Tuesday, March 31, 2009

Russia Must Be Involved In Ukraine Gas System Upgrade - Merkel

BERLIN, Germany -- The European Union and Ukraine must work with Russia in modernizing the Ukrainian natural gas pipeline network, the German chancellor said on Tuesday.

German Chancellor Angela Merkel with Russian President Dmitry Medvedev.

The EU and Ukraine signed an agreement last week on modernizing Ukraine's Soviet-era pipelines, triggering an angry reaction from Russia, which exports most of its Europe-bound gas via Ukraine. Moscow said the deal failed to take into account its interests.

"Ukraine is a sovereign state, but we are talking about a gas pipeline network that serves several countries, and Russia must definitely participate in this," Angela Merkel said at a joint news conference with Russian President Dmitry Medvedev in Berlin.

Merkel urged for negotiations between Russia and the EU to settle differences over the cooperation agreement with Kiev reached last Monday, and to "prevent a conflict" as "Russia is not happy at having been excluded from the talks."

The latest dispute has stirred fears in Europe of a repeat of January's dispute between Russia and Ukraine, when some EU consumers were left without gas for about two weeks.

Medvedev told the news conference that Russia would soon send its gas transportation proposals to both the European Union and Ukraine.

"We need to create a proper legal basis, so that such issues do not create difficulties for us in the future," he said, while calling the Brussels talks "questionable."

"Dividing up a product that does not belong to you is not possible. It is equally impossible to build a viable gas transportation system without the country that produces the gas," he said, adding that Russia was ready to engage in talks on the issue with the EU and Ukraine.

Medvedev also warned that Russia would take into account Ukraine's pipeline agreement with the EU in considering Kiev's request for a $5 billion loan.

Moscow has delayed inter-governmental talks with Kiev, and threatened to review energy ties with Europe if its interests are disregarded.

Ukrainian Premier Yulia Tymoshenko has said on several occasions that Russia is welcome to invest in the modernization of the national gas grid.

Russian energy officials have said that Ukraine's network is part of the export system used by gas monopoly Gazprom, and that uncoordinated capacity and other changes to the network could affect exports and production.

Ukrainian President Viktor Yushchenko's recent remark that Ukraine would soon join the common European energy system have also raised concerns in Moscow, as the move would bring Ukraine legally closer to the EU in energy dealings.

Source: RIA Novosti

Monday, March 30, 2009

Ukraine Asks Japan For $5 Billion Dollar Loan

KIEV, Ukraine -- Japan is considering the possibility of granting 5-billion-dollar loan to Ukraine. According to Bogdan Danilishin, the Minister of Economics of Ukraine, this issue was discussed during the talks between Ukraine’s Prime Minister, Japan’s Finance Minister Kaoru Yosano and Japan's Prime Minister Taro Aso.

Ukraine's Prime Minister Yulia Tymoshenko, center left, is welcomed by Japanese officials on her arrival at Tokyo's Haneda Airport, for a two-day visit.

He also said Tymoshenko told Kaoru Yosano that Kiev hopes to deepen economic ties with Japan, which has a competitive edge over high-tech industries and energy conservation areas.

This week Japan is likely to send its experts to Ukraine to define the terms of the loan.

"We have an agreement that this credit can be given on even more favorable conditions than IMF’s conditions," Bogdan Danilishin said.

At the same time Yulia Tymoshenko dismissed reports that the country had taken on a begging role in negotiations with other countries and international organizations amid the current financial crisis.

"I would like to refute statements that Ukraine has taken on the role of a beggar," the premier told journalists on return from a visit to Japan, adding "Ukraine and Japan are building cooperation. There is no begging here."

Ukraine has been hit hard by the global economic crisis with its currency, the hryvnia, depreciating 50% since September.

Kiev received the first installment of $4.5 billion as part of a $16.43 billion IMF loan in November 2008, however, further payments have been delayed over the country's inability to prove to the IMF that Kiev is capable of reducing its budget deficit.

Earlier it was reported that Ukraine had applied to Russia for a $5 billion loan to pay for natural gas deliveries.

Source: Pravda

Russian Diplomat Found Dead In Southern Ukraine

ODESSA, Ukraine -- Russia's vice-consul in Odessa, southern Ukraine, was discovered dead early on Monday, local media said.


"It is true, the man passed away," a diplomatic source told RIA Novosti. "I can't tell you what happened, it is being investigated."

Misto.Odessa.ua, the city's news portal, reported that Igor Tsvetkov, born in 1965, apparently hanged himself in the Russian consulate building in Odessa.

The diplomat's wife and child are reported to have been in an adjoining room when the alleged suicide occurred.

The local police department and the Russian consulate have yet to make an official statement.

Tsvetkov, the vice consul in charge of bilateral cultural cooperation, was also rumored to be responsible for providing support to pro-Russian political parties in Odessa.

This January media in the southern city reported that a briefcase containing official documents was stolen from the official's car.

Source: RIA Novosti

Ukraine Cafe Glorifies Anti-Soviet Fighters

LVIV, Ukraine -- The popular Kryivka (secret place) cafe in the western Ukrainian city of Lviv celebrates the deeds of a wartime anti-Soviet guerrilla group.

A waiter holds a gun as he serves clients in the restaurant "Kryïvka" in Lviv, which celebrates the Ukrainian Insurgents Army.

"Are there Russians or Communists amongst you?" barked the grey bearded man at the entrance, clutching an old sub-machine gun.

The man, dressed as a soldier, offers visitors a glass of honey vodka -- "poison for the Moskals", he cackles -- before leading them to the cafe which seeks to imitate a Ukrainian nationalist hideout.

The controversial Ukrainian Insurgent Army (UPA) are still revered as heroes in western Ukraine for fighting Soviet forces up to the early 1950s in the hope of creating an independent Ukrainian state.

But their detractors accuse them of collaborating with the Nazis and taking part in deadly ethnic cleansing operations against local Polish citizens.

Almost everything in the cafe is a reference to the UPA: the waiters are dressed in khaki, the crockery is metal and wartime weapons and photos adorn the walls.

You can even fire a plastic bullet into the portrait of Soviet wartime leader Joseph Stalin, something Ukraine's First Lady Kateryna Yushchenko lost no time in doing when she visited.

"Before, we had a plaster head of Lenin to fire at. But it was completely destroyed in about two weeks of shooting and we still haven't purchased a new one," said senior waitress Anna Garbar.

The existence of such a restaurant would be unimaginable in the east of Ukraine, where daily life is conducted mostly in Russian rather than Ukrainian and memories of the Soviet Union are fonder.

For centuries part of the Polish Kingdom and then an important town of the Austro-Hungarian Empire, the beauty of Lviv's UNESCO-listed mediaeval centre is in stark contrast to the urban landscapes of most ex-Soviet cities.

The city of Lviv and its region were only annexed into the Soviet Union during World War II and the city has grown into a Ukrainian nationalist stronghold since the country won independence.

After the hopes of the 2004 Orange Revolution that ousted a corrupt old regime from power, political unity remains elusive in Ukraine partly because of the country's linguistic and cultural division.

The divisions show no sign of becoming smaller. This month, the Freedom movement of Oleh Tyahnybok, known for his populist Ukrainian nationalist rhetoric, won a shock victory in local elections in a region neighbouring Lviv.

"Some Russian speakers are scared of coming in, while others try and speak as little as possible," laughs Garbar, who has worked as a waitress at the Kryivka since its opening in August 2007. "But once they see that no-one means them harm they relax," she said.

For the cafe's founder and co-owner Yurko Nazaruk the aim is to "tell the true history about the UPA, which fought for the independence of western Ukraine."

But he emphasises that this is done with a sense of humour and a light touch. "We wanted to stick the myth about our city -- that we kill Russians, that it's illegal to speak Russian in a street -- on its head."

The UPA remains deeply controversial today and not just amongst historians.

Moves by Ukraine's pro-Western President Viktor Yushchenko to rehabilitate its leaders have caused consternation in Moscow, which sees such groups as enemies in the fight against Fascism.

In 2007, Yushchenko bestowed the title of Hero of Ukraine on the group's overall leader Roman Shukhevych, who was killed in 1950 in a shoot-out with Soviet security forces.

Western Ukraine had again been part of Poland in the inter-war period, until Soviet troops ousted Polish forces in 1939. Nazi forces then took over the region two years later.

Formed in 1942, the UPA initially welcomed the arrival of German troops as liberators from Communist oppression although Ukrainian historians insist the group then declared war on the Nazis.

The group fought Soviet forces from its foundation up to the 1950s and is also blamed for killing thousands of Polish civilians in its conflict with the Armia Krajowa (Home Army, AK) non-Communist Polish resistance.

The UPA's hatred of Communism is reflected in the cafe's menu, which includes delicacies like a "grilled KGB agent" or a fish speciality called "drunken Russian".

"We are trying to show history as it is, and in no way do propaganda for Nazism," said the co-owner Nazaruk.

And for most of the satisfied clientele, the cafe's references are more of a joke than anything else. For Vitali Tolstoy, one of the few native Russian speakers in Lviv, it is precisely the place where old enemies should meet.

"We need to sit down at table so that this war finally finishes after so long," said the retired doctor over dinner.

Source: AFP

Sunday, March 29, 2009

Extreme Right Gains Ground As Ukraine Falls Into Crisis

MOSCOW, Russia -- Europe's economic crisis has allowed the extreme right in Ukraine to capitalise on the turmoil engulfing the former Soviet republic.

A poisonous feud between President Viktor Yuschenko and Yulia Tymoshenko, the prime minister, has compounded the problems facing Ukraine.

