The Kiev Times /December 2013 - January 2014/

INTERNATIONAL INFORMATION AND ANALYTICAL EDITION THE KIEV TIMES www.thekievtimes.ua DECEMBER 2013/ JANUARY 2014

THIS ISSUE PUBLISHED ON DECEMBER 9

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FALL EVENTS

THE KIEV TIMES | DECEMBER 2013/JANUARY 2014

EUROMAIDAN: FROM PEACE TO WAR, AND BACK AGAIN

Ukrainian berkut (riot police) in the thick of things on Maidan

leaders announce an “all-Ukrainian” strike, protesters assault the monument to Lenin, and seize Kiev City Hall and the House of Trade Unions. About 1,000 protesters camp out in the newly-seized building.

December 2. The center of Kiev is blocked, including: Khreshchatik, Institutskaya, and Mikhaylovskaya streets. In Ivano-Frankivsk and Ternopol ongoing strike action is announced.

The President of the Russian Federation, Vladimir Putin, breaks his silence at last, claiming that the events in Ukraine remind him not of a revolution, but pogroms.

President Yanukovych rejects the call for his resignation, issued by Sergey Levochkin.

The Maidan protestors defined the beginning of the winter

N

ovember 21. Ukraine stops preparations for Association with the EU; Ukrainian media explodes with this unexpected news. Social networks witness the activation of Euro-integration supporters; around 10 p.m. they gather at the main square of Kiev.

They are joined by representatives of the opposition – Arseniy Yatsenyuk, Oleg Tyagnybok, Vitalii Klitschko, Yuriy Lutsenko and others. Thousands of protesters, plus concerts and slogans – this is the picture of the first Euromaidan.

November 22. At night, the main protest is planned to be conducted November 24. Not more than 150 people are at the square in the morning. The government keeps silent, the Internet sparks with discussion. Remonstrative moods, not only in the capital, spread across the country, and Euromaidans gather in all major cities.

At 10 p.m., the first collision between the berkut and protesters takes place. No blood is shed; however, law enforcement officers pull down the tent camp.

November 23. Foreign representatives (in particular, U.S. Secretary of State, John Kerry) cancel their visits to Ukraine.

Everything is relatively calm in Kiev; in Nikolaev though, supporters of Euro-integration are cleared away, and an attempt to put Euromaidan under restraint through the court system is started. Similar events unfold in Lviv.

Reports about the preparation of an “anti-Euromaidan” in the capital – demonstrations to support the governmental decision – appear in the media.

November 24. Waves of protests to support Euromaidan sweep

through the whole world, from London to Seoul. There were two major protests in Kiev: supporters of Viktor Yanukovych gather at Maidan and Mikhaylovskaya square; supporters of the opposition and the EU in Shevchenko park, from where they set off to European square. About 100,000 people come to defend the AA with the EU. In the evening several incidents including scuffles with police occur.

November 25. Protesting activists brake into a car, which they believe to be wiretapped. According to the Security Service of Ukraine, the car was parked at the square for security purposes – to trace possible signals of explosive mechanisms. After the “auto-massacre” the berkut unleash tear gas on the protestors.

In response, many Ukrainians head to the capital: at night the media reports a suspension of buses on the Lviv-Kiev highway.

November 28. A long-awaited event: Lithuania opens the Eastern Partnership Summit. A protesting crowd holds its breath while waiting for the resolution.

November 29. President Yanukovych does not sign a single document at the Summit, and the President of Lithuania, Dalia Grybauskaitė, tells journalists that the heads of the EU could not persuade Ukraine to sign the Association Agreement.

Around noon, serious disturbances occur in the capital of Ukraine. In the evening, Euromaidan protestors are surrounded by special forces operatives. Collisions take place. The Shuster Live program, airing live, is interrupted by

November 30. The ninth day of Euromaidan officially becomes the last one: at 4 a.m. berkut conduct a military assault on the square where hundreds of protesters have gathered. Dozens of people are injured and taken into custody, around 150 protesters find shelter in Mikhaylovskiy cathedral. After the assault on Maidan, workers begin to set up a New Year’s tree.

The embassy of the USA, along with embassy of a number of European countries react immediately. They issue statements saying that the assault on the peaceful demonstrations will cause serious consequences for the Ukrainian government. The Metropolitan police reports that protesters threw stones at the

December 3. Euromaidan is moved to the Vekhovna Rada building.

The deputies are not able to force the Council of Ministers to resign because Communist party members, along with Party of Regions members refrain from voting.

Viktor Yanukovych goes to China on a previously-planned official visit. The EU states that it does not expect any delegations from Ukraine. The General Prosecutor of Ukraine, Viktor Pshonka, informs the public that the seizure of City Hall and other buildings will trigger the opening of criminal proceedings.

December 4. The Shevchenko district court of Kiev sends nine people to prison for two months; they are charged with criminal seizure of administrative buildings, and other crimes, in connection with events on December 1 in the center of Kiev. Overall, the police start 53 cases against protesters.

Euromaidan, as well as the center of the capital, is gradually drowning in litter, protesters are

Ukraine doesn’t change. However, soon she decides not to follow through her initial threats.

December 7: Nikolay Azarov declares that the protestors will not see the government resign.

Meanwhile, Maidan solemnly waits for “the momentous tomorrow”, since the opposition expects 1 million people to attend the Narodnoe Veche. The news about the dead man found in the center of Kiev receives another detail: the man was sick with tuberculosis.

Media shamelessly uses this information as a chance to spread the gossip that people at Maidan could become infected.

December 8: According to different estimates, from 50,000 to 1.5 million of people gather in Kiev.

Maidan gives Viktor Yanukovych 48 hours to impeach the government.

Meanwhile, unknown assailants in masks pull the statue of Lenin to the ground from atop his pedestal.

December 9: News of bombs possibly set in three separate Kiev metro spreads throughout the media. Narodnoe Veche activists prepare to defend their demands with fists. Soldiers are deployed to the capital…

Chief Executive Artem Shamrai Managing Director Katerina Roshuk Editor-in-Chief Rostislav Bunyak Photo Editor Dmytro Zagoruiko Designer Oleksander Lyubeznov Editors Olga Medvedeva Glib Kornienko Oleksi Komarovsky

November 26. The calmest day.

Lithuanian Parliamentary Speaker, Loreta Šniokaitė-Graužinienė, and the deputy of the European Parliament, Pavel Koval, make speeches in front of Ukrainians, in favor of Euro-integration.

Editor of the English version Mariana Pryven

November 27. Students give Viktor Yanukovych a letter demanding the signing of the Association Agreement with the EU. The opposition suspects that the government is committing political treason and files a bill demanding the Vekhovna Rada to take responsibility for this.

Imprisoned former PrimeMinister of Ukraine Yulia Tymoshenko appeals to the leader of the EU to sign the Association Agreement with Ukraine without any additional stipulations, including her amnesty.

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The protest by the President's residence was the most provocative event

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Kiev’s city hall was seized on December 1st

mayhem in the studio. Euromaidan passes a resolution, the key point of which is the impeachment of the President.

berkut, which is why they were assaulted.

In the afternoon, news of the resignation of the Head of Administration of the President of Ukraine, Sergey Levochkin, circulates through the media.

Several deputies leave the Party of Regions party, including Inna Bogoslovskaya and her partner Vladimir Melnichenko. President Viktor Yanukovych states that he is utterly incensed by the assault on the protestors at Maidan, and demands that those responsible are found. Around 5 thousand people come out to Mykhaylovskaya square; in the evening they number more that 10 thousand.

December 1. The website of the Ministry of Internal Affairs is hacked by Ukrainian specialists.

According to the calculations of oppositional leaders, the streets of Kiev are filled with 300,000 people.

Anonymous radicals in masks riding a tractor try to storm the Administration of the President, powering through the human fence formed by the berkut. Oppositional

short on food. ATMs do not work. In the evening, the first Vice-PrimeMinister of Ukraine, Sergey Arbuzov, claims that the government is ready to discuss with the question of pre-term elections with the opposition – both presidential and parliamentary, and the Head of MIA of Ukraine is ordered not to assault Euromaidan.

December 5. OSCE meeting starts in Kiev where Nikolay Azarov states that protest actions are usual events in Kiev. Activists of Euromaidan are given five days to unblock the Council of Ministers and Kiev City Hall.

December 6: The morning begins with an organized demonstration of civil disobedience outside the General Prosecutor’s Office and evolves into a plan for Narodnoe Veche (public assembly). Around lunch time, the corpse of an anonymous man is found not far from Maidan. Ukrainian singer Ruslana announces that hers could be the next body found. She claims that she will burn herself alive if

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Photo UNIAN

A sharp 180-degree turn by Ukraine, in refusing to sign the Association Agreement for Euro-integration, came as a shock to the system. A collective sense of vertigo suddenly gripped the country, and was further aggravated by the events at Euromaidan. Curing this affliction, while simultaneously trying to deal with the political consequences, was not easy. How, with what and, more importantly, why was Ukrainian society so seriously afflicted at the junction of fall and winter?

Photo Ukrainian News

By Olga Medvedeva

www.thekievtimes.ua

FALL EVENTS

3

IT ALL JUST REPEATS ITSELF

Photographer Igor Gychka

By Miron Iroreshnichenko

It's a waste of time.

You'll not make them see sense.

The more liberal they are, the coarser they are.

Civilisation is a fetish to them, but its idea is inaccessible to them.

However much you grovel to it, gentlemen, you'll not gain recognition from Europe: in her eyes you will forever be not the servants of enlightenment, rather its serfs.

(By Fyodor Tyutchev; translated by F.Jude) Euromaidan 2013.

CU-EU. Euromaidan. Narodnoe Veche (public assembly). The President is in China. Ukraine is in turmoil. The parties of the conflict hurl accusations back and forth. The situation is becoming absurd…

It has all become the topic for a Kiev Times interview with two virtual experts of absurdity and deceit: Professor X, a resident of North America, and Colonel Y, former head of presidential security.

They both firmly believe themselves to be true patriots of Ukraine.

Do you remember the movie Wag the Dog? X: Of course I do! It was a Hollywood movie with a great script and brilliant actors, which was definitely written on Capitol Hill, about intelligence services in the USA, though it could have been any superpower, which was able to use anyone for the realization of their goals…

Y: However, anyone whose ambitions are controlled by their intellect will rethink the reality and those who are consumed by their ambitions should not watch this film. Zealous supporters of the EU and CU probably have not watched this film and even if they have, they understood nothing.

That is why the Square of Independence turned into the Square of Dependence on the EU and took the name of Euromaidan.

Who rules over Maidan’s emotions?

Y: Maidan was pulled together by the sincere and honest emotions of Ukrainians. However, these emotions need to be fed. Only a limited number of people know the real directors and script writers serving their respective target audiences. It is these directors and writers who rule over the emotional state of Euromaidan.

How does it happen?

Y: Not everything happening now in Kiev can be characterized as “peaceful demonstration”.

“Peaceful overthrow” is absurd in itself. It is also true that atrocities of berkut (riot police) are totally unjustified. We need to take into account, though, that riot police are just following orders and do not have the right to break their oath.

Media gatekeepers do not need reality at all. Political operatives create the situations they want. By extracting pieces of information from the whole context, they create emotional episodes that cause predictable reaction in readers and viewers.

For example…

X: One of the mostly circulating videos a riot police officer is shown hitting a protester with his truncheon; the protester is holding a phone with the camera on and rolling. Half a meter from the incident there is a professional TVcamera on a tripod. It all becomes clear that behind the camera there is a professional operator who directs the actions of the policeman. The emphases of media gatekeepers often shift towards riot police, meaning, they are entirely to blame.

Y: In fact, on one side of Euromaidan there is the government and, as strange as it may seem, the opposition. On the other side, there are people. And in between there are the riot police.

The reason for this is that no one wants to take responsibility for these events and regular people cannot moderate this unrest.

Consequently, all the guilt is dumped upon the shoulders of riot police.

Who needs aggression?

X: Political operatives always need an enemy, internal or external, real or fictitious. Take a moment to remember Leningrad doctors in Stalin’s times, Jews in Nazi Germany, witch hunting in the USA. The most effective irritator for those whose emotions have been numbed is primitive aggression. And the level of adrenaline of the crowds shoots up again.

Does the media lie?

Y: Part of it does, and the other part is in the exact same situation as people involved in Euromaidan.

They are burning with desire to fulfill their mission but at that they do not understand that they are only puppets in the hands of the master.

But does the media keep doing its job?

Y: The media is filled with illogical absurdity which is necessary for some: the government, opposition or someone else.

X: There is a list of students, circulating around the Internet, who turned to medical facilities after the conflict with riot police, which happened under the skeleton of the Christmas tree. The youngest was over 30. Who are they? In hospitals, according to other media sources, there are more than 50 wounded berkut officers. Who needs this?

Who makes people collide? The media is responsible: it needs to tell, not only the government, but

X: It sounds absurd but the Ukrainians who gathered at Euromaidan appeared to be opposing both the government and the “puppet” opposition.

Y: Klichko, Yatsenyuk and Tyagnybok are afraid of going past the point of no return in their relations with the government and the people. At this point they cannot allow the government to free Yulia Tymoshenko to oppose them.

In fact, the government itself is very afraid of Tymoshenko. Regarding the former Prime Minister, both the opposition and the government are unanimous. The thing is that Tymoshenko would have become a more unquestionable leader for Euromaidan, having pushed aside the leaders of the opposition, and President Victor Yanukovych would have faced a more serious rival.

How was it in 2004?

Y: 2004 and the years that followed are a striking example of betraying the interests of those who believed in “orange” leaders.

Apart from Tymoshenko, who kept her reputation as a revolutionary due to to her imprisonment, many of the “orange” politicians turned into bastards in the eyes of their supporters.

X: Politicians playing the strings of human souls sometimes manage to deceive many for a short period of time. But the limit of trust has been exhausted. We cannot forget that revolutionaries make revolutions happen and bastards take advantage of their results.

What is the role of Yulia Tymoshenko?

Y: Hers is the role of national leader. But this role is restricted by her court sentence. Herein lies the paradox: 15 thousand people are storming empty buildings of the Council of Ministers and Presidential Residence, but no one is trying to free Tymoshenko.

X: For both the opposition and the government, Tymoshenko in prison is the perfect scenario.

For the opposition, she is the torch of light just out of reach, for the government she is a temporarily extinguished flame.

A freed Tymoshenko can ruin the balance and lead the country to unpredictable consequences. The government, the opposition, the

Politicians playing the strings of human souls sometimes manage to deceive many for a short period of time

opposition wants to build its own Absurdistan. However, even such a task is too difficult for them.

Has Victor Yanukovych distanced himself from the problems and is he not capable of making tough decisions?

Y: Toughness is absurd now. Toughness is criminal.

Indecisiveness as well. He needs wisdom. And the President has problems with it.

Has the President distanced himself or was he suspended on purpose so that everyone hates him even more?

Y: It is a secret. The behavior of Yanukovych during this time is mysterious. One thing is obvious: the President kept the majority in Parliament – meaning that the game follows his rules for now.

What happens tomorrow? We’ll see.

Is freedom of speech possible in Ukraine?

X: The media in developed countries works for their governments. Ukrainian media works for either the EU, or the USA, or the CU… They do not form the image of the country.

Y: Because of the media, it

The latest events have shown that there is no leader in the opposition – rather it is managed by someone from beyond the rest of the world the entire truth about Maidan. However, the media fails to take this responsibility.

What is the role of Lutsenko at Euromaidan?

Y: The actions of the ex-PrimeMinister are provocative.

Who and what helped Lutsenko gain such formative political power in 2004?

Y: Every politician has their own audience. In every country about 6% of the population which suffers from mental illnesses.

Correspondingly, they acquire their own political leaders.

X: My interlocutor, as bitter as it sounds, is right. Occupation of the administrative buildings alone is quite something! Can you imagine what would happen to protestors if occupied Toronto City Hall? They would stay strong for about 10 minutes and then spend the rest of their life in prison. In Europe the actions of police in such cases would be harsher.

Y: After the protestors demanded to pass the City Hall building to the people of Kiev, the question appeared how many among the thousand, who had occupied the City Hall, were actually from Kiev.

For the most part, the occupants were from Lviv, Ternopil, IvanoFrankivsk… These people were backed up by Lutsenko and his political associates.

Despite all the efforts of various provocateurs, the opposition presents itself as one body.

Y: It is a false impression. The latest events have shown that there is no leader in the opposition – rather it is managed by someone from beyond. The influence of the Party of Regions on the opposition is really felt. The vote for the Council of Ministers resignation is really something!

opposition inside the opposition, and the opposition inside the government understand that.

European officials are the ones that understand it best, they do not need thousands of Tymoshenko supporters somewhere in Germany out in the streets with posters saying: “We don’t like Germany!

We want to live better! We need to divide Germany and join it to Ukraine because we live worse!”

Why does Poland need Ukraine?

X: If we make an analogy with a train car, Poland’s place is at the end of this car near the toilet. It really wants to change its status so that this place near the toilet is taken by somebody else. Because it is the last one who gets all the waste from the EU – commodities, resources and human.

