Friday, February 27, 2009

Yushchenko backs off after G7 pressure?

According to 'Segodnya', President Yushchenko has proposed declaring a moratorium on political quarrels and forgetting about the presidential elections until 1st July.

The declaration was made during a meeting with prime minister Tymoshenko, VR chairman Volodymyr Lytvyn and opposition representative and PoR old-timer Mykola Azarov.

Yushchenko also suggested forgoing all attempts to disturb the population further by means of rash statements in the mass media .

"All you will be Presidents in your time. But please forget about the elections until the 1st of July. There's no need to rush. I am convinced, victory will be achieved by the person who should win. The main thing is that Ukraine does not lose," said Yushchenko.

The sudden change of tack by the president, who has conducted a vicious campaign of criticism against the Tymoshenko government for many months, may have been the product of Thursday's encounter between Yushchenko and the ambassadors of the G7 countries, IMF representatives, and World Bank officials who, according to "Delo" presented the Ukrainian head of our state with an ultimatum: either make peace with Tymoshenko and, together with the Cabinet of Ministers, begin to satisfy IMF requirements, or the major states will change their "model of collaboration" with Ukraine, and leave the country short of the desperately needed $16.5Bn IMF credits.

"Delo" claims western governments are perturbed fact that Ukraine could become [dangerously] financially dependent on Russia. Indeed Moscow, in contrast to the IMF, could provide credit support without excessive conditions.

So was the Russian loans affair just a clever double-bluff to ease IMF's opening of their wallets?

As for the 'moratorium' - the toys will be flying around the sand pit within just a few days again, no doubt.

p.s. 'Oboz' is reporting that National Security and Defence Council secretary, Raisa Bohatyryova, has been sacked by the president, but no ukaz has yet appeared on the presidential website. [see previous posting on FN]

The sacking, according to 'Oboz' was supposedly linked to her reluctance to take part in a 'power scenario'.

Thursday, February 26, 2009

President takes heavy flak

Yesterday, in a TV appearance, former president Leonid Kravchuk called upon president Yushchenko, in no uncertain terms, to resign in a 'humane scenario'. More on this in English, here:

The president's response, on his official site, here

Some in PoR are goading BYuT into collecting signatures in parliament to start impeachment proceedings against the president, even though Kravchuk himself is against such a move. First vice-speaker of parliament Oleksandr Lavrynovych admits VR deputies could undertake such proceedings before any fresh presidential elections take place next winter.

And there are stories circulating [e.g. in 'Segodnya'] that National Security and Defence Council Secretary, formerly one of PoR's most senior leaders, Raisa Bohatyryova, may soon be sacked from her job.

She has, apparently, not been active enough in 'fighting Tymoshenko', and could be replaced by Valeriy Khoroshkovsky, who is rumoured to be close to our old friend Dmytro Firtash..

'Segodnya' [owned by Rinat Akhmetov] claims the Bohatyryova is 'traditionally' considered to have good connections with Donetsk business circles, whilst Firtash is the PM's enemy #1. And relations between YuVT and these business circles have 'warmed' recently.

p.s. Today's 'Segodnya' reports that 23% of Ukrainians wish to see their country and Russia unite to form one state, whilst only 14% of Russians have analagous feelings...interesting..

Monday, February 23, 2009

Not all nonsense

By the way, the nonsense I referred to in the Friday post has been from government people who have been quoted here and from some commenters and not from any of the excellent efforts that LEVko has made here. He deserves our gratitude and more credit than he has had and probably less meddling from me.

I don't know of anyone who has done a better job of keeping us all informed on the Ukrainian situation than he has.

LEVko, would you email me? I lost all of your contact info. when my harddrive went dead.

Friday, February 20, 2009

Some posts removed and other things

We allow just about anything to be posted here including things we don't agree with. And some of what has been posted here in the past in the comments section has been nonsense to my way of thinking. But we post it.

We have been careful to allow everyone to have their say even if they want to remain anonymous to say it. So I will be deleting any comments that refer to anyone by name who wishes to remain anonymous nor w2ill I allow the same to be published when the3y come up for moderation.

By the way, people in our area are not buying what here is called sausage but what is more like bologna. That is what the shop owner down the street is saying. That is almost a staple in the diet here. And they are not ordering things like cakes and the like. So Roshen is not going to be sending much of anything this way.

And one home improvement supply store--not a chain--that was busy before September of last year with cars and trucks going in and out at all times of the day, now sits with the parking lot empty quite a bit. (They were very happy we stopped in and ordered a load of drywall and other things.)

Anecdotal yes, but real nonetheless.