An unexpected regional election victory by a previously marginal ultra-nationalist party is among a string of developments in Ukraine that threaten to fulfil the worst fears of G20 leaders as they gather for their summit in London.

Lacking the protection of European Union membership, Ukraine has few of the safeguards that prevent its Western neighbours from falling into ruin.

A sharply weaker currency, a collapse in exports and an economy expected to contract by at least six per cent this year has forced the country to seek £11 billion from the International Monetary Fund. Even this lifeline is endangered by a poisonous feud between President Viktor Yuschenko and Yulia Tymoshenko, the prime minister.

The two rivals led the Orange Revolution in 2004, before falling out in spectacular style. As Mrs Tymoshenko plots to take Mr Yuschenko's job, ordinary Ukrainians are showing signs of rejecting them both.

On March 15, voters in the Ternopil region of western Ukraine elected a new regional assembly. This was an Orange Revolution bastion, a region that has long sought to embrace the West and shun Russia.

But it is also has Ukraine's highest unemployment. In a crowded field, the previously little-known Freedom Party won 50 of the regional assembly's 120 seats as voters embraced its hard Right leader, Oleg Tyagnibok, who has urged the expulsion of all Jews and Russians from Ukraine.

"The problem is less the popularity of the nationalists than the universal disappointment with mainstream parties," said Viktor Chumak, a political scientist in Ukraine's capital, Kiev. "Voters are sympathising with radicals more and more as a result of the crisis."

So concerned are the authorities with the Ternopil result, which they claim was rigged, that commentators are predicting the presidential election could be postponed. Some commentators even say that the constitution may be changed so that the president is chosen by parliament rather than by the people.

Critics argue that mainstream politicians - both the squabbling Orange Revolution ruling alliance and the equally discredited pro-Russian opposition - only have themselves to blame because of their failure to give a lead in a time of crisis.

As the danger of political radicalism grows, Ukraine is in danger of formal bankruptcy. Oleksandr Suhonyako, the president of the Association of Ukrainian Banks, gave warning that the country could default on its sovereign debt because of political division and ineptitude.

"In a way, the crisis in Ukraine is less an economic one than a political one," he told the Daily Telegraph. "The key political leaders do not understand how to lead the country out of crisis. If the political crisis continues, we could see the worst case scenario. The threat of sovereign default is there."

The country's government debt, at only 20 per cent of GDP, is well below the recognised danger threshold. The main concern is over corporate debt, with fears that banks could collapse, triggering crises in the financial sectors of western European countries like Austria, which is significantly exposed to Ukraine.

Earlier this month, Western diplomats and politicians forced Mr Yuschenko and Mrs Tymoshenko to pledge to work together to fulfill the IMF's conditions for the rescue package.

The prime minister, however, quickly reneged. On the day she pledged to use her parliamentary majority to pass the laws recommended by the IMF, Mrs Tymoshenko instead marshalled her forces to sack the foreign minister, one of the president's most important allies.

The IMF's money is still being withheld.

Source: Telegraph UK

Andrei Shevchenko's International Career With Ukraine Drawing To A Close

LONDON, England -- Old players never die: they just go to Milanello. But while signing for AC Milan seems to have rejuvenated the 33-year-old David Beckham, the 32-year-old Andrei Shevchenko continues to moulder.

Andrei Shevchenko

The Ukraine forward has started just two league games this season, and there are, for the first time, suggestions that his international career may be coming to an end.

Shevchenko was left out of Ukraine's starting line-up for the qualifier against Belarus last September, but that could be explained by the need to have him fresh for the trip to Kazakhstan four days later. For the coach Oleksiy Mykhailychenko to omit him against England would be another matter entirely.

The suspicion is that a place will be found for him, but his snappish response to questioning about his lack of pitch-time suggests he is beginning to feel the pressure.

"Once again these questions!" he said. "As for me, such things have never influenced my play for the national team and I hope that it will be the same this time."

There is justification to his words. He may have managed only nine league goals over the past three seasons, but Shevchenko's form for Ukraine held up remarkably well. When he was finally introduced against Belarus with quarter of an hour remaining, he converted the injury-time penalty that decided the game. He scored again in Almaty the following Wednesday.

"He will score a point against the sceptics who have covered him in dirt," the former national coach Josef Szabo insists, but a lacklustre performance in the 0-0 draw against Croatia in November raised serious doubts.

The issue has been brought into sharper focus by Andriy Voronin's comments after being left on the bench throughout that game that he would have been better off spending the time with his new-born son.

His case has been strengthened by his recent form for the Bundesliga leaders Hertha Berlin, for whom he has scored seven goals in his last seven games.

Liverpool are believed to be willing to accept an offer of €4million to make his loan move permanent. It is unclear, though, whether Hertha could match his present salary of €4m.

Leaving out Shevchenko would not only signal the end of the frontline career of the greatest player of an independent Ukraine, but it would also sever the final tie with the era of Valeriy Lobanovskyi.

Shevchenko is the last survivor of the great final generation of the state-funded academies that also included Sergei Rebrov and Oleh Luzhny.

Mykhailychenko, meanwhile, played for Lobanovskyi with Dynamo Kyiv and the USSR, served as his assistant as Dynamo and succeeded him on his death in 2002.

The two league championships he subsequently won were seen almost as posthumous titles for Lobanovskyi, and as soon as things went wrong, of course, it was seen as his fault for steering away from the Lobanovskyian path.

Ukraine is beginning to move on, and the fruits of the new club academies are starting to emerge. Six of the squad that arrived in St Albans on Wednesday were part of the Ukraine squad that reached the final of the European Under-21 Championship in 2006.

Shakhtar Donetsk's Dmytro Chyhrynsky is established at centre-back, and only injury denies the Dynamo Kyiv forward Artem Kravets his place in the squad. For now, though, Mykhailychenko will probably maintain the link with the past.

Given the position of the Dynamo Kyiv playmaker Oleksandr Aliev seems secure, that means Mykhailychenko either making a direct choice between Shevchenko and Voronin, or abandoning the lone striker system he would surely prefer.

"Shevchenko has great experience, a great desire to play," he said. "It will be much easier for the young players we are bringing in to develop if he is alongside them."

Shevchenko certainly seems to expect to be playing, and is relishing the prospect of a first outing at Wembley, having missed Chelsea's victory over Manchester United in the 2007 FA Cup final.

"A player who dreams of his best match should dream of doing it at Wembley," he said.

"The atmosphere is really impressive and England are one of the best teams in the world. They have very strong players, real stars, and therefore we must meet them with collective play and commitment. Everybody has to play not at 100 per cent but at 150 per cent of their ability."

The question, though, is really what percentage of his past ability Shevchenko can muster these days.

Source: Telegraph UK

Grim Ending To Ukraine's 'Orange' Fairy Tale

KIEV, Ukraine -- For thousands of jubilant Ukrainians crammed into Kiev's main square on Jan. 23, 2005, a duo of pro-Western politicians were a prince and princess ready to whisk them to a magic land of EU membership and prosperity.

Protesters rally around a Vladimir Lenin monument, seen in the background, in central Donetsk, Ukraine, on Friday. About 30,000 activists from the opposition Party of Regions waved blue flags and chanted 'Crisis Stop!' and 'Down with the Authorities!'' Opposition activists around the country are holding anti-government protests, demanding early elections amid a worsening financial crisis.

Now with the so-called Orange Revolution that swept the old order from power a distant memory, the tale of Viktor Yushchenko and Yulia Tymoshenko is, like many folk tales, heading for a somewhat macabre end.

A victorious Yushchenko took the acclaim of the crowds that day after finally being inaugurated president after a disputed election. Tymoshenko would a few days later become his prime minister.

But now Ukraine is among the countries worldwide worst hit by the economic crisis and the two leaders have been engaged in a poisonous feud that has made them a laughing stock in the media.

With next presidential elections expected in January, Yushchenko's poll ratings are languishing at less than three percent, possibly making him the most unpopular elected head of state in the world.

"The economic crisis is more serious than in other countries. But there is another factor: the political instability and constant crisis situation," said the director of the Penta political research center Volodymyr Fesenko.

"There is a great disappointment with the existing political leadership."

The vast independence square in central Kiev that was the main arena for 2004's peaceful uprising is now inhabited by the grubby tents of protesters who have been staging a sit-in against the ruling elite over the past four weeks.

"Get Usikh!" reads the Ukrainian-language slogan of one movement daubed on its tents along with a broom. "Clear Out!"

The country's economy is paying for its continued reliance on exports from Soviet-era heavy industry, whose production has slumped by more than 30 percent as global demand slumped for metal and mining products.

Only now have Yushchenko and Tymoshenko agreed to a formal ceasefire in their public battle, a condition set by the International Monetary Fund to give out a US$1.9 billion tranche of a standby loan vital for staving off the risk of default.

The weekly Fokus put the pair on its cover as Obi-Wan Kenobi and Princess Leia from the "Star Wars" films, under the headline "With Whom Will the Force Be?." The Korrespondent meanwhile portrayed the pair as child vagabonds in rags with the headline "The Children of Default."

A twist in the tale?

With the current story ending so badly, the question is what the next chapter will hold for the 46 million inhabitants of Europe's largest country.

Yushchenko seems out of the frame, and the latest poll by the Razumkov center think tank shows his vanquished opponent from 2004, Viktor Yanukovich, leading with 19.5 percent and Tymoshenko second with 17.9 percent.

The charismatic Tymoshenko, who still styles her hair with traditional Ukrainian braids, is conventionally seen as a pro-Western figure while Yanukovich draws his support from pro-Moscow Russian speaking regions.

