RUSSIA: MIXED MESSAGES ON UKRAINE; IRE OVER

C O N F I D E N T I A L MOSCOW 002655 SIPDIS E.O. 12958: DECL: 09/04/2018 TAGS: PREL PGOV ECON RS UP GG SUBJECT: RUSSIA: MIXED MESSAGES ON UKRAINE; IRE OVER YUSHCHENKO REF: A. KYIV 1672 ¶B. LONDON 2211 Classified By: Ambassador John R. Beyrle: Reasons 1.4 (b, d). ¶1. (C) Summary: Russian officials have sent mixed signals regarding their commitment to Ukraine's territorial integrity and the future of Russian-Ukrainian relations. While Putin reassured the international community that Russia had no intention of redefining borders with Ukraine, Medvedev posited "privileged" zones of Russian influence and the prerogative to protect compatriots abroad. Likewise, MFA Director Sorokin underscored Russian respect for Ukrainian borders, but acknowledged that the Big Treaty and the Sevastopol basing agreement were linked in policymaking circles; he attributed Russian-Ukrainian tensions to a Yushchenko policy focused on baiting Russia, in order to detract from dismal approval ratings at home. Hard-liners have used the Georgia crisis to warn that Yushchenko's strategy of wooing the West was splintering Ukrainian society, with Yushchenko,s hosting of UK Miliband's speech drawing Lavrov,s ire. Spillover of political tensions into the economic realm came on September 1, with First DPM Shuvalov issuing instructions to protect the Russian market from Ukrainian goods within one week. End summary. Putin, Medvedev Send Mixed Signals -------------- ¶2. (C) Russia's ruling tandem sent mixed messages on the lessons that Ukraine should draw from Moscow's recognition of Abkhazia and South Ossetia. On the one hand, Putin used a series of foreign press interviews to explicitly reassure the international community that Russia had no designs on Ukrainian territory, stating "Russia has long recognized the border's of today's Ukraine." Putin acknowledged that negotiations continued over the border demarcation, but said they were "technical" in nature. He called allegations that Russia sought to threaten Ukraine with its actions in Georgia a provocation. Positing that there are tensions among the Crimean Tatars, Russians, and ethnic Ukrainian populations in Crimea, Putin called it "an internal problem to Ukraine itself." On September 1, however, Medvedev muddied the waters, enumerating foreign policy principles that asserted privileged zones of Russian influence and a prerogative to protect Russian compatriots abroad. Yushchenko Imperils Russian-Ukrainian Relations -------------- -- 
¶3. (C) In a recent meeting on Ukraine, MFA Director Viktor Sorokin stressed that despite the heightened bilateral tensions, Russia believed that relations would return to normal, since both countries had "very large geopolitical interests that no one wants to lose." Sorokin put full blame for the deterioration in relations on Yushchenko, commenting wistfully that Russia sought the "peaceful and respectful" relations it had with Ukraine in 2004; a time, he hastened to add, when Ukraine was already cooperating with NATO. Yushchenko's strategy, he maintained, was the intentional baiting of Russia -- including preemptive negotiations over the Black Sea Fleet, statements on Georgia that were "more provocative than those from Washington," an effort to promote schisms in the Orthodox church, and the elevation of Holodomor as the unique targeting of the Ukrainian people during collectivization -- but insisted Russia was exercising restraint. Noting with incredulity the reports that Yushchenko's office had labeled PM Tymoshenko a Russian traitor, Sorokin expressed concern over Yushchenko's effect on the "fragile" fabric of Ukrainian society. While ridiculing the charge, Sorokin confirmed that Moscow saw real differences in Tymoshenko's reaction to Georgia and approach towards Moscow, approvingly noting that she kept her eye on the economic bottom-line. ¶4. (C) Acknowledging that the mood of the Kremlin was "very serious," Sorokin said that Russia "did not want to go back 100 or 200 years ago" in its relations with Ukraine. When pushed on provocative statements from Russian officials on Ukrainian's sovereignty, Sorokin stressed that Russia was committed to Ukraine's territorial integrity. Unlike Georgia, he emphasized, all Ukrainians -- regardless of party and, with little exception, ethnicity -- have a vision of Ukraine as a united country, which was never the case with South Ossetia and Abkhazia. Sorokin rejected reports of the distribution of Russian passports in Sevastopol, while noting that over three million Ukrainians work or live in Russia and could choose to obtain a Russian passport for ease of employment and travel, which the Russian Constitution permitted. The GOR did not have accurate statistics on the number of people who hold Russian passports in Crimea. The greater concern in Crimea, Sorokin argued, was growing Tatar separatism and its Wahhabist (Hizb-i Tahreer) linkages. Black Sea Fleet -------------- ¶5. (C) With respect to Yushchenko's August 13 decrees restricting the operations of the BSF, Sorokin expressed regret at Ukraine's cancellation of the August 27 consultations on the issue. If implemented, the decrees would make BSF operations "very difficult," and ran counter to earlier understandings and the spirit of the BSF treaties. Sorokin said it was too early to say whether Russia would implement these decrees. ¶6. (C) Sorokin agreed that the three Sevastopol agreements on the BSF were legally distinct from the "Big Treaty" on Friendship, Cooperation and Partnership with Ukraine, but underscored DFM Karasin's public statement that policymakers -- like most Russians -- viewed the agreements as historically bound. (Sorokin, who participated in the original BSF negotiations, related Yeltsin's decision to sign the Big Treaty only after Chernomyrdin delivered the signed agreement on Sevastopol.) He affirmed that while the MFA previously issued a statement that Yushchenko's decrees on the BSF were not in keeping with the Big Treaty, the Russian side was not implying any intentions to seek changes to the latter document. Hard-liners Urge Ukraine to Learn Georgian Lesson -------------- -------------- ¶7. (C) While Putin and MFA officials have downplayed efforts to call into question Ukraine's sovereignty, prominent hard-liners have insisted that an important lesson that Russian neighbors should draw from Georgia is the need to take seriously the interests of their Russian minorities. Duma CIS Committee Deputy Chairman (and Director of the CIS Institute) Zatulin minced no words in an August 29 meeting, telling us that Russia had now proved its reliability as a patron to far-flung Russians, in contrast to its inability to defend the interests of compatriots denied citizenship in the Baltics. Reiterating his public boasts to us, Zatulin said that "I respect Ukraine's territorial integrity, but I can provide no guarantees if Yushchenko decides to attack Russians in Crimea." ¶8. (C) The significance of the Big Treaty, Zatulin stressed, was its commitment to "friendship and partnership" -- goals that he accused Yushchenko of undermining. For many in Russia, Zatulin warned, adherence to the Big Treaty was the price Kyiv paid to secure recognition of Ukrainian territorial integrity; nonetheless, the treaty was an unpalatable compromise, with 45 percent of Russians still believing that Crimea should not have been ceded. While Russia did not intend to "seize" the Crimea or Sevastopol, it would be "perfectly legitimate," Zatulin argued, for Russia to encourage Ukraine to give its regions autonomy or to develop a federation agreement (akin to that between Russia and Tatarstan),while making it easier for Russian speakers to maintain Russian as their primary language. ¶9. (C) While MFA Sorokin pined for "a return to 2004" and noted Tymoshenko's pragmatic focus on the Ukrainian-Russian economic bottomline, Zatulin charged that Yushchenko's effort to woo the West and divert attention from his seven percent popularity ("up from four percent after Georgia") would continue to fuel a provocative foreign policy towards Russia. Rather than Russia interfering in Ukraine's affairs, Zatulin charged that Yushchenko's own strategy was leading to the splintering of Ukraine. Zatulin, whose anger towards the Yushchenko government was sharpened by his visa revocation and expulsion in 2008, relished recounting stories of Yushchenko's office putatively ordering the Donetsk administration not to receive the Prime Minister. "This is your guy?" Linking Yushchenko and Saakashvili, Zatulin charged that the U.S. was going to repeat its mistake, by supporting another nationalist leader who would rend the social fabric of his country in the quest for U.S. approval. Lavrov Lashes Out Against Miliband -------------- ¶10. (SBU) Russia reacted strongly to UK Foreign Secretary Miliband's August 27 speech in Kyiv (ref b),with commentators underscoring that Ukraine's role in hosting the public UK broadside had particularly irritated the Russian leadership. In an August 27 press conference, FM Lavrov scornfully countered Miliband's charges, arguing that the Foreign Secretary had made technical errors in accusing Russia of "invading a sovereign state, blockading Georgian ports, and blowing up bridges and tunnels." Lavrov criticized Western countries' forgiveness of Saakashvili's anti-democratic restrictions, and challenged Miliband's characterization of George Kennan's "Long Cable," and the role of NATO as "an anchor of stability, democracy, and economic development." Lavrov underlined that NATO's expansion only served to "divide Europe." ¶11. (SBU) Few Russian media sources covered Miliband's or Lavrov's comments. One exception was an article written by a Ukrainian journalist published in the centrist-Moscow daily, Nezavisimaya Gazeta. She accused Miliband of declaring a new "Iron Curtain" and accused the West of creating a new, anti-Russia coalition. The article noted that the sequential condemnations of Russia by Western governments on August 26 were evidence of this coalition. The article speculated that Miliband's approach would lead to an "economic war" that would "divide Ukraine." Trade Relations Under Pressure -------------- ¶12. (C) On September 1, First Deputy PM Shuvalov gave the Ministries of Economic Development, Industry and Trade, Agriculture, Finance and Foreign Affairs one week to develop measures to protect the Russian market from goods from Ukraine, in light of Ukraine's free trade regime with Russia and its recent accession to the WTO. The media are speculating that Russia may impose duties on many Ukrainian goods that now enter the country duty free under CIS trading rules and the countries' 1993 bilateral free trade agreement. Russia reportedly may also be considering nullifying or delaying until 2013 a deal to permit unlimited imports of Ukrainian sugar starting in 2009 and of Ukrainian spirits as of 2010. These measures are widely seen here as politically motivated and intended to punish Ukraine for its support of Georgia in its conflict with Russia. ¶13. (C) Agriculture Minister Gordeyev also stated August 27 that his ministry would seek to cut poultry, pork and dairy imports as part of a broad reassessment of the commitments Russia has made during the WTO accession process. Dairy products such as milk and butter are significant Ukrainian exports to Russia. If Russia opened the question of dairy import quotas, or restricted imports or increased duties on other Ukrainian goods, it would risk opening WTO market access negotiations with Ukraine, which so far has not requested bilateral talks regarding Russia's accession. Having written off WTO entry for the time being, the GOR likely is calculating that now is a good time to increase protection for Russia's domestic agriculture industries. Comment -------------- ¶14. (C) Russia continues to calculate that Yushchenko, not Moscow, is out of synch with the Ukrainian populace, and will look to exploit the increasingly apparent fractures in the Orange coalition. While the MFA has trumpeted restraint, the impulse to teach Yushchenko a lesson remains, meaning that a diplomatic or economic escalation in what has been primarily a war of words is possible. BEYRLE