INCORPORATING UKRAINE INTO U.S.-RUSSIA POLICY

C O N F I D E N T I A L SECTION 01 OF 04 MOSCOW 002412

SIPDIS

E.O. 12958: DECL: 09/20/2019
TAGS: PREL PGOV PHUM PNAT PBTS ENRG RS UP
SUBJECT: INCORPORATING UKRAINE INTO U.S.-RUSSIA POLICY

REF: A. MOSCOW 1509

B. MOSCOW 1650

C. MOSCOW 1658

D. MOSCOW 1794

E. MOSCOW 2071

F. MOSCOW 2349

Classified By: Ambassador John R. Beyrle for reasons 1.4 (b),(d)


1. (C) Summary. Ukraine is shaping up as a key challenge in
U.S.-Russian relations. The risk of serious trouble remains
as long as the two governments are at loggerheads, and as
long as Russian leaders engage in periodic bouts of
historical propaganda aimed at undermining Ukraine's claim to
nationhood, culture, language, religion, sovereignty, and
identity. We see these factors playing out in Russia's Black
Sea Fleet, energy, and cultural policies, while the GOR's
high-level barbs and Ukraine's presidential election campaign
increase the complexity of bilateral relations. Our approach
to Russia on Ukraine should be clear and direct: support for
improved Russia-Ukraine bilateral ties, a focus on
competitive and open energy markets in Europe, and conscious
engagement with Medvedev and Putin aimed at addressing their
fears of Ukraine as a Western beachhead -- while standing
rock-solid on Ukraine's right to set its own course and
determine its own future. End Summary

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New bluster
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2. (C) In recent months, Moscow's bluster about Ukraine has
reached a new level. Prime Minister Putin led the way while
paying respects at the graves of White Russian commanders on
May 24, when he quoted General Denikin as saying, "No one can
be allowed to interfere in relations between us, 'Great
Russia and Little Russia' -- that is Ukraine. This was
always a purely Russian internal affair." DFM Grushko
similarly surprised us June 8 with his bluntness when he
asserted that "Crimea is Russia. It is a simple fact of
life." (ref A). In talks with visiting Special Envoy for
Eurasian Energy Morningstar, Gazprom Deputy CEO Alexander
Medvedev compared Ukraine to a child that "had not been
punished in kindergarten," so continued its bad behavior.
Russia's bluster culminated in President Medvedev's letter to
Ukrainian President Yushchenko, published August 11, which
was triggered in part by Kyiv's expulsion of two Russian
diplomats -- as our MFA contacts spin it, for "spying in
Crimea," a charge they term "ridiculous," given the strong
Russian presence there. In the letter, Medvedev presented
Ukraine with a litany of complaints about allegedly
anti-Russian behavior, because of which Medvedev postponed
sending newly appointed Russian Ambassador Zurabov to Kyiv
(ref E). Accordingly, polls conducted shortly after
Medvedev's letter became public suggest that 78 percent of
Russians currently have an unfavorable view of Ukraine.


3. (C) In the meantime, a few Russian pundits have begun to
revive discussions about the prospect of a Russia-Ukraine war
(see also ref F -- this was the subject of a recent cover
story in the popular newsmagazine Kommersant Vlast'),whether
to put an end to Ukrainian "provocations" of Russia, or to
split what some call the internally divided Ukrainian "failed
state." This raises the questions about what motivates
Moscow's current approach, what assumptions can be made about
Russia's near-term tactics, and what elements can inform a
long-term U.S. policy toward Russia regarding Russian-Ukraine
relations.

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Russia's motivation toward Ukraine
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4. (C) From our discussions with analysts and MFA officials,
we assess that the following attitudes underlie Russia's
approach toward Ukraine:

-- "We are one people": Even though Russia's leadership
class accepts the fact of Ukrainian independence, it has
never come to terms with it emotionally, and in fact has
gradually moved away from acceptance in the decade since
Putin came to power. The problem is exacerbated by multiple
orders of magnitude when the subject is Crimea, a peninsula
that (according to polls) most Russians believe should be
part of Russia, and of which a majority of inhabitants would
likely prefer just such an outcome if asked to vote on the

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matter.

-- Halting NATO expansion to the east: As with Georgia,
Russia has consistently expressed staunch opposition to
Ukrainian NATO membership, arguing that the Ukrainian
population opposes membership, while Russian-Ukrainian
military-industrial ties would be severely damaged if Ukraine
were to join the western alliance. The argument is both
strategic (NATO forces just a few hours' drive from Moscow)
and once again emotional: the thought of Ukraine belonging to
an "opposing" alliance is too much for many Russians to
accept.

