[Ohio UZO News] Rice attacks 'reprehensible' Putin warnings FT (2); EDM

[Deychak, Orest]

Financial Times

www.ft.com <http://www.ft.com/> 

Rice attacks 'reprehensible' Putin warnings

By Daniel Dombey in Washington 

Published: February 14 2008 

"The Soviet Union . . . is gone forever, and I hope that Russia
understands that," she said. "We are absolutely devoted to the
independence and sovereignty of Ukraine and of other states that were
once a part of the Soviet Union."

Condoleezza Rice, US secretary of state, yesterday highlighted the tense
relations between Moscow and Washington when she hit out at Russia's
"reprehensible" rhetoric and said she would appoint a special energy
co-ordinator for central Asia, a region dominated to date by Russian
energy interests.

Appearing at the Senate's foreign relations committee, Ms Rice responded
fiercely to questions about recent Russian behaviour, including
President Vladimir Putin's suggestion this week that Ukraine could be
targeted with nuclear missiles and his warning of a new arms race with
the west.

"The unhelpful and, really, I will use a different word, reprehensible
rhetoric that is coming out of Moscow is unacceptable," Ms Rice said.

Relations between Moscow and Washington have hardened in the wake of
disputes over Russia's objections to proposed US missile defence bases
in Poland and the Czech Republic, as well as US concerns about what it
sees as Mr Putin's use of intimidation at home and abroad.

But the US secretary of state emphasised that she believed the principal
areas of difficulty related to the post-cold war map of Europe - on
issues such as North Korea and Iran, the two countries co-operated much
more closely.

"The Soviet Union . . . is gone forever, and I hope that Russia
understands that," she said. "We are absolutely devoted to the
independence and sovereignty of Ukraine and of other states that were
once a part of the Soviet Union."

Ms Rice was prodded by Richard Lugar, the committee's ranking
Republican, to respond to Russian initiatives with countries such as
Kazakhstan, Turkmenistan, Serbia and Bulgaria that seem to have cemented
Moscow's position as gas supplier to the rest of Europe.

"I do intend to appoint, and we are looking for, a special energy
co-ordinator who could especially spend time on the central Asian and
Kazakh region," she replied. "It is a really important part of
diplomacy. In fact, I think I would go so far as to say that some of the
politics of energy is warping diplomacy in certain parts of the world."

Privately, many US officials complain that the European Union has not
made a more effective attempt to build relations with the central Asian
countries that provide Russia with an increasingly important part of its
gas supply, or to forge a common policy on Russia.

In other comments, Ms Rice said that the US and Nato's development and
counter-insurgency effort in Afghanistan, which has been widely
criticised in recent weeks, was "not as good as it needs to be". She
emphasised the US's call for other Nato countries to step up, both in
providing troops and forging a more coherent development strategy.

Joseph Biden, committee chairman, praised Ms Rice's promise that an
agreement to be negotiated with Iraq would contain no security
guarantees. He had previously said that it could "bind" the next
administration into a large troop presence in the country.

Financial Times

Tymoshenko welcomes gas deal

By Catherine Belton in Moscow 

Published: February 14 2008 

Yulia Tymoshenko yesterday heralded Ukraine's deal with Russia as a
"great victory" after both sides agreed to cut out a Swiss-registered
middleman and settled a deal over the payment of natural gas arrears.

The Ukrainian prime minister said the agreement to eliminate
RosUkrEnergo, the trading company, was "another step towards
establishing order in the gas market, another step towards eliminating
corruption and shadow schemes in the energy sector". Ms Tymoshenko had
long called for RosUkrEnergo, half-owned by Gazprom, the Russian state
gas monopoly, and half-owned by two Ukrainian businessmen, to be axed
from the Ukraine-Russia gas trade, saying it was a danger to European
energy security due to its opaque ownership.

In 2005, the Ukrainian security service began an investigation into
whether the trading company had links with Semyon Mogilevich, who is
wanted by the US Federal Bureau of Investigation on suspicion of
racketeering and fraud. The investigation was not completed.

RosUkrEnergo and its two Ukrainian owners - Dmytro Firtash and Ivan
Fursin - have repeatedly denied any ties with Mr Mogilevich. Mr
Mogilevich's lawyer has denied his client has any ties with the company.
Mr Mogilevich was arrested in Moscow last month on separate charges of
tax evasion related to a perfume retailer. He denies any wrongdoing.

Gazprom had previously warned that replacing RosUkrEnergo, which
supplies both cheaper central Asian gas and more expensive Russian gas
from Gazprom to Ukraine, could lead to price rises for Kiev. Viktor
Yushchenko, the Ukrainian president, had also warned that a rapid axing
of intermediaries could lead to price increases.

Analysts said Tuesday's agreement to replace the trading company with a
joint venture directly owned by Gazprom and Naftogaz Ukrainy, Ukraine's
energy monopoly, would give both companies a greater share of Ukraine's
domestic gas market. The joint venture also replaces another link in the
intermediary chain, Ukrgazenergo, which was half-owned by Naftogaz and
half-owned by RosUkr-Energo.

The agreement means Gazprom will increase its stake in the Ukrainian
domestic gas business to 50 per cent from 25 per cent.

"The gas question long ago became a question of political relations
between the two countries," said Valery Nesterov, energy analyst at
Moscow brokerage Troika Dialog. "This was also about a fight between
political clans in Ukraine for control of gas flows. Gazprom has agreed
to meet the new political reality in Ukraine."

Mr Nesterov added that negotiations on paying down the gas debt would
still be tricky but would no longer be intractable.

Eurasia Daily Monitor

February 14, 2008

http://www.jamestown.org/edm/

PUTIN WARNS UKRAINE AGAINST SEEKING NATO MEMBERSHIP

Presidents Vladimir Putin of Russia and Viktor Yushchenko of Ukraine met
on February 12-13 in Moscow for their final bilateral summit before the
end of Putin's presidency. The meeting opened with Yushchenko describing
Russia repeatedly as Ukraine's "strategic partner" in front of the
assembled media. "Russia has been, is, and will be our strategic
partner. And we shall conduct all our relations with Russia based on
this understanding." Further in the same vein, "We confirm our sincere
wish to develop the strategic partnership with Russia and we are
determined to achieve results" (Russia TV, Ukraine TV Channel One,
February 12).

Putin did not reciprocate such compliments, however. And in concluding
the meeting, the Russian president urged "doing everything so that our
partnership acquires a strategic character, without any reservations"
(Russia TV Channel One, Interfax, February 12). Russia's own
reservations stem most recently from Kyiv's decision to seek a
Membership Action Plan (MAP) with NATO, following the recent change of
government in Ukraine.

At the joint press conference, Putin lent additional weight to Russia's
previous warnings against Ukraine joining NATO or otherwise hosting NATO
or U.S. military installations on Ukrainian territory. Replying to a
leading question, Putin warned, "It is horrible to say and terrifying to
think that Russia could target its missile systems at Ukraine, in
response to deployment of such installations on Ukrainian territory.
Imagine this for a moment. This is what worries us."

While acknowledging that Russia has "no right to interfere" with
Ukraine's decisions, Putin nevertheless cautioned Kyiv against accepting
"limitations on its sovereignty," which he claimed are inherent in NATO
membership. "But if Ukraine wants its sovereignty restricted, that is
its own business."

Yushchenko mustered a response the following day in a televised
interview and while visiting the Ukrainian cultural center in Moscow to
meet community representatives. He cited Ukraine's constitution, which
bans the stationing of foreign forces on Ukrainian territory, with the
temporary exception of the Russian fleet in the Crimea until 2017. "Can
one imagine that there will be a NATO base in Sevastopol [post-2017]? Of
course not, and there never will be." And in general "we are not going
to take any steps that would create threats to Russia." Reaffirming the
Ukrainian leadership's decision to submit the issue of NATO membership
to a referendum prior to any decision, Yushchenko called for patient and
calm discussions on this issue within Ukraine as well as between Ukraine
and Russia (Russia TV Channel One, UNIAN, February 13).

Ukraine requested a NATO decision on MAP in a January 16 joint letter by
Yushchenko, Prime Minister Yulia Tymoshenko, and Verkhovna Rada chairman
Arseny Yatsenyuk to NATO Secretary-General Jaap de Hoop Scheffer (see
EDM, January 18). Kyiv looks forward to a decision to that end by the
Alliance at its Bucharest summit in early April. In the wake of that
request, Ukrainian officials have redoubled assurances that Ukraine's
advance toward NATO membership would proceed gradually -- Yatsenyuk
envisages 10 years (Glavred, January 30), leaving ample time for mutual
adjustments in Ukraine-Russia relations.

Moreover, Ukrainian officials at home and abroad underscore the need to
inform the Ukrainian public systematically about NATO. The Alliance's
approval rate in Ukraine has not exceeded 20% in recent years. The
Orange authorities had in 2005 envisaged a campaign to educate the
Ukrainian public about NATO, but have yet to deliver on that intention.
At present, a critical mass in the opposition Party of Regions under
former prime minister Viktor Yanukovych vocally opposes the idea of NATO
membership and demands that the request to NATO for a MAP be officially
retracted.

>From January 18 to date, the Party of Regions and the Communist Party
have blocked physically most of the time the presidium and rostrum in
the Parliament's chambers, making it impossible for the legislature to
operate (Interfax-Ukraine, UNIAN, February 12, 13).

The Party of Regions is opportunistically catering to its
Russia-oriented electorate in the eastern regions. Yanukovych and
politicians around him had officially supported the goal of joining NATO
in 2003-2004 during Yanukovych's first premiership, under then-president
Leonid Kuchma. However, NATO's 2004 Istanbul summit cold-shouldered
Kyiv; and the ensuing political turmoil in Ukraine has meant a net loss
of almost four years before a bid for MAP could be resubmitted.

The governing coalition holds the slimmest possible majority of 227
seats in the 440-member parliament. However, the Party of Regions is
facing a possible split, with a small but influential group under Renat
Akhmetov evidencing a degree of receptiveness to the ultimate goal of
NATO membership and to a MAP toward that goal.

--Vladimir Socor

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