Sunday, May 31, 2009

Russia-Ukraine Gas Feud: Something’s Gotta Give

BRUSSELS, Belgium -- Ever since the January Ukrainian-Russian gas agreements reached by Ukrainian Premier Yulia Tymoshenko and Russian counterpart Vladimir Putin in Moscow one-on-one, a second chapter fall-out of the European gas crisis has been imminent.

Russian Prime Minister Vladimir Putin (R) and his Ukrainian counterpart Yulia Tymoshenko attend a joint news conference following their talks in Astana, Kazakhstan.

“We have been waiting for a relapse to begin with. Even when the original deal was done back in January, we were noting that Ukraine’s economy is in terrible shape and not getting better and it almost seems a matter of time before they have to go back to the table to renegotiate something else,” Ron Smith, chief strategist at Alfa Bank, told New Europe telephonically from Moscow. “We are watching it on a month-to-month basis and at some point something’s gotta give — it may well be Russia giving them more credit, selling them gas on credit, whatever, but I think both sides would want to avoid having another shut down of gas.”

Tymoshenko’s bitter rival, Ukraine’s President Viktor Yushchenko said that Ukraine and Russia should return as soon as possible to the issue of establishing a market price on natural gas and its transit, Nezavisimaya Gazeta reported on May 29. Yushchenko, who is scheduled to visit Russia in early June, stressed once again that the January Ukrainian-Russian gas agreements are unacceptable for him both politically and economically.

Ukraine agreed to a transfer to market gas prices. It would be correct considering the simultaneous introduction of a market price on gas transit, Yushchenko said. In this case, nobody would comment on the gas price, even that determined by the formula that is assessed as the most imperfect in Europe by many experts, he claimed. “However, during the talks, the Ukraine side, probably, following, first of all, political reasons, left the transit price at the level that was three years ago.

What results did it lead to? As early as in the first quarter, the Russian gas transit became unprofitable for us,” Yushchenko stressed as the long-running dispute between Moscow and Kiev over gas continues.

Russian gas monopoly Gazprom CEO Alexei Miller said on May 26 it fears that Ukraine will not pay in full for May gas supplies and threatened to make Ukraine’s national gas company Naftogas Ukrainy pay in advance for supplies. Two weeks ago, Putin and Tymoshenko failed to agree how Ukraine’s underground storage facilities would be filled and who would pay for this.

Russian President Dmitry Medvedev urged the EU to help with the bills during the EU-Russian summit at Khabarovsk on May 21-22. Putin also called European Commission President Jose Manuel Barroso on May 29 to warn him of difficulties he anticipates in payments coming from Ukraine to Gazprom. Barroso said the EU’s top leaders are set to discuss the Russia-Ukraine gas issue at a summit on June 18-19.

Barroso’s comments came a day after Italian Prime Minister Silvio Berlusconi said he would put forward at the next European Council meeting Russia’s proposal to have the EU pay part of Ukraine’s gas bills. “It’s been obvious for a few weeks, even months, that Italy is partnering up with Russia. I think they see it in their interest, which is one of the problems the EU as a political body has always had – it’s a collection of sovereign countries and their interests will diverge substantially,” Alfa Bank’s Smith told New Europe.

He reminded that Italy’s ENI and Gazprom plan to double the capacity of the South Stream pipeline. “Between that and Nord Stream suddenly the need to transit through Ukraine becomes questionable,” Smith said.

He said the deal might be partially in response to an EU-Ukraine agreement signed in March to modernise Ukraine’s gas transportation system without Russia’s involvement, which angered Moscow. According to Smith, Russia may say something along the lines of “Okay, if you want to pour a few billion dollars in upgrading the Ukrainian gas system feel free, it may not be necessary because we may be able to bypass it entirely.”

Source: New Europe

A Grandson Returns To Retrieve His Legacy

NEW YORK, NY -- It was the sign above the store that made me stop short, one perfect spring day, during a stroll down East Seventh Street: Surma Books & Music. The goods for sale were ceramic eggs, embroidered blouses, religious icons. A few shelves of books and cassette tapes, mostly in Ukrainian.

Honey for sale at Surma Books & Music.

The sight of it all woke the memory of another sign, another road, another May, 26 years ago.

“Apiarist,” said the sign on that street, in Saddle River, N.J.

The beekeeper was 91 years old, lord and servant to 700,000 bees. They darted into a tangle of raspberry vines. Their wooden hives were set in the yard. The old man worked barehanded; he said the stings prevented rheumatism. He was spry as a fawn.

And his voice, on that spring afternoon in 1983, was fragrant with Ukraine that he left in 1910. After digging coal near Scranton, Pa., he moved to a pocket of the Lower East Side of Manhattan known as Little Ukraine. He opened a shop and stocked it with books and newspapers and things from the old country. Then he kept bees in northern New Jersey.

Schoolchildren — not a wandering reporter — were his steady visitors. A class of fifth graders sat on tree stumps, in the shade of a pine grove, and absorbed lore of the bee: the needless terror of the stings, and the flowers the bees pollinate, their combs thick with honey.

But, the kids wanted to know, wasn’t he scared? “A beekeeper likes to be with the bees,” he said. “When he hears them buzzing around, he thinks it’s a symphony.”

Nearly three decades later, in the shop on Seventh Street, I mention the old beekeeper, Myron Surmach. The man behind the counter nods.

“My grandfather,” he says. “He started this store in 1918.”

The grandson is Markian Surmach, 47, and he is almost as surprised to be standing in the shop, a few doors east of Third Avenue, as I am to encounter another Surmach in 2009.

“I was away for a long time,” he said. “Most of my generation of Ukrainians moved away and assimilated.”

When Myron Surmach moved from shopkeeping to beekeeping in the 1950s, he turned the store over to his son, Myron Jr., who had a fine run as impresario of Ukrainian dances and parties and outfitting the flower children of the 1960s. Peasant blouses were in demand. Janis Joplin and Joan Baez and members of the Mamas and the Papas shopped in Surma Books & Music.

The grandson, Markian Surmach, whose first language was Ukrainian, lived above the store until he was 6. He left Little Ukraine and New York behind in 1991. “You want to define yourself, apart from the mold,” he said. “I chose to run away.” He started a Web-development business in Denver.

Surmach the beekeeper and store founder died in 1991, not quite 99 years old. His son died in 2003, at age 71. Markian has a sister, who was busy raising her children.

“If I didn’t come back, the store was going to close,” he said.

No place stays the same for 15 years, certainly not in Manhattan. With a few exceptions, Ukrainians have long since drained from the Lower East Side. So have the artists living cheaply. “The homogenization of city life is not unique to New York, or this country,” Mr. Surmach said. “It’s all over the world.”

People return to the store around Christmas and Easter, and also after attending services at St. George Ukrainian Church, he says. The older people will glance through the Ukrainian newspapers; younger ones will pick over the crafts, the painted eggs and greetings illustrated with folk scenes by a Surmach aunt.

He wrestles with the future. “I started a business of my own with a clean white slate,” he said. “Here, the book is fully written. I’m just trying to write in the margins. I haven’t given up yet. I’m trying to find meaning.”

Perhaps, he says, he will bring fresh life to the shop with music. He is offered another memory of his grandfather from 1983: for the visiting schoolchildren, the beekeeper played the bandura, a 55-string lute.

“For an old man, this is like family,” Myron Surmach had told the kids. “Everyone, when they get old and lonely, should have a bandura. It is like family because it has all the voices.” He plucked a high note. “These are the children.” Then a richer one: “These are the ladies.”

Hearing of this nearly three decades later, the grandson smiled and pointed to a bandura, hanging on the wall. He stood below an old sign, “Honey Sold Here.” The old bee farm is gone, but Surma Books & Music still stocks honey, fields of clover, tangles of raspberry, remembered in a jar.

Source: The New York Times

Saturday, May 30, 2009

Ukraine On The Brink

WASHINGTON, DC -- Russia has always had a knack for overshadowing its neighbors - and this time the West, focused on Moscow, is distracted from a crisis in Ukraine. As U.S. President Barack Obama gears up to "reset" Russia relations, Ukraine is in disarray.

All eyes on the reset button, Washington has failed to notice Russia's meddling in a crisis next door.

The country is teetering between economic collapse, Russian influence, and vague promises of Western support. It will take decisive moves from Washington to help pull Ukraine back from the edge. At the least, Obama should visit ailing Ukraine and prove that good relations with Russia don't meant forgetting the rest of the region.

Economic decline is largely to blame for Ukraine's perilous predicament. The country paid heavily for of its massive corporate foreign debt, failure to push through serious economic reform, and unwillingness to clean up a terribly corrupt energy sector.

The International Monetary Fund and World Bank forecast an 8 to 9 percent drop in GDP this year, and that might be a conservative estimate; the economy has contracted some 30 percent in the first quarter alone. Ukraine's currency, the hryvnya, has fallen 40 percent against the dollar.

Unemployment may reach 10 percent and mass protests are not out of the question -- especially in the troubled east.

Finger-pointing among Ukrainian politicians, already a national sport, will only accelerate as the country gears up for January 2010 elections for president (and possibly early parliamentary elections, too). Many, including Prime Minister Yulia Tymoshenko (who has been feuding with President Viktor Yushchenko since the Orange Revolution brought him to power in 2004) are calling for constitutional reform that would strengthen Ukraine's parliament and weaken the presidency.

Constitutional reform, important though that may be, is a divisive distraction at a horrible time. What would be more helpful is economic reform, as the IMF recommended as part of its $16.4 billion deal last year.

But politicians are desperate for quicker solutions, even ones that may not have Ukraine's long-term interests in mind. Enter Moscow, which has provided loans to the tune of several billion dollars already to Kiev and is interested in buying up more Ukrainian properties and assets.

