UKRAINE: YUSHCHENKO AND CODEL FRIST DISCUSS

C O N F I D E N T I A L SECTION 01 OF 03 KIEV 001481

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/13/2016
TAGS: PREL OREP PGOV PARM UP
SUBJECT: UKRAINE: YUSHCHENKO AND CODEL FRIST DISCUSS
COALITION, UKRAINE'S STRATEGIC PLACE, BILATERAL ISSUES

Classified By: Ambassador, reason 1.4 (b,d)


1. (C) Summary: President Yushchenko discussed Rada majority
coalition possibilities, bilateral U.S.-Ukrainian issues, and
his vision for Ukraine's future April 13 with a delegation
led by Senator Majority leader Bill Frist (R-TN) and
including Senators Judd Gregg (R-NH) and Richard Burr (R-NC).
Yushchenko expressed satisfaction with recent progress on
forging a coalition between Our Ukraine, the Tymoshenko Bloc
(BYuT),and the Socialist Party but emphasized that there
needed to be two-three more weeks of work to resolve details
to ensure that the "Coalition of Democratic Forces" worked
more smoothly in 2006 than in 2005. Yushchenko said that
Ukraine's future would be secure only through eventual
membership in NATO and the EU, but Ukraine faced a much
harder path than other Central European countries not as
closely affiliated with Russia as Ukraine; certain forces
within and without pushed Ukraine to take an Eastern path and
sought to spoil her relations with the West. On bilateral
issues, Yushchenko made a renewed pitch for energy
cooperation "at a strategic level," focusing primarily on
nuclear energy and on lessening Ukraine's complete dependency
on Russia for nuclear fuel. He thanked the U.S. for
assistance in combating avian flu, highlighted the
possibilities for space cooperation, and asked for U.S.
assistance in strengthening control of Ukraine's border with
Moldova's Transnistrian region through modern border control
technology.


2. (C) Comment: Tymoshenko had told us in an earlier April 13
meeting (septel) that she expected her party, Our Ukraine,
and the Socialists to initial later in the day a preliminary
document on the intention to create an Orange Coalition.
Yushchenko in contrast told us that there would be such a
coalition, but that he had instructed PM Yekhanurov to take
two-three weeks to complete the document that the coalition
partners would sign. Tymoshenko, Our Ukraine's Bezsmertny,
and the Socialists' Moroz did in fact sign the protocol on
forming a coalition late on April 13, according to press
reports. This is very good news, the first clear public step
committing the sides to an Orange Coalition. Nonetheless,
Tymoshenko and Yushchenko demonstrated in their meetings very
different time frames for reaching the final deal. In
addition to the inking of the protocol, it is a positive sign
that Yushchenko did not once criticize Tymoshenko. This is
the first time since her sacking in September 2005 that
Yushchenko has not done so in a meeting with us. End summary
and comment.

Coalition of Democratic Forces Needs a Solid Program
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3. (C) Senator Frist thanked Yushchenko for his April 2005
appearance before a joint session of Congress, congratulated
Ukraine on holding free, open, and transparent elections, and
noted that Ukraine had been a focus of discussion in their
previous stops in Moscow, Warsaw, and Tbilisi. The elections
appeared to have reinforced the cause of reform that
Yushchenko championed. The U.S. supported the establishment
of a reform-oriented coalition. In their prior meeting with
Yuliya Tymoshenko (septel),continued Frist, the Senators had
made clear the importance of market-based reforms and of
avoiding both price setting and overregulation. Tymoshenko
had asked the Senators to pass a message to Yushchenko that
she supported him, supported economic reform, and would
denounce price setting and reprivatization. The Senators
reiterated that the U.S. supported a coalition committed to
reform.


4. (C) Yushchenko stated that the elections had clarified
Ukraine's political situation. He was personally satisfied
with the competitive campaign and the results, "with a few
nuances" (i.e., his party's distant, third-place finish
behind his fiercest competitors). Of most importance was
that the coalition which had supported him in 2004 had "not
lost a single vote" in 2006. Nearly all the parties that had
run on an anti-NATO platform had disappeared, though some
political forces remained under the influence of Moscow. The
main question now was dealing with discrepancies within the
majority.