And the leaders bicker.

We tuned into Radio Era the other day and head s session of the Rada. They were taking about some kind of bill to establish some sorts of relations with Morocco and Albania. When one deputy said that this was frivolous in light of what was happening out in the country, he was told, "Your two minutes are up."

I am surprised though at how patient the people still are. Maybe they've seen it all before? Maybe they figure it makes no difference?

Monday, February 16, 2009

More gloomy predictions

More gloomy news from Europe here

A portion:

"Bank analysts predict that Ukraine is heading for a historic default on its national debt, in a scenario that could complicate EU-Ukraine relations and have an impact on the recent Russia-Ukraine gas transit deal.

"The market is pricing in a probability of sovereign default of almost 90 percent," Commerzbank analyst Ulrich Leuchtmann told EUobserver on Monday (16 February).

Gloomy predictions

Failure to save East Europe will lead to worldwide meltdown, according to this analyst

"The unfolding debt drama in Russia, Ukraine, and the EU states of Eastern Europe has reached acute danger point....If one spark jumps across the eurozone line, we will have global systemic crisis within days. Are the firemen ready?"

No doubt president Yushchenko will moan it was all Yulia Tymoshenko's fault..

Thursday, February 12, 2009

Talk of presidential rule..

This [loosely translated portion] from an article in today's 'Segodnya':

Prosecutor-General and State Security Service [SBU] thrown at Tymoshenko

Decision by National Security and Defence Council theoretically opens up path to direct presidential rule

The war between Viktor Yushchenko and Yulia Tymoshenko is gaining momentum. On Wednesday a resolution by the NSDC dated 10th February was announced, [read it here]in which the gas agreements concluded by premiers Tymoshenko and Putin were 'blown to bits'. The agreements were called a threat to the security of the country. The Prosecutor General's office and SBU have been specifically instructed to verify the legality of the actions of the Ukrainian officials (i.e. Tymoshenko) in signing the treaty with Russia.

On Tuesday the head of the parliamentary temporary investigation commission investigating the functioning of the country's gas transport system, Ina Bohoslovskaya, promised to refer the matter to the Prosecutor-General's office, requesting the opening of criminal case against the premier and her removal from office for misuse of her official position during the gas talks with Moscow.

After a decision is made by the NSDC, if the Prosecutor-General's office reveals problems with Tymoshenko, her removal could theoretically take place (Yushchenko wanted to deal with the-then prime minister Viktor Yanukovych during the spring crisis of 2007 in a similar fashion).

What happens next? As we have already written, political scientist Vadim Karasyov, who is close to the presidential secretariat, considers the introduction of direct presidential rule an alternative to the "economic dictatorship of Tymoshenko".

The 'Segodnya' article adds that others are not sure about this. "Yushchenko is not capable of dictatorship, it is not in his character," says Mikhail Chechetov..


Wednesday, February 11, 2009

Gas problems in PoR too..

Whilst president Yushchenko and PM Tymoshenko are fighting like cat and dog, Party of Regions are having their problems too, as described in an article in today's big-selling 'Segodya' newspaper, which owned by major PoR sponsor and PoR parliamentary deputy Rinat Akhmetov.

Here are some loosely translated portions:

Leading figures in PoR exchange harsh words

This week the conflict inside PoR between the "RosUkrEnergo group" of Lyovochkin and Boyko on one side, and prominent 'Regionaly' Boris Kolesnikov and Andriy Klyuev on the other, spilled out into the open.

Last week they threw accusations at each other behind closed doors, away from the eyes and ears of the public. But now they have begun to do this quite openly.

The dispute flared up after an angry statement from Lyovochkin, who some ill-wishers want to exclude from the party. He said that "persons who were active in the bribing of deputies and causing the VR's disintegration in 2006-2007, those, contaminated by corruption and extortion in 2007, who 'bought up' deputies from the BYuT-NUNS coalition, used money stolen during this period to purchase houses in Dubai for themselves… These guys are ready to betray and submit the party to BYuT, and give up party principles, in exchange for places in Tymoshenko's KabMin".

Nestor Shufrich, from the other camp, compared Lyovochkin with garbage. He claimed Lyovochkin had hindered Yanukovych's presidential campaign in 2004, when he helped to establish contacts betweenViktor Yushchenko and Leonid Kuchma.

Meanwhile PoR leader Viktor Yanukovych was in Moscow today, where he met the new Russian Orthodox Patriarch Kirill to discuss the forthcoming visit of the Patriarch to Ukraine [and offering prayers for party unity?]