Does Euromaidan prepare the country for the presidential elections of 2015?

X: Euromaidan, meaning the opposition, as ironic as it is, prepares the victory of the government at the elections of 2015. Such helplessness and unsystematic actions of the opposition are unacceptable.

The coal miners of Donbas will go against Yanukovych. Absurd?

Y: Of course. These typically inert miners of Donbas, having to shoose between not receiving a government salary and such “democrats” as Farion, Lutsenko, and Tyagnybok, will agree to go hungry rather than see such “democrats” in their city.

X: Farion, instead of making the Ukrainian language popular, turned it into a whip. Such politicians kill the desire of the Russian speaking population of Ukraine to learn Ukrainian.

Y: The government has built its own country, and the current

seems that some people are selling the country to the EU and others – to the CU. There is no feeling that Ukraine needs to become a sovereign country.

Is the Russian opposition more effective than the Ukrainian one?

X: In Russia and Ukraine the opposition is the part of the government and a loyal helper.

Y: It happens more often that the opposition plays the role of the bad cop for the government that is the good cop. Many understand that.

of the Ukrainian journalist community is that it turned into several media groupings, the sole task of which is to destroy the rival.

Is Ukraine a subject or an object of geopolitics?

Y: Ukraine is a tube, fence, and buffer between Europe and Russia. You can make your own conclusions.

This is the country which…

Y: …which many see as a frontier zone. Many want to set up a manageable “partisan underground” here. The West does that at the expense of “grant eaters”, Russians – with the help of a sort of “Russian club”. The rest is just irrelevant.

Does someone need an independent Ukraine?

Y: 46 million romantics need it. However, they do not fully understand what kind of independence they need. What is the EU? Dependence. What is the CU? Dependence.

Who rules over the contemporary world?

X: In the EU, there is an unquestionable economic and political leader – Germany. Try to remember for how many years German leaders have tried to conquer the world. They used to do it through wars, and now they use Mercedes-Benz, Deutsche Bank and Bosch.

The planet pays for German technologies. Today, Germany rules over Europe.

When will Ukrainians go to Europe without visas?

X: In about 59 years. It is not a given that Ukrainians would like to go to Europe, especially after diving deeper into European laws.

It is possible that their lives will become harder. And at that point

Ukraine will get another “Klichko from Miami” or “Yatsenyuk from Vienna” or “Tyagnybok from New Zealand” to call for Maidan. So, this Ukromaidan will have its fame for 15 minutes and then a couple of Euro-water-cannons from a European city will come and wash away all of its participants into the Dnieper. From the Dnieper they will be caught in the Europolice nets and then brought to Eurocourt.

But then human rights will be protected…

Y: What rights? Why could they sue their president in Germany and we cannot try an oppositional Prime Minister? Do we need such human rights?

X: In the West, the one who fights against the government knows what may come of it.

Demonstration of Muslim political powers in Berlin is reminiscent of the 1st of May demonstrations in the USSR: several hundreds of eastern people whose route is defined by millimeters and slogans that go no further than general politics of the state.

Europe is a community where law defines every step of the person.

Only the mad will go against the law, independent from the current political course of the country.

How many maidans need to be gathered in order to…

Y: …Ukraine is dreaming that Maidan will change its life. Yet, so far we see that only politicians advertise themselves, and organizers make money off people who remain the same as they were before.

New leaders do not appear at Maidan, the old ones show senile uselessness.

Neither the EU, nor the CU will become a miracle cure for Ukraine.

We need to build our own country – powerful and independent.

Has Putin also contributed to Euromaidan?

Y: Euromaidan was cleared out

by Putin personally, truncheons were produced as ordered by Putin for Ukrainian political elites, and rain with wind was delivered by the “northern bear”… There are no limits to media prophets’ imagination.

Has the state department contributed to Euromaidan?

X: The state department, as far as I know, helped it. Somewhere in the press there was a number of $100 million given for the development of democratic processes in the country, which culminated in the events of Euromaidan.

We can often hear accusations of media involvement. What is your opinion?

Y: Journalists always position themselves as neutral or objective observers. In reality the majority of them obviously work someone else’s tasks.

They may not forgive you these words…

Y: They may not but you are asking for the truth. The problem

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THE YEAR OF REGIONS

THE KIEV TIMES | DECEMBER 2013/JANUARY 2014

A LVIV MITTEN FOR ALL OF UKRAINE Photographer danverbi

By Ostap Drozdov

Those who were not born in Lviv find it hard to understand what this city is all about. Lviv can be judged on its stereotypes, which it gladly confirms. Therefore, Lviv reflects the ideas of the one talking about it. The task of this city is to be different for everyone.

Ukraine needs Lviv as an irritant

L

viv is a unique city where everything is found in abundance. Love and hate; the contemporary and the outdated; professionals and amateurs; creativity and almost the same amount of primitiveness; beauty and ugliness. So, what is most abundant in Lviv?

Lviv is dominated by dreams! It is itself a living dream. However, to become a European city is one dream Lviv has not yet realized. To have a happy Ukrainian Ukraine is a dream to have something we do not yet possess. Having analyzed the dreams of Lviv, we can flawlessly compose a list of unrealized opportunities. All revolutionary aspirations of Lviv lack pragmatism and, in fact, there is no plan whatsoever. Lviv’s aspirations are simply aspirations for a dream.

When the berkut beat up the protesters on the night of November 30, thousands of different Lviv residents headed to Kiev. They had not planned to go.

There was a drive and a dream.

Lviv has lived in constant stress ever since Ukraine became independent. Every resident of Lviv feels constant anxiety. Not anxiety for each single person but for some anonymous substance that can just barely be called a native country.

become Lviv; this love is doomed to be one-sided.

Lviv exploits two equally powerful stereotypes: “Banderian Lviv” and “European Lviv”. These two Lvivs never intersect. The youth at Euromaidan, called for “no politicians”! European Lviv is fighting against Banderian Lviv, while respecting the latter’s right to exist. European Lviv always wins. The presence of intolerant radicals is explained by this expressive “Europeanness” of Lviv, meaning the recognition of their right to exist. It all depends upon who is welcome in Lviv.

Ukraine needs Lviv as an irritant, and as a disciplinarian who – invoking Shevchenko – shrilly accuses fellow Lvivians and Ukrainians alike of being: “Slaves, foot rests, dirt of Moscow…” Lviv has to exist in order to play the

In fighting for Ukraine, Lviv is just trying to stop its own suffering

ongoing struggle for Ukraine is not just loyalty to traditions, nor is it a habit. It is a struggle against a continual onslaught of derisive opinions about Lviv from around the country. It is no one’s fault that its name is Ukraine. For 22 years, many Lviv residents taught others to hate themselves for their own failure to be happy in their own country. Because people have

Lviv nature, and find some common ground. They cried out with happiness when they found it. It was shameful to doubt Ukraine. It was fashionable to look for at least some comforting facts. It was scary not to find any. It is still scary now.

Cries of “when will this finally be over with?” came to be a sort of salvation for the people of Lviv, softening the scorn and

I must admit, however, that these expectations of change tire me, and, given a choice, I would gladly separate myself from the rest of the world along the banks of the river Zbruch. There are too many Lvivians who keep running out of arguments for sharing a country with Donbas.

And still…stubborn hope stands resolutely in the way of this. The hope that somewhere out there in an almost-lost Ukraine, there is a chance to stop the bickering and turn everything around.

That someone still needs Lviv’s audacity. That our man-made revolutions will gain support in a fossilized remotely Ukrainian heart. It is not as much a dream as a goal in itself. These are not just dreams that have grown from complacency. This is desperation.

The despair of the subjugated and

Lviv has the right to its own voice in Ukraine precisely because of its active and rebellious nature, even in the face of adversity drop everything, leave his job, consciously agree to go unpaid for a month, and rush to the capital.

All to participate in another revolution. (“What if it works out

role of the eternal opponent, for the entire contemporary history of Ukraine is a history of regress that tends to spark the imagination and occupy some people’s dreams now

groveling, constantly apologizing for being eternally subsidized revolutionaries trying to wake tired miners from their lethargic sleep.

There was a young couple

and then. Lviv without Ukraine will remain a poor European backwater, constantly mourning the loss of the Cossack steppes, metropolitan prospects and Donbas mines.

Ukraine without Lviv will become a stable little Russian province.

Lviv has the right to its own voice in Ukraine precisely because of its active and rebellious nature, even in the face of adversity.

That is why Lviv needs to be allowed to keep dreaming, and even encouraged to dream. Lviv should emit nervousness and speculation.

together at Euromaidan. During the atrocious blast, the berkut grabbed the girl by her legs and started dragging her down the concrete steps. The boy stood at bay, holding his girlfriend’s hand.

But it slipped away; there was only a mitten left. A mitten of a girl who only wanted to live in Europe, but a Europe that counted Ukraine as one of its members. Lviv throws that mitten to the rest of Ukraine. Not as a challenge. Not as a pretense. But as a call to stand up and be counted. If not for yourself than for this one mitten.

Cries of “when will this finally be over with?” came to be a sort of salvation for the people of Lviv, softening the scorn and denigration of the city from the rest of the country

For 22 years, Lviv has been nursing this pet dream for the future of Ukraine. I would not like to talk about “a Ukraine that is not” – it is just an uncomfortable

to speak Russian in Kiev to get a higher salary. Because when going to the Crimea people have to keep secret about where they came from. Because in Russia they have

denigration of the city from the rest of the country.

The average citizen of Lviv will love Ukraine as long as the latter offers the opportunity

Lviv has to exist in order to play the role of the eternal opponent Ukraine. That is why Lviv perceives all convulsions as another chance – finally people from the other bank of the Dnieper will wake from a stupor and stop hating their own country and themselves. Lviv’s

to prove that they are not Bandera lovers, but just normal people.

For 22 years thousands of people from Lviv hated themselves for not being able to be who they were.

They tried to fit Ukraine to their

for a struggle. This is not about martyrdom; in fighting for Ukraine, Lviv is just trying to stop its own suffering.

Those not born in Lviv should realize that a true Lvivian will

this time?”) It is these dreams that make Lviv defenseless. Separate voices of reason get lost in the choir of pathos. One needs to prepare for a successful revolution for several years, considering in detail not only the future gala events on the red carpet, but also paths for retreat. Out of habit, Lviv has never had a backup plan in case of defeat. The relationship between Lviv and Ukraine is the history of shattered illusions.

Lviv has already become Ukraine, consciously refusing its other noble origin. But Ukraine will never

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THE YEAR OF REGIONS

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ANDREY SADOVYY: “POLITICIANS ARE INFECTED WITH COMMUNISM AND DOUBLE STANDARDS”

By Irina Pavlyuk

Lviv Mayor, Andrey Sadovyy, told us about his non-political goals, investments, and warm relations with the Mayor of Donetsk.

W

hat is more important: the interests of the city or the central government?

The harmonious development of Lviv, for sure. I was born in Lviv, grew up in Lviv, and I was elected Mayor of Lviv. It is a big honor for me and I will do everything to ensure that Lviv becomes a city where people really want to live.

I want there to be prospects for young people, decent lives for the elderly, and I want businesses and investors to consider Lviv as their native city, so that all visitors to the city fall in love with Ukraine.

Photo UNIAN

How powerful is the influence of regional centers on the country?

Lately this influence has been declining, which is connected with the government’s regulation of self-administration, however contradictory that may sound. In reality it should be the other way around. The errors of a young country need to be realized and fixed.

Can Lviv, in your opinion, contribute to the discussion on the foreign policy of Ukraine?

Lviv has partnership agreements with many cities around the world.

We are located close to EU borders, and try to be a growth driver and

the time Victor Yanukovych was elected as the President of Ukraine.

This spacious, bright city where a great amount of money is invested in infrastructure is a good example for every other city.

What can they learn from Lviv?

Openness, international relations, competitiveness and a development strategy for the city as well as effectiveness of the tourist industry. In Lviv, it is entertainment tourism that is developing, and in Donetsk the industrial side needs to be highlighted. There are many people in the world who would be happy to visit powerful enterprises, and what is more, do it after effective reforms.

How is the state strategy of regional development realized?

It all looks fine on paper. Yet it is very hard to implement without financial resources. All regions have agreements with the government. However, due to the lack of funding, these agreements are hard to realize. Everything possible needs to be done in order for Ukraine to fully realize the importance of political stability as one of the key priorities of homeland security.

of employees amounted to 10,000, and as of January 1, 2014 we expect a 20-25% surplus. The average salary in the industry is more than 10,000 uah.

Rinat Akhmetov articulated an effective method of attracting investment: introducing common rules for everybody. Do you agree with this method?

Without hesitation. Relations between business and the government need to have common rules and be absolutely open. We need to reduce the possibility for the emergence of corruption schemes. Corruption in the country is unprecedented. Thank God the country’s top leadership understands it. I am sure that if the country declares war on corruption, the amount of investment will significantly increase. If Ukraine signed the Association Agreement, many countries of the world would seriously consider us legitimate business partners.

Could Lviv make use of the Yavoriv zone’s unique status today?

Free economic zones are absent in Ukraine today. The point of these zones is preferential tax treatment. The country needs this

It would not hurt to reconstruct the transport connection between Lviv and Donetsk introduce new world practices. We aim at passing this experience to other Ukrainian cities. We have a lot to share, ranging from bicycle infrastructure, where we have achieved a lot, to huge industrial parks. Among our partners is EBRD. We have worked a lot with them and expect great results.

If regional cities are heard, Ukraine will get a chance to develop. Cities are the oldest form of common human existence. In medieval times, cities, frankly speaking, saved Europe. State rulers realized that they could not handle everything on their own and delegated more power to cities.

This was how Magdeburg Law was established, facilitating the fast growth of cities. These countries were successful. These countries made history, in fact.

So will the cities be heard?

If we want to be a successful country, we need to put cities first.

In case we want to find our own, unique way, we could drift towards full decentralization. However, I do not believe it is a good way forward.

Should Lviv and Donetsk, cities with different geopolitical aims, consider the interests of one another? How do we reach a compromise if Lviv is just one hundred kilometers from Poland and Donetsk is the same distance from Russia?

We are one country, and so it is axiomatic that both regions be considered.

For starters, it would not hurt to reconstruct the transport connection between Lviv and Donetsk that was terminated in 1991. There was an attempt to restore it in 2010 but it failed for a number of reasons. Today it is possible to fly from Lviv to Donetsk for practically the same price as from Kiev to New York.

It is a good thing that we are different and we have different opportunities for growth. We can forge relations not only with the West but also with the East. I have very warm relations with the Mayor of Donetsk, Mr Lukyanchenko. He is a professional executive who has come a long way.

When were you last in Donetsk?

Last year. A considerable number of big business representatives, who feel their social responsibility, live there. All big companies pay legal salaries. Patriotism to the city is clearly felt in Donetsk.

When any city dweller is assigned to this or that position in Kiev he tries to help his own city. Donetsk has improved in appearance since

Over the last 20 years, Ukraine has been living in a black and white world. There are no hues in Ukraine. Discussions about taxes or medical reforms can be led but there should be no deviation from the past practices. The countries that surround us have no such problems and thus develop fast.

Look at Poland 20 years ago.

Poles seemed very poor back then compared to Ukraine. Where are Poland and Ukraine now?

Ukraine is slowly destroyed by constant arguments. We keep looking for the rock-bottom.

Political elites should stop thinking about their own ambitions and start thinking about our country.

When a politician is elected he promises to serve his country. As soon as he is empowered he starts thinking about the party. It is a deadly dangerous for the country.

regime in order to have competitive advantages considering that our neighbors Poland and Russia have in their disposal transit servicing parks with tax preferences. The investor decides which country to go to after having considered these advantages.

If an investor in Poland creates new work places in the IT sphere, the government compensates them for a certain amount of the resources invested. I raised this topic once in the government. They looked at me as if I was mentally unstable. Pay for work places?

But they do it in the rest of the world! Every work place assures establishment of new work places.

Tax payments grow and the state budget fills up.

We don’t need to reinvent the wheel, we need to adopt good world practices and implement them.

What is the way out?

I have anchored my hopes to those people who were born in independent Ukraine. When I see the young people of Lviv who organized a several thousand strong meeting, my hope grows even stronger. There was no party flag at the meeting. Politicians are persona non grata here. I believe in them because they want to be responsible for their actions. All our politicians are infected with communism and double standards.

Young people sense that and, therefore, distrust the government.

We need to work with young people and give them support. Since I was first elected as the Mayor, more than 6 thousand young people have completed an internship in the City Hall. The best ones get hired.

We teach and train accredited Ukrainian executives.

How important is cross-border cooperation?

Cross-border cooperation is highly important. The Ukrainian coordinator of such cooperation is the Ministry of Economy, the department which is notorious for its rapid changes in staff and not very efficient control of money.

Every Polish Mayor has one problem: he cannot embezzle all the resources he gets. A paradox?

No, the state has enough money.

If Ukraine signed the Association Agreement, we could lay claims to this part of the European pie.