-- Yushchenko not an option: While not as outspoken against
Ukrainian President Yushchenko as against Georgian President
Saakashvili, Moscow clearly has declared him persona non
grata and will not deal with him, accusing him of driving a
pro-Western policy that at the same time is purposely and
gratuitously anti-Russian. At a time when Russia's campaign
against "falsification" of history has found traction in what
many in Russia consider to be a lack of appreciation for the
sacrifices of the USSR in liberating Europe, the situation
has been exacerbated by what many Russians see as
Yushchenko's approval for commemorating and honoring
Ukrainians who fought with the Nazis, some in the SS. This
is usually the first or second argument against Yushchenko
used by our GOR and non-governmental contacts: how can they
be expected to work with someone who thinks that fighting
with the SS against the Red Army was praiseworthy? Russia
has made clear that it is biding its time and placing its
hopes on the "new Ukrainian leadership" expected after the
January 2010 elections there (ref E).

-- Ukraine must not fail: Experts we spoke to disagreed with
the notion circulated in the press that the failure of
Ukraine as a state, due to domestic political paralysis, was
in Russia's interest. Carnegie's Andrey Ryabov saw no
benefit for Russia if Ukraine were to fall apart, arguing
that the "fragments" remaining after Russia absorbed the
Russian-speaking parts of the country would become Russia's
liability. The Europe Institute's Sergey Karaganov called on
the U.S. and Russia to cooperate in preventing Ukraine's
slow-motion collapse, arguing it was "ludicrous" to even
contemplate friendly nations occupying a "de-sovereignized"
Ukraine.

-- Russia depends on gas exports: Gazprom and the Russian
budget depend on secure and uninterrupted gas transit through
Ukraine, which makes up about 80% of Russian gas exports to
Europe. Recent publicly and privately (ref C) expressed GOR
concerns about Ukraine's gas infrastructure are not only
tactical moves in the gas war, but also represent a genuine
concern for the security of one of the GOR's primary income
streams. Implying that gas transit cannot be viewed
separately from Russian-Ukraine relations as a whole, DFM
Denisov told Special Envoy Morningstar that the
Russia-Ukraine energy dispute was "a family affair" (ref C).

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Assumptions regarding Russia's Ukraine policy
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5. (C) Extensive conversations with Russian MFA officials
and foreign policy analysts point to several key factors
driving Russian policy toward Ukraine:

-- The Black Sea Fleet: In recognition of the lack of
alternatives (Maria Platonova argued on ia-center.ru that
Novorossisk, Ochamchire, and Tartous/Syria for different
reasons all were unsuitable replacements for Sevastopol) as
well as Russia's long history of engagement in Crimea, Moscow
believes it needs to retain its lease of port facilities in
Sevastopol for the BSF. In order to accomplish this, the GOR
is at pains to stress that the relationship between Russia
and Ukraine at the working level on this difficult issue is
cooperative (ref B). While criticizing Ukraine's "incessant
attempts to complicate the activities of Russia's Black Sea
Fleet," Medvedev in his open letter called for the
observation of the "fundamental agreements" governing its
basing (ref E).

-- Reliance on Ukraine for gas transit: The GOR's repeated
warnings from the highest levels -- including from Putin and
Medvedev -- that Ukraine might miss its gas payments are
meant to raise doubts about Ukraine's reliability as a gas
transit state. These doubts could support an intervention,

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perhaps in conjunction with German or other partners, to gain
control over Ukraine's transit pipelines, or could at least
provide further justification for the GOR's efforts to build
alternative gas transit routes. Either option would advance
Russia's goal of maximizing Ukrainian dependence on Russia
while minimizing Russia's dependence on Ukraine.

-- Russian culture abroad: Russia has made the preservation
of Russian language and culture in Ukraine and elsewhere a
keystone of its public posture (and posturing) toward
Ukraine. Medvedev on August 11 broadly accused Ukraine of
"ousting the Russian language from public life, science,
education, culture, media, and judicial proceedings." Our
contacts at the MFA assert that preserving Russian language
and culture abroad is too important for Russia to downplay
for the sake of improved relations. Russians are utterly
oblivious to Ukrainian views on this question. A good
example of this is one of the points made in Yushchenko's
reply to Medvedev's letter: there are plenty of
Russian-language classrooms in Ukraine (indeed entire schools
in some regions),but there is not a single
Ukrainian-language public school in all of Russia, despite
the high percentage of Ukrainian-origin populations in such
regions as the Russian Far East and Siberia.