The dispute between these two PoR wings has been rumbling for a while. Unsurprisingly, there is a whiff of gas about it..

Monday, February 09, 2009

Tymoshenko in Munich

Listen to PM Yulia Tymoshenko's speech: "NATO, Russia, oil and gas", [in Russian] at the 45th Munich Security Conference yesterday, here

"I would dearly want to see Ukraine as a participant of a European policy of security and defence," she said, adding that the collective system of security and defence suggested by Chancellor Merkel and President Sarkosy, would not be an alternative to NATO, but a "widening of possibilities".

"The European policy of security and defence is an intensification of all processes of integration, and a strengthening of security and defence, and this is why it cannot be considered an alternative [to Ukraine's membership in NATO]", but it would provide a place for countries that cannot, or do not want to join NATO.

She called construction of alternative gas pipelines bypassing Ukraine a "crazy idea," and suggested a unified system for determining the price of gas and its transit, claiming that the recent gas crisis revealed the absence of such a policy.

She intends to make an effort to overcome te recent problems and reconcile Ukraine and Russia.

She had a meeting with US VP Joe Biden, beating president Yushchenko and Russian leaders to a face-to-face conversation with the 'top bananas' of the new US administration. Only she, Merkel and Sarkosy had this 'honour'.

Significantly, she sat in the front row with Biden and Eurocommissioner Javier Solana during the conference. Presidents of other former Soviet republics were seated further back in rows two and three. President Yushchenko was fuming in Kyiv, no doubt.

Friday, February 06, 2009

Only 10 NUNS deputies support ousting of Tymshenko's government

Only 10 NUNS deputies supported a PoR-sponsored no confidence motion in the Tymoshenko-led government in the Ukrainian parliament today. Amongst the 10 were presidential secretariat head Viktor Baloha's 'Yedyniy Tsentr' group, and Yushchenko's brother Petro.

The numbers are very bad news for the president. The pro-presidential NUNS entered the current parliament with 72 deputies in Autumn 2007. With an ever-receding power base, the chances of a second presidential term for Yushchenko are almost nil.

PoR are to hold a party conference, maybe next month, to decide where they go from here.

Meanwhile Viktor Baloha describes Tymoshenko's progress report delivered before parliament today as having "all the characteristics of a theatrical production with elements of fantasy"; and "of representing the country as a fairytale state where all the good things are performed by a magic fairy".

"Yu.Tymoshenko utilised all of her actor's talents and clever juggling of facts to remove resposibility for personal failings in the economy," added Baloha. [Isn't this what all politicians do?]

Tuesday, February 03, 2009

Aslund on Russian-Ukrainian gas war

I'm posting this article by Anders Aslund in the 'Moscow Times', in full, in case it goes to 'subscribers-only'

Will the Real Gazprom CEO Please Stand Up

The great Russian-Ukrainian gas war is over, and it is time to assess the outcome. On the surface, the result looks promising. Finally, Russia and Ukraine have concluded a normal long-term gas agreement. Both gas prices and transit tariffs are market-related and based on clear principles without shady intermediaries or arbitrariness. The gas prices will probably average $230 per 1,000 cubic meters in 2009, while investment bankers had expected $250.

Prime Minister Vladimir Putin claimed that Ukraine had an obligation to guarantee transit of Russia's gas since Kiev ratified the Energy Charter Treaty (which Moscow has not ratified). Putin lamented that the "European Union is placing Russia and Ukraine in the same category," but the supplier in this transaction is also obligated to deliver. Vedomosti perhaps put it best: "Gazprom's reliability as a supplier is inseparable from Ukraine's as a transit state."

Corruption and Ukrainian domestic politics were major factors in a conflict in which the prime antagonists were Prime Minister Yulia Tymoshenko and Dmitry Firtash, partial owner of the shady intermediary RosUkrEnergo. Both Tymoshenko and Putin claim that RosUkrEnergo through Ukrainian President Viktor Yushchenko's administration disrupted the gas negotiations on Dec. 31.

Tymoshenko walked away from this conflict with an outstanding victory. RosUkrEnergo has been excluded from the Russian-Ukrainian gas trade, losing profits of at least $1 billion a year. At his news conference on Jan. 8, Putin implausibly denied that he knew Firtash, although both were co-founders of RosUkrEnergo in July 2004. Subsequently, Gazprom sold RosUkrEnergo's debt of $1.7 billion to Naftogaz, allowing Naftogaz to squeeze Firtash out.