Does the current legislation encourage an increase in investment because it is impossible to the develop city without it?

Ukraine is not the safest place for the western investors. Considering the difficult situation, we are actively cooperating with EBRD. We received not only loans, but also grants and technical support. This way we can develop infrastructure and have a real opportunity to attract mid-size businesses to our projects.

Naturally, we work with national investors as well. Just take a look at how much investment comes into Ukraine from Ukrainians who have moved abroad. I am talking about billions of dollars, and this sum is constantly growing. The biggest example is the IT industry. At the beginning of this year, the number

What is the role of “local oligarchs” in shaping the image of the city?

You know, I am happy that we have no oligarchs here. I am very pleased with that. We put a lot of effort into the development of small and mid-size businesses. We are the free city of Lviv which was endowed with life by King Daniil.

And oligarch thinks of a city as his property; in our case the city is owned by the people. We want no lord above us.

How about a few words about the city economy; the most risky sphere of a big city’s development.

Very soon Lviv will acquire 20 million euros in investments from EBI. In the course of the last few years we have repaired more than 100 km of roads. We modernized the entire infrastructure.

The city is fully lit. However, the more you do, the more there is left to be done.

I would like for Lviv to become like Barcelona, Munich and Prague and join the family of cultural European capitals.

Very soon Lviv will acquire 20 million euros in investments from the EBI.

Reform of housing and public utilities is the most wanted one in Ukraine. What the relations between a tenant and a service provider should look like? What is needed to be dome in order to enact a real change?

While implementing reforms it is important to organize cooperation with tenants. All processes are under control

2014 we need to finish filling out all the necessary forms. Then the shortlist decision will be made. We have some very serious competitors. Among them Beijing, who has already hosted the Olympics, Oslo and Krakow.

If Ukraine wants to put winter sports development and an increase in income from winter tourism on the docket, we

be the Mayor. I have the goal to build a city that people want to live in. I was born in Lviv, went to school, fell in love, and got married here; my wife Ekaterina and I have five sons, and that is why I know for sure that this city needs to be comfortable. The voters believed in me and they are my masters. I am responsible for the city and I need to be worthy of it.

Corruption in the country is unprecedented. Thank God the country’s top leadership understands it today. The city dispatcher service thoroughly monitors all addresses.

The situation is quite different from what we had back in 2006.

Managers of housing and public utilities regularly report about the work they do. They go from apartment to apartment and have effective discussions with their residents. Meetings can be very heated. Do you remember how difficult it was to find a chief in the Soviet times? They acted like Tsars! Today this chief comes to the people himself. And everyone understands that he is a hired employee whose salary is paid by these people.

We changed the system. City Hall should serve people. Our most immediate goal is to switch to the electronic control of utility data collection. We want to reduce corrupt schemes and increase the effectiveness of our work.

Is the city ready to compete for a chance to host the 2022 Olympic Games?

We have applied to host. At the beginning of October, important trainings will take place and in

definitely need to work on it. To this end, we have already built a new airport, stadium, and an athlete’s village. We also plan to build an exhibition complex. In Tysovets, which is just an hour away from Lviv, we intend to build a complex of chairlifts. It is a very important and profitable project.

Do you compare Lviv to other Western European cities?

We do… Those cities, though, have bigger budgets. In Poland there is a city like Lviv – Wroclaw.

If we speak about metropolises to look up to, regarding infrastructure, Vienna needs to be mentioned for its unique planning and intelligent approach.

What are you more afraid of: Mayoral Elections or responsibility to voters?

I have worked as the Mayor for 7.5 years. I am proud to be working for the benefit of society. What are elections? If you are chosen, you can keep working. If the society chooses someone else, you need to help this person and be a good counselor. My main goal is not to

They often ask me: Mayor – politician or administrator? I think that the Mayor is a strategist who needs to be a politician, administrator, and executive at the same time.

Are you an independent figure?

I depend on every person who talks to me, my wife, and all the residents of Lviv. I am independent of any big political processes. As the song goes: “It is only a city that can turn slaves into people”.

Is there a chance that I would run into you on the streets of Lviv?

I go walking a lot. I am always among people. We do not have a separate canteen, and that is why I go to nearby places to eat.

There is a possibility to criticize, listen to criticism, tell people how to make things better and listen to their objections. I go to Lviv theaters, and even more often – to the Philharmonic. There is less amateurism there.

This interview was conducted before the events surrounding Maidan.

6

THE YEAR OF NATIONALISM

THE KIEV TIMES | DECEMBER 2013/JANUARY 2014

THE SPECTER OF NATIONALISM

By Vladislav Gulevich, political analyst

After the specter of communism in Europe wandered off, its place was taken by nationalism. Nowadays, European political parties proclaiming nationalist slogans are becoming more widely supported.

“J

obbik” in Hungary, “Fiamma Tricolore” in Italy, “Freiheitliche Partei Österreichs” in Austria, “Front National” in France… The list of parties with nationalist ideologies is a long one.

The features they have in common are negative attitudes towards immigrants and the processes of globalization that sweep through the world and turn into a so-called glocalization, where instead of unification of national economies and traditions we are witnessing the tendency towards their seemingly permanent separation.

The topic of migration has become a permanent fixture of the political lexicon in a number of European countries. The question of whether or not to adopt certain directives from the EU, which affect the economic livelihood of these European countries, is also hotly contested.

The numerous manifestations of separatism we see across the continent are repercussions of globalization, and separatist aspirations can be seen almost everywhere in Europe. Spain has the more recent development of Catalonian independence in addition to the Basques; Great Britain is threatened by the probable future independence of Scotland.

European nationalism is a reaction to the influx of people from other cultures. Turks, Arabs, Africans, Chinese, Indians are like incoming waves moving towards Europe, devouring the local population and washing away European identity. Europe has fallen victim to its own offspring – an ideology of liberalism which spurs on human vices and puts man’s animal nature above the spiritual. The psyche of the average European turned out to be quite hedonistic in its morals which all of a sudden started to change. Europe has been flooded by immigrant waves and newcomers who live within another system of morals and beliefs, where hedonism is not regarded as a gem of consciousness but rather as a psycho-economic category which can be easily sacrificed for the sake of greater metaphysical ideals. For some people it is the idea of establishing an Islamic Caliphate in Europe; for others – maintaining traditions of their countries abroad, without radicalism but with unyielding persistence.

Europe wishes to keep its former political authority but it keeps fading away into nothing on the way to progress; the idea of progress in itself has been doubted

by intellectuals for a long time now. Common European social institutions and norms are also experiencing transformations; one cannot find solace even at church, which has been turned into an adjunct member of secular governments in a secular Europe.

The church was forced to not only put its metaphysics aside but also assume a great deal of secularity.

The church has become less religious and more secular, yet as a religious and social institution it should be a counterweight to secularity.

There is a problem with migrants in Russia as well, but it is rather specific there. Russians are not content with the behavior of migrants going contrary to the notion of “when in Rome”. It was inevitable that huge Russian cities (Moscow, Saint Petersburg) would fall victim to migrant criminality, because metropolises, more so than small towns, fan the flame of capitalism with such strong concentrations of money and liberal ideologies. Whether in Paris, London, or Moscow, citizens develop cosmopolitan ideals in the same way. However, in Russia, the Orthodox church has authority over the population. It has not been turned into an adjunct of liberal economics, as it has been in Europe, and the national identity of Russians is a solid spiritual construction. The problem of migrants, unfortunately, allows all manner of ill-informed nationalist views to enter the political scene.

Ostensibly for the struggle for the survival of Slavic Russia, these people try to provoke national hatred and conflict, which always catch the attention of western analysts. The American Jamestown Fund regularly dedicates its

Kazakhstan, led by their own nationalists, which means that the territory of Russia would be cut in half along the Volga river in the Povolzhye region. Washington could not possibly wish for a better geopolitical present. Yet, the “Orenburg Corridor” still exists and the Jamestown Fund keeps kindling Russophobia among the peoples of the Russian Federation – from Karelia to Chechnya.

Moreover, earlier it was said that western intelligence agencies were trying to encourage the growth of Russian radical nationalists, and even various skinhead organizations. Controlling both camps (i.e. Russian and nonRussian nationalists) it is easier for Americans to set these groups against each other in order to later falsely lament the oppression of the peoples of Russia by “Russian imperialists”.

Ukrainian nationalism stands alone against this background. Its only common feature with other countries’ nationalisms is that it is called nationalism. This is where the similarities end and the differences begin. Unlike other brands of nationalism, Ukrainian nationalism bares its teeth not only to its biggest neighbor (Russia) but also to a great deal of its own citizens. Threats that “Bandera will come and sort things out” are addressed to the citizens of Ukraine. Oleg Tyagnibok is especially fond of issuing these proclamations. Ukrainian nationalism splits Ukrainian society instead of uniting it. It cannot be otherwise because the nature of Ukrainian nationalism itself is neither integrative nor formative.

He who views Ukrainian nationalism as a defense ideology

Europe has fallen victim to its own offspring – an ideology of liberalism

to Gelendzhik and Tuapse. This message has always been a part of Ukrainian nationalist ideology from the very beginning. Let us recall the words of Mykhail Kolodzinskiy, a member of OUN and founder of the military doctrine of Ukrainian nationalism: “Us, building the Ukrainian state, need to push the border of Europe to Altay and Dzhungaria. Europe lacks this space. Ukraine is called to connect this space with Europe politically, economically and culturally… and the phrase “on the brink of two

Nationalists don’t like remembering the First World War because they would have to remember Thalerhof and Terezin expert commentaries to issues of ethnic relations in Russia; its sharpest criticisms are directed at the Russian government and Russian political parties, while their sympathies are routinely with representatives of nonRussian nationalities. One of the latest kinks is the opinion of the Jamestown Fund on eliminating the so-called “Orenburg Corridor” – a stretch of land separating Bashkiria from Kazakhstan. If Ufa and Kazan had a common border with Kazakhstan, they could fall away from Russia along with

is naive. In fact, it is expansive and strives for the extension of Ukrainian borders at the cost of its neighboring countries. Only the deaf have not heard of “ethnic Ukrainian territories” taken from Ukrainians by Poles, Belarusians, Slovaks, Hungarians, Romanians, and Russians. At that, “as it should be”, the majority of Ukrainian territories need to be taken away from Russia. Agitators of various nationalist groupings (UNA-UNSO, “Tryzub” named after Bandera, “Svoboda”) claim that Ukrainian ethnic territories stretch as far as

worlds” will acquire real content…

Just as Caesar conquering Gaul opened Europe to Roman culture and civilization, our nationalist revolutionary armies have to discover for Western European culture the space stretching to the south and south-west of Ukraine…

It was a grand purpose of our life, as a nation, as a race – to gain the steppe above the Black and Caspian Seas and build here, on the verge of two continents, the center of the new world civilization. When the policy of Ukrainian nationalism strives for

settling borders of Ukraine on the Volga river and spreading its influence over Central Asia, the political doctrine of Ukrainian nationalism cannot limit itself to just Ukrainian ethnographic lands. A person who refuses to participate in this struggle and calls for pacifism is a rotten wart on a healthy body”.

In 2014, the world will be commemorating the anniversary of the First World War. In Ukraine even if official events take place, they will be ratcheted down.

Within the years of the First World War in the course of Austrian and Hungarian terror in Western Ukraine, tens of thousands of Carpathian Ruthenians – the ancestors of contemporary Galichians, Bukovians, and Transcarpathians, who kept their common Russian selfconsciousness, were murdered. I would like to remind the reader that this ethnonym “Ukrainians” was a novelty and meant political and not ethnic membership. The western Ukrainian population in its entirety continued to identify as Russian even though the Austrians put a lot of effort into transforming the Ukrainian regional identity into a national one. During WWI, those refusing to become Ukrainians were assigned to the concentration camps of Thalerhof

and Terezin. Austrian officers then started a hunt for Carpathian Ruthenians. Whether Galichian farmer or Bukovian intellectual, answering in the affirmative to the question “Ruthenian?” was enough to be hanged on the nearest tree (Austrian soldiers carried specially prepared ropes in their backpacks) or sent to Thalerhof.

In the 1920s the “Thalerhof Almanac” was first published in Lvov, where the prisoners of Thalerhof and Terezin shared their memories. The Almanac contained abundant background references and photographs. The unflattering role of the Ukrainian nationalists of that time was distinctly highlighted (at that time they were a novelty, forged in Austria as external support to fight with “moskali”) as informers for Austrian officers. Their squeals landed Carpathian Ruthenians in Austrian prisons. As we see, from its very origin Ukrainian nationalism divided its fellow citizens into the “proper” and “improper” and from its very birth the targets of its attacks were its fellow citizens. These destructive tactics remain dominant today because, as before, it is a political instrument in someone else’s hands. It is enough to read the official program of external policy of the “Svoboda” party to assure oneself that this program was plagiarized from some American strategist because the geopolitical aspirations of “Svoboda” followers correspond so much to the interests of Washington.

In short, nationalists don’t like remembering the First World War because they would have to remember Thalerhof and Terezin.

“Nationalism is not what it is, and first of all, nationalism is not what it seems to itself. The cultures it demands to protect and restore are often its own fiction or changed to the point of not being recognized”. The words of English philosopher Ernst Gellner, the author of a sensational book “Nations and Nationalism”, are often forgot during political games.

Meanwhile, Ukraine has once again not supported Russia’s resolution against honoring Nazism, adopted at the meeting of the Third Committee of the 68th session of the General Assembly of the UN. The full name of the resolution is “Struggle against Heroization of Nazism and Other Kinds of Practices Conducive to Escalation of Contemporary Forms of Racism, Race Discrimination, Xenophobia and Intolerance Connected with Them”. It was quite predictable that the main financial supporters of Ukrainian nationalism – Canada and the USA – argued against the resolution, as they have many times before.

The EU and Ukraine remained neutral. This points to the fact that nationalist ideology and nationalism are still in demand among the political elite and they are not ready to decline its dirty services.

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www.thekievtimes.ua

THE YEAR OF WEST

7

LAST STRUGGLE FOR SOVEREIGNTY

By Evgeniy Morin

The European Commission (EC), in an effort to avoid further economic crisis, has restrained the financial sovereignty of EU members.

O

n November 15, the web edition of the British newspaper, The Telegraph, posted an article with the headline “EU uses new budget powers to demand more austerity in Italy and Spain”.

Bruno Waterfield, The Telegraph’s correspondent in Brussels, writes that the European Commission has for the first time “exercised historic new EU powers allowing it to revise national budgets”. Moreover, national draft budgets are reviewed by Brussels before national budget committees have even voted on them. Thus, the non-elected European bureaucracy in Brussels took over national governments and parliaments of EU countries. The reason is that stability of the European currency is too delicate a matter to be entrusted to national governments and parliaments, for they are much more interested in their electorate and country rather than the wellbeing of Europe as a whole.

Olli Rehn, vice president of the European Commission, responsible for the euro-zone of 17 EU member states, pompously stated (I quote from The Telegraph article): “Because in an economic and monetary union, national budgetary decisions can have an impact well beyond national borders, member states have given the commission the responsibility”. This means credence cannot be given to the national government authorities of the EU countries. And further: “This is a historic moment! One has to ask whether the eurozone’s voters yet appreciate what a huge shift in sovereignty this is away from national parliaments to conclaves of finance ministers and commission officials”. Stopping

short of an outright demand for the revision of budgets, or imposition of penalties, Mr Rehn said he was encouraging governments to bring their 2014 budgets into compliance with the commission’s interpretations of the new rules.

“This exercise is much more about partnership than penalties,” he said.

And who has been criticized by Brussels the most?

Spain and Italy have been warned that their budgets for 2014 are in breach of European Union rules. France was also cautioned to cut down on its budget expenses in 2014-2015. As Europe’s largest and most prosperous economy, Germany was lightly criticized for not making significant progress in following EU recommendations to help its neighbors in the eurozone by encouraging domestic demand and imports, and also for decreasing their macroeconomic indicators.

However, as soon as a new government of Germany is established, considering the results of the 2013 autumn elections, it will have to introduce a new budget to the parliament with due regard to the Commission’s recommendations. As a side note, the most stable budget in

set out in the Maastricht Treaty that led to the very creation of the EU’s eponymous currency.

According to Waterfield, the commission’s Italy verdict has become “political dynamite”.

The country’s Prime-minister, Enrico Letta, and the coalition are continuously torn by the arguments over tax reductions in the parliament. Left wing opposition in that same parliament vigorously struggle against the policies of austerity advanced by the Italian government.

Fabrizio Saccomanni, the Italian finance minister, believes that the suggested regulations on the Italian government at the behest of EU officials, can fatally weaken the country’s economy. This Brussels intervention aggravates the situation, especially after Mr Rehn ruled out an exempting €3bn in investment spending that the Italian government has included in its 2014 budget. It was planned to use the investment spending for privatizing of dilapidated cultural and architectural sites on condition that the new owners preserve their historical significance and allow tourists there. Nonetheless, the sum of money received in the course of privatization is hard to predict in advance – that is the

The PIGS countries - Portugal, Italy, Greece, and Spain - have recently been under serious EU pressure

a greater economic decline that will inflame Italians against the policy

So - welcome to the brand new EU, where the decision to cut national budgets is made in Brussels only!