"For the moment, Tymoshenko is the favorite and she has a very good and strong team. But the crisis is working against her. With every week of the crisis, her chances of victory become worse," commented Fesenko.

But labels are a tricky business in Ukraine's shifting political world and it was Tymoshenko who signed the deal with Russian Prime Minister Vladimir Putin ending the New Year gas crisis.

Oleksandr Lytvynenko, senior political analyst at Razumkov center, said it would be wrong to see Yanukovich's Party of the Regions as an unambiguously pro-Russian force.

"They can come up with pro-Russian slogans but Yanukovich accused Tymoshenko of acting in Moscow's interests when she signed the deal to end the gas conflict."

"It is a party that is not interested in the integration of Ukraine into Russia but with obtaining power in Ukraine itself. The party was always like this."

Adding further intrigue is speculation that Tymoshenko could form an alliance with Yanukovich which could see her staying as prime minister and the latter working as a more ceremonial president.

And as if that was not enough, the Kiev political world has been abuzz with talk that an outside figure could spring to prominence in the elections.

Areseniy Yatseniuk, 34, a pro-Western protege of Yushchenko and an ex-parliament speaker, is winning around 12 percent of the vote in presidential opinion polls although he is only just forming a political faction.

Meanwhile, the establishment was rocked by the surprise victory of the Freedom movement of Oleh Tyahnybok, known for his populist Ukrainian nationalist rhetoric, in elections in the western Ternopil region this month.

"Many people are saying that those in power are yesterday's people and new faces are needed. There is a demand for something new," said Lytvynenko.

But for all the bitter disappointments, there have been dramatic changes within society since the Orange Revolution removed a corrupt regime that often seemed stuck in a Soviet time warp.

"The relationship between people and politics has changed. It has become more rational, critical. There is no sign of the extent of stagnation in public consciousness that there was before 2004," said Lytvynenko.

Source: AFP

Saturday, March 28, 2009

The Lost City Of Chernobyl

CHERNOBYL, Ukraine — It looks like a baby monitor, but the beeping device that tour guide Dennis Zaburin clutches in his hand monitors radiation. The digits on the dosimeter's display change rapidly, indicating rising and falling danger. Other than the beeps, our footsteps are the only sounds we hear, multiplied as they echo off the abandoned buildings that surround us.

A park that never opened in Pripyat.

Zaburin knows where it's "safe" and the spots to avoid. But I have my doubts. I am, after all, at the site of the world's worst nuclear accident: Chernobyl, Ukraine.

More than 20 years after the atomic genie was released from the bottle, the invisible danger in this modern ghost town remains. Zaburin tells me not to worry, but I can see the readout on his dosimeter. It says 1,800. Only a few hours earlier he told me that 50 is normal. What am I doing here?

Hallowed ground

On April 26, 1986, Reactor No. 4 at Chernobyl, in what was then the Soviet Union, blew up. I've been fascinated since then by how man's quest to control nature backfired and how nature is slowly reclaiming a city where thousands once worked, raised families and made a community. I've read the books about Chernobyl, seen the movies and played the game (yes, there is actually a video game set here).

At the time of the accident, four reactors were in operation and two more were under construction. It was during a systems test in the early morning hours of that spring day that things went terribly wrong. Technicians tried to stop the test and rein in the reactor, but it overheated, resulting in a massive blast. While it wasn't a nuclear explosion, the reactor blew apart, shooting radioactive debris more than a mile into the sky.

In the days after the explosion, winds carried radioactive fallout across most of Europe. Eventually more than 300,000 people were forced to relocate.

It may seem a macabre place to visit, but is Chernobyl any different from the sites of tragedies like Auschwitz or New York's ground zero? It too has become hallowed ground where people come to witness history and to remember.

Welcome to Pripyat

Chernobyl lies about 80 miles northwest of Kiev, Ukraine's capital. It is an atomic bull's-eye in the middle of the menacingly named Zone of Alienation, a 20-mile exclusion area that surrounds the power plant.

Just after 9 on a sunny Wednesday morning I board a tour bus in central Kiev, along with five Swedes and a Norwegian — curious tourists from countries close to the accident. We pass through a series of military checkpoints before arriving at the town of Chernobyl.

While the power station is referred to as Chernobyl, it is actually located in Pripyat, a model Soviet town founded in 1970 to support the nuclear complex. We stop at a bland government building and head inside.

This is where I first meet Zaburin, our young but serious government tour guide. The 27-year-old is dressed in bluejeans, camo jacket and a Formula 1 ball cap. He doesn't smile. Inside a large room lined with maps and photographs of the disaster, Zaburin gives us a short lecture about what happened and what to expect.

Machines and men

The tour begins at what he calls the vehicle museum. It's really nothing more than a few military vehicles scattered about a grass field in desperate need of a mow. Zaburin waves his dosimeter a few inches from a tank — the numbers skyrocket.

Even though I know how dangerous radiation is, it's easy to forget about the risk because it's invisible. But the signs and the beeping of the dosimeter keep reminding me.

Most of the time our group is quite boisterous — making comments, asking questions, taking pictures. But at the Monument to the Firefighters we become subdued. Until this point we've seen only objects that were affected by the disaster. The large blue sculpture reminds us of the human toll.

Officially, fewer than 100 people died in the initial disaster. But poor record-keeping, combined with the long-term nature of radiation poisoning, make it impossible to determine exactly how many have died in the past 23 years — or to predict how many more will.

A city's skeletons

Pripyat, the power plant's support city, once had a population of about 50,000. Today it's zero.

Back in 1986, officials told residents that the evacuation was temporary and they need only bring a few days' worth of clothes. As a result, most people left everything behind, unaware that they would never return.

Pripyat was a modern city before the disaster. Today, it is a crumbling shell, a surreal place where empty roads are lined with street lamps that never light. The only traffic is the occasional bright yellow dump truck emblazoned with radioactive symbols. Zaburin warns us not to breathe when they pass by. The dust could be hazardous to our health.

It's at the main square where I really feel Pripyat's emptiness. Zaburin tells us we're free to explore the city's skeletons: a grocery store filled with overturned carts and moldy signs. A hotel waiting for guests that will never come. Disconnected phone booths, empty swimming pools and overgrown paths that snake past faded signs highlighting the achievements of a country that has ceased to exist.

Books, chairs and even radiators are scattered about, the flotsam and jetsam of 1980s Soviet life. A child's ballet shoe here, a trumpet case there. A strip of old film, perhaps touting the bright future of this atomic city?

The heart of the disaster

A few miles away, down a deserted road, partially completed cooling towers and idle construction cranes welcome us to the reactor complex. We drive past stagnant cooling ponds and a decaying network of electrical transmission infrastructure before reaching the heart of the disaster: Reactor No. 4, an enormous and enormously frightening building.

Nearby is another poignant tribute: the Monument to the Liquidators. In the weeks, months and years that followed the explosion, 100,000 troops and 400,000 experts and civilians worked to stabilize the complex and clean up the radioactive mess.

They became known as the liquidators, and their work may have saved countless millions. But they paid a high price: Many became very sick, and many died.

The Sarcophagus, a hastily constructed containment structure, covers the wreckage of Reactor No. 4. Built as a temporary measure, it is the only thing standing between tons of loose radioactive material and the outside world.

As I stand before the giant tomb, Zaburin explains that it is in dire need of replacement, and there are plans to build a new structure to completely contain the Sarcophagus. If it were to collapse before then, clouds of radioactive dust would be released into the air, creating another nuclear disaster.

A park that never opened

The children of Pripyat must have been bursting with excitement in the days before the disaster. A new amusement park was scheduled to open on May 1, 1986, in honor of May Day. It never did.

Instead of children's laughter, this amusement park is silent, a sad reminder of shattered dreams and the lives ripped apart. The large decaying Ferris wheel has become a tragic symbol of the disaster. A few steps away, I spot a rotting stuffed toy hanging in the smashed window of a ticket booth, as if caught in mid-escape.

It feels like the set of a zombie movie, but Pripyat is not dead. It's renewing itself. Just as nature is slowly returning, evident in the grass that now grows between the cracks in the plaza or the shrubs and trees that have found root in the contaminated soil, so too are people slowly returning to the area, albeit in the form of visitors like me.

It may be thousands of years before this area is safe enough for human habitation. Until then, the site of humanity's worst nuclear disaster may become one of the world's most chilling tourist attractions.

Source: Mercury News

Opening Salvos Of A New Gas War: Russia Versus The EU And Ukraine

WASHINGTON, DC -- The Ukrainian - EU agreement on renovating the main Ukrainian gas trunk pipeline signed in Brussels on March 23 was greeted with a virulent reaction from Moscow. Russian Prime Minister Vladimir Putin, who runs his countries gas sector with an iron fist, threatened to "review" existing gas supply contracts and prices with EU states and Ukraine as well as relations with the EU and Ukraine. The ostensible reason for Putin's reaction was that Russia was not included in the deal.

Russian Prime Minister Vladimir Putin, runs his countries gas sector with an iron fist.

According to the EU-Ukrainian agreement, the EU would allocate $2.57 billion towards the renovation of the pipeline. Ukrainian Prime Minister Yulia Tymoshenko asked that the renovation include expanding the present through-put capacity of 145 billion cubic meters of gas annually by 58.6 billion. The deal includes a basic demand put forth by Ukraine that EU gas companies would now buy Russian gas at the Ukrainian-Russian border and pay Ukraine the transit fee.

This would de-facto integrate the Ukrainian pipeline into the EU gas transportation system, a major defeat for Putin's conception of creating a gas pipeline consortium with Russian participation which would manage the Ukrainian system, but allow Ukraine to maintain ownership of the pipeline. However, the Putin plan called for Russia to insure the transit of its gas to Europe through Ukraine with Russia paying Ukraine the transit fee.