"Finally, we eliminated a big political slush fund, which fed several political forces," Tymoshenko said. Firtash has spent lavishly on Ukrainian politics, mainly on former Prime Minister Viktor Yanukovych's Party of the Regions but also on Yushchenko's administration. The elimination of RosUkrEnergo will cleanse Ukrainian politics of gas money. Although Yanukovych has sensibly kept a low profile, his campaign financing will most likely dwindle in the end.

Gazprom's cost in the gas war was very high. Its direct financial loss was about $2 billion, but its reputation has suffered even more since the gas monopoly has proven itself an unreliable supplier. Its customers will try to reduce their dependence on the state-run gas monopoly, but when Gazprom is the problem new pipelines are of little help.

Before the conflict broke out, Gazprom opened a web site that criticized Ukraine. This suggests that Moscow was gearing up for a fight. Gazprom and Putin pulled no punches in going after Kiev. "The current situation shows a high degree of criminalization of power in Ukraine," Putin said.

During the January 2006 Russia-Ukraine gas conflict, Gazprom's stock price skyrocketed because investors were impressed when the company pushed for higher export prices at a time of rising energy prices. During the latest gas war, however, Gazprom's stocks plummeted as investors objected when the company treating its customers recklessly by demanding unrealistically high prices at a time of sharply falling energy prices.
Meanwhile, European gas consumers suffered considerably, and the European Union looked terribly weak, having failed to learn anything from previous gas wars.
But one European politician stands out as a true leader -- German Chancellor Angela Merkel. During Putin's news conference with Merkel on Jan. 16 in Berlin, Merkel lectured him like a teacher to a schoolboy, placing the responsibility on Moscow, and Putin ate his teacher's humble pie.

Austria, France, Hungary, Germany and Italy have quietly built up gas reserves that could last for three months; they have learned the lesson from 2006. Now, other European countries are likely to build up large reserves and further diversify their energy supplies, although this is very expensive.

Putin has the most complex motivation in all of this. By directly commanding Gazprom and taking over the negotiations, Putin confirmed the old assumption that he is the real CEO of Gazprom. Although Ukraine had paid its gas bills by Dec. 30, Putin ordered the disruption in the gas supply, making him the main culprit.

Gazprom's damaged reputation will likely impair its stock price and debt rating. The conflict was also a disaster for Russia's foreign policy. President Dmitry Medvedev's hastily arranged "gas summit" attracted no heads of state and was the largest snub to Russian diplomacy in recent memory.

Putin has been identified as one of RosUkr-Energo's main beneficiaries, but now he has accepted the fact that this middleman will have to be eliminated from gas transactions. Moreover, he looked panicky when he lost himself in technical details, accusing Ukraine of "theft" of tiny gas volumes, far smaller than customary losses.
In the end, the gas war had to be settled by Russian and Ukrainian prime ministers. The press photos showed a strident Ukrainian prime minister, while Putin looked increasingly frustrated.

So why did Putin instigate the gas war in the first place? My suspicion is that his main purpose was to whip up Russian patriotism against Ukraine and enhance support for the government in a time of economic decline. This was perhaps his only success. According to the state-run pollster VTsIOM, 63 percent of Russians believed that Ukraine was solely responsible for the conflict.

Another suspicion is that Putin hoped to destabilize Ukraine by exploiting its domestic divisions and its severe financial crisis. If this were his goal, he failed. Tymoshenko had little choice except to liquidate RosUkrEnergo since it was an issue of her political survival.

After Putin and Tymoshenko signed the gas peace treaty, Ukraine has eliminated a major source of corruption. Now it should reform its distorted energy sector to improve efficiency and save energy. Ukraine must stop subsidizing its imports of gas, and it should also raise the government's purchasing price for domestically produced gas to stimulate domestic production.

And the EU should get more serious about its own energy security. Whatever Putin's motive was, he is likely to offer more shocks as the situation grows worse for both Russia and Putin in a deepening economic crisis. The EU must realize that it needs a Russia policy no less than it requires an energy policy.

Only two winners are apparent -- Tymoshenko and Merkel. There are many losers: Firtash, European gas consumers, Gazprom, its shareholders, Yushchenko and, last but not least, Putin.

Sunday, February 01, 2009

Testosterone-driven president

Read President Yushchenko's latest address to the nation, in English here

Where is this leading to, I wonder?

Last Monday, in the long 'Svoboda Slova' TV programme, PM Tymoshenko expressed fear that Yushchenko is deliberately cranking up the economic crisis in order to establish direct presidential rule...

BTW: "Women tend to be more risk averse when it comes to financial gambles,"... "They tend to trade less and that tends to be a better strategy. With more 'average women' trading, maybe the stock market would look different."

And we wouldn't be in the global mess we're in right now..