-- Low-level cooperation remains strong: In contrast to the
role the preservation of Russian culture plays, and the
high-level barbs hurled at Ukraine, our MFA interlocutors
claim that there are numerous areas of fruitful and ongoing
cooperation between Russia and Ukraine. This includes the
recently signed Space Technology Protection Agreement, the
July 15 Nuclear Fuel Agreement, and a cooperation agreement
signed by the Interior Ministries June 4. MFA 2nd CIS
Department Director Vyacheslav Yelagin explained that
Russia's inflammatory rhetoric was invariably a reaction to
Yushchenko's anti-Russian policies or other unwelcome
Ukrainian initiatives, such as the EU-Ukraine gas pipeline
modernization accord (ref D). Experts agreed that the
upcoming presidential elections in Ukraine were behind
Moscow's recently intensified vitriol, although Deputy Dean
of the MGIMO University Mikhail Troitsky speculated that
Russia might also be testing the West's resolve to help
Ukraine in its gas and other woes.

-- Backing the winner: Moscow is now waiting out the end of
Yushchenko's presidency and closely following the contenders'
fortunes in Ukraine's pre-election campaign. Experts are
divided on whether Moscow has a favorite in the race. While
analyst Alexei Makarkin judged that Prime Minister
Tymoshenko's ability to deliver on economic relations with
Russia, including the January gas agreement, was proof of the
"tacit support" Moscow has shown her, Ryabov thought her
unpredictability precluded support by Moscow. Some thought
that Yanukovich now remained Moscow's best bet, while most
agree with Global Affairs editor Fyodor Lukyanov, who stated
August 19 that the Kremlin does not want to end up backing
the loser like during the December 2004 Ukrainian election
crisis.

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The Way Forward
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6. (C) There is a clear consensus among analysts here that
an improved U.S.-Russia dialogue on Ukraine would help the
situation. They cite the following elements as essential:

-- Pursue western integration and NATO enlargement
deliberately, but quietly: There is no prospect of rapid
movement on this front, and we can agree to (firmly) disagree
with the GOR while continuing our efforts to promote
Ukraine's integration with the West, and deferring discussion
with Russia of our disagreement over NATO membership for
Ukraine until improved levels of trust in the U.S.-Russia and
NATO-Russia relationships create a climate more conducive to
such discussion.

-- Welcome Russia-Ukraine cooperation while strengthening
Ukraine's independence: This was seen here as the
fundamental message of VP Biden's visit to Kyiv. Igor Bunin,
Director of the Center for Political Technology, argued that
Russia could improve its relations with Ukraine by building
up its "soft power." Russia, he said, could make itself
attractive to other nations by creating a stable democracy
with a diversified, high-tech economy that respected human
rights and combated corruption -- all goals we support.

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Russia also needs to come to terms with Ukraine's
independence and avoid unilaterally exacerbating tensions,
while pursuing cooperation on political, economical, and
cultural issues, and broadcasting these successes. By
repeatedly privately advocating these principles and
continuing to help to convince Russia of the advantages of
such a policy, the U.S. can promote an outcome from which all
sides benefit.

-- Promote transparent market mechanisms in energy deals:
Playing into the previous point on welcoming
Russian-Ukrainian cooperation, we can express our preference
for energy relations between Russia and Ukraine as well as
Russia and the West that are based on commercial
calculations, a view no side should dispute. While promoting
a more stable and transparent energy-related investment
climate, we should acknowledge, as SE Morningstar did during
his recent trip (ref C),that we share Russian concerns about
Ukraine's gas infrastructure, and support Ukrainian efforts
to reform and modernize its system. We should welcome
efforts, including Russian proposals, to improve the system,
as long as those efforts are consistent with principles of
transparency, market mechanisms, and sovereignty (Gazprom
taking over the system does not qualify).

-- Engage with Medvedev and Putin: We need to have a frank
and direct dialogue on Ukraine's future with both Medvedev
and Putin, building on increasing levels of trust following
the Moscow Summit and Missile Defense decision. Our message
should emphasize our current policy priorities, which get
insufficient attention here among both the leadership and the
Russian public: we want a strong, independent, and sovereign
Ukraine that has a close, thriving, and mutually beneficial
relationship with Russia. We do not want to build new walls
in Europe.


7. (U) This report was coordinated with Embassy Kyiv.
Beyrle