The vice chairman of the European Regulators' Group for electricity and gas (ERGEG), Walter Boltz, told the newspaper Kommersant on March 25, "In reality there are no reasons why Russia should insure transit (of gas) and why we shouldn't pay for transit. We buy gas at the Ukrainian-Russian border and worry about its delivery ourselves. I believe there is no alternative."

At the heart of the matter are a number of issues vital for Russian interests; maintaining its gas hold over Europe and its geopolitical goal of bringing Ukraine into Russia's sphere of influence. If the through-put capacity of the Ukrainian pipeline is expanded by almost 60 billion cubic meters there would be no commercial justification for building either the Nord Stream or South Stream pipelines. The cost of upgrading the Ukrainian pipeline is estimated at about $5-7 billion, far less than the estimated $12 billion needed to build Nord Stream and the $13 billion needed for South Stream.

In his reaction to the EU-Ukraine agreement to expand the Ukraine pipeline, Putin lashed out by asking the far from rhetorical question: "Nobody asked us if we are ready to transport such quantities (of gas)". Was this a threat or a bluff by Putin, the hidden CEO of Gazprom? More likely than not, it was an emotional outburst based on rational fear. If Nord Stream and South Stream are doomed by an expansion of the Ukrainian pipeline, then the Nabucco pipeline might become far more acceptable for those EU member states who had already signed up for South Stream.

With European demand for Russian gas down by 40 percent in February 2009 from a year ago, Gazprom is now caught in a dangerous cash flow situation and has already warned that it would reduce its vitally needed investment program into exploring for new fields -yet the company continues to pour money into building its new skyscraper in St. Petersburg and announced that it would take its option on buying from Italy's ENI the remaining 20 percent of Gazpromneft at the current price of $2.1 billion in April 2009.

Putin's threat to unilaterally "review" the price of gas for the EU and Ukraine is a more direct form of intimidation. This can be done only if Russia decides to abandon the existing price based on oil products and devises a new pricing formula, one based on political and financial considerations convenient to Gazprom.

By March 25, the pressure mounted on the Ukrainian government. Russian President Dmitri Medvedev told the Russian National Security and Defense Council that he was cancelling "indefinitely" a meeting between Russian and Ukrainian negotiators to discuss, among other matters, a loan request for $5 billion from the Ukrainian side. Part of the $5 billion was to be used by Ukraine to pay Russia for gas purchases in 2009.

In the meantime, Yulia Tymoshenko headed to Japan for a meeting with Japanese corporations and banks to discuss possible loans and greater Japanese investments into Ukraine Tymoshenko can well be looking to Japan to extricate her from a potentially embarrassing refusal by Russia to lend her government $5 billion for which has personally lobbied.

Within Ukraine, the agreement with the EU was instantly criticized by the largely pro-Russian Party of Regions. The shadow cabinet's energy minister, Yuriy Boyko, went on the air where he supported Putin's views and argued that "Without the full inclusion of Russia, the main supplier (of gas) it is impossible to guarantee that the Ukrainian gas transportation system will receive any gas. Ignoring Russia's concerns is contrary to Ukraine's interests".

Despite Boyko's reservations, most energy analysts see the agreement as a major breakthrough in cleaning up the murky, corruption ridden gas transport schemes which some attribute to Boyko and his constant lobbying of shady middleman schemes. What is certain is that Gazprom and Vladimir Putin will fight this new arrangement tooth and nail in order to keep the Ukrainian pipeline system linked as close as possible to the Kremlin in order to prolong the millions of dollars of hidden rents which benefit both Russian and Ukrainian elites.

Source: Eurasia Daily Monitor

Friday, March 27, 2009

Opposition Protests In Crisis-Hit Ukraine

KIEV, Ukraine - Opposition activists held anti-government protests across Ukraine on Friday, demanding the president and prime minister step down amid a worsening financial crisis.

Activists shout during a rally in central Kiev, Ukraine, demanding early elections amid a worsening financial crisis.

About 3,000 activists from the opposition Party of Regions waved blue flags on Kyiv's main square and chanted: "Crisis Stop!" and "Down with the Authorities!" Similar protests were held in a dozen other Ukrainian cities, the party said.

Although the rally in Kyiv was relatively small, it reflected growing discontent with the government's handling of the financial crisis. Analysts warn dissatisfaction could grow into mass protests and civil unrest later this year.

The leader of the Russian-leaning opposition party, Viktor Yanukovych, accused pro-western President Viktor Yushchenko and his 2004 Orange Revolution ally-turned-foe, Prime Minister Yulia Tymoshenko, of mishandling the crisis.

Analysts expect the Ukrainian economy to contract by at least six per cent this year. Industrial output has dropped nearly one-third as global demand has fallen and the national currency, the hryvna, has lost nearly half of its value.

"Everything they promised - they did just the opposite," Yanukovych told a cheering crowd.

"These authorities must resign - both the president and the government."

Ukraine is scheduled to hold presidential elections late this year or early next year but both Yanukovych and Tymoshenko have recently said they want an early vote. The two are expected to be the top contenders in the race with about 17 and 15 per cent support respectively, recent polls indicate. Yushchenko's ratings have sunk to below five per cent.

Source: AP

Thursday, March 26, 2009

Kiev Residents Protest Eccentric Mayor

KIEV, Ukraine -- Hundreds of angry Kiev residents on Thursday picketed the office of the city's increasingly unpopular mayor, an eccentric millionaire who sings at rallies, poses in Speedos to show off his good health and goes by the nickname Cosmos.

Kiev Mayor Leonid Chernovetsky

Angered by major price hikes for public transport, utilities and medical care, the protesters demanded that mayor Leonid Chernovetsky resign.

But so far the 57-year-old has proved highly resilient, despite widespread accusations of corruption and erratic behavior often bordering on the absurd.

He survived an early vote last year that was initiated by Ukraine's parliament in an attempt to unseat him. He is now fending off an investigation over controversial sales of city land and even a parliamentary inquiry into whether he is mentally fit to hold office.

Eager to demonstrate he is of sound body and mind, he invited journalists to watch him earlier this month jogging, doing chin-ups and diving into a swimming pool in his tight Speedo suit.

''They are judging me today,'' Chernovetsky said, after he emerged from the water and flexed his muscles in front of the cameras. ''They want me to spend my whole life behind bars in a psychiatric ward. I want to demonstrate to the whole world that I am completely healthy, both physically and psychologically.''

Chernovetsky says his nickname is derived from his policies, which are ''cosmic'' and ''completely unusual for Ukraine.''

''I am proud that they don't resemble anything that went on in Ukraine before,'' he said on a talk show last year.

Chernovetsky was elected Kiev mayor in 2006 in a surprise win over the capital's incumbent mayor and boxing heavyweight champion Vitaly Klitschko.

His critics charge he won the race through questionable tactics such as donating pasta, sugar and other food to Kiev's impoverished pensioners. He was re-elected last May, largely due to his opponents' failure to unite behind a single candidate.

Chernovetsky has acknowledged on national television that he had given bribes worth $21 million when he was a businessman in the early 1990s. But he denies bribing his voters, calling himself ''the humble mayor who loves babushkas.''

In an effort to increase city revenues, he has proposed charging foreigners to live here, selling his kisses in a lottery and introducing entry fees for visits to city cemeteries. He has also started holding $100,000 dinners for entrepreneurs interested in discussing their affairs with city authorities.

Chernovetsky's opponents have acccused his administration of giving away or selling through non-transparent auctions about 300 plots of land worth several billion dollars in late 2007. Klitschko filed a lawsuit to invalidate those deals, but it was turned down by a Kiev court. Parliament is now investigating those transactions.

Ukraine's competitive elections for president, parliament and Kiev mayor are a testament to the level of democracy in this former Soviet state of 46 million, a sharp contrast to the carefully managed elections in neighboring Russia and Belarus.

But many Kiev residents have had enough, saying Chernovetsky's bizarre policies were bad before but have become unbearable during an economic crisis that is one of the worst in Europe.

About 2,000 elderly women, students and bus drivers from all political groups waived flags in front of Chernovetsky's office Thursday and chanted ''Down with the mayor!'' The drivers parked dozens of buses on Kiev's main streets, blocking traffic to protest job layoffs.

''It's not that he doesn't respect us, it's that he is mocking us!'' said Dmytro Antonenko, a 50-year-old teacher. ''We like him as a singer, but as a singer only.''

Chernovetsky brushed off the protests, saying he was open to dialogue with residents and had set up a complaint line that receives some 9,000 calls a day.

''He believes this demonstration was a political provocation by his opponents,'' said spokeswoman Oksana Makarchenko.

Chernovetsky vowed he would not be intimidated and said he still planned to run for president in an election expected in early January.

Source: Kyiv Post

Economic Havoc Heats Up Political Strife In Ukraine

KIEV, Ukraine -- Ukraine’s political crisis today is a powder keg, and it is the ongoing economic havoc that has contributed most of the powder. The Opposition is planning massive protest actions, hoping half of the country’s population will take to the streets.

A metalworker at the Iron and Steel Factory in the Ukrainian industry city of Mariupol. Already rocked by the collapse of the Soviet Union's command economy, the global economic crisis means Ukraine's metals factories have been struck by a plunge in export orders that count for 80 percent of their production.

In the meantime, President Viktor Yushchenko’s strength is at a critical low, and politicians and experts speculate early parliamentary elections may be expected as early as this summer.

