News as of October 25th - 28th

[stepanstas]

Ukraine gets a deal on Russian gas - for a price

MOSCOW Ukraine agreed Tuesday to a 36 percent increase in price for natural gas supplied by Russia next year, wrapping up annual contract talks that last year dragged on until the Russian gas company, Gazprom, cut off supplies on New Year's Day.

While a victory for Prime Minister Viktor Yanukovich of Ukraine, who has sought to repair strained ties with neighboring Russia since taking office in August, the deal also appeared to require Ukrainian concessions that would increase Kremlin influence over the former Soviet republic.

A Swiss-registered energy trader, RosUkrEnergo, will supply Ukraine's entire imports at $135 per 1,000 cubic meters, or 35,300 cubic feet, up from $95 now, according to Yanukovich, who brokered the agreement. The average European price for Russian natural gas is $230 per 1,000 cubic meters.

The deal, promising Ukraine not less than 55 billion cubic meters of gas from Russia and Central Asia, was signed Tuesday in Moscow, the Interfax- Ukraine news agency reported.

Ukraine relies on imports for about 80 percent of its energy needs, supplied from Russia or through pipelines passing over Russian territory, and is wary that Russia uses its energy for political influence.

At a news conference with Yanukovich in Kiev, Prime Minister Mikhail Fradkov of Russia said that Ukraine should respect Russia's position on issues like cooperation with NATO, the European Union and the World Trade Organization. "I would say quite openly that we need to synchronize the negotiation process of our countries on WTO," Fradkov said.

He also raised concerns about the pro-Western ambitions of the Ukrainian president, Viktor Yushchenko.

Yanukovich appeared conciliatory, stating that there was no alternative to closer cooperation between Moscow and Kiev.

But the Our Ukraine party, led by Yushchenko, rejected Fradkov's comments on WTO entry and criticized the Russian prime minister for trying to put "pressure on Ukraine aimed at influencing its foreign policy."

Bilateral relations sank two years ago after Yushchenko was swept to power, defeating Moscow-backed Yanukovich in the rerun of a rigged election after Ukraine's Orange Revolution.

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Ukraine says EU must respect its membership ambitions

BRUSSELS (AP) - The EU must offer Ukraine the prospect of full membership than to exile it from the European mainstream along with nations in North Africa and the Middle East, the country's envoy to Brussels said Wednesday.

"We are not neighbors of Europe, we are part of Europe," said ambassador Roman Shpek, head of the Ukrainian mission at the EU. "For us, it is not pleasant to be in the same basket as Morocco, Libya or Israel," he said ahead of Friday's EU-Ukraine summit.

Shpek also rejected suggestions that a gas deal signed with Russia on Tuesday would give Moscow a say on Ukraine's aspirations to join the World Trade Organization in the coming months.

"Next year Ukraine will become a full member of the WTO," Shpek told reporters. "Russians they have their own agenda and for us it's not the issue to compete with Russia."

Ukraine's President Viktor Yushchenko will meet European Union leaders in Helsinki, Finland, for the annual EU-Ukraine summit. The talks are expected to launch negotiations on a new economic and political cooperation agreement.

The Ukrainians hope that will include the prospect of eventual membership. The EU is noncommittal, reflecting growing wariness about expanding the bloc which admitted 10 new countries in 2004, is about to take in Romania and Bulgaria and is engaged in negotiations with Croatia and Turkey.

Shpek insisted under the treaty which underpins the Union, the EU must keep its doors open to European nations that share its values of democracy, human rights and free market economy.

"You cannot change values," Shpek said. "European politicians should recognize that Ukraine has the same rights as all European states."

So far, the EU has refused to grant Ukraine a "membership perspective," including the former Soviet republic in its "neighborhood policy" along with Belarus, Israel, the south Caucasus countries and several Arab nations around the Mediterranean Sea.

