POLISH PRESIDENT CAUTIONS YUSHCHENKO ON GAS DEAL

C O N F I D E N T I A L WARSAW 000353 SIPDIS E.O. 12958: DECL: 03/02/2106 TAGS: PREL ENRG PGOV UP PL SUBJECT: POLISH PRESIDENT CAUTIONS YUSHCHENKO ON GAS DEAL REF: WARSAW 325 Classified By: Political Counselor Mary Curtin, reasons 1.4b,d ¶1. (C) In the course of his February 28-March 1 visit to Ukraine, Polish President Lech Kaczynski delivered a strong message to Ukrainian President Viktor Yushchenko on the January gas deal with Russia, expressing concern about the consequences of the agreement for Ukraine's economy and its ability to act as a sovereign state. Polish MFA Director for Eastern Policy Wojciech Zajaczkowski told us that this exchange took place during a one-on-one session between the two presidents, and suggested that this may have been the first time that Yushchenko -- who listened carefully but offered no substantive response -- had heard these concerns expressed in such direct terms. Zajaczkowski urged that the United States deliver a similarly forceful message. ¶2. (C) Acknowledging our assurances that we have discussed our concerns with the Ukrainian government and offered support for renegotiating the agreement to exclude RosUkrEnergo, Zajaczkowski suggested that Yushchenko and others may nevertheless underestimate the depth of international concern about this issue -- particularly following our subsequent decision to grant Ukraine market economy status (which they may have taken as a signal that we are not overly concerned about the gas deal). The Poles see no signs that the Ukrainian government is prepared to move, either before parliamentary elections or immediately afterwards, to renegotiate this deal. Challenging the agreement will be much more difficult should Yanukovych become prime minister, Zajaczkowski noted. ¶3. (C) Zajaczkowski recommended that Ukrainian Foreign Minister Tarasyuk, a critic of the gas deal, hear during his upcoming visit to Washington not only our concerns, but also clear guidance for moving forward with American support, both technical and political. Ultimately, we have to reach Yushchenko, Zajaczkowski maintained, but it would be very helpful if we could provide Tarasyuk and like-minded ministers with arguments to use in moving the president. ¶4. (C) Otherwise, the meetings between the Polish and Ukrainian presidents went very well, Zajaczkowski reported, confirming press accounts and Kaczynski's own positive assessment of the personal chemistry between the two leaders. Kaczynski reaffirmed Polish support for Ukraine's NATO and EU aspirations, and explicitly endorsed the "Orange" camp in this month's elections (while noting that Poland will work closely with any democratically-elected government). Zajaczkowski acknowledged that there was little movement on the Odessa-Brody pipeline extension, but suggested that that was to be expected, particularly given the discussions of the Ukraine-Russia gas deal. ASHE