Thursday, October 31, 2013

Doing Business 2014 Report: Ukraine Is Most Improved Economy This Year

KIEV Ukraine -- The World Bank and the IFC experts have acknowledged Ukraine's tremendous progress in simplifying conditions for doing business. Having leaped 25 positions since last year, the country is ranked 112 among 189 economies in the Doing Business 2014 report.

Ukraine has implemented regulatory reforms for local entrepreneurs in eight areas out of 10 between June 2012 and June 2013.

Ukraine has improved the most over the past year in making it easier to run a business, as indicated in the Doing Business 2014 report released by the World Bank and the IFC in October 2013.

Other countries on the most improved list include Rwanda, the Russian Federation, the Philippines, Kosovo, Djibouti, Côte d'Ivoire, Burundi, the former Yugoslav Republic of Macedonia, and Guatemala.

Ukraine's growth in the ease of doing business ranking started last year when the country jumped 15 positions to 137 from 152.

In 2012-2013 Ukraine has advanced by another 25 positions to become the top improver.

Interestingly, in the first quarter of 2013 foreign investors have invested almost USD 1.6 billion - 76 percent increase compared to the first quarter of 2012, as reported by the State Statistics Service of Ukraine.

Ukraine received the highest ranking (13th place) for the ease of getting a loan, surpassing Brazil, and following Belarus, Kyrgyzstan and Russia.

The biggest progress in the starting a business category Ukraine obtained by eliminating the requirement for registration with the State Statistics Service and by eliminating the cost for value added tax registration.

The Eastern European country also simplified construction permit issuance and registration of real estate ownership rights.

Despite considerable advancement, Ukraine lacks progress on such indicators as getting electricity, protecting investors, paying taxes, trading across borders and resolving insolvency, reads the report.

"We, at the World Bank Group, are encouraged by Ukraine's regulatory improvements in the past year. The country's ranking in this year's Doing Business report shows that a lot can be achieved in a short time when there is a political will for reform," said Qimiao Fan, World Bank Country Director for Belarus, Moldova and Ukraine.

He expressed hope that the government would continue to further implement reforms.

Source: Yahoo Finance

Ukraine Says Hopes To Settle Russian Gas Bill Row Soon

KIEV, Oct 30 (Reuters) - Ukraine's energy minister acknowledged on Wednesday the country may have fallen behind in payments for monthly supplies of Russian gas but said he expected the matter to be settled with Moscow very soon.

Eduard Stavitsky

Russian gas export monopoly Gazprom said on Tuesday Ukraine, which relies heavily on supplies of Russian gas, had failed to settle a $882 million bill for August deliveries and demanded it be paid urgently.

The harsh language used by Gazprom and Russian Prime Minister Dmitry Medvedev evoked fears of a new "gas war" over prices between the two neighbours, similar to those in the winters of 2006 and 2009 which caused supplies to be disrupted not only to Ukraine but to the rest of Europe.

Speaking to journalists, the Ukrainian minister, Eduard Stavitsky, said:

"We have always paid up in dealings with our partners and we will pay this time as well...Occasionally there can be, of course, misunderstandings and issues over timing. So there have been slight delays in payments."

Announcing a Naftogaz team was going to Moscow, he said he expected the matter to be settled "today, at the latest tomorrow".

The new gas row with Russia has flared amid tension over Ukraine's plans to sign landmark agreements with the European Union on association and free trade next month - something which has dismayed its former Soviet master.

Obliquely referring to this, Stavitsky said:

"I hope our partners will act according to business interests and not according to political ones."

Source: Yahoo Finance

Wednesday, October 30, 2013

Udar Leader Calls For Tymoshenko Release

KIEV, Ukraine -- Vitaliy Klichko, the leader of the opposition Udar party, said he had a “bad feeling" about whether the authorities would free jailed former Prime Minister Yulia Tymoshenko and send her to Germany for medical treatment.

Vitaliy Klichko (L) and Yulia Tymoshenko

The release of Tymoshenko, who is serving a seven-year jail sentence on abuse of power, is seen as a prerequisite for Ukraine's signing landmark deals with the European Union next month.

The EU views Tymoshenko’s imprisonment as a case of “selective justice" and demands her release before the summit on November 28-29 in Vilnius.

“It all depends on the President of Ukraine, because [the president] has absolute power in our country,” Klichko said.

“If Viktor Yanukovych wants to do it, Yulia Tymoshenko will be free tomorrow.”

But “I have a bad feeling” about that, Klichko added.

Klichko, who currently has the best chance of beating Yanukovych at the next election in March 2015, called on the president to approve a historic decision that would lead to the signing of the deals and would benefit 46 million of Ukrainians.

“I hope that Yanukovych will take a very important decision - not for himself, but for the 46 million people across the country,” Klichko said.

The call come less than a week after two European Union ministers urged Ukraine to stop "bluffing" and reach a deal on the release of Tymoshenko because time was running out.

Polish Foreign Minister Radoslaw Sikorski and Sweden's Carl Bildt met Yanukovych amid a flurry of diplomatic activity aimed at nailing down a compromise on the Tymoshenko row.

Her case has become symbolic for the EU of "selective justice" which the bloc wants ended in the former Soviet republic before agreements on association and free trade are signed in Vilnius.

Yanukovych is seen as being anxious at keeping Tymoshenko out of action as a political force as he prepares for the run-up to a re-election bid in 2015 and has stalled over releasing her.

Yanukovych said recently he would sign a law to allow her to go to Germany for medical treatment for spinal problems, if such a draft were adopted by Parliament. 

But he has balked at a call by European mediators to pardon her and wipe out her sentence altogether - something which opposition supporters of Tymoshenko are still asking for.

Drafts of possible legislation floated by pro-Yanukovych deputies envisage her going to Germany only as a convicted criminal and returning to Ukraine to complete her sentence after treatment.

Source: Ukrainian Journal

Russia Demands Ukraine Payment, Raising Fears Of New Gas War

MOSCOW, Russia -- Russian gas export monopoly Gazprom demanded Ukraine pay an overdue gas bill urgently on Tuesday, raising fears of a new "gas war" and increasing pressure on Kiev as it tries to build ties with Europe.

The company logo of Russian natural gas producer Gazprom is seen on an advertisement in front of the White House in Moscow.

Prime Minister Dmitry Medvedev described the payment problems as critical, ahead of Kiev's signing next month of agreements with the European Union which would mark a historic shift away from former imperial master Moscow.

Using language that harked back to earlier spats in which Moscow cut off gas to Ukraine, hitting onward deliveries to Europe, Medvedev told Gazprom CEO Alexei Miller Kiev had not taken the payments seriously enough in recent talks.

"The (problems) exist and they are absolutely critical," he said at a government meeting.

Miller said Ukraine had been given until October 1 to pay for natural gas deliveries in August, but no payment had yet been received.

He said Gazprom had also paid Ukraine $1 billion up front to pump gas though its territory to Europe.

"The situation with Ukraine's gas payments is coming to the boil. Ukraine has failed to pay fully for August supply," Miller told the meeting.

Earlier he said he was "extremely concerned".

Ukraine's state oil and gas firm, Naftogaz, declined to comment on Gazprom's remarks, but Prime Minister Mykola Azarov said the government was "monitoring the issue".

"This primarily is a question concerning two companies and they have to sort things out," Azarov's press service said.


Russia and Ukraine have waged two gas wars over prices in the winters of 2006 and 2009, with Moscow halting deliveries not only to Ukraine but to the rest of Europe, forcing some in the European Union to seek alternative sources of energy.

President Vladimir Putin wants Ukraine to join a Moscow-led customs union and Russia has put pressure on its neighbor, which faces large payments to service its debt over the next 18 months, by tightening customs rules and banning some imports.

Earlier this year, Russia hinted that gas prices which Kiev has called "exorbitant" could be cut if it joined the customs union, which unites Russia with two other former Soviet republics, Kazakhstan and Belarus.

Medvedev said Russia could resort to a system of advance payments if Ukraine did not respond to its demands.

"There is a danger of a new gas war with Ukraine, where the economy is struggling," said Sergei Vakhrameyev, an analyst with Ankorinvest brokerage in Moscow.

"The situation of past years, when gas flows to Europe halted could be repeated again."

Putin and Ukrainian President Viktor Yanukovich met in the Black Sea resort of Sochi on Sunday for bilateral talks, although neither side has commented on what was discussed.

Ukraine, which imports nearly all its gas from Russia, pays about $400 per 1,000 cubic meters, slightly higher than the average price paid by European customers. 

Naftogaz said earlier this month it had 17 billion cubic meters of gas in storage, enough to get through the winter.

Gazprom ships more than half of its gas to Europe via Ukraine.

This year it aims to increase exports to Europe, where it provides a quarter of gas needs, to 152 billion cubic meters from 138 bcm last year.

Source: Yahoo News

Tuesday, October 29, 2013

Interview: Lithuanian President Says Ukraine Under 'Huge Pressure' From Russia

VILNIUS, Lithuania -- On November 28-29, Lithuanian President Dalia Grybauskaite will host European Union leaders and their counterparts from the bloc’s six Eastern Partnership countries in Vilnius for what’s expected to be an historic summit.

