Showing posts with label Russia. Show all posts
Showing posts with label Russia. Show all posts
Tuesday, May 18, 2010
Wednesday, May 12, 2010
Revenge or Justice? Old criminal case re-launched against ex-PM of Ukraine Yulia Tymoshenko.
Today, on 12 May 2010, former Prime Minister and current active oppositionist Yulia Tymoshenko visited the Main Investigative Department of the Prosecutor General’s Office of Ukraine. She was officially informed that the criminal case No4912-93 has been re-launched against her.
It is an old, but not very clear story. There is no official information yet on the content of a case, but it is said that the case concerns suspected bribes. I may only say for sure that the criminal case No4912-93 against Mrs. Tymoshenko was opened in May 2004, while she was in a strong opposition to President Leonid Kuchma. Current President Viktor Yanukovych had been serving as a Prime Minister that time.
According to the Prosecutor General’s Office information service, the proceedings were closed in January 2005 – after the Orange Revolution and the inauguration of President Viktor Yushchenko. The planned investigative actions were not completed, PGO press service claims, and the pre-court trial has been re-launched.
Yulia Tymoshenko states that the case No4912-93 was closed in 2004 (e.g. before she came to power). At the today’s press briefing near the office of the PGO Main Investigative Department, she said that the investigation was dismissed due to the absence of crime components. ‘Prosecutor General’s Office is a repressive instrument of Yanukovych”, she argues. “A big shadow project on privatization of state monopolies has been prepared, using the technology of foundation of joint ventures with foreign country. Our political team is the only one which opposes to that”.
The same time some fresh cases have been opened against the team of Yulia Tymoshenko. The Vice Prime Minister of Ukraine Volodymyr Sivkovych has recently informed journalists that investigation of cases on stealing the budgetary funds by the Tymoshenko’s Government is planned to be finished by autumn 2010. By that time “the majority of opposition members will think on how to hide or escape”, he added. The alleged corrupt practices in a budget sphere are estimated to overcome 100 billion UAH (more than 12.5 billion USD).
Meanwhile, on 17-18 May the President of Russia Dmitry Medvedev will visit Ukraine again – to sign more documents, strengthening the ties between two countries. First of all, an agreement on the demarcation of Russia-Ukraine border is to be signed. Let’s see what Ukraine is granting to Russia in this field.
It is interesting to mention that on the day of Medvedev’s arrival to Kiev, Yulia Tymoshenko is invited to the PGO office again. Revenge or justice?
It is an old, but not very clear story. There is no official information yet on the content of a case, but it is said that the case concerns suspected bribes. I may only say for sure that the criminal case No4912-93 against Mrs. Tymoshenko was opened in May 2004, while she was in a strong opposition to President Leonid Kuchma. Current President Viktor Yanukovych had been serving as a Prime Minister that time.
According to the Prosecutor General’s Office information service, the proceedings were closed in January 2005 – after the Orange Revolution and the inauguration of President Viktor Yushchenko. The planned investigative actions were not completed, PGO press service claims, and the pre-court trial has been re-launched.
Yulia Tymoshenko states that the case No4912-93 was closed in 2004 (e.g. before she came to power). At the today’s press briefing near the office of the PGO Main Investigative Department, she said that the investigation was dismissed due to the absence of crime components. ‘Prosecutor General’s Office is a repressive instrument of Yanukovych”, she argues. “A big shadow project on privatization of state monopolies has been prepared, using the technology of foundation of joint ventures with foreign country. Our political team is the only one which opposes to that”.
The same time some fresh cases have been opened against the team of Yulia Tymoshenko. The Vice Prime Minister of Ukraine Volodymyr Sivkovych has recently informed journalists that investigation of cases on stealing the budgetary funds by the Tymoshenko’s Government is planned to be finished by autumn 2010. By that time “the majority of opposition members will think on how to hide or escape”, he added. The alleged corrupt practices in a budget sphere are estimated to overcome 100 billion UAH (more than 12.5 billion USD).
Meanwhile, on 17-18 May the President of Russia Dmitry Medvedev will visit Ukraine again – to sign more documents, strengthening the ties between two countries. First of all, an agreement on the demarcation of Russia-Ukraine border is to be signed. Let’s see what Ukraine is granting to Russia in this field.
It is interesting to mention that on the day of Medvedev’s arrival to Kiev, Yulia Tymoshenko is invited to the PGO office again. Revenge or justice?
Thursday, April 8, 2010
No losers, but Ukraine. The USA and Russia signed START II – a new Strategic Arms Reduction Treaty.
Today, on 8 April 2010 the Presidents of Russia and the United States have signed a new Strategic Arms Reduction Treaty, START II, which is to replace the Treaty between the USA and the USSR on the Reduction and Limitation of Strategic Offensive Arms (START), signed on 31 July 1991, and expired on 5 December 2009.
The new START has already been called as a new significant step in bilateral relations between the Russian Federation and the United States. But, despite all the words about strengthening the international security, the real needs of non-nuclear-weapon countries, and especially the states that unilaterally forswear the nuclear weapons, were left behind the scene. Neither Barack Obama, nor Dmitrir Medvedev hasn’t declared clearly the willingness of their countries to increase credibility of security guarantees for unprotected “little” members of the international community.
As a result, after the expiration of the old START, Ukraine, a pioneer state which performed a unilateral nuclear disarmament, is left de jure unprotected from possible outside aggression by any clear legal mechanism. For this moment Ukraine is not a party of any international legally binding document, which may for sure guarantee its safety.
“There are no losers and winners. All the international community has won”, Dmitry Medvedev said to journalists at the joint press conference with Barack Obama. I would not agree with Mr. Medvedev. There is at least one loser – as it usually happens, the loser is Ukraine.
Let’s refresh our memory. The role of Ukraine in the global nuclear disarmament process may serve as a great example for any country of P5, taking to the account the unilateral decision of the country to become nuclear-weapons-free in early 1990s (last nuclear weapon left Ukraine in 1996).
Following the collapse of the USSR in 1991, the nuclear armory heritage of Ukraine was estimated as the third-largest in the world. In 2002 Ukraine declared its willingness to forswear the nuclear arsenal (let’s not get into the details, why it was decided, and whether this decision was clear-eyed).
But in that early 1990s it was obvious that in return for forswearing one of the biggest nuclear arsenals in the world, Ukraine shall get significant security guarantees (including economy security). The providers of these guarantees should be Russia (as the recipient of the weapons) and the United States.
Such guarantees were impliedly (as Ukraine was one of the parties) provided by mentioned above and now expired Treaty on the Reduction and Limitation of Strategic Offensive Arms (START), signed by the USA and the USSR in 1991. To present a kind of extra-guarantees, after the Trilateral Statement by the Presidents of Ukraine, the USA, and Russia (14 January 1994), the Budapest Memorandum on Security Assurances was signed on 5 December 1994. This document was closely connected with the accession of Ukraine to the Treaty of Non-Proliferation of the Nuclear Weapons (NPT) in November 1994.
Budapest Memorandum was signed by Ukraine, Russia, United States, and United Kingdom. China and France assured their support and security guarantees for Ukraine in the diplomatic notes of 5 December 1994. No questions? There are a lot. The problem is that the Budapest Memorandum doesn’t contain the clear mechanisms of guaranteeing the protection for the country, its independence and territorial integrity from any threats. It presents only the mechanism of holding consultations, when such a threat may appear. Moreover, the decisions, taken during the mentioned consultations, may be vetoed by any member of the UN Security Council (for example, by Russia).
As a result, de jure Ukraine is not a member of any system of collective security today – and, de facto, is unprotected.
Years of efforts of Ukrainian diplomacy were dedicated to attempts to formalize the security assurances for Ukraine from nuclear weapons states. To accomplish this goal, a new comprehensive legally binding treaty shall be worked out, taking to the account the START Treaty expiration. This new Treaty shall be signed by all the nuclear states (P5), and should contain clear description of mechanisms of the implementation of security guarantees for Ukraine, including negative security assurances, as well as the responsibility of nuclear states for violation of these obligations. Such an approach will only enhance and strengthen the non-proliferation regime and global security, in particular in the context of establishment of nuclear weapon free zones.
The START II Treaty demonstrated that in can con be considered as such a document. The new document shows a kind of egocentrism of the super powers: the commitment of Ukraine, Belarus, and Kazakhstan to accede the NPT as non-nuclear-weapon states was only “taken into account” in the preamble of the START II. Cold War ended, but the negligence to needs of ‘small countries’ is still present not only in presidents’ rhetoric, but also in multilateral documents.
Besides, the President of Ukraine Viktor Yanukovych – during his first visit to Russia – proposed to sign the START II Treaty in Kiev, not in Prague. Such a decision could have served at least as a sign of respect to Ukraine as a country dedicated to global disarmament and non-proliferation. Unfortunately, this proposal was not taken seriously.
The next ‘point of hope’ for Ukrainian security is the NPT Review Conference, which is scheduled for May 2010 (New York). Hopefully, the new edition of the NPT Treaty will include some statements to guarantee peace and stability in one of the biggest states of European continent.
The new START has already been called as a new significant step in bilateral relations between the Russian Federation and the United States. But, despite all the words about strengthening the international security, the real needs of non-nuclear-weapon countries, and especially the states that unilaterally forswear the nuclear weapons, were left behind the scene. Neither Barack Obama, nor Dmitrir Medvedev hasn’t declared clearly the willingness of their countries to increase credibility of security guarantees for unprotected “little” members of the international community.
As a result, after the expiration of the old START, Ukraine, a pioneer state which performed a unilateral nuclear disarmament, is left de jure unprotected from possible outside aggression by any clear legal mechanism. For this moment Ukraine is not a party of any international legally binding document, which may for sure guarantee its safety.
“There are no losers and winners. All the international community has won”, Dmitry Medvedev said to journalists at the joint press conference with Barack Obama. I would not agree with Mr. Medvedev. There is at least one loser – as it usually happens, the loser is Ukraine.
Let’s refresh our memory. The role of Ukraine in the global nuclear disarmament process may serve as a great example for any country of P5, taking to the account the unilateral decision of the country to become nuclear-weapons-free in early 1990s (last nuclear weapon left Ukraine in 1996).
Following the collapse of the USSR in 1991, the nuclear armory heritage of Ukraine was estimated as the third-largest in the world. In 2002 Ukraine declared its willingness to forswear the nuclear arsenal (let’s not get into the details, why it was decided, and whether this decision was clear-eyed).
But in that early 1990s it was obvious that in return for forswearing one of the biggest nuclear arsenals in the world, Ukraine shall get significant security guarantees (including economy security). The providers of these guarantees should be Russia (as the recipient of the weapons) and the United States.
Such guarantees were impliedly (as Ukraine was one of the parties) provided by mentioned above and now expired Treaty on the Reduction and Limitation of Strategic Offensive Arms (START), signed by the USA and the USSR in 1991. To present a kind of extra-guarantees, after the Trilateral Statement by the Presidents of Ukraine, the USA, and Russia (14 January 1994), the Budapest Memorandum on Security Assurances was signed on 5 December 1994. This document was closely connected with the accession of Ukraine to the Treaty of Non-Proliferation of the Nuclear Weapons (NPT) in November 1994.
Budapest Memorandum was signed by Ukraine, Russia, United States, and United Kingdom. China and France assured their support and security guarantees for Ukraine in the diplomatic notes of 5 December 1994. No questions? There are a lot. The problem is that the Budapest Memorandum doesn’t contain the clear mechanisms of guaranteeing the protection for the country, its independence and territorial integrity from any threats. It presents only the mechanism of holding consultations, when such a threat may appear. Moreover, the decisions, taken during the mentioned consultations, may be vetoed by any member of the UN Security Council (for example, by Russia).
As a result, de jure Ukraine is not a member of any system of collective security today – and, de facto, is unprotected.
Years of efforts of Ukrainian diplomacy were dedicated to attempts to formalize the security assurances for Ukraine from nuclear weapons states. To accomplish this goal, a new comprehensive legally binding treaty shall be worked out, taking to the account the START Treaty expiration. This new Treaty shall be signed by all the nuclear states (P5), and should contain clear description of mechanisms of the implementation of security guarantees for Ukraine, including negative security assurances, as well as the responsibility of nuclear states for violation of these obligations. Such an approach will only enhance and strengthen the non-proliferation regime and global security, in particular in the context of establishment of nuclear weapon free zones.
The START II Treaty demonstrated that in can con be considered as such a document. The new document shows a kind of egocentrism of the super powers: the commitment of Ukraine, Belarus, and Kazakhstan to accede the NPT as non-nuclear-weapon states was only “taken into account” in the preamble of the START II. Cold War ended, but the negligence to needs of ‘small countries’ is still present not only in presidents’ rhetoric, but also in multilateral documents.
Besides, the President of Ukraine Viktor Yanukovych – during his first visit to Russia – proposed to sign the START II Treaty in Kiev, not in Prague. Such a decision could have served at least as a sign of respect to Ukraine as a country dedicated to global disarmament and non-proliferation. Unfortunately, this proposal was not taken seriously.
The next ‘point of hope’ for Ukrainian security is the NPT Review Conference, which is scheduled for May 2010 (New York). Hopefully, the new edition of the NPT Treaty will include some statements to guarantee peace and stability in one of the biggest states of European continent.
Friday, January 15, 2010
There is a threat to Independence and Integrity. President Yushchenko addressed Ukrainian citizens.
Today on 21.00 the President of Ukraine Viktor Yushchenko has made an extraordinary address to the citizens of Ukraine, translated by all the national TV and radio channels.
“January the 17th may become the day, when country will be pushed to backward direction”, Viktor Yushchenko said. Among the main threats President mentioned “a threat of energy dependence and loss of the influence to the gas transit system”, “a debt load of tens of billions dollars”, “a threat of reconsideration and postponing the European direction”, and “a threat to the integrity and sovereignty” of Ukraine.
Also President has emphasized a threat of the falsification of voting results.
Viktor Yushchenko appealed to election commissions at every polling place (to respect the rule of law), to judges (“you will play the unique role”), and to the ‘shoulder-strap people’ (“your duty is to defend the people’s choice”).
“January the 17th may become the day, when country will be pushed to backward direction”, Viktor Yushchenko said. Among the main threats President mentioned “a threat of energy dependence and loss of the influence to the gas transit system”, “a debt load of tens of billions dollars”, “a threat of reconsideration and postponing the European direction”, and “a threat to the integrity and sovereignty” of Ukraine.
Also President has emphasized a threat of the falsification of voting results.
Viktor Yushchenko appealed to election commissions at every polling place (to respect the rule of law), to judges (“you will play the unique role”), and to the ‘shoulder-strap people’ (“your duty is to defend the people’s choice”).
Sunday, January 10, 2010
Orange sunset as Ukraine poll heralds turn to Russia | World news | The Observer
The Observer: "Orange sunset as Ukraine poll heralds turn to Russia. Five years after Ukraine's Orange Revolution, its next presidential election is between two pro-Moscow candidates"
Both of the front-running candidates in the poll have indicated that firmer ties with Russia, whether for pragmatic or ideological reasons, will be a priority. The poll will thus ring the death knell for a pro-western revolution that degenerated into a morass of political infighting, compounded by economic crisis.
Leading the polls is Viktor Yanukovych, a former prime minister whose initial victory as the Russia-backed candidate in 2004 sparked allegations of a rigged vote. His only serious rival is Yulia Tymoshenko, the prime minister and Moscow's new favoured candidate. President Viktor Yushchenko, hero of the Orange Revolution, now has an approval rating below 3%. Last week he accused Yanukovych and Tymoshenko of comprising a "single Kremlin coalition", such was their joint desire for warmer relations with Moscow.
Whether Yanukovych or Tymoshenko wins, the goal of Nato membership, still aspired to by Yushchenko, is almost certain to be abandoned.
Yanukovych last week repeated his long-held stance that he would take Ukraine off the path to Nato membership. "Ukraine was and will be a non-aligned nation, as it is now," he told.
Wednesday, September 16, 2009
The Lit-Crit. Reflections while reading the FT article ‘Yushchenko hits at Moscow ahead of poll’.
The Financial Times has published an article called ‘Yushchenko hits at Moscow ahead of poll’ on Monday, 14 of September. I’ve read this story only today, and couldn’t stand but to share my strong disagreement with some points, so categorically stated by the author. So, let me give some comments to this article.
‘Yushchenko hits at Moscow ahead of poll’
By Roman Olearchyk in Kiev
Published: September 14 2009 14:16 Last updated: September 14 2009 14:16
Viktor Yushchenko, the embattled Ukrainian president, complained of Russian meddling in Kiev’s domestic affairs ahead of a high-stakes presidential election, which the pro-western leader is expected to lose to a more Kremlin-friendly candidate.
---To be pro-Western doesn’t mean to be totally anti-Russian. I don’t think that the spoiled relationship with the official Moscow may be called as the advantage of the presidency of Mt. Yushchenko.
In a Financial Times interview, Mr Yushchenko said Moscow had waged a smear campaign against Kiev and could try to manipulate Ukraine’s electorate – claims that were also made in 2004 when Mr Yushchenko was propelled to power against a Kremlin-backed candidate. Voters remain split in an east-west axis between Russian and Ukrainian speakers.
--- It is wrong to state that the Ukrainian electorate is divided to Russian speakers and Ukrainian speakers. The author either have never visited East of Ukraine (but I hardly think so), or just wanted to make a witty statement to attract more attention of foreign readers. I would say that there are a lot of Ukrainian speakers in Eastern Ukraine, especially in a countryside: even my own relatives who are living near Donetsk are using Ukrainian as a language of family communication. Yes, there are lot of Russian speakers in the Eastern and Central part of Ukraine – mostly due to the labor migration from other regions of Soviet Union caused by the industrialization growth. But let me assure the respected author of the article that most of the Russian speaking people are feeling themselves as citizens of Ukraine, not servants of Russia as some people want to demonstrate.
The problem of the split of electoral preferences in Ukraine is not the question of language, but sort of a regional solidarity. People from Eastern Ukraine support Viktor Yanukovych and the Party of Regions, first of all, because they think he is going to support their interests, and to make their own regions more prosperous. Such an antagonism to other opponents of Mr. Yanukovych is a simple reaction to their rhetoric, which often sounds unfriendly to the Eastern regions of Ukraine – people from there had been called as thieves, extremists, betrayers, Russian henchmen and so on. The same situation we may see in Western Ukraine, when some politicians are trying to win extra-support, setting Ukrainians against each other.
The issue of Russian interference in Ukraine’s election emerged last month when Dmitry Medvedev, Russia’s president, accused Mr Yushchenko of waging “anti-Russian” policies by seeking membership in the Nato military alliance, and urged the country’s future president to be more friendly.
--- What is a problem with being friendly to your neighbors?
Mr Yushchenko said he expects Russia to stir up separatist sentiment on Ukraine’s Russian-leaning Crimean peninsula. But he ruled out escalation into a military conflict of the kind seen last summer in Georgia, another pro-western ally on post-Soviet turf. Moscow continues to firmly back the independence aspirations of two Georgian breakaway enclaves, one of which, South Ossetia, was at the centre of the war.
Many in Kiev fear a similar scenario in Crimea.“They will try to exploit the ‘Crimean Card’. But, I don’t see a risk that the situation in Georgia would repeat,” said Mr Yushchenko when asked if separatism or military clashes could erupt. “Ukraine is not Georgia,” he said, referring to the country’s larger population, military and geopolitical significance.“Strength today is not in a military position. Employing it would be complete stupidity,” he added.
--- I agree with the statement about the ‘Crimean Card”. Nevertheless, the military scenario in the Crimea is unfortunately possible, but rather in a form of a provoked inside disorder.
Referring to last January’s natural gas stand-off between Kiev and Moscow, which disrupted European supplies, and relentless Russian warnings that recession-battered Ukraine was unable to pay its gas bill, Mr Yushchenko said: “There are a lot of hidden and cynical schemes being played through information airwaves, aimed at discrediting Ukraine” in the eyes of Europe and the world.
Mr Yushchenko said: “We are witnesses of how the politics of totalitarianism is reaching its apogee against the principles of democracy, sovereignty and territorial integrity. Georgia is a sign of how, unfortunately, the Pan-European community did not stand up to defend these fundamental principles. It was a setback,” he said.
--- Nothing to say. Was the EU supposed to dig up the hatchet against Russia?
The Ukrainian president said he hoped soon to meet US President Barack Obama to discuss these and other issues and expressed solidarity with a plea to Western leaders made last week by members of Ukraine’s intelligentsia. In an open letter, politicians, artists and experts had called for western leaders to provide Ukraine with stronger security guarantees against an increasing threat from Russia.
--- ‘to discuss these and other issues’ – it’s rather strange interpretation of the interview with the President of a country.
Mr Yushchenko trails three frontrunners in the election who are actively seeking to harmonise relations with Russia. They include Yulia Tymoshenko, prime minister and erstwhile Orange Revolution partner, and ex-prime minister Viktor Yanukovich, the Moscow-backed candidate in 2004. Mr Yushchenko accused them of pandering to Moscow, selling out Ukrainian interests as “trading cards” to get Russia’s support for their candidacies.
--- Is it bad to seek to harmonize relations with a neighboring super-power? I think that the most preferable way for Ukraine to build its foreign policy and strategy of its implementation is making friends, not enemies. Russia will never disappear from Ukrainian border, and the smartest way is to try to build a system of checks and balances based on the multi-vector policy.
‘Yushchenko hits at Moscow ahead of poll’
By Roman Olearchyk in Kiev
Published: September 14 2009 14:16 Last updated: September 14 2009 14:16
Viktor Yushchenko, the embattled Ukrainian president, complained of Russian meddling in Kiev’s domestic affairs ahead of a high-stakes presidential election, which the pro-western leader is expected to lose to a more Kremlin-friendly candidate.
---To be pro-Western doesn’t mean to be totally anti-Russian. I don’t think that the spoiled relationship with the official Moscow may be called as the advantage of the presidency of Mt. Yushchenko.
In a Financial Times interview, Mr Yushchenko said Moscow had waged a smear campaign against Kiev and could try to manipulate Ukraine’s electorate – claims that were also made in 2004 when Mr Yushchenko was propelled to power against a Kremlin-backed candidate. Voters remain split in an east-west axis between Russian and Ukrainian speakers.
--- It is wrong to state that the Ukrainian electorate is divided to Russian speakers and Ukrainian speakers. The author either have never visited East of Ukraine (but I hardly think so), or just wanted to make a witty statement to attract more attention of foreign readers. I would say that there are a lot of Ukrainian speakers in Eastern Ukraine, especially in a countryside: even my own relatives who are living near Donetsk are using Ukrainian as a language of family communication. Yes, there are lot of Russian speakers in the Eastern and Central part of Ukraine – mostly due to the labor migration from other regions of Soviet Union caused by the industrialization growth. But let me assure the respected author of the article that most of the Russian speaking people are feeling themselves as citizens of Ukraine, not servants of Russia as some people want to demonstrate.
The problem of the split of electoral preferences in Ukraine is not the question of language, but sort of a regional solidarity. People from Eastern Ukraine support Viktor Yanukovych and the Party of Regions, first of all, because they think he is going to support their interests, and to make their own regions more prosperous. Such an antagonism to other opponents of Mr. Yanukovych is a simple reaction to their rhetoric, which often sounds unfriendly to the Eastern regions of Ukraine – people from there had been called as thieves, extremists, betrayers, Russian henchmen and so on. The same situation we may see in Western Ukraine, when some politicians are trying to win extra-support, setting Ukrainians against each other.
The issue of Russian interference in Ukraine’s election emerged last month when Dmitry Medvedev, Russia’s president, accused Mr Yushchenko of waging “anti-Russian” policies by seeking membership in the Nato military alliance, and urged the country’s future president to be more friendly.
--- What is a problem with being friendly to your neighbors?
Mr Yushchenko said he expects Russia to stir up separatist sentiment on Ukraine’s Russian-leaning Crimean peninsula. But he ruled out escalation into a military conflict of the kind seen last summer in Georgia, another pro-western ally on post-Soviet turf. Moscow continues to firmly back the independence aspirations of two Georgian breakaway enclaves, one of which, South Ossetia, was at the centre of the war.
Many in Kiev fear a similar scenario in Crimea.“They will try to exploit the ‘Crimean Card’. But, I don’t see a risk that the situation in Georgia would repeat,” said Mr Yushchenko when asked if separatism or military clashes could erupt. “Ukraine is not Georgia,” he said, referring to the country’s larger population, military and geopolitical significance.“Strength today is not in a military position. Employing it would be complete stupidity,” he added.
--- I agree with the statement about the ‘Crimean Card”. Nevertheless, the military scenario in the Crimea is unfortunately possible, but rather in a form of a provoked inside disorder.
Referring to last January’s natural gas stand-off between Kiev and Moscow, which disrupted European supplies, and relentless Russian warnings that recession-battered Ukraine was unable to pay its gas bill, Mr Yushchenko said: “There are a lot of hidden and cynical schemes being played through information airwaves, aimed at discrediting Ukraine” in the eyes of Europe and the world.
Mr Yushchenko said: “We are witnesses of how the politics of totalitarianism is reaching its apogee against the principles of democracy, sovereignty and territorial integrity. Georgia is a sign of how, unfortunately, the Pan-European community did not stand up to defend these fundamental principles. It was a setback,” he said.
--- Nothing to say. Was the EU supposed to dig up the hatchet against Russia?
The Ukrainian president said he hoped soon to meet US President Barack Obama to discuss these and other issues and expressed solidarity with a plea to Western leaders made last week by members of Ukraine’s intelligentsia. In an open letter, politicians, artists and experts had called for western leaders to provide Ukraine with stronger security guarantees against an increasing threat from Russia.
--- ‘to discuss these and other issues’ – it’s rather strange interpretation of the interview with the President of a country.
Mr Yushchenko trails three frontrunners in the election who are actively seeking to harmonise relations with Russia. They include Yulia Tymoshenko, prime minister and erstwhile Orange Revolution partner, and ex-prime minister Viktor Yanukovich, the Moscow-backed candidate in 2004. Mr Yushchenko accused them of pandering to Moscow, selling out Ukrainian interests as “trading cards” to get Russia’s support for their candidacies.
--- Is it bad to seek to harmonize relations with a neighboring super-power? I think that the most preferable way for Ukraine to build its foreign policy and strategy of its implementation is making friends, not enemies. Russia will never disappear from Ukrainian border, and the smartest way is to try to build a system of checks and balances based on the multi-vector policy.
Thursday, March 5, 2009
The Camouflaged Gas. Naftogaz Ukraine paid the February-2009 bill to Russian Gazprom; the same time agents in masks were raiding its headquarters.
Today the State oil and gas company Naftogaz Ukraine has paid $50 million to Russian Gazprom. Together with yesterday’s payment of $310 million it settles the gas supply bill of Ukraine for February 2009. Now all the Europe may breathe a sigh of relief: this month there will be no gas cut-off.
(Besides, I’ve noticed at least one mismatch – in figures. The figures I’ve mentioned above, given according to the information of the Secretariat of the President of Ukraine, have in total $360 million – which means that Ukraine imported only 1 billion cubic metres (bcm) of Russian gas in February. Gazprom’s officials have recently mentioned that Naftogaz has to pay $400 million. Hopefully it will not be a purpose for a new gas-fight between Ukraine and Russia).
Nevertheless, the gas supply remains in a center of a domestic turmoil in Ukraine. Muscular men wearing black masks and camouflage entered the Naftogaz Ukraine headquarters yesterday. They passed by the helpless company guards, and started to question the accountants of the company, and to search for something in the management office. All the main TV channels were translating this fascinating story in almost live regime (it’s a democracy!). “Armed people in camouflage pushed aside security, and showed no documents,” a spokesman of Naftogaz Valentyn Zemlyansky said to journalists.
The masked men appeared to be the secret service agents, who came to the Naftogaz Ukraine to take off the documents, related to Russian-Ukraine gas supply agreement, signed in January. The spokeswoman of the Security Service of Ukraine (SBU) Maryna Ostapenko informed press that the national security service is investigating criminal case on the illegal appropriation of 6,3 bcm of gas by the State company Naftogaz Ukraine. “Everything is within the frames of law”, Mrs. Ostapenko assured, and added that the Naftogaz authorities knew that the documents are to be seized that day. (The last remark explains such a huge media support of the action).
Anyway, the most interesting thing is not a scary picture, but the reasons of the scandal. As every contemporary problem in Ukraine, it has origins in the struggle for power between the President of Ukraine Viktor Yushchenko and the Prime Minister of Ukraine Yulia Tymoshenko.
The story begins in November 2008, when the Ukrainian Customs office refused to perform customs clearing of 11 bcm of Russian gas, pumped to Ukrainian gas storages by Russian Gazprom. The gas was dedicated for the well-known Swiss-registered intermediary RosUkrEnergo, half owned by Gazprom, and half – by Ukrainian billionaire Dmytro Firtash. The Customs of Ukraine bonded all the amount of gas (for some reasons), until the gas conflict with Russia started. (Here I would like to suppose again that the gas “war” with Russia was a planned thing).
In January 2009 – in frames of a settlement of the Russia-Ukraine gas dispute – Russians transferred to Naftogaz Ukraine the rights to claim from RosUkrEnergo the debt, which it has to Gazprom. The same time Russia received a 20 per cent discount on pipeline transit fees. A new set of bilateral Agreements eliminated RosUkrEnergo from Russia-Ukraine gas trading scheme.
As the PM says, Gazprom agreed to give the gas to Ukraine at a privileged price of $1,7 billion for all the 11 bcm of gas, and these money were to be considered as a payment for a transit of Russian gas to Europe. (I haven’t seen the documents, but it sounds like a true). This fact permitted to the Prime Minister Yulia Tymoshenko to declare that the average gas price for Ukraine in 2009 is $228 per tcm.
After the signing of the Agreements with Gazprom, Naftogaz Ukraine faced a new problem: a Head of the State Customs office of Ukraine Valery Khoroshkovsky refused to perform a custom clearing of mentioned amount of gas. He claimed the gas belongs to RosUkrEnergo.
The Prime Minister solved the problem: Mr. Khoroshkovsky was fired. But the President appointed him as a Deputy Head of the Security Service of Ukraine (SBU).
At long last, the Ukrainian Customs released the 11 bcm of ex-RosUkrEnergo-gas from the bond – in favour of the State company Naftogaz Ukraine. After that the SBU started the investigation mentioned above. On 3 March at night Deputy Head of the department of Energy Customs office Taras Shepitko was arrested. The next day men in mask appeared on the threshold of Naftogaz.
As for this moment, there is a ruling of a court, which states the SBU should stop the actions concerning the mentioned Naftogaz-case. Pro-presidential and pro-government experts are giving controversial comments. RosUkrEnergo still insists that is owns the gas. Gazprom didn’t make any statements concerning this concrete question.
Mrs. Tymoshenko is condemning the actions of the SBU. “They simply wanted to paralyze the activities of Naftogaz and destroy the gas distribution system in Ukraine,” she said. She also accused Mr. Yushchenko of lobbying on behalf of RosUkrEnergo. First Vice Prime Minister Alexander Turchynov also declared yesterday that “Viktor Yushchenko was patronizing RosUkrEnergo”, and that Mr. Khoroshkovsky “has joint business with Mr. Firtash”.
The press secretary of the President of Ukraine Iryna Vannikova informed yesterday that “President fully supports the actions of the SBU”. “The Security Service acts in frames of law. The actions of the Security Service agents are rather tough, but it is a demand of the circumstances of this case, - Mrs. Vannikova said. - President is sure that it is necessary to show a determination and insistence in the investigation of the identified corrupt practices”.
(Besides, I’ve noticed at least one mismatch – in figures. The figures I’ve mentioned above, given according to the information of the Secretariat of the President of Ukraine, have in total $360 million – which means that Ukraine imported only 1 billion cubic metres (bcm) of Russian gas in February. Gazprom’s officials have recently mentioned that Naftogaz has to pay $400 million. Hopefully it will not be a purpose for a new gas-fight between Ukraine and Russia).
Nevertheless, the gas supply remains in a center of a domestic turmoil in Ukraine. Muscular men wearing black masks and camouflage entered the Naftogaz Ukraine headquarters yesterday. They passed by the helpless company guards, and started to question the accountants of the company, and to search for something in the management office. All the main TV channels were translating this fascinating story in almost live regime (it’s a democracy!). “Armed people in camouflage pushed aside security, and showed no documents,” a spokesman of Naftogaz Valentyn Zemlyansky said to journalists.
The masked men appeared to be the secret service agents, who came to the Naftogaz Ukraine to take off the documents, related to Russian-Ukraine gas supply agreement, signed in January. The spokeswoman of the Security Service of Ukraine (SBU) Maryna Ostapenko informed press that the national security service is investigating criminal case on the illegal appropriation of 6,3 bcm of gas by the State company Naftogaz Ukraine. “Everything is within the frames of law”, Mrs. Ostapenko assured, and added that the Naftogaz authorities knew that the documents are to be seized that day. (The last remark explains such a huge media support of the action).
Anyway, the most interesting thing is not a scary picture, but the reasons of the scandal. As every contemporary problem in Ukraine, it has origins in the struggle for power between the President of Ukraine Viktor Yushchenko and the Prime Minister of Ukraine Yulia Tymoshenko.
The story begins in November 2008, when the Ukrainian Customs office refused to perform customs clearing of 11 bcm of Russian gas, pumped to Ukrainian gas storages by Russian Gazprom. The gas was dedicated for the well-known Swiss-registered intermediary RosUkrEnergo, half owned by Gazprom, and half – by Ukrainian billionaire Dmytro Firtash. The Customs of Ukraine bonded all the amount of gas (for some reasons), until the gas conflict with Russia started. (Here I would like to suppose again that the gas “war” with Russia was a planned thing).
In January 2009 – in frames of a settlement of the Russia-Ukraine gas dispute – Russians transferred to Naftogaz Ukraine the rights to claim from RosUkrEnergo the debt, which it has to Gazprom. The same time Russia received a 20 per cent discount on pipeline transit fees. A new set of bilateral Agreements eliminated RosUkrEnergo from Russia-Ukraine gas trading scheme.
As the PM says, Gazprom agreed to give the gas to Ukraine at a privileged price of $1,7 billion for all the 11 bcm of gas, and these money were to be considered as a payment for a transit of Russian gas to Europe. (I haven’t seen the documents, but it sounds like a true). This fact permitted to the Prime Minister Yulia Tymoshenko to declare that the average gas price for Ukraine in 2009 is $228 per tcm.
After the signing of the Agreements with Gazprom, Naftogaz Ukraine faced a new problem: a Head of the State Customs office of Ukraine Valery Khoroshkovsky refused to perform a custom clearing of mentioned amount of gas. He claimed the gas belongs to RosUkrEnergo.
The Prime Minister solved the problem: Mr. Khoroshkovsky was fired. But the President appointed him as a Deputy Head of the Security Service of Ukraine (SBU).
At long last, the Ukrainian Customs released the 11 bcm of ex-RosUkrEnergo-gas from the bond – in favour of the State company Naftogaz Ukraine. After that the SBU started the investigation mentioned above. On 3 March at night Deputy Head of the department of Energy Customs office Taras Shepitko was arrested. The next day men in mask appeared on the threshold of Naftogaz.
As for this moment, there is a ruling of a court, which states the SBU should stop the actions concerning the mentioned Naftogaz-case. Pro-presidential and pro-government experts are giving controversial comments. RosUkrEnergo still insists that is owns the gas. Gazprom didn’t make any statements concerning this concrete question.
Mrs. Tymoshenko is condemning the actions of the SBU. “They simply wanted to paralyze the activities of Naftogaz and destroy the gas distribution system in Ukraine,” she said. She also accused Mr. Yushchenko of lobbying on behalf of RosUkrEnergo. First Vice Prime Minister Alexander Turchynov also declared yesterday that “Viktor Yushchenko was patronizing RosUkrEnergo”, and that Mr. Khoroshkovsky “has joint business with Mr. Firtash”.
The press secretary of the President of Ukraine Iryna Vannikova informed yesterday that “President fully supports the actions of the SBU”. “The Security Service acts in frames of law. The actions of the Security Service agents are rather tough, but it is a demand of the circumstances of this case, - Mrs. Vannikova said. - President is sure that it is necessary to show a determination and insistence in the investigation of the identified corrupt practices”.
Sunday, February 8, 2009
Hugging to Death. The gas consortium of Ukraine, Russia, and Europe will not solve a problem of EU energy security, but undermine Ukrainian interests.
There is at least one clear conclusion from the “Cold war” of January 2009: to avoid a future gas supply crisis, Europe needs a common energy security policy. I would suggest to read a blog-post of Charles Tannock, Member of the European Parliament for London, and an article of Andrew Wilson, a senior policy fellow at the European Council on Foreign Relations, published in the Wall Street Journal, for extra thoughts and information on this point.
I agree that the unified energy supply scheme is a very positive thing for Europe. But what worries me is that the new European energy security concept is moving step-by-step against the national interests of Ukraine – not without help of Russia and powerful trans-national corporations. In a widely proposed system of co-operation, which foresees a foundation of gas consortium with the participation of the EU, Ukraine and Russia, all the parties are winning some benefits, except Ukraine, which is supposed to lose control over its gas pipelines’ system for decades (or for ever, depending on ‘flexibility’ of Ukrainian officials).
To my point of view, the first step to the formation of the united system of European Energy Security should be a very straight price talk. Europe cannot be united in the gas supply questions, until it doesn’t have a common formula of price for gas and its transportation. Without such an agreement all the other steps would be inefficient.
I liked very much a recent speech of the Prime Minister of Ukraine Yulia Tymoshenko at the Munich Security Conference on Saturday, 7 February 2009. “The price of the gas transit has not been formed in unified way. The question is: Why?” she said. “If we find such common approaches, we will be able to eliminate a political component from the system of pricing and supplies of gas to all the European countries.”
But why indeed the EU, not talking about the European continent as a whole, hadn’t manage to form the unified gas price and transit approach for all the time of its existence? The question is not rhetoric, and the answer is simple: the formation of the common Energy Supply (or Security, if you want) System for Europe is disadvantageous for the main European energy corporations. It is not a secret that the oil and gas trade business is very profitable, inter alia, by its shadow or semi-shadow schemes, which would be impossible to realise, if all the business were totally transparent and understandable even for members of the European Commission or the European Parliament. So, the establishment of a really clear system of gas trade in Europe looks like a miracle at the moment.
What next? The international investment conference on the modernisation of Ukrainian gas transit system is going to take place on 23 March in Brussels, according to the mutual arrangement of the President of Ukraine Viktor Yushchenko and the President of the European Commission Jose Manuel Barroso of 27 January 2009. The talk-work on the preparation of public opinion has already started. Vladimir Chizhov, Russia's ambassador to the European Union, said to journalists on 4 February 2009 that “the fact that the Ukrainian pipeline network was neglected ever since the collapse of the Soviet Union is recognised by everybody... The fact that its technical status is not up to standard is recognised by everybody. The fact that money supposed to be spent on maintenance from transit fees was spent on something else is recognised by everybody”. Only the last question may be considered as a full truth.
The potential members of the future Consortium are: Gazprom, Naftogaz Ukraine, and directly involved European companies – like E.ON Ruhrgas AG, GDF Suez SA., Gaz de France, BASF SE's Wingas, and Eni SpA. Russians, Ukrainians and Europeans would own the one third of the company each. People from GDF Suez, E.ON Ruhrgas AG and Eni SpA have already had the consortium-related meeting with the Prime Minister of Russia Vladimir Putin in Berlin on 16 January 2009.
Ukraine is supposed to give (rent) to the consortium its gas pipelines system, Russian Gazprom – gas fields, European companies – money. Some Western analysts say that Ukrainian government could sell a stake in Ukraine’s gas transit system to a new consortium. I don’t think it’s a good idea for Ukraine and its future.
Yes, Ukraine needs money for the gas transit system upgrade, but it may find money by itself (it will be not difficult to take a credit for a good-written & well-thought project), going on with receiving the full profits from the transit of the Russian gas to Europe. Ukraine is going to receive from Russia from $2 billion in 2009 to $4 billion per year, starting from 2010.
As for the European Union there is no economic difference at all, whether there is the Russia-Ukraine-EU consortium or not. Russia may find a purpose to switch off gas anyway, and the possible consortium-profits will be collected in hands of managers of the multinationals. And what is good for Ruhrgas, Shell or Gaz de France is not automatically good for Germany, Netherlands, or France. Don’t even mention the interests of tax-payers: the companies, which may directly operate with Ukrainian gas pipeline system, would be for sure an affiliated structures of famous brands, registered in offshore zones.
The establishment of the European common energy security system is not a question of today. It is even not a question of tomorrow. But the Europe has to start preparations for the day after tomorrow right now, working out all the papers needed, and communicating with partners – especially hard talks are supposed to be with Russia. Moreover, I may bet that the talks would finish with nothing. The real goal of Russia, Gazprom, and European energy corporations in Consortium-project are extra profits they may have, fooling Ukraine around. The sorting out the system of the gas supply to Europe looks like not profitable for them at all. The common sense had never beaten the business strategy. It’s a rule for today. What will be the day after tomorrow or later (I mean in long-term period)? Nobody knows, but the little strokes fell great oaks.
I agree that the unified energy supply scheme is a very positive thing for Europe. But what worries me is that the new European energy security concept is moving step-by-step against the national interests of Ukraine – not without help of Russia and powerful trans-national corporations. In a widely proposed system of co-operation, which foresees a foundation of gas consortium with the participation of the EU, Ukraine and Russia, all the parties are winning some benefits, except Ukraine, which is supposed to lose control over its gas pipelines’ system for decades (or for ever, depending on ‘flexibility’ of Ukrainian officials).
To my point of view, the first step to the formation of the united system of European Energy Security should be a very straight price talk. Europe cannot be united in the gas supply questions, until it doesn’t have a common formula of price for gas and its transportation. Without such an agreement all the other steps would be inefficient.
I liked very much a recent speech of the Prime Minister of Ukraine Yulia Tymoshenko at the Munich Security Conference on Saturday, 7 February 2009. “The price of the gas transit has not been formed in unified way. The question is: Why?” she said. “If we find such common approaches, we will be able to eliminate a political component from the system of pricing and supplies of gas to all the European countries.”
But why indeed the EU, not talking about the European continent as a whole, hadn’t manage to form the unified gas price and transit approach for all the time of its existence? The question is not rhetoric, and the answer is simple: the formation of the common Energy Supply (or Security, if you want) System for Europe is disadvantageous for the main European energy corporations. It is not a secret that the oil and gas trade business is very profitable, inter alia, by its shadow or semi-shadow schemes, which would be impossible to realise, if all the business were totally transparent and understandable even for members of the European Commission or the European Parliament. So, the establishment of a really clear system of gas trade in Europe looks like a miracle at the moment.
What next? The international investment conference on the modernisation of Ukrainian gas transit system is going to take place on 23 March in Brussels, according to the mutual arrangement of the President of Ukraine Viktor Yushchenko and the President of the European Commission Jose Manuel Barroso of 27 January 2009. The talk-work on the preparation of public opinion has already started. Vladimir Chizhov, Russia's ambassador to the European Union, said to journalists on 4 February 2009 that “the fact that the Ukrainian pipeline network was neglected ever since the collapse of the Soviet Union is recognised by everybody... The fact that its technical status is not up to standard is recognised by everybody. The fact that money supposed to be spent on maintenance from transit fees was spent on something else is recognised by everybody”. Only the last question may be considered as a full truth.
The potential members of the future Consortium are: Gazprom, Naftogaz Ukraine, and directly involved European companies – like E.ON Ruhrgas AG, GDF Suez SA., Gaz de France, BASF SE's Wingas, and Eni SpA. Russians, Ukrainians and Europeans would own the one third of the company each. People from GDF Suez, E.ON Ruhrgas AG and Eni SpA have already had the consortium-related meeting with the Prime Minister of Russia Vladimir Putin in Berlin on 16 January 2009.
Ukraine is supposed to give (rent) to the consortium its gas pipelines system, Russian Gazprom – gas fields, European companies – money. Some Western analysts say that Ukrainian government could sell a stake in Ukraine’s gas transit system to a new consortium. I don’t think it’s a good idea for Ukraine and its future.
Yes, Ukraine needs money for the gas transit system upgrade, but it may find money by itself (it will be not difficult to take a credit for a good-written & well-thought project), going on with receiving the full profits from the transit of the Russian gas to Europe. Ukraine is going to receive from Russia from $2 billion in 2009 to $4 billion per year, starting from 2010.
As for the European Union there is no economic difference at all, whether there is the Russia-Ukraine-EU consortium or not. Russia may find a purpose to switch off gas anyway, and the possible consortium-profits will be collected in hands of managers of the multinationals. And what is good for Ruhrgas, Shell or Gaz de France is not automatically good for Germany, Netherlands, or France. Don’t even mention the interests of tax-payers: the companies, which may directly operate with Ukrainian gas pipeline system, would be for sure an affiliated structures of famous brands, registered in offshore zones.
The establishment of the European common energy security system is not a question of today. It is even not a question of tomorrow. But the Europe has to start preparations for the day after tomorrow right now, working out all the papers needed, and communicating with partners – especially hard talks are supposed to be with Russia. Moreover, I may bet that the talks would finish with nothing. The real goal of Russia, Gazprom, and European energy corporations in Consortium-project are extra profits they may have, fooling Ukraine around. The sorting out the system of the gas supply to Europe looks like not profitable for them at all. The common sense had never beaten the business strategy. It’s a rule for today. What will be the day after tomorrow or later (I mean in long-term period)? Nobody knows, but the little strokes fell great oaks.
Thursday, January 29, 2009
Jaap de Hoop Scheffer: "If there is a Russian-Ukrainian dispute on energy security I think NATO allies should pick that up".
Let me not to tell anything about Ukrainian politics today. Everything is going well here in Kiev, the politicians are going on with presidential campaign, claiming each other in all the possible sins. The main topics of discussion: gas contracts (Presidential secretariat has issued a new research, making the conclusion that the papers signed in Moscow are not good for Ukraine and may - and possibly should - be revised), the date of Presidential election (December 2008 or January 2009), and a couple of dismissals and appointments - current and prospective. Instead of Ukrainian domestic politics saga, I propose some NATO-reading for today: Transatlantic Leadership For A New Era: Speech by the NATO Secretary General at the Security and Defence Agenda - 26 January 2009. This speech, followed with questions and answers session, really worth to be read. I will give here the words of NATO Secretary General Jaap de Hoop Scheffer, which were concerning directly Ukraine and its geopolitical role in global processes.
"We have seen how the need for reliable energy supply is transforming from a mainly economic question into a central security issue. For many nations, being cut off from energy is a matter of national survival. The recent quarrel between Russia and Ukraine was only the latest reminder of this. This latest crisis showed how a bilateral dispute can have a powerful knock-on effect, both in terms of the heat in houses and a chill in international relations".
"Clearly, no one gets a veto over NATO enlargement. That process is central to our aim of consolidating Europe as an undivided and democratic security space and it is not negotiable. The pace and direction will be of our choosing. But the NATO-Russia relationship is too valuable to be stuck in never-changing arguments. We need a positive agenda, one that befits the importance of both Russia and NATO".
"Considering the political, security and energy issues that run through Central Asia and the Caucasus, I believe we need stepped up focus on those regions as well. I think NATO should consider its role in energy security much more seriously. There is, to my mind, clear added value for the Alliance".
"It is simply not enough to have Heads of State and Government provide NATO with a mandate in energy security, yet to have Allies hesitate to use NATO as a forum for discussion during crises".
"The Bucharest decision was rather clear, or was very clear, I should say, and as I said in my introductory remarks, we will set the pace and we will decide upon the moment. But the moment is performance-based. So I cannot give you a timeframe. It is not around the corner, I would say, as we speak, as far as, of course, Ukraine and Georgia are concerned. We are intensifying our relationship, as you know, through the NATO-Ukraine Commission, the NATO-Georgia Commission, but I do think that enlargement in this sense is not around the corner, but I can't be more specific here in that regard".
"If there is a Russian-Ukrainian dispute on energy security I think NATO allies should pick that up. Not because we have any ambition, or we pretend to play any role. Please, no! There was a Czech presidency which immediately was proactive and involved. That was the European Union involved. Other people were involved. Certainly not NATO. But that does not mean that those subjects are irrelevant for NATO, if you agree with me that NATO is a political military organization".
"I think Russia cannot afford to have a non-dialogue with NATO, and NATO cannot afford to have a non-dialogue with Russia".
"Of course I'm discussing protecting pipelines in times of crisis. I said protecting pipelines is first and foremost a national responsibility. And it should stay like that. NATO is not in the business of protecting pipelines. But when there's a crisis, or if a certain nation asks for assistance, NATO could, I think, be instrumental in protecting pipelines on land".
"NATO is not in the energy business. So if in a situation like we had over the past weeks NATO allies are totally deprived of gas you will not see a NATO Secretary General stepping forward, raise his finger and tell the Europeans or the Russians or the Ukrainians for that matter, listen, guys, you have to stop this. We have other international organizations, other people to do this, and certainly not a NATO Secretary General, the European pres... the European Union presidency, rather, or others.
So we are not in the energy business, but of course when a nation is for a long time deprived of all gas, or all energy, in the North Atlantic Council, and quite rightly so, when a nation raises its finger and says, Secretary General, we would like to discuss the energy situation, should NATO then say no, that's none of our business? I don't think so. Although you'll not see us in the forefront in the energy business because we are not in the energy business. We're in the security business.
And I say again, we usually use the word energy security. And that's our business".
"We have seen how the need for reliable energy supply is transforming from a mainly economic question into a central security issue. For many nations, being cut off from energy is a matter of national survival. The recent quarrel between Russia and Ukraine was only the latest reminder of this. This latest crisis showed how a bilateral dispute can have a powerful knock-on effect, both in terms of the heat in houses and a chill in international relations".
"Clearly, no one gets a veto over NATO enlargement. That process is central to our aim of consolidating Europe as an undivided and democratic security space and it is not negotiable. The pace and direction will be of our choosing. But the NATO-Russia relationship is too valuable to be stuck in never-changing arguments. We need a positive agenda, one that befits the importance of both Russia and NATO".
"Considering the political, security and energy issues that run through Central Asia and the Caucasus, I believe we need stepped up focus on those regions as well. I think NATO should consider its role in energy security much more seriously. There is, to my mind, clear added value for the Alliance".
"It is simply not enough to have Heads of State and Government provide NATO with a mandate in energy security, yet to have Allies hesitate to use NATO as a forum for discussion during crises".
"The Bucharest decision was rather clear, or was very clear, I should say, and as I said in my introductory remarks, we will set the pace and we will decide upon the moment. But the moment is performance-based. So I cannot give you a timeframe. It is not around the corner, I would say, as we speak, as far as, of course, Ukraine and Georgia are concerned. We are intensifying our relationship, as you know, through the NATO-Ukraine Commission, the NATO-Georgia Commission, but I do think that enlargement in this sense is not around the corner, but I can't be more specific here in that regard".
"If there is a Russian-Ukrainian dispute on energy security I think NATO allies should pick that up. Not because we have any ambition, or we pretend to play any role. Please, no! There was a Czech presidency which immediately was proactive and involved. That was the European Union involved. Other people were involved. Certainly not NATO. But that does not mean that those subjects are irrelevant for NATO, if you agree with me that NATO is a political military organization".
"I think Russia cannot afford to have a non-dialogue with NATO, and NATO cannot afford to have a non-dialogue with Russia".
"Of course I'm discussing protecting pipelines in times of crisis. I said protecting pipelines is first and foremost a national responsibility. And it should stay like that. NATO is not in the business of protecting pipelines. But when there's a crisis, or if a certain nation asks for assistance, NATO could, I think, be instrumental in protecting pipelines on land".
"NATO is not in the energy business. So if in a situation like we had over the past weeks NATO allies are totally deprived of gas you will not see a NATO Secretary General stepping forward, raise his finger and tell the Europeans or the Russians or the Ukrainians for that matter, listen, guys, you have to stop this. We have other international organizations, other people to do this, and certainly not a NATO Secretary General, the European pres... the European Union presidency, rather, or others.
So we are not in the energy business, but of course when a nation is for a long time deprived of all gas, or all energy, in the North Atlantic Council, and quite rightly so, when a nation raises its finger and says, Secretary General, we would like to discuss the energy situation, should NATO then say no, that's none of our business? I don't think so. Although you'll not see us in the forefront in the energy business because we are not in the energy business. We're in the security business.
And I say again, we usually use the word energy security. And that's our business".
Saturday, January 24, 2009
Gas tricks. The Secretariat of the President of Ukraine issued an analysis of Russia – Ukraine gas agreement.
Just to note some figures for a future reference. Yesterday (23 January 2009) the Secretariat of the President of Ukraine issued an analysis of Russia – Ukraine gas agreement.
Acording to the Secretariat, an average price of Russian gas for Ukraine in 2009 will be $256/tcm (price in the 1st quarter 2009 - $450, actual Ist quarter price with the 20% discount - $360). Average price of Russian gas in 2009 for Slovakia will be $240 (Ist quarter price - $296), for Hungary – 237 ($403), for Poland - $300-310 ($458), for Czech Republic - $340-350 ($420), for Romania - $310-320 ($470), and for Germany - $250-260 ($330-340).
If the “Secretariat prices” are true (I may question the current gas price for Germany, which is told to be $330-340, but is around $450), Ukraine with the base price of $450 in the 1st quarter of 2009 looks like a definite loser.
Acording to the Secretariat, an average price of Russian gas for Ukraine in 2009 will be $256/tcm (price in the 1st quarter 2009 - $450, actual Ist quarter price with the 20% discount - $360). Average price of Russian gas in 2009 for Slovakia will be $240 (Ist quarter price - $296), for Hungary – 237 ($403), for Poland - $300-310 ($458), for Czech Republic - $340-350 ($420), for Romania - $310-320 ($470), and for Germany - $250-260 ($330-340).
If the “Secretariat prices” are true (I may question the current gas price for Germany, which is told to be $330-340, but is around $450), Ukraine with the base price of $450 in the 1st quarter of 2009 looks like a definite loser.
Thursday, January 22, 2009
The Time Bomb. According to the new Russian gas price formula, with the recovery of a world economy, the economy of Ukraine will feel worse.
In the comment to my last post, Leopolis mentioned (very reasonably) that the reliance on a cheap gas has harmed Ukraine’s energy security. It harmed Ukrainian economy as well. Yes, that’s true that Ukraine lost a lot of time, not taking any significant measure to ensure the development of energy saving programmes. As a result, Ukrainian industry is extremely energy consuming, and Ukrainian economy is one of the most energy intensive on the continent. But it is not a fault of Viktor Yushchenko as a President (though he could do something in this field instead of just talking). The problem is that Ukrainian and foreign (mostly Russian) oligarchs who privatised big powerful plants and factories – at a very low price actually – didn’t care at all about any energy saving during all the 17 years of independence of Ukraine. These people, together with Ukrainian politicians, just used low gas prices to earn millions, or even billions of dollars. Business climate is so co-dependent with political situation in Ukraine that it’s really more reasonable for businessmen to have a fast profit today than to invest in an uncertain future.
Anyway, to switch to the market gas prices at the peak of the world economy crisis is also an evil for the country. Ukrainian industry simply doesn’t have time and financial strength for quick modernization and re-equipment. As a result, thousands of workers will lose jobs, provoking the social crisis. It opens a room for some radical or extremist ideas to override the common sense, which is really dangerous.
But the main problem with Russia-Ukraine gas agreement is that it contains a delayed-action bomb – according to the gas price formula, with the recovery of a world economy, Ukrainian economy will feel worse. Everyone noticed that the base gas price for that formula (which nobody have seen) is $450 per tcm. So, de facto Ukraine agreed for the raise of the price of Russian gas almost in three times – in December 2008 Kiev still paid $179.5 per tcm of gas from Russian pipeline.
$450 is really a very high level, taking to the account the geographical closeness of Ukraine to Russia. For example, in the first quarter-2009 Germany will pay $470/tcm, but the cost of transit of gas from Russia-Ukraine border to Germany costs not less than $50/tcm (only Ukrainian transit fee is around $20/tcm). One more example: according to the information of the Secretariat of the President of Ukraine, Hungary will pay for Russian gas only $400/tcm in the first quarter-2009. Romania pays $470, but buys only around 4 bcm of gas every year.
So, if we take these “European averages” together, we will have a base price for Ukraine around $400-420, but not $450.
Ukraine will not suffer a lot from the new gas price in 2009, as it will be presented with 20% discount. Meanwhile, it is still not clear, how much will Kiev pay in average during the year. Gazprom officials made public only the price for the first quarter 2009 – $360/tcm, and mentioned that the average price “may be less than $250”. The Prime Minister of Ukraine Yulia Tymoshenko said that the average figure is $228.8. It’s still $50 more than a price-2008, but Ukraine will definitely survive.
Well, Ukrainian industry will survive in 2009, but not develop. European industry instead will have a unique opportunity to use low gas prices for future growth of its potential. Ukrainian plants and factories will definitely lose their market competitiveness. I have to mention here that – according to the Moscow agreements – the GazpromSbytUkraine Company will control up to 25% of the domestic industry gas market of Ukraine, so, Russians will have a possibility to support loyal and “punish” competitive Ukrainian enterprises.
But the most important changes are expected not in short-term, but in mid-term prospects. What will happen, when the world economy will start recovering from the current crisis? Oil price will grow. As oil price will grow, gas for Ukraine will be more and more expensive. I would like to inform that the gas price of $450 corresponds not with a peak oil price of 2008 - $140/barrel – but with the price of Brent at the level of $111,4, according to the Naftogaz source. So, in 1,5-2 years time Ukraine will unfortunately face its own big economy crisis. …But it’s not an important question for Ukrainian politicians: all the worst is going to happen AFTER the presidential election.
Anyway, to switch to the market gas prices at the peak of the world economy crisis is also an evil for the country. Ukrainian industry simply doesn’t have time and financial strength for quick modernization and re-equipment. As a result, thousands of workers will lose jobs, provoking the social crisis. It opens a room for some radical or extremist ideas to override the common sense, which is really dangerous.
But the main problem with Russia-Ukraine gas agreement is that it contains a delayed-action bomb – according to the gas price formula, with the recovery of a world economy, Ukrainian economy will feel worse. Everyone noticed that the base gas price for that formula (which nobody have seen) is $450 per tcm. So, de facto Ukraine agreed for the raise of the price of Russian gas almost in three times – in December 2008 Kiev still paid $179.5 per tcm of gas from Russian pipeline.
$450 is really a very high level, taking to the account the geographical closeness of Ukraine to Russia. For example, in the first quarter-2009 Germany will pay $470/tcm, but the cost of transit of gas from Russia-Ukraine border to Germany costs not less than $50/tcm (only Ukrainian transit fee is around $20/tcm). One more example: according to the information of the Secretariat of the President of Ukraine, Hungary will pay for Russian gas only $400/tcm in the first quarter-2009. Romania pays $470, but buys only around 4 bcm of gas every year.
So, if we take these “European averages” together, we will have a base price for Ukraine around $400-420, but not $450.
Ukraine will not suffer a lot from the new gas price in 2009, as it will be presented with 20% discount. Meanwhile, it is still not clear, how much will Kiev pay in average during the year. Gazprom officials made public only the price for the first quarter 2009 – $360/tcm, and mentioned that the average price “may be less than $250”. The Prime Minister of Ukraine Yulia Tymoshenko said that the average figure is $228.8. It’s still $50 more than a price-2008, but Ukraine will definitely survive.
Well, Ukrainian industry will survive in 2009, but not develop. European industry instead will have a unique opportunity to use low gas prices for future growth of its potential. Ukrainian plants and factories will definitely lose their market competitiveness. I have to mention here that – according to the Moscow agreements – the GazpromSbytUkraine Company will control up to 25% of the domestic industry gas market of Ukraine, so, Russians will have a possibility to support loyal and “punish” competitive Ukrainian enterprises.
But the most important changes are expected not in short-term, but in mid-term prospects. What will happen, when the world economy will start recovering from the current crisis? Oil price will grow. As oil price will grow, gas for Ukraine will be more and more expensive. I would like to inform that the gas price of $450 corresponds not with a peak oil price of 2008 - $140/barrel – but with the price of Brent at the level of $111,4, according to the Naftogaz source. So, in 1,5-2 years time Ukraine will unfortunately face its own big economy crisis. …But it’s not an important question for Ukrainian politicians: all the worst is going to happen AFTER the presidential election.
Monday, January 19, 2009
Ukraine-Russia gas transit and supply contracts: Europe will not suffer from gas-cut during next 10 years, gas price for Ukraine still in shadow.
First of all, I would like to thank Tammy Lynch, Bakinets, and Anonymous reader for their comments to my gas posts. Well, I have to confess that my price prognosis has appeared to be rather pessimistic. I will be really happy, if I am wrong: the less the gas price is, the better it is for Ukraine and its economy.
Why I suggested that the gas price for Ukraine will be around $320 per tcm in 2009? My thoughts were based on three things:
1. Ukrainian negotiators were insisting on fixed gas price (I was pleasantly surprised when I’ve heard today that the gas price formula has been worked out for Ukraine).
2. The Prime Minister of Russia Vladimir Putin, President Dmitri Medvedev and the head of Gazprom Alexei Miller were declaring the “European price” for Ukraine at the level of $450 per tcm (last time Mr. Putin told that on Saturday, 17 January).
3. Gazprom has just switched to some “European formula” in his relations with Turkmenistan, and the price of Turkmen gas for Russians in the first quarter of 2009 will be about $300 per tcm.
It seemed logical to assume that the gas price for Ukraine should be at least more than $300. It is really great if the today’s statement of Prime Minister of Ukraine Yulia Tymoshenko is true, and Naftogaz will pay only around $235-250 per tcm. (She also told that the 20% discount will save $5 billion, which is possible when the price is $220). It would be like a miracle, if the average price for Ukraine were $199 as was suggested by the Secretariat of Ukrainian President. But we have to think, why Moscow agreed for such a low price level, as the Gazprom is clearly not a charity foundation, especially at crisis times.
Anyway, it is still difficult to say, how much Ukraine will pay for gas in 2009. There is not much information about the gas supply contract at all. Here is all I know today:
a) Gas supply and gas transit contracts are signed for 10 years;
b) Starting from 2010, the transit fee and the gas price will be calculated on a base of a clear formula (I hope this “Ukrainian formula” does already exist);
c) In 2009 there will be a fixed gas price for Ukraine, based on “average European gas price minus 20%”;
d) Transit fee in 2009 will stay at the level of 2008 – $1.7 per tcm for 100 km;
e) There will be no mediators in gas trade between Ukraine and Russia (but I think it’s early to say good bye to RosUkrEnergo as a player on European gas market).
Yulia Tymoshenko promised to make the new gas price public “in one-two days”, and it seems that the price is not agreed yet, despite of any paper signed. As the Russian TV reported, after signing the documents and press briefing Mrs. Tymoshenko went to the Gazprom office for some extra negotiations.
Talking about the gas price in 2010, I would like to propose a link, which leads to the fresh prognosis of Goldman Sachs Group Inc., forecasting “swift and violent rebound” in energy prices in the second half of the 2009.
Oil prices may have reached their lowest point already, after falling to $32.40 in mid-December, and are expected to rise to $65 by the end of this year, Goldman Sachs Group Inc. commodity analyst Jeffrey Currie said at a conference in London today. A recent tactic of using supertankers to store crude oil to take advantage of higher prices later this year is “difficult” to profit from and is “near the end of this process” anyway, the Goldman analyst said.
New York crude futures for delivery in December, trading near $56 a barrel, currently cost some $15 a barrel more than March futures, a market situation known as contango, where prices are higher for later delivery. The contango is likely to flatten as supply cuts by OPEC and other producers take effect, reducing the availability of oil for immediate delivery, Mr. Currie said.
Why I suggested that the gas price for Ukraine will be around $320 per tcm in 2009? My thoughts were based on three things:
1. Ukrainian negotiators were insisting on fixed gas price (I was pleasantly surprised when I’ve heard today that the gas price formula has been worked out for Ukraine).
2. The Prime Minister of Russia Vladimir Putin, President Dmitri Medvedev and the head of Gazprom Alexei Miller were declaring the “European price” for Ukraine at the level of $450 per tcm (last time Mr. Putin told that on Saturday, 17 January).
3. Gazprom has just switched to some “European formula” in his relations with Turkmenistan, and the price of Turkmen gas for Russians in the first quarter of 2009 will be about $300 per tcm.
It seemed logical to assume that the gas price for Ukraine should be at least more than $300. It is really great if the today’s statement of Prime Minister of Ukraine Yulia Tymoshenko is true, and Naftogaz will pay only around $235-250 per tcm. (She also told that the 20% discount will save $5 billion, which is possible when the price is $220). It would be like a miracle, if the average price for Ukraine were $199 as was suggested by the Secretariat of Ukrainian President. But we have to think, why Moscow agreed for such a low price level, as the Gazprom is clearly not a charity foundation, especially at crisis times.
Anyway, it is still difficult to say, how much Ukraine will pay for gas in 2009. There is not much information about the gas supply contract at all. Here is all I know today:
a) Gas supply and gas transit contracts are signed for 10 years;
b) Starting from 2010, the transit fee and the gas price will be calculated on a base of a clear formula (I hope this “Ukrainian formula” does already exist);
c) In 2009 there will be a fixed gas price for Ukraine, based on “average European gas price minus 20%”;
d) Transit fee in 2009 will stay at the level of 2008 – $1.7 per tcm for 100 km;
e) There will be no mediators in gas trade between Ukraine and Russia (but I think it’s early to say good bye to RosUkrEnergo as a player on European gas market).
Yulia Tymoshenko promised to make the new gas price public “in one-two days”, and it seems that the price is not agreed yet, despite of any paper signed. As the Russian TV reported, after signing the documents and press briefing Mrs. Tymoshenko went to the Gazprom office for some extra negotiations.
Talking about the gas price in 2010, I would like to propose a link, which leads to the fresh prognosis of Goldman Sachs Group Inc., forecasting “swift and violent rebound” in energy prices in the second half of the 2009.
Oil prices may have reached their lowest point already, after falling to $32.40 in mid-December, and are expected to rise to $65 by the end of this year, Goldman Sachs Group Inc. commodity analyst Jeffrey Currie said at a conference in London today. A recent tactic of using supertankers to store crude oil to take advantage of higher prices later this year is “difficult” to profit from and is “near the end of this process” anyway, the Goldman analyst said.
New York crude futures for delivery in December, trading near $56 a barrel, currently cost some $15 a barrel more than March futures, a market situation known as contango, where prices are higher for later delivery. The contango is likely to flatten as supply cuts by OPEC and other producers take effect, reducing the availability of oil for immediate delivery, Mr. Currie said.
Sunday, January 18, 2009
Double-cross. New gas agreement with Russia will cost Ukraine from 3 to 4 billion dollars.
Today (at night actually) the Prime Minister of Ukraine Yulia Tymoshenko reached a preliminary agreement with the Prime Minister of Russia Vladimir Putin on gas supply to Ukraine in 2009-2010: Ukraine will switch to “European price” with the 20% discount, and the gas transit fee will stay at the previous level.
In my previous post I gave the main figures of Russia-Ukraine gas trade. I mentioned that if Ukraine had agreed for Russian December proposal of gas price of $250 per tcm and unchanged transit fee of $1.7 per 1 tcm for 100 km, Kiev would pay to Russians around $3.85 billion more in 2009. But in new reality the losses of Ukrainian economy will be much more significant.
If the “average European price” is $400 per 1 tcm (Russian authorities have previously declared that it may be up to $460), Ukrainian price for this year would be around $320 per tcm. Ukraine consumes 55 bcm of gas every year, this amount costs $17.6 billion. So, this year Ukraine will overpay the price-2008 on $7.727 billion.
Direct loss of a non-signing of gas supply contract on conditions, proposed by Russia in December, is $3.877 billion (if the price-2009 is $320 per tcm). Even if the price will be different – higher or lower – Ukraine will lose from 3 to 4 billion dollars of budget money. The extra losses of January gas conflict: the cut of budget revenues due to the stoppage of work of more than 20 biggest plants and factories, further gas price raise on the internal market, and a dramatic damage of image of Ukraine as a business partner and predictable democratic country. And how can we call this if not the betrayal of the State interests?
It will be possible to smooth over the budget damage if Ukraine have the permission to perform re-export of gas to Europe (at European prices): financial crisis decreased the gas consumption, Ukraine also has significant amounts of gas in storages, and it can just sell the excesses. But there is no information, if Gazprom will give to Naftogaz Ukraine the re-export permission.
The agreement on gas supply to Ukraine in 2009-2010 is supposed to be signed on 19 December.
In my previous post I gave the main figures of Russia-Ukraine gas trade. I mentioned that if Ukraine had agreed for Russian December proposal of gas price of $250 per tcm and unchanged transit fee of $1.7 per 1 tcm for 100 km, Kiev would pay to Russians around $3.85 billion more in 2009. But in new reality the losses of Ukrainian economy will be much more significant.
If the “average European price” is $400 per 1 tcm (Russian authorities have previously declared that it may be up to $460), Ukrainian price for this year would be around $320 per tcm. Ukraine consumes 55 bcm of gas every year, this amount costs $17.6 billion. So, this year Ukraine will overpay the price-2008 on $7.727 billion.
Direct loss of a non-signing of gas supply contract on conditions, proposed by Russia in December, is $3.877 billion (if the price-2009 is $320 per tcm). Even if the price will be different – higher or lower – Ukraine will lose from 3 to 4 billion dollars of budget money. The extra losses of January gas conflict: the cut of budget revenues due to the stoppage of work of more than 20 biggest plants and factories, further gas price raise on the internal market, and a dramatic damage of image of Ukraine as a business partner and predictable democratic country. And how can we call this if not the betrayal of the State interests?
It will be possible to smooth over the budget damage if Ukraine have the permission to perform re-export of gas to Europe (at European prices): financial crisis decreased the gas consumption, Ukraine also has significant amounts of gas in storages, and it can just sell the excesses. But there is no information, if Gazprom will give to Naftogaz Ukraine the re-export permission.
The agreement on gas supply to Ukraine in 2009-2010 is supposed to be signed on 19 December.
Friday, January 16, 2009
FKPtt Universal Swissland – brand-new item in the Russia-Ukraine gas puzzle.
Igor Pukshyn, Deputy Head of the Secretariat of the President of Ukraine, issued a statement today, indirectly accusing the Prime Minister of Ukraine Yulia Tymoshenko in lobbying her own business interests in current gas conflict with Russia. Mr. Pukshyn claims that there is a need in a careful examination of the possible “wish of the Head of the Government to include the company, which is close to her, in the scheme of gas supply to Ukraine”.
With reference on “media sources” and “statements of the parliamentary opposition”, Igor Pukshyn assumed that “Yulia Tymoshenko, using the authority of her position, is making significant efforts to put into the European gas market an affiliated company – FKPtt Universal Swissland (the spelling of President’s press-service. – T.V.), registered in Switzerland – which have to receive significant amounts of Russian fuel. The information stating that the co-owners of this company are odious Viktor Medvedchuk (ex-Head of the Administration of Leonid Kuchma. – T.V.) and Igor Bakai (a famous gas tycoon close to President Kuchma, and the first Head of Naftogaz Ukraine until 2000. – T.V.) also worth attention”.
In this context, Mr. Pukshyn mentioned “the active opponency of Mrs. Tymoshenko to the activities of the gas trader RosUkrEnergo, which is a direct rival of the mentioned Swiss company, and the absence of the contract signed between the Naftogaz Ukraine and Gazprom on direct gas supply”. The Security Service of Ukraine and the General Prosecutor’s Office will examine all the mentioned accusation, the President’s aide informed.
With reference on “media sources” and “statements of the parliamentary opposition”, Igor Pukshyn assumed that “Yulia Tymoshenko, using the authority of her position, is making significant efforts to put into the European gas market an affiliated company – FKPtt Universal Swissland (the spelling of President’s press-service. – T.V.), registered in Switzerland – which have to receive significant amounts of Russian fuel. The information stating that the co-owners of this company are odious Viktor Medvedchuk (ex-Head of the Administration of Leonid Kuchma. – T.V.) and Igor Bakai (a famous gas tycoon close to President Kuchma, and the first Head of Naftogaz Ukraine until 2000. – T.V.) also worth attention”.
In this context, Mr. Pukshyn mentioned “the active opponency of Mrs. Tymoshenko to the activities of the gas trader RosUkrEnergo, which is a direct rival of the mentioned Swiss company, and the absence of the contract signed between the Naftogaz Ukraine and Gazprom on direct gas supply”. The Security Service of Ukraine and the General Prosecutor’s Office will examine all the mentioned accusation, the President’s aide informed.
Tuesday, January 13, 2009
Parliamentary Control. Starting from today, a special Investigation Commission of MPs will follow the gas negotiations between Ukraine and Russia.
Today the Parliament of Ukraine has founded a Temporary Investigation Parliamentary Commission to follow all the developments of current gas crisis. The Committee is going to examine the actions of Ukrainian officials in the sphere of gas supply and gas transit in 2008, and also will follow the negotiations with Russian Gazprom in 2009. The questions of signing the new gas supply and transit contracts – including financial issues, like gas price – will be under everyday control of the Commission.
222 MPs voted in favour of the Commission’s founding: 174 members of the Party of Regions (total size of faction – 175 MPs), 27 members of Communist party (total size – 27), and 19 members of the Block of the Speaker Lytvyn (total size – 19). The Block of Prime Minister Yulia Tymoshenko (BYT) and all the faction Our Ukraine – People Self-Defence (OU-PSD) didn’t support the idea of establishing the parliamentary control of gas problematic.
The new-elected Head of the Temporary Investigation Commission Inna Bogoslovska (member of the Party of Regions) promised to give the information on its findings to press every three days. “Our task is to speed up the signing of two contracts”, Inna Bogoslovska explained. On 6 February the preliminary report of the Commission will be presented in Parliament. The Commission (according to the size of every faction, it comprises 4 MPs from the Party of Regions, 3 MPs from the BYT, 2 MPs from the OU-PSD, 1 MP from BL and one Communist) is going to work during two months.
“It may well happen that, according to the results of this Commission’s activities, the question on the impeachment of President and the resignation of Government will be raised”, Inna Bogoslovska said. The leader of the Party of Regions Viktor Yanukovych went further today, calling for the immediate Government resignation. The Communist party on its turn proposed to start the impeachment procedure as soon as possible.
P.S. I’m not going to comment a lot the today’s “blockade” of Russian gas transit to Europe as I still think that this “problem” is staged by some forces from Russia AND Ukraine. I would only add one point concerning the gas interests of Russia. It is important to pay attention to one interesting figure the Prime Minister of Russia Vladimir Putin mentioned during his meeting with foreign journalists last week. He told that Russia might pay for the Middle Asian gas “on average $375 per tcm” in 2009. As the European gas prices (in most of the EU countries) are linked to the oil prices, and the oil prices are still falling despite of all the Russian efforts and the statements of the OPEC countries, it is reasonable for Moscow just to win time for extra negotiations, in particular, with the successor of Turkmenbashi. But I have to say that Russia will have to re-start gas export to Europe in a very short time – there are simply not enough of gas storage facilities on the Russian territory. In a while Moscow will face only two choices: to transit the gas to Europe or to burn it (or to close some gas wells), losing money Gazprom needs too much today.
222 MPs voted in favour of the Commission’s founding: 174 members of the Party of Regions (total size of faction – 175 MPs), 27 members of Communist party (total size – 27), and 19 members of the Block of the Speaker Lytvyn (total size – 19). The Block of Prime Minister Yulia Tymoshenko (BYT) and all the faction Our Ukraine – People Self-Defence (OU-PSD) didn’t support the idea of establishing the parliamentary control of gas problematic.
The new-elected Head of the Temporary Investigation Commission Inna Bogoslovska (member of the Party of Regions) promised to give the information on its findings to press every three days. “Our task is to speed up the signing of two contracts”, Inna Bogoslovska explained. On 6 February the preliminary report of the Commission will be presented in Parliament. The Commission (according to the size of every faction, it comprises 4 MPs from the Party of Regions, 3 MPs from the BYT, 2 MPs from the OU-PSD, 1 MP from BL and one Communist) is going to work during two months.
“It may well happen that, according to the results of this Commission’s activities, the question on the impeachment of President and the resignation of Government will be raised”, Inna Bogoslovska said. The leader of the Party of Regions Viktor Yanukovych went further today, calling for the immediate Government resignation. The Communist party on its turn proposed to start the impeachment procedure as soon as possible.
P.S. I’m not going to comment a lot the today’s “blockade” of Russian gas transit to Europe as I still think that this “problem” is staged by some forces from Russia AND Ukraine. I would only add one point concerning the gas interests of Russia. It is important to pay attention to one interesting figure the Prime Minister of Russia Vladimir Putin mentioned during his meeting with foreign journalists last week. He told that Russia might pay for the Middle Asian gas “on average $375 per tcm” in 2009. As the European gas prices (in most of the EU countries) are linked to the oil prices, and the oil prices are still falling despite of all the Russian efforts and the statements of the OPEC countries, it is reasonable for Moscow just to win time for extra negotiations, in particular, with the successor of Turkmenbashi. But I have to say that Russia will have to re-start gas export to Europe in a very short time – there are simply not enough of gas storage facilities on the Russian territory. In a while Moscow will face only two choices: to transit the gas to Europe or to burn it (or to close some gas wells), losing money Gazprom needs too much today.
Sunday, January 11, 2009
High Treason – II. Some conclusions from the Cold War started by Russia-Ukraine gas dispute.
The Gas Cold War 2009 caused by the Russia-Ukraine gas dispute has not finished yet, but we can already make some important conclusions. Sitting in the cold Kiev flat (we’ve got very low pressure in central heating system), I will try to give my point of view as briefly as possible.
Conclusion 1. The indisputable winner of the Gas Cold War 2009 is Russia and Russian Gazprom.
I would not agree with some observers who say that the image of Russia as a reliable gas supplier and the Gazprom as a relevant business partner suffered a lot. Europe and Europeans may think and feel whatever they want, but it is really impossible to replace more than 160 billion of cubic meters of Russian gas with some alternative source of energy. So, Europe will stay dependent on Russian gas supply, whatever the image of Russia will be.
Actually Russian Gazprom has already received a lot of profits from the Cold War:
1. Gas prises. European consumers were predicting the Russian gas average prices for Europe to fall to around $320 per tcm (thousand cubic metres) in 2009 due to the low oil prices level. New Cold War led to rise of the oil demand in Europe as of the alternative energy resource, and this will prevent the significant fall of gas prices.
2. Alternative pipeline projects. Gazprom currently has two new gas pipelines projects: the Nord Stream pipeline, which runs under the Baltic sea from Russian Vyborg to German Greifswald, and the South Stream, which will cross the Black Sea to Bulgaria and then split in the direction of Austria and Greece. Both pipelines will definitely get bigger support of the European companies, as the alternative for “non-adequate” Ukrainian route. (Though Ukrainian route cannot be eliminated as it transports around 80% of Russian gas export to Europe).
3. Punching Ukraine. Undermining the image of Ukraine and its President Viktor Yushchenko was a “pleasant revenge” of Russia and its top-authorities for Orange Revolution, support of Georgia, and Holodomor festivities. After this crisis nobody (except of some ultra-pro-Ukrainian-idealists) in Europe would think seriously about the possibility for Ukraine to join the EU earlier than in 100 years, and nobody in NATO would seriously consider future Ukrainian full membership in the Alliance.
4. Extra money. The crises appeared to become the real opportunity to rise gas prices for Ukraine and to get extra-profits.
Conclusion 2. The Gas Cold War was artificially organized.
Of course, Ukraine could sign the gas supply agreement with Russia before the New Year and prevent the crisis. Gazprom proposed the price of $250 per tcm, which is acceptable for Ukraine and its economy (in case of proper management of the State Oli and Gas Company Naftogaz Ukraine and fair distribution of up to 18 billion cubic meters of gas the Ukraine is producing by itself every year. The price of $250 is logical: last year Ukraine was paying $179,5 per tcm, and there is an agreement that the price will raise gradually to the European level during three years. It is approximately plus $70-80-90 every year, so, Russians should charge $250 or even more, and it was predictable.
But the gas agreement with Russia was not signed, and the Ukrainian officials who refused to sign the documents were consciously provoking the gas crisis. No agreement – no supplies, even a schoolboy may predict such a situation. Some Naftogaz officials said that the President of Ukraine Viktor Yushchenko prohibited signing of this agreement. It sounds unconvincing, as at that time nobody, including the Prime Minister of Ukraine Yulia Tymoshenko, made any rough statement on this point. It is also very naïve to think that the Gazprom and Naftogaz Ukraine really have communication problems and cannot reach a deal on gas supply to Ukraine. It’s unbelievable even if we take to the account the fact that the Head of Naftogaz Oleg Dubyna is flying in one plane with his Gazprom counterpart Aleksei Miller.
So, the gas crisis was surely staged by Kremlin and by some high authorities in Ukraine. Viktor Yushchenko is not among them, though he didn’t do anything (he could do a lot) to prevent the Gas Cold War. I would also add that the Head of Naftogaz Ukraine Oleg Dubyna was appointed to his position by the Yulia Tymoshenko’s quota, and that he is in very close relations with the Industrial Union of Donbass business group, which has permanent conflict of interests with “gas trade middleman” Dmytro Firtash who controls half of the “RosUkrEnergo” intermediate company.
Conclusion 3. In frames of Ukrainian domestic politics the gas crisis played not in favour of President Yushchenko.
Everyone might notice that the President of Ukraine was trying not to be involved into the gas crisis from the very start. He was mentioned a lot by all the participants of the negotiations (in positive and negative manner), he made some phone calls to his counterparts in Europe and to Russian President Dmitriy Medvedev, but he was avoiding to get inside the negotiations and discussions by himself. Why? It seems that he has a very vulnerable position, when one is talking about the gas supply question. During his Presidency, Mr. Yushchenko has been accused a lot of times in having some profits from the work of the RosUkrEnergo. In particular some people were accusing Mr. Firtash in paying some bills for Kateryna Chumachenko, the wife of the President. These accusations were never proved, but also never dishonoured, though Viktor Yushchenko could for example appeal to courts. If these accusations were true (even semi-true), Viktor Yushchenko is going to lose one of the main sources of his financial support before the Presidential election. By the way, some of the money may be re-transferred in favour of Mrs. Tymoshenko, if we just hypothetically assume that the Itera Company of Igor Makarov may come back to the big gas-supply scene as some people say.
Conclusion 4. The main loser of the Cold War is Ukraine as a country, its economy, and the State oil and gas company Naftogaz Ukraine (but not the current management of this company).
In the geopolitical sense the image of Ukraine as a country (and as a democratic country in particular) has suffered a lot. The New Cold War has demonstrated that Ukraine is totally unpredictable, since the actions of its authorities and state companies are based on the today’s interests of domestic politics, rather than on long-term programmes or interests of the country. Despite of the declarations about the dedication to the democratic ideals and the European course of current leaders of Ukraine, they showed up as a real threat to Europe, European economy and even to the health of the citizens of the European States.
The State Oil and Gas Company Naftogaz Ukraine is close to bankruptcy today. Though I am sure that with normal management this company may easily become a mail financial supplier of Ukrainian budget. (I was trying to make some calculations earlier, and maybe will publish the results here one day, of course, after careful self-proof-reading).
Conclusion 5. The intermediate gas supply company RosUkrEnergo may seem to be a loser, but is not.
The intermediate company RosUkrEnergo also may be considered as a loser in the New Cold War as it will probably be eliminated from Russia-Ukraine gas trade scheme. But I don’t think this statement is true, taking to the account billions dollars of profit RosUkrEnergo had received during the last four years, operating in the sphere of the re-export of gas from Russia to Ukraine and Europe (Hungary, Romania, Poland and Slovakia) and gas trade inside the domestic market of Ukraine. Half owned by Gazprom, RosUkrEnergo was founded as a temporary source of profits, and now it’s just a time for something new. I will not be surprised if Mr. Firtash would be among founders of a new gas trade company who will operate on European – and Ukrainian – markets in coming years.
Conclusion 6. The Europe, still suffering from lack of gas supply, may be considered as a loser also, and the object of manipulation as well.
Conclusion 7. The Cold War is an evidence of a betrayal of the interests of Ukraine by its highest authorities – President, Prime Minister, and Head of State Oil and Gas Company. Their actions and failure to act as well may be called as a high treason with all the consequences it should cause.
Conclusion 1. The indisputable winner of the Gas Cold War 2009 is Russia and Russian Gazprom.
I would not agree with some observers who say that the image of Russia as a reliable gas supplier and the Gazprom as a relevant business partner suffered a lot. Europe and Europeans may think and feel whatever they want, but it is really impossible to replace more than 160 billion of cubic meters of Russian gas with some alternative source of energy. So, Europe will stay dependent on Russian gas supply, whatever the image of Russia will be.
Actually Russian Gazprom has already received a lot of profits from the Cold War:
1. Gas prises. European consumers were predicting the Russian gas average prices for Europe to fall to around $320 per tcm (thousand cubic metres) in 2009 due to the low oil prices level. New Cold War led to rise of the oil demand in Europe as of the alternative energy resource, and this will prevent the significant fall of gas prices.
2. Alternative pipeline projects. Gazprom currently has two new gas pipelines projects: the Nord Stream pipeline, which runs under the Baltic sea from Russian Vyborg to German Greifswald, and the South Stream, which will cross the Black Sea to Bulgaria and then split in the direction of Austria and Greece. Both pipelines will definitely get bigger support of the European companies, as the alternative for “non-adequate” Ukrainian route. (Though Ukrainian route cannot be eliminated as it transports around 80% of Russian gas export to Europe).
3. Punching Ukraine. Undermining the image of Ukraine and its President Viktor Yushchenko was a “pleasant revenge” of Russia and its top-authorities for Orange Revolution, support of Georgia, and Holodomor festivities. After this crisis nobody (except of some ultra-pro-Ukrainian-idealists) in Europe would think seriously about the possibility for Ukraine to join the EU earlier than in 100 years, and nobody in NATO would seriously consider future Ukrainian full membership in the Alliance.
4. Extra money. The crises appeared to become the real opportunity to rise gas prices for Ukraine and to get extra-profits.
Conclusion 2. The Gas Cold War was artificially organized.
Of course, Ukraine could sign the gas supply agreement with Russia before the New Year and prevent the crisis. Gazprom proposed the price of $250 per tcm, which is acceptable for Ukraine and its economy (in case of proper management of the State Oli and Gas Company Naftogaz Ukraine and fair distribution of up to 18 billion cubic meters of gas the Ukraine is producing by itself every year. The price of $250 is logical: last year Ukraine was paying $179,5 per tcm, and there is an agreement that the price will raise gradually to the European level during three years. It is approximately plus $70-80-90 every year, so, Russians should charge $250 or even more, and it was predictable.
But the gas agreement with Russia was not signed, and the Ukrainian officials who refused to sign the documents were consciously provoking the gas crisis. No agreement – no supplies, even a schoolboy may predict such a situation. Some Naftogaz officials said that the President of Ukraine Viktor Yushchenko prohibited signing of this agreement. It sounds unconvincing, as at that time nobody, including the Prime Minister of Ukraine Yulia Tymoshenko, made any rough statement on this point. It is also very naïve to think that the Gazprom and Naftogaz Ukraine really have communication problems and cannot reach a deal on gas supply to Ukraine. It’s unbelievable even if we take to the account the fact that the Head of Naftogaz Oleg Dubyna is flying in one plane with his Gazprom counterpart Aleksei Miller.
So, the gas crisis was surely staged by Kremlin and by some high authorities in Ukraine. Viktor Yushchenko is not among them, though he didn’t do anything (he could do a lot) to prevent the Gas Cold War. I would also add that the Head of Naftogaz Ukraine Oleg Dubyna was appointed to his position by the Yulia Tymoshenko’s quota, and that he is in very close relations with the Industrial Union of Donbass business group, which has permanent conflict of interests with “gas trade middleman” Dmytro Firtash who controls half of the “RosUkrEnergo” intermediate company.
Conclusion 3. In frames of Ukrainian domestic politics the gas crisis played not in favour of President Yushchenko.
Everyone might notice that the President of Ukraine was trying not to be involved into the gas crisis from the very start. He was mentioned a lot by all the participants of the negotiations (in positive and negative manner), he made some phone calls to his counterparts in Europe and to Russian President Dmitriy Medvedev, but he was avoiding to get inside the negotiations and discussions by himself. Why? It seems that he has a very vulnerable position, when one is talking about the gas supply question. During his Presidency, Mr. Yushchenko has been accused a lot of times in having some profits from the work of the RosUkrEnergo. In particular some people were accusing Mr. Firtash in paying some bills for Kateryna Chumachenko, the wife of the President. These accusations were never proved, but also never dishonoured, though Viktor Yushchenko could for example appeal to courts. If these accusations were true (even semi-true), Viktor Yushchenko is going to lose one of the main sources of his financial support before the Presidential election. By the way, some of the money may be re-transferred in favour of Mrs. Tymoshenko, if we just hypothetically assume that the Itera Company of Igor Makarov may come back to the big gas-supply scene as some people say.
Conclusion 4. The main loser of the Cold War is Ukraine as a country, its economy, and the State oil and gas company Naftogaz Ukraine (but not the current management of this company).
In the geopolitical sense the image of Ukraine as a country (and as a democratic country in particular) has suffered a lot. The New Cold War has demonstrated that Ukraine is totally unpredictable, since the actions of its authorities and state companies are based on the today’s interests of domestic politics, rather than on long-term programmes or interests of the country. Despite of the declarations about the dedication to the democratic ideals and the European course of current leaders of Ukraine, they showed up as a real threat to Europe, European economy and even to the health of the citizens of the European States.
The State Oil and Gas Company Naftogaz Ukraine is close to bankruptcy today. Though I am sure that with normal management this company may easily become a mail financial supplier of Ukrainian budget. (I was trying to make some calculations earlier, and maybe will publish the results here one day, of course, after careful self-proof-reading).
Conclusion 5. The intermediate gas supply company RosUkrEnergo may seem to be a loser, but is not.
The intermediate company RosUkrEnergo also may be considered as a loser in the New Cold War as it will probably be eliminated from Russia-Ukraine gas trade scheme. But I don’t think this statement is true, taking to the account billions dollars of profit RosUkrEnergo had received during the last four years, operating in the sphere of the re-export of gas from Russia to Ukraine and Europe (Hungary, Romania, Poland and Slovakia) and gas trade inside the domestic market of Ukraine. Half owned by Gazprom, RosUkrEnergo was founded as a temporary source of profits, and now it’s just a time for something new. I will not be surprised if Mr. Firtash would be among founders of a new gas trade company who will operate on European – and Ukrainian – markets in coming years.
Conclusion 6. The Europe, still suffering from lack of gas supply, may be considered as a loser also, and the object of manipulation as well.
Conclusion 7. The Cold War is an evidence of a betrayal of the interests of Ukraine by its highest authorities – President, Prime Minister, and Head of State Oil and Gas Company. Their actions and failure to act as well may be called as a high treason with all the consequences it should cause.
Monday, January 5, 2009
The High Treason. Non-settled gas dispute with the Russian Gazprom is leading Ukraine to energy bankruptcy and deep economy problems.
On 1 of December Russian Gazprom cut off gas supply to Ukraine. This news was among the top-3 in the entire world media during the New Year holidays. I think it would be first if there was no war in sector Gaza. The reasons of Gazprom’s actions are totally legitimate: unpaid debt for gas supply to Ukraine in 2008 and non-existence of a supply contract for 2009. Such a confusing situation seems to be not a terrible negligence of Ukrainian authorities, but a carefully planned scheme. The goal is to take the case to state of total mess, and then to re-divide the scheme of control of profits from gas supply to Ukraine. As a side effect, the State oil and gas company Naftogaz Ukraine may go bankrupt and Ukraine may lose control of its huge gas transportation system in favour of Russia or some Russia-leaded consortium.
These actions of Ukrainian officials can definitely be qualified as a high treason. But nobody will be charged for that.
There is no need to remind here the very details of the debt-dispute Russia and Ukraine had in late December 2008 – the media explained it very good. Talking in general, the Naftogaz Ukraine failed to pay off a debt for gas shipped from Russia in 2008: it paid $1.52 billion just one day before the New Year, but Gazprom claimed the total debt was $2.1 billion (including $450 million of penalties for the late payment for November and December gas shipments).
Current situation differs from the gas problems of early 2006. Now Ukraine has significant amounts of gas saved in storages: about 17 billion cubic metres (bcm) is owned by Naftogaz Ukraine, and the intermediary RosUkrEnergo (I’ll talk about this company later) has extra 11 bcm. That’s why there is no evidence of harm for Ukraine caused by the gas cut-off. Yet. But the gas battle with Gazprom will definitely influence the crisis-hit Ukrainian economy, pushing it down. World economy crisis reduced the industrial energy consumption in Ukraine almost by a quarter, and the main problems may be laid on shoulders of Ukrainian citizens. Higher gas prices will lead to rise of a gas fees for the households, which are heavily subsidising by the state.
The problem is that a dramatic raise of gas prise was not planned in the budget of Ukraine for 2009, approved by Parliament and signed by President before the New Year holidays. Moreover, a gas-supply part of the budget had been highly criticised even before problems with Gazprom went too far. The Deputy Head of the Secretariat of the President of Ukraine Oleksandr Shlapak said on 29 December that the 1.6 billion hryvnias, the budget assigned for Naftogaz Ukraine to keep low gas prises on the internal market, is not enough at all. “If we even manage to keep a gas price at $179.5 per 1,000 cubic meters (tcm) during the talks with our Russian partners, and the Ukrainian hryvnia’s rate to dollar stay at 7.5, there will be a need to compensate for Naftogaz Ukraine up to 9.2 billion hryvnias. Feel the difference”, he informed.
This means that in 2009 somebody will go bankrupt: either Naftogas, or Ukrainian citizens, or even Ukrainian state.
The gas price for Ukraine is really a painful question for years. In 2008 Naftogaz Ukraine had to pay $179.5 per tcm for gas from Russia, which is almost 3 times less than EU countries were paying. Due to the agreement to switch to market prices “step by step”, Gazprom offered the price rise to $250 per tcm for 2009. But it was already too high for Ukraine: it was going to pay not more than $201 per tcm (according to budget plans of the Government). As a result, Ukrainian officials didn’t sign even temporary agreement and left the country without contracted gas supply at all. Can somebody imagine such a thing to happen on a state level in any other European country?
It’s obvious that something is standing behind this artificially made conflict. It seems that the real source of Ukrainian gas problems, which may easily ruin the country’s economy, is a fight for the profits from gas transit and supply to Ukraine. As for this moment the only party of gas-supply scheme didn’t lose a cent from this situation is the RosUkrEnergo, the gas-trading intermediary between Russia and Ukraine. This company is making profit “buying” huge amounts of Russian gas on Ukrainian border and re-selling it to Ukraine (working also indirectly on Ukrainian domestic market) and some Eastern European countries (like Hungary and Romania). So, everyone who is in charge of RosUkrEnergo has guaranteed billions of profit. As for today, Russian Gazprom owns 50% of RosUkrEnergo, another half is under control of the commercial structures of Ukrainian-born businessman Dmytro Firtash. By the way, he also is linked with Ukrainian Nadra bank, which was accused by Yulia Tymoshenko in fraud with hryvnia rate in December (here is a link to my post about this matter).
That’s all I have time to write today. To be continued…
These actions of Ukrainian officials can definitely be qualified as a high treason. But nobody will be charged for that.
There is no need to remind here the very details of the debt-dispute Russia and Ukraine had in late December 2008 – the media explained it very good. Talking in general, the Naftogaz Ukraine failed to pay off a debt for gas shipped from Russia in 2008: it paid $1.52 billion just one day before the New Year, but Gazprom claimed the total debt was $2.1 billion (including $450 million of penalties for the late payment for November and December gas shipments).
Current situation differs from the gas problems of early 2006. Now Ukraine has significant amounts of gas saved in storages: about 17 billion cubic metres (bcm) is owned by Naftogaz Ukraine, and the intermediary RosUkrEnergo (I’ll talk about this company later) has extra 11 bcm. That’s why there is no evidence of harm for Ukraine caused by the gas cut-off. Yet. But the gas battle with Gazprom will definitely influence the crisis-hit Ukrainian economy, pushing it down. World economy crisis reduced the industrial energy consumption in Ukraine almost by a quarter, and the main problems may be laid on shoulders of Ukrainian citizens. Higher gas prices will lead to rise of a gas fees for the households, which are heavily subsidising by the state.
The problem is that a dramatic raise of gas prise was not planned in the budget of Ukraine for 2009, approved by Parliament and signed by President before the New Year holidays. Moreover, a gas-supply part of the budget had been highly criticised even before problems with Gazprom went too far. The Deputy Head of the Secretariat of the President of Ukraine Oleksandr Shlapak said on 29 December that the 1.6 billion hryvnias, the budget assigned for Naftogaz Ukraine to keep low gas prises on the internal market, is not enough at all. “If we even manage to keep a gas price at $179.5 per 1,000 cubic meters (tcm) during the talks with our Russian partners, and the Ukrainian hryvnia’s rate to dollar stay at 7.5, there will be a need to compensate for Naftogaz Ukraine up to 9.2 billion hryvnias. Feel the difference”, he informed.
This means that in 2009 somebody will go bankrupt: either Naftogas, or Ukrainian citizens, or even Ukrainian state.
The gas price for Ukraine is really a painful question for years. In 2008 Naftogaz Ukraine had to pay $179.5 per tcm for gas from Russia, which is almost 3 times less than EU countries were paying. Due to the agreement to switch to market prices “step by step”, Gazprom offered the price rise to $250 per tcm for 2009. But it was already too high for Ukraine: it was going to pay not more than $201 per tcm (according to budget plans of the Government). As a result, Ukrainian officials didn’t sign even temporary agreement and left the country without contracted gas supply at all. Can somebody imagine such a thing to happen on a state level in any other European country?
It’s obvious that something is standing behind this artificially made conflict. It seems that the real source of Ukrainian gas problems, which may easily ruin the country’s economy, is a fight for the profits from gas transit and supply to Ukraine. As for this moment the only party of gas-supply scheme didn’t lose a cent from this situation is the RosUkrEnergo, the gas-trading intermediary between Russia and Ukraine. This company is making profit “buying” huge amounts of Russian gas on Ukrainian border and re-selling it to Ukraine (working also indirectly on Ukrainian domestic market) and some Eastern European countries (like Hungary and Romania). So, everyone who is in charge of RosUkrEnergo has guaranteed billions of profit. As for today, Russian Gazprom owns 50% of RosUkrEnergo, another half is under control of the commercial structures of Ukrainian-born businessman Dmytro Firtash. By the way, he also is linked with Ukrainian Nadra bank, which was accused by Yulia Tymoshenko in fraud with hryvnia rate in December (here is a link to my post about this matter).
That’s all I have time to write today. To be continued…
Tuesday, December 23, 2008
It’s a democracy. The question calling the President of Ukraine to leave the country has won the biggest Internet rating.
Today the President of Ukraine Viktor Yushchenko held his annual concluding press conference. In frames of this event he has answered a couple of questions of Ukrainian Internet users, which were submitted in advance. I was following the process of submission of questions with a big interest, as the most popular one appeared to be the following: Mr. President, how much money should the people of Ukraine pay to convince you and other top authorities to leave this country?
Actually, it is not a question but an attitude of Ukrainians toward President in particular, and all the ruling politicians in general. I voted for it, and a lot of my friends – almost all of the people I was talking with during last 2-3 weeks – did the same. I may say that Ukrainians of very different positions and ranges supported this question. For example, the link to this question I received by e-mail from my friend who is a housewife with a very active social position. Of course I didn’t believe that the question would be really asked. But it happened, and all the Ukraine has heard it during a live translation of the press conference on TV and radio. I have to mention that President was surely prepared for that. And tried to move the responsibility for this question outside the borders of Ukraine.
Viktor Yushchenko declared that “it is a provocation”, and that “the respected authors of this question are situated not in Ukraine, and don’t represent Ukrainians” (having in mind Russians, of course). “We even can not pose a question without help”, President assumed. Also Mr. Yushchenko said, “The real authorities should be half step ahead to show the way to nation”. The leader of nation shall tell, “our choice is such-and-such, we have to go in such a direction”, no matter “you like it or not”.
And some extra quotations of President I liked the most:
“The version of early presidential election is written not in Ukrainian offices”.
“Parliament is the most destabilising institution”.
“It is good when Parliament works like an aquarium – clear and visible”.
Actually, it is not a question but an attitude of Ukrainians toward President in particular, and all the ruling politicians in general. I voted for it, and a lot of my friends – almost all of the people I was talking with during last 2-3 weeks – did the same. I may say that Ukrainians of very different positions and ranges supported this question. For example, the link to this question I received by e-mail from my friend who is a housewife with a very active social position. Of course I didn’t believe that the question would be really asked. But it happened, and all the Ukraine has heard it during a live translation of the press conference on TV and radio. I have to mention that President was surely prepared for that. And tried to move the responsibility for this question outside the borders of Ukraine.
Viktor Yushchenko declared that “it is a provocation”, and that “the respected authors of this question are situated not in Ukraine, and don’t represent Ukrainians” (having in mind Russians, of course). “We even can not pose a question without help”, President assumed. Also Mr. Yushchenko said, “The real authorities should be half step ahead to show the way to nation”. The leader of nation shall tell, “our choice is such-and-such, we have to go in such a direction”, no matter “you like it or not”.
And some extra quotations of President I liked the most:
“The version of early presidential election is written not in Ukrainian offices”.
“Parliament is the most destabilising institution”.
“It is good when Parliament works like an aquarium – clear and visible”.
Monday, December 22, 2008
What’s up, Ukraine? 15-21 December 2008.
Falling currency . On Thursday, 18 December the Ukrainian hryvnia dropped to its historical low against the US dollar – 10-10.5.
Less than a half of the year ago US dollar cost around 4.8 hryvnias. The Prime Minister of Ukraine Yulia Tymoshenko declared that the hryvnia’s value felt down due to “a special speculative operations planned at the currency market of Ukraine, and organized with the assistance of the National Bank (Central bank) and some other banks of Ukraine”, in particular, Nadra bank.
“The bank that was just bought for 600 million dollars, received from the National Bank financial resources of 7 billion 100 million hryvnias”, Yulia Tymoshenko said, adding that “the bribes made up from 3% to 7% of the total amount of financing”. Yulia Tymoshenko pointed out that Ukrainian businessman Dmytro Firtash (owner of the Group DF holding, which is famous also for a scandal around the financial support of the British Conservatives) and the Presidential Secretariat are standing behind the Nadra bank. “They need to tumble the hryvnia’s value to dollar”.
Getting closer. The U.S. Secretary of State Condoleezza Rice and Ukrainian Foreign Minister Volodymyr Ohryzko signed the U.S. – Ukraine Charter on Strategic Partnership.
The joint U.S. – Ukrainian declaration called a “Charter on Strategic Partnership”, signed in Washington on 19 December, appeals for the expanding of the economic and security ties between two countries, and strengthening of the cooperation in energy, trade and other areas.The document does not have a legally binding status.
The declaration states that the United States intends to open a diplomatic post in the Autonomy Republic of Crimea, a region that is highly influenced by Russia (there are many ethnic Russians and Russian-speaking people with Russian passports), and is hosting Russia's Black Sea fleet in Sevastopol (under a lease agreement until 2017). ”Ukraine welcomes the United States' intention to establish an American diplomatic presence (American presence post) in Simferopol, the capital of Crimea”, said the joint declaration.
State Department spokesman Sean McCormack has already said the Crimean diplomatic post would be a small one, dedicated to the organising of cultural events and doing political reporting. Mr. McCormack denied any intentions to provoke Russia by establishment of this post. ”This is about U.S.-Ukraine bilateral relations. If the Russian government chooses to be upset by ... my stating that we're considering opening up… a one-person or two-person American presence post, well, there's not much I can do about that,” he added. Russian officials haven’t made any statements on this point, but analysts are saying that this answer may be given in more sharp position of Moscow in gas-trade dialogue with Ukraine. Minister Ohryzko told reporters the post “probably will be done next year”.
Also Washington promised to help to strengthen the candidacy of Ukraine for NATO membership, which is another painful question for the official Russia. Nevertheless, U.S. would work within the NATO-Ukraine Commission to agree on a plan for training and equipping Ukrainian armed forces. “We plan to undertake a program of enhanced security cooperation intended to increase Ukrainian capabilities and to strengthen Ukraine's candidacy for NATO membership,” the document said.
Washington also promised to help Ukraine with “rehabilitating and modernizing the capacity of Ukraine's gas transit infrastructure”, cooling down Russian dreams to fort a consortium for the exploiting of Ukrainian gas lines.
Fitch Ratings: The credit outlook for the Ukrainian energy and utility sector during 2009 is negative.
The report issued on Thursday 18 December lists the main problems of the Ukrainian energy and utility sector: a funding crisis in the state-controlled power generation sector, downward pressure on regulated tariffs due to a severe recession, restricted access to bank lending and debt capital markets, and continued turmoil at NJSC Naftogaz of Ukraine (‘B’/Rating Watch Negative). Fitch expects an economic recession in Ukraine in 2009 to drive down power demand, providing only temporary respite to falling capacity reserve margins.
Fitch expects liquidity and refinancing risk to remain high for the Ukrainian energy and utility sector through most of 2009, as foreign banks and markets remain effectively closed to Ukrainian issuers. Naftogaz will continue to confront major challenges in 2009, including a lack of transparency, potentially insufficient state subsidisation for its loss-making residential business, higher import prices, accumulating gas payables and restricted access to external financing. However, Fitch continues to view Naftogaz as an important strategic asset for the Ukrainian government (Ukraine rated at ‘B+’/Outlook Negative) and factors state support into the company’s rating.
The 2009 credit outlook, entitled "Ukrainian Energy and Utilities – 2009 Outlook”, is available on the agency's public website http://www.fitchratings.com/.
Eternal problem. Russia blocks Ukrainian famine-genocide resolution at the United Nations.
Russia blocked Ukraine-initiated UN resolution claiming Holodomor in the Soviet Union in early 1930s was famine-genocide aimed against Ukrainians, rather than a common tragedy of many nations in the country. “We succeeded to bloc the inclusion of the item into the agenda of the current UN General Assembly,” Russian Ambassador to the United Nations Vitaly Churkin said on Thursday, 18 December, according to the Russian media.
The Ambassador also added the United States and Great Britain backed the Ukrainian motion, which “ended in nothing.” Mr. Churkin said Russian representatives were active in explaining the history of Holodomor to foreign partners. As a result, nine EU countries did not sign the Ukrainian declaration, although “EU members usually act in a consolidated manner”.
Less than a half of the year ago US dollar cost around 4.8 hryvnias. The Prime Minister of Ukraine Yulia Tymoshenko declared that the hryvnia’s value felt down due to “a special speculative operations planned at the currency market of Ukraine, and organized with the assistance of the National Bank (Central bank) and some other banks of Ukraine”, in particular, Nadra bank.
“The bank that was just bought for 600 million dollars, received from the National Bank financial resources of 7 billion 100 million hryvnias”, Yulia Tymoshenko said, adding that “the bribes made up from 3% to 7% of the total amount of financing”. Yulia Tymoshenko pointed out that Ukrainian businessman Dmytro Firtash (owner of the Group DF holding, which is famous also for a scandal around the financial support of the British Conservatives) and the Presidential Secretariat are standing behind the Nadra bank. “They need to tumble the hryvnia’s value to dollar”.
Getting closer. The U.S. Secretary of State Condoleezza Rice and Ukrainian Foreign Minister Volodymyr Ohryzko signed the U.S. – Ukraine Charter on Strategic Partnership.
The joint U.S. – Ukrainian declaration called a “Charter on Strategic Partnership”, signed in Washington on 19 December, appeals for the expanding of the economic and security ties between two countries, and strengthening of the cooperation in energy, trade and other areas.The document does not have a legally binding status.
The declaration states that the United States intends to open a diplomatic post in the Autonomy Republic of Crimea, a region that is highly influenced by Russia (there are many ethnic Russians and Russian-speaking people with Russian passports), and is hosting Russia's Black Sea fleet in Sevastopol (under a lease agreement until 2017). ”Ukraine welcomes the United States' intention to establish an American diplomatic presence (American presence post) in Simferopol, the capital of Crimea”, said the joint declaration.
State Department spokesman Sean McCormack has already said the Crimean diplomatic post would be a small one, dedicated to the organising of cultural events and doing political reporting. Mr. McCormack denied any intentions to provoke Russia by establishment of this post. ”This is about U.S.-Ukraine bilateral relations. If the Russian government chooses to be upset by ... my stating that we're considering opening up… a one-person or two-person American presence post, well, there's not much I can do about that,” he added. Russian officials haven’t made any statements on this point, but analysts are saying that this answer may be given in more sharp position of Moscow in gas-trade dialogue with Ukraine. Minister Ohryzko told reporters the post “probably will be done next year”.
Also Washington promised to help to strengthen the candidacy of Ukraine for NATO membership, which is another painful question for the official Russia. Nevertheless, U.S. would work within the NATO-Ukraine Commission to agree on a plan for training and equipping Ukrainian armed forces. “We plan to undertake a program of enhanced security cooperation intended to increase Ukrainian capabilities and to strengthen Ukraine's candidacy for NATO membership,” the document said.
Washington also promised to help Ukraine with “rehabilitating and modernizing the capacity of Ukraine's gas transit infrastructure”, cooling down Russian dreams to fort a consortium for the exploiting of Ukrainian gas lines.
Fitch Ratings: The credit outlook for the Ukrainian energy and utility sector during 2009 is negative.
The report issued on Thursday 18 December lists the main problems of the Ukrainian energy and utility sector: a funding crisis in the state-controlled power generation sector, downward pressure on regulated tariffs due to a severe recession, restricted access to bank lending and debt capital markets, and continued turmoil at NJSC Naftogaz of Ukraine (‘B’/Rating Watch Negative). Fitch expects an economic recession in Ukraine in 2009 to drive down power demand, providing only temporary respite to falling capacity reserve margins.
Fitch expects liquidity and refinancing risk to remain high for the Ukrainian energy and utility sector through most of 2009, as foreign banks and markets remain effectively closed to Ukrainian issuers. Naftogaz will continue to confront major challenges in 2009, including a lack of transparency, potentially insufficient state subsidisation for its loss-making residential business, higher import prices, accumulating gas payables and restricted access to external financing. However, Fitch continues to view Naftogaz as an important strategic asset for the Ukrainian government (Ukraine rated at ‘B+’/Outlook Negative) and factors state support into the company’s rating.
The 2009 credit outlook, entitled "Ukrainian Energy and Utilities – 2009 Outlook”, is available on the agency's public website http://www.fitchratings.com/.
Eternal problem. Russia blocks Ukrainian famine-genocide resolution at the United Nations.
Russia blocked Ukraine-initiated UN resolution claiming Holodomor in the Soviet Union in early 1930s was famine-genocide aimed against Ukrainians, rather than a common tragedy of many nations in the country. “We succeeded to bloc the inclusion of the item into the agenda of the current UN General Assembly,” Russian Ambassador to the United Nations Vitaly Churkin said on Thursday, 18 December, according to the Russian media.
The Ambassador also added the United States and Great Britain backed the Ukrainian motion, which “ended in nothing.” Mr. Churkin said Russian representatives were active in explaining the history of Holodomor to foreign partners. As a result, nine EU countries did not sign the Ukrainian declaration, although “EU members usually act in a consolidated manner”.
Sunday, November 30, 2008
Orange fresh. Who is responsible for the failure of the Ukrainian democratic breakthrough of 2004?
Better late than never. Here is the topic I promised to write about yesterday, based on a letter of Joseph Gregg from San Antonio, Texas. Mr. Gregg is not a professional political analyst, but he is following the Ukrainian politics with a big interest. In the last two years he spent several months in Ukraine; he has also visited Russia a lot. In his letter addressed to me as an author of this web page, he expressed some thoughts about the President of Ukraine Viktor Yushchenko and the nature of failure of the Orange Revolution’ hopes and promises, and asked me for a follow-up opinion. At first, some quotations from the letter:
Let me start from the end. I agree that the problems Ukraine is facing today are huge, but the solutions are not as simple as it may seem. Ukraine is in need of deep structural reforms – yes, we have to improve our judicial system, but also we need structural economic reforms, new tax policy, land reform, changes in the model of local budgeting, re-building of a system of social security, new energy strategy, and a lot of other things, which are important and urgent. To accomplish these goals, first of all, we need the Parliament, which is able to work effectively. The experience of the last three years demonstrated that Ukraine will never get such a Parliament, using proportional system of vote – no matter, what kind of party list we would adopt (closed or open).
Ukrainian political parties do not have mass membership. They are built not on the values that have a strong public support, but around the charismatic leaders. “Batkivshchyna” party (and even Block of Yulia Tymoshenko) is nothing without Yulia Tymoshenko; the Party of Regions will break up without Viktor Yanukovych. The election of Viktor Yushchenko as an official leader of “Our Ukraine” is nothing more than an attempt to save the party, which is falling apart. All political system of Ukraine is highly corrupt, and even the essential democratic institutions like the Constitutional Court or Central Electoral Commission are fully packed with main parties’ protégés.
One of the public reasons of switching to the proportional voting system was the idea that it will help to build up a real party system in Ukraine. In fact, it just has led to the paralysing of the lawmaking branch of the state power. To cure that disease we should move back to majority vote – at least to give an opportunity for regional leaders to be present in the Verkhovna Rada, not selling themselves to any party (personality).
Next point I would like to mention concerns the President of Ukraine personally. I do not agree with people making from Viktor Yushchenko a kind of anti-hero, badly treating the country and innocent lady Prime Minister. For example, in the question of Russian Gazprom debt neither he nor she was an independent observer. The current non-transparent scheme of gas supply (and transit) in Ukraine was established after the Orange revolution, and was not changed in times when Yulia Tymoshenko was not a Prime Minister.
I agree that the ideals and promises of the Orange Revolution were ruined to a large extent because of Viktor Yushchenko personal weakness. Standing on Maydan, he declared that “criminals of Kuchma times” will be in prison, but in less than a half of a year he was shaking hands with people, whom he previously publicly called as thieves. In other words, he just failed to be tough with his opponents. The main problem of Viktor Yushchenko was that he talked a lot about the changes, but in fact didn’t change anything essentially. Except of his friends (the current team of Mr. Yushchenko is almost free from his comrades of Maydan times).
I want to believe that Viktor Yushchenko is a good person and a sincere patriot of Ukraine. But he is not good enough as the President. He would be a great leader of a country with well-developed democratic traditions, a country, which is not situated on the edge of geopolitical interests of the world powers. Ukraine is definitely not such a country. To govern Ukraine is a big challenge for every politician.
It’s easy to blame Viktor Yushchenko for political impotence. But let me remind that he wasn’t standing on Maydan alone. All the people leading the Orange Revolution are equally responsible for the weakness of today’s Ukraine. The leaders of the Orange revolution had a lot of nice-sounded slogans, but also a total absence of strategy on future governing. They asked us to shout, “Kuchma go away”, and “Yushchenko, yes!”, but in fact they didn’t even think, what to do after Leonid Kuchma would really go away. For almost four years the Orange leaders haven’t worked out a clear step-by-step plan on how to make Ukraine prosperous and democratic. They go on thinking how to get rid of each other. That’s the main problem of contemporary Ukraine. We are in terrible need of new fresh leaders who will end the deadlock. But there are no sigh of such a new movements. Just show me that growing-up centre of progress in Ukraine, and I will join this team.
After the attempt on his life and subsequent events of Maidan, the goodwill of
the world was made available to him. Instead of promises delivered, he was
not interested in the running of the business of the country, only in its
ceremonial leadership with a tone of condescension. The shame is that
these things needed to be done are yet devalued by his other pernicious and ego
led actions. Convinced he is Messiah, he fails to notice no one longer
follows...
No matter whom you support, we are all embarrassed and diminished
by his actions to the PM. His latest protestations for her to
pay the Gazprom debt make him the lap dog of Medvedev at the expense of
every Ukrainian. It is as if he would gladly shout “Fire!" in a crowded
theater hoping someone might trample "the Braided One's" toes without even
momentary consideration of other lives that might be lost in the
stampede.
The problems are huge, the solutions deceptively simple:
direct vote of the citizens for their representative to the VR; equality under
the law and the responsibility for it by elected officials and government
workers; a judiciary that is independent and righteous.
Let me start from the end. I agree that the problems Ukraine is facing today are huge, but the solutions are not as simple as it may seem. Ukraine is in need of deep structural reforms – yes, we have to improve our judicial system, but also we need structural economic reforms, new tax policy, land reform, changes in the model of local budgeting, re-building of a system of social security, new energy strategy, and a lot of other things, which are important and urgent. To accomplish these goals, first of all, we need the Parliament, which is able to work effectively. The experience of the last three years demonstrated that Ukraine will never get such a Parliament, using proportional system of vote – no matter, what kind of party list we would adopt (closed or open).
Ukrainian political parties do not have mass membership. They are built not on the values that have a strong public support, but around the charismatic leaders. “Batkivshchyna” party (and even Block of Yulia Tymoshenko) is nothing without Yulia Tymoshenko; the Party of Regions will break up without Viktor Yanukovych. The election of Viktor Yushchenko as an official leader of “Our Ukraine” is nothing more than an attempt to save the party, which is falling apart. All political system of Ukraine is highly corrupt, and even the essential democratic institutions like the Constitutional Court or Central Electoral Commission are fully packed with main parties’ protégés.
One of the public reasons of switching to the proportional voting system was the idea that it will help to build up a real party system in Ukraine. In fact, it just has led to the paralysing of the lawmaking branch of the state power. To cure that disease we should move back to majority vote – at least to give an opportunity for regional leaders to be present in the Verkhovna Rada, not selling themselves to any party (personality).
Next point I would like to mention concerns the President of Ukraine personally. I do not agree with people making from Viktor Yushchenko a kind of anti-hero, badly treating the country and innocent lady Prime Minister. For example, in the question of Russian Gazprom debt neither he nor she was an independent observer. The current non-transparent scheme of gas supply (and transit) in Ukraine was established after the Orange revolution, and was not changed in times when Yulia Tymoshenko was not a Prime Minister.
I agree that the ideals and promises of the Orange Revolution were ruined to a large extent because of Viktor Yushchenko personal weakness. Standing on Maydan, he declared that “criminals of Kuchma times” will be in prison, but in less than a half of a year he was shaking hands with people, whom he previously publicly called as thieves. In other words, he just failed to be tough with his opponents. The main problem of Viktor Yushchenko was that he talked a lot about the changes, but in fact didn’t change anything essentially. Except of his friends (the current team of Mr. Yushchenko is almost free from his comrades of Maydan times).
I want to believe that Viktor Yushchenko is a good person and a sincere patriot of Ukraine. But he is not good enough as the President. He would be a great leader of a country with well-developed democratic traditions, a country, which is not situated on the edge of geopolitical interests of the world powers. Ukraine is definitely not such a country. To govern Ukraine is a big challenge for every politician.
It’s easy to blame Viktor Yushchenko for political impotence. But let me remind that he wasn’t standing on Maydan alone. All the people leading the Orange Revolution are equally responsible for the weakness of today’s Ukraine. The leaders of the Orange revolution had a lot of nice-sounded slogans, but also a total absence of strategy on future governing. They asked us to shout, “Kuchma go away”, and “Yushchenko, yes!”, but in fact they didn’t even think, what to do after Leonid Kuchma would really go away. For almost four years the Orange leaders haven’t worked out a clear step-by-step plan on how to make Ukraine prosperous and democratic. They go on thinking how to get rid of each other. That’s the main problem of contemporary Ukraine. We are in terrible need of new fresh leaders who will end the deadlock. But there are no sigh of such a new movements. Just show me that growing-up centre of progress in Ukraine, and I will join this team.
Subscribe to:
Posts (Atom)
Posts