Russia might not be acting out of mere kindness of heart; a campaign to regain its sphere of influence might be at work.

If so, it's a campaign with strategic implications. Russia's Black Sea fleet is set to operate in Ukraine's port city of Sevastopol until 2017. In its current economic predicament, Ukraine will be in a weaker position in contentious negotiations with Moscow about whether to renew the arrangement.

The same is true as the country rejects Russian nationalist claims that Crimea, internationally recognized as part of Ukraine, really belongs to Russia. Clashes between the two countries over gas delivery to Europe are also likely to continue -- with Russia in a position to apply further pressure on Ukraine, (though Ukraine also needs to pay its bills so that future cutoffs are harder to justify).

Why should the international community be concerned about Ukraine's fragility? In a word: location. The country of more than 46 million people is a strategically placed capitalist (albeit fragile) democracy on the fault line between Russia and the European Union.

Messy and frustrating as Ukrainian politics may be, the country has been both peaceful and democratic since the Orange Revolution in 2004. The media in Ukraine are freer than ever, and the parliament (the Rada) is no rubber stamp for the executive branch -- more than some of Ukraine's neighbors can say.

Ukraine is central to achieving the goal of a Europe that is whole, free, and at peace. It's the right country in the right place. But if the West turns away, gains from the past five years could be lost.

Visible U.S. support for Ukraine is critical as the country struggles through the coming months. Obama should avoid boosting one politician over another prior to any elections. A visit to Kiev on the president's scheduled trip to Moscow in July would help, sending a powerful message that America will not seek to improve relations with Russia at all costs, neighbors included.

On his trip, Obama must make clear that he seeks better relations with Ukraine and other countries in the region even as he improves ties with Moscow. It's a delicate balancing act, but neither policy can succeed without the other.

Source: Foreign Policy

Yushchenko Seeks To Revive His Political Fortunes

WASHINGTON, DC -- The resignation of the Ukrainian President Viktor Yushchenko's chief of staff Viktor Baloga has long been expected. He issued a strongly worded attack on Yushchenko as having failed to implement his 2004 election promises, and therefore had no right to stand for a second term. Moreover, he had lobbied for Yushchenko to support Party of Regions leader Viktor Yanukovych's candidacy.

President of Ukraine Viktor Yushchenko

Yushchenko did not support Baloga's strategy to disband parliament, since it lacked a coalition majority (only 40 out of 72 Our Ukraine-People's Self Defense (NUNS) deputies joined the coalition). On May 22 in an interview on Inter television, Yushchenko again reiterated that "his faction" (NUNS) was not a member of the coalition.

The constitutional court ruled on May 12 that the presidential elections will be held on January 17, and not in October for which parliament had previously voted. According to the Minister of Justice Mykola Onishchuk, this ruled out the proposal to hold simultaneous presidential and parliamentary elections in October. Baloga had attempted to enter parliament in order to secure immunity before the presidential elections.

The situation rapidly deteriorated for Baloga on May 12 when a Kyiv court ruled that the deputy head of the Security Service (SBU) Tyberia Durdynets, could be lawfully arrested and his office and home searched. Durdynets was a close ally of Baloga's from his home region of Trans-Carpathia.

It is widely believed that Durdynets had acted under the former chief of staff's orders when placing Ukrainian politicians and state officials under surveillance -including the deputy head of the prosecutor's office Renat Kuzmin. The prosecutor's office had instructed the SBU and interior ministry to use force if necessary, to bring Durdynets to justice - he has since fled and has been placed on an Interpol wanted list. Another Baloga loyalist, the SBU deputy head Anatoliy Pavlenko, might also be charged for conducting illegal surveillance operations.

Baloga clearly viewed the court order as an indirect attack on himself, and felt betrayed that Yushchenko had not intervened to support "his man," Durdynets. He also warned on local Trans-Carpathian state television on May 17 that if he was the next target, he intended to reveal damaging inside information on Yushchenko.

The Ukrainian political consultant Vasyl Baziv, believes that Baloga possesses substantial kompromat on Yushchenko, and that his resignation will have serious repercussions within Ukrainian politics.

A presidential secretariat insider told EDM that as chief of staff, Baloga had developed a close relationship with the two rival wings within the Party of Regions: the Donetsk old guard led by the "ideologist" Boris Kolesnikov, a close associate of the oligarch Rinat Akhmetov, and the "gas lobby" linked to RosUkrEnergo (RUE) co-owner Dmitriy Firtash.

The presidential insider told that since January 2008 "Baloga has been one of the most ardent guardians of RUE interests in its clash with Prime Minister Yulia Tymoshenko.

In March 2009 an officer from the Main Information Service of the presidential secretariat confirmed that Firtash remained the only oligarch to pay ‘bonuses' to even the minor ranks within the secretariat." The Tymoshenko government also removed RUE from this year's gas contract with Russia.

On May 12 Ukrainska Pravda speculated that the first deputy head of the SBU Valeriy Khoroshkovsky, might become the next target in the campaign against Baloga loyalists and Firtash's allies. Khoroshkovsky dispatched SBU Alpha units to carry out a raid against Naftogaz Ukrainy on March 4, which was widely condemned as using the SBU to lobby his private business interests.

Khoroshkovsky is believed to maintain a close business relationship with Firtash in the largest Ukrainian television channel Inter, which has strongly promoted Arseniy Yatseniuk as an alternative "orange" candidate to Tymoshenko in the upcoming presidential elections.

Baloga felt betrayed by Yushchenko's support for Kyiv governor Vera Ulianchenko's election on May 16 as the head of the People's Union-Our Ukraine (NSNU) - one of nine parties within the NUNS bloc. Ulianchenko replaced Baloga as the chief of staff, indicating that Yushchenko finally decided to support the NSNU as the presidential party of power, rather than Baloga's United Center.

Ulianchenko stressed that there is only one pro-presidential party: NUNS. Baloga has had strained relations with Ulianchenko, and attempted to promote the United Center party, which he controls, as the presidential favorite. NSNS activists had sharp differences with Baloga, since his "unpleasant activities" had damaged the party in his efforts to further the United Center.

Yushchenko remains convinced that he will revive his political fortunes and enter the second round of voting. On May 21 the pro-Yushchenko PR specialist Myron Wasylyk, suggested: "Yushchenko is in the midst of picking a new team to complete his policy agenda for the last months of his first term.

He is looking for a group of political managers who work well together as he begins his most important political journey - reconnecting with the millions of voters who were his electoral base, in the hope of winning re-election in 2010." Yushchenko might be competing against three "orange" candidates - Tymoshenko, Yatseniuk and Anatoliy Grytsenko - within western and central Ukraine in what will be a difficult contest.

In contrast, Yanukovych will enter round two, facing little competition within southeastern Ukraine. Some of Yatseniuk's support might also return to Yushchenko by focusing on his two achievements -democratization and nation-building. He has positioned himself in the nationalist and anti-communist, rather than in the centrist niche.

Playing on Yushchenko as a Ukrainian nation-builder might re-introduce ethnicity into the election campaign and again risk dividing Ukraine, as happened in the 2004 elections. Meanwhile, a split "orange" vote will permit Baloga's favorite -Yanukovych- to win the election.

Source: Eurasia Daily Monitor

Friday, May 29, 2009

Gaining Citizenship, Soldier Completes Journey From Ukraine

OKLAHOMA CITY, USA -- Alla Tarbox always wanted to be a soldier. But in Lugansk, Ukraine, that thought would forever remain a fantasy, as Ukrainian women are barred from military duty.

Oklahoma National Guard Spec. Alla Tarbox takes her oath of citizenship during a ceremony at the U.S. Immigration Services office in Oklahoma City on Thursday.

"I had to wait for the right time and the right country,” said Tarbox, a specialist in the Oklahoma National Guard. "I wanted to be surrounded by people who believe in the same values and live according to the same principles.”

And for Tarbox, the U.S. became that place of hope.

Tarbox, 28, received her citizenship documents Thursday in front of about 30 military personnel and civilians at the U.S. Citizenship and Immigration Services office after three years of work with the National Guard.

"We had talked about this for a long time,” Chief Warrant Officer Dan Kendrick said. "I was really proud of her. Everything she did her entire adult life had been focused for this point. She was probably about to explode.”

How it all began

Traveling to the U.S. just before her 25th birthday, Tarbox ventured across the country visiting friends she met as an American Peace Corps volunteer. When she arrived in Oklahoma, she felt attached.

"I settled down and decided this would be my state,” Tarbox said.

And Kendrick said Tarbox has been dedicated to her work ever since.

Because of her ability to assimilate into the culture and show her intelligence and kind demeanor, Tarbox was given responsibility as a property book technician — taking care of $400 million worth of equipment, doing inventory and cataloging.

"It’s because of her attitude and intelligence,” Kendrick said. "She’s the super person.”

Tarbox said her citizenship creates an open road ahead, as she’s ready to begin officer school and hopes to gain clearance to someday work for the U.S. Secret Service. As a citizen, Tarbox could sponsor relatives — her parents and two stepbrothers live in Ukraine — to immigrate to the U.S. if they choose.

Maj. Lindy White, a South Korean native who gained U.S. citizenship in 1988, said she asked Tarbox before the ceremony if she had family members in the country.

"She said she didn’t, but she does,” White said. "She had a great showing of the National Guard family being here. We’re her family.”

Tarbox said she’s excited to potentially deploy overseas — no matter where the destination.

"I’m fully ready,” Tarbox said. "I’m stationed here since I’m in the Guard but I’d go anywhere our mission brings us.”

Source: NewsOK

Ukraine’s Orange Revolution Five Years On

KIEV, Ukraine -- Ukraine will hold presidential elections in January 2010 that are likely to give the country a new president. Viktor Yushchenko, elected in January 2005 on the crest of the Orange Revolution, has only 3-4 percent support making it impossible for him to win a second term. He would therefore follow Ukraine’s first President Leonid Kravchuk who also only served one term in 1991-1994.