The people have long lost the last bits of illusion about the political forces they once wholeheartedly voted for. Ukrainian society feels an urgent need for the emergence of a new political force. In this connection analysts have pointed to the fast popularity climb of the former parliamentary speaker, Arseny Yatsenyuk, who, some suspect, may contest the presidency, and with success.

The oppositional Party of Regions has begun a national action in the Crimea in support of the demand for the resignation of the president and government. In Simferopol, the peninsula’s main city, Yanukovich on Thursday was holding a meeting of the shadow Cabinet.

A large crowd gathered in the central square of Simferopol. “Stop the Crisis, Bring the Authorities to Justice” was the watchword. The Crimean rally is seen as a prelude to much stronger actions of protest, due to be staged in Kiev as of March 27. On the same day Odessa and sixteen other Ukrainian cities, including those in the country’s West, will see protest demonstrations.

Nearly half of the Ukrainians (42.2 percent) are prepared to participate in authorized protest actions, and nearly one-fourth (23.8 percent) will dare demonstrate without permission, as follows from a March opinion poll by the Razumkov Center.

The Marketing and Consulting agency quotes the pollster’s experts as saying the Ukrainian people’s anger has grown considerably since December 2008.

Yanukovich believes that the surest way of leading Ukraine out of the political and economic crisis will be re-electing all bodies of power.

“Our main task is to find a means of how to oust the current authorities in the near future. We cannot tolerate this for another year. In one year’s time the country may be lying in ruins,” Yanukovich warned.

The leader of the Party of Regions declared the need for calling early presidential and parliamentary elections.

“Only after that there will emerge the possibility of political and economic stabilization in Ukraine,” he said. “I am certain that the Ukrainian people will manage to cope with this, and the Party of Regions will actively help them in this.”

Yanukovich recalled that the Party of Regions had waged a struggle against this ‘orange power’ in 2004 and in all the subsequent years.

“We did our utmost to ensure it should leave for good and vacate this country once and for all,” Yanukovich said.

The rally, which brought together some 5,000-6,000 residents of Simferopol, voted for a resolution demanding the resignation of the president and Cabinet of Ministers, for disbanding parliament and for initiating early elections. Street demonstrations, say the organizers, will be the first phase of a plan that may eventually lead to the declaration of early parliamentary elections.

Early elections may be called as soon as June 2009, deputy parliamentary speaker Nikolai Tomenko, of the Yulia Timoshenko Bloc, said.

The leader of the pan-Ukrainian association Liberty, Oleg Tyagnybok, made a similar statement to the daily Kommersant.

“There are three scenarios. Number one is early parliamentary elections are called first, and then the presidential one. That’s what Viktor Yushchenko wants. Number two is parliamentary and presidential elections are to be held simultaneously. That’s the Viktor Yanukovich-backed option. And number three is a freeze on any elections till 2015. That’s Prime Minister Yulia Timoshenko’s wish,” Tyagnybok said.

The chief of the Democratic Initiatives research center, Ilko Kocheriv, doubts early parliamentary elections are likely, though.

“The authorities are perfectly aware that calling early elections amid the political and economic crisis would be tantamount to planting a mine under one’s own seat,” he told the daily Nezavisimaya Gazeta. He acknowledged that the positions of the incumbent president are at a critical low.

The pressure on the Ukrainian political elite is so strong that several months before the official beginning of the election campaign Viktor Yushchenko’s opponents decided to initiate impeachment procedures. However, the sole political force that has backed this idea is the Party of Regions, on the condition, though, Timoshenko Cabinet steps down, which makes the whole affair as rather problematic.

Ukraine is to elect a new president at the end of 2009 or the beginning of 2010.

In the meantime, none of Ukraine’s political forces enjoys a preferential position.

”What makes Ukraine’s recent history after 1991 so special is that we have not a single political force that would enjoy credibility with a majority of the population. The existing political system has discredited all of the current political forces,” the director of the Sociology Institute under the Ukrainian Academy of Sciences, Nikolai Shulga, said.

The Party of Regions, he said, has its own stable electorate at a level of about 29-33 percent. Viktor Yanukovich largely owes the support he enjoys to his confrontation with the ‘orange forces.’ Those who back him are unable to support other politicians by virtue of their cultural, linguistic and geo-political preferences. True, Yanukovich’s supporters have had their own reasons to be disappointed somewhat, but his opponents have created far more problems for themselves.

“Humiliation and distortion of history, speculations over the theme of famine of the 1930s, the surge of pro-Nazi sentiment and glorification of Nazi collaborators and henchmen, as well as attempts to set the Ukrainians and the Russian against each other, (this strife allegedly constitutes the backbone of history Russian-Ukrainian history), and the restoration of some tiny localities Russians had allegedly destroyed – all this has caused the people’s revulsion and disillusionment about Yushchenko.”

The electorate of Our Ukraine is in dismay, says the political scientist. It has turned its back on Yushchenko (and no new people are coming to join him). Also, a great share of voters feel disappointed over Timoshenko and the smaller parties – the Christian Democratic Party, the fragments of People’s Rukh, and the Yuri Kostenko Popular Party.

If parliamentary elections were to be held next Sunday, the Party of Regions would gain the upper hand, as follows from the results of an opinion poll the Agency of Social Studies conducted in March. The Party of Regions would get 19.2 percent of the votes, the Yulia Timoshenko Bloc, 15.4 percent, the Arseny Yatsenyuk Bloc, 6.9 percent, the Litvin Bloc, 5.2 percent, and the Communist Party of Ukraine, 3.4 percent. The movement For Ukraine under the former leader of the Our Ukraine-People’s Self-Defense faction, Vyacheslav Kirilenko, would have certain chances of getting into parliament, too. It would receive 3.2 percent of the votes of the polled. In the meantime, Viktor Yushchenko’s bloc Our Ukraine can count on a tiny 2.9 percent of the votes, and Oleg Tyagnybok’s Liberty, 2.3 percent.

As they consider the chances of likely contenders for the presidency, experts point to the quick rise of the former parliamentary speaker, leader of the Front of Change, Arseny Yatsenyuk. If one assumes he will manage to persuade the hesitant ones, and also those who have so far voted against all, the young politician’s emergence in the forefront of the election campaign will look quite probable.

According to a FOM-Ukraine opinion poll the Marketing and Consulting company is referring to, if the presidential election were to be held in the middle of February, the leader of the Party of Regions, Viktor Yanukovich, would have 20.4 percent of the votes, Prime Minister Yulia Timoshenko, 17.5 percent, former parliamentary speaker Areseny Yatsenyuk, 10.1 percent, Communist Party leader Pyotr Simonenko, 4.7 percent, parliamentary speaker Vladimir Litvin, 3.7 percent, and President Viktor Yushchenko, 1.9 percent.

The farther down the road, the more interesting the picture gets. Should Yanukovich and Yatsenyuk qualify for the run-off, the former would get 30.2 percent of the votes, and the latter, 32.1 percent. In case of the Timoshenko-Yatsenyuk option the ration would be 20.4 percent to 31.5 respectively.

Source: ITAR-TASS

Russian Ambassador Calls Ukraine-EU Gas Declaration Senseless

KIEV, Ukraine -- The recent Ukraine-EU natural gas pipeline declaration does not make any sense and looks like a deal signed by "a deaf man and a blind man," the Russian ambassador in Ukraine said Thursday.

Russian ambassador to Ukraine, Viktor Chernomyrdin.

Ukraine and the European Union signed a declaration on Monday to modernize the ex-Soviet state's natural gas pipeline network. Russia, which transits about 80% of its Europe-bound gas via Ukraine, said it was excluded from the talks in Brussels, and Prime Minister Vladimir Putin threatened to review ties with the EU.

"If you want my opinion, it looks as if a deaf man and a blind man sat at a table and signed the paper without even understanding what they had signed," the UNIAN news agency quoted Viktor Chernomyrdin as saying.

The EU endorsed Ukraine's plan to modernize its Soviet-era pipelines and underground storages and build new gas metering stations, for which Europe pledged 2.5 billion euros ($3.4 billion) and promised to encourage more investment on the condition Kiev reform the sector to make it more open and transparent.

Ukraine also asked the EU to help build two more pipelines to increase the network's capacity by about 60 billion cubic meters to 200 billion cu m, a project it earlier estimated at $5.5 billion.

Kiev says this would be cheaper than building long-distance gas pipelines, such as Nabucco promoted by Europe and the Nord Stream and South Stream projects Russia has been pushing.

President Viktor Yushchenko said on Monday Ukraine would soon join the treaty on the common European energy system, raising fears in Moscow that Ukraine would be legally closer to the EU in the energy sphere.

Some EU countries experienced disruptions in gas supplies in January as Russia briefly cut off shipments via Ukraine amid a debt and pricing row with its neighbor. The crisis fueled EU concerns on reliance on Russian energy.

The Ukrainian prime minister said on Tuesday that Russia was welcome to invest in Ukraine's pipelines and modernize them.

"Russia can invest in and modernize the gas pipeline system," Yulia Tymoshenko told a news conference, adding that Moscow might not like some aspects of the cooperation agreement with EU, but the document did not run counter to Russia's interests.

Russia's energy giant Gazprom said, though, that the increase in gas pipeline capacity envisioned in the document would affect future export contracts and production of natural gas in Russia and Central Asia.

Source: RIA Novosti

Ukrainian Oligarchs Lose Wealth, Keep Power In Crisis

DONETSK, Ukraine -- What's the difference between a Ukrainian and a Russian oligarch? They both lead lavish lifestyles, adore football, and have lost billions in the financial crisis.

A multi-billionaire and top leader of the Regions Party, Rinat Akhmetov.

But unlike their now politically timid Russian counterparts, Ukraine's super rich are unafraid of meddling in politics and are seen playing a key role ahead of January presidential elections.

Russian billionaires have steered clear of politics since several fell foul of the law under strongman ruler Vladimir Putin, including the now jailed head of the Yukos oil giant Mikhail Khodorkovsky.

Their Ukrainian counterparts may be less well known outside the country but an elaborate courtship dance with its highly polarised political elite is being followed avidly by the nation.

"Our situation is different to Russia. The state does not put this pressure on big business. It prefers a process of negotiations and compromise," said Oleksandr Lytvynenko, senior political analyst at the Razumkov Centre.

In the southeastern industrial city of Donetsk, whose region is home to the country's biggest concentration of mining, metal and chemical industry, it's hard to escape the presence of one man -- Rinat Akhmetov.

Akhmetov is the multi-billionaire owner of System Capital Management, a conglomerate whose interests range from mining and metals, to banking and the media.

The coal miner's son owns regional and national newspapers, the top Donetsk hotel and above all the city's pride and joy -- its football side FC Shakhtar Donetsk.

Thanks to Akhmetov's support, Shakhtar are now a regular in top European competitions and will move this year to a new 50,000-seat stadium which is being built for the club on the city outskirts.

The ethnic Tartar had always been seen as the financial muscle behind the Party of the Regions of Viktor Yanukovich, the pro-Moscow faction which reaches out to the Russian speaking population of areas like Donetsk.

But over four years after the Orange Revolution that brought pro-Western leaders to power, Akhmetov is now playing a more cautious game and political analysts are intrigued by his increasing closeness to Prime Minister Yulia Tymoshenko.

"The current political strategy of Rinat Akhmetov is to balance creating a positive image for himself while improving relations with decision makers who until recently were implacable foes -- like the Tymoshenkoites," the weekly Kommentarii wrote.

According to Volodymyr Fesenko, the director of the Penta centre for political research, "businessmen do not want there to be a single winner in the Ukrainian political fight in whom all the power is to be concentrated."

"The situation is changing, some oligarchs are distancing themselves from politics while others are diversifying their political activities.

"They are spreading their risk."

According to the latest rich list of US magazine Forbes published this month, Akhmetov is now the 397th richest man in the world with a fortune of 1.8 billion dollars compared with 7.3 billion last year.

Like almost every oligarch across the former Soviet Union, his fortune has been hit by the slump in commodities prices amid the economic crisis and also the plunge in equity markets.

Forbes' figures show he has now been overtaken as Ukraine's richest man by Viktor Pinchuk, the founder of the Interpipe piping company and a son-in-law of former president Leonid Kuchma.

Pinchuk, whose fortune was estimated at 2.6 billion dollars compared with five billion before the crisis, himself served as a member of parliament between 1998-2006.

But according to his website, he has now "retired from politics" and channels his finances into charity work and cultural events.

He was behind ex-Beatle's Paul McCartney's open air concert in Kiev last year and his Pinchuk Art Centre will in April show a major retrospective of British modern artist Damien Hirst.

Akhmetov and Pinchuk lost out in the aftermath of the Orange Revolution when their joint purchase of the country's largest steel producer Kryvorizhstal for a bargain price in 2004 was denounced by Yushchenko and then annulled by a court.

It was then sold to Indian giant Mittal Steel for almost five billion dollars, almost seven times more than what the two oligarchs had paid. But now both businessmen are members of a charity fund headed by Yushchenko's daughter.

Ukraine's third richest man according to Forbes, Ihor Kolomoysky, is a more reclusive figure, but who is still seen playing a prominent role in politics after switching allegiances between Tymoshenko and her foe, President Viktor Yushchenko.

The Dnepropetrovsk-based billionaire's Privat group is one of the biggest holdings in Ukraine with interests in steel, food and banking.

Another prominent figure is Dmitry Firtash, who has long been seen as an ally of Yushchenko and foe of Tymoshenko and is the co-owner of energy trader RosUkrEnergo.

Source: AFP

Wednesday, March 25, 2009

Ukraine Opposes Deployment Of Extra Submarines With Russia's Black Sea Fleet

KIEV, Ukraine -- Ukraine is opposed to deploying more submarines with Russia's Black Sea Fleet, which is based in Crimea, spokesman for Ukraine's Foreign Ministry Vasily Kyrylych said on Wednesday.

Lada class Russian submarine.

Commenting Russia's plans to deploy some new submarines with the Black Sea Fleet, Kyrylych stressed Russia could conduct modernization of the fleet only with Ukraine's consent, according to the Interfax-Ukraine news agency.

"Modernization of the Black Sea Fleet is possible only after the signing of appropriate agreements with Ukraine," he said.

"This is not a new issue. It was repeatedly discussed during the bilateral consultations, and the position of Ukraine on this issue is well known to the Russian side. We are opposed to increasing the number of military units of the Black Sea Fleet, which is based in the territory of Ukraine," Kyrylych added.

A senior Russian Navy official said on Tuesday that the Black Sea Fleet must have eight to 10 submarines in active service and the Navy plans to commission new Lada class vessels to meet the requirement.

"We are planning to deploy additional submarines with the Black Sea Fleet, including new Lada class vessels, but our plans are being hampered by Ukraine, which sees this as the deployment of new weaponry rather than an upgrade of the existing fleet," said Vice Admiral Oleg Burtsev, deputy head of the Navy General Staff.

The Black Sea Fleet currently deploys one Project 877 Kilo class diesel-electric submarine, while an outdated Project 641 Foxtrot class sub is undergoing a long-term overhaul.

Russia's Black Sea Fleet uses a range of naval facilities in Ukraine's Crimea as part of a 1997 agreement, under which Ukraine agreed to lease the bases to Russia until 2017.

The Ukrainian authorities repeatedly emphasized that Ukraine would not extend the lease of the base for Russia's Black Sea Fleet beyond 2017, and urged Russia to start preparations for a withdrawal.

Source: Xinhua

Pro-Russia Protest Against US Frigate In Sevastopol

SEVASTOPOL, Ukraine -- Pro-Russia protesters cried "NATO out" Wednesday as a US naval frigate arrived in the Ukrainian naval port of Sevastopol, where Russia's Black Sea fleet is also based.

Activists from the Ukrainian Communist Party and Russian Bloc protest as the USS Klakring sails into Sevastopol. The pro-Russia protesters cried "NATO out" as the US warship arrived in the Ukrainian port -- where Russia's Black Sea fleet is based.

The USS Klakring docked at 0630 GMT, as about 250 largely communist and far-left demonstrators also shouted "Yankee go home!"

The frigate is in port for a five-day "friendly visit" and will not take part in any exercises, a Ukrainian navy statement said.

It is feared that Sevastopol in the Crimea, where the Russian fleet has maintained a presence for over 200 years, could become a flashpoint in strained relations between Russia and the West.

Russia signed a 20-year contract with Ukraine in 1997 to station its fleet in the Black Sea and makes an annual payment of 12 million dollars (nine million euros) to Kiev for the privilege.

Ukrainian officials have repeatedly called for the fleet to leave Sevastopol when the lease expires in 2017.

Source: AFP

Platini To Visit Poland And Ukraine 2012 Chiefs

COPENHAGEN, Denmark -- UEFA president Michel Platini will visit Poland and the Ukraine on April 15 and 16 to meet officials organising the troubled 2012 European Championships.

UEFA president French Michel Platini, seen here during the 33rd ordinary congress of the European football federation in Copenhagen, will visit Poland and the Ukraine on April 15 and 16 to meet officials organising the troubled 2012 European Championships.

"This visit is important because I will bring with me the top UEFA directors so that we can get a precise idea of what's happening in Poland and the Ukraine," explained Platini during a press conference here on Wednesday at the end of UEFA's 33rd Ordinary Congress.

"We'll spend one day in each country to listen to the presentations of the local organising committees on stadia, cities and infrastructures," he added.

"We're doing this because there's a steering committee that will discuss everything at the beginning of May and I'd prefer to have seen the host cities in order to see the progress that is being made on the stadia and the cities."

Regarding the preparation work, the former France international said that "the situation at the organisational level is not easy for Poland and the Ukraine, and it's not easy for UEFA either".

"But these two countries are working thoroughly and UEFA is also doing everything it can to take things forward," he insisted.

Poland and the Ukraine were a surprise choice to host the tournament and have since been dogged by concerns about their ability to meet their commitments regarding the construction of stadia and the creation of transport and hotel infrastructures.

Source: AFP

Vaccine Scare Threatens Health In Ukraine

KIEV, Ukraine -- A widespread scare about vaccine side effects in Ukraine has led to a sharp drop in immunizations that could result in disease outbreaks spreading beyond the former Soviet republic, international and local health officials say.


Hundreds of thousands of fearful Ukrainians have refused vaccines for diseases such as diphtheria, mumps, polio, hepatitis B, tuberculosis, whooping cough and others this year, according to official estimates.

Authorities have canceled a U.N.-backed measles and rubella vaccination campaign funded by U.S. philanthropist Ted Turner, and will have to collect and incinerate nearly 9 million unused doses in coming months.

"I never thought I'd see the day where perfectly good vaccines are being destroyed," said Michael Bociurkiw, a spokesman for UNICEF.

Around the world, health officials say they are struggling with the repercussions of vaccine fears they call unwarranted and dangerous.

In 2003, imams in northern Nigeria fomented a boycott of polio vaccinations claiming they were a Western plot to make Muslims infertile or infect them with HIV. Authorities in Indonesia are discussing a plan to end childhood immunizations against a number of diseases out of fears that foreign drug companies are using the country as a testing ground.

A budding movement of parents getting exemptions from pre-school vaccination laws is seen as partly responsible for a spike in U.S. measles cases.

Experts blame the Ukrainian scare on government mismanagement and irresponsible media coverage of an anti-vaccination campaign launched after the May death of a 17-year-old boy who had received a combined shot for measles and rubella.

Activists including members of the homeopathic and alternative healing industries blamed his death on the vaccination. Ukrainian authorities said they needed to investigate and halted the campaign to revaccinate 9 million Ukrainians aged 16-29 for measles — a leading cause of childhood death — and rubella, which can cause serious birth defects.

The Ukrainian Health Ministry and World Health Organization concluded that the boy died of septic shock from a bacterial infection unrelated to the vaccine. But the ministry decided last month to terminate the revaccination campaign, saying there was no longer enough time to administer the vaccines before they expire this summer and that people would refuse the shots.

Over 4.5 million Ukrainians, mostly children, are vaccinated for a wide variety of diseases each year in the country of 46 million. Health authorities say spreading fears of immunization were largely responsible for an estimated 10 percent drop in the vaccination rate since May.

"This threatens to lead to a spike in the number of infectious diseases," said Lyudmyla Mukharskaya, the country's deputy chief public health official. "There will be outbreaks, especially among children."

Ukraine has had two major outbreaks of measles since 200. Ukrainians aged 16-29 have proven to be highly susceptible, apparently because of an ineffective vaccination campaign carried out in the 1990s, when the country was in economic crisis following the collapse of the Soviet Union.

If Ukraine cannot revaccinate at least 95 percent of the estimated 9 million people who got deficient vaccines in the '90s, UNICEF says, the next outbreak could be even bigger.

"There are concerns that the measles disease could be exported to other European countries where Ukrainians travel," Bociurkiw said.

Independent health experts say government mistakes were a major factor in the vaccine scare. Prosecutors briefly detained the country's chief public health official after the teen's death and claimed that the vaccine, which was certified by WHO, was imported into the country without proper authorization.

Dr. Fedir Lapiy, an expert in infectious diseases based in Kiev, said prosecutors appeared to have used the case to promote themselves and discredit political opponents.

"It looked more like a PR campaign than a thorough probe," Lapiy said.

Ukraine has an educated population but rumors and misperceptions spread easily. Constant political turmoil and a devastating financial crisis — one of the worst in Europe — has fueled mistrust of Ukraine's crumbling health care system, and authorities in general.

"It is sad to see the population of a country in the middle of Europe refusing to get immunized," said Andrei Tulisov, an infectious disease and immunization specialist at WHO.

Ukrainian media outlets are numerous and uncensored but do not widely follow Western standards of fairness and accuracy. Some print and online reports alleged after the boy's death that the Indian-made measles and rubella vaccine would sterilize men as part of a plot by Ted Turner, whose Washington-based United Nations Foundation charity paid for the vaccines.

"This kind of scare tactic coupled with the death of the boy struck the fear of God into a lot of young people and parents," Bociurkiw said.

Nina Zaichenko, a 25-year-old interior designer in Kiev, says she has decided not to immunize her 1-year-old daughter, Dasha, against any diseases until at least the age of 3. She fears the infant's body is still to weak to handle vaccinations and she does not trust the local health system to acquire and properly store high-quality vaccines.

"The chances of a child getting sick from a vaccine and from the disease itself are equal," Zaichenko said, an assertion experts say has no basis in the truth. "It's a hard choice for parents to make."

UNICEF says it believes only up to 30 percent of Ukrainians who need revaccination for measles and rubella would turn up if the campaign were restarted today. Only 400,000 people received vaccines before the campaign was stopped.

The Health Ministry says it will work to promote the need for immunizations among the population, and look for ways to launch a new measles and rubella vaccination campaign.

Source: AP

The Prognosis For Ukraine

KIEV, Ukraine -- Following events in Ukraine is like listening to the tale of the boy who cried "wolf": people have been shouting "crisis" for so long that it is hard to tell whether or not a terminal crisis has finally arrived.


The situation does look pretty bad. Ukraine's chronic political stalemate has run into the buzz saw of a global economic recession. Then add to the mix an obstreperous Russia, eager to flex its muscles – as shown by its willingness to cut gas supplies for an unprecedented two weeks this January.

First, the grim economic numbers. The hryvnya has lost 60 percent of its value against the dollar over the past year – despite the government spending $11 billion of its reserves in an effort to shore up the currency.

The global slump saw demand collapse for Ukraine's export commodities like steel and chemicals. By January, industrial production had fallen by 34 percent year on year. Inflation is running at 22 percent, while real wages have fallen 12 percent.

This is by far the worst performance of any of the Commonwealth of Independent States economies. The International Monetary Fund is predicting that GDP will fall 6 percent in 2009.

Sixty percent of Ukraine's loans and mortgages are held in dollars, and in October fears of a bank run and currency collapse led the Ukrainian government to negotiate a $16.4 billion loan from the IMF.

The first $4.5 billion tranche was paid out, but the IMF suspended the second payment, due in February, because the government failed to make politically unpopular spending cuts (including cuts in utility subsidies) and the parliament passed a budget based on over-optimistic assumptions about revenue and hence spending for 2009.

The mounting economic crisis was exacerbated by the feuding between President Viktor Yushchenko and his archrival, Prime Minister Yulia Tymoshenko, whose backers maintain an unsteady majority in the parliament, the Verkhovna Rada.

In October, Yushchenko tried to disband the Rada and hold fresh elections but backed off after complaints from Western allies. In November, he suspended talks on the 2009 gas contract with Moscow, helping to trigger the January gas crisis.

More recently, on 4 March he sent the National Security Service to raid the headquarters of the gas company Naftogaz Ukrainy, seen as loyal to Tymoshenko.

The Rada in turn succeeded in ousting Foreign Minister Volodymyr Ohryzko, who was accused of mounting an anti-Tymoshenko publicity campaign, although legislators called a cease-fire in February in their attempts to fire the head of the central bank.

The finance minister, Viktor Pynzenyk, resigned on 12 February; six weeks later the post remains unfilled. This is not the most auspicious time for the state treasury to be without a head.

The politicians are maneuvering in preparation for the presidential elections scheduled for January 2010. Yushchenko himself has no chance of prevailing (polls put him at 3 percent support). It will likely be a three-way race among Tymoshenko, Party of Regions leader Viktor Yanukovych, and a new contender, the 34-year-old former parliamentary speaker, Arseniy Yatsenyuk.

Some observers insist that the fundamentals of the Ukrainian economy are sound. Anders Aslund of the Peterson Institute in Washington, D.C., the best-informed specialist on the Ukrainian economy, insists that a default is unlikely and argues that Ukraine has met the IMF's key conditions.

On one condition, balancing the budget, the fund has lightened up and now appears willing to accept a modest deficit. By March Ukraine still had $26 billion in reserves, enough to cover eight months of imports.

In 2008 the government's fiscal deficit was a modest 1.5 percent of GDP, and the external trade deficit was about 7 percent of GDP. The state's foreign debts amount to about $24 billion, or some 20 percent of GDP, well below the levels usually seen in pre-default economies.

Corporate debts are higher, estimated at $40 billion or more, but the fall in world oil and gas prices will ease pressure on an economy that is highly dependent on imported energy.

WHAT'S THE WEST TO DO?

The European Union itself has a great deal at stake, given its dependence on Russian gas pumped across Ukraine, and given the exposure of Austrian banks in Ukraine. But the EU lacks a common approach and has delegated the job of handling Ukraine's financial problems to the IMF.

Meanwhile, back in Washington think tanks have been issuing reports urging the Obama administration to act – to encourage the feuding Ukrainian leaders to cooperate in implementing the IMF program.

They argue that Ukraine is too big – and too strategically located – to be allowed to fail. While they no longer call for an immediate pre-membership plan for NATO entry, recognizing that this step is opposed by many NATO partners, they still advocate helping prepare Ukraine to join the alliance.

In the Brookings Institution report "Engaging Ukraine in 2009," authors Steven Pifer, Aslund, and Jonathan Elkind baldly state that "the primary reasons for engaging Ukraine remain geopolitical," that is, to "encourage Moscow to pursue a more cooperative, integrative foreign policy and give up any thought of seeking to restore the Russian empire."

Such policies would probably serve to redouble Moscow's determination to push back against the American presence in the region. So it is not at all clear that Ukraine would benefit from efforts to talk up and politicize the economic crisis.

Ukraine's dilemma is that pressure to speed up external integration with Western institutions is opening up rifts within Ukrainian society that threaten internal disintegration, given the ideological distance between western Ukraine and the east and south of the country.

These divisions are of course being exploited by a rogue's gallery of Russian political actors. But Western pressure, diplomatic or economic, is only likely to exacerbate the problem.

Source: Business Week

Tuesday, March 24, 2009

Moscow Delays Talks With Kiev Over Ukraine-EU Pipeline Deal

MOSCOW, Russia -- Russia is putting off government consultations with Ukraine, which were due next week, until its natural gas pipeline declaration with the EU is clarified, President Dmitry Medvedev said on Tuesday.


Ukraine and the European Union signed a cooperation declaration on Monday to modernize the ex-Soviet state's gas pipeline network. Russia, which transits about 80% of its Europe-bound gas via Ukraine, said it was excluded from the talks in Brussels.

"The consultations will take place after Russia has received answers to its questions," Medvedev told a Security Council meeting. "This declaration raises questions."

Speaking at the meeting, Prime Minister Vladimir Putin said: "For our inter-government consultations to be effective, we need to clarify the situation."

On Monday, Putin threatened to review ties with the EU if it continued to ignore Russia's interests.