Governments from the 25 EU nations are currently mulling a proposal from the European Commission to open negotiations on a new cooperation agreement to deepen relations with Ukraine by setting up a free trade zone, strengthening diplomatic ties and boosting collaboration in areas such as energy, justice, nuclear safety, and environment protection.

Meanwhile, the two sides are expected to sign agreements on the margin of Friday's summit to make it easier for Ukrainians to travel, work and study in the EU and to increase cooperation in customs and border control, Shpek said at a meeting hosted by the EU Ukraine Business Council.

The private business group said the summit should adopt five priorities for boosting economic ties: open EU markets to Ukrainian goods; fight corruption and tighten protection of property rights in Ukraine; advance private-public partnerships in energy, transport and telecoms; hasten Ukraine's WTO membership plans; and promote energy efficiency.

"We would like to see an enhanced agreement for Ukraine that recognizes the reality that Ukraine is a European market that offers outstanding business potential," said James Wilson, the council's director.

Yanukovych will heighten Ukraine▓s image in the world

International financial circles positively estimate financial policy, carried out by Victor Yanukovych▓s government, as the first vice PM and finance minister Mykola Azarov told the press conference.

⌠Recently I had meetings with heads of International monetary fund mission, heads of the World bank and the president of the European bank. Their estimations of our draft budget for 2007 in respect to budget deficit are very positive,■ he said in particular.

Azarov also noted that Ukraine▓s rating in the world will rise in the near future.

Yushchenko to Putin: 'Ukraine can defend itself without Russia'

Kiev - Ukraine President Viktor Yushchenko on Thursday sharply criticised his Russian counterpart Vladimir Putin for suggesting the Kremlin's Black Sea fleet could help regional security by protecting Ukraine from exterior threats.

'Ukraine is a sovereign nation and has sufficient military forces to take care of itself ... and is in no need of assistance from any other foreign nation,' Yushchenko said in Helsinki.

Yushchenko's remarks were the Ukrainian president's first public response to Tuesday comments by Putin arguing Russian naval and land forces stationed in Ukraine's Crimea province contributed to regional stability, and could if necessary defend Ukraine from outside attack.

Ukraine's Defence Minister Anatoly Hrytsenko was even more direct in his criticism of Putin's declaration, telling reporters in Kiev: 'I cannot imagine a situation where Ukraine would ask another country for help in preventing interference in our internal affairs.'

'There are no changes in plans for the (Russian) fleet to remain in Crimea after its lease runs out,' he said.

Putin's remarks came during a three-hour television call-in programme on Russian state television. The Russian leader had been responding to a question from a citizen of the Ukrainian port city Sevastopol, where Russia's Black Sea fleet is based.

'We are prepared ... to provide assistance to our neighbour and brotherly republic Ukraine, to protect her, in case someone were to have the idea of interfering in her internal affairs,' Putin said during the televised question-and-answer session.

Putin qualified his remarks by saying he believed Ukraine should resolve its internal matters on its own.

His comments nevertheless sparked an almost immediate firestorm of rhetoric by Ukrainian commentators across the political spectrum, as one of the few things Ukraine's widely-divided ruling clans agree on is that they prefer to run the former Soviet republic without Russia's help.

The term 'brotherly republic' is a politically-loaded term in both Russia and Ukraine, implying effective subordination of Kiev to Moscow's control.

The expression 'protection from foreign interference in internal affairs' is if anything even more inflammatory, as the phrase was the standard justification given by the Soviet Union to invade its smaller neighbours.

Relations between Russia and Ukraine have been thorny since Ukraine's 2004 Orange Revolution, which shifted the country's foreign policy orientation from Russia towards Europe.

Increasing Russian assertiveness in the international arena in recent years has exacerbated the conflict.

A treaty between Russia and Ukraine allows Russia to base its Black Sea fleet in the port Sevastopol until 2017.

Well, as far as i see all good news except for the gas. I guess Ukraine will still need to rely on Russia for that.