2014 (except for Germany) was in Estonia, an EU newcomer.

Italy and Spain – countries with the most floundering economies in the EU – have suffered the most. They were reprimanded for “breaking debt reduction targets in breach of spending caps” that were

very reason why the EC denied this source of budget input.

Mr Saccomanni, on the contrary, believes that the Italian government can spend any amounts of budget money in order to meet EU rules. Otherwise, the country will be threatened by even

of austerity, which is opposed by many forces: right- and left-wing parties alike.

Spain was told by the EC that its draft budgetary 2014 plan had a big fiscal gap nearly impossible to eliminate but which should have already been narrowed down.

ICELANDIC PRECEDENT: FACTS AND FICTION

By Evgeniy Morin

In 2010, some media outlets reported that a majority of the population of Iceland refused to pay debts to big international banks.

D

espite the undeniable fact that foreign deposit holders were fleeced by some banks of Iceland, the events that took place on the inclement northern island were overly mythologized by the mass media. So what really happened to the finances of Iceland?

It all started in 2003 when Iceland liberalized its system of finance and almost instantaneously became a hedge fund. Its banks made money from financial speculation and attracted foreign depositors looking for high rates of return. These foreigners were mainly Europeans, while Icelandic banks gambled mostly with investments in the USA. In 2003, the bank assets of Iceland were equal to double (200%) the annual GDP of the country. In 2007, bank assets of the island of Vikings and volcanoes reached a ninefold (900%) volume of annual GDP. The enormous financial bubble from Icelandic banks became an affluent financial stream evolving into a flood for the 320,000 inhabitants of the island.

In 2007, the UN named Iceland the best country in the world to live in, further boosting its miraculous economy.

However, this “bubble” burst in 2008, leading Icelandic banks to declare a default amounting to $85 billion to all depositors, most of whom were foreigners. As a result, the IMF stepped in, having negotiated a payment schedule to foreign depositors. Even though a law aimed at settling these

In 2010, a national referendum was held where 93% of the Island’s population voted against the government's paying back the debts of wildcat bankers, seen as largely illegal

Iceland today is no different from other European countries.

It is slowly sinking into a debt crisis abyss along with the European Union debts was passed at the end of 2009, in winter 2010 Icelanders took to the streets, and in March 2010 a national referendum was

held where 93% of the island’s population voted against the government’s paying back these debts, seen as largely illegal.

Depositors from the UK and the Netherlands saw the biggest losses. These 340,000 people found themselves short of approximately

The EC had given the green light to France’s budget for 2014 but with certain stipulations! The European Commission warned that a 2014 budget shortfall needs to be reduced by lowering budget expenses in order to balance it by 2015. Yet no word was spoken of how it should be done: let the French government figure that out.

Waterfield finally reported that “The commission has also cautioned Finland, Malta and Luxembourg, asking the three countries to review their 2014

budgets to ensure that they meet euro-zone targets.” So – welcome to the brand new EU, where the decision to cut national budgets is made in Brussels only!

Unfortunately, it is impossible to ignore EC recommendations.

Today, only 4 EU countries – Greece, Ireland, Portugal and Cyprus – get aid from the European Financial Stability Facility and remain under the strictest control of Brussels. Be certain, the EC will take any measures to keep the list of aid recipients short.

$5.3 billion. However, the system of deposit insurance that was in place before the crash, applied solely to residents, i.e. the citizens of Iceland. What’s more, in 20032008, Icelandic banks were by all parameters regarded as offshore, and as such they had no system of deposit insurance for foreign depositors.

There was no IMF blockade of Iceland. On October 24, 2008 the government of the country applied for a term loan from the Fund.

And as early as November 17, 2008 the land of volcanoes received $5.1 billion loan (about 30% of GDP-2008) to finance the central government budget deficit. Iceland committed to reducing budget deficits and to normalize banking operations.

In June 2009, the government of Iceland announced the recapitalization of three new banks which had emerged from the crash, and, as a basis, used their assets of $2.1 billion (12% of GDP) to issue government liabilities.

As for the “nationalization” of their banking system, similar measures were implemented not only in Iceland, but also in the USA, Great Britain and other European countries in 2007-2009. It was a socalled “technical nationalization” intended to save banks from bankruptcy, at the cost of the state budget, for the sake of financial stability in the country. When a crisis is over, the state withdraws its capital from the banks and the banks become private again.

Besides, all foreign holders of deposits in the banks of Iceland, except for the 340,000 offshore ones, were compensated for losses by their national governments.

The foreign debt of Iceland was quite big at that time, but not astronomical. In 2007, it equaled 29.1% of GDP, in 2008 it went up to 70.3%, and in 2009 – 88.2%. These debt figures are similar to figures of such European countries as Ireland and Greece; however, the latter two never defaulted. By the way, it explains all the media hysteria about the threat of default in these European countries.

Why (and for whom?) was the myth of the “sovereign default” of Iceland needed in 2010? The reason could be the need to push Greece, Spain, Portugal and other

EU countries such as Hungary to the verge of collapse. All the “Iceland Passion” media reports were stirred up due to some WallStreet and London City banks’ (“GP Morgan Chase”, “Morgan Stanley”, “Goldman Sachs” and other giants) desire to fool around a little! They issued large amounts of “credit default swaps” (CDS). These swaps are so-called “financial derivatives”: some insurance for different kinds of defaults that banks, companies and even governments can create out of their own debt. Creditor banks and holders of debt securities of European countries have purchased credit default swaps worth hundreds of billions of dollars.

Among them were also swaps of the national debt of Iceland. All these investors anticipated the possibility of Iceland’s creating the precedent of a sovereign default as a potential problem for CDS investors. Another group of banks and companies which acquired “security papers”, obviously dreamed of these sovereign defaults. The main point was to spread panic in the media and provoke the rise and fall of security papers, for it is only imbalance of the markets that gives “global players” the opportunity to make money from currency fluctuation.

Iceland today is no different from other European countries. It is slowly sinking into a debt crisis abyss along with the European Union. Here are the dynamics of the accumulation of joint sovereign debt of the eurozone (% of annual GDP) according to the European Commission data: 2007 – 66%; 2011 – 88%; 2012 – 93%. In 2013 this debt will exceed 95%.

The same is true about Iceland.

Its joint debt in 2009 equaled 88.2% of GDP, and in 2012 it reached 118.9%. There was no confrontation between the IMF and Iceland, quite the opposite in fact: following the results of 2012, this country was praised by the IMF for successful settlement of a substantial part of the debt for 2008-2009 and regulation of the bank crisis. Therefore, the myth of the “heroic sovereign default” in Iceland turned out to be just a trite little fairy tale in the media. Yet people always tend to believe the best…

8

THE YEAR OF THE CRISIS

THE KIEV TIMES | DECEMBER 2013/JANUARY 2014

ON CURRENCY, AND OTHER MATTERS

FIVE YEARS OF CRISIS: SHADOWBOXING

By Michael Garbuz

By Aleksandr Dudchak, economist

In 2013, the world's main currencies were all affected by the economic crisis. Media attention on the possibility of world economic and political instability in a number of countries instantly affected their exchange rates.

The country has been unable to bounce back after a five year crisis as it continues to wait for the pokraschennya (“improvement” in Ukrainian). Ukraine's GDP of $175 billion in 2012 did not rise above the pre-crisis level of $179 billion in 2008.

he most influential news, with regard to the exchange rate of dominant world currencies, – dollar, euro, yen, ruble, yuan – were the proceedings of the US government to increase its borrowing debt ceiling. Currency quotes were also influenced by reports of economic recession in a number of EU countries, according to financial analysts.

A definitive way for Ukrainians to protect their savings from instability at the exchange market is a multi-currency investment portfolio Foreign Currency Twists and Turns

The American dollar reacted viciously as well to the break out of military conflict in Syria by experiencing fluctuations of around 8%. Similar fluctuations were experienced by the euro and ruble. “This year, the Euro, at least twice, hit records for annual fluctuation. Thus, at the beginning of the year the quote for the euro/dollar pairing rose to 1.37, and by mid autumn to 1.38. This summer the exchange rate dropped to 1.28”, – stated Vladimir Fenyuk, the head economist of the department of operations on the interbank level of the treasury of the “Natsionalny Kredit” bank.

The yen dropped in value by 10% in 2013. Such a rate, according to Fenyuk, completely suits Japanese exporters, yet this rate continued to fluctuate in Japan. Another Asian currency, the yuan, was more stable, having appreciated by 2%. Its rise in value could be connected to the peculiarities of the Chinese economy and growing trust of this currency by the world community, says the director of the ratings agency IBI-Rating, Grigoriy Pererva. The Russian ruble was closely tied to world oil prices throughout year. “The Ruble’s rate to the dollar dropped within margins of nearly 12%.

It was quite a considerable range for this currency”, observed Alexander Okhrimenko, the President of Ukrainian Analytical Center.

Hryvnia Staggering

Within the last months of 2013, the rate of the hryvnia to the dollar dropped to within margins of 2%. It is a fairly narrow range of currency fluctuation, but for Ukraine it is the most suitable option, thinks Alexander Okhrimenko. Such a fluctuation allowed the economy to depend less on the dollar and to increase the demand for hryvnia deposits. “The stability of the hryvnia allowed prices on imported goods to remain at earlier levels, while for household appliances they dropped further”, – says Okhrimenko.

There are no predictions for a substantial devaluation of the hryvnia in the next 6 months, assures Valdimir Fenyuk. The National bank, according to him, takes the necessary measures to stabilize the national currency.

“However, I expect the rate of the hryvnia to become even more flexible and that fluctuation will not be uncommon. That said, I do not think that the range of this fluctuation will go much above 5%”, – he says.

A less positive prognosis comes from a specialist in bonds trading with “Concord Capital” Yuriy Tovstenko. “In 2014 the probability of hryvnia devaluation will, for the most part, depend on Ukraine’s ability to attract currency from foreign markets with the help of European bonds, and on its ability to procure IMF and Russian funds”, - he noted. At worst, the hryvnia could devaluate by 10% next year, up to 9 hryvnia per 1 dollar, Tovstenko believes. A definitive way for Ukrainians to protect their savings from instability at the exchange market is a multi-currency investment portfolio, Vladimir Fenyuk thinks. He recommends dividing funds into five or six even parts and investing them in the US dollar, Japanese yen, euro, Australian dollar, gold, and Ukrainian hryvnia.

U

kraine is cornered. Its trade deficit last year was $20.43 billion (data from the Central Audit Office). Debts owed to the International Monetary Fund (IMF) were around $5.6 billion, and debts to Gazprom, as of November 2013 – were approximately $0.8 billion, not to mention all possible fines that Ukraine hopes to avoid by counting on The European Court of Arbitration, which is traditionally negatively inclined towards Russia.

In such a position, Ukraine is unsuccessfully seeking resources of financial aid. During this difficult time, the relations of Ukraine and China are encountering a period of rapid development, which originated during the visit of the Ukrainian President to China in September 2010, and the visit of the President of the People’s Republic of China, Hu Jintao, to Ukraine in June 2011.

However, the objectives and circumstances of this collaboration are different for the two countries.

This is evident even today. The People’s Republic of China is pursuing its global interests. China is trying to reduce the Russian Federation’s influence in Eurasia for its own benefit, and aiming to gain access to more modern technologies, especially military technology.

Ukraine, in its turn, is shaping its economy with a “Let’s live until Monday” approach, hoping for short-term or medium-term benefits from collaboration with China. The main priorities for Ukraine are loans or investments, under any pretext, to patch the actual “holes” in the economy.

n the beginning of 2013, many national industries were on the verge of bankruptcy. Ukraine’s share of imports in the domestic market for a number of key industries was: light industry – 98.4%; passenger cars – 82.8%; refrigeration and freezing equipment – 83.1%; agricultural machine building – 79.8%; pharmaceuticals – 77.6%; furniture – 77.6%; paper and paper products – 61.4%.

Also, clearly, international finance organizations created the necessary conditions to shift the Ukrainian economy to “manual control” in case of an extreme change in its integration course.

The West is putting a lot of effort into making sure it doesn’t happen.

What contributes to the country’s development? Oddly enough even high-tech equipment is not in demand in Ukraine, and the needs of the domestic market do not allow for these fields to exist, regardless of the demand in foreign markets.

We cannot afford to live in the way that Norway, the United Arab Emirates or Russian Federation do, based on hydrocarbon resources.

We are not competitive on foreign markets; we cannot offer cheap products at the expense of cheap labor costs, as does China.

Starting from 2004, the country has tried to get through to the Western Europe market, reducing interactions with traditional partners in the Commonwealth of Independent States (CIS).

Frequently it’s done regardless of common sense and the economic interests of the country. Hasn’t history taught Ukraine anything?

The EU Ambassador to Ukraine, Jan Tombinski, announced: “Ukrainian products will not go to the European market without adaptation, there is a need to work on standardization”.

Entering the World Trade Organization (WTO) in 2008, before the current global financial and economic crisis, devastated the economy. The country’s leaders have set a goal to outrun Russia in this process. But a sufficient enough protection of the domestic

Photo UNIAN

T

I

Ukraine has been unable to bounce back after the global crisis began 5 years ago

market was not created, and the start of the global crisis has multiplied the consequences of these ineffective measures.

Ukraine filed an appeal to the WTO demanding it to review tariffs on 371 product criteria. Five years later the appeal was fiercely objected by the Ukrainian trade “partners” in WTO. Ukraine does

not have sufficient foreign direct investments abroad. According to the Central Intelligence Agency statistics webpage, the sum total of all Ukrainian direct foreign investments abroad, as of 31.12.2012, amounted to only $7.853 billion. To compare, Russia’s direct foreign investment was $413.1 billion for this same period;

By Aleksandr Dudchak, economist

Ukraine has already received $3 billion from China for leased lands, and will get the same amount in 50 years, if the contact is renewed. But are there inherent risks in such a deal? which the latter agreed to open a credit line of $3.66 billion to develop a program that would transition Ukraine away from coal, steering it toward natural gas consumption instead.

The program is undoubtedly necessary for Ukraine, however the necessity of the price reduction on gas for the benefit of the Ukrainian chemical industry has never died off. The fact that now China shares technologies with Ukraine is a depressing truth, when we think back to 1990, when Ukraine was on the list of the most developed industrial regions and was in possession of technologies that were only a dream for China at that time.

geopolitical problems to solve, in which, financial matters are pushed to the background.

In this case the geopolitical goal is to prevent the emergence of a geopolitical center in Eurasia.

As predicted, the year 2014 will be just as complicated. After the suspension of “Euro-integration” the West will be violently

In the beginning of 2013, many national industries were on the verge of bankruptcy

UKRAINE AND CHINA: COLLABORATION OR ACQUISITION?

We must bear in mind that the scale and mutual value of the economies of the two countries are different. The share of Ukrainian products in the import/export of China is insignificant, while China accounts for 10.2% of Ukraine’s imports and 4.1% of its exports.

Unlike the U.S., China is not sending its warships to foreign shores and almost never applies the “soft power” necessary for them to launch ruling regimes in other countries. China is striving to achieve goals through effective economic collaboration.

In 2012, the Ministry of Energy and Coal Mining announced an agreement with the Chinese Development Bank, according to

Kazakhstan, $22.84 billion; Poland, $57.5 billion; China, $502 billion; and for the USA – $4.507 trillion.

As reported in a November announcement in the Financial Times, the American investment fund, Franklin Templeton, bought Ukrainian government bonds for a nominal amount of $5 billion on the global financial market. This

In April of last year, UkrLandFraming Agro Group negotiated a contract with the largest Chinese machine-building corporation Sinomach to procure

deal has direct financial benefits for the investment fund – in case Ukraine receives aid from the IMF, Europe, or Russia, this investment can be profitably sold.

However, there is a reason to believe that such organizations, including rating agencies, IMF, and other participants of global financial markets, have strategic

vindictive, using the “civilized” and tools of the market to apply pressure.

The most important challenge for Ukraine is to save the remains of its high-tech production industry. Without collaboration with its traditional and natural partners – ex-Soviet republics – it cannot be done.

deliver 4-6 million tons of grain, GMO free, and appropriate to international quality standards.

Part of the earnings will be spent on purchasing agricultural equipment in China, seeds, fertilizers and other farming products. In 2009, China had 2 million hectares of foreign lands at its disposal for agricultural production. In 2013, China signed the contract with Ukraine to lease 3 million hectares of the Ukrainian land for a period of 15 years, let alone arrangements with other countries. By area, it’s slightly bigger than Armenia and a little smaller than Belgium. The total of the contract is $3 billion, and Ukraine will get another $3 billion if the agreement is renewed in 50 years. But both parties have the right to terminate the contract, just not before years has passed.

