Identifier
Created
Classification
Origin
06KIEV2166
2006-06-05 09:55:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Kyiv
Cable title:  

UKRAINE: CODEL BLUNT'S 5/29 MEETING WITH PRESIDENT

Tags:  OREP PGOV PHUM PINR SOCI PREL ECON CASC KOCI 
pdf how-to read a cable
VZCZCXRO7603
PP RUEHDBU RUEHIK RUEHLN RUEHVK RUEHYG
DE RUEHKV #2166/01 1560955
ZNR UUUUU ZZH
P 050955Z JUN 06
FM AMEMBASSY KIEV
TO RUEHC/SECSTATE WASHDC PRIORITY 9713
INFO RUCNCIS/CIS COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
UNCLAS SECTION 01 OF 03 KIEV 002166 

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: OREP PGOV PHUM PINR SOCI PREL ECON CASC KOCI
UP, RS
SUBJECT: UKRAINE: CODEL BLUNT'S 5/29 MEETING WITH PRESIDENT
YUSHCHENKO

(U) Sensitive but unclassified. Please handle accordingly.
Not for Internet distribution.

Summary
-------

UNCLAS SECTION 01 OF 03 KIEV 002166

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: OREP PGOV PHUM PINR SOCI PREL ECON CASC KOCI
UP, RS
SUBJECT: UKRAINE: CODEL BLUNT'S 5/29 MEETING WITH PRESIDENT
YUSHCHENKO

(U) Sensitive but unclassified. Please handle accordingly.
Not for Internet distribution.

Summary
--------------


1. (SBU) During a May 29 meeting with CODEL Blunt, President
Yushchenko characterized Ukraine's economic growth as
"strong" and predicted that a new Orange coalition government
would be formed "in a couple of days." Negotiations over top
leadership positions had begun May 29 and should be complete
within "a few days." Eponymous bloc leader Yuliya Tymoshenko
would serve either as Prime Minister or Rada Speaker, and
Yuriy Yekhanurov would fill the remaining position; this
leadership arrangement would cause some MP defections from
the Orange camp, but Yushchenko asserted that the new
government would be able to muster enough votes in parliament
to pass legislation. The new government, though Orange,
would have "constructive relations" with the rival Party of
Regions, the top vote-getter in the March parliamentary
elections. Yushchenko was downbeat on relations with Russia,
stressing that Ukraine and Europe more generally needed to
end their energy dependence on Russia. One way to do that
was to pump Caspian oil westward via the Odesa-Brody
pipeline; another was to use Ukraine's pipeline network to
move Kazakh and Turkmen gas to European markets. Russian
opposition to such competition would be fierce, Yushchenko
explained, adding that USG support for energy diversification
was critical. Yushchenko asked for continued USG assistance
in improving Ukraine's courts and police, both key tools in
combating corruption. He also stressed that his government
had made important progress in curbing the anti-Semitic
activities of the foreign-funded Inter-Regional Academy of
Personnel Management. Yushchenko reviewed his efforts to
make it easier for foreign companies to do business in
Ukraine, emphasizing that his government had cut red tape and

abolished visa requirements for U.S. and EU citizens. He
assured the CODEL that Ukraine would place no new
restrictions on adoptions by Americans and reiterated that
Ukraine was committed to creating a transparent adoption
system, though Kiev needed better post-placement reporting
compliance by American families. End summary.

Yushchenko On: The Economy...
--------------


2. (SBU) President Yushchenko met May 29 with a Congressional
delegation led by House Majority Whip Representative Roy
Blunt (R-MO) that included House Minority Whip Representative
Steny Hoyer (D-MD),the Chairman of the House Democratic
Caucus Representative James Clyburn (D-SC),Representative
Rodney Frelinghuysen (R-NJ),and Representative Sam Graves
(R-MO). Yushchenko began the discussion by focusing on
Ukraine's economy, noting that foreign direct investment and
wages were rising and that economic growth was strong, up
2.6% in April. Government revenues during the first quarter
of 2006 were up 23% over the same period last year,
Yushchenko said, adding that 2005 government revenues rose
51% over 2004, the last year of the Kuchma presidency.

...Coalition Politics...
--------------


3. (SBU) Turning to politics, Yushchenko asserted that the
greatest risk of creating a new Orange coalition was that it
might "collapse." To prevent that from happening, he
explained, leaders from Our Ukraine (OU),the Socialist Party
(SPU),and the Tymoshenko Bloc (BYuT) had been working on a
detailed program that all three sides could accept and agree
to implement; the negotiating had been particularly tough
with the SPU, which opposed, for example, Ukraine's WTO entry
and the privatization of state industries. Yushchenko
claimed that three sides had finally "worked out" a common
program, but still needed "a couple of days" to reach
agreement on "the personalities" for key positions in the new
government. Yushchenko related that, in the new Orange
coalition, Yuliya Tymoshenko and Yuriy Yekhanurov would be
either Prime Minister or Rada Speaker; there were "pluses and
minuses" to Tymoshenko serving again as prime minister,
Yushchenko said, adding that there were more than a "dozen"
OU and BYuT MPs who would not support a Tymoshenko PM
candidacy. But even with those potential defections, he
asserted, the new Team Orange could muster a majority of 243
in parliament -- 17 more than needed to pass legislation.
(Note: Maintaining the Orange forces' 243-seat majority in
the face of defections would require the defection of Regions
or Communist MPs to the Orange side.)

...Working With Party of Regions...