The story of how Yushchenko came to power with high domestic and international expectations that he largely failed to fulfill will be a fascinating area for future research by historians, political scientists and sociologists.

This article provides an initial overview of the Yushchenko presidency; first considering whether it was part of a ’second wave’ of democratic breakthroughs from 1996-2004 (the ‘first wave’ being in 1989-1991) and then analyzing three factors that facilitated the Orange Revolution.

A ‘Second Wave’?

Were the democratic breakthroughs and revolutions which occurred between 1996 and 2004 in post-communist states part of a ’second wave’, sweeping Romania (1996), Bulgaria (1997), Slovakia (1998), Croatia and Serbia (1999-2000), Georgia (2003) and finally Ukraine (2004)? This remains an area of debate as the ‘Revolutions’ in Georgia and Ukraine are, in some senses, fundamentally different to the five earlier cases.

Firstly, the offer of EU membership to the first five countries was crucial in bolstering support for the pro-western and pro-democratic opposition, thereby ensuring their victory in elections. In Georgia and Ukraine the EU has never offered membership.

Secondly, Ukraine was unique in experiencing a massive Russian covert and overt intervention in the 2004 elections aimed at preventing the election of the opposition candidate Yushchenko. The EU only intervened reluctantly during the Orange Revolution, at the instigation of new members Poland and Lithuania, to facilitate round-table negotiations between the opposition and authorities.

Three factors behind the Orange Revolution

Scholarly discussions surrounding the phenomenon of democratic revolutions have been overwhelmingly dominated by American political scientists. This has meant that the discussion has focused on the ‘democratic’ nature of these revolutions (e.g. electoral fraud, human rights violations, democratization) to the detriment of two factors that were at work in Ukraine and Georgia: national identity and social populism.

Electoral fraud was undoubtedly crucial in acting as the ‘trigger’ that brought large numbers of Ukrainians on to the streets who were not opposition activists (this differentiated the Orange Revolution from the Ukraine Without Kuchma protests in 2000-2001 where it was mainly activists who took to the streets). But democratisation, human rights and electoral fraud are not sufficient to mobilise millions. zation.

As seen during Mikhail Gorbachev’s rule in the late 1980s, anti-Soviet mobilization only proved to be strong in the USSR and Central-Eastern Europe when nationalism and democratization fused together, such as in Poland, the Baltic states, Western-Central Ukraine, Moldova and Georgia - but not in Russia outside Moscow, russified Belarus or in Central Asia.

In Ukraine, nationalism was boosted by a second factor, anti-elite social populism, which helped to mobilize Ukrainians against the oligarchic regime and authorities and , specifically, candidate, Viktor Yanukovych.

The role of national identity and social populism are missing from the discussion on democratic revolutions . Countries in the Commonwealth of Independent States (CIS) experienced a very different transition to that experienced in the former Soviet outer empire of Central-Eastern Europe and the Baltic states.

The USSR was a totalitarian state and empire and these two factors led to what I have described elsewhere as a ‘quadruple transition’ consisting of democratization, creation of a market economy, state-institution building and nation-building. The ‘quadruple transition’ resembles post-colonial transitions found elsewhere in the world.

They are more difficult than the dual transitions of democratization and marketization that took place in Latin America and Southern Europe in the 1970s and 1980s, and in Central-Eastern Europe in the 1990s -where there was no need to undertake nation and state building in most countries, and which already exhibited elements of a market economy.

The 2004 Ukrainian presidential elections were not only a contest about the future direction of Ukraine but also a contest over national identity in a regionally divided country. The ‘pro-Europe’ candidate, Yushchenko, won majorities in the west and centre of the country (which are predominantly Ukrainian-speaking) while the ruling regime’s ‘pro-Russian’ candidate, Yanukovych, won majorities in the east and south (which are predominantly Russian-speaking).

The majority of the participants in the Orange Revolution came from Western and Central Ukraine showing the degree to which Ukrainian-speaking national identity and civil society synthesised together. Civic nationalism therefore played a vital role in Ukraine’s Orange Revolution.

The creation of market economies from the fully ‘command-administrative’ economies found throughout the USSR, contrasts to the transition from ‘goulash (semi-market) communism’ to market economies in Central-Eastern Europe. The economic transition in Ukraine, Russia and elsewhere in the CIS produced a small clique of super wealthy oligarchs (many of whom are now in exile in the UK), generated widespread public anger, anti-elite sentiments and a desire for revenge.

The Ukrainian Academy of Sciences conducted a yearly survey between 1994 and 2004, asking which element of society was most influential. They found that a majority of Ukrainians believed it to be ‘organised crime’. With Yanukovych put forward as the ruling regime’s candidate, Ukrainian voters in 2004 believed that this was the final leg in the mafia’s take-over of the country. Yanukovych had two criminal convictions and was high in Ukraine’s most powerful Donetsk clan (perceived to be criminal by many).

Widespread social anger at a decade of economic transition enabled President Vladimir Putin to turn Russians against liberal democracy by equating the chaos and ‘oligarcisation’ of the 1990s with ‘democracy’ itself. Russians applauded his campaign against oligarchs; only the West protested Mikhail Khodorokovsky’s imprisonment.

In Ukraine the democratic opposition channelled social anger against the oligarchs and corrupt ruling elites from the onset of the Kuchmagate crisis in November 2000 (when the president was accused of involvement in the murder of journalist Georgi Gongadze) over the following four years to the Orange Revolution. The main slogan of the Orange Revolution, used repeatedly by Yushchenko at rallies, was not ‘Free Elections!’ but ‘Bandits to Jail!’.

Following his election, President Yushchenko has been a persistent critic of Prime Minister Tymoshenko’s ‘populism’ since her first period in government in 2005,but the criticism is unfair because her two governments have merely sought to implement Yushchenko’s 2004 election programme - itself socially populist.

The Razumkov Ukrainian Centre for Economic and Political Studies think tank developed Yushchenko’s ‘Ten Steps’ election programme (July 2004) and fourteen draft decrees (October-November 2004). The ‘Ten Steps’ and fourteen decrees became the basis for the Tymoshenko government programme approved by parliament in February 2005; the programme’s preamble stated, ‘The government programme is based on, and develops the basis of, the programme of Ukrainian President Viktor Yushchenko’s ‘Ten Steps towards the People’…’

The ‘Ten Steps’ and fourteen draft decrees are replete with social-populist policies. The ‘Ten Steps’ explains that, ‘Social programmes are not a devastation of the budget, but investments in the people, in the country and the nations future’. Yushchenko pledged in Step two that if he is elected, ‘My Action Plan will ensure priority funding of social programmes. The way of finding budgetary money for this purpose is easy: not to steal, not to build luxurious palaces and not to buy expensive automobiles’.

Viktor Yushchenko’s 2004 Election Programme

Ten Steps Towards the People

1. Create 5 million jobs.
2. Ensure priority Funding for Social Programmes.
3. Increase the Budget by Decreasing Taxation.
4. Force the Government to Work for the People and Battle Corruption.
5. Create Safe Living Conditions.
6. Protect Family Values, Respect for Parents and Children’s Rights.
7. Promote Spirituality and Strengthen Moral Values.
8. Promote the Development of the Countryside.
9. Improve Military Capabilities and Respect for the Military.
10. Conduct Foreign Policy that Benefits the Ukrainian People.

14 Draft Decrees

1. Promote Social Defence of Citizens.
2. Take Steps to Ensure the Return of Lost Savings to Citizens.
3. Increase Support for Child Allowance.
4. Establish the Criteria for Analysing the Activities of Heads of Local State Administrations.
5. Reduce the Terms of Military Service
6. Create a System of People’s Control of the Activities of State Authorities.
7. Struggle against Corruption of High Ranking State Officials and Civil Servants in Local Governments.
8. Reduce the Number of Inspections of Businesses and Ease their Registration Process.
9. Withdraw Peacekeeping Troops from the Republic of Iraq.
10. Defend Citizens Rights to Use the Russian Language and other Minority Languages in Ukraine.
11. Ensure the Basis for Good Relations with Russia and Belarus.
12. Ensure the Rights of the Opposition in Ukraine.
13. Adopt First Steps to Ensure Individual Security of Citizens and to Halt Crime.
14. Strengthen Local Government.

Yushchenko’s Record

Yushchenko’s support in 2004 came from a cross-section of Ukrainians and grew out of a large number of expectations. Post-Soviet politicians operate in an inherited political culture where they are unaccountable to voters or the judiciary, whilst other politicians ignore their programmes after being elected themselves. Yushchenko’s fatal mistake was to not appreciate the degree to which Ukrainians were changed by the Orange Revolution and that they would not countenance their president ignoring his programme and societal demands for ‘justice’.

Of the three factors that facilitated the Orange Revolution -democratic rights, national identity and social populism- Yuschenko has successfully addressed two, but failed with one. He has presided over Ukraine’s democratization in the holding of two free elections and the emergence of a plural media.

Ukraine is the only CIS country defined as ‘Free’ by the Freedom House think tank while during the same period Russia has moved in the opposite direction from ‘Partly Free’ to ‘Unfree’. Yushchenko has also energetically devoted himself to national identity questions, such as reviving Ukraine’s historical memory and commemorating the victims of Stalinism and Communism.

The 1933 artificial Ukrainian famine has been raised on an international level. Yushchenko’s nation-building drive has led to poor relations with autocratic Russia where Jozef Stalin is being rehabilitated.