China is developing a program for settling its citizens in different countries. Evidently, Ukraine is on the list of such countries. For instance, in the Koryukovskiy district of Chernihiv region three thousand Chinese troops have

incursions. Traditionally, China has tried to send abroad, along with investments, its citizens, who were leaving the country earlier, and the possibility of having more than one child was not their only drive. In many countries, Chinese “islands” are being created or already exist. No longer limited to the well-known “Chinatowns”, labor townships around enterprises built with Chinese money are becoming increasingly common. Those who understand Chinese claim that the character for “emigrant” could be translated as “a bridge to China”.

Any Chinese person, according to the constitution of the People’s Republic of China, has a right to protect the Chinese state. Any “Chinese”, not any “citizen of China”!

Clearly, in response to the political technology of “Twitter revolutions” China has invented a technology of economical expansion that can be called “torrent-economy” – when the remote areas of a unified system work together for a common good through a single center. It

The fact that now China shares technologies with Ukraine is a depressing truth a loan of $4 billion. In October of the same year, the State Food and Grain Corporation of Ukraine and the National Chinese machineengineering corporation CCEC signed a $28 billion agreement, according to which Ukraine will supply grains to China for a period of 15 years. According to this agreement, Ukraine is obliged to

already landed, bought all bicycles available for purchase, and ordered 600 more.

Crops that local producers hadn’t managed to collect were raided by Chinese settlers, as they “borrowed” corn and other crops that had been sown by local workers. Regional authorities have not yet worked out a preventive measure for such

is appropriate to mention here a few words from the newspaper of the People’s Liberation Army of China, Jiefengjun Bao, dated April 3rd, 1988: “Effective longterm executed control over a strategic region, which is performed beyond geographical borders, will eventually result in transferring the geographical borders”.

www.thekievtimes.ua

THE YEAR OF CRISIS

9

TO PASS (THE BUDGET) OR NOT TO PASS. IS THIS REALLY A QUESTION?

Photo UNIAN

By Evgeniy Morin

Ukraine is facing the possibility of a New Year's without a state budget.

Against the backdrop of a full-scale street revolution, a draft of the Ukrainian state budget for 2014 is still “pending”. The reason it remains “pending” is that the government is still in the dark on a number of key expenses for the 2014 budget.

The key numbers of the 2014 budget will be known only at the last moment

I

t is true that the Council of Ministers is commissioned to draft a bill outlining the expenditures of the state budget by December 17. As of the writing of this article (December 5) no one knows exactly which numbers will end up in the bill. The media has reported that government revenue currently totals 500 billion uah. Despite this December 17th deadline, the head of the Verkhovna Rada, Vladimir Rybak, is more pessimistic: he thinks that the state budget of Ukraine for 2014 will be approved after the New Year comes. However, all financial problems need to be solved now.

The Case of the Missing Budget

Speaking at the meeting of the Council of Ministers of Ukraine, Prime-Minister Nikolay Azarov claimed that the government revenue deficit in the 2013 state budget amounted to 34 billion uah for the first eleven months of this year. Such a severe deficit is directly tied to significant economic decline in Ukraine. The first eleven months of 2013 saw an income tax shortfall of 36 billion uah. (To compare, 13 billion uah more was collected last year, in the same time frame, due in large part to foreign trade). To alleviate the difficulty, the word is that taxes are going to be collected

in advance until the end of 2013; however, this still won’t be enough to make up the difference. It was out of pure necessity that the Council of Ministers and Verkhovna Rada were forced to incorporate tax anticipation bills in 2013.

At present, it is difficult to forecast the size of economic growth for 2014; when considering the price of Russian gas, and the level of inflation in the country, it is practically impossible.

The key numbers of the 2014 budget will be known only at the last moment. On December 2nd, Prime Minister Nikolay Azarov announced a plan for negotiations with Russia, which are to take place before December 16th (literally: “within two weeks”). However, the subject of these negotiations is unknown to the media. One thing is clear though: it is not about loans. The conditions that allow their procurement are a mystery.

Apart from that, any loans require some kind of security deposit. Yet the subject there is also unknown.

Therefore, Ukraine should not count on very sizable loans.

On December 4th, the issue of the “missing budget” was addressed by the People’s Deputy of Ukraine, and Batkivshchyna party member, Roman Ilik, in an interview with a correspondent of the Kiev Times:

“Which budget are you talking about? Who has seen it? I am the deputy head of the Health Care Committee of the Verkhovna Rada.

Today is the 4th of December. None of the deputies (including Party of Regions members) have seen the draft bill of expenses for the Ministry of Public Health, and I am not even talking about the main budget for Ukraine. What do we ratify? Numbers that are way off the mark? What about the Budget Code? How do we control everything then?”

Is default looming over the cities of Ukraine?

Euromaidan and protests in western regions of Ukraine could create a serious problem in December 2013. According to the Prime Minister, the state has to pay 25.5 billion uah of the budget to the citizens of Ukraine. This means 22 billion uah worth of retirement benefits, and about 3.5 billion uah toward other social benefits.

Ukrainian cities are experiencing a difficult financial situation, as explained by expert of budget policy from the Ukrainian Association of Cities, Alexander Slobozhan.

134 cities, which are members of this Association, are experiencing deficits in salary payments, district heating provider compensations,

and energy debts. By the end of 2013, these deficits will amount to 7.5 billion uah. 2/3 of this sum are deficits for the regional capitals of Ukraine, of which there are 24.

The State Financial Department believes that the necessary amount of “salary” money for Ukrainian cities is 4.5 billion uah. Even in Kiev, the deficit of the city budget, as of December, is 1 billion uah; therefore, municipal officials will receive only half of their November salary this month. The main reason for such incongruence between government revenue and expenses is poor planning in estimating the amount of money that could be collected from the working public, which is the main source of income for local budgets.

Until October 2013, local financial problems were largely solved by interest-free loans from the State Treasury. As of November 25, 2013 the Treasury had given loans to local administrations totaling 8.7 billion uah. A portion of this sum – 1.1 billion uah – were short-term loans that had to be refunded by December 1st. Where is this money now, has it been refunded to the cities? Have these debts been acquitted by the Treasury and the Ministry of Finance? Nobody is talking. Everything is covered by the fog of revolution.

Here is one more curious fact illustrating the reduction of expenses of city budgets and the depth of economic decline in Ukraine in 2013. Within three quarters (from January to September) of 2013, Ukraine spent 60% fewer resources on the purchase of commodities and services than last year. Only 55 billion uah were spent this year, versus 138.7 billion uah for the same period last year. Moreover, within the same period, 25% fewer contracts were signed, as evidenced by data from the State Statistics Committee of Ukraine. It looks like these tendencies will continue in 2014.

Where do we get the money from?

According to preliminary estimations, in 2014 Ukraine will have to pay a total of $8.2 billion, including a payment of $3.7 billion to the IMF. The government still doesn’t know where it can procure the funds needed to balance the state budget. The terms and conditions inherent in restructuring existing debt agreements also remain murky. The reason for this is the refusal to comply with the conditions of the IMF, which promised to provide Ukraine with a stabilization loan of $15 billion.

However, in order to get it, the government needs to cut down on all social benefits. This would mean raising gas, electricity, housing, and other public utilities tariffs, immediately, by at least 40%, and subsequently marking them up even further. So far the President and the government have promised that no cutbacks on social benefits will be seen in 2014. Where they will find the money necessary to keep this promise is, as of yet, a mystery.

Cuts in the budget defined as “sequestration” loom ominously like the spectral “Ghost of Christmas Yet to Come” over the Council of Ministers and budget committee of the Verkhovna Rada.

Staring into the face of this bleak reality, we need to acknowledge that the financial policy of the Ukrainian government of the last five years, starting with the crisis of autumn 2008, has bankrupted the country.

The state budget cannot fulfill the financial obligations of the state to the people under current economic conditions. Will the current government of Ukraine manage to undertake unpopular measures like raising tariffs on the public and freezing social benefits?

This is the most important question in Ukrainian politics today.

FIGURE SKATING IN UKRAINE: NEW LEADER AND NEW EVENTS

By Pavel Zagirnyy

Evgeniy Larin, the President of the Ukrainian Figure Skating Federation (UFSF) told us about the present and future of figure skating in Ukraine, and the role of sports in his life.

S

ports are life. I could never imagine my life without them. Professionally, I am really overloaded these days, so sports remain a powerful motivator and a great help for me.

A lot connects me with figure skating: from happy childhood emotions to victories of my youth.

It was a bright and shiny time in my life. My mother brought me to the figure skating school when I was four. It was a parental choice, for it is quite difficult to decide on something at such a young age. I won’t lie, practices gave me immense pleasure and also helped develop physically. I think that the way my posture looks today was determined by those childhood practices.

The ice rink became a second home for me and gave me the possibility to meet and mingle with other people. It was a happy and bright childhood. Training meetings, tests, field tournaments and everything connected with sports became a very important part of my life. It went on for many years.

Somehow, in life, things tend to work out. My life priorities have changed, yet even today when my work schedule is heavily loaded, I try to get away with my friends, visit the skating rink, and refresh my friendship with ice. I am quite proud of my still perfect skating.

I would like to move from my sports past to the sports past of

Today, the Ukrainian team, as well as figure skating in the country, is still in a stage of formation

Ukraine. Ukrainian figure skating has a long and interesting history with an impressive number of big sports names. I am not only talking about famous sportsmen, but also about those who have never climbed the platform to receive a medal.

We need to remember the coaches, choreographers, directors of sports

schools and managers of the Federation, whose hard work has strengthened the status of figure skating. Everyone deserves respect, honors, recognition.

Take 5 minutes of your time to read through the history of our Federation on our official website www.ufsf.org

Today, the Ukrainian team, as well as figure skating in the country, is still in a stage of formation. For a number of reasons, figure skating had been degrading for quite a while. No new skaters appeared, skating rinks were closed. It led to the decline of the sport’s popularity, a lack of competition, and in some cases even the disappearance of competitive skaters altogether.

As a group of like-minded people, we support systematic efforts aimed at restoring this most beautiful sport, and the situation is gradually improving.

I believe in this younger generation, which is showing remarkable results today, winning different international

competitions, including the Grand Prix.

In terms of world rankings, Yakov Godorozha is rated as 108th out of 608, Natalia Popova is 82nd out of 904, Elizaveta Usmantseva and Roman Talan share the 99th spot out of 335 pairs, and Shivan HikkinKenedi and Dmitriy Dun stand at 31st out of 244 dancing pairs.

Last year, with the help of the Ministry of Youth and Sports, we started preparations for the Ukrainian Open 2013 tournament, which will be conducted by the Federation, and take place between December 18 & 21 in the Palace of Sports in Kiev. Ukraine has not seen a competition of such high level for nearly 10 years. After such a long

break, this is going to be a great event for the world of Ukrainian sports.

The Ukrainian Open 2013 is the first step toward hosting the European Figure Skating Championship in Ukraine, and could even bring us closer to hosting a World Championship.

We are trying to resurrect figure skating, not only as a sport, but also as a way of life. We want to make it so impressive that Ukrainian sports life will be difficult to imagine without it. Then Ukraine will see its own figure skating champions and Olympians. And then thousands of children will tell their parents: “I WANT TO BE PLYUSHCHENKO! BAYUL! PETRENKO!”

10

THE YEAR OF VICTORY

THE KIEV TIMES | DECEMBER 2013/JANUARY 2014

A DICTATOR’S PLAYBOOK, OR HOW SHAKHTER GOT TO #1

By Gleb Kornienko

Dictators have never been popular with their own people. Average citizens silently hated them; intellectuals criticized them for their atrocities, pressure, and witch-hunts. There are dictators in Ukrainian football. For the last five years this role has been filled by the football club Shakhter.

I

t is true that a football dictatorship significantly differs from the common view of a dictatorship. A football dictator is naturally different from Pinochet or this newest North Korean strongman. Nevertheless, some common features can be seen.

The thing that makes Donetsk’s Shakhter the leader of Ukrainian football is not its skilled players and decisive on-field victories.

Information policy

“Let me use the mass media – and I will turn any nation into a pig sty” – Joseph Goebbels, Nazi minister of propaganda, once said.

This particular Nazi was not so wrong. Television, and print and electronic media all form social opinions, and society itself rarely resists this kind of influence.

The Shakhter football club has attracted the attention of a number

critically (unfortunately, they are the majority) might have the “official” impression that no other Ukrainian team can beat Shakhter and all the referee’s errors, which happen to benefit the champion, are really just misunderstandings.

For the sake of justice it needs to be noted that explicit collusion is

football whistleblower works for the benefit of his new employer.

However, a decent competitor for Shakhter has popped up on the field of information. Kharkov’s Metallist is zealously trying to push aside the champion of the football field and, arguably, will get support beyond it.

can only be taken by former sports stars, who are amateurs when it comes down to management.

We can assume that the onetime champion of Ukraine tried to develop their management according to the scheme of Bavaria: in Munich key positions were outsourced to former football

Alexender Livshitz: “In football it is better to count on people you have known well for a while.” beyond the editorial board of the channel: even from the point of view of ideology, there is a great distance between the Shakhtar football club and the Football channels.

About a month ago, there was another fiasco with Dinamo coach, Oleg Blokhin, when, in a fit of anger, he screamed at a Football reporter, saying: “Why don’t you

Metallist owner, Sergey Kurchenko, acquired UMHGroup which includes a number of influential media core groups, both electronic and print. From now on, Kurchenko will own the most popular football dailies in the country: Football magazine and the website Football.ua. Apart from that, the billionaire, who also has a reputation of being loyal

idols like Uli Hennes or Carl-Heinz Rummenigge. Either way, whatever Bavaria achieved is well beyond Dinamo’s capacity.

It turns out that Surkis fans are in the majority in Ukrainian football. At least, that is what exPresident of Krivbas Alexender Livshitz thinks: “I keep insisting that in football it is better to count on people you have known well for

The football army of Rinat Akhmetov: Sergey Palkin as general manager and Alexander Denisov as media specialist

of media outlets, some of which cover not only Donbas but the entire country. The most wellknown example is the TV channel Football which, within only five years of its existence, (the first mini-anniversary was celebrated just a few weeks ago) acquired the rights to all major tournaments and created a subsidiary channel, Football+.

Football is a loss-making venture, and its CEO, Alexander Denisov, honestly admits that in the near future he will hardly be able to break even with operation costs. Ukrainians are not ready to pay for televised football matches.

However, the ideological side of the problem is immeasurable in terms of money. Football is a part of the media core group SCM (System Capital Management), which is equally as important as one of the most popular channels in the country, Ukraina, and is loyal to Shakhter and other clubs close to the current champion.

Information policy dictates close attention to the country’s strongest team, which is always pitched to the public in a favorable light. Viewers not able to think

ask Lucescu about his resignation?

He lost too!” Blokhin’s tirade was reminiscent of a middle school pupil throwing a tantrum over a failing grade on a test. People ridiculed his words, yet there was a grain of truth in the source of this exasperation. Not an ill word can be spoken on the Football channel about Shakhter coach.

Editor-in-chief of Football magazine, Artem Frakov, believes that there is no information war in Ukrainian football. Even if there had been one, it ended long ago: “Why does Shakhter need to lead an information war against Dinamo if those two are on different poles?!” – the journalist explained.

The team of Igor Kolomoyskiy and Igor Surkis decided to strike back. Profootball managed to firm up its ratings and has been able to exceed those of Football.

Nevertheless, 90 minutes a week cannot compare with a top-notch TV station.

“Human resources determine everything” – Stalin once claimed.

A few months ago Football “purchased” the most “stingy” expert of Profootball, Victor Leonenko. Nowadays the former

to the current government, has repeatedly stated through his topmanagers his desire to invest in television in the near future.

Artem Frankov, having been given a new boss, assured the public that Football will never favor the Kharkov team: “I have worked as editor-in-chief for 16 years. No one has ever dictated to me what and how to write. It will never happen. I spoke with the new board of editors: not a word was said about going deeply into the editorial policy. Moreover, we are not the most critical publication with regard to Metallist.

Professionals versus amateurs

Let us imagine that a team of professionals came to play against a team of amateurs in one of the regular sparring matches. It is quite obvious who would win. Everyone understands that, including such successful businessmen as Rinat Akhmetov and Igor Surkis.

But rotten luck it is when the latter thinks, for some reason, that professionals need to be invited to resolve matters pertaining to football, while executive positions

a while. The ones who have already helped you implement a lot: they will not deceive you. You well know that there is a lot of big money in football…”

Rinat Akhmetov chose another way: he understood that turning a club into a place for honored veterans is dangerous for business.

It is also foolish to try to tune up work in the club by using one’s own resources. It is worth mentioning that the heroes of the past were not asked to leave the club, many of them continue to work there on the level of the club school and receive an additional monthly pension.

The team of Darijo Srna is the special reserve of Mircea Lucescu

is executive director for strategy, commerce and marketing, and is now responsible for promotion of the Shakhter brand.

However, Alexander Livshitz still feels that it is too early for Ukrainian clubs to think about inviting foreigners: “Maybe it is worth attracting British marketing experts to work for Shakhter but the overwhelming majority of Ukrainian clubs do not even need to think about that. Can we even speak about brand managers if some clubs can hardly make ends meet?”