Lithuanian President Dalia Grybauskaite

In an interview with RFE/RL correspondent Rikard Jozwiak, Grybauskaite shared her views on what Ukraine must do to sign an EU Association Agreement, whether Belarusian President Alyaksandr Lukashenka will attend, and whether EU membership for the Eastern Partnership countries is on the horizon.

RFE/RL: Some reports state that Belarusian President Alyaksandr Lukashenka might be invited to the summit despite the fact that he is blacklisted by the European Union. Other reports state that the country’s foreign minister, Uladzimir Makey, will represent Minsk. As a host, who would you prefer to come?

Grybauskaite: It is not about a preference, it is about possibilities.

We send an invitation to a country and it is very clear that people can only come to Vilnius if they are not on the [EU's list of blacklisted Belarusian officials].

RFE/RL: Are you concerned that there will be an empty chair representing Belarus, as was the case at the Eastern Partnership summit in Warsaw in 2011? 

Grybauskaite: Look, it is not about an empty chair.

It is useful for Belarus to come, but really, the Vilnius summit is not mainly about Belarus.

It is about Ukraine, Moldova, and Georgia -- countries that already did a lot of homework.

We will probably be able to push the integration towards Europe a lot further.

We are preparing to initial the agreements on free trade [and association] with Moldova and Georgia and probably we already are very close to signing the treaty with Ukraine.

RFE/RL: Would the summit be a failure if there was no signature with Ukraine? 

Grybauskaite: I don't think so.

[That’s] because we are so far with a lot of countries, not only with the free trade agreements, but also with the visa-liberalization process and visa-facilitation.

I think that these countries did so much of their homework in reforming their legal system and in human rights protection.

So, really, [with] this chance and possibility to sign these treaties, already these countries did a lot [in terms of] what is important for themselves, for democratization, for human rights protection, for economic reforms, [and] for the prosecutors’ offices -- all things that are very useful for themselves.

Whatever Ukraine will decide, finally -- even if they will not be able to fulfill all the necessary steps, which I doubt -- I think we still have greater chance for a more positive outcome than a negative.

I think already [Ukraine is] successfully achieving very good results for themselves because they are on the path of reform.

RFE/RL: If former Ukrainian Prime Minister Yulia Tymoshenko is allowed to travel to Germany for medical treatment but isn’t fully pardoned, would that be enough for you to sign an Association Agreement with Ukraine? 

Grybauskaite: Let’s not speculate now on the final outcome, because we know that on November 5 there will be a vote on the special legal proposals [regarding Tymoshenko] in the Ukrainian parliament, the Rada, and of course, all the [EU] member states, together with Ukraine, will finally decide [on the next steps].

But we also need to have in mind that Ukraine is under huge, huge pressure from Russia not to do it all.

[There is] especially huge pressure on the economy, with bans on some products -- [much like the ban on] Lithuanian milk products.

They are also under pressure on energy prices and all of this pressure is still increasingly visible.

All of the pressure is also having an impact on public opinion in Ukraine and Europe and also on the decisions and the speed of decision in Ukraine itself.

RFE/RL: When do you think Moldova will achieve a visa-free regime with the EU? Will that happen in Vilnius? 

Grybauskaite: Moldova is already in the second stage of the process, the so-called [visa] road map, and of course we are very much expecting that they will be able to finalize the next steps as soon as possible for further visa liberalization.

All the doors are open and we expect that we will be able to have a report by the end of the year on the progress.

The road map is very clear on Moldova: in the nearest years they will have much easier access in the European area.

RFE/RL: Will there be any mention of European aspirations or any other wording to express that the six Eastern Partners could one day join the EU? 

Grybauskaite: The path itself is even more important sometimes than any kind of wording.

[That’s] because they are doing reforms that are useful for themselves.

Democratization, market reforms, human rights protection, legal reforms, and of all these are important for the countries themselves.

The integration process, not necessarily membership immediately, is even more important today for them.

Source: Radio Free Europe

Putin And Ukraine's Yanukovich Hold Unofficial Meeting In Sochi

SOCHI, Russia -- Russia's Vladimir Putin has come together with his Ukrainian counterpart, Viktor Yanukovich, for a meeting without ties, Putin’s spokesman Dmitry Peskov has said.

Vladimir Putin (L) and Viktor Yanukovich

According to Peskov the leaders have met in the southern city of Sochi, which is shortly to host the Winter Olympics, to continue discussing urgent topics that made the agenda of their Minsk talks earlier this month.

Leaders of former Soviet countries, known as the Commonwealth of Independent States, or CIS, met in the Belarusian capital of Minsk on October 25.

The presidents discussed anti-criminal cooperation within the borders of the former Soviet country, ways to boost staggering economic partnerships and the upcoming 70th anniversary of WWII’s Victory Day.

Source: Voice of Russia

Monday, October 28, 2013

Ukraine Nationalists' Flag Stunt Vexes FIFA

ZURICH, Switzerland -- FIFA criticised Friday attempts by controversial Ukrainian party Svoboda to exploit a visit to its Swiss base, as campaigners called for a clampdown on far-right displays in Ukraine's football stadiums.

"We fully regret any attempts by the said group to manipulate or link their political ideas to FIFA within the scope of an informal visit," a spokesman for world football's governing body told AFP.

The behaviour of Ukraine fans is in focus as the 2014 World Cup playoffs against France loom, and in the wake of incidents during qualifying matches.

A delegation from Svoboda including lawmaker Ihor Miroshnychenko -- known for an anti-Semitic outburst against Ukraine-born Hollywood star Mila Kunis -- visited FIFA's Zurich headquarters earlier this month.

He and a fellow lawmaker had their photograph taken with Walter De Gregorio, FIFA's communications and public affairs chief, which FIFA said was unplanned.

The two politicians also posed inside FIFA's building with a large red-and-black flag.

The flag, whose colours stand for blood and soil, is commonly used by Ukrainian far-right and nationalist groups and is in the spotlight of match monitors from the Football Against Racism in Europe (FARE) network.

FARE was mandated by European football's governing body UEFA to draw up a list of xenophobic and offensive symbols in the run-up to Euro 2012, hosted by Ukraine and neighbouring Poland, and the flag was among them.

"Governing bodies such as FIFA, as well as national federations, have a responsibility not to let football become a tool for legitimising extremism," Rafal Pankowski of Poland's Never Again Association, part of FARE, told AFP.

"We put a lot of effort into eliminating racist and far-right behaviour from Polish and Ukrainian stadiums before, during and after Euro 2012. It would be a shame if the racist extremists are allowed a foothold in Eastern European football again," he added.

FIFA, which has beefed up its anti-racism drive this year, insisted campaigners had no cause for worry despite the flag stunt.

"FIFA fully recognises its responsibility to lead the way in abolishing all forms of discrimination in football," a spokesman said.

The flag was the banner of the Ukrainian Insurgent Army (UIA), which during World War II massacred Poles and Jews and allied with Nazi Germany.

But Svoboda and others claim history has been slanted against the UIA, which also fought the Soviets in a vain effort to win independence, and say honouring its memory in stadiums and elsewhere is legitimate.

Svoboda, whose supporters range from neo-Nazis and hardcore nationalists to mainstream voters weary of political horsetrading and corruption, is now the fourth-largest party in Ukraine's parliament.

In a statement, it said it visited FIFA to hand over a dossier on the UIA's history and defend the flag against a potential ban.

The visit came ahead of Ukraine's home World Cup qualifier against Poland on October 11 in Kharkiv, where fans' flags sparked outrage.

"People can have different views on the history of Ukraine, but to display such flags at a game against Poland is clearly hostile," said Pankowski.

The incident came after monkey chants against Brazilian-born Ukraine player Edmar by his own fans during a September 6 home qualifier against San Marino, plus Nazi salutes and the display of SS symbols.

FIFA ordered Ukraine to play their next qualifier behind closed doors and imposed a five-year ban on international matches in Lviv, the western city which is the hub of the nationalist movement.

The sanction was suspended when Ukraine appealed, and the case will not be heard before the World Cup playoffs on November 15 and 19, FIFA said.

Source: AFP

Ukraine Setting Clocks One Hour Back On Night Of October 27

KIEV, Ukraine -- In the early hours of October 27 Ukraine is setting the clocks one hour back to switch to its standard time (GMT +2).

Pursuant to Government Resolution 509 of May 13, 1996, the hour hand is set back one hour on the last Sunday of October at 4am.

The daylight savings are to efficient use of the light day and saving electricity.

As Ukrainian News earlier reported, in the first half of 2011 daylight savings' hazard for citizens' health was being widely debated.

On September 20, 2011, the Verkhovna Rada cancelled daylight savings after the Russian and Belarusian authorities.

But the move incurred displeasure in the western Ukrainian dwellers and officials, who said that with daylight savings abolished dawn in their region would break as late as by 10am.

In the end, on October 18, 2011, Parliament re-established daylight savings.

In February 2012, the Cabinet of Ministers registered draft law No.10125 with the parliament, by which they proposed to abolish daylight savings as of summer 2013 (to set the clocks one hour forward no more) but the MPs never considered the document.

Source: Ukrainian News

Sunday, October 27, 2013

Russian EU Lobby Irked By Ukraine Re-Buying Its Gas For Less Money

BRUSSELS, Belgium -- Attempts by Ukraine to shed its dependence on Russian energy by organising reverse gas flows from EU countries have been met with strong reactions from the pro-Russia lobby in the EU.

Gazprom's Alexey Miller

Although officially the EU Institutions have once again opened an anti-trust probe against Gazprom, the initiatives by Ukraine to put in place reverse gas flows, the re-buying of Russian gas sold to other countries, may lead to another gas scandal with Russia on the eve of the new heating season.

Thanks to the efforts of Ukraine's leadership, talks on gas supply diversification have been followed by practical steps.

On the basis of an agreement with the German company RWE on the reverse supply of gas, Ukraine has for the first time proved in practice that it can not only export gas but also import it from Europe if necessary.

In November last year, Ukraine began importing gas from Germany through the territory of Poland in line with arrangements with RWE.

Germany benefits from lower gas prices than other European countries.

Since April this year, Ukraine has also started to get natural gas from Hungary.

In addition, negotiations about the possibility of supplying natural gas to the Ukrainian gas transmission system are taking place with gas transport operators in Slovakia and Romania.

This spring Ukraine launched tests for gas supplies from Slovakia.

However, it is impossible to on to go about permanent deliveries.

Gazprom hinders this and refuses to export gas to RWE through the territory of Slovakia.

Gazprom has got financial leverage on Slovakia.

The Russian gas monopoly reserves and pays for about 90% of transit capacities of the Slovak gas transport system.

The Slovak operator Eustream is happy with this so far, and doesn't intend to revise its transit contract with Gazprom yet.

Especially as Gazprom even suggested granting a gas price discount.

Russia considers that Ukraine physically has no opportunity to get reverse gas supply from Europe.

According to the Gazprom head Alexey Miller, Ukraine actually doesn't import gas, but uses transit Russian gas for its virtual reverse.

According to Russia, this is the violation of the existing contracts.

And as for now, Ukraine is shrinking its consumption of Russian gas.

In 2011 Ukraine bought about 40 billion cubic meters (bcm) of gas.

In 2012 this figure was cut to 33 bcm.

The forecast of the government for the current year is 27 bcm.

In the meantime, due to the debts of Naftogaz, Ukraine is getting into greater energy dependence from Russia.

At the end of September, the parliament of Ukraine approved guarantees for Gazprombank's credit to Naftogaz for the sum of €365,4 million ($505 million).

Concurrently, in October President of Russia Vladimir Putin declared that the loan amounting to €549 million ($758 million) was granted to Ukraine.

Amid Ukraine's declarations about the reduction of Russian gas purchases up to the volume of 27.3 bcm this year, Gazprom's concessions in the question of expansion of gas pumping once again testify to the absence of desire to reconsider the provisions of the contract signed in 2009.

In mid-October this year Gazprom representatives reported that the chairman of the board of the company, Alexey Miller, met with the prime minister of Slovakia, Robert Fico, in Bratislava.

During the meeting the special attention was paid to the supply of Russian gas to Slovakian consumers and its transit to third countries.

Russian media did not fail to point out that the negotiations took place against the background of attempts by Ukraine to use Brussels pressure to persuade Slovakia in the strategic and financial benefit from the reverse flow of Russian gas to Ukraine. 

However Slovakia, in the light of the last year's arrangements with Russia about the discount for gas and payment for the transit lost earlier due to the Nord Stream launch, opposes this scheme.

This year, Ukraine has sharply reduced purchases of the Russian gas.

The main reason lies in the high price of Russian gas and in Russia's reluctance to compromise on the revision of its pricing formula.

Attempts by Ukraine to escape Russian dependence by organising reverse supply from EU countries has predictably been encountered by the activation of the pro-Russian lobby in the EU.

Gazprom has declared that the reverse pumping of gas from the EU is illegal and urges Kiev officials to adhere to the provisions of their contract on gas supply.

The government of Ukraine is trying to diversify gas supplies, the high prices for the Russian gas being the best motivation.

Reverse gas flows from EU countries present a chance to save money and redistribute it for social needs.

Today EU countries and their companies play a part in the tension over the high price of Russian gas in Ukraine.

And it’s not about the forthcoming Eastern partnership summit in Vilnius, Lithuania.

The Russian gas monopoly on the EU market has been stirring irritation in EU countries for a long time.

EU countries realised too late what was behind Gazprom's "kindness", as the company gives discounts for its own gas with one hand, and with the other it systematically carries out the policy of buying up gas transport capacities in these European countries.

Nowadays, the gas reverse from the EU is a real alternative to Russian gas, although over the next three to five years Ukraine will be able to receive a considerable increase of internal gas production as a result of developing shale and deep water shale gas.

The government of Ukraine has already signed all the necessary agreements with the companies Shell, Chevron and ExxonMobil.

The European Commission does not see any contradiction in the re-export of Russian gas to Ukraine with regard to EU legislation.

Besides, less Russian gas in the European market influences directly and favourably the spot gas prices, to the advantage of the European consumer.

And on the eve of the heating season, this advantage is at least as relevant as the probability of aggravating Russia-Ukraine relations.

Source: EurActiv

Putin Says His Final 'No' To Ukraine

MOSCOW, Russia -- Ukraine will not be able to join the Customs Union (CU) after signing the agreement on associated membership in the EU, Russian President Vladimir Putin said at a press conference, following the meeting of the Supreme Eurasian Economic Council in Minsk.

Vladimir Putin

"No, impossible," Putin said when asked about such a possibility for Ukraine.

At the same time, Russia is not going to interfere in the process of Ukraine's European integration, the Russian president said, adding that Moscow was "neither for, nor against it."

"This is not our business at all. This is a sovereign right of the Ukrainian administration in the face of the president, the parliament and the government," he said.

According to Putin, the impossibility of Ukraine's accession to the CU lies in the creation of a free trade area between Kiev and the EU.

From about 10,000 import customs tariffs, Ukraine would have to reset 7,000 as soon as the agreement comes into force, which is to happen in February next year, Putin said.

In another three years, he added, the openness of the market will be on the level of 85.5 percent, and 98.5 percent - a few years later.

"This openness of the market is very dangerous for us and is not acceptable at this stage of our economic development," said Putin.

Russia, in the long term, aims to create common Eurasian economic space from Lisbon to Vladivostok, but it must be all coordinated and conducted gradually, he added.

To crown it all, another obstacle for Ukraine to become a simultaneous member of the Customs Union is the fact that Ukraine will have to follow technical regulations of the European Union.

As a result, almost all goods produced in Ukraine, will be subject to EU rules.

According to experts, this will require an investment of about 100 billion euros ($138 billion).

Kiev does not have such sources, Putin said.

In his view, it could oust Ukrainian goods to other markets, primarily to the CU market, which would require measures to protect it.

There will be no ban on the importation of goods, but these products will no longer enjoy preferential treatment under a free trade zone.

Putin also said that the goods will be regarded as "made in Ukraine" even when they are produced from the parts made ​​in the EU.

"It's called a screwdriver, screwdriver assembly. We do not want to have screwdriver assembly on our territory on a massive scale," Putin said.

"We do not want a gift in the form of a screwdriver from the back porch," he stressed.

The president believes that such a state of affairs may complicate cooperation between Russia and Ukraine in the field of aviation, aerospace, shipbuilding and mechanical engineering.

Kiev also agreed to fully open and liberalize the market of agricultural goods for the EU, Putin said.

Russia can not "take it all personally and have it all transferred to the Russian territory," the president said.

Earlier, Prime Minister Dmitry Medvedev also stated that Ukraine would not be able to "sit between two chairs" - to sign the agreement on associated membership with the EU and join the Customs Union.

The prospects for the European integration of Ukraine have repeatedly become a reason to exchange threatening statements from the authorities of the two countries.

Two weeks ago, for example, Ukrainian Prime Minister Mykola Azarov said that in the next few years, Kiev may completely refuse from gas imports from Russia.

In response, Russian presidential adviser Sergei Glazyev did not exclude the introduction of visa regime with Ukraine in connection with the "integration process."

This week, it was said that convicted former Prime Minister Yulia Tymoshenko may save Putin from "geopolitical defeat."

Her case may impede the European integration of Ukraine.

In the EU, they believe that Kiev has not reached necessary progress in the quest to meet the criteria for the signing of the Association Agreement with the EU.

The main complaint from the EU is the refusal from Ukrainian President Viktor Yanukovych to pardon Tymoshenko.

Meanwhile, members of the Customs Union speculate which countries may join the association of Russia, Belarus and Kazakhstan.

According to Kazakh President Nursultan Nazarbayev, the organization may have another member - Turkey.

According to the Rossiyskaya Gazeta, the Customs Union, in addition to Turkey, is of interest to Armenia, India, and even Syria.

Nazarbayev, speaking about the interest of Turkey in the organization, said:

"They say that Syria wants to join the Customs Union. Turkey is a big country, we have a common border with the country. This would brush criticism aside, because no matter where you go in the West, they ask questions of whether we are rebuilding the Soviet Union or creating something for Russia? Maybe Turkey's move to join the CU would put and end to these questions," the Kazakh president said.

"Another major economy, India, shows the same interest," Putin noted in his turn. 

Source: Pravda

Saturday, October 26, 2013

Ukraine and Turkey - Coup in the Making?

LONDON, England -- Though Norway in June overtook Russia in total exports of natural gas to Europe, the balance of Russian gas to Europe comes through Ukraine, which itself is dependent upon Russia for 60% of its current gas consumption.

While Ukraine controls the transit of 90% of its gas to Europe, Russia is consistently trying to use its gas exports to Ukraine to gain greater control of the Ukraine transit system, which itself deems a strategic asset.

The struggle for control of export to Europe and Ukraine’s own struggle to increase domestic production and move closer to Europe, with an European Association Agreement set to be signed in November this year, has put extreme stress not only on the energy independence of Ukraine but of Europe as a whole.

From an energy geostrategic standpoint, Europe needs Ukraine to move closer to Europe, “but for all its planning, Europe also knows retribution, in the shape of an energy squeeze, is likely from Russia.

Moscow, which has a long-standing disagreement with Ukraine over gas, has said it will raise Ukraine’s gas prices and officials do not rule out it doing the same for the EU, which gets nearly 40% of its gas from Russia.

“The EU should not look at Ukraine as a business opportunity alone, particularly in light of currently lagging gas demand, but should examine the long-term future of European energy security and the key role Ukraine will continue to play in it. Partnership with the EU is not a silver bullet for the troubled Ukrainian energy sector, but it is certain to reduce the volatility of future pricing disputes and is perhaps the only solution that does not leave Ukraine’s fate entirely in Russian hands,” according to an article by Richard B Andres and Michael Kofman.

Ukraine has also done much in the past 18 months to increase its energy independence.

Recent shale tenders with Shell and Chevron and with Exxon for the development of the Ukrainian Black Sea have the potential to greatly reduce the dependence Ukraine has on Russian exports and potentially for Europe as well.

While the full picture of unconventional gas is expected to be assessed in the coming years, the key to success, as is the case of Ukraine, is infrastructure.

If the future of shale gas exploration is to be bright, a new infrastructure will have to be built to link the sources of unconventional gas with the grid to allow for the commercialization of the gas.

To ensure that the Energy Community brings results, once operationalized the shale gas opportunity should be extended to the Eastern Neighborhood.

It would allow the Eastern Neighborhood, in particular Ukraine, to create stronger bonds between the EU and the region and, as a result, galvanize stronger energy interdependence between the EU and Russia by stabilizing Ukraine’s internal energy supply, according to a policy paper from the Black Sea Trust for Regional Cooperation (BST).

Coup in the Making? 

In the past five years, there has been significant growth in Europe’s LNG [ Liquefied Natural Gas] import capacity; however, high LNG prices driven by Japanese demand, and the higher oil-linked price that LNG receives in Asia has diverted much of this supply from the European market.

An agreement between Ukraine and Turkey for the transit of LNG through the Bosporus, as the gateway to the Black Sea, would be a major coup for European energy security.

It would put downward pressure on current LNG prices due to the high demand and premium paid in Asia and would eventually provide Europe with cheap shale gas through a viable alternative marketplace.

It’s an idea developed by Robert Bensh , energy advisor to Ukrainian Vice Prime Minister Yuriy Boyko, managing director of Pelicourt Limited and senior advisor for Cub Energy Inc., which operates in both Ukraine and Turkey.

The potential for LNG exports to Europe without a deal between Turkey and Ukraine for liquefied natural gas (LNG) through the Bosporus will fall flat, and Russia will continue to provide at least 30% of Europe’s natural gas through 2023.

“The European Union can and should play a more active role in shaping the Black Sea security environment. As a full regional player, it should promote cooperation on an equal footing, and refrain from acting as a sponsor as it does, for instance, in the Mediterranean. As a privileged partner of all countries of the region, the EU should use its bilateral relations with each of them, including Russia and Turkey, to contribute towards the emergence of a cooperative security environment in the Black Sea region,” according to a European Parliament briefing .

A CRS Report for US Congress agrees, stating:

Development of more liquefied natural gas (LNG) transport and reception facilities from distant suppliers, such as Nigeria, into Europe could be another course of action.

Coupled with the development of new oil and gas pipelines could be an offer from NATO (and/or EU) members to provide security for energy infrastructure in periods of unrest or conflict in supplier and transit countries.

For both Ukraine and Turkey, such a deal would also be a political and economic coup of vast proportions, Bensh says.

For Ukraine, LNG is the key to energy independence.

For Turkey, LNG is the key to becoming one of the most important energy hubs between the Middle East and Europe.

In combination with the Trans-Anatolian Pipeline (TANAP), which will bring Azerbaijani gas from Shah Deniz through Turkey on to European markets, controlling the LNG segment through the Black Sea would give Turkey broader leverage than any other player in Europe.

For both Ukraine and Turkey, it would mean greater access to the economic benefits of the European Union, control over Europe’s LNG market and a level of political leverage over the continent that would render both world-class strategic players.

The benefits to Ukraine and Turkey are significant:

Benefits to Ukraine 

Independence from Russia Greater access to the European Union, with Kiev able to be assertive on the terms.

Political leverage in Washington, which is keen to see a Turkey-Ukraine LNG deal put through, especially one focused in part on Qatari gas as opposed to Iranian gas.

Control of the European market for LNG Economic prosperity by giving an edge to heavy gas-reliant industries.

Strategic positioning and leverage that goes beyond Europe and into the Middle East/Gulf and especially between competitors Qatar and Iran.

Benefits for Turkey 

Control of the European LNG market Rise as an energy hub between the Middle East and Europe, not just an energy transit country.

Political leverage over Europe and access to the EU on Ankara’s terms.

Political leverage with Washington Strategic positioning as an energy hub that renders Turkey the decision-maker from Europe to the Middle East/Gulf.

Diversification of supplies, with less reliance on Russian and Iranian deliveries, including from emerging African powerhouses such as Angola and Ghana.

Timing is important, and the window of opportunity should be taken advantage of before new pipelines come online and while two of the world’s biggest gas players—Qatar and Iran—are in a desperate race to grab the European market.

If an LNG agreement is solidified within this timeframe, it will dictate rather than serve as an afterthought to Europe’s gas future.

In this respect, Ukraine and Turkey together already have a certain amount of leverage at the negotiating table, particularly with respect to Qatari supplies, which are very eager to get to the wider European market.

Timing is critical as Iran, suffering under economic sanctions that has caused widespread unemployment and a recession (the under 35 age group is thought to have unemployment of over 40%; a sobering thought in a period of Arab Springs) is attempting to have access to markets from which it currently is cut off from; and there is no better indication of this than the British government’s current reconsideration of the embargo on BP’s joint venture with the Iranian National Gas Company in the Rhum field.

One additional factor in the conflict in Syria was, Qatari-versus-Iranian plans to run a pipeline through the country to Turkey, eyeing the European market.

In terms of critical timing, Ukraine and Turkey would be better positioned strategically were they to strike an LNG deal before the beginning of Phase Two production at Azerbaijan’s Shah Deniz field, and before TANAP begins operations.

The price of LNG is more volatile due to the Asian market, and it would be more beneficial for LNG to secure this market, while natural gas futures for Shah Deniz supplies, which have already been contracted out for 25 years to nine European companies.

Another Black Sea LNG project—the Azerbaijan-Georgia-Romania Interconnector (AGRI) project—is also being delayed due to the perception that European demand is not ready for this project.

This is a false perception that is driven by the Asian-driven LNG price spikes and the diversion of cargoes away from the European market.

AGRI at present is languishing as it waits for the market to develop.

This is an opportunity for a Ukraine-Turkey LNG agreement.

The first to develop will control the market.

The AGRI project is hoping to transport natural gas from the Caspian region (primarily Turkmenistan) to Europe designed as a part of the Southern Corridor and as the shortest direct route for Caspian gas to European markets.

If realized, AGRI would transport Azerbaijani LNG from Georgia, across the Black Sea, to an LNG terminal planned for construction on the Romanian Black Sea coast, then piped through to Hungary through the interconnector with Romania and then further into Europe.

Azerbaijan, Romania and Georgia signed the Memorandum of Understanding for this project in April 2010, but not much has happened since then.

The project requires the construction not only of a regasification terminal in Romania, but also a liquefaction plant in Georgia.

Competition for this strategic positioning will come from the development of Mediterranean LNG projects, which could also be a game-changer for Europe.

Potential projects here (Cyprus and Israel, first and foremost) remain uncertain, but if realized they would offer gas to high-demand Southeastern European markets with attractive pricing.

In the absence of an LNG agreement between Ukraine and Turkey, Cyprus and Israel have the potential to capture the European market from the Mediterranean side.

Timing is critical and the advantage will go to the players who recognize the opportunity to fill the long-term LNG supply gap that has been created by the diversion of cargo to Asia.

Ukraine, has the potential to fill this gap and control the market.

LNG’S Role in European Energy Security 

The European Market for LNG at a Glance:

Relative to 2011, LNG deliveries to the EU fell 31% in 2012, with imports from Qatar down 35%, Nigeria 31% and Algeria 18%, while imports to Asia have grown by up to 70%.

So far for 2013, LNG deliveries are in line with this downward trend.

For the first quarter of 2013, gas flowing out of LNG terminals into pipelines (LNG send-out to grids) in the UK, Netherlands and Belgium was down by 60% over the same period in 2012, and down 40% in France and 30% in Spain, Italy and Portugal.

The average price of spot pipeline gas in Europe is around $10 per MMBtu, while the average spot LNG price is $11.40/MMBtu (there is a wide range of LNG pricing across Europe).

In Japan, LNG prices are about 40% higher (as of Q1 2013) than spot prices in the UK, for example.

LNG in Europe, Present and Future 

At the close of 2012, LNG accounted for 19% of Europe’s gas supply, while 81% was natural gas transported via pipeline.

The Fukushima disaster in Japan forced European countries to reconsider their nuclear policies, and this has forced a stronger focus on coal, natural gas and LNG.

Before Fukushima, LNG was favored over natural gas because supplies were greater at that time and prices were cheaper than piped-in gas.

As a result of the Fukushima disaster and Japan’s resultant eschewing of nuclear power reliance, is a run on LNG by Japan and other Asian nations who are willing to pay higher prices.

This has driven LNG prices up and diverted supplies to the Asian market.

In addition, it has caused fewer LNG development projects to be pursued in Europe.

This translates into future gas shortages when LNG supplies can no longer meet growing Asian demand and when there is a lack of long-term LNG commitment in Europe.

This is the critical window of opportunity in the market for Ukraine and Turkey.

There is a certain counter-intuitive momentum to be grasped here.

Because Asia signs on to long-term LNG agreements with high, oil-linked prices, there are predictions that Europe will find itself with extremely restricted access to LNG in the near- to medium-term future, with a recovery in demand and a growing reluctance to rely on dirty coal for power generation.

This past decade has seen global LNG supplies double and regasification and shipping capacity triple.

The exception is Europe, where Ukraine and Turkey are singularly positioned to take advantage of this LNG gap before demand picks up and the opportunity for strategic positioning is weakened.

The LNG market is set to expand globally over the next decade, and demand for LNG in Europe is most likely set to rise even without affecting natural gas supplies.

Thus, TANAP and a Ukrainian-Turkish LNG agreement would work in tandem, not in competition, to control an even greater market share.

If Russia ends up building natural gas storage facilities in Turkey—an idea for which Gazprom expressed interest earlier this year—Turkey will lose its chance for maximum political leverage.

This past winter, Gazprom redirected natural gas from its storage facilities in Europe after a spike in demand in Turkey.

This prompted a Russian justification for potentially building storage facilities in Turkey ostensibly to come to the rescue when supplies are insufficient.

In theory, though, this would represent an increased Russian energy footprint in Turkey that would negatively impact Turkey’s energy hub ambitions and would only help to solidify its dependence on Russian supplies, which amount to about 58% of Turkey’s total supplies.

An LNG deal with Ukraine would give Turkey greater access to additional alternative supplies, and this, combined with an anticipated increase in Azerbaijani supplies from Shah Deniz will allow Turkey to become a true, diversified energy hub.

Qatar is heavily courting both Ukraine and Turkey for LNG through the Bosporus.

From Qatar’s perspective, if Qatari LNG is allowed to pass through the Turkish-controlled Bosporus, this will deal a heavy blow to Iran.

As such, Qatar recognizes Turkey’s role here as a key geopolitical power broker on the energy scene.

Along this same line of thought, Qatar’s perception is that Russia is not capable at this time of preventing a Turkey-Ukraine energy deal focused on Qatari gas.

For Turkey, though, such a deal would allow it to further diversify its supplies, reducing reliance on both Russian and Iran—the latter which has been unreliable in terms of supplies over recent years.

Such a deal also further underlines the extent of political leverage Ukraine and Turkey would enjoy well beyond Europe, and into the Middle East.

Geopolitically, if Ukraine and Turkey were to bring Qatari gas through the Bosporus and on to European markets, this would help balance the power of a Russian-Iranian axis.

It would reshape geopolitical dynamics, with Turkey the driving force through its strategic position as a Middle East-Europe energy hub.

Turkish and Ukrainian interest can either merge, or diverge to be counter-productive both to their gas supply needs and to European energy security.

The perceptions of competition between Ukraine and Turkey are there, however, it is only through the combined, complementary force of the two that we will see a new energy powerhouse emerge.

LNG is the future, and globally we are looking at a major upswing in demand, including for Europe in the medium-to-long term.

As becomes clearer every year, pipeline gas delivery is hindered severely by economics and geopolitics.

It limits room for consumer maneuvering, especially for those who are reliant on few, or single, sources.

LNG can avoid much of these same hurdles, despite the investment cost associated with LNG facilities.

There is a great deal of market flexibility to be found in LNG due to the absence of piping contracts.

LNG will become the key fuel of the future, and the forces that grasp the Black Sea market for LNG first will be among the most influential players on the global energy market.

There is also the Black Sea marine industry to consider here, and the future is likely to see this converted to LNG—with new and converted transport vehicles and vessels running on LNG.

Source: Oil & Energy Insider

US Ambassador: Association With The EU Will Stimulate Ukraine's Economy

KIEV, Ukraine -- The U.S. supports Ukraine's European aspirations and expects that the Association Agreement (AA) and establishment of the free trade area with the EU will provide a significant impetus to the development of Ukraine's economy and will attract investments.

U.S. Ambassador Pyatt

This statement was released by the U.S. Ambassador to Ukraine, Geoffrey Pyatt, as reported by Unian.

According to Ambassador Pyatt, Ukrainian entrepreneurs will receive an advantage on the European market throughout the transition period of implementation of EU regulations, which may last from three to 10 years.

The U.S. official also noted that Ukraine may experience the growth of investments coming from abroad, provided it is financially attractive.

The fact that association with the EU will benefit Ukraine's economy has been also stressed by the Lithuanian Ambassador to the U.S., Zygimantas Pavilionis.

He believes that Ukraine may increase its GDP manyfold after signing the AA.

Ambassador Pavilionis cited Poland's example, when the country increased its GDP six times between 1995 and 2004 after the signing of the AA, similar to the one which Ukraine is expected to sign.

He reiterated that after Ukraine signed the AA, it would get access to the 500 million market.

In addition, since both the U.S. and the EU are negotiating the possibility of establishing free trade area, Ukraine has great potential to dip into the 800 million market.

"This will be the largest liberal market in the world," stated the Lithuanian official.

He also noted that Poland at the time didn't have such a deep and comprehensive free trade area with the EU that Ukraine is going to get.

Notably, on October 9, 2013, when attending a discussion titled Diplomatic Dialogue: Ukraine's Quest for European Integration & Lithuania's Chairmanship of the EU, organized by Harriman Institute in New York City, Ambassador Pavilionis spoke about the European road of Lithuania, advantages of EU membership and the priorities of Lithuanian EU Presidency.

He stressed that Lithuania firmly supported the signing of the Association Agreement between Ukraine and the EU and saw Ukraine's future in the European Union.

Reportedly, the signing of the AA is scheduled for November 28-29 at the Eastern Partnership summit, which is to take place in Vilnius, Lithuania.

Source: PR Newswire

Friday, October 25, 2013

Ukraine Boxer Vitali Klitschko To Seek Presidency

KIEV, Ukraine -- Ukrainian WBC heavyweight boxing champion, Vitali Klitschko, has confirmed he will run in the country's 2015 presidential election.

Vitali Klitschko, leader of the Ukrainian opposition Udar (Punch) party.

He made his announcement in response to a bill passed in parliament that bars candidates who have lived outside Ukraine during the past 10 years.

The pro-Western Udar party MP has permanent resident status in Germany. 

"Everything that has taken place in parliament today... does not intimidate me and will not stop me," he said.

"To head off these various schemes and attempts at getting even with me as a possible candidate, I want to declare this: I will run for president."

Mr Klitschko is the first declared contender against the incumbent, Viktor Yanukovych.

He has actively campaigned against what he calls the president's "authoritarian policies".

The bill adopted on Wednesday amended Ukraine's current tax code.

It now states that if a Ukrainian national holds permanent resident status in another country they cannot be considered a resident of Ukraine.

Previously, they only had to live in Ukraine for at least 180 days a year.

According to the constitution, a presidential candidate must have been resident in Ukraine for 10 years prior to polling day.

Mr Klitschko said the amendment clearly had a "political context", something denied by a member of Mr Yanukovych's Party of Regions. 

'European standards' 

The 42-year-old boxer heads the Ukrainian Democratic Alliance for Reforms (Udar), whose acronym means "Punch".

It came third in last year's parliamentary elections.

"My main goal is for Ukraine to be a European, modern country with European standards of life," Mr Klitschko told the BBC in August.

"I will decide with people who have the same vision, the same dream, to go into politics and from the inside to change the situation."

He has spoken out against corruption in the country and the jailing of former Prime Minister Yulia Tymoshenko for abuse of office - a charge that her supporters claim was politically motivated.

"We can't be a democratic country with political prisoners," he said.

Mr Klitschko is also pushing to strengthen Ukraine's links with the EU.

"We see our future in the European family. We are European with our mentality, with our history," he said.

Source: BBC News

Ukraine Is Full Of Eastern Surprises

KIEV, Ukraine -- “Dmitri, is that an abaya?” Wandering through the courtyard of Kiev’s Pechersk Lavra, a huge monastery containing caves, catacombs and saint’s relics, I notice several women wearing headscarves or full-length black abayas. Dmitri, my local guide, has no idea what an abaya is, but explains that some of the women adopt customs from old Slavic mythology or the Eastern Orthodox church practices.

Moments like this continue to greet me over a long weekend in Ukraine.

It’s a culture full of unexpected curiosities, and my predisposition that the infrastructure would be a sea of grey leftovers from the partial Soviet-era destruction is overwhelmingly proved wrong by the variety of historical and regenerated architecture, each with a unique, century-specific story.

Exploring Ukraine feels like walking through the chapters of a history book.

My taxi ride from Kiev’s newest airport, Zhulyany International Airport, is the only car journey that’s necessary over my two days in the city.

Armed with a map, I head straight out on foot from the Radisson Blu, from Dh700 ($191) per night, including Wi-Fi, in Kiev’s Podil area, a bustling district of trade and commerce that’s manageable on foot and within walking distance of some of Ukraine’s most impressive architectural structures.

Within five minutes of Podil’s centre, I reach the foot of St Andrew’s (Andriyivskyy) Descent.

A cobbled incline filled with cafes, restaurants and people selling souvenirs and vintage relics from the most tumultuous eras of Ukraine’s history, from the Second World War to the old Russian empire.

I stumble across a few post-war, 1948 Olympic-edition, vintage Leica cameras with prices starting in the US$300 (Dh1,102) range, but don’t stick around long enough to be able to prove whether they’re authentic.

The peak upon which St Andrew’s Church rests provides a panoramic view of Kiev’s hill-and-valley terrain, and unlike other buildings that I had walked past so far, St Andrew’s presents an image of grandeur and wealth, exaggerated by the structure’s Taj Mahal-esque love story origin.

Built by the same individual behind Russia’s renowned Winter Palace, the spires of St Andrew’s glimmer in majestic aqua and gold.

It’s easy for frequent city explorers to get “templed or churched-out” when trying to squeeze in visits to as many landmarks as possible within a few days.

An afternoon walk around Kiev, however, doesn’t get dull.

Its complex history of periods of prosperity, war and Soviet rule has resulted in a richly diverse architectural landscape.

My untrained eye immediately picks up on the combination of colourful, Vienna-style buildings, theatrical Baroque style and Stalin-era, grey, functional towers.

The diversity never gets tiresome.

If anything, it makes me more curious about Ukraine’s complicated history.

Aside from religious landmarks, there’s also the impressively grand National Opera House and the Golden Gate, which defined Kiev’s city limits in 1307, but has since been restored.

I don’t manage to catch a ride on the cable car that connects the upper and lower part of Kiev, but a local recommends a journey on the funicular that connects the lower city from Podil to the upper city in Mykhailivska Ploscha,  Dh0.30 ($0.08) per person.

Kiev has had years of constant upheaval from wars since the Mongol invasion in1240 but, despite the 1930s Soviet regime destroying many structures, Ukraine’s attitude illustrates a resilience, and the city is clearly proud of demonstrating how it’s fought back.

When Dmitri asks me to hazard a guess at the age of an ancient-looking building, I estimate at least 500 years.

It was actually constructed in 2003 using the original plans from the 10th century to bring back some of the old and magnificent Kiev.

This is one of many examples of how Kiev has attempted to regenerate without forgetting its roots.

The most impressive structure in Kiev is St Sophia Cathedral, taking more than 10 years to build by Old Russian and Byzantine art masters.

Partially destructed during the Soviet rule, the regenerated section has been built around the remains without tainting the original Baroque architecture, including 13 gleaming golden domes, which would make even the least enthused tourist stop and stare.

A few hundred steps up the flight of stairs of St Sophia’s bell tower next door is worth the burning thighs for the bird’s-eye view over St Sophia’s domes and across the green hill areas of Kiev that cocoon the lower part of the city.

Countries in Eastern Europe occasionally have the reputation of having an unfriendly or cold culture.

In Ukraine’s case, this generalisation is a rather unfair one.

While there are no smiles for the sake of smiling, all the locals I meet and speak to are very warm individuals.

The local cuisine is equally warm and inviting.

Tsarske Selo $10 [Dh37] to $15 [Dh55] per person) is a good place for a long lunch between sightseeing, serving local cuisine of borscht (vegetable soup), varenyky (dumplings) and the addictive pyrizhky potato pancakes served with sour cream.

On every menu I come across in Ukraine, chicken Kiev was a staple option, but I learn from a local that its origins likely lie in Russia or France. 

English is not widely-spoken in Ukraine.

Booking in a local guide for a walking tour for your first day is a good idea for an orientation of the city and an introduction to key local words to help navigate around the street signs and food menus.

Moving between Kiev’s districts can be done via the city’s extensive metro system.

From the impressively grand designs of the metro, you’d never guess the city has had such a disrupted past.

I tested it from the deepest metro station in the world, 105.5 meters (346 feet), at Arsenalna back to my hotel in Podil.

A large part of the city’s three-million-strong population must be in the metro, or at least that’s what the rush and chaos feel like.

I recommend being quick and nimble on the system: while the trains arrive every few minutes, blink and you might miss the train doors open and close.

After two days exploring the best of Kiev but barely touching the surface, I take a one-hour flight to Odessa, the country’s southern city resting on the north-west tip of the Black Sea’s coastline.

Constructed by a Dutchman, invaded by the Ottoman and Russian empires and a place of ex-Turkish settlement, the clash of culture and architecture is wonderfully haphazard but manages to remain distinctly Ukrainian.

Odessa has a strikingly different culture, feel and climate from Kiev, leaning more towards Mediterranean than Eastern European. Ukrainians visit Odessa as a holiday destination because, as a local explains: “It feels like a different country”.

While Kiev’s pace is steady but sure, the energy from walking around Odessa is frantic.

A younger city than Kiev, Odessa’s streets are based on a grid system, the overwhelming majority of which have free public Wi-Fi, so navigation on foot is the simplest and best way to explore the city.

Within a 25-minute walk of each other are the Opera House (tickets for shows start at $15 [Dh55]), the Potemkin Steps descending into the Black Sea port, the City Garden, cafes and the trinket shopper’s and art gallery-phile’s ideal haven, Primorsky Boulevard.

Similar to Kiev, the architecture spans many centuries. Odessa however, has more pastel-coloured, Venetian-style architecture, contributing to its seaside holiday atmosphere.

The culture strikes me as more laid-back and even the local fashion is more diverse.

Aside from the port area, the rest of Odessa’s coast is beach, accessible all year round but probably most enjoyable between May and September.

Unlike its neighbouring cities, English is more widely spoken in Odessa, which makes navigating through a food menu much easier, but chips away at the fun element of surprise when the dishes arrive at the table.

My most memorable meal in Ukraine is a 10-minute drive outside the Odessa city centre.

A mid-20th-century, Soviet cottage-and-garden restaurant, Dacha serves a full variety of local cuisine, locally grown vegetables, condiments and take-home preserves; the relaxing garden venue, with 1950s-style decor, makes diners feel compelled to take time over a meal, rather than rush through.

The Odessa Museum of Arts contains a huge collection of Russian and Ukrainian arts from the 19th and 20th centuries, contained in a palace presented to the city by an art-loving patron.

Aside from the two floors of art above ground, there are two floors of softly illuminated underground grottos below the palace that can only be accessed with a guide.

Following the short spiral footpath into the palace’s underground, the guide explains how the grottos, which stay a constant temperature all year round, were frequented for secret meetings, fateful passions and winter parties.

Central Odessa has a full range of hotels, hostels and bed-and-breakfasts.

During the summer months, I recommended booking into a coastal hotel.

For autumn and winter, any hotel within the pedestrian-friendly centre of Odessa is within a 15-minute walk of the city’s most impressive landmarks.

Perhaps learning about Stalin’s regime at school had left me with assumption that Ukraine would be a place still trying to shake off the grey cloud that war and invasion had left.

The country has instead used the unstable years to it’s advantage by constantly regenerating to illustrate the colourful variety of Ukraine’s roots combining Cossack, Slavic, Russian, Polish, Turkish and Mongol influences.

Five days is enough time to enjoy the best of Ukraine’s landmarks, leaving me with an appetite to learn more about its history and explore more of Eastern Europe, and the knowledge that a Mediterranean-style beach holiday is only five hours away from Dubai.

Source: The Dubai National

Thursday, October 24, 2013

Don’t Let Russia Bully Ukraine

BRUSSELS, Belgium -- Europe’s leaders may soon have to choose between a woman and a nation.

They should resist the impulse to pick Yulia Tymoshenko over her 46 million fellow Ukrainians.

There is a strong argument for doing just that:

Ukraine, which wants to sign a trade deal and wider association agreement with the European Union at a summit Nov. 28-29 in the Lithuanian capital of Vilnius, has imprisoned Tymoshenko for political reasons.

The EU has set Tymoshenko’s release as a condition for the deal, whose primary purpose is to instill the bloc’s standards and values.

Why compromise these very values?

Yet nothing is so simple when it comes to Ukraine, a nation torn by its history, trade and geography, between Russia to the east and the EU to the west.

What the EU’s leaders need to decide is how their economic and security interests -- and those of Ukrainians in developing a more accountable, prosperous and independent country -- will be best served.

Refusing Ukraine also risks compromising those goals and values.

Tymoshenko, a former prime minister who made a fortune in Ukraine’s spectacularly corrupt natural gas transit business in the 1990s, is hardly an Eastern European Aung San Suu Kyi.

She is, however, a symbol.

Her jailing in connection with a gas contract she negotiated with Russia in 2009 is at best selective justice, common in Ukraine under President Viktor Yanukovych.

She and Yanukovych -- the former pro-Western; the latter long seen as pro-Russia -- have personified Ukraine’s two warring impulses.

They are now united, however, on the importance of Ukraine’s integration with the EU.

Russian President Vladimir Putin has helped to clarify why the deal with the EU matters.

He is demanding that Ukraine join a rival group, the Eurasian Customs Union, which he started in late 2011 with Kazakhstan and Belarus.

It has become clear that the Customs Union is just a ruse for restoring Russian influence.

Russia has blocked imports at the border with Ukraine, banned wine imports from Moldova, warned of winter gas supply disruptions, and even threatened Armenia with the loss of security guarantees -- all to coerce these countries into joining its union.

Europe’s leaders should by now have learned the dangers of allowing Russia to bully its neighbors, as well as the value of having stable democracies on their borders.

If Europe rejects Ukraine over the Tymoshenko issue, the decision would be interpreted across the region as EU weakness in the face of opposition from Russia, rather than strength of principle.

Ukraine would immediately come under pressure to cut a deal with its domineering neighbor, because it is near bankruptcy.

History also shows that non-oil economies of the ex-communist bloc fare better when they integrate with the EU.

Ukraine badly needs the kind of institutional and legal regime change that only the EU can reliably provide.

It also needs to make the painful adjustments -- ending domestic energy subsidies, for example -- that the International Monetary Fund is demanding in exchange for restoring a $15 billion loan.

Russia, on the other hand, offers Ukrainians just one thing: less expensive energy that would come not so much with strings attached as steel cables.

Even from the standpoint of Tymoshenko and her supporters, it makes sense for the EU to sign up Ukraine in Vilnius.

The logic is straightforward:

If Ukraine is rebuffed, Yanukovych is unlikely to suddenly release his archrival, who could then compete against him in elections in 2015.

By contrast, if the trade and association agreements go forward, the EU would have more numerous and promising opportunities to continue pressing Ukraine over Tymoshenko.

Yanukovych’s conversion to EU values is certainly disingenuous, and rewarding him for the mismanagement of his country is repugnant.

Yet the stakes, for Europeans as well as Ukrainians, are much larger than either him or Tymoshenko.

Source: Bloomberg

Russian, Ukrainian Presidents To Discuss Ukraine’s Integration In Europe

MOSCOW, Russia -- Russia’s President Vladimir Putin and Ukraine’s President Viktor Yanukovich are expected to hold talks Thursday on the sidelines of a summit of the Supreme Eurasian Economic council that will be held in the Belarusian capital Minsk, Putin’s aide Yuri Ushakov told reporters Monday night.

Vladimir Putin (R) and Viktor Yanukovych

"The agenda of these talks is very broad," he said.

Ushakov confirmed that one of the issues the two presidents will take up concerns the choice between the associated membership of the EU and participation in the integration processes as part of the CIS Customs Union, which Ukraine is expected to make very soon.

"I think this problem overshadows all other aspects of our relationship and, quite naturally, the two Presidents will take it up in one way or another," he said.

Ukraine may sign the agreement on association with the EU at a summit meeting of the so-called Eastern Partnership in Vilnius next month.

The process of Ukraine’s integration in the EU has turned into a cornerstone problem of Russian-Ukrainian relations in recent months.

Moscow has said many a time that Ukraine will lose the preference in has in trade with Russia now after it gets associated membership of the EU.

President Putin, for instance, said in early October that the Russian government would have to take decisions on protecting its national market if Ukraine signed the association agreement.

In addition, Ukraine will not be able to become a full-fledged member of the Customs Union embracing Russia, Belarus and Kazakhstan at present.

Source: Voice of Russia

Wednesday, October 23, 2013

EU Ministers Urge Ukraine To Stop Bluffing On Tymoshenko

KIEV, Ukraine -- Two European Union ministers urged Ukraine on Tuesday to stop “bluffing” and reach a deal on the release of jailed former prime minister Yulia Tymoshenko because time was running out.

Ukraine's FM Leonid Kozhara (C), Poland's FM Radoslaw Sikorski (L) and Sweden's FM Carl Bildt following a meeting with Ukraine's President Viktor Yanukovych in Kyiv, October 22, 2013.

Polish Foreign Minister Radoslaw Sikorski and Sweden's Carl Bildt met Ukrainian President Viktor Yanukovych amid a flurry of diplomatic activity aimed at nailing down a compromise on the Tymoshenko row which threatens the signing of landmark agreements with the EU next month.

The 28-member bloc says the opposition leader, Yanukovych's fiercest opponent, was the victim of a political trial when she was jailed for seven years in 2011 for abuse of office.

Her case has become symbolic for the EU of “selective justice” which the bloc wants ended in the former Soviet republic before agreements on association and free trade are signed in Vilnius, Lithuania, on November 28.

Though he badly wants the agreements to cement a course of Euro-integration, Yanukovych is anxious to keep Tymoshenko out of action as a political force as he prepares for the run-up to a re-election bid in February 2015 and has stalled over releasing her.

With pressure mounting on him, he has now offered now to sign a law to allow her to go to EU member Germany for medical treatment for spinal problems, if such a draft were adopted by parliament.

But he has balked at a call by European mediators to pardon her and wipe out altogether her sentence - something which opposition supporters of Tymoshenko are still asking for.

Drafts of possible legislation floated by pro-Yanukovych deputies envisage her going to Germany only as a convicted criminal and returning to Ukraine to complete her sentence after treatment.

"Time for action" 

As politicians from the ruling Regions Party and the opposition wrangled over a solution, the two EU ministers, Sikorski and Bildt, warned time was running out. 

“The time for bluffing is over on both sides now. It's time for action,” Sikorski said standing alongside Bildt after a meeting of more than one hour with Yanukovych in Kiev.

The agreements scheduled to be signed in Vilnius would mark a historic shift towards the West and away from Russia for Ukraine, a former Soviet republic.

Irish politician Pat Cox and former Polish President Aleksander Kwasniewski, EU envoys who are shuttling to and fro in pursuit of a compromise, saw Tymoshenko in hospital in Kharkiv where she is being treated under prison guard.

They also met a senior member of Ukraine's presidential administration and Prime Minister Mykola Azarov.

There was no word from them on how negotiations were going and it was not known if they were still pressing for a pardon for her.

The two men will report back to the European Parliament in time for a decisive, pre-summit meeting by the EU on November 18 when the 28 member states will try to map out a joint position on Ukraine.

Sikorski and Bildt declined to go into details of what they themselves discussed with Yanukovych.

They declined too to say how Cox and Kwasniewski's mission was progressing, but added their findings would be crucial.

“We will not go into details, but what they report will be decisive. If there is a green light from Pat Cox and Alexander Kwasniewski there will be a green light for Ukraine in Europe,” Bildt said.

“Without a green light from them, there will not be a green light. This is the political reality of the day ... We are now approaching crunch time,” he said.

There was no word from Tymoshenko on whether she was prepared to accept Yanukovych's proposal.

Her party, Batkivshchyna, said on Monday that the solution lay solely in Yanukovych's hands and did not require any new laws being passed.

Source: Voice of America

Rasmussen: No NATO Membership For Ukraine, Georgia

BRUSSELS, Belgium -- Ukraine and Georgia will not join NATO next year, the trans-Atlantic alliance's top official said Tuesday.

NATO Secretary General Anders Fogh Rasmussen.

NATO Secretary General Anders Fogh Rasmussen said Ukraine decided to end its long-standing bid to join the North Atlantic Treaty Organization while Georgia remained interested but would not become a member in 2014, Russia's RIA Novosti news service reported.

Both countries will still have partnership action plans with the alliance and will still work together, Rasmussen said before a two-day NATO defense ministers' meeting began in Brussels.

Ukraine and Georgia, lobbying to become NATO members for years, both enjoy full support for their bids from the United States, but alliance members rejected a proposal to offer them membership in 2008, RIA Novosti said.

Russia has opposed eastward expansion by NATO, particularly when it involves former Soviet Union republics.

Rasmussen also said the alliance does not plan to create any new formal coalitions with the Collective Security Treaty Organization, a loose Eurasian military alliance based in Russia.

Officials said NATO-Russia cooperation, improving capabilities and progress in Afghanistan were the top agenda items when the alliance's defense ministers meet Tuesday and Wednesday.

The ministers also will discuss defending against cyberattacks, NATO's Ballistic Missile Defense system and review NATO reforms, NATO said on its website.

Ministers also will consider the next step in the alliance's Connected Forces Initiative, focusing on NATO's training, education and exercises program after the coalition force's mission in Afghanistan ends in 2014.

A NATO-Russia Council is planned for Wednesday, officials said.

Among other things, NATO ministers and Russian Defense Minister Sergey Shoygu will discuss international security issues, including Syria.


Tuesday, October 22, 2013

EU Is Damned Either Way On Ukraine

LONDON, England -- With little more than a month to go before the European Union is due to sign trade and association agreements with four former Soviet nations, Europe’s leaders face an impossible dilemma over Ukraine.

Yulia Tymoshenko (L) and Viktor Yanukovych

The EU can sign the deal at a ceremony in the Lithuanian capital of Vilnius on Nov. 28-29, allowing Ukraine to manipulate the rules and standards that define the union.

Or its member countries can refuse and risk consigning Ukraine to a future under more authoritarian rule and deeper dependency upon Russia.

Given the unpleasantness of that choice, it came as no surprise Oct. 21 when EU foreign ministers meeting to discuss the issue in Luxembourg gave no clear recommendation either way on what their governments would do.

In immediate terms, the issue turns on the fate of former Ukrainian Prime Minister Yulia Tymoshenko.

Her imprisonment most visibly symbolizes the selective justice that EU leaders said her country would need to overcome for the agreement to be signed, as well as for the associated Deep and Comprehensive Free Trade Area to come into effect.

President Viktor Yanukovych refuses to pardon Tymoshenko, who was convicted in 2011 of abuse of office for her negotiation of a natural gas contract with Russia while she was prime minister.

At the same time, the state has frozen two further cases it opened against her, and intricate efforts are under way to allow her to seek medical treatment under custody in Berlin while guaranteeing her exclusion from Ukrainian politics.

Turning Tables 

There probably is no such guarantee that the EU could accept.

Opinion polls suggest that if a free and fair election were held in Ukraine today, Yanukovych would probably lose, with or without Tymoshenko in the running.

In 2015, when elections are due to be held, the risk is that Tymoshenko would prevail even in a rigged contest.

For Yanukovych, the stakes involve not only losing power but also a turning of the tables and his own possible imprisonment for abuse of power.

Tymoshenko, however, is only a stumbling block.

The deeper issues are twofold.

First, unless Ukraine changes the way the state and economy work, it could suffer hardship under the free-trade area and possibly damage the EU’s single market.

This is why, in December 2012, the EU made the association conditional on progress in three areas -- justice, the electoral system and institutional reform (a polite euphemism for severing the link between politics, business and crime).

The past few weeks have witnessed unprecedented activity in Ukraine to make the required changes to legislation.

Several high-profile figures subjected to selective justice have been released from prison or had travel bans lifted.

Nevertheless, perceptions persist that these efforts are for show and that Ukraine’s patrimonial system of power and rent-seeking remains firmly in place.

So although, for example, the criminal code has been much improved, the interior ministry, the prosecutor’s office and tax service remain unreformed.

Most personnel associated with the malpractice Ukraine has agreed to end remain in place.

What does this say about the government’s intentions?

Yanukovych did not create the link between politics, business and crime in Ukraine, but since his election in 2010, he has expanded the abuses of a predatory and deprofessionalized state that discourages entrepreneurship and embitters ordinary citizens.

He views association with the EU as a political resource rather than a blueprint for change.

Forfeit Leverage 

If the EU signs the agreement with Ukraine, it will vindicate the tactics of a tenacious, uncooperative and unpopular government.

It will also risk an anti-EU backlash in Ukraine as rules are applied selectively and the rigors of the free-trade area bite.

If, however, the EU refuses to sign, it will forfeit any leverage it has and risk propelling Yanukovych into hard authoritarianism.

Without Ukraine, the EU’s Eastern Partnership -- for which November’s trade and association agreements are the substance -- will probably atrophy.

The initialing of the equivalent agreements with Moldova and Georgia might provide some compensation but probably not enough to arrest the trend.

Armenia, the fourth country that was due to sign an association agreement, has already had a last-minute change of heart, under pressure from Russia.

Russia is the second major issue for the EU.

It has invested enormous political capital into a competing scheme of integration in its neighborhood, the Eurasian Customs Union, which it hopes to develop into a more politically integrated Eurasian Union.

The EU’s Eastern Partnership, like the bloc itself, is a normative project built upon principles and practices.

These are markedly different from the “civilizational” norms and “cultural code” that Russia wants to maintain in what it calls its sphere of privileged interests.

Unlike an association with the EU, the Eurasian alternative does not require Ukraine to improve its standards of governance, reform its system of justice, strengthen property rights, or apply best practices to the relationship between business, consumers and the state.

To date, only Russia, Kazakhstan and Belarus -- all authoritarian nations -- have joined the Eurasian Customs Union.

The EU might express regrets if Ukraine and other Eastern Partnership countries were to opt freely for President Vladimir Putin’s vision, but it would not seriously object.

But the EU has expressed concern that these countries are being coerced into making the choice.

Putin says this is just business -- if Ukraine lowers its tariffs on EU imports, the Customs Union must take “protective measures.”

Yet this does not explain the leaking of an inventory of actions that Russia has contemplated taking against Ukraine should it sign up with the EU, its threat to withdraw security guarantees from Armenia, the brutal choices put to Moldova over energy and migrant workers, or the raft of trade blockages on unsubstantiated sanitary grounds taken against these countries in recent months.

Russia’s choices are much clearer than those facing the EU’s leaders.

If Ukraine enters the EU’s normative space, Putin’s effort to build what he calls a “distinctive” civilizational model to the EU’s rule-based one will be moribund.

Russia is determined not to let this happen and, thanks to Ukraine’s self-inflicted infirmities, sees little chance that it will, whether it signs the EU’s Association Agreement next month or not.

Vilnius will not be the end of this story.

Source: Bloomberg

Europe Warns Ukraine Time Running Out For Tymoshenko Solution

BRUSSELS, Belgium -- The party of Ukraine's jailed opposition leader Yulia Tymoshenko on Monday rejected President Viktor Yanukovich's terms for her release and European envoys said time was running out to solve a row threatening agreements with the European Union.

Yevgenia Tymoshenko, daughter of jailed Ukranian former Prime Minister and opposition leader Yulia Tymoshenko, addresses supporters of opposition parties in front of a screen displaying a picture of her mother, during a unification congress of opposition parties on a central square in Kiev June 15, 2013.

Tymoshenko, 52, a former prime minister, was jailed for seven years in 2011 for abuse of office after what Western governments say was a political trial.

EU envoys have asked Yanukovich to pardon his arch-foe so she can travel as a free person to Germany for treatment for back problems, a compromise seen as guaranteeing signature of landmark deals on association and free trade on November 28 in Vilnius, Lithuania.

With pressure mounting on him, Yanukovich on October 17 said he was ready to sign a law to allow her to go abroad for treatment, if such a draft was adopted by parliament.

But he did not mention granting her a pardon and floated drafts have indicated she would be allowed to go only as a convicted criminal and would be expected to return to Ukraine to complete her sentence after treatment.

On Monday, Yanukovich confirmed his move, telling visiting Czech President Milos Zeman that a draft law on the question would go to parliament soon.

Though there was no direct word from Tymoshenko, her party Batkyvshchyna said a solution lay solely in Yanukovich's hands and did not require any new laws being passed.

Nor, it said, did Yanukovich's offer meet the EU's requirement to end the application of "selective justice" in Ukraine under which politicians could pressure courts to victimize their opponents.

"We again emphasize that ending the problem of politically-motivated justice and solving the problem of Yulia Tymoshenko lies exclusively with President Viktor Yanukovich," it said in a statement.

The agreements due to be signed with the EU will mark a big shift in Ukraine's trade policy westwards away from its old Soviet master Russia, and failure to sign in Vilnius would be a huge setback for Yanukovich's policy of Euro-integration.

At the same time, he is anxious to keep Tymoshenko out of action as a political force as he prepares for the run-up to a bid for re-election in February 2015.

She has made it clear she envisages returning to the political fray if and when the verdict and sentence against her is quashed.


Two European envoys, who have shuttled in and out of Kiev for a year and a half to nail down a compromise to save the Vilnius summit, broadcast a message of urgency when they arrived in the Ukrainian capital on Monday for talks.

"Time to secure a viable settlement is running out," Irish politician Pat Cox and former Polish President Aleksander Kwasniewski said in a statement.

Apart from seeing members of Yanukovich's administration, and possibly Yanukovich himself, they were also scheduled to travel to the northern town of Kharkiv to see Tymoshenko, who is being treated in hospital there under prison guard.

Moves by the ruling Party of the Regions to begin drawing up a draft law as envisaged by Yanukovich ran into opposition from pro-Tymoshenko supporters at a parliamentary meeting.

Former economy minister Arseny Yatsenyuk, who leads the pro-Tymoshenko faction in parliament, said there was a request for a pardon before Yanukovich and therefore a solution lay with him and not with parliament.

"We need a compromise between the government, our European partners and one which Yulia Tymoshenko agrees with," he said.

Urging Yanukovich's leadership to solve the issue through the EU mediation mission, he said:

"We can now draw a line under (a period of ) shameful Ukrainian history in which the political opponent of an acting president was locked up, and close the Pandora's box opened by your government."

EU ministers meeting in Luxembourg urged Kiev to move quickly to resolve the row but appeared divided over how to approach it.

Sweden's Carl Bildt said there was "not much" time left for Kiev to placate Europe and suggested Stockholm may not by satisfied by any plans to allow Tymoshenko to seek medical treatment in Germany on condition she returns later.

"That opens up the question what happens thereafter. Will Ukraine demand she is extradited and brought back to prison? That would be a detour not a solution," he told reporters.

Dutch Foreign Minister Frans Timmermans said Ukraine had yet to meet all conditions related to its justice system before it can win the trade deal with Europe in November.

"There are other requirements on the table. The Tymoshenko case is important but that's not the only criterion," he said.

Source: Yahoo News