AMBASSADOR PRESENTS CREDENTIALS; YUSHCHENKO

C O N F I D E N T I A L SECTION 01 OF 02 KYIV 002114

SIPDIS

E.O. 12958: DECL: 07/04/2019
TAGS: PGOV PREL ECON UP RS
SUBJECT: AMBASSADOR PRESENTS CREDENTIALS; YUSHCHENKO
STRESSES RUSSIA THREAT

Classified By: Ambassador John F. Tefft for reasons 1.4 (b,d)

SUMMARY
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1. (C) Ambassador presented his credentials to President
Yushchenko December 7. In the monologue that followed,
Yushchenko asserted that Ukraine is facing the most serious
challenge to its sovereignty since the fall of the USSR. The
pro-Russian policies of PM Tymoshenko and Regions party
leader Yanukovych would put Ukraine's sovereignty at risk.
Yushchenko termed "inadequate" the December 4 U.S.-Russia
joint statement on security assurances. He called for higher
level contact with the U.S. and welcomed the visit of FM
Poroshenko to Washington December 9. Yushchenko blamed
Tymoshenko for negotiating inferior energy contracts with
Moscow and bringing the state-run gas company Naftohaz near
bankruptcy. He said the EU would not stand up to Moscow, as
the Georgia events had proven; hence the importance to
Ukraine of close relations with the U.S. If Russia succeeds
in holding sway over Ukraine, it will move in short order to
dominate Georgia, Moldova and Belarus. End Summary.


RUSSIAN THREATS TO SECURITY
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2. (C) After the credentialing ceremony, President
Yushchenko, accompanied by Foreign Minister Poroshenko and
Presidential Foreign Policy Advisor Honcharuk, told the
Ambassador that Ukraine is facing the most serious challenge
to its sovereignty since independence. Moscow would use all
available levers to prevent Ukraine from further integrating
with the West. The President emphasized that there was "no
difference" between the pro-Russia policies of PM Tymoshenko
and opposition leader Yanukovych; they are "like a pair of
boots." Yanukovych is naive and Tymoshenko is cynical, but
the result is the same -- deference to Russia. As for
Russia, "it is all about geopolitics." Yushchenko said that
giving into Russian pressure to allow the Black Sea Fleet to
stay in Crimea past 2017 and abandoning Ukraine's NATO
membership quest would put Ukraine's independence at risk.


3. (C) Yushchenko recounted that in 2003 (when Kuchma was
president) the Kremlin had provoked tension by building a
causeway to tiny Tuzla island in the Kerch strait. Kuchma
tried to reach Putin but was unable to establish contact for
ten days. Yushchenko observed that he has no contact at all
with President Medvedev. He noted other Russian
provocations, such as the declaration by the Russian Duma
that Sevastopol is a Russian city, and Russia's unwillingness
to come to agreement on border demarcation.


BUDAPEST MEMORANDUM NOT ENOUGH
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4. (C) Yushchenko rejected as "inadequate" the December 4
U.S.-Russian joint statement reaffirming the security
assurances in the 1994 Budapest Memorandum. Ukraine needs
more compensation for voluntarily giving up its Soviet-legacy
nuclear stockpile -- notably binding bilateral security
guarantees. Yushchenko asked the Ambassador to "please
forward my alarm" at the security situation Ukraine faces.
He belittled the U.S. attempt to reset relations with Moscow,
observing that "every time there is a new U.S.
Administration," it tries to improve relations with Russia;
it takes only one or two years before they learn that
"nothing changes there."

EU WEAK ON RUSSIA; UKRAINE NEEDS U.S.
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5. (C) Yushchenko emphasized the importance to Ukraine of
frequent, high-level contact with the U.S., especially at the
Foreign Minister level. He cited Foreign Minister
Poroshenko's December 9 visit to Washington as an important
signal that the U.S. was still engaged with Kyiv. Yushchenko
underlined the role the Strategic Partnership Commission
could play in improving bilateral ties, but said that the
level of representation should be raised higher to
demonstrate U.S. support and help keep Ukraine on a westward
course. He said that Ukraine's relationship with the U.S.
was particularly important because the European Union was
timid; when Moscow causes trouble, the EU "runs away." The
EU made this clear by its inadequate response to the Georgia
conflict of August 2008, when it came up with an "empty plan"
and gave "carte blanche" to Russia. If democracy fails in
Ukraine (via the election of Tymoshenko or Yanukovych as
President),Russia will move quickly to assert itself further
over Georgia, Moldova and Belarus.

KYIV 00002114 002 OF 002



GIVE LUKASHENKO A CHANCE
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6. (C) Ambassador observed that Lukashenko had not changed.
Yushchenko countered that Lukashenko's situation had changed.
His relations with Russia are increasingly bitter.
Lukashenko is looking for alternatives. Right now he is
cornered and "we need to give him a second chance."
Lukashenko is under pressure to recognize South Ossetia and
Abkhazia. Yushchenko appealed for U.S. outreach to
Lukashenko to prevent this from happening.


TYMOSHENKO CUTS OUT WESTINGHOUSE
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7. (C) Yushchenko criticized PM Tymoshenko's energy policies,
speaking specifically to concerns in the nuclear and gas
sector. On the nuclear side, the President stated that
Tymoshenko had cut a deal with the Russian side to cancel
U.S. involvement in Ukraine's nuclear sector. (Note:
Westinghouse currently has a contract to provide nuclear fuel
to the three units at the South Ukraine Nuclear Power Plant
from 2011-2015. Westinghouse has also indicated its interest
in constructing a nuclear fuel fabrication facility in
Ukraine.) Yushchenko said, however, that the final battle
was not yet lost and that he would do everything he could to
keep Westinghouse in Ukraine. He stressed that U.S. support
was vital both through the Department of Energy's Nuclear
Fuel Qualification Program and the possible future production
of nuclear fuel in Ukraine. Ukraine's goal, according to
Yushchenko, is to replace Russian nuclear fuel with American
nuclear fuel.


RUSSIAN PLAN TO BANKRUPT NAFTOHAZ
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8. (C) Yushchenko also attacked the gas contracts Tymoshenko
negotiated with Putin in January 2009. Under the contracts,
Ukraine is forced to buy excessive amounts of gas and is
underpaid for its transit services. Yushchenko claimed that
the transit rate through Ukraine is three to four times less
than transit rates for European countries. Yushchenko
charged that Russia planned to bankrupt Naftohaz in the next
few months. As a result of the January contracts, he said,
Naftohaz would end the year with a $4 billion loss and would
legally owe Gazprom $8 billion in penalties (though Putin has
indicated Gazprom would waive these). Yushchenko concluded
that Ukraine could not cope without (unspecified) assistance
from the United States.
TEFFT