The Donetsk boss made a farsighted and informed step, having offered the honorary position of the director of international club competitions to famous ex-referee, Lubos Michel (referee of the finals of the Champions League between Chelsea and Manchester United in 2008). The informal side of the issue was clear: the famous Slovak had to add authority and weight to the gornyaks at the European arena.

A vivid example of a similar policy is the general manager of Shakhter Sergey Palkin. Sergey Anatolievich spent his youth studying finance: first in Kiev, then in Britain. He started working for SCM and was later transferred to the club.

Sergey Palkin has no sports background, nor can the title “legend” be applied to either his first or last names; despite this he still remains in his position.

Managing a football club is no different for a person from another sphere. Surely, it is necessary to have a rather extensive view on football processes, but having the experience of a player or coach is not.

Palkin managed to master the necessary skills and was already well-suited to lead, having an excellent education, the desire to learn, talent and management skills, and exceptional knowledge in the sphere of finance.

Thus, while Igor Surkis plots to reshuffle some of the most popular Dinamo players, Rinat Akhmetov keeps hiring European specialists and raising his own resources.

Monopoly on the Ukrainian market

Shakhter’s application to participate in Ukrainian championship matches contains 29 players. About 30 footballers are orbiting gornyaks: they are rented

by Ukrainian (mainly Ilichevets and Sevastopol – 12 and 6 players respectively), European and Latin American clubs.

Among three dozen footballers unwanted by Shakhter, are many

Emelyanov; ex-star of the Brazilian football club, Dentinho; and the previously successful Bruno Renan and Alan Patrick. This list does not include three dozen other players who took second place in youth tournaments.

Shakhter has grand human resources. Owing to tight cooperation with various clubs of the Premier League, gornyaks youths have gained enormous experience at the highest level.

Former mentor of Donetsk players, Valeriy Yaremchenko, believes that it is very good: “If there is a chance, why not buy a footballer?

It is a normal practice worldwide: Barcelona and Real do it too”.

Shakhter can allow itself practically any operation on the transfer market of Ukraine. It is clear that luring the best players away from the competition is hardly possible (yet Metallist has twice sold leading footballers Tyson and Devic within the last few years). However, when it comes to fighting for rare talents with Ukrainian passports, the champion knows no equal. Shakhter can easily buy a candidate for the Ukrainian national team from any other Ukrainian club (except for competitors from Kiev, Kharkov, and Dnepropetrovsk) and send them to play for the youth team.

Yaremchenko does not view this practice of buying and selling gornyaks as being a monopolistic practice: “under Soviet times all the best ones were gathered on one team, for all decisions were made by the government. It is much easier now: you are welcome to pay and take anyone you like”.

The ability to pay and overpay is a whole different story.

In the context of limits on foreign players, Mircea Lucescu prefers to recruit a considerable number of Ukrainians, with the hope that one of them will be able to reach the level of the first eleven, while some will play supporting roles during the matches of the second tier.

As practice shows, many Ukrainian players feel completely happy with Shakhter: they receive salaries equal to those of players of top European clubs, but without stooping to the level of let’s say Tavria waging a brutal struggle for survival.

Valeriy Yaremchenko agrees with that: “You say that Shakhter damages Ukrainian football by pulling out many capable players with Ukrainian passports? Many of them do not even want to play!

Let us be honest: are you sure that Anton Shinder came to fight for a place in the first eleven and not wait for monthly payments to his bank account? Don’t get me wrong, I do not judge the players: active

Artem Frankov: “Why does Shakhter need to lead an information war against Dinamo if those two are on different poles?!”

A few years was enough for Akhmetov to realize the advantages of employing a foreign coach. The management of the club eventually started attracting more and more highly professional foreign managers: Joseph Palmer (of Great Britain), for example,

players with serious names. For example, candidates for the Ukrainian national team, Butko and Ordets; Georgian national team players, Targmadze and Okriashvili; Ukrainian youth team players, and one member of the Russian U-21 team, Roman

football life lasts for about ten years, they need to be used to the fullest”.

Until there is a limit on foreign players in Ukraine, the opportunity to acquire almost any appealing Ukrainian for Shakhter is a big help.

www.thekievtimes.ua

THE YEAR OF VICTORY

11

RUSLAN MARMAZOV. IF YOU GO AGAINST THE GRAIN YOU ARE BOUND TO BE NOTICED

By Rostislav Bunyak

The head of the press service of Donetsk's Shakhter believes that the ideological global football war never ends.

D

o you agree that if one journalist interviews another one, his last name is a brand?

Not necessarily. It could be that there is not enough material to fill the newspaper columns and a journalist asks his colleague for help: say, help me out, let us fix an interview, you are an outstanding person after all! Considering the status of your work we brush aside this version and can only agree that yes, it is a brand. A specific one, though.

You created three teams at “Telenedelya”, “Komsomolskaya Pravda” and press service of FC “Shakhter”. What is the difference between social and football journalism?

The scope of activity of a press service is not fully journalism in a strict sense. Or else, only a very specific division of it is. In fact, it deals with editing of the huge amount of materials; we make a club magazine and prematch programs ourselves. This team also edits the biggest club website of the country. But, the press service has

internet editions have emerged, but they are experiencing “growthrelated diseases” ranging from illiteracy to permissiveness. In a nutshell, I hope that great times for Ukrainian sports journalism are still ahead, but please God let them come soon. I would like to bear witness to the luxuriant growth of the field. I put forward Romanian journalists as an example because their country is not that well-off. Many parts of Romania are still stuck in almost medieval times. Yet sports journalism is abundant and determined. The examples of England, or Spain are of no use to us. The difference between the levels of the economy and football popularity in general is too big between our countries.

For now we can compare ourselves with Romania in this aspect, or even Turkey, however, neither is beneficial for Ukraine.

Where are you most loved, and also, most hated?

I have not conducted a special investigation, of course. I am not really all that vain. I assume that

situational and short-lived. It is different every time: somewhere we take over, and somewhere we are taken over by our opponents.

However, I do not recollect any serious goofs lately. It used to be very difficult to fight against Dinamo’s ideological machine.

These are different times. The power and glowing of “Shakhter” empire lets us feel completely secure on any patch of the battlefront, especially when we talk about the ideological one.

Recently we have acquired forcible arguments like wins on the field and great play. The ideological war in football never ends. It will alter, transform, one rival will be replaced by another. The war will be going on with different degrees of intensity.

It was captain Titarenko, who led only the “old chaps” to fight and could ponder upon the way to write on the remaining Reichstag wall “satisfied with ruins of Reichstag” and then set off home to sprinkle his gardens. Where is my Reichstag?

There is none. It is a different war, an eternal crusade for me. Except, in this case I have no cross to carry

There are very few professional sports journals or shows.

It would not take much time to name creative and qualified journalists in this field to monitor the news, react to any worthy external materials and so on. I am not even going to go into a bunch of organizational moments, like accreditation of the press before matches, preparation of open practices and all kinds of different image events. None of the regular newspapers ever saw such kind of multi-functionality. In addition, I will stress it again that we have only one topic – FC Shakhter.

In your interviews you refer to Romanian sports journalism as an example for Ukraine. Which league are our national sports media stuck in?

Far from the Big Leagues, regrettably. There are very few professional sports journals or shows. It would not take much time to name creative and qualified journalists in this field. Some

there is more sympathy for me in Donetsk, and more antipathy for me in Kiev. A long time ago, when I was a practicing journalist, I was surprised to find out how popular I was in Transnistria. I did not expect that! It turned out that Football is sold there, and football supporters are familiar with and like my work.

Recently, in Germany, a football fan of “Shakhter” threw his arms around my neck shouting: “It is the first time I’ve seen Marmazov in person!” That was fun. In short, I love everyone who treats me nicely; I am their friend and even distant relative. The ones who think bad of me give me an enormous advantage – I never think about them.

Has there ever been an information war that you lost?

It is most likely that you imply local information conflicts,

for higher ideals of “Shakhter” or the two crossed hammers from our emblem. I love this symbol, it is powerful. Donetsk’s is more proper.

Have you ever thanked “Dinamo” for Kiev’s dragging your club into the information war and helping you score in it?

We rarely exchange nice words with Dinamo. Somehow it did not work out historically. One day I will probably be enlightened enough to bless our enemies for everything they have done to us.

In order to raise your ratings you need to win the war. If there is no enemy, it should be made up.

Are there any enemies left for Shakhter or do you really have to “create” them?

We raise our ratings by other wins. On the pitch, I mean. The

“It would not take much time to name creative and qualified journalists in this field”

rest is just additional equipment.

Earlier I spoke about how the information war is endless, so there are always enemies. I do not think that we will have to create them artificially to keep fit. Now we look peaceful and sometimes even lenient to our opponents, to some extent. We can afford that. One should not lie to himself and take confident calm for insecurity. In other words, do not anger us.

Don’t you think that the action movie in the media between Shakhter and Dinamo will turn into a melodrama with time, a kind of 156th episode where the plot has already been calculated by the viewer?

Basically, people love melodramas. Even if they know for sure what to expect from the next episode. The reason is that there are always noble heroes and grotesque villains, and the fever pitch of life.

It is hard to imagine that in England, football supporters and club management fighting for championship status were

close friends. As for example with Shakhter and Metallist.

Maybe another war would be more wholesome for Ukrainian football?

How do you know about close friendship? Or do you imply the absence of obvious struggle?

Thinking about the possibility of war with Metallist, I need to say that it is already in progress. It is a quiet and slow one. Right now it is more like a romantic courtship a-la Denis Davydov. When there is one prize and several runners-up, collision is inevitable. Real military actions will take place when Metallist confirms its ambitions with core football arguments – trophies. I mean plural – trophies, and not one or two successful matches. Then it will become an interesting and dangerous competitor.

What was more interesting for you: striving for the top or trying to hold on to that position?

I have been working for Shakhter for 9 years and there was not a second when I was bored. I was

losing my mind at my previous jobs: everything was set and routinely boring. Here every day is a new creative challenge. So it is equally interesting for me to both attack a position and hold it.

So many years in Shakhter. Let us assume that the team wins some Cup every year which is equivalent to their wins on the pitch. Have you already won your Champions’ League?

These were wonderful years full of victories. It is understood that my contribution to winning trophies is minimal, yet I relate to it. It is a great happiness. I will win the Champions’ League together with Shakhter. It will not be some kind of abstract thing like “for totality of merits” but a real “earned” League’s Cup. By the way, it was brought to Donetsk in the framework of some PR event. I was present at the ceremony, Mirca Lucesku also stopped by, along with some players… You know, we decided not to touch it, I mean the Cup, not to take photos with it. Why? It is not ours. As soon as we win it, we will “examine” all of it.

THE SUBJECTIVITY OF FOOTBALL JOURNALISM

By Ruslan Marmazov, Public Relations Director of FC Shakhter

Football journalism might seem like such an easy thing! You watch a game, figure out what happens to the extent that you can, paint the picture in vivid colors to the great joy of the readers. If you have done it somehow figuratively – even better! If you are able to add some exclusive material, or ad lib something smart, you are well on your way.

T

his is a highly idealistic view. There are plenty of different knots and splinters in our football journalism. I probably sound arrogant saying that it is quite difficult to find a professional who can write about a game where people kick a ball from Chop to Uspenka.

What do I mean when I say it is difficult? It is literally impossible!

Fortunately, journalists do not take any type of oath to uphold standards. Therefore, they stake out a claim for their point of view and interpretation, sometimes – fiction. That is one side of the issue. The other one is that for some reason the citizen with a pen gets high requirements. A poet is also much more than that. The same goes for a journalist. People expect universal wisdom and refined impartiality from a regular football portrayer of ordinary life.

In case an opinion of a journalist does not correspond to the reader’s – thumbs down! We can bravely label such author as a pen-pusher and hate him to no end. I am not sure whether the following statement will be a revelation for you, but football journalism cannot be totally objective. The subject of

data. You can argue with me, for we live in a free country. I would be more than happy to discuss it with you. But not just yet. This is my editorial, right? And I insist on everything I said. So, football journalism is subjective. We should not confuse it with lying and defamation; it is enough of

yes, than no. Another one: it is rather no, than yes. Enter extras!

The atmosphere gets charged, emotions intensify, it nearly comes down to a brawl. What is most important – no one can prove anything! Meanwhile the calories are burnt and a cloud of neurons are trashed. No cheating. Just a sole desire to seem objective. Yet football is not totally math, thank God. There is a lot of humanity in football; it is, strictly speaking, built upon mistakes. People will dedicate dissertations to that, you will see. Our task is more modest.

Let us assume that journalists are armed with their subjective view, a pinch of talent and access to the masses; do they manipulate social football opinion? Surely and with pleasure! Every day and every hour.

Sometimes they do not even pay

Football journalism cannot be totally objective description has a space invisible to subjective perception. You also need to consider that journalists writing about football are football fans. They can have a different education and beliefs but in their essence, first and foremost, they are football fans. This is the main source of affection coming from every note (or otherwise, total rejection) unless these are protocol

that too. These are the things of different levels, though. My thing is the following. If one attempts to imagine the axis of absolute truth while describing the events on the pitch, there is always a small clearance that allows drifting away from it a little. Not much and in a proper way. For example, a penalty is given at the judge’s discretion.

One journalist writes: it is rather

attention to it, being as involved in the process as they are. Whose interests do they follow? Most often it is done in the name of their own journalist-fan interests.

Extol the ones they adore, punk the ones they dislike. However, we understand that everything happens. Let us take clubs’ media.

It is somehow more difficult for them. Praising regularly the wins

of their team it is not hard to reach the level of agitprop. Sometimes it is even easier. One should not pretend to be the most neutral journalist in the world. I, let us say, always try to sign my name (as in this case) under the article with the mention of my position.

It is like lifting up a vizor to show your club face. I do this so that the reader understands what to expect from me. It is honest. I do not understand my colleagues from other clubs who hide behind the tag a “famous sports reviewer”. As if no one knows what his position on Dinamo is! It is funny, really!

External media is a whole other story. It would be best if their actions were regulated by the laws of the market. The product should be sold. Consequently, the articles should hit the reader with sappiness and pitch. It would not hurt to bring a conflict to the pages. Then you could expect good circulation. Abroad, there are editions with colossal rubrics dedicated to the main clubs of the country – three or four. The other ones get included into compilation threads for they are not important enough. The reader takes a newspaper, reads about his favorite ones, blows his nose on the enemies, for cheeky! We have only one special edition with internal conflict – Football magazine. The editorial board

there solidly lurches toward Dinamo. But! When I was writing for them, I could “Shakhter it up” as much as I wanted. An amazing example of a multiple-directional market approach. A nice exception in this vast country. I would like to tell you one more thing about how one-sided publications with low circulation and obvious external subsidies pretend to be objective; about the club that has the most stadiums, and how they got them; about how it is possible to simulate indignation/ approval of a progressive football community with the help of only three websites, …and many things like that. Yet I have noticed that I am running out of space here.

And for all I know these could be special cases. Today we are talking about conceptual things.

Therefore, I offer you a formula for success. There are subjective journalists who sympathize with a certain club. The president of this club sets high goals for his team and often reaches them. The fans like it, they respect the president, love their team. Journalists write subjectively about that. Who cares?

It is the one whose team is falling apart; the fans hate their president and treat their coach skeptically.

Meanwhile, journalists discuss objectively the right way chosen and upcoming achievements. This is sad.

13

TO HELL WITH YOU, 2013!

THE KIEV TIMES | DECEMBER 2013/JANUARY 2014

THE UKRAINIAN TOAST AS A NEW GEOPOLITICAL STRATEGY

By Dmitriy Vydrin, political scientist

I recently attended a round-table discussion led by a competent and witty American expert, James Jatras, who started the meeting with a hypothesis about the “components of President Yanukovych’s power”.

A

ccording to Mr Jatras, President Yanukovych has made two efficient and effective moves within the last two months.

The first one: he refused to play political chess with the Russian government for he obviously did not feel that it was the right time for such a complicated and multifaceted game. So instead, he sat down to play political poker with the “European losers” (as James put it), a situation which, by contrast, made President Yanukovych feel much stronger.

The concept is amusing and witty. However, I would like to add something to it; if we choose to apply the analogy with poker, I think that our President’s advantage is that he dared to play geopolitics with real cards

leagues – that those who reach the easiest and most bafflingly clear decisions win. Moments like these define who wins, and usually it is not the one who is inclined to the transcendental algebra of political analysis but he who knows the arithmetic of earthly and unsophisticated decisions.

I sometimes think that our world is just tired, ready to drop from the fatigue of the Machiavellian game of major league politicians.

It’s missing something simple and clear that can be experienced on the level of simple human feelings and analogies.

I remember how a few years ago an audience applauded newlyelected president Yanukovych when he suddenly mentioned how great it would be to recognize the

bring “spring to our kingdom”, he simply smiled. He knew well that both wintery chill and spring thaw come sooner or later regardless of man’s squabbles. There are natural laws for that; however, there are also always geopolitical laws.

