presence in the European
steel market: Huta Czestochowa might be added to Hungary's Dunaferr and
DAM Steel. DIU already owns the latter assets in Hungary. However, this is
not the end of the 2-year drama. Sudhir Maheshwari, financial director of
Mittal Steel announced the company is ready to negotiate with the Ukrainian
government to participate in a possible new tender for buying Kryvorizhstal
metallurgic major.

However, Ukrainian experts are sceptic about the efficiency of this
decision. The overall mood is Mittal Steel can bring disaster to
Kryvorizhstal. They remind of an incident that happened in 2001. LNM
unpredictably refused to follow its investment obligations in Ireland and
fired all workers of Irish Steel. We examined in detail the conflict at
Mittal Steel Temirtau in Kazakhstan in IntelliNews Central Asia This Week
from Mar 23, 2005 ("Kazakh Mining: The Beginning of Labor Movements?")

Worth noting, Kryvorizhstal is not only an asset controlled by oligarchs,
but it also provides work places to 60,000 employees with average wages
of UAH 1,600 (USD 316.8). We must warn that output growth of the global
metallurgic sector is higher than that of demand. Thus, overproduction is
possible. If it happens, steel majors will face the need to reduce
capacities. Kryvorizhstal might be at serious risk if it becomes controlled
by a foreign investor. -30- [Action Ukraine Repor Monitoring Service]
=============================================================
9. CANADA-UKRAINE BUSINESS FORUM IN KYIV - MAY 11 & 12

Stephen Bandera, Four Freedoms
Kyiv, Ukraine, Wed, May 4, 2005

KYIV - On Wednesday May 11, the Ukrainian Chamber of Commerce
and Industry (UCCI) and the Canada-Ukraine Chamber of Commerce
(CUCC) will host a two-day business forum that will allow businessmen
to meet and learn about economic opportunities in their respective
countries as well as identify specific areas of co-operation or partnering.

The forum program includes remarks by the Mayors of Kyiv and Toronto
- Oleksandr Omelchenko and David Miller, Ukraine's Minister of the
Economy Serhiy Terjokhin, and Canadian Ambassador Andrew
Robinson.

Minister Terjokhin will deliver a keynote address on the topics of the
current state of Ukraine's economy and the government's plans for
economic reforms.

Bohdan Onyshchuk, Vice-President of Legal Affairs for the CUCC, and
Victor Yanovsky First Vice-President and General Secretary of UCCI will
deliver opening remarks on behalf of the host organizations.

On the first day of the conference, a panel will discuss taxation, FIPA,
trade tariffs and barriers and corporate legal issues facing businessmen in
both countries. Panelists include: Lubomyr Kwasnycia (Romyr Consultants
Corporation), Michael Reshitnyk (International Trade Canada), Motria
Onyschuk-Morozov (International Finance Corporation) Yasyl Kostycky
(Academy for the Study of Law of Ukraine) Volodymyr Storoschuk (State
Customs Services of Ukraine) and Natalya Hayevska (Supervisory Board
of the Ukrainian Auditing Chamber).

Three break-out B2B sessions will be held on the second day of the forum
on Thursday May 12. The sessions will focus on: land development, trade and
investment opportunities and financial markets. The discussions will be led
by representatives of the UCCI and CUCC, including: Zenon Potoczny (Shelton
Canada Corporation), John Znaczko (Roots & Images Inc.), Bohdan Myndiuk
(Mytram Consulting Inc.), Lenna Koszarny (Western NIS Fund), Iryna Zarya
(First Ukrainian Trading System PFTS), Oksana Stoianova, Client Relationship
Manager, KINTO and Dan Martiuk (Western International Trust Co. Ltd.).

The forum proceedings will be held on the premises of the Ukrainian Chamber
of Commerce and Industry, located at Velyka Zhytomyrska, 33. -30-
-------------------------------------------------------------------------------------------------------------
Contact: Stephen Bandera: sbandera@fourfreedoms.net
=============================================================
10. U.S. DEPARTMENT OF COMMERCE INITIATING A REVIEW TO
DETERMINE WHETHER UKRAINE SHOULD BE CONTINUE
TO BE TREATED AS A NON-MARKET ECONOMY
COUNTRY FOR ANTIDUMPING DUTY LAW

U.S. DEPARTMENT OF COMMERCE
International Trade Administration (ITA) (A-823-812)
Washington, D.C., 70 FR 21396, April 26, 2005

Initiation of a Changed Circumstances Review of the Antidumping
Duty Order on Carbon and Certain Alloy Steel Wire Rod from Ukraine

AGENCY: Import Administration, International Trade Administration,
Department of Commerce.

ACTION: Notice of initiation and request for comments.
---------------------------------------------------------------------------------------------------
DATES: April 26, 2005.
SUMMARY: The Department of Commerce is initiating a changed
circumstances review in order to determine whether Ukraine should
continue to be treated as a non-market economy country for purposes of
the antidumping duty law. Written comments (original and six copies)
should be sent to Joseph A. Spetrini, Acting Assistant Secretary for
Import Administration, U.S. Department of Commerce, Central Records
Unit, Room 1870, 14th Street and Constitution Avenue NW, Washington,
DC 20230.

FOR FURTHER INFORMATION CONTACT: Lawrence Norton or Shauna
Lee-Alaia, Office of Policy, Import Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW, Washington DC,
20230, 202-482-1579 or 202-482-2793, respectively.

SUPPLEMENTARY INFORMATION:
BACKGROUND:
Citing changes that have occurred in Ukraine over the past several
years, on April 2, 2005 the Government of Ukraine's Ministry of Economy
and European Integration requested that the Department of Commerce
conduct a review of Ukraine's status as a non-market economy (``NME'')
country within the context of a changed circumstances review of the
antidumping duty order on carbon and certain alloy steel wire rod from
Ukraine. In response to this request, the Department is initiating a
changed circumstances review in order to determine whether Ukraine
should continue to be treated as an NME country for purposes of the
antidumping law, pursuant to sections 751(b) and 771(18)(C)(ii) of the
Tariff Act of 1930, as amended (``the Act'').

Specifically, the Department is resuming the review of Ukraine's NME
status on which it deferred a decision in 2002. See Antidumping Duty
Investigation of Carbon and Certain Alloy Steel Wire Rod from Ukraine;
Notice to defer a decision regarding Ukraine's non-market economy status,
67 FR 51536 (August 8, 2002). The Department has treated Ukraine as an
NME country in all past antidumping duty investigations and administrative
reviews.

See, e.g., Final Determination of Sales at Less Than Fair Value: Carbon
and Certain Alloy Steel Wire Rod from Ukraine, 67 FR 55785 (August 30,
2002); Final Determination of Sales at Less Than Fair Value: Certain
Hot-Rolled Carbon Steel Flat Products from Ukraine, 66 FR 50401
(October 3, 2001); and Final Determination of Sales at Less Than Fair
Value: Steel Concrete Reinforcing Bars from Ukraine, 66 FR 1857 (April
11, 2001). A designation as a NME remains in effect until it is revoked
by the Department. See section 771(18)(C)(i) of the Act.

Opportunity for Public Comment

As part of this inquiry to determine whether to revoke Ukraine's
NME status, the Department is interested in receiving public comment
with respect to Ukraine in relation to the factors listed in section
771(18)(B) of the Act, which the Department must take into account in
making a market/non-market economy determination:
(i) The extent to which the currency of the foreign country is
convertible into the currency of other countries;
(ii) the extent to which wage rates in the foreign country are
determined by free bargaining between labor and management;
(iii) the extent to which joint ventures or other investments by firms
of other foreign countries are permitted in the foreign country;
(iv) the extent of government ownership or control of the means of
production;
(v) the extent of government control over allocation of resources and
over price and output decisions of enterprises; and
(vi) such other factors as the administering authority considers
appropriate.

Comments--Deadline, Format, and Number of Copies

The deadline for submission of comments will be 45 days after the
date of publication of this notice in the Federal Register. Rebuttal
comments may be submitted up to 30 days after the date by which initial
comments are due. Each person submitting comments should include
his or her name and address, and give reasons for any recommendation.

To facilitate their consideration by the Department, comments should be
submitted in the following format: (1) begin each comment on a separate
page; (2) concisely state the issue identified and discussed in the
comment and include any supporting documentation in exhibits or
appendices; (3) provide a brief summary of the comment (a maximum
of three sentences) and label this section "summary of
comment; (4) provide an index or table of contents; and (5)
include the case number, A-823-812, in the top right hand corner of
the submission.

Persons wishing to comment should file a signed original and six
copies of each set of comments by the dates specified above. All
comments responding to this notice will be a matter of public record
and will be available for public inspection and copying at Import
Administration's Central Records Unit, Room B-099, between the hours
of 8:30 a.m. and 5 p.m. on business days. The Department requires that
comments be submitted in written form. The Department recommends
submission of comments in electronic media, preferably in Portable
Document Format (PDF), to accompany the required paper copies.
Comments filed in electronic form should be submitted on CD-ROM as
comments submitted on diskettes are likely to be damaged by postal
radiation treatment.

Comments received in electronic form will be made available to the
public on the Internet at the Import Administration Web site at the
following address: http://ia.ita.doc.gov/.

[Page 21397]
Any questions concerning file formatting, document conversion,
access on the Internet, or other electronic filing issues should be
addressed to Andrew Lee Beller, Import Administration Webmaster,
at (202) 482-0866, email: webmaster-support@ita.doc.gov.

HEARING
After reviewing all comments and rebuttal comments, the Department
will hold a public hearing on the NME country issue if one is requested
in the initial or rebuttal comments on this issue by an interested
party, as defined by section 771(9) of the Act, or if the Department
determines that one is warranted. If the Department holds a hearing,
the Department will announce a place and time for that hearing. This
determination is issued and published in accordance with sections
751(b) and 771(18)(C)(ii) of the Act.

Dated: April 20, 2005. Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-1980 Filed 4-26-05; 8:45 am]
http://ia.ita.doc.gov/frn/0504frn/E5-1980.txt
=============================================================
11. U.S. HOUSE BILL TO AUTHORIZE THE EXTENSION OF
NONDISCRIMINATORY TREATMENT (NORMAL TRADE RELATIONS)
TO THE PRODUCTS OF UKRAINE

Jim Gerlach, Member of U.S. Congress
Sixth District, Pennsylvania (R-PA)
U.S. House of Representatives
Washington, D.C., March 2, 2005

HR 1053 IH: 109th CONGRESS
1st Session, H. R. 1053

To authorize the extension of nondiscriminatory treatment (normal
trade relations treatment) to the products of Ukraine.

IN THE U.S. HOUSE OF REPRESENTATIVES
March 2, 2005

Mr. GERLACH (for himself, Ms. HARMAN, Mr. WELDON of Pennsylvania,
Mr. KENNEDY of Minnesota, Ms. KAPTUR, and Mr. BURTON of Indiana)
introduced the following bill; which was referred to the Committee on
Ways and Means

A BILL: To authorize the extension of nondiscriminatory treatment
(normal trade relations treatment) to the products of Ukraine.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. FINDINGS.
Congress finds as follows:
(1) Ukraine allows its citizens the right and opportunity to emigrate, free
of any heavy tax on emigration or on the visas or other documents required
for emigration and free of any tax, levy, fine, fee, or other charge on any
citizens as a consequence of the desire of such citizens to emigrate to the
country of their choice.

(2) Ukraine has received normal trade relations treatment since 1992 and
has been found to be in full compliance with the freedom of emigration
requirements under title IV of the Trade Act of 1974 since 1994.

(3) since the establishment of an independent Ukraine in 1991, Ukraine
has made substantial progress toward the creation of democratic
institutions and a free-market economy.

(4) Ukraine has committed itself to ensuring freedom of religion, respect
for rights of minorities, and eliminating intolerance and has been a paragon
of inter-ethnic cooperation and harmony, as evidenced by the annual human
rights reports of the Organization for Security and Cooperation in Europe
(OSCE) and the United States Department of State.

(5) Ukraine has taken major steps toward global security by ratifying the
Treaty on the Reduction and Limitation of Strategic Offensive Weapons
(START I) and the Treaty on the Non-Proliferation of Nuclear Weapons,
subsequently turning over the last of its Soviet-era nuclear warheads on
June 1, 1996, and agreeing, in 1998, not to assist Iran with the completion
of a program to develop and build nuclear breeding reactors, and has fully
supported the United States in nullifying the Anti-Ballistic Missile (ABM)
Treaty.

(6) At the Madrid Summit in 1997, Ukraine became a member of the North
Atlantic Cooperation Council of the North Atlantic Treaty Organization
(NATO), and has been a participant in the Partnership for Peace (PfP)
program since 1994.

(7) Ukraine is peaceful state which established exemplary relations with
all neighboring countries, and consistently pursues a course of European
integration with a commitment to ensuring democracy and prosperity for
its citizens.

(8) Ukraine has built a broad and durable relationship with the United
States and has been an unwavering ally in the struggle against international
terrorism that has taken place since the attacks against the United States
that occurred on September 11, 2001.

(9) Ukraine has concluded a bilateral trade agreement with the United
States that entered into force on June 23, 1992, and is in the process
of acceding to the World Trade Organization.

SEC. 2. TERMINATION OF APPLICATION OF TITLE IV OF THE
TRADE ACT OF 1974 TO THE PRODUCTS OF UKRAINE.

(a) Presidential Determinations and Extension of Nondiscriminatory
Treatment- Notwithstanding any provision of title IV of the Trade Act of
1974 (19 U.S.C. 2431 et seq.), the President may-

(1) determine that such title should no longer apply to Ukraine; and

(2) after making a determination under paragraph (1) with respect to
Ukraine, proclaim the extension of nondiscriminatory treatment (normal
trade relations treatment) to the products of that country.

(b) Termination of Applicability of Title IV- On and after the effective
date under subsection (a) of the extension of nondiscriminatory treatment
to the products of Ukraine, title IV of the Trade Act of 1974 shall cease to
apply to that country. END
-------------------------------------------------------------------------------------------------------
FOOTNOTE: More co-sponsors for this bill are needed. Contact: Bryan
Kendro, Legislative Assistant, Congressman Jim Gerlach, 308 Cannon
Building, Washington, D.C., 20515, Bryan.Kendro@mail.house.com
[EDITOR]
============================================================
12. UKRAINE COMMUNISTS TO PROTEST AGAINST VETERAN STATUS
FOR PARTISANS WHO FOUGHT BOTH NAZIS AND SOVIETS

Associated Press, Kiev, Ukraine, Thu, May 5, 2005

KIEV - Ukraine 's Communists planned protests Thursday against Ukrainian
government plans to give anti-Soviet partisans the same recognition offered
to World War II veterans. Petro Symonenko, head of the Communist Party,
announced the creation of a special headquarters aimed at "preventing the
mockery of the heroism and memory of our grandfathers and fathers."

The protests come amid plans by President Viktor Yushchenko and his
allies to win "reconciliation" between Ukrainians who fought against the
Nazis and partisans who fought both Nazis and Soviets. The issue is
particularly sensitive ahead of the 60th anniversary Monday of the Allied
victory over the Nazis in Europe.

The government acknowledged the process will be slow, because many
Red Army veterans consider their countrymen from the Ukrainian Insurgent
Army to be "enemies of the people." About 100,000 Ukrainians participated
in the partisan army, primarily those living in western Ukraine.

Ukraine's Defense Minister Anatoliy Gritsenko acknowledged Thursday that
"society is still not psychologically ready for full reconciliation," but as
more time passes "we will talk not about victory but more about honor and
memory." -30- [The Action Ukraine Report Monitoring Service]
=============================================================
13. BUSH TO REMIND PUTIN OF SOVIET BALTICS OCCUPATION
Thanks Lithuania for its support of democracy in Ukraine

Associated Press, Vilnus, Lithuania, Thu, May 5, 2005

VILNIUS - U.S. President George W. Bush said he will remind Russian
President Vladimir Putin about the Soviet occupation of the Baltics when
they meet in Moscow for the 60th anniversary of the end of World War II
in Europe.

In excerpts of an interview to be broadcast Thursday, Bush told
Lithuanian state television that he will stress to the Russian leader that
the end of the war did not bring freedom for Estonia, Latvia and Lithuania.

"Yes, of course I'll remind him of that," Bush said, adding that he told
Putin during their last meeting in Slovakia that the end of World War II
was not a day of celebration for the Baltics.

The U.S. president is to visit Latvia Friday ahead of his trip to Moscow.
He will meet with his Baltic counterparts, two of whom have declined
invitations to the Moscow celebrations because of Russia's unwillingness
to denounce the Soviet annexation of their countries.

Bush said he understood Lithuanian President Valdas Adamkus' decision
to not attend the celebrations and added he hopes Russia will maintain
good relations with its Baltic neighbors. "It really is in Russia's
interests to have free countries and democracies on her border," Bush
said.

Russia has accused the Baltics of souring the May 9 celebrations by
demanding Moscow admit the three nations were forced to join the Soviet
Union in 1940.

Lithuanian state television said Bush also praised Lithuania for its support
in bringing Ukraine on a path to democracy and said he expects the Baltic
country to help ensure free elections in neighboring Belarus.

Bush spoke to television networks from the three Baltic countries on
Wednesday in Washington. The full interviews were scheduled to be
aired later Thursday. -30-
=============================================================
FOOTNOTE: The article above says the end of the World War II did not
bring freedom for Estonia, Latvia and Lithuania. The end of the war also
did not bring freedom for Ukraine and many other countries in Central
and Eastern Europe. [EDITOR]
=============================================================
14. STILL THE TYRANT, STALIN REFUSES TO BE WISHED AWAY

LETTER FROM EUROPE: By Steven Lee Myers
The New York Times, New York, NY, Wed, May 4, 2005

MOSCOW, May 3 - That old nostalgia for Stalin is surfacing again. It always
does around the May holidays. This delights a few die-hard Stalinists here
but dismays many more people. The ambiguity is represented neatly in the
person of Zurab Tsereteli, the closest thing Russia has to an official
artist.

With the 60th anniversary of the victory over Nazi Germany approaching,
he cast a monumental bronze statue of Stalin, along with Churchill and
Roosevelt, at their 1945 summit conference in Yalta. A monument to Stalin
alone seemed a bit much, he acknowledged. But for most other people
so,too, is the one Mr. Tsereteli created, depicting Stalin uncritically, in
historical context.

The authorities in Yalta - now a part of Ukraine, a place that suffered
greatly under Stalin - declined Mr. Tsereteli's gift. So did Moscow after a
public furor that erupted when a city lawmaker suggested installing the
statue in the city's Victory Park.

The statue is now headed to Volgograd, the city better known by its wartime
name, Stalingrad, but even there officials took pains to emphasize that it
was not a tribute to Stalin per se, but rather to the leaders of the Allied
effort to defeat fascism.

The fuss over the statue underscores Russia's problem when it comes
to celebrating its past: the past involves some uncomfortable truths the
country and its leaders would rather not dwell on.

Part of the reluctance, no doubt, reflects President Vladimir V. Putin
himself, a former colonel of the K.G.B. who is unapologetic about his own
background in a security apparatus that at its worst terrorized Soviet
citizens. Perhaps a larger factor, echoed across the country, is a desire to
restore to Russia a sense of historic pride and greatness after the collapse
of the Soviet Union and an early round of soul-searching about Soviet
crimes that followed Russia's independence.

Even Stalin's newest sculptor - whose grandfather was arrested and executed
in the Great Terror in 1937 - sounds conflicted. "We should not look at what
happened in the past," he said at a news conference last week in which he
compared Stalin to other complicated historical figures, like Napoleon. "We
should take only the facts and look to the future."

Mr. Putin is hoping to strike the same balance.

Mr. Putin has invited some 50 heads of state, including President Bush, to
attend a military parade on May 9, the day Stalin's Soviet Union chose to
commemorate the end of what is known here as the Great Patriotic War,
on Red Square for what he called a celebration of "the joy of victory and
reconciliation."

The once unimaginable scene of a Kremlin leader standing beside an
American president and the leaders of Germany, Japan and Italy at what
used to be the annual demonstration of Soviet military might (large panels
will deftly cover Lenin's Tomb) certainly suggests a fundamental
geopolitical reconciliation.

But the government's grandiose plans - which include dozens of
ceremonies, concerts and other events - have also turned into a source
of rancor, reviving unsettled grievances at home and abroad and showing
that Russia remains conflicted about its Soviet past.

The presidents of Lithuania and Estonia - nations occupied by Soviet
troops in 1940 and reoccupied after the Soviets ousted the Nazis in
1944 - pointedly refused Mr. Putin's invitation. They cited Victory Day as
a day that honored resumption of what would turn into 46 years of
occupation, prompting diplomatic and political sniping that has continued
with increasing nastiness.

The Baltic leaders, along with President Aleksander Kwasniewski of Poland,
have used the 60th anniversary to renew calls for Russia - as the inheritor
of much of the Soviet Union's legacy - to account for the darker aspects of
its past. Most notorious of all is the Molotov-Ribbentrop pact, the
nonaggression treaty that the Soviet Union signed with Nazi Germany in
939, leading to the Soviet occupation of part of Poland that year and the
Baltic states a year later.

After Hitler's armies invaded the Soviet Union in 1941, the pact vanished
from official history, and even now it rarely makes an appearance. In the
Soviet-like posters that have appeared across the country in honor of the
60th anniversary of Victory Day, the war lasted only from 1941 to 1945.
A renunciation of Molotov-Ribbentrop - or of the Soviet Union's domination
of Eastern Europe after the war - appears to be highly unlikely.

Mr. Putin hardly defends Stalin but for him, as for many others here, any
second-guessing of the Soviet victory in the war amounts to an effort to
rewrite history - to, as he put it, "diminish the part played by the Soviet
Union and the Soviet Red Army in the victory over Nazism."

The Soviet Union, to be sure, suffered enormously in the war. Officially,
27 million soldiers and citizens died. The victory is, arguably, its
greatest achievement, which is why May 9 remains a revered holiday,
one that touches almost every family.

An exhibition of contemporary art at the Krokin Gallery in Moscow includes
unvarnished works exploring the war's costs and honoring the ordinary
soldiers who suffered most. One includes an enlarged crumpled photograph
of the artist Aleksandr Ponomarev's grandfather, who died in Stalingrad. The
image is inscribed with Stalin's notorious order, "Not one step back."

"History has no subjunctive mood," the exhibition's curator, Aleksandr V.
Petrovichev, said. "They are not singing the song of Stalin's praise. They
are dealing with the topics of the time. Yes, there was Stalin. Yes, there
were those events. It is reality."

Still, for some here, the new Russia's historical memory remains stubbornly
selective, embracing the positive and ignoring the negative.
Yuri N. Afanasyev, a historian and honorary president of the Russian State
Humanities University, laments what he calls a restoration of official,
incomplete and dishonest history.

"An attempt is being made to vindicate the official history of Russia," Mr.
Afanasyev, honorary president of the Russian State Humanities University,
said during a conference in Moscow last month. "This is the same history of
Stalin's time - falsified, biased, ideologized." (Erin E. Arvedlund
contributed reporting for this article.) -30- [The Action Ukraine Report
Monitoring Service]
=============================================================
15. THE MEDIA: LOOKING BACK IN ANGER
The Holocaust and America's Most Important Newspaper, NY Times

Book Review by Peter Novick
Book World, The Washington Post
Sunday, May 1, 2005; Page BW06

NEW BOOK: "BURIED BY THE TIMES"
The Holocaust and America's Most Important Newspaper
By Laurel Leff. Cambridge Univ. 426 pp. $29

During World War II, most Americans didn't pay much attention to what we
now call the Holocaust. Many knew that the Nazi regime was persecuting and
murdering Jews in Europe, but few had an overall grasp of the scope and
nature of that genocide. In Buried by the Times, Laurel Leff puts under the
microscope the coverage given to the Holocaust in the New York Times
during the war. She reports that while there was, on average, a Holocaust-
related story every other day, only a few dozen of those stories made the
front page.

Moreover, Jews were often described as "among" the Nazis' victims rather
than as their primary victims. By thus "burying" the Holocaust, she charges,
the Times sabotaged efforts to rouse the American public -- efforts which,
had they been successful, might have produced an effective rescue
program.

The tone of Leff's account is one of unremitting outrage. When the Times
fails to report any Holocaust-related event, she is outraged. If the paper
reports on it, she's outraged that the report isn't on the front page. When
a Holocaust story is on the front page, she complains that it isn't high
enough on the front page. When there is no editorial on some
Holocaust-related subject, she is outraged, and if there is an editorial,
she's outraged that it isn't the lead editorial.

She is regularly outraged when either reportage or commentary, wherever
placed, mentions not Jews alone but other victims as well. When one item
made clear that a majority of those killed at a certain locale were Jews,
she complains that this was noted "only once" in the story. All of this is
so over-the-top as to verge on self-parody.

Other writers have offered various explanations for the failure of the
American press to feature the Holocaust more prominently during the
war. Sources were scanty, not always reliable, and often contradictory.
Americans' attention was focused on battle zones where American
troops were engaged. And there was sometimes a calculated reason for
deemphasizing special Jewish victimhood. Americans were far more
focused on the Japanese than on the German enemy ("Remember
Pearl Harbor").

That the Nazis were the enemy of the Jews was well known; the task was
to portray Nazi Germany as the mortal enemy of "free men everywhere."
Hence the (sometimes exaggerated) emphasis on other victims. And,
given continued high levels of anti-Semitism in the United States, not
emphasizing Hitler's war against the Jews was an attempt to sidestep
the claim that America was engaged in a war for the Jews.

Leff notes these and other explanations but finds them inadequate. For
her, the keys to the Times's failure to live up to its journalistic
obligations were the character and mindset of its publisher, Arthur Hays
Sulzberger. Sulzberger was a Jew of a sort now rare: a believer in the
classical Reform position that Jewishness means solely religious belief
-- not ethnic "peoplehood."

His political loyalties were strictly American, his sensibility was liberal
and universalist, and he was an opponent of the campaign for a Jewish state
in Palestine. And he didn't want the Times to become -- or seem to be -- a
spokesman for any parochial Jewish concern. Therefore, according to Leff,
he bent over backward to deny the specificity of Jewish victimhood, refused
to allow the Times to give prominent notice of the Holocaust and withheld
support for rescue programs that focused on European Jewry.

This argument is not completely wrongheaded. All of us are pulled this way
and that by our ways of seeing the world, and surely this was true of
Sulzberger. But the great difficulty with blaming the behavior of the Times
on the particularities of Sulzberger's belief system is that so many
others -- Jews and gentiles, universalists and particularists, Zionists and
anti-Zionists -- behaved more or less identically. Yehuda Bauer, a leading
Israeli Holocaust scholar, writes that the wartime Palestinian press would
"go into ecstasies about some local party-political affair, while the murder
of the Jews of Europe is reported only in the inside pages."

In the United States the Zionist Jewish Frontier warned against forgetting
"what was done to the Czechs, the Poles, the Jews, the Russians."
Universalizing the portrayal of Nazi barbarism was a common strategy to
discredit the idea that the war against Nazi Germany was a war for the Jews.
One can argue, as Leff does, that this concern was exaggerated, but if ever
a strategy was "well meant," this was it.

Buried by the Times offers a good deal of interesting information about
Times coverage of the Holocaust -- although the reader should be wary of
paraphrases and truncated quotations that are sometimes tendentious. But
those who would like to understand the reasons behind the Times coverage
will have to await a chronicler less consumed by prosecutorial zeal. -30-
---------------------------------------------------------------------------------------------------------
Peter Novick is the author of "The Holocaust in American Life."
---------------------------------------------------------------------------------------------------------
FOOTNOTE: Ukrainians also look back at The New York Times with
extreme anger over the way The New York Times covered the genocide
in Soviet Ukraine in 1932-1933 (Holodomor-famine terror). Millions died
as a result of actions by Stalin and the Soviet government to move huge
amounts of food products from Ukraine to other parts of the Soviet Union,
to crush the independent spirit found in rural Ukraine and to collectivize
the privately owned family farms.

The top NYT's foreign affairs reporter in Moscow, Walter Duranty, in his
many news articles whitewashed what was going on in Ukraine by saying
people were hungry but very few were dying.

Ukrainians have supported the campaign to revoke the Pulitzer Prize of
Walter Duranty, because he misled the world with his mendacious
articles on the situation in Ukraine, when he claimed there were no
famine there. The Times certainly and beyond a doubt also failed to
live up to its journalistic obligations while Walter Duranty was on their
payroll and especially in 1932-1933. [EDITOR]
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