KIEV 00002166 002 OF 003


--------------


4. (SBU) Yushchenko stressed that, though Orange, the new
governing coalition would have "constructive relations" with
the rival Party of Regions. That party's interests,
Yushchenko emphasized, would not be ignored. Yushchenko
explained that he had recently held a series of discussions
with Party of Regions chief Viktor Yanukovych, reviewing a
wide range of issues -- including Ukraine's possible
membership in NATO. Yushchenko characterized the discussions
as "constructive," noting that Regions "wants to work with
us" and that some Regions' MPs might wind up "moving into our
camp."

...Relations with Russia...
--------------


5. (SBU) Yushchenko said that, generally speaking, it was
still difficult for the Kremlin to acknowledge that Ukraine
was a sovereign, independent country. It was hard for Moscow
to accept that it would have no say in who would become
Ukraine's next prime minister, foreign minister, or, more
importantly, first deputy prime minister for energy issues;
all of these decisions would be made by Kiev alone.
Characterizing energy ties with Russia as "highly
politicized," Yushchenko stressed that Ukraine, and Western
Europe, had to diversify energy supplies and reduce
dependence on Russia. One way to do that was to pump Caspian
oil westward via the Odesa-Brody pipeline; another was to use
Ukraine's pipeline network to move Kazakh and Turkmen natural
gas to European markets. (Comment: The latter would only be
possible if Russia offered open transit access to its
pipelines, since Ukraine has no alternative connection for
gas from Kazakhstan and Turkmenistan.) Russian opposition to
such competition would be formidable, Yushchenko said, and
Moscow would exploit the EU's lack of a common energy policy.
USG support would therefore be critical, Yushchenko said,
adding that "without such support, the projects are not
feasible." Yushchenko also noted to the Congressmen that an
American firm (note: Vanco) had recently won a tender for oil
exploration in the Black Sea, and added that he would like to
see major U.S. firms work with their Ukrainian counterparts
on aerospace projects.

...Corruption and Anti-Semitism...
--------------


6. (SBU) Yushchenko asked for continued U.S. assistance in
strengthening the independence of Ukraine's judiciary and the
professionalism of its law enforcement community. Yushchenko
stressed that both the courts and the police were key to
tackling corruption, one of Ukraine's major societal ills.


7. (SBU) In response to a question from Rep. Hoyer,
Yushchenko asserted that his government had made important
progress in combating the anti-Semitic activities of the
private, foreign-funded Inter-Regional Academy of Personnel
Management, known by its Ukrainian acronym MAUP. Yushchenko
said that he had publicly condemned MAUP for its
"intolerance" and had issued an administrative order barring
civil servants from studying or working at any MAUP branch
campus. The Ministry of Education had been reviewing the
credentials of all MAUP affiliates, and had closed six of
them in March for violating the law. Moreover, Yushchenko
said, a criminal case had been opened against MAUP's
notoriously anti-Semitic weekly newspaper, Personnel Plus.
MAUP's leader, Hryhoriy Shchokin, had in early May asked him
to halt the Ministry of Education's credential review -- a
request that Yushchenko said he declined. MAUP's activities
would continue to receive scrutiny from the Presidential
Secretariat, Yushchenko said, adding the government would

SIPDIS
make progress against MAUP "month by month." Yushchenko also
noted that Shchokin's openly anti-Semitic "Ukrainian
Conservative Party" had been one of the "big losers" in the
March parliamentary elections. (Note: The Ukrainian
Conservative Party finished 31st out of 45 contending blocs
and parties, getting 0.09% of the national vote.)

...Helping American Business...
--------------


8. (SBU) In response to a question from Rep. Frelinghuysen,
who related that many of his Ukrainian-American constituents
had found it very difficult to do business in Ukraine,
Yushchenko recalled that when he took office, there were
approximately 5,000 regulations that businesses had to comply
with. That number had been cut to about 3,000; further
cutting of red tape was up to the Rada, which Yushchenko said
needed to pass business-friendly legislation. Yushchenko

KIEV 00002166 003 OF 003


stressed that his administration had, one year ago,
eliminated visa requirements for the citizens of the U.S.,
EU, Japan and Canada; as a result, the number of people,
including businessmen, visiting Ukraine during the past 12
months had nearly tripled (as compared to the period May
2004-May 2005).

...and Adoptions
--------------


9. (SBU) In response to a question from Rep. Blunt,
Yushchenko stressed that Ukraine would place no new
restrictions on adoptions by Americans and emphasized that
Ukraine was committed to creating a transparent adoption
system. He said that the Ministry of Education had prepared
a report for him calling for the establishment of a "feedback
channel" to get information on the welfare of Ukrainian
children adopted by American families. The ministry report
had asserted that the Ukrainian government had no information
on "two-thirds" of the Ukrainian children adopted by
Americans since Ukrainian independence. Remarking that
"two-thirds is a huge number," Yushchenko explained that his
political opponents had publicly accused his government of
permitting Ukrainian children to be sold to foreigners for
use as involuntary organ donors. Yushchenko stressed that
his government needed information on all Ukrainian adoptees
in order to effectively counter the "baseless allegations" of
its political opponents. He complained that some American
families had failed to provide required post-placement
reports and had ignored requests for such reports made by
Ukrainian consular officials in the United States. More
transparency and mutual understanding were needed, Yushchenko
said. (Comment: Since the beginning of May, the Ministry of
Education is no longer involved in adoption issues, so it is
likely that Yushchenko was referring to a somewhat dated
report. The Ukrainian government has never given Embassy
Kiev overall non-reporting numbers as high as 66%. It is
true, however, that a September 2005 report by the Ministry
of Education asserted that about two-thirds of the reports
for children adopted in 2004 had not yet been submitted.)


10. (U) The delegation cleared this cable.


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