For example, there is a law that any powerful geopolitical entity inevitably draws in the neighboring smaller ones. As long as Europe exists and emits its currency to the world, it cannot help but draw others in.

These are strong geopolitical cards – the knowledge that natural laws are manifested in politics in their own way. Still he has one more “card” to show.

At some point in his career, as I

between the two angles of the triangle able to consume the third one. Any Ukrainian toast will see this triangular power struggle “drunk away” for it always implies the wellbeing of all the sides.

In Russia, it is common to drink “to friends”. In Europe, at politically correct cocktail parties, they drink “to neighbors”. Only Ukrainian villages can boast of drinking “to everybody’s wellbeing”! Yanukovych’s effort to work with both Europe and Russia was probably naïve, but sincere, and thus a completely real attempt to combine the interests of all three parties.

I do not know yet if it will succeed, but personally I am

Yanukovych, according to my own personal view, relied not on the colossal experience and analysis of international political experts, but rather on his own unquestionable experience as a battle-hardened leader. Perhaps recalling a past life as a particularly astute taxi driver (think: The Transporter) he remembered the physical laws of speed: if one drives like an arrow from the bow, one’s braking distance is much longer.

With inertia to contend with, it is impossible to turn 90 degrees, let alone 180.

Thus, his real trump card during the game with his virtual European opponents was, in my opinion, the knowledge that this mysterious force of inertia exists, however strange it may seem, not

recognized republics of the postSoviet space. To acknowledge the difficulties people there encounter in their daily lives, as well as in the business world, due to a sort of statehood limbo.

This statement was meant to be a harmless gesture of goodwill, and not expressly calculated. It went against the excepted view of the world elite on this matter, yet it sounded utterly humane, innocent and kind. That was something that gained rounds of applause.

Within the last few months, in the course of a long-lasting intrigue with Ukraine getting closer to the EU, President

only on the autobahns but also on geopolitical highways. Since the country has been tailoring its laws to meet European standards - creating joint economic projects, being dragged into long-term relationships with European financial structures and so on – throwing on the emergency brake or going in reverse is now physically impossible.

Yet another ace up his sleeve was the knowledge of the laws of nature he studied while Governor of the industrial, and largely agricultural Donetsk region. Therefore, when Russian colleagues assured us that signing

Viktor Yanukovych has one more “trump card” up his sleeve

the agreement with Europe would “freeze us out”, he kept silent. When European colleagues claimed that not signing the agreement with them would never

TO HELL WITH YOU, 2013!

By Anatoliy Tolstoukhov, PhD in Philosophy

Sometimes I feel like saying “to hell with you” to the year 2013 because the number 13 always has to do with devils and demons. So, sending this year to hell would in a sense be like sending it back home.

W

e are tired of swearing and complaining. We would rather start a debacle or stir up the country. The pseudo-revolutionary echo of the beginning of the last century has come down to us. We are still captives of the past century; however, we think we are free.

I love football. Many examples in everyday life can be understood through parallels to a variety of other fields of human existence.

A football game can explain much about local life and politics, and vice versa.

Eleven of the best players came to the match at Olimpiyskiy stadium and gave millions of fans a sense of unity and victory. Three days later we lost to the national team of France without scoring a point, and without a chance to experience real joy. Europe stopped us from going further by resorting to selective refereeing.

The Ukrainian national team showed that it is psychologically not ready to play “cutthroat matches”. The French national team demonstrated the way Europe puts others into a Procrustean bed of its interests. The score was fair but the rules of that match seemed to be “very particular” when it came to the enforcement of being offsides.

The notion of “offsides” is significant not only in football. In the political arena, there is also a blatant disregard for the rules of the game. However, it happens not only on one field, it happens everywhere.

Politics today, unlike football, is played on the fields between Ukraine and Europe, and Ukraine and Russia. Yet, for the tournament to be complete one game is missing, namely Europe vs. Russia. It is best to have it on the neutral Ukrainian

later accusations of E. Kushnarev and V. Tikhonov in separatism?

In 2013, Rava-Russkaya (a town in the Lviv Oblast) voted to “join” Europe. The town is something like a western version of eastern Severodentsk. So, Lviv does not recognize the central government; however, all separatism fighters are keeping silent. Guardians of the law are quiet as well. If people in the eastern part wanted to do the same, they would be immediately labeled and accused of wrongdoings.

“One-sided” democracy gives birth to “flawed patriotism”.

“Patriots” are the ones who fight for

see it, he realized that a Ukrainian toast is much stronger than any geopolitical paradigm. The thing is that all current geopolitical paradigms are based upon a deal

more comfortable at warm, cozy and provincial Ukrainian feasts than in the world’s piercing, cold, geopolitical winds, storms and hurricanes.

disgust for the politicians and “field commanders” and at the same time rewrote all the education programs.

Now, their main class is in “maidan democracy”. The students of KyivMohyla Academy were basically led by their Chancellor to do some maidan field work. The right-wing Svoboda party was also teaching political culture on their way to storm the Cabinet Council and President’s Residence. Force your way through, suffocate with tear gas, break into a random car on the roadside – these are the basics of political culture offered by Svoboda. Svoboda’s Joan of Arc, Mrs. Farion, concealed her communist past. When it all became public, the deputy called herself an eagle tortured by hyenas/journalists. This became a textbook case illustrating the attitude of Svoboda to freedom of speech – at the least, and to journalists – at the most. It will take a while to record and to understand the chronology of these days. We have not yet mentioned Vradievka where police “monsters” raped a woman on behalf and in the name of law. We have not continued with the colony named after Yulia Timoshenko, in which the rights of prisoners are elevated to the

“Belovezhskiy Union”. Today, timetested national sovereignties are being tested by time, and Ukrainian sovereignty turned out to be the most wanted, promising and capricious one. It is being split both from the inside and the outside.

When looking into the past, we choose to see history differently. A glance into the future dissolves the present, which becomes the past.

Someone is always guilty; however, no one takes responsibility. If someone still does, they are never accountable for “politics” but for a crime. Nevertheless, on the other hand, two Prime Ministers were sentenced: one in the USA and another one in Ukraine. This is politics. Small Latvia has a different approach. After the collapse of a shopping mall no one has been sentenced yet, nothing happened to the Mayor, but the government was dismissed. There were no protests; there was a meeting with the President.

Today, Ukrainians demand the resignation of the government, which saved us from economic collapse and pressed a “pause” button, instead.

That was 2013 for Ukraine – the 80th anniversary of Golodomor and

The notion of “offsides” is significant not only in football.

In the political arena, there is also a blatant disregard for the rules of the game

All those against separatism grew silent when Rava-Russkaya voted to “join” Europe

field. However, somehow it does not work.

“Democratic” Europe refuses to play with “authoritarian” Russia, and this is what Ukraine does not really get. Everyone wants to see the latter as strong, stable and growing.

However, with no commitments on

the part of other countries, we are facing “one-sided democracy” and if the international community, lecturing us on democratic values, is infected with it, Ukrainians must have caught it, too.

Do you remember the 2004 convention in Severodonetsk and

Western values for all of Ukraine.

If this phenomenon is articulated in their native language, Ukrainian, it becomes “superpatriotism”.

The question of how to deal with common human values, the way they are understood by others, remains unanswered.

This year a new kind of “eurointegration” production – maidans – has been exported to the West.

Everyone is discussing Ukraine these days. Everything would be great, but there is one small flaw.

Language cannot change anything or enact a material change.

Nonetheless, thanks to TV, the world has witnessed “short-lived maidans”. Television seems to have become a great support to the Ukrainian European maidan! All of a sudden something strange started to happen to it. Students pushed “veterans” aside, expressed their

level of international relations.

We have not talked about armored machinery resting under open sky right by Kiev and so on. Ukraine is a wonderland of miracles that sock and don’t surprise anymore. Indeed, the devilry lies in viewing these events against the background of historical dates in 2013: 1025 years since Kievan Rus was baptized, 70 years since the date of liberation of Kiev and other regions, 80 years since Golodomor… Everything tells us that we need to remember.

First of all, we need to remember those millions who gave their lives for the politics of power and those millions who gave their lives away to save the world from this civilizational genocide. Historians of the Soviet government attributed all achievements of socialism to the year 1913. However, they later failed and in 1991 ended up with

a record-breaking high harvest; the 70th anniversary of the liberation of Kiev from fascist invaders and the attempt to occupy the capital by the supporters of unquestionable European integration. It was the year when the rights of one prisoner became more important than the rights of millions.

We walked from 1913 into 2013 with lots of bloodshed on the way.

It would explode one’s heart to go back from 2013 to the past.

Therefore, these periods have a lot in common; they talk to one another and to us. Let us say “to hell with you!” and “Godspeed” for the best and let the most valuable stay with the people. And may we not forget that after 1913 there was a no less difficult year ahead…1914, when a series of even more harrowing events began to unfold.

Photo UNIAN

in his hands while his European partners held “air” in theirs. These things are probably beautiful, undoubtedly important, but at the same time very-very virtual.

As we translate it all into a language of philosophical generalizations, I would say that Yanukovych turned out to be a Grand Master of simple matters and evident truths.

Politics is often perceived as a sphere of subtle moves, sophistry and floral rhetoric. It happens.

Rarely. More often it happens, according to my observations, in politics, and moreover, in geopolitics – meaning in the major

Photo UNIAN

Yanukovych turned out to be a Grand Master of simple matters and evident truths

www.thekievtimes.ua

TO HELL WITH YOU, 2013!

13

THE BANKS ARE KILLING UKRAINIAN RETAILERS

By Mariana Pryven

Ukrainian business consists of import and export. I will be talking about import because that is what I know best, and this is what defines the level of economic prosperity of the country by creating its gross domestic product (GDP).

“I

would like to talk about current tax policies and explain why GDP of Ukraine is not growing today” – Igor Balenko started our conversation. Mr Balenko is the President of the Ukrainian Trade Association, Head of the Board of Directors of the supermarket chain, ZAO Furshet.

Let’s define terms and criteria.

One of the indicators of halted GDP growth is the decrease of the average purchase size in the retail business, the field I work in. What does it mean? We calculate how much money a person spends on food or in a restaurant on average per year, considering the size of the city and the living standards of the neighborhood. It is obvious that the average purchase size in the Kiev residential area, Troyeshina, is twice as small as that in the central Pechersk neighborhood.

Retail business is most sensitive to the changes in buying capacity of the population, and that is why the decrease became apparent immediately.

receive a bigger sum of money. In the end, our banks make money on these loans and again give it to consumers at interest. What they do is develop a consumers’ network, instead of investing into national businesses. This is pure speculation, which kills business and pushes the population into debt. Our lawmakers have not created any mechanisms that would regulate banks. Only when our banks begin giving credits to enterprises at 12% interest will a business be able to pay off these loans.

Both in Pechersk and Troyeshina?

Everywhere. The average bill has diminished by 10% in retail network stores. At first glance, it doesn’t seem like a lot. However, if you consider that masses of people spend big amounts of money every

How do businesses survive in this tough environment?

Businesses try to use their own resources. They try not to take bank loans, which also means that they don’t develop. If you talk to producers – the next link in the market chain – they will tell

Does it mean that businesses, instead of freely managing the money, let the banks earn money at their expense?

More than that, the most profitable business today is conducted by debt collection agencies which wheedle the debts out of the people, using a legal framework. Earlier, this sort of activity didn’t even exist, but there was no such chaos in consumer loans either.

receive more revenue. One way to change the situation I have just described would be to stop banks from speculations and restrict their unlimited possibilities, when it comes to business loans and consumer credits.

Apart from reforming the bank system, how else would you change the existing market?

I would develop the retail business where every item goes through a counter. I would recommend the government to invest the collected taxes in the form of subsidies into the producers of socially significant products in order to control the price on the level of farmers. This is what all the developed countries do.

Why is milk in Germany cheaper than in Poland or Ukraine? The German government simply subsidizes farmers, which means that they will sell milk to you, figuratively speaking, twice as cheap, considering the subsidy.

What can be done about the “black market” sales?

If one day the government increased and enforced taxes for private businessmen it would become unprofitable for them to continue working. Here, I mean not private businessmen who create an enterprise, work for it and develop

The biggest problem is the bank. In Ukraine, banks issue loans for businesses at the interest rate of 25% annually.

Is this fair? day on food, 10% will become a very high number. Daily, the rate of return on investments in retail trade is decreasing because people do not spend money; they simply do not have it. It means they have not received it in their business or salaries.

The situation in the restaurant business is even more desperate – it is on the verge of failure in Ukraine, and its trade has decreased by 40%.

As for the construction industry, due to the Cyprus crisis and its consequences for the European banks, the dynamics of this market in Ukraine have changed for the better. People began investing money into property, instead of hiding their savings in the Western banks in fear of losing it one day.

No doubt, the construction industry only benefited from this. However, this development is observed only in Kiev, while in other cities of Ukraine, paradoxically, the industry is in a stage of stagnation.

How would you describe the structure of the present-day Ukrainian market?

Let’s look at the entire market chain – from the moment when a business receives a bank loan, to the minute a good is purchased.

The first link of this chain and the biggest problem is the bank.

In Ukraine, banks issue loans for businesses at the interest rate of 25% annually. Is this fair, considering that a businessman makes 20% out of the enterprise, in which they decided to invest the loan? Now, a loan as a form of support for business development does not function in Ukraine.

Banks in our country have the full freedom to give out a loan at any interest. As you know, they issue consumer loans at incredibly high interest rates of 50% annually and even 1-2% per day. Foreign banks are forbidden to be engaged in such wildcat activities by the laws of their countries. This is the reason foreign banks are leaving or have already left the Ukrainian market.

Banks should be service providers for business. Now, let’s look at any Ukrainian bank. A founding shareholder gives a certain amount of money to start a bank but it is not enough because banks run not only on fixed assets. They also need to solicit money. How do Ukrainian banks tackle this? They issue credits at extremely high interest rates of 18-21% annually – and people go there because they are not required to prove their employment to

you that their situation is dire as well. Only a few develop because they use high-tech means of production, while those who work in the agricultural sector, and are oriented towards export, (which doesn’t contribute to the GDP) are undergoing difficulties. As a result, there is a struggle between producers and retailers, meaning stores, markets, supermarkets, restaurants, etc. Producers and retailers cannot afford to take bank loans at such high interest rates and, thus, they begin fighting for money – who will pay to whom first or grant a deferment of payment.

Retailers create long-term contracts to pay for the received products and, as a result, producers don’t get their money on time. In these circumstances, producers start working with markets because there are no taxes, and the trade happens faster, with cash. It is obvious that businessmen do not sell products at markets, but they hire people in the same way retail stores do, with the only difference that these people receive salaries under the table.

Are Ukrainian markets illegal?

Approximately 50% of trade occurs through retail chains that work “with receipts” and thus whose revenue is taxed. The other 50% of retail is done via markets, bazaars, small stores, kiosks, and street stalls. According to the data of the Ministry of Economics, in the last 8 months of 2013, retail businesses have paid UAH 26.2 billion in taxes on trade totaling UAH 276 billion, while private businessmen have paid UAH 2.8 billion on UAH 283.5 billion worth of trade. It turns out that the national budget deficit equals approximately UAH 24 billion annually. Today, there is an opinion that legal retail business is a monster which creates unequal conditions for the market and producers. Yes, non-competitive conditions do exist. However, the reason for that is not that retail chains monopolized the market but because there is a lack of retail space and the existence of “black markets” which neither pay due taxes to the government, nor give social guarantees to the hired people. In fact, retail, which is represented by legal retail chains, is only 18% of the entire national trade. Actually, it is the monopolistic producers who want legal retail business not to develop because they prefer to go around taxes and in this way to

it. I mean the ones who are hired simply as labor power – without any social guarantees and tax commitments. One has to increase taxes for them slowly, by monthly raises. Gradually, only those will remain in retail who can work by themselves.

It is extremely important not to allow for monopolies neither in retail, not in production.

Today, there is a high

“Actually, it is the monopolistic producers who want legal retail business not to develop because cash registers mean taxes”

correspond to the actual situation.

On the other hand, it is right that a person who defines the laws knows about business not from hearsay.

Here, one needs a balance which is achieved by other tools. The Cabinet of Ministers should have experts who could see any attempt at lobbyism of any industry, while creating a bill of law, and correct it.

For example, in a process of passing laws in the retail sphere there are many participants, including producers. However, regarding agricultural laws or producers’ laws, we – retail outlets – are excluded from having a voice in legislation. Although, we are the key players on the market! First and foremost, it is us who know and communicate with the consumers and thus can recommend producers and lawmakers to introduce certain norms which will not harm consumers in any way. Again, when we receive low-quality products from a lobbied producer, we are

develop such advanced production means. However, it doesn’t mean that for this one has to join an American, European, Russian, or any other union.

Could the big business owners influence the national legislation?

They can but all of them pursue their own business interests.

In my opinion, there should be external regulation measures.

Regarding wage tax, there is a certain psychological limit and if it is crossed a person will stop paying taxes. It is pretty simple – if it is 20-30% everybody will pay because they wouldn’t want to risk their hard-earned money and if it is 60% it is not hard to see what is happening. And it is not because don’t want to pay but because their labor would become unprofitable.