Yushchenko’s record in dealing with social populist demands has been a failure. He is perceived as having sought to undermine Tymoshenko’s two governments at every opportunity. No ‘Bandits’ went to jail, the elites remain above the law, politicians remain unaccountable, the judiciary and prosecutors office is as corrupt as it was in the pre-Orange era and only one re-nationalisation took place (Kryvorizhstal).

The Tymoshenko’s government policy last year of seeking to repay lost Soviet bank deposits (promised in Yushchenko’s second of his fourteen decrees from his 2004 programme) was blocked by the president and denounced as ‘populist’. Ukrainians supported the policy and Tymoshenko’s ratings shot up making her the country’s most popular politician.

Yushchenko’s failure to implement his 2004 programme, and his attempts to undermine governments that sought to do so, have brought four years of political crises and pre-term elections. This failure to implement the social and legal components of his 2004 programme, coupled with his association with four years of political instability, have overshadowed Yushchenko’s two contributions to Ukrainian contemporary history as a democratiser and nation-builder.

Ukrainian politicians need to appreciate the rules of the game in democracies; namely, that voters will punish them in elections if they ignore their election promises.

Source: Taras Kuzio

Thursday, May 28, 2009

EU Should Help Ukraine Avoid New Gas Price War: Gazprom

MOSCOW, Russia -- Russian gas giant Gazprom called on the European Union Thursday to help Ukraine with payments for gas supplies to avoid a repeat of the dispute that saw supplies cut in January.

Russian Gazprom CEO Alexei Miller

"For the moment we can still avoid a gas crisis in Ukraine," said Gazprom chief Alexei Miller in a statement. "For that, Europe and Russia have to invest together to prevent it. There is no time to lose."

For several days now, Russia has been warning of the possibility of a repeat of the dispute with Ukraine over payments last winter.

Since the gas for many other European countries passes through Ukraine, when Russia cut supplies in January, it caused severe shortages in eastern EU states for two weeks until the row was resolved.

Russia has said that Ukraine's state gas company Naftogaz does not have the means to buy gas this summer with a view to stocking it in underground reservoirs for the winter.

Last Friday, Russia President Dmitry Medvedev called on the European Union to work with Moscow to help Ukraine meet its payments.

Italian Prime Minister Silvio Berlusconi, who is very close to Russia's Prime Minister Vladimir Putin, said Thursday he would back the Russian initiative at the next meeting of European Union leaders in June.

Source: AFP

International Audit Into Ukraine's Central Bank

KIEV, Ukraine -- International auditors will probe actions taken by Ukraine's central bank during the financial crisis after the government accused it of mismanagement and corruption, a central bank official said Wednesday.

Ukraine's central bank

Premier Yulia Tymoshenko has accused bank chief Volodymyr Stelmakh of murky currency procedures that helped cause the Ukrainian currency, the hryvna, to collapse. Stelmakh has denied the accusations.

Vasiliy Pasichnyk of the central bank's regulation and oversight department said Ernst & Young had begun auditing the bank's actions from the past few months.

Stelmakh is an ally of Tymoshenko's bitter rival President Viktor Yushchenko and has struggled to hold onto his position during the crisis.

Source: Forbes

Wednesday, May 27, 2009

Ukrainian Teenager's Death Blamed On Illegal Vaccine

KIEV, Ukraine — Ukrainian prosecutors have ordered a senior health official detained on suspicion of illegally importing millions of doses of a vaccine that they charge caused a teenager's death, officials said Wednesday.

United Nations agencies have concluded that the 17-year-old boy's death in May 2008 was caused by a bacterial infection unrelated to the U.N.-certified vaccine for measles and rubella he had just received.

But his death still led to widespread fears over immunization and caused health officials to terminate a campaign to revaccinate 9 million Ukrainians for measles and rubella.

Dr. Fedir Lapiy, an expert in infectious diseases based in Kiev, has said that the Ukrainian government, plagued by infighting between various political groups, has mismanaged the crisis. Lapiy says that some officials have used the investigation to discredit their political opponents instead of conducting a thorough probe.

Prosecutors have accused former Deputy Health Minister Mykola Prodanchuk of importing the vaccine without properly registering it here, which they say eventually led to the boy's death. They have provided no details on how the vaccine is alleged to have killed the boy.

Yuriy Boychenko, spokesman for the Prosecutor General's office, told The Associated Press Wednesday that a Kiev court issued a search warrant for Prodanchuk after he failed to show up for questioning. Prodanchuk must be detained while a court decides whether he should be held in custody pending the investigation, Boychenko said.

Prodanchuk, who resigned shortly after the teenager's death, has maintained his innocence. His lawyer, Mykola Shupenya, told the AP that he was in a hospital with an unspecified lung condition and could not appear in court.

UNICEF, the U.N. children's agency, declined to comment. The World Health Organization reiterated that officials believe the vaccine was not responsible for the boy's death.

Experts say termination of the vaccination campaign and the widespread refusals of vaccination could lead to major disease outbreaks in this France-sized country of 46 million and potentially spread to its European neighbors.

Source: Fox News

Viktor Yushchenko Refuses To Dismiss Defense Minister Yuri Yekhanurov

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko said he would not ask the Verkhovna Rada for dismissing Defense Minister Yuri Yekhanurov.

Defense Minister Yuri Yekhanurov chats with Prime Minister Yulia Tymoshenko.

“No, I will not do that,” the president told a Tuesday press conference in the Zhitomir region.

In his opinion, the related request of Prime Minister Yulia Timoshenko aimed “to destabilize the executive authorities and to seize full control.”

“This is nothing but politics,” the president said. “This is the policy aimed to destroy efficient authorities and the pre-election intrigues.”

Yushchenko said he had read a report of the Main Auditing Department concerning the activity of the Defense Ministry and dismissed as unfounded corruption charges against Yekhanurov. “I have ordered the Prosecutor General’s Office to investigate the problem, as corruption claims are being increasingly made by those who are guilty themselves,” he said.

Timoshenko asked the president to dismiss the defense minister on May 25. Main Auditing Department head Nikolai Sivulsky accused the Defense Ministry of inappropriate control over the use of land belonging to the ministry on May 20. He also affirmed violations in the catering of servicemen.

Yekhanurov said that the Defense Ministry did not sell any land during his ministerial office. The corruption accusations “are a comedy,” he said.


Tuesday, May 26, 2009

Ukraine Accuses Moscow Of Genocide Over 1932 Famine That Killed Millions

KIEV, Ukraine -- Bitter enmity between Ukraine and Russia could be rekindled after the Kiev authorities launched a criminal investigation into a devastating famine that claimed millions of lives, stating it was an act of genocide orchestrated by Moscow.

More than 70 years since the famine struck Ukraine, which was then part of the Soviet Union, the country's prosecution service believes it has enough evidence to begin criminal proceedings.

A statement issued by Ukraine's security service, the SBU, said that through murder, the forcible collectivisation of agriculture, dispossession, deportation and confiscation, the Soviet authorities had "aimed at organising hunger to kill the Ukrainian people as an ethnic group".

It went on: "The Stalinist regime wanted to create living conditions that would result in the total physical elimination of ethnic Ukrainians."

Although estimates of how many people died in what Ukrainians call the Holodomor, which ravaged the nation in 1932 and 1933, conservative estimates have put the death toll at more than seven million.

Ukraine has long maintained that Stalin wanted to wipe out the Ukrainian people, because of their questionable loyalty to the Soviet Union and their stubborn adherence to age-old farming practices that stood in his way of the plan to destroy private agriculture.

In the early 1930s, Stalin launched a brutal campaign of collectivisation and requisition across Ukraine that few historians dispute turned a natural famine into a human tragedy of massive proportions. Eye-witness accounts from the time speak of whole villages being obliterated by starvation and disease, and people resorting to cannibalism to stay alive. Often, the authorities prevented survivors fleeing the famine-stricken regions in fear that if news got out, it would damage the credibility of Stalin's regime and policies.

The Ukrainian government has waged a long campaign in the international arena to have the famine classified as genocide, while some Ukrainian nationalists argue that Russia, as the successor to the Soviet Union, should now be held responsible.

However, the Russian government disputes the genocide claim, pointing out that famine and starvation struck other regions of the Soviet Union at the same time. It also argues that so far no evidence, such as a paper trail, clearly stating that the Kremlin wished to starve Ukraine has ever come to light.

With Ukraine and Russia at odds over links to the West and energy, Kiev's genocide claims have assumed a political dimension. Some in Russia consider Ukraine's willingness to open old wounds as evidence of its determination to antagonise Moscow and seek sympathy in the West.

Dmitry Medvedev, the Russian president, has charged Ukraine's pro-western president, Viktor Yushchenko with exploiting the famine for "instantaneous political goals", while General Vasily Khristoforov, head of the registration and archives department at Russia's federal security service, dismissed the Holodomor as a "Ukrainian invention".

Ukraine's decision to push ahead with a criminal investigation could fall under the scrutiny of a new Russian commission, appointed by Mr Medvedev last week and charged with guarding against "the falsification of history at the expense of Russian interests".

But opposition to the inquiry also comes from within Ukraine, with some politicians questioning the sense of investigating events of 70-plus years ago.

"From the legal point of view, what the security service is doing is absurd," said Gennady Moskal, a member of parliament. "Who will criminal charges be brought against? Maybe against a cemetery? Who can be brought to justice? If a person was 18 years old in 1933, then how old are they now when criminal proceedings are beginning?"

Source: The Scotsman

Ukraine Discusses Oil Supply With Libya

TRIPOLI, Lybia -- Visiting Ukrainian Prime Minister Yulia Tymoshenko called on Monday for energy cooperation with Libya saying her country needed to diversify its energy sources to reduce dependence on Russia.

Prime Minister Yulia Tymoshenko

"Our independence (toward Russia) would be greater if we were energy-independent and if we diversified our supply sources," Tymoshenko said after talks with Libyan Prime Minister Baghdadi Mahmoudi.

"So far we we dependent 100 percent on only one source (Russia)," she said.

Tymoshenko suggested that Libya build an oil refinery in the Ukrainian port of Odessa as well as petrol stations in the former Soviet republic "to distribute its (oil) production in Ukraine and Europe."

Tymoshenko, whose remarks were translated into Arabic, also said her country was ready to provide Libya with the means to stock and transport four million tonnes of wheat a year.

She likewise suggested aeronautic cooperation between Ukraine and Libya, and added that 17 accords were ready to be signed at a meeting in her country.

Mahmoudi, meanwhile, said Libya wanted to cooperate with Ukraine in civilian nuclear energy. "Libya has several offers for civilian nuclear cooperation but we prefer to do it with Ukraine," he said.

Source: AFP

Sunday, May 24, 2009

Ukraine Says Romania One Of Its Potential Enemies

KIEV, Ukraine -- Ukrainian Defence Minister Yuriy Yekhanurov lashed out at Romania and Russia in a television show, accusing both countries of making territorial claims on Ukraine, according to reports published by ‘Romania libera’ and ‘Ziua’ on Saturday.

Ukrainian Defence Minister Yuriy Yekhanurov.

Yekhanurov, who is close to Ukrainian President Viktor Yushchenko, said Romania is a potential enemy of Ukraine, as Bucharest politicians frequently question the legality of the current borders of the Ukrainian state, Similarly, Russia questions the statute of Crimea, he said.

“Sometimes, even the highest leaders of Romania resort to this kind of statements, recently saying that they do not recognize the border with the Republic of Moldova. These kinds of statements are dangerous, Yekhanurov said. His comments referred to President Traian Basescu’s recent statement that the signing of a border treaty with Moldova would be ‘useless’ as it would mean accepting the Ribbentrop-Molotov pact.

The comment has triggered an angry response from Chisinau, but also from Moscow.

Yekhanurov moved on the say that Russia is also a great danger to Ukraine’s territorial integrity. “There are questions about Crimea and you know very well that after the August 2008 conflict in the Caucasus, everybody realized that there is a regional security problem here,” he said.

The minister underlined however that Ukraine must have friendly relationships with all its neighbours, but must be strong enough “so that nobody ever thinks of attacking their neighbours”.

Kiev has repeatedly accused Bucharest of leading a systematically aggressive policy towards its northern neighbour, slamming Romanian plans to grant mass-citizenship to Ukrainians living in Cernauti and Odessa and to ‘brutally’ assimilate the Ukrainian minority in Romania, according to daily ‘Ziua’.

Earlier this month, Yushchenko said he was worried about Romania’s plans to grant passports to Ukrainians and asked that the issue be analysed by the European Commission. Recently, Ukraine’s former Foreign Minister Borys Tarasyuk accused Romania of being guilty for all bilateral conflicts, starting from Bystroye to the expulsion of two Ukrainian diplomats this year, in the wake of an espionage scandal that also involved Kiev.

The diplomats were expelled after it was revealed that a Romanian non-commissioned officer was selling classified military information to a Bulgarian spy, who was then re-selling the intelligence to a third party, possibly Ukraine.

A military analyst quoted by ‘Romania libera’, Cornel Codita, said that Ukraine’s reaction was triggered by President Basescu’s statements, which generate the perception that Romania is a hostile country because it makes various territorial claims.

A specialist in ex-Soviet area issues, Armand Grosu, was quoted by the newspaper as saying that “Ukraine only notices the fact that Romania is an enemy because there are almost evident territorial claims: because it won’t sign the border treaty with Moldova and because it suggests that Ukrainians and Moldovans could swap territories.”

Grosu said that the Ukrainian defence minister’s statements were also triggered by “Romania’s incoherent policies”, in spite of the fact it has always supported Ukraine’s accession to NATO.

Source: Nine O'Clock

Russia-EU Summit Ends With Differences Over Energy

KHABAROVSK, Russia -- A tense summit meeting between Russia and the European Union has failed to provide assurances Europe will not face another mid-winter gas cutoff. Russian President Dmitri Medvedev has also warned that stronger European ties with former Soviet republics should not turn into an anti-Russian coalition.

Russian President Dmitry Medvedev, left, and EU Foreign Policy Chief Javier Solana seen before a meeting during a Russia-EU Summit in the Far Eastern city of Khabarovsk, about 6,100 km (3,800 miles) east of Moscow.

Meeting in the city of Khabarovsk in the Russian Far East, Russian and EU leaders failed to bridge differences that block assurances of reliable gas supplies to Europe. Russian President Dmitri Medvedev said his country has no problem supplying the fuel or honoring its delivery commitments to Europe.

He blamed the continent's recent energy disruptions on the inability of Ukraine to pay for its own supplies. About 20 percent of Europe's supply of natural gas comes from Russia through Ukrainian pipelines.

Mr. Medvedev says assurances should be provided by those who pay for the gas, and there is room here for cooperation. The Russian leader notes that if Ukraine has the money, fine, though he expresses doubt that it does.

Russia Prepared to Help Ukraine

He says partners in such circumstances help their partners. President Medvedev said Russia is prepared to help Ukraine, but wants a considerable part of this work to be assumed by the European Union and countries interested in reliable and secure energy cooperation.

Russia is also seeking to replace the so-called Energy Charter Treaty, a 1990's agreement on integration of European and former Soviet energy sectors. Moscow signed, but did not ratify the treaty, which would provide foreign commercial access to Russian pipelines.

The European Union does not want the Charter scrapped, but EU Commission President Jose Manuel Barroso said Russia has put forth interesting suggestions.

"We could consider those proposals in the process of revision of the Energy Charter Treaty," he said.

Moscow Suspicious of EU Partnership Program

Moscow is also suspicious of the EU's Eastern Partnership Program with several former Soviet republics. President Medvedev warned in Khabarovsk that the outreach program should not turn into an anti-Russian coalition.

He says what concerns Russia is that in some countries, the European Partnership is seen as a partnership against Russia. The Kremlin leader says he does not have in mind EU leadership nor any of the partners at the table [in Khabarovsk], but rather other countries.

The Partnership Program is designed to enhance Europe's relationship with Armenia, Azerbaijan, Belarus Georgia, Moldova, and Ukraine.

Positive Comments About Summit

Despite tensions at the summit, Czech President Vaclav Klaus said the summit increased mutual trust between the EU and Russia. The Czech Republic holds the EU's rotating presidency.

The venue chosen by Russia, the city of Khabarovsk, is near China, about 8,000 kilometers east of Brussels. President Medvedev made a point on Thursday of noting EU leaders would understand how great Russia is by having to fly so far.

Source: VOA

Putin Warns Outsiders Over Ukraine

MOSCOW – Prime Minister Vladimir Putin warned the West on Sunday not to meddle in relations between Russia and Ukraine, according to remarks cited by state-run news agencies.

Russian Prime Minister Vladimir Putin visits the tomb of Gen. Anton Denikin at a cemetery of Donskoy Monastery in Moscow, Sunday, May 24, 2009.

After laying a wreath at the grave of Anton Denikin, who fought against the Red Army after the 1917 Bolshevik Revolution and is now cast by the Kremlin as a patriot, Putin urged journalists to read Denikin's diaries, RIA-Novosti and ITAR-Tass reported.

"He has a discussion there about Big Russia and Little Russia — Ukraine," they quoted Putin as saying. "He says that nobody should be permitted to interfere in relations between us, they have always been the business of Russia itself."

Portions of present-day Ukraine were part of pre-Revolutionary Russia and were sometimes called "Little Russia" or "Lesser Russia," while the bulk of the country was known as "Great Russia." Many Ukrainians find the terms offensive and misleading.

Putin's remarks came as the dominant Russian Orthodox Church called for Slavic unity amid celebrations honoring Saints Cyril and Methodius, considered founding fathers of a common Slavic culture.

But the comments could anger Ukrainians and increase their wariness about Moscow's intentions toward the former Soviet republic.

Ukraine has been independent since 1991, when the Russian-dominated Soviet Union collapsed. But Putin's remarks seemed to suggest that Moscow's close historical ties with Ukraine means gives it a measure of influence that other countries cannot claim.

The remarks come amid competition between Russia and the West for influence in Ukraine.

Russian officials have said they are determined to keep Ukraine out of NATO. For some Ukrainians, Russia's war last year against pro-Western Georgia was a chilling suggestion of how far Moscow is willing to go.

Russian nationalists want to regain the Crimean Peninsula, which was made part of Ukrainian Soviet Republic by Soviet leader Nikita Khrushchev in the 1950s. There is tension between Russia and Ukraine over Russia's Black Sea Fleet, which Ukrainian leaders have said they will evict from the Crimean port of Sevastopol when the current lease runs out in 2017.

Denikin, who died in exile in the United States in 1947, was reburied in 2005 in the cemetery Moscow's historic Donskoy Monastery.

Putin's visit to his grave was a reflection of how the prime minister, a longtime KGB officer who was president from 2000-2008, has celebrated individuals and images from both the Soviet era and czarist times in a drive to instill pride in Russians.

Source: AP

Seven Churchgoers Die In Ukraine Road Accident

LVIV, Ukraine -- Seven Ukrainian churchgoers died and seventeen were injured in a Sunday road accident, police officials said. The victims had been en route to worship at the Krehovsky monastery in western Lviv province, said Svetlana Dobrovolska, a police spokeswoman, according to a Channel 5 television report.

The Orthodox Christian pilgrims' minibus collided head on with a lorry in the early morning hours, after the lorry driver fell asleep, according to the report.

It was not clear from initial reports whether the lorry driver was among the injured. Survivors were being treated at local hospitals.

Ukraine's road system is among Europe's most dangerous. Analysts say poor road conditions, corrupt police unwilling to enforce traffic law, and overuse of some road sections are all contributing causes.

Source: DPA

Russia Offers Ukraine 5-Year Advance Payment For Gas Transit

ASTANA, Kazakhstan -- Prime Minister Vladimir Putin proposed on Friday that Russia pay Ukraine five years in advance for natural gas transit, to help Kiev buy gas to fill its underground storage facilities and ensure uninterrupted supplies to Europe.

Prime Minister Vladimir Putin with Prime Minister Yulia Tymoshenko.

The announcement came amid fears of a new disruption in Russia's Europe-bound gas supplies via Ukraine, as the country, suffering a severe recession, needs to buy some 19.5 billion cubic meters at a cost of over $4 billion.

Speaking after talks with his Ukrainian counterpart Yulia Tymoshenko, Putin said: "We propose advance payment for transit of our gas to European consumers."

He said that supply stability is currently under threat due to "the upcoming elections in Ukraine and the possible reorganization of its gas pipeline network."

The premiers are in Kazakhstan for a meeting of Commonwealth of Independent States heads of government.

Putin said that disputes concerning transit and supplies of natural gas cannot be resolved until the Ukrainian leadership reaches a common position.

"I am asking the peoples of both countries to take note of this. Under such conditions and with such high risks it is unlikely that we will be able to solve our problems under this setup. We need a consolidated position from the Ukrainian leadership."

The gas contracts with Russia are one of a range of issues over which Ukraine's president and prime minister have clashed.

Earlier this week, President Viktor Yushchenko said the contracts signed with Russia at the start of the year are likely to be reviewed in the near future, as Ukraine is unable to meet its obligations under the current terms.

Putin also said that Russia is ready to take part in financing the process of filling Ukraine's underground gas storage facilities.

"Russia is ready to contribute its share... The size of this share should be determined in the course of negotiations," he said.

Russian energy giant Gazprom suspended gas deliveries to Ukraine on January 1 over non-payment and the sides' failure to reach a new gas deal. A week later, Gazprom accused Ukraine of stealing gas intended for EU consumers, and cut off supplies to the European Union via the country, prompting two weeks of gas shortfalls across much of Eastern Europe.

The standoff was resolved after negotiations between premiers Putin and Tymoshenko resulted in the signing of a new gas agreement for 2009-2019 on January 19.

Under the terms of the new gas deal, Ukraine will pay Russia European market prices - set at $450 per 1,000 cu m for the first quarter - with a 20% discount in 2009, while transit fees fixed under a previous agreement remain unchanged. Yushchenko has repeatedly criticized the deal.

Source: RIA Novosti

Friday, May 22, 2009

Yatsenyuk's Three Possible Roads To Ukraine's Presidency

KIEV, Ukraine -- Arseniy Yatsenyuk, a former parliament speaker and foreign minister of Ukraine, turned 35 on May 22, clearing the way for him to run as a candidate in the January 2010 presidential elections. Now it is time for him to begin considering his campaign tactics, and he faces three choices.

Arseniy Yatsenyuk could be the latest hope for the Orange coalition to patch up its differences.

One option is to agree to receive a poisoned chalice from the unpopular President Viktor Yushchenko by being tipped as his successor. This would mean an agreement under which Yushchenko would not run (because, with under 3 percent support, according to recent polls, he has little chance of winning) or, alternatively, he would run but would not campaign against Yatsenyuk.

The Yushchenko camp's near-pathological dislike of Prime Minister Yulia Tymoshenko does not mean that Tymoshenko would not continue to remain prime minister in the event of her not being elected president. Ukraine's constitution does not insist on new parliamentary coalitions or a new government following a presidential election.

By supporting Yatsenyuk and Party of Regions head Viktor Yanukovych, the presidential secretariat might prevent Tymoshenko's election as president, but it would still likely have to continue contending with her as prime minister.

Yushchenko ally and RosUkrEnergo co-owner Dmytro Firtash is providing media access through Ukraine's popular Inter television channel, as is Viktor Pinchuk (who has admitted financing Yatsenyuk) through ICTV, STB, and Novyi Kanal. Ukrainian analysts have long noticed a close association between Firtash and Yatsenyuk , whose popularity is described as a "television project."

In the 2002 elections, Pinchuk supported another TV project -- the Winter Crop Generation party (KOP) -- to take votes away from Yushchenko's Our Ukraine. Another young challenger, former Defense Minister Anatoliy Hrytsenko, has seen his support stagnate, in part because of his more limited access to television.

Orange 'Dream Team'

A second option for Yatsenyuk would be -- as deputy parliament speaker and Tymoshenko bloc member Mykola Tomenko has proposed -- to negotiate a deal with Tymoshenko. The aim would be to prevent an inter-Orange conflict between the two leading Orange candidates (Tymoshenko and Yatsenyuk ) that could facilitate Yanukovych's election victory.

Yatsenyuk has ruled out any deals, but this could change if he does not make it into a second round of presidential voting and Tymoshenko seeks an endorsement from him in the second round.

Tomenko points out that Tymoshenko and Yatsenyuk are competing for the same Orange voters in western and central Ukraine, whereas Yanukovych has no powerful electoral competitors in the eastern and southern parts of the country. Communist Party (KPU) leader Piotr Symonenko will never mount a serious challenge to Yanukovych.

Tomenko rightly believes that it would be better for Yatsenyuk and Tymoshenko to negotiate a deal before the election by agreeing to divide the presidency and government between them depending on who enters and wins the second round. They could agree, for example, that if Tymoshenko wins the second round, she would appoint Yatsenyuk prime minister. On the other hand, if Yatsenyuk wins, he would keep Tymoshenko on as prime minister.

Together, Tymoshenko and Yatsenyuk could create an unbeatable "dream team" that could be potentially a powerful coalition in support of the change and reforms that Ukrainians were promised in the Orange Revolution. This dream team could be bolstered by Hryhoriy Nemyria as foreign minister, Anatoliy Hrytsenko as National Security and Defense Council secretary, and a Hrytsenko protege as defense minister.

Ukraine's Euro-Atlantic integration would be assisted by the fact that this would be the first Ukrainian government that had three English-speakers: Yatsenyuk, Nemyria, and Hrytsenko.

Yatsenyuk's third choice would be to reject Yushchenko's poisoned chalice, refuse to do a deal with Tymoshenko, and instead campaign independently. This path would be the most difficult, as every presidential candidate needs financial and media resources.

This strategy would be unlikely to give Yatsenyuk a good election result that he could then use to negotiate a position for himself. Hrytsenko will be competing with Yatsenyuk for third place in the presidential elections and Yatsenyuk's support has plateaued at 12-14 percent, mostly Our Ukraine voters disillusioned with Yushchenko.

Taking A Stand

In addition to his flat ratings, Yatsenyuk faces four other challenges.

First, as Ukrainian media have increasingly noted, Yatsenyuk has been conspicuous in not stating what he stands for. A former Yushchenko supporter said, "Yushchenko may be an airhead, but at least he has some views, while Yatsenyuk seems to have none." In an election campaign, he will have to state what he stands for.

Secondly, his new Front for Change party has no regional structures, so Yatsenyuk will be reliant on state-administrative resources provided by regional governors. These might be available in some regions, but not everywhere as Tymoshenko's Fatherland and Yanukovych's Party of Regions have the most developed party structures in Ukraine.

Viktor Baloga was a staunch opponent of Tymoshenko (and therefore saw in Yatsenyuk a way to block her election), but his replacement as presidential chief of staff is likely to be less so inclined.

Third, support for nationalism is growing, as Ukrainians are disillusioned with establishment politicians and fearful of the global economic crisis. The populist-nationalist Svoboda swept the March 18 Ternopil elections. Yatsenyuk's ethnic origins could be used by political "technologists" resorting to "black" public relations, or dirty tricks.

Fourth, Yatsenyuk can no longer count on public support by standing above intra-elite squabbling, which has been one of two reasons (the other being the "television project") for his dramatic rise in popularity. An anti-Tymoshenko strategy would be negative, not positive, which would dent his ability to pursue the analogy of a "Ukrainian Obama."

At this point, it is impossible to predict which of the three main candidates will win Ukraine's presidential election. And that is a good thing -- Ukraine is definitely not Russia.

Source: Radio Free Europe

Russia Rejects Ukraine Gas Proposal, Talks Stall

ASTANA, Kazakhstan -- Russia rejected a Ukrainian proposal to defer payment on up to $5 billion in gas storage payments as energy talks on Friday between the prime ministers of the ex-Soviet neighbours ended in stalemate.

Russia's Prime Minister Vladimir Putin (R) and his Ukrainian counterpart Yulia Tymoshenko answer journalists' questions after their meeting in Astana, May 22, 2009.

Russian Prime Minister Vladimir Putin dismissed the proposal by his Ukrainian counterpart, Yulia Tymoshenko, for Kiev to buy gas for its storage facilities in exchange for future transit fees that Moscow would pay to deliver gas via Ukraine.

"The volumes are large. The timeframe for what would essentially be a loan is also large," Putin told reporters after the meeting. "We will not work under such conditions and with such big risks."

He added: "Russia is ready to do its part in resolving this question, but only its part."

President Dmitry Medvedev, attending an EU-Russia summit in the far eastern city of Khabarovsk earlier on Friday, challenged European leaders to help Ukraine pay its gas bills and help avert a new gas crisis.

The stalled negotiations also come a day after a Russian government source said Kiev and Moscow were on the verge of another gas crisis, a possible repeat of the dispute that left millions of Europeans without heating in the dead of winter this year.

Tymoshenko told reporters no decision had been reached, but expressed hope that a resolution would be found.

"I believe that we will find a compromise," she said after talks in the Kazakh capital, Astana, which was hosting a meeting of CIS prime ministers.

Russia, which supplies a quarter of Europe's gas, much of it via Ukraine, has twice cut supplies in recent years due to pricing disputes amid icy political relations between Moscow and Kiev.

Russian gas export monopoly Gazprom says it wants to store extra gas in Ukraine during winter to be able to respond more quickly to the needs of its customers in Europe.

How these storage facilities will be filled, and who will pay to fill them, have become the main sticking point in the most recent gas talks between the former Soviet allies.

Putin estimated the required volume of gas to be kept in storage in Ukraine would reach 15 billion cubic metres this year. This is in addition to gas taken out for Ukraine's domestic use.

Source: Kyiv Post

Baloha Leaves With Sharp Attacks On Yushchenko

KIEV, Ukraine -- Victor Baloha, President Victor Yushchenko’s chief of staff for nearly three years until May 19, switched overnight from top presidential confidant to bitter rival. In resigning, Baloha cited his opposition to his former boss’ plan to run for re-election as one of the many reasons for their breakup.

After three years in the job of president’s chief of staff Victor Baloha quits and accuses his ex-boss of “corruption and nepotism.”

In his parting shot, the man long seen as the Presidential Secretariat’s “grey cardinal,” said Yushchenko had “no moral right” to run for re-election. He also accused Ukraine’s leader of “corruption and nepotism,” a hint that political pundits said was meant to broadcast his possible knowledge of compromising material that opponents may want to get their hands on.

“When I informed you of outrageous facts, you pretended not to hear me,” Baloha said in a written statement, slamming Ukraine’s 2004 Orange Revolution hero. “Millions saw in every line of your inauguration speech the hope that with a new president, there would be a new Ukraine. None of those hopes has been realized.”

Yushchenko confirmed that he had accepted Baloha’s resignation on May 19.

Since his appointment in September 2006, Baloha has been seen as wielding enormous power and moving in the shadows at Bankova Street in a similar way to Victor Medvedchuk, the chief of staff of Yushchenko’s predecessor, Leonid Kuchma.

Baloha’s critics have long accused him of corruption and backtracking on the democratic achievements of the Orange Revolution. He denied any wrongdoing.

The relationship between the president and his right-hand man was widely seen as close. In March 2008, Yushchenko memorably scolded supporters who sought Baloha’s ouster, saying: “Baloha is me.” But analysts say that Baloha’s resignation and subsequent swipes at his former boss reflect disagreements over strategy.

“The major reason Baloha left was because of Yushchenko’s refusal to accept his strategy to dissolve parliament and call elections,” said Serhiy Taran, director of the International Democracy Institute. “Yushchenko doesn’t have a political strategy, and he never really had one.”

Frequently demonized by Yushchenko’s opponents, Baloha laid the blame on Yushchenko for relentless conflict with Prime Minister Yulia Tymoshenko, and a Victor Yanukovych premiership before her. “It wasn’t the initiative of the head of the secretariat to create conflicts with other branches of power,” he said. Baloha also criticized the president for failing to establish political unity and consensus.

“You’ve never been seen as a partner by any authorities or political force. The snap Verkhovna Rada election in 2007 gave a chance to reach a political compromise and stabilize the authorities. You didn’t use the chance. You nominated Tymoshenko for prime minister for the second time after her candidacy was a failure. The country won’t recover soon from the consequences of your decision,” Baloha added.

Analysts said that these comments stem from frustration at Yushchenko’s refusal last year not to go along with Baloha’s attempts to build an alliance in support of the president between the United Center Party, in which he is a key figure, and Yanukovych’s Regions Party.

The future for both men is now unclear. Both are deeply unpopular with former allies and voters, according to polls.

Baloha’s accusations of “corruption and nepotism” underlined the ace that he may hold – kompromat, or compromising materials – on Yushchenko’s administration. At a press conference on May 21, he declined to publicly release what arsenal he may hold. But some political pundits say his knowledge could prove valuable in the upcoming presidential elections, possibly enough to form political alliances.

“I am not a kompromat-releasing machine,” Baloha said. A small group of protestors gathered outside the building where the press conference was being held, holding placards demanding that Baloha be sent to jail.

He added that he didn’t intend to head the staff of any of the presidential candidates, but also didn’t rule out working with any political force in the future, including Tymoshenko’s bloc, the Party of Regions, Our Ukraine or any other party. One of Party of Regions’ influential lawmakers Borys Kolesnykov said his party “will consider” cooperation.

While some political analysts saw his departure as a blow that left the president isolated, Vadym Karasyov, who has advised both Yushchenko and Baloha in recent years, said Baloha’s exit could reinvigorate Yushchenko’s political career.

Yushchenko announced on May 19 that Baloha’s replacement would be the governor of Kyiv oblast and longtime ally and personal friend Vira Ulyanchenko. Widely seen as a bureaucrat with a more conciliatory approach to Baloha, her appointment has been welcomed, even among Yushchenko’s foes.

Kost Bondarenko, director of the Horshenin Institute think tank, suspects that Yushchenko wanted to part with Baloha. “Baloha keeps emphasizing that it was his decision, but Yushchenko wanted a more conciliatory figure with the elections approaching,” he said.

Karasyov agreed, adding that Ulyanchenko will help to build his relations with big business. “It’s not clear that Yanukovych and Tymoshenko can offer a guarantee to big business,” he said, referring to pledges of security or favors influential billionaires might seek in return for supporting presidential candidacies. “But Yushchenko can,” he added.

But with his approval ratings in the low single figures, analysts give him little chance in the presidential elections, set for January 2010. “Nothing can help Yushchenko now,” said Bondarenko.

Source: Kyiv Post

EU Should Lend Ukraine Money: Medvedev

KHABAROVSK, Russia -- Russian President Dmitry Medvedev urged the European Union to lend Ukraine money he said Kiev needed to meet its gas payment obligations.

Russian President Dmitry Medvedev

The Russian leader said he doubted Ukraine's ability to pay four billion dollars for 19.5 billion cubic metres of gas that Kiev needs to replenish its underground reservoirs in time for winter.

He said a syndicated loan agreement should be reached, with European and Russian participation. The EU, however, should come up with most of the money, Medvedev added.

"We are ready to help the Ukrainian state but would like the European Union, those countries that are interested in reliable security of energy cooperation, to take upon themselves the bulk of this work," he said.

Referring to the financial problems Moscow believes Kiev is suffering, Medvedev said: "We have doubts about Ukraine's ability to pay."

Ukraine, one of the countries hardest hit by the global economic crisis, has asked Moscow for a five-billion dollar loan to help with its gas payments.

But the Russian finance ministry said this week a decision had not yet been made.

In Kiev on Thursday, however, Naftogaz spokesman Valentin Zemliansky denied there was any problems, telling AFP: "We're not anticipating any crisis. The financial situation of the company is stable."

A payment dispute between Russia and Ukraine was at the heart of the gas conflict that shut down supplies to a dozen European customers in January.

On Thursday, a Russian government official told the country's news agencies that Ukraine might find itself "on the brink of a new gas crisis" if it did not sort out its financial difficulties.

In response to a question from a reporter about whether Russia could guarantee there would not be a repeat of the last winter's crisis, a visibly irritated Medvedev said it was not Russia's job to do so.

"The Russian Federation has not given any assurances and will not give any," he said. "What would be the good of that? Let those who pay for gas give assurances."

Source: AFP

Thursday, May 21, 2009

Russia 'Close To New Gas Crisis With Ukraine'

MOSCOW, Russia -- Russia and Ukraine may be close to a new gas crisis as Kiev faces difficulties making payments, an official accompanying Prime Minister Vladimir Putin to Kazakhstan was quoted as saying on Thursday.

Staff at the Orlovka gas-compressor station near the Ukraine-Romania border check pipelines.

"If things are that bad in the financial sphere ... We could come to the conclusion that we could be on the brink of a new gas crisis," news agencies quoted the official as saying, referring to Ukraine's poor economic situation.

Putin was expected to meet his Ukrainian counterpart Yulia Tymoshenko during a gathering of prime ministers of former Soviet states in Kazakhstan.

Source: AFP

Ambassador Breaks Ground On New U.S. Embassy Just Before Leaving Kiev

KIEV, Ukraine -- In a ceremony attended by journalists, Kiev city officials and diplomats, U.S. Ambassador to Ukraine William Taylor broke ground at a construction site in Kiev where the new U.S. Embassy will be located.

U.S. Ambassador William Taylor (L) breaks ground on what will be his country's new embassy in Kiev.

The event may have been one of Taylor's last public appearances as U.S. Ambassador to Ukraine. His diplomatic mission in Ukraine is coming to an end. It is still uncertain who will replace him.

Asked at the event who will replace him, Taylor said that a decision had not yet been made.

“However, I know that there is a lot of discussions ongoing right now. There are many candidates who want to come and work here,” he added.

The new, 5-story embassy will be located on Tankova street. It is expected to be built and functional by 2012, employing 400 people.

The consulate and embassy building, currently located in separate sites in Kiev, will be located at the new site. It will also include a food store and bank for personnel, and a gym with showers.

The site will also include quarters for a special forces squad from the Navy Seals, and a basketball court for them. The facility will also include a children’s play ground and tennis and volley ball courts with room for spectators.

Parking for almost 400 cars will be made available.

Source: Kyiv POst

Ukraine May Not Host Euro 2012 Championship Because Of Political Intrigues

KIEV, Ukraine -- Ukraine may not become the hosting country of Euro 2012 Football Championship because of political scandals in the country.

Kiev's Olympic stadium under re=construction.

Two years ago, UEFA awarded the right to host Euro 2012 to Poland and Ukraine. The matches of the Ukrainian part of the championship were originally planned to be held in the cities of Kiev, Donetsk, Dnepropetrovsk and Lvov. Kharkov and Odessa were named to be backup locations. The final match of the championship was said to take place in Ukraine’s capital, Kiev.

UEFA’s decision was perceived enthusiastically in Ukraine. It is an open secret that holding such events is impossible without the construction of airports, hotels and other objects.

However, Ukraine’s leadership did not move a finger to have the nation prepared for hosting the landmark sports event. Nothing has been built in the country: President Viktor Yushchenko and Prime Minister Yulia Tymoshenko are too much preoccupied with their struggle for power.

It transpired on May 12 that the matches of the European Football Championship would be held only in Kiev and Donetsk . UEFA said the next day that Kiev had been confirmed as the location for play-offs, quarterfinals and semifinals.

At the same time, the final game of Euro 2012 will take place in Kiev only if the city provides adequate conditions at the stadium, at the airport, as well as at hotels and in the field of transportation.

For the time being, the Ukrainian authorities have only met UEFA’s requirement to dismantle the shopping center near Kiev’s Olympic Stadium. They could not do it for two years because of the arguments within the teams of Yushchenko, Tymoshenko and Kiev Mayor Leonid Chernovetsky, who had their own business interests in the construction of the shopping center.

UEFA’s Executive Committee took Dnepropetrovsk and Odessa off the list of the hosting cities. Donetsk, Lvov and Kharkov will have the honor to host the games only if they take efforts to provide all the necessary conditions for the event.

The final decision will be made on November 30, 2009. If nothing changes for the better, Ukraine will not host Euro 2012. No other country has ever had the right to hold the championship on only one stadium.

Yushchenko, Tymoshenko and Vladimir Litvin (the speaker of the Ukrainian Parliament) wrote a letter to UEFA’s President Michel Platini and said that the government had assigned additional resources to have everything prepared on time.

“We are certain that we will be able to execute all our guarantees particularly about the financial support for the preparations to Euro 2012 tournament. We have taken anti-crisis measures and conducted negotiations with the IMF,” the officials wrote in the letter.

As a matter of fact, the Ukrainian government is trying to re-borrow the funds to re-distribute a certain part to other creditors. UEFA is not interested in that. The Union of European Football Associations will disregard all verbal explanations and pay attention to the work performed instead.

In the meantime, Moody's Investors Service downgraded Ukraine's foreign and local currency government bond ratings to B2 from B1 with a “negative” outlook. The decision was made against the background of the worsening of the macroeconomic situation in Ukraine and the nation’s weak banking system.

Ukraine has a great difficulty in funding the European Football Championship. It goes without saying that there will be neither hotels nor roads built in Dnepropetrovsk and Odessa.

The endless struggle between Yushchenko and Tymoshenko may eventually deprive Ukraine of the celebration of football.

Source: Pravda

Ukraine Celebrates Shakhtar Donetsk Victory In UEFA Cup

KIEV, Ukraine -- Celebrations broke out across Ukraine early Thursday morning in the wake of Donetsk Shakhtar's win in the UEFA Cup tournament. An estimated 5,000 fans took to the streets in the capital of Ukraine's industrial heartland Donetsk to cheer their side's 2-1 victory over Werder Bremen.

Ukrainian fans of Shakhtar Donetsk FC react after the victory of their team in the UEFA Cup final soccer match between Werder Bremen and Shakhtar Donetsk in Donetsk, Ukraine, early morning Thursday, May 21, 2009.

Crowds in Donetsk's central square chanted "Shakhtar is Champion!" as automobiles - many flying flying black-and-orange Shakhtar colours - drove by with horns blaring, Channel 5 television reported.

Smaller spontaneous street parties took place in the Ukrainian capital Kiev and even in the western provincial centre Lviv, a region usually politically opposed to Donetsk.

Ukrainian President Viktor Yushchenko, on hand in Istanbul to cheer Donetsk on from VIP seating, was among the first officials to praise the first-ever European silverware win by a club based in independent Ukraine.

"You have given joy to millions of your countrymen," Yushchenko said. "Today the entire country will celebrate your victory with you."

The irony of Yushchenko's declaration, made public by his administration, was lost on few Ukrainian football fans, as the Ukrainian President has long talked of his life-long support of Shakhtar's arch-rival Dynamo Kiev.

Ukraine's chronic and frequently vicious political in-fighting seemed forgotten later on Thursday morning, as Prime Minister Yulia Tymoshenko - Yushchenko's inveterate rival and fiercest critic - joined the president to praise Shakhtar.

"I thank you, boys, for your peerless gameplay, and for a fantastic holiday," she told Kiev reporters. "You have given our nation a true triumph!"

Frequently an opponent of Donetsk's pro-Russia politicians, Tymoshenko said that on game night she was among Shakhtar's most devoted fans.

"My family and I sat together and held hands and cheered, we worried, and at the 97th minute, when the score became 2-1 in our favour, it was so wonderful. I don't know what our neighbours thought, but we shouted, whistled, and sang," Tymoshenko said, according to an Interfax report.

"I hope those who are not football fans will forgive me, but yesterday for two whole hours I was able to forget about the financial crisis, about International Monetatary Fund credits, and about politics. Yesterday football ruled the country," she said.

Ukrainian media echoed Tymoshenko's celebratory tone, with the Inter television calling Shakhtar's victory "A historical event, a great achievement for all Ukraine and all Ukrainians."

But some fans in the former Soviet republic, true to the Ukrainian folk tradition of caution even during the greatest success, early on Thursday were seeing a downside.

"Probably now there will be a wave of offers from major European sides," wrote Volod95 in a comment on a Korrespondent web magazine. "One can only hope our sides can hold their teams together, and that (players) won't fall for big money."

Shakhtar owner Rinat Akhmetov, according to Forbes magazine Ukraine's wealthiest citizen, will pay each Donetsk player a cool half million euros ($650,000) for the UEFA win, Interfax reported.

Source: DPA

Ukraine PM Calls On Defense Min To Resign

KIEV, Ukraine -- Ukraine's Prime Minister Yulia Tymoshenko on Wednesday called on Defense Minister Yuri Ekhanurov to resign over allegations of corruption, which the minister has vehemently denied.

Ukraine's Defense Minister Yuri Ekhanurov.

Tymoshenko told a cabinet meeting she would write to President Viktor Yushchenko asking him to put a request before parliament for the minister's sacking, the Interfax agency reported.

But Yushchenko rejected any such proposal in a statement issued from Istanbul, Turkey, where he was due to watch Shakhtar Donetsk play Werder Bremen in the UEFA Cup final.

"This is a political move designed to create trouble" in the country, he said, in comments issued by his press service.

Earlier Wednesday, Mykola Syvulsky, the head of the finance ministry's finance inspection department, said there was a case to answer against the defense minister, Interfax reported.

The allegations concerned not just suspicions over the purchase of food for the army at prices up to 40% over the market price, but a property transaction involving 300 hectares of land, he said.

Ekhanurov has denied the accusations against him and called for state prosecutors to investigate.

A former prime minister himself who is close to the president - Tymoshenko's sworn political enemy - he suggested the accusations against him had to do with the presidential race ahead of the 2010 election.

Tymoshenko is considered a leading candidate for the next presidential election, while Yushchenko, who has said he will seek a second term, is currently polling as low as 2%, according to some surveys.

Source: AFP

Wednesday, May 20, 2009

Shakhtar Prevail In UEFA Cup Finale

ISTANBUL, Turkey -- An extra-time goal from Brazilian midfielder Jadson earned Shakhtar Donetsk a 2-1 victory over Werder Bremen in the UEFA Cup final here on Wednesday to clinch the Ukrainian side's first European title.

Shakhtar Donetsk rejoices after winning final UEFA cup.

Jadson's 15-yard shot slipped through the grasp of Werder goalkeeper Tim Wiese in the 97th minute after the teams had been locked 1-1 at the end of normal time.

The Germans thought they had snatched an equaliser in the last minute of the additional period, only for on-loan Chelsea striker Claudio Pizarro's bundled effort to be ruled out for a foul on Dmytro Chygrynskiy.

Brazilian striker Luiz Adriano had finished coolly to give Shakhtar the lead in the first half, before an error by goalkeeper Andriy Pyatov allowed Werder centre-back Naldo to level.

Shakhtar become the first team from Ukraine to lift a European trophy since the break-up of the Soviet Union, while they will also be the last team to lift the UEFA Cup before its re-launch as the Europa League next season.

Mircea Lucescu's side settled first at the Sukru Saracoglu stadium and spurned the game's first clear opening when Adriano shot wide after being cleverly picked out on the cusp of the Werder area by Jadson.

The Ukrainians, inspired by the inter-play of their five-man Brazilian contingent, then went ahead in the 25th minute when Adriano ran onto a loose pass and delicately lifted the ball over the advancing Wiese.

Werder had overturned deficits against pre-tournament favourites AC Milan and local German rivals Hamburg earlier in the competition, and 10 minutes before half-time they drew level when Naldo's thumping 30-yard free-kick was tamely palmed into the net by Ukraine international Pyatov.

Wiese proved to be made of sterner stuff when he superbly touched away a stinging drive from Mariusz Lewandowski at full-stretch just before the interval.

The German shot-stopper kept out a Jadson free-kick early in the second period as Shakhtar resumed their occupation of the Werder defensive third, the orange-shirted players zipping passes across the pitch with beguiling ease.

Werder missed the promptings of their suspended Brazilian playmaker Diego, but they were inches away from going in front when Pizarro's glanced header was repelled by a sprawling Pyatov.

Wiese pushed away a long-range effort from Darijo Srna as Shakhtar began extra-time on the front foot and moments later they took a decisive lead when Jadson met Srna's centre with a low drive that crept beneath Wiese into the bottom-left corner.

Shakhtar is also the last club to win the competition before it is renamed the Europa League for next season.

Source: AFP