UKRAINE: HUNGARY LENDS QUIET SUPPORT TO UKRAINE'S

C O N F I D E N T I A L SECTION 01 OF 02 KYIV 001826 SIPDIS SIPDIS E.O. 12958: DECL: 07/25/2017 TAGS: PGOV PREL ETRD EINV HU UP SUBJECT: UKRAINE: HUNGARY LENDS QUIET SUPPORT TO UKRAINE'S EU ASPIRATIONS REF: BUDAPEST 2719 Classified By: Acting Political Counselor Michael Uyehara for reasons 1 .4(b,d) 1 Summary. President Yushchenko and Hungarian Prime Minister Ferenc Gyurcsany's two meetings, during Yushchenko's July 10-11 state visit to Hungary and Gyurcsany's July 27 visit Mukacheve in the Ukrainian Carpathian region, indicates warming relations and follows on expanding bilateral trade. The pace of high-level bilateral interactions has picked up in 2007, beginning with Gyurcsany's and Yushchenko's January 14 meeting in Zakarpattia Oblast and followed by Prime Minister Yanukovych's March 6 working visit to Budapest. Hungarian President Laszlo Solyom's state visit to Ukraine, planned for 2008, will round out the exchange of visits. With trade growing at a 30% annual rate (approaching two billion dollars a year) and with ongoing strong Ukrainian investment in Hungary, the outlook for continued robust economic interaction is strong. Hungary provides considerable support to Ukraine's 150,000 ethnic Hungarians and would like to see more Ukrainian support of Hungarian schools and recognition of Hungarian university degrees. The two countries realize that the welfare of ethnic Hungarians in Ukraine is an important factor in their relations; a bilateral committee meets regularly to address issues faced by their respective ethnic minorities. The Hungarian Charge d'Affaires in Kyiv said his country is a strong supporter of Ukraine's EU aspirations and together with Poland and Lithuania form a pro-Ukraine "troika" within the EU. End Summary. ¶2. (U) We met with Ukrainian Hungarians Society Director Tibor Vass on June 15, Hungarian Embassy Charge d'Affairs Laszlo Horvath on July 17, and the Acting Head of the State committee on Nationalities and Religions Heorhiy Popov on July 25 to obtain an overview of Ukraine-Hungary relations in the wake of Yushchenko's state visit. Shared History and Increasing Economic Interaction -------------- -------------- ¶3. (U) Ukraine shares a short 64 mile border with Hungary and ties over more than a millennium. In 895 AD, the seven Magyar tribes crossed the Verecke pass in the Carpathian Mountains and conquered what is now Hungary. When President Solyom visits Ukraine in 2008, he will dedicate a memorial to that event at the pass. Much of western Ukraine was part of the Austria-Hungarian empire before the outbreak of the First World War. Zakarpattia, where 97% of Ukraine's 150,000 ethnic Hungarians live, wound up as part of Czechoslovakia at the outbreak of the Second World War, and was incorporated into the Soviet Union shortly after the German surrender in ¶1945. Popov, who is also co-chairman of the Mixed Ukrainian-Hungarian Commission for the Rights of National Minorities, noted that there are only 6,000 ethnic Ukrainians in Hungary. ¶4. (U) According to the World Trade Atlas, Ukraine imported $802 million of goods and services in 2006 from Hungary (a 24% increase over 2005),while exporting $946 million (a 37% increase over 2005),making Hungary Ukraine's 14th largest source of imports and 8th largest export destination. Ukraine exports chemicals and pharmaceuticals, pulp and paper, and radio and electronic equipment to Hungary and imports grain, oil and oil products, lumber and lumber products, textiles, and electronic equipment. In addition to substantial official trade, the border region is the scene of a lively smuggling operation that provides income to an estimated 100,000 people (reftel). ¶5. (U) Horvath said that Yushchenko visited the Ukrainian-owned Dunaferr steelworks while on the state visit to highlight Ukrainian investment in Hungary. Horvath also mentioned that Ukraine's Ferrexpo is planning to construct a rolled steel plant in north-east Hungary "on a greenfield site." He remarked that there have been discussions about constructing a Hungarian-owned one billion cubic meter underground gas storage facility on Ukrainian territory and construction of small hydro-electric power stations on the Tysa river. Horvath said that there is not much Hungarian investment in Ukraine but was optimistic about continued Ukrainian investment in his country. Hungart Focuses on Protecting Ukraine's Ethnic Hungarians -------------- -------------- ¶6. (U) Although Hungary has s fairly small population compared to Ukraine (10 million verses 46 million),it has an impressive diplomatic presence here, maintaining consulates in Uzhhorod and Berehove in addition to an embassy in Kyiv KYIV 00001826 002 OF 002 that together issue over 200,000 visas a year. Hungary takes a strong interest in the welfare of the ethnic Hungarians in Ukraine and goes to great lengths to help them preserve their identity; they are entitled to a Hungarian identity card which gives the holder rights to many of the benefits of citizenship, including access to higher education at Hungarian universities. Hungary also issues them a "national visa" that is good for five years instead of the usual one-year term. Hungary provides financial support to the 70 Hungarian language schools in Zakarpattia and support to many of the municipalities with a high proportion of ethnic Hungarian residents. ¶7. (C) Although the Mixed Ukrainian-Hungarian Commission for the Rights of National Minorities meets regularly to address problems faced by ethnic Ukrainians in Hungary and ethnic Hungarians in Ukraine, both Horvath and Vass complained about the lack of state funding for Hungarian language schools (a complaint that Popov dismissed); the difficulties that ethnic Hungarian students face when they take Ukrainian language university entrance examinations; and bureaucratic hurdles faced by Ukrainian graduates of Hungarian universities in getting their degrees officially recognized here. Horvath and Vass both noted that there had been considerable immigration to Hungary by young Ukrainians of Hungarian decent. Vass estimated that 10,000 ethnic Hungarians had left Ukraine for Hungary between 1991 and 2001 when the last official census was taken. Horvath was concerned that the rising standard of living in Hungary would continue to tempt many ambitious young Ukrainians of Hungarian origin to leave. Hungary is a Strong Supporter of Ukraine's EU Aspirations -------------- -------------- ¶8. (C) We noticed several events during Yushchenko's state visit related to the 1956 intervention by Soviet troops in Hungary and asked Horvath if the memory of this tragedy has been an impediment to better relations. Horvath said the gestures Yushchenko make during his trip were appreciated but said "they were his idea" and in general Hungarians do not blame Ukrainians for what happened. Horvath said that "you don't hear much about relations between Hungary and Ukraine because there are no problems." He noted that Hungary is an active supporter of Ukraine within the EU and together with Lithuania and Poland form a pro-Ukraine "troika." ¶9. (C) Horvath noted that little progress had been made on the 2007 Action Plan that was signed on March 6 during Yanukovych's visit. Horvath did not expect much to be accomplished on the Action Plan -- which addressed many of the issues that are of concern to ethnic Hungarians here -- before the September 30 Verkhovna Rada elections which he hoped would bring in "a new government." Both Horvath and Vass lamented the fact that the ethnic Hungarian community was politically divided between The Party of Hungarians of Ukraine and the Democratic Party of Hungarians of Ukraine, which was partly responsible for the absence of an ethnic Hungarian in the Rada. ¶10. (U) Visit Embassy Kyiv's classified website: www.state.sgov.gov/p/eur/kiev. Taylor