Let’s again look at Georgia, where tax charges become fair and I am emphasizing here – not profitable

We say that a person who is in business should not be a politician but we know that this is not realistic and doesn’t correspond to the actual situation concentration of certain products in the Ukrainian market: chicken and eggs, and then also big foreign companies’ (for example, Procter & Gamble) production. As a result, a large part of goods are more expensive in Ukraine than in Europe.

Should Ukraine aspire to the Western business model in order to balance its economics?

I would not call it either the European, or the Western model.

It is rather a certain business model that allowed many countries who applied it to advance. One has to also understand that it is impossible to subsidize anything if there is no money in the budget.

One has to earn money first. Look at Georgia that was able to reform its tax system which gave a way to a balanced economy. Certainly, Georgia is a small country, where new rules are enacted much faster than, let’s say, in huge Russia. Nevertheless, economic development greatly depends on the processes within a country.

Is corruption a chief factor of a halt in the development of the Ukrainian economics?

It is rather related with lobbyism of certain interests. Ministers and deputies, who come to the Parliament in groups and promote their own business interests, receive surplus profits in a short period of time. Anything else is of no interest to them.

The promotion of one’s own interests due to their official government position is corruption, isn’t it?

Well, yes. However, we say that a person who is in business should not be a politician but we know that this is not realistic and doesn’t

the ones who are guilty in the end!

We cannot unpack a product in order to check its quality and when its quality is poor we should deal with the discontent consumers. A food store doesn’t have a lab which would check an incoming item, so later it turns out that somebody got poisoned by a melon which had an unacceptable amount of pesticides.

When a producer increases the prices, consumers blame it on retail stores because they don’t analyze why there can be a price increase when they come to shop.

Have you ever tried to reject a low-quality supply?

To continue with the melons’ example, it is not producers themselves who deliver them to us but some third parties. You can reject one intermediary but, considering that those melons were grown on one and the same field, the second intermediary will sell you the same product. Since a small farm cannot do both grow and sell, the existence of third parties is entirely justified but only if they are subjects to tax. Under the previous government there was a slogan “From Fields to Markets”, which would be completely impossible. A farmer would have to hire a seller and then a controller, who would observe a seller and see that they don’t steal anything. And again, we are back to the same problem of the “black market”. Back to that slogan, which became a law bill, it said “10% from a producer to a consumer”. How is this possible, when there is more than 10% of production waste? Here is another example of lobbyism which was aimed at other monopolists, this time on supply arena.

Technologies in the USA and Europe are more efficient and up-to-date. We should aspire to

but fair. One of the ways to solve the problem of lobbyism there was to engage foreign professionals and experts, with no ties to any Georgian business.

In which correlation are foreign and Ukrainian products represented in Furshet food store chain?

85% of food supplies on the Ukrainian market are produced in Ukraine. When it is claimed that the Ukrainian market is overwhelmed by the goods of the foreign producers it holds true for commodity goods and hardware.

The agricultural sector enjoys the assuring dominance of the Ukrainian producers. We welcome local producers and put their products on the store shelves if they are competitive.

There is another problem that needs to be mentioned. It is a deficit of the retail space, or shelves. If there is one shelf that can contain two bags with milk of one kind and there are 10 milk producers that want to work with us we have to reject some of them because there is simply no space for everybody. It is necessary to increase the number of shelves, stores, chains in order to avoid monopolization. In this case, every producer will be able to find its own niche.

What do you think are the reasons for the poor customer service in Ukraine?

I can make some conclusions based on my professional experience. Our stores have special schools that train cashiers and other staff members. However, it is impossible to change a person who grew up in difficult conditions and wasn’t brought up in a decent way.

In order to enact real change there should be time and awareness. It is true for every sphere of human activity.

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THE YEAR OF TV

THE KIEV TIMES | DECEMBER 2013/JANUARY 2014

MIKHAIL KOMAROVSKIY: ON THE SAD STATE OF TV

By Rostislav Bunyak

Production manager of “Kvartal 95” studio, the talk show “My Kid Can”, “The Voice: Reboot”, and executive producer of the show “Like Two Peas” on the “Ukraina” channel, Mikhail Komarovskiy seems to believe that no one needs anything these days.

T

hree statements that characterize Ukrainian television.

After 21 years working in television, let me state the following: in fact, there is no real contemporary television in Ukraine yet.

But are there any companies trying to produce it?

First of all, “Kvartal 95” which taught itself television production within a short period of time, produced several successful movies and came into its own through television. Some production companies that work together with “1+1”. Definitely STB. “Ukraina” channel with its older audience.

Like?

“Who’s Worth More?” Andrey Dzhedzhula is an experienced host who leads an intellectual show with interesting drama. It is a show for people who wish to guess the answers along with the participants.

“Who Wants to Become a Millionaire?” is more than 10 years old, yet it did not succeed in Ukraine. Intellectual casino “What?

Where? When?” In Russia stars do not participate in it but they raised the stars of this specific show there. Moreover, for this game to be popular in our country we need to invite music stars.

Why are there so many niche channels in Russia and hardly any in Ukraine?

The advertising market is considerably smaller in Ukraine.

For instance, there is TET which conquered the youth audience, targeted by the Novyy channel. Novyy is experiencing a transitional period now, they have a new management team. That is not to say that the previous team drew an audience and the current one ruined everything. It is much more complicated than that.

There was a change in air times and content, and different people are watching, different minds are thinking.

Why does Ukrainian television purchase foreign television formats so often?

Why do we not produce our own tractors and lawn mowers? Why do we buy Hyundai trains and travel in foreign cars? We do not have production of our own.

In order to create a product, other than something basic, we also need frames and design engineering departments.

Reorganization?

Not really. Moses led the Jews through the desert for 40 years until the last witness of the old lifestyle pattern passed. The managers at Novyy are welleducated people. Television is math. And they can do math.

Why – “lately”?

Is the market flooded?

There is no market in Ukraine.

Instead there are 10 vagrant surnames. I faced this problem back in the 90s working on “SV show”.

Mykola Veresen, as my guest, entered the production room and asked: “How was it?” Cool, funny and beautiful. “Okay, that’s me, 10 other hosts, and what’s next?” I didn’t understand his concern right away. Only when all of the stars on channel 20 had vanished, including various musicians and crazy freaks, did I understand. Our management found a way out then and the project was enhanced with the help of actors and musicians from Russia and the former USSR. Ukrainian television counts on housewives and primitive viewers. Is this a stereotype?

Not at all. There are products for various audiences on our television.

What about state television?

Everyone knows what a National channel is. Unfortunately, it is not a channel our nation can look up to, as it is, for example, in Russia.

“Ever since Ukrainian television stopped splitting cash, the honorariums I am offered now are, say the least, disappointing…” (Dmitriy Nagiev) I am not going into finance. In order to make a good project we need experienced, e-du-ca-ted people. There have been so few lately!

After “Star Fabric-3” a number of stars were born but they did not receive the right promotion.

Matias, Shurins, Bushmina, Borisenko Brothers… Stas won.

Where is he? Right, he is a host on M1 channel – stunning! He supports financially his solo concerts. Maybe not everybody likes Shurins but the fact that he won the “Fabric” means that he has talent.

“The Voice” – three seasons, one of them was for children. Where are the winners?

“Wholesome and positive television is not in demand in Ukraine right now, as we can infer”

After the collapse of the USSR, professional institutes remained where traditions were kept; great masters who made the best movies in the world, at that time, worked there. The school went strong till the end of 90s. Masters kept

leaving and the ones they imparted their knowledge to didn’t always use it and could not keep up with the progress of the times. Despite receiving knowledge, they stopped.

Is it true that Russian television is way ahead of Ukrainian television?

They try to keep knowledge in Russia. Even though Russians do not like to look westwards, they keep peeping. They do not invite specialists but “go to Hollywood” with pleasure in order to witness everything.

Don’t our people go there too?

They do, but they cannot apply this knowledge. Somehow many Ukrainians coolly believe that everything made in the West is not fully right.

Adaptation is vital.

Our specialists need linguistic and mental adaptation both in the West and in Russia. Our viewers are softer, they like tender, touching stories. There should be no harshness, fights or blood between the characters. Let us leave it to the Russians, for example; they have a different mentality. Russians are much more aggressive.

quality than theirs.

I want to remind you that television is, first of all, about technologies. Creating television formats in the West is a job of renowned organizations.

“Freemantle”, “Endemol”, “Zodiac” and so on are companies that have produced a number of successful formats, applied in dozens of countries.

Which formats do you have in mind?

“Star Factory-3”, “Factory Super finals”, “Beat the Blondes”, “Intuition”, “X-factor”, “Ukraine’s Got Talent”… It is unreasonable that “Who Wants to Become a Millionaire?” did not succeed.

Chances are that our people think rather about how to make money than intellectual matters.

Yet our television is dominated by a flawed tradition of canceling the project if it doesn’t take off from the very first moment. There

How much time does it take to implement a project?

I do not even know about Ukraine. In the West – at least one year. “Kvartal 95” became popular because of “Evening Kvartal”.

The guys made money and took some time off in order to develop other shows. How much time passed between the first concert of “Evening Kvartal” to the launch of “Make the Comic Laugh” and “Evening Kiev”? Almost 8-9 years.

What is a format?

A format is a television program.

There are some formats that need to be stuck to, but there are still others that require national adaptation.

change period in the country. We will see no fresh faces until the current generation changes.

Does the West experience a generation change?

Western television personalities are celebrities cultivated by the system. People write and talk about them, and most importantly, adore them. What do we have? You open Mediananny and what do you see – harsh gossip, constant filth. The more bitterness, the better. I have a feeling that Mediananny is run by sadists.

Are these programs a consequence of competition in the media?

Black PR is effective PR. It is too black here!

Can Ukrainian television improve its quality?

I am not ready to answer this question. The amount of mistrust and doubt holds me back.

I cannot say that everything on the TV is exceptionally grey. There are some positive tendencies, yet they are so damn few.

There are some production companies and separate topmanagers who work. However, at some stage they all lack strength, money, professionalism; they are eaten by the human factor, envy…

What do broadcasters expect, money aside, from launching a new TV show?

Financial motivation is always present, but it is not the main goal. First of all, top-managers, producers of programs, projects and channels want to attract the highest number of viewers and become a top-rated channel.

How can TV compete with the Internet?

It is an inevitable process, yet a distant one. Internet-television is not accessible for everybody. Not long ago, people thought that vinyl would be completely replaced by CDs. Even small-time singers and groups still make vinyl.

The Internet is a huge dumpster where you can find absolutely everything you need. TV has another purpose. It has to give the viewer a product of high television quality at the right time.

It is quite the opposite here…

Ukrainian viewers watch television nightmares and think: “Thank God it did not happen to me”. In the USA everyone is happy the Sun rises and thanks God for this miracle. People are tuned into positive thinking. When will it happen in Ukraine?

Can this approach be changed in Ukraine?

Wholesome and positive television is not in demand in Ukraine right now, as we can infer.

Do you believe in manipulations?

I choose to refrain from answering that question.

Soap operas about police, medics, the army…are these propaganda?

Of course. I watched the first version of “Cops” with pleasure.

Originally, it was a 100% match.

After that it was just about making money.

Why does the sports news keep disappearing? Isn’t it a format?

Probably there are not many people who like sports. Our country is not a very sporty one. We proudly take 14th place at the Olympics…

Sports news is a cultivation of victories and results and as for us – alas we only have…

What will change in a year?

Nothing. We will be getting ready for the presidential elections.

Sex and violence and gossip?

“Lie detector” is a kind of gossip.

“X-factor” and “Ukraine’s Got Talent” are watched to track the success of the unknown person.

What will happen to Pervyy national?

Have you ever been to their office? Have you seen the equipment these people work with? They work with stuff that couldn’t be couldn’t be found outside a museum. A long time

Has the content of the talent show format been worn to thin?

Regional channels…? …are a complete disaster.

Do they have any chance?

Nope.

There is no market in Ukraine. Instead there are 10 vagrant surnames. I faced this problem back in the 90s working on “SV show”

They go and watch… …and say: it is done quite nicely there, but we can do it better in Ukraine.

is no such thing in Russia. They analyze it and then launch a second season which turns out to be much better. Only if the third season still shows no results, is the show is cancelled.

And do it worse?

Technologies and instruments used in the West, and Russia also, are frequently absent here. Guided by personal ambitions, only some of my colleagues think that they can make a product of higher

It seem that the popularity of musical shows is falling? Or is it a misconception?

It is only true in our country.

The reason? The winners of the TV shows have little chance to make a successful career.

If there are 45 million people living in one country, a tenth of which can participate in similar shows, this can only be a 3-4 season project.

We see the same people on different shows…

We pay too much attention to the stage when the idea is born, and the production stage. As a rule, there is no money for the preparation stage.

The same thing is true for music shows. There is a generation

ago when I was working on NTKU I received the newest, for that time, equipment for video editing.

Control panel 500! The same year, President Kuchma went to Japan and he was invited to a museum displaying various Sony products, and there was this panel we adored in Ukraine – on display under a glass cover.

Who needs the influential Pervyy national?

They know who they are!

www.thekievtimes.ua

THE YEAR OF TV

GRIGORIY KROPIVSKIY: ON THE SALO, POTATOES, AND ONIONS OF THE UKRAINIAN TV DIET

By Rostislav Bunyak

The Russian broadcaster believes that the quality of television is defined by the economy, and that western TV-formats have led to the destruction of national flavor on TV.

North Korea, educating society is impossible. Putin does not impose himself directly in this regard.

What about the trend “Russia is an empire, older nanny”?

You can of course live on salo, potatoes, and onions. They will get you by. However, you can also try artichokes, kiwis, and prawns. The same is true with television. Some viewers are quite satisfied with just the First channel; other viewers want a serving of “Culture”.

Today’s television has lots of information. It is impossible to say whether it is good or bad – it is a palette with a multitude of colors.

Do you believe in the theory of global directing?

I don’t fully believe in it.

Certainly, there is a definite ideological machine that calculates the situation and steers the information in the right direction.

Maybe that is the main purpose of TV? When the economy is bad – blame the gays. That is not a problem of television, but social ideology. Should anything go bad, someone needs to be blamed. Ukraine? No, it is no enemy for Russia.

Is Russian TV ready for live executions?

Generally speaking, it happens everywhere; if not on air, then in the movies. There were no murders in the 70s movie series ZnaToKi (Investigate the Case). Can you imagine a police drama where no one dies?

Does this mean that emotions have supplanted reason?

The viewer gets bored if no one dies. Imagination used to be inside a person, now this person does not need to conjure the image. The action guidelines are on the screen.

There is a good example taken from Dostoevsky. When Raskolnikov set off to murder the old lady, his heart was plagued with doubts, it was a psychological withdrawal. Today it is easy: the character comes and kills his victim.

Because of the remote?

The pace of most programs is quick. The remote controls television. A person can switch channels on and on until something catches his attention.

“Imagination used to be inside a person, now this person does not need to conjure the image. The action guidelines are on the screen”

“Is it possible to create public television?”

Russian mass communications expert, Andrew Miroshnichenko, is sure that media outlets cannot be completely objective and independent. Do you agree?

Theoretically, they can be independent… However, in practice they almost don’t exist anywhere in the world. The media reflects the level of capitalization of a society, or a single person who owns them, such as Donald Trump. The biggest billionaire in the world is the owner of MSM. Are there any journalists, editors, or producers in Russia who freely express their point of view?

Certainly, but to what degree?

The editor-in-chief, owner, and, figuratively speaking, the president of the country all have different degrees of independence. I know reporters who work for different publications and are absolutely independent. However, their independence can swayed when a good offer comes their way.

Lobkov, Pozner, Parfenov – has their independence been compromised?

They all have good, solid positions. If their inner expression is not restricted, they impose no self-limitations. In general, a good journalist is one who has his own

presented by television or radio is important to grannies. For a young person, however, the official point of view is not important at all, what really matters is the opinions of their peers.

What is the role of television in Vladimir Putin’s administrative system?

For Putin in 2000, in my opinion, television was extremely influential. I thought there was great potential in him, and his policies for Russia. Everything was done professionally and intelligently back then. Whatever we have now is a topic for another interview.

Can we assume that Putin has returned the status of “superpower” to Russia?

Probably not in a complete sense, as the West sees it. Obviously that is his intention though.

Journalism is called the fourth estate. Should responsibility for current events be divided between the government and the media?

There is no one to share power with, the government has it all.

Do they speak openly about censorship in Moscow?

Everything is spoken about openly in Moscow. President Putin is asked tough questions at press conferences. However, Vladimir

“Western formats are a nightmare on Russian TV” Are format and money closely related notions?

No. Format reflects the media choices people make.

People love trashy content. Do you agree?

This a framework upon which the media ideology rests. The rest is just a social mandate.

In past years, the viewer was hooked by intellectual game shows like,“Who Wants to Be a Millionaire”, “The Smartest”, “What? When? Where?” Now we are in the midst of an era of sick jokes and humiliation. