[Ohio UZO News] WSJ; AP; EDM (2); RFE/RL; public event(rsvp needed)

[Deychak, Orest]

The Wall Street Journal
Politics & Economics: In Brief -- 
23 February 2007 
Ukrainian Assembly Rejects Pro-West Foreign Minister 
Ukraine's parliament rejected President Viktor Yushchenko's nominee as
foreign minister, casting doubt on the increasingly isolated leader's
pledges to seek entry to the European Union and NATO. Mr. Yushchenko, who
swept to power on a wave of "Orange Revolution" protests in 2004, said he
would resubmit Volodymyr Ohryzko's name to the chamber. The president has
all but lost control of the legislative agenda since he appointed rival
Viktor Yanukovych as prime minister last year. 
AP
Ukraine Parliament Deals Blow to Leader 
By MARA D. BELLABY 
Associated Press Writer 
22 February 2007 
KIEV, Ukraine (AP) - Parliament on Thursday rejected President Viktor
Yushchenko's choice to be foreign minister, dealing another major blow to
his efforts to maintain control over this ex-Soviet republic's foreign
policy. 
Career diplomat Volodymyr Ohryzko, nominated by Yushchenko to replace the
ousted Borys Tarasyuk, won only 196 votes, far short of the 226 needed for
approval. Lawmakers also rejected Yushchenko's choice of Viktor Korol as
Security Service chief, in a 190-4 vote. 
Yushchenko said he was surprised that parliament didn't approve Ohryzko, who
had served as Tarasyuk's deputy. 
"I want to hear from parliament why they are not satisfied with the
candidacy of Ohryzko -- a person who during the last 10 to 15 years held a
significant place in Ukrainian diplomacy, who worked in important diplomatic
spheres, who has experience that not a lot of people in Ukraine have," said
Yushchenko, according to the Unian news agency. 
He said he would nominate both Korol and Ohryzko again. 
Yushchenko, who won the presidency after the 2004 Orange Revolution, has
sought to pull Ukraine out of Russia's shadow and win membership for this
nation of 47 million in the European Union and NATO. But he has fallen far
short of his ambitions, and last year, his party was humbled by the
Russian-leaning party of his political rival, Viktor Yanukovych, in
parliamentary elections. 
When Yanukovych put together a majority coalition, Yushchenko agreed to
nominate his one-time foe as prime minister, and the two govern jointly in
what has become a bruising battle for power with the president on the losing
end. 
Yanukovych forced out Tarasyuk last month after a dispute that resulted in
the government temporarily cutting off funding to the Foreign Ministry.
Under the constitution, the president gets to nominate the foreign minister,
but his choice requires parliamentary approval. 
Yushchenko tapped Ohryzko to replace him, but the parliamentary majority
immediately expressed its disappointment with the choice. Ohryzko came under
special criticism for his decision to speak Ukrainian -- and have it
translated into Russian -- during a conference that included Russian and
Ukrainian politicians and experts. Some attendees complained that it slowed
down the talks and Ohryzko, who is fluent in Russian, should have spoken
Russian. 
"He showed a total absence of professionalism. He showed that he is not a
diplomat, but a person with an inferiority complex," said Yanukovych ally
Yuriy Bondarev. 
Yushchenko's party and the bloc of former Prime Minister Yulia Tymoshenko
supported Ohryzko, arguing that he was a career diplomat who had risen
through the ranks of the Foreign Ministry. Former Foreign Minister Hennadiy
Udovenko, a member of Yushchenko's party, said that Ohryzko could be counted
on to stick up for Ukraine. 
"Today he thinks about the national interests of Kiev, of Ukraine but not
about the national interests of Moscow. He doesn't grovel at the feet of our
big neighbor," Udovenko said, referring to Russia. 
Later, in a sign of protest over parliament's actions, opposition lawmakers
from Tymoshenko's bloc cut off lights in the parliamentary hall, forcing the
evening session to be conducted in the dark. Lawmakers used flashlights and
lights from mobile phones to continue working. 

Eurasia Daily Monitor
Friday, February 23, 2007
UKRAINIAN-RUSSIAN STEEL MERGER ENTAILS TOP-LEVEL POLITICAL RAMIFICATIONS

The Industrial Union of Donbas (IUD), Ukraine's second-largest steel-making
group, is negotiating a merger with the Russian Metalloinvest group
controlled by Alisher Usmanov, who also heads Gazprom's investment arm for
assets other than gas, Gazprominvestholding. An IUD-Metalloinvest merger
could generate far-reaching political and business repercussions in Ukraine
and beyond.

On February 19, the sides signed an agreement on the mutual evaluation of
their assets, preparatory to a merger (Financial Times, February 20). A
merger would be followed by an initial public offering of the integrated
holding on Western capital markets. The stated ambition is to match or
overtake the output of Severstal, Russia's largest steel producer.

The IUD is a rival to Renat Akhmetov's Systems Capital Management (SCM),
which is also based in the Donetsk region, largely bankrolls the governing
Party of Regions, and holds sway on personnel appointments throughout the
economic ministries and agencies. However, SCM by no means fully dominates
or represents the Donetsk region's interest groups and has proceeded to
pressure some of them.

IUD owners Vitaly Hayduk and Serhiy Taruta -- each with a stake of slightly
under 50% -- formed a political alignment with the embattled President
Viktor Yushchenko during the second half of 2006. Since then, Hayduk serves
as Secretary of the National Security and Defense Council; and Oleksandr
Chaliy -- IUD's top political adviser -- serves as deputy head of the
Presidential Secretariat, while Taruta oversees IUD's daily operations. This
alignment seeks to counterbalance the close relationship between Akhmetov's
SCM and the government of Prime Minister Viktor Yanukovych. However, a
merger of IUD with Usmanov's Metalloinvest, an ally of Russian energy giant
Gazprom, could lead to a reshuffle of top-level political and business
relationships in Ukraine.

The Russian holding's iron- and steel-related assets -- grouped in the
Gazmetall concern -- include the Ural Steel plant, the Lebedinsky and
Mikhailovsky ore-mining and ore-dressing plants, as well as a 50% stake in
the Ormeto Machine Plant in co-ownership with Uralmash. Gazmetall produces
six million tons of raw steel annually.

Usmanov and the Metalloinvest co-owner Vasily Anisimov are also said to be
the main shareholders of Moldova's Ribnita steel plant, situated in the
Russian-controlled Transnistria region and said to bankroll the latter's
officially acknowledged budget. Ranked among the most modern steel plants in
the former USSR, the Ribnita plant has passed through various hands of
Gazprom-connected Russian companies, from Itera to Metalloinvest, in
notoriously opaque transactions. A certain "Austro-Ukrainian Hares Group,"
named after Yushchenko's Arab businessman-friend Yusuf Hares, acquired 90%
ownership of Ribnita in 2004, then sold an undetermined portion of that to
the current owners, some of them hidden under undecipherable acronyms
(Moldpres, Olvia Press, January 29, 30).

The IUD includes the Alchevsk coke and steel plants and the Dnyprodzerzhinsk
steel plant in Ukraine, as well as the Dunafer and Huta Czestochowa steel
plants in Hungary and Poland, respectively. IUD produces nine million tons
of steel pipes and rolled goods annually.

An IUD-Gazmetall merger would result in a combined capitalization of some
$15 billion, reduce production costs, and pool existing steel output
capacities of 15 to 20 million tons annually. According to the Uzbek-born
Usmanov, the integrated holding would be a leader "on the wide expanses of
our former fatherland" (Interfax-Ukraine, February 20).

Such declared ambitions notwithstanding, the merger scheme largely stems
from the need to surmount certain handicaps on either side. Gazmetall
controls only small production capacities for steel products such as pipes
and rolled goods. Moreover, it does not own industrial assets on European
Union territory, which IUD does in Poland and Hungary and would include
these in the integrated holding. For its part, IUD does not own iron ore
mines and dressing plants in Ukraine or anywhere, but would gain access to
such resources through Gazmetall in Russia, thus offsetting a major handicap
against IUD's Ukrainian competitors.

IUD's major disadvantage in this regard stems from the manipulative
privatization of the Ukrainian Ore Industry (Ukrrudprom) in 2004 by
then-president Leonid Kuchma and the first government of Viktor Yanukovych.
That privatization awarded the lion's share -- the Central and Southern iron
ore-dressing plants -- to Akhmetov's SCM, along with a stake in the Southern
plant to Ihor Kolomoysky's Pryvat Group and with the Inhulets ore-dressing
plant to Russian businessman Vadim Novinsky's Smart Group. At present,
Gazmetall and Smart Group seek to acquire stakes in the Kryvyy Ryh
ore-dressing plant, which is up for privatization and in which SCM is also
an interested party (Ukrayinska pravda, February 18).

Deprived of a domestic iron-ore base of its own, IUD has had to resort to
costly ore imports from overseas or to buy it from its political and
business rivals, which in turn have resorted to overpricing. With SCM now
essentially in control of the government, IUD is reaching out to Russia for
iron-ore supplies through Gazmetall. Given Usmanov's close relations with
Gazprom, it seems likely that SCM also hopes for special arrangements on gas
supplies (as SCM is said to have obtained for itself in 2006).

These realignments entail not only business but also political
ramifications, reflecting the political roles of major steel producers in
Ukraine, with SCM and IUD backing the government and the presidency,
respectively, in their ongoing power struggle.

(Interfax-Ukraine, February 18, 19, 20; Ukrayinska pravda, February 18)

--Vladimir Socor

Eurasia Daily Monitor
Thursday, February 22, 2007
YULIA TYMOSHENKO TO VISIT WASHINGTON, NEW YORK

Yulia Tymoshenko, leader of the eponymous political bloc and head of the
Ukrainian opposition, arrives in the United States on Sunday, February 25,
for a six-day visit that will take her to New York and Washington. It is her
first visit to the U.S. as a politician. Her visit follows that of Prime
Minister Viktor Yanukovych on December 4-6, 2006, and President Viktor
Yushchenko in April 2005 (see EDM, April 4, 7, 2005).

Tymoshenko's visit has been organized differently from that of Yanukovych.
His tour was highly choreographed by his Washington public relations firm in
such a way that he refrained from open discussions and refused to meet the
Ukrainian diaspora. In this case, Tymoshenko's team in the U.S. is taking a
more open, inclusive position, ensuring that diaspora are included and that
both sides of the aisle in American politics are being addressed in a more
substantive manner.

In New York, Tymoshenko will speak at the Council on Foreign Relations,
Columbia University, and will be hosted at a luncheon by J.P. Morgan
investment bank. In Washington, Tymoshenko is set to speak at the Center for
Strategic and International Studies and the National Press Club, as well as
holding high-level meetings with the U.S. government and Congress. She will
meet with the diaspora in both locations and also will receive an award at
the annual Ronald Reagan banquet. Press interviews are scheduled with the
Wall Street Journal, Washington Post, New York Times, Financial Times, Time,
and Newsweek.

The Tymoshenko bloc finished second during the 2006 parliamentary elections
with 22.2%, a three-fold increase over her 2002 results. Most national
democratic parties, which had aligned with business centrists to create Our
Ukraine in 2002, deserted Our Ukraine and Yushchenko in the 2006 elections.
Our Ukraine received 10% fewer votes in 2006 under Yushchenko than four
years earlier under president Leonid Kuchma. Political parties, such as
Reforms and Order, have moved from Our Ukraine to the Tymoshenko bloc. Rukh,
led by ousted foreign minister Borys Tarasyuk, is reportedly holding
negotiations to follow suit.

Two factors explain why a large proportion of orange voters defected to the
Tymoshenko bloc. First, shock at her dismissal as prime minister in
September 2005 only two weeks after Yushchenko had described the Tymoshenko
government as the "best in Europe."

Second, the bloc's consistent opposition to any deals with the Party of
Regions. Tymoshenko stated unequivocally, "We believe that establishing a
coalition with the mafia is treason to Ukraine." This opposition reflects
the bloc's long-standing position during the four years of anti-Kuchma
protests that preceded the Orange Revolution when it refused to negotiate
with the Kuchma regime and called for his impeachment.

Yushchenko and Our Ukraine never supported impeachment proceedings and
defended Kuchma from allegations arising from the Mykola Melnychenko tapes,
on which the president is overheard ordering the kidnapping of journalist
Heorhiy Gongadze. Just last week Prosecutor Mykhailo Potebenko, who presided
over the Gongadze cover up, was awarded a state medal for his "contribution
to the building of a law-based state." Former Polish president Alexander
Kwasniewski, who brokered the December 2004 roundtable negotiations, has
confided that Kuchma was given immunity during the talks.

Yushchenko and Our Ukraine have always been noted for their flexibility. In
2002-2003 and in 2005-2006, they wavered between negotiating deals with the
authorities and Party of Regions or working with Tymoshenko. After the 2006
elections, Our Ukraine's political council head Roman Bezsmertny negotiated
an "orange coalition" of democratic forces, while Our Ukraine leader and
prime minister Yuriy Yekhanurov negotiated a grand coalition with the Party
of Regions. Both coalitions were sidelined by the Anti-Crisis coalition.

Yushchenko's preference for broad roundtables could be seen in the Orange
Revolution and in August 2006. The Tymoshenko bloc opposed both roundtables,
and they were the only parliamentary force that refused to sign the
Universal agreement. Tymoshenko bloc deputy Hryhoriy Nemirya explained,
"They saw no reason to sign a document where Our Ukraine's participation is
window dressing for the Party of Regions to run the government or be present
at the birth of a Molotov cocktail coalition that could explode in the hands
of the people trying to build it." The Tymoshenko bloc and the Pora party
condemned the signing of the Universal agreement as a "betrayal" of the
Orange Revolution.

A February poll by the Razumkov Center gave Tymoshenko 18.9% popular appeal
with Yanukovych at 23.7%. Yushchenko's support has plummeted to 11%. The
Tymoshenko bloc and Party of Regions control 70% of deputies in parliament
and both forces are likely to gain more seats in the event of elections
ahead of 2011.  

Based on polling trends in the last two years, Tymoshenko and Yanukovych are
likely to be the frontrunner candidates in the 2009 presidential elections.
Tymoshenko has admitted, "And I want to say that from childhood I knew that
I would be leader of this country. And I am not even joking here."

In February, Our Ukraine and the Tymoshenko bloc signed an agreement
establishing a united opposition of 204 deputies. Our Ukraine leader
Vyacheslav Kyrylenko said it would "counteract the revenge of
anti-democratic forces." Yushchenko, who has finally agreed to head Our
Ukraine, has understood that the Tymoshenko bloc is the key to preventing
the Yanukovych government from infringing on the democratic gains of the
Orange Revolution. The New York Times magazine  (January 1, 2006) wrote,
"Tymoshenko is a compelling mixture of ruthless calculation, iron will, and
sincere passion."

Tymoshenko and her political bloc face four key issues in the coming months.

First, the opposition alliance is opposed by the business wing of Our
Ukraine that harbors what has been described as a "Yuliaphobia."

Second, establishing a more clearly defined ideological profile for the
Tymoshenko bloc. Currently, "The charisma of Tymoshenko the leader will act
as the bloc's ideology and its program." The Tymoshenko bloc unites the
liberal-center-left ground and the Fatherland Party has a social democratic
profile giving it the ability to absorb disillusioned Socialist voters.

Third, in the 2006 elections the Tymoshenko bloc finished second place in
six of eastern and southern Ukraine's ten regions. This strength could grow
and challenge the Party of Regions outside its strongholds of Donetsk and
the Crimea.

Fourth, balancing between being head of the opposition and the 2009 Orange
front-runner presidential candidate.

Tymoshenko's visit to the United States follows her two successful visits to
Western Europe in 2005 as prime minister and last year as opposition leader.
Her U.S. visit next week is set to change U.S. perceptions of Ukraine's
politics and reinforce her image as playing a central role in defending the
democratic gains of the Orange Revolution.

(Ukrayinska pravda, April 17, 2006, February 2; obozrevatel.com, January 10;
glavred.info, December 9, 2005; (president.gov.ua/documents/5745.html, Kyiv
Post, August 11, 2006)

--Taras Kuzio


Radio Free Europe/Radio Liberty
Russia/Ukraine: Origins Of Putin's 'Revolutionary Development' A Mystery 
By Roman Kupchinsky  
	
February 21, 2007 (RFE/RL) -- Russian President Vladimir Putin stirred up a
hornet's nest when he publicly announced earlier this month that the
Ukrainian government had approached Russia with the idea of unifying the
countries' respective gas-pipeline networks.

Putin hailed the overture, coupled with Ukrainian interest in drilling for
natural gas on Russian territory, as a "revolutionary development" that was
in the "interest of both countries." 
  
Circling The Wagons
  
Ukrainian officials and lawmakers responded quickly to Putin's comments,
made on February 1 to reporters assembled for the annual Munich Conference
on Security Policy. 

Within days, legislation had been passed forbidding the sale or transfer of
ownership of Ukraine's trunk gas pipeline to another country. An
investigation was also launched to determine just who may have been
responsible for making such proposals. 
  
Vitaliy Hayduk, chairman of Ukraine's National Security and Defense Council,
soon provided some insight. 
  
Hayduk told a February 16 press conference that, after a meeting of the
Yushchenko-Putin Commission in December, it was in fact an unidentified aide
of Putin's who had delivered a memorandum containing such proposals. "Given
its content," Hayduk said, "such a memorandum was deemed unacceptable and
could not be signed." 
Yanukovych was caught off guard by the Ukrainian parliament's reaction to
Putin's comments. 
  
Hayduk's claims were supported the next day by the deputy head of Ukrainian
President Viktor Yushchenko's administration, Oleksandr Chaliy. On February
17, Chaliy revealed that Putin had proposed the idea of an asset swap --
Ukraine's pipeline in exchange for Russia granting Ukraine the right to
drill for gas on Russian soil -- during a January 10 phone conversation with
Yushchenko. 
  
However, Chaliy said, the Ukrainian president had rejected the idea. "No
proposals to exchange assets" ever came from Yushchenko, Chaliy insisted. 
  
Public suspicion then turned to Prime Minister Viktor Yanukovych and Fuel
and Energy Minister Yuriy Boyko. 
  
Looking For Answers
  
Yanukovych at first appeared be caught off guard by the Ukrainian
parliament's harsh reaction to Putin's comments -- even within the ranks of
his own Party of Regions. In the immediate aftermath, Yanukovych made a
number of contradictory statements on the issue while trying to blame the
scandal on members of Yushchenko's administration. 
  
Did the gas proposals originate in Russia or Ukraine? Did the gas proposals
originate in Russia or Ukraine?But Hayduk's and Chaliy's testimonies that
Russia's proposals had been rebuffed by Yushchenko's administration served
to embarrass Yanukovych's government, which turned to Boyko to arrange a
campaign to save face. 
  
As Hayduk made his revelations, Boyko met with Gazprom CEO Aleksei Miller to
discuss "the development of strategic cooperation between Russia and Ukraine
in the oil and gas sector." 
  
No details were provided of what the two men spoke about. 
  
However, Interfax reported that the day before the meeting Boyko had said
Ukraine should be given access to Russian gas reserves since UkrHazEnergo --
a partly Russian joint venture between the Swiss-registered gas trader
RosUkrEnergo and Ukraine's Naftohaz Ukrayiny -- was already working in the
Ukrainian market. 
  
The flaw in Boyko's logic, though, is that UkrHazEnergo can hardly be
considered a Russian company. Only one-quarter of the firm belongs to
Gazprom -- the rest belongs to Ukraine's Naftohaz and two private Ukrainian
businessmen. 
  
Theories Abound
  
Interfax on February 15 also cited Boyko as saying he knew of an agreement
Yanukovych had with the "leadership of the Russian Federation" under which
Ukraine would be allowed to produce gas in Russia. 
  
This revelation led to question about with whom in the "Russian leadership"
Yanukovych had reached such an agreement. If it was Putin, could this be the
origin of the Russian president's announcement in Munich? 
  
One theory is that Yanukovych agreed to Putin's proposals under the
condition that UkrHazEnergo -- whose role in Ukraine's energy sector is
being debated -- be kept intact. 
  
Putin, as the theory goes, may have gone ahead and made the agreement public
in the believe that it was a done deal. 
  
If so, the strong resistance his words received in Ukraine must have been an
embarrassment to the Russian leader -- both because he was caught jumping
the gun on his dealings with Ukraine and because of the realization that he
may not be as influential in dealings with Ukraine as he expected when
Yanukovych became prime minister.

Community Meeting with Yulia Tymoshenko
March 1, 2007; 5:00pm - 7pm
Washington, DC 
The Washington Group, The Ukrainian American Coordinating Council, The
Ukrainian Congress Committee of America and the U.S.-Ukraine Foundation,
cordially invite you to a Community Meeting with Yulia Tymoshenko. 
The event will include a presentation by Ms. Tymoshenko, questions from the
audience, and responses to the issues raised. 
Location:
U.S. House of Representatives 
Rayburn House Office Building
South Capitol and Independence Avenues, SW (near Capitol South metro)
Room B339-B340
Washington, DC 
RSVP by 5:00pm on Tuesday, February 27, 2007 via e- mail at unis at ucca.org
<mailto:unis at ucca.org>  or BDFDirector at thewashingtongroup.org
<mailto:BDFDirector at thewashingtongroup.org> . 
--------------------
In addition to several speaking events (CSIS, National Press Club),
Tymoshenko will meet with Members of Congress (hosted by the Ukrainian
American Caucus, in conjunction with the Helsinki Commission and House
Foreign Affairs Committee European Subcommittee), Senators, and high-ranking
Administration officials. 


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