RUSSIAN MFA ON UKRAINE, MOLDOVA

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 001077

SIPDIS

E.O. 12958: DECL: 04/24/2019
TAGS: PREL PGOV ENRG RS UP MD
SUBJECT: RUSSIAN MFA ON UKRAINE, MOLDOVA

Classified By: Pol M/C Alice G. Wells for reasons 1.4(b) and (d)


1. (C) Summary: In an April 24 meeting, MFA Second CIS
Director Viktor Sorokin rejected Ukrainian President
Yushchenko's call for a "reset" in relations as gimmickry,
noting a continued negative trajectory. While Putin and
Tymoshenko will discuss USD 5 billion in Russian credits
during their April 29 meeting, Sorokin said the credits were
not linked to gas purchases, despite Energy Minister
Shmatko's April 25 preparatory meetings in Kyiv. Sorokin
said Russia would press for clarity on its role in
modernizing Ukraine's gas infrastructure, and sought
management responsibility, but not ownership. He noted
frictions over the border demarcation, Black Sea Fleet, and
history. While predicting an uptick in pro-Russian
statements designed to appeal to a Russia-leaning Ukrainian
electorate, Sorokin said Russia had no illusions and would
deal with virtually any Ukrainian political leader. Sorokin
warned that that Chisinau could become "another frozen
conflict" if Romania and Moldova failed to sign a border
delimitation agreement and -- ironically enough -- decried
Romania's policy of issuing passports to citizens of a
neighboring country. End Summary.

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Ukraine
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2. (C) In an April 24 meeting, MFA Second CIS Director
Viktor Sorokin dismissed Ukraine President's offer to "reset"
relations as a rhetorical gambit, noting that
Ukrainian-Russian relations needed "a total overhaul." In a
sweeping judgment, Sorokin said there was no positive
movement in any area of the relationship. While Yushchenko
may attend the June 3-5 St. Petersburg Economic Summit,
Sorokin said there was no serious political dialogue underway
between the Presidents. Flagging Putin and Tymoshenko's
April 29 intergovernmental economic commission meeting as the
last high-level political contact before the Ukrainian
presidential elections, Sorokin made the following points:

-- Gas Contract: While Ukraine has paid its gas bills on
time so far, Sorokin expressed unhappiness over Yushchenko's
public call to "review" the contract. While Russia had heard
that Ukraine wanted to reduce the volume of gas purchased, it
had not been given a reason, and Sorokin said Moscow's
reaction would be influenced by whether it was a function of
reduced Ukrainian industrial activity or the absence of
financial resources to pay.

-- Gas Infrastructure: Russian Energy Minister Shmatko is
headed to Kyiv on April 25 for preparatory talks for the
Putin-Tymoshenko session and, Sorokin said, would be pressing
for clarity over how and whether Russia would participate in
the modernization of Ukraine's gas infrastructure. Stressing
the organic link between the supplier and transit countries,
Sorokin insisted that Russia had no interest in ownership of
Ukrainian assets, but believed it was natural to seek a
management role if Kyiv accepted Russian credits. Sorokin
criticized the Ukraine-EU gas conference as amateurish, with
EU politicians woefully underinformed about the real state of
Ukraine's gas infrastructure. He reiterated Putin's proposal
for a Russian-EU-Ukrainian consortium, but complained that
Ukraine wanted foreign investment without any guarantees
provided to the investors.

-- Russian credits: Expressing strong concern over the state
of the Ukrainian economy, Sorokin noted its effect on Russia,
with a 30-40 percent drop in bilateral trade in
January-February 2009. Tymoshenko had reiterated her request
for Russia to provide Kyiv with USD 5 billion in credits,
which would be discussed with Finance Minister Kudrin during
the Putin-Tymoshenko negotiations. Sorokin noted that while
Yushchenko's secretariat had denied the need for a Russian
loan, Yushchenko himself had been silent on the issue.
Sorokin stressed that the credits were not for gas purchases,
but to stabilize Ukraine's financial system and to help
create the economic conditions that would make it easier for
Ukraine to buy Russian gas. While the Russian credits were
designed to spur Ukrainian financial and economic reform,
Sorokin rejected any IMF-style conditionality.

-- Ukrainian internal politics: Sorokin maintained that
Russia would deal with any Ukrainian leader except the most
Russophobic (and identified the Freedom Movement as one of
Moscow's red lines). Interests and not personalities would

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drive Russian engagement and, while noting Tymoshenko's
ability and willingness to conduct business with Putin,
Sorokin made it clear that Russia had no illusions about
where the Ukrainian Prime Minister's interests lay. Sorokin
predicted an uptick in positive statements about Russia from
the Ukrainian political class, driven by the need to attract
a largely pro-Russia Ukrainian electorate in the lead-up to
the presidential elections. Russia would not be swayed by
the blandishments.

-- Border politics: In response to whether good fences made
good neighbors, Sorokin admitted that a better political and
economic atmosphere needed to be created before progress was
likely in the negotiations. While Sorokin maintained that
Russia wanted to finalize the border, he said the
negotiations were difficult, with the Kerch Strait more
complicated than the Sea of Azov. Border negotiations evoked
public interest, and Sorokin again attributed the ease of the
2003 land border agreement to the healthy political
relationship that existed at the time. He underlined that
Russia would only resolve the issue via bilateral
negotiations, and rejected Ukraine's proposal to settle the
border at the International Court of Justice in the Hague.

-- Black Sea Fleet: Sorokin explained MFA spokesman Andrei
Nesterenko's April 21 statement that the Black Sea Fleet was
"a link between the people of Russia and Ukraine, and a
factor of stability in the region," as a reaction to earlier
statements by Yushchenko and Rada speaker Litvin calling into
question again the Russian military presesnce. Sorokin
welcomed Litvin's statement in an April 5 interview with Ekho
Moskvy that the Black Sea Fleet should be a "guarantor of
Ukraine's security."

-- Cultural politics: Noting the latest spat over who was
the rightful heir to Gogol's legacy, Sorokin warned that
while cultural issues complicated relations between Russia
and Ukraine, the internal divisions they provoked within
Ukrainian society were of greater concern. Arguing that
Russian-German rapprochement was possible due to the
respectful posture of both countries to one another, Sorokin
charged that if Russian-Ukrainian relations were reduced to
the Holodomor issue, a dangerous grievance would be nurtured.

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Moldova
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3. (C) Sorokin attributed the demonstrations after the April
5 Moldova elections to the "lack of a culture of democracy"
in Moldova. While Chisinau needed to respect the rights and
opinions of the minority, Sorokin ironically stressed that
"the greatest democracy" needed to teach the defeated
opponents in Moldova to respect the election results and
views of the majority. Reiterating Russia's position that
the demonstrators constituted a thwarted "color revolution,"
Sorokin insisted that the constitutional framework had to be
respected in Moldova. Chisinau, he commented, did not need a
Ukrainian-style democracy that transformed presidential
systems into parliamentary republics in the "course of an
hour."


4. (C) Sorokin stressed Russian support for Moldovan
territorial integrity, with Transnistria an integral part of
Moldova, assuming its neutrality. If Moldova's neutral
status were clarified, Transnistrians would be satisfied,
with Sorokin pointing to the absence of violence between the
two populations over the last 17 years. Condemning the
symbolism of the Romanian flag hoisted above Moldova's
parliament during the protests, Sorokin went on to express
concern that Moldova could become "another frozen conflict"
if Romania and Moldova failed to sign a border delimitation
agreement. Russia considered a Moldova-Romania agreement
guaranteeing Moldova's territorial integrity crucial to
ensuring stability and security in the region. Sorokin also
criticized alleged Romanian plans to issue "millions" of
Romanian passports to the citizenry of Moldova, and
unconvincingly rejected our reference to similar Russian
policies in Transnistria or South Ossetia as "not
comparable," given the difference in scale of the operations.

BEYRLE