5. (C) The new coalition government, Yushchenko continued,
would be a democratic one, and would be "Orange." Yushchenko
asked the Senators to pass the message in Washington that
Ukraine's "democratic choice was not under threat." However,
there remained a number of steps to ensure the Rada majority
coalition to be formed would have a sustainable basis and
could avoid the mistakes of the first Orange coalition in
2005 (which fell apart after seven months of governing).
There would be no rush to sign a coalition agreement;

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two-three weeks of hard work remained. Yushchenko stated he
did not want a repeat of the reprivatization debacle and the
meat, oil, and gas standoffs of 2005 (i.e., the Tymoshenko
policies); that would set business-government relations back
years.


6. (C) Yushchenko said the three parties (Our Ukraine,
Tymoshenko bloc, Socialists) needed to sign a solid political
agreement listing the dozens of problems Ukraine faced and
how the coalition would solve them. Failing to do so would
doom the coalition to another short, unsustainable stint.
Yushchenko would insist on a clear path of Euro-Atlantic
integration and the possibility of land sales (note: both of
which would be resisted by the minority partner Socialists).
The Premier would play the key role in implementation; that
was why sorting out issues now and securing the support of
all 243 MPs in the Our Ukraine, BYuT, and Socialist factions
were important.


7. (C) Yushchenko expressed satisfaction with the progress in
negotiations over the past several days. On the pending
political reunion with Tymoshenko, Yushchenko denied any
reluctance, noting that he had benefited in the past from
partnering with her and appreciated her for what she had
done, while adding: "but the devil is in the details." The
task ahead for coalition negotiators over the next two weeks
was to tease out the devils and deal with them. Yushchenko
also gave high marks to the April 11 meeting he had convened
with leaders of all five parties that will be represented in
the next parliament (Rada),noting that apart from the
Communists the other parties approached the dialogue
constructively. As a result, he planned to hold another
meeting toward the end of April.

Ukraine's strategic choice: NATO/EU (but Russia a factor)
-------------- --------------


8. (C) In response to Senator Burr's question about
Yushchenko's vision for Ukraine in five years, Yushchenko
said that Ukraine's strategic development was predicated on
eventual membership in NATO and the EU, fundamental goals
that drove Ukraine's foreign policy. The European
Parliament's April 6 resolution expressing desire to see
Ukraine as an EU Associate Member particularly gratified
Ukraine, especially since the current Ukraine-EU agreement
expired in 2007.


9. (C) For Ukraine's future, integration into Western
institutions was a strategic choice, stated Yushchenko,
because Ukraine "was stretched Christ-like on a cross,
crucified between West and East." He underscored Ukraine's
vulnerability. Poland, Slovakia, Bulgaria, Romania and other
central European countries had faced a simple decision to
join Europe and pursue Euro-Atlantic integration; the only
question had been when. For Ukraine, it was not just a
question of when, but if, since there was an alternate choice
pushed by political forces advocating an Eastern inclination,
buttressed by outside forces engaged in projects to discredit
Ukraine's reputation in the West. Both domestic and foreign
forces supported a return to union (with Russia). Ukraine
could go either East or West, but Ukraine chose West because
that was the choice of hope. Yushchenko stressed that
Ukraine's fate was also important for Europe itself.


10. (C) Yushchenko cited two specific rumors that had been
planted in the media: that Ukraine had hosted a CIA-run
terrorist detainee prison, and that extremists linked to
Usama bin Laden had been allowed to be in Ukraine. He warned
that the next rumor designed to create a scandal between the
U.S. and Ukraine might be released in the coming days: that
Ukraine had sold missiles to Iraq. "Do not believe the story
if you hear it; it is not true." Russia was sending unsubtle
hints as well: $230 per thousand cubic meters of natural
gas, plus dairy and meat bans. But he as President would
make decisions about Ukraine's future solely on the basis of
Ukrainian national interests, Yushchenko vowed, not on the
narrow interests of certain political forces.

Bilateral Issues: Energy, Space
--------------


11. (U) Yushchenko thanked the Senators for the progress made
in U.S.-Ukraine relations over the past year in resolving
issues which had festered for years: the granting of Market
Economy Status; the lifting of the Jackson-Vanik amendment;
and the signing of a WTO protocol. U.S.-Ukrainian diplomatic
activity had been intense, increasing the positive dynamics
of the bilateral relationship.


12. (C) Yushchenko expressed hope for energy cooperation "at

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the strategic level," stressing that the issue was "very,
very important" to Ukraine, which needed to diversify its
market and adjust to European standards where possible. The
main issue concerned nuclear energy. Ukraine had 14 nuclear
power reactors, nine or ten of which would reach the end of
their planned lifetime in the next decade but could be
extended another 15-20 years with proper upgrades. Ukraine
also wished to diversify some of the fuel assemblies it used,
switching to U.S. or European cycles. Finally, Ukraine,
which mined its own uranium ore, was interested in
enrichment/processing capacity to break its 100-percent
dependency on Russia. Yushchenko mentioned natural gas
pipeline projects only in passing but noted that he would
meet (for the second time) with the head of the European
Energy Agency later on April 13.


13. (SBU) Yushchenko welcomed the involvement of U.S. energy
companies in such projects. Senator Burr replied that the
U.S. wanted to be Ukraine's partner on such issues; the U.S.
was also looking toward nuclear energy to supply a much
larger share of future energy needs. Ukraine should be able
to find new partners, whether it be General Electric or
Toshiba; competition was good for all.


14. (U) Yushchenko thanked the U.S. for helping to combat
avian flu. Thanks to U.S. assistance, Ukraine could now
conduct analysis in-country, rather than sending samples to
Western Europe. Avian flu was a serious issue for Ukraine
and for neighboring countries and would not go away, since
Ukraine straddled migratory bird routes.


15. (C) Yushchenko supported enhanced bilateral space
cooperation. Ukraine had signed an agreement with NASA and
was working on several technical projects. Ukraine had won a
tender for the Brazilian Alcantara launch site; the first
Ukrainian rocket should launch from Alcantara in 2007.

Transnistria
--------------


16. (C) Yushchenko thanked the U.S. for support of efforts to
resolve the Transnistria conflict in Moldova. There were two
elements on which Ukraine looked to the U.S. for further
action. Politically, Ukraine hoped the U.S. could take
advantage of the expanded 5-plus-2 format to renew
negotiations. Technically, Ukraine needed help with modern
management/control of its border with the Transnistrian
region, currently a 450-km stretch riddled with forest
footpaths and tracks without physical barriers and a history
of active smuggling. The 100-person EU Border Assistance
Mission (EUBAM) was a decent start, but Ukraine needed to set
up new regulated checkpoints and install optical equipment to
monitor more remote stretches. The Ukrainian ability to
control its border was currently very weak.


17. (SBU) Senator Gregg, noting his responsibility for
oversight of Homeland Security issues, replied that the U.S.
spent a great deal of time developing new technologies for
border monitoring and should be able to respond to
Yushchenko's interest in this area if he wished to send a
Ukrainian team to the United States. Yushchenko thanked
Senator Gregg and asked his foreign policy adviser,
Ambassador Kostyantyn Tymoshenko, to make arrangements with
the Border Guards. Ukraine needed to develop a new concept
of modern border management, Yushchenko stressed. The model
could subsequently be applied to its eastern border (with
Russia),which had never been demarcated fully and had never
been a physical border.

Bio note
--------------


18. (C) Bio note: Yushchenko appeared to comprehend more
English in this meeting than in the past, visibly reacting to
comments in English, rather than waiting/relying on
interpretation into Ukrainian. He also repeatedly
interjected: "Yes, yes" and "Thank you" into the conversation
and added: "Thank you for coming" as the Codel shook hands
with him as they departed. The scale of the dioxin-induced
chloracne on Yushchenko's face continues to subside,
noticeably so on his forehead (less so on his cheeks and
temples),though it would appear that significant scarring
will remain.


19. (U) Codel Frist did not have an opportunity to clear this
message.


20. (U) Visit Embassy Kiev's classified website at:
www.state.sgov.gov/p/eur/kiev.
Herbst