The EU endorsed Ukraine's plan to modernize its Soviet-era pipelines and underground storages and build new gas metering stations, for which Europe pledged 2.5 billion euros ($3.4 billion) and to encourage more investment on the condition Kiev reform the sector to make it more open and transparent.

Ukraine also asked the EU to help build two more pipelines to increase the network's capacity by about 60 billion cubic meters to 200 billion cu m, a project it earlier estimated at $5.5 billion. Kiev says it is cheaper than building long-distance gas pipelines, such as Nabucco promoted by Europe and the Nord Stream and South Stream projects Russia has been pushing for.

President Viktor Yushchenko said on Monday Ukraine would soon join the treaty on the common European energy system, raising fears in Moscow that Ukraine would be legally closer to the EU in the energy sphere.

Some EU countries experienced disruptions in gas supplies in January as Russia briefly cut off shipments via Ukraine amid a debt and pricing row with its neighbor. The crisis fueled EU concerns on reliance on Russian energy.

The Ukrainian prime minister said on Tuesday that Russia was welcome to invest in Ukraine's pipelines and modernize them.

"Russia can invest in and modernize the gas pipeline system," Yulia Tymoshenko told a news conference, adding that Moscow might not like some aspects of the cooperation agreement with EU, but the document did not run counter to Russia's interests.

Tymoshenko said Monday's deal had ensured Ukraine's energy interests for decades.

Source: RIA Novosti

Monday, March 23, 2009

Ukraine-EU Gas Deal Angers Russia

BRUSSELS, Belgium -- Ukraine agreed to clean up corruption in its gas export industry in return for Western investment in a deal with the EU on Monday that sparked a sharp warning from its powerful neighbour, Russia.

Ukraine agreed to clean up corruption in its gas export industry in return for Western investment in a deal with the EU on Monday which sparked a sharp warning from its powerful neighbour, Russia.

Moscow warned it would "review" its relations with the European Union if Russia was left sidelined by the discussions here, which followed a winter dispute between Kiev and Moscow that disrupted gas supplies to Europe.

Ukraine's President Viktor Yushchenko told government and industry officials in Brussels that he would "restore order" and "reject all corruption" in Ukraine, which needs billions of euros to upgrade its aging gas infrastructure.

At a conference here on modernising Ukraine's gas infrastructure, it signed an agreement with the European Commission, the World Bank, the European Investment Bank and the Bank for European Reconstruction and Development.

Under the deal, the Ukrainian gas transport company must prove its legal independence from outside influence, offering access to its pipeline at transparent prices that respect European norms.

However, Ukraine has no intention of giving up ownership of the major strategic asset, through which passes 80 percent of the gas sent by Russia to the European Union.

Putin slammed the agreement as "unprofessional," in comments reported by Russian news agencies after the Brussels meeting, and warned Moscow could review its ties with the bloc.

"If the interests of Russia are going to be ignored then we will be compelled to begin to review the principles of our relationship," Putin was quoted as saying in the southern city of Sochi.

European confidence in Ukraine as a gas-transit partner country suffered a blow in January when Moscow cut off deliveries to Ukrainian consumers and transit supplies amid a row with Kiev about new prices and debts.

Several EU states were left without Russian gas for two weeks.

"We cannot allow our citizens to face fuel shortages in the depth of winter again," EU External Relations Commissioner Benita Ferrero-Waldner told the conference in Brussels.

"All of us... have an interest in ensuring Ukraine provides a reliable and secure transit route for gas in decades to come."

The agreement lays out the commitments that Kiev is to make to pave the way for much-needed foreign investment in its gas pipeline network.

Yushchenko said he intends to have metering stations set up along transit pipelines in Ukraine and open up access to the country's substantial underground gas storage facilities.

Putin scorned the new agreement. "It seems to me that this document ... is at the very least not thought-out and unprofessional," he said. "To discuss questions of supplies without the main supplier is simply not serious."

Moscow is currently involved in several gas pipeline projects with European companies, such as the Nord Stream project which aims to bypass Ukraine with a pipeline beneath the Baltic Sea to Germany.

The EU wants to tread carefully with Kiev and Moscow as it seeks to diversify its sources of gas shipments by backing the Nabucco pipeline that will bring gas from the Caspian through Turkey.

Ukrainian Prime Minister Yulia Tymoshenko said building new pipelines bypassing Ukraine would be much more expensive than updating Ukraine's network.

Ukraine is seeking more than 5.5 billion dollars (4.1 billion euros) to expand its gas pipelines, but refuses to give up ownership of the infrastructure.

The Russian foreign ministry had already warned in a statement that the agreement could push up gas prices for Ukrainian and European consumers and disrupt supplies.

"If this is just a little technical hitch in the already quite complicated trilateral relations between Russia, Ukraine and the European Union then no matter," Putin said on Monday.

"But if this is the start of an attempt to systematically ignore the interests of the Russian Federation then that is very bad."

Source: AFP

Chernobyl Taking A Toll On Invertebrates Too

CHERNOBYL, Ukraine -- Most of the talk about the ecological aftermath of the Chernobyl nuclear accident in Ukraine has been about the impact of the 1986 disaster on animals.

Population declines suggest invertebrates are very sensitive to radiation.

Recent research has refuted the idea that the region around the power plant, contaminated by radiation and off limits to most humans, has become a sort of post-apocalyptic Eden for deer, foxes and other mammals and birds.

A new study by the same researchers shows that it’s not much of a paradise for invertebrates, either. Anders Pape Moller of the University of Paris-South and Timothy A. Mousseau of the University of South Carolina report in Biology Letters that the abundance of insects and spiders has been reduced in the area.

The researchers conducted standard surveys in forests around Chernobyl over three springs from 2006 to 2008, noting the numbers of bumblebees, butterflies, grasshoppers, dragonflies and spider webs at points with radiation levels that varied over four orders of magnitude.

After controlling for factors like height of vegetation and type of soil, they found that abundance declined with increasing radiation intensity.

The decline was noticeable even in areas with relatively low levels (about 100 times normal background), which suggests that invertebrates are highly sensitive to radiation.

The researchers note that most of the radiation in the area is in the top layer of soil, and given that many invertebrates spend much time in or near soil — as eggs, larvae or adults — that could explain the decline.

Source: The New York Times

EU To Upgrade Ukraine's Outdated Gas Pipelines

BRUSSELS, Belgium -- The EU vowed Monday to help upgrade Ukraine's network of gas pipelines in exchange for reforms in the country's energy management to avoid a repeat of the January dispute which resulted in the cutoff of Russian gas deliveries to Europe.


The two sides signed an agreement to improve both the management and capacity of Ukraine's 40-year-old grid of gas pipelines. In return for embracing market economy practices, Kiev can expect billions of euros (dollars) in funding and western expertise on how to run a profitable -- and reliable -- energy sector.

The EU did not say how much it would commit for the work. Ukrainian Prime Minister Yulia Tymoshenko said the project would need euro 5.5 billion, while the EU has costed it at euro 2.5 billion, without setting a figure on the final bill.

Ukrainian gas pipelines carry domestic supplies but also Russian gas to Western Europe. A fifth of gas consumed in the EU comes from Russia through the Ukraine.

Ukrainian President Viktor Yushchenko said "we are determined to improve the functioning of the gas market and root out all kinds of corruption and make sure that the system works to the benefit of all."

A key priority, he said, was building gas metering stations to improve the monitoring of gas passing through Ukrainian pipelines.

Yushchenko signed the gas agreement with European Commission President Jose Manuel Barroso.

It aims to improve both the safety and capacity of Ukraine's pipeline network and revamp its management so western investors can put up money without fear of losing any of it to endless red tape or corruption.

This year, Ukraine plans to join the European Energy Community, which sets common trade rules for producer and consumer nations. It means that by 2012, Ukraine's energy laws must comply with market economy standards.

That -- plus cuts in excessive domestic consumption -- will boost exports, especially from the Black Sea region, and make "Ukraine a predictable market" for Western Europe, said Ukrainian Energy Minister Yuriy Prodan.

Energy supply is a sensitive political issue in the region, and the EU-Ukraine deal quickly triggered Russian misgivings about being sidelined in its own backyard.

Ukraine's gas pipeline network "has an organic link with Russia," Russian Energy Minister Sergei Shmatko told a conference at which the EU-Ukrainian gas declaration was signed.

The EU-Ukraine agreement is part of a web of cooperative deals the EU is seeking with Russia's immediate neighbors for fear that Moscow's enduring sway in ex-Soviet republics hampers across-the-board reforms.

"We are working for safe and attractive conditions for the transit of Russian gas," said EU Energy Commissioner Andris Piebalgs. "There is no intention to exclude Russia."

EU officials were pleased both Yushchenko and Ukrainian Prime Minister Yulia Tymoshenko -- his political rival -- showed up for Monday's signing ceremony.

Yushchenko has accused Tymoshenko of delaying repayment of debt to Russia worth $2.4 billion ($3.3 billion) for gas imports, saying that leaving it unpaid makes Ukraine a colony of Moscow. The state gas company Naftogaz, which answers to Tymoshenko, disputes the size of the debt.

"Today's participation of the prime minister and the president shows that in some issues they are united," said Piebalgs.

Tymoshenko told the EU that modernizing her country's outdated gas pipelines -- which span 37,600 kilometers and comprise 73 compressor stations and 13 underground storage facilities -- will cost euro 5.5 billion ($7.5 billion). She said that was cheap compared to building alternative pipelines, as the EU is contemplating.

The European Commission has provisionally costed Ukraine's modernization program at euro 2.5 billion ($3.4 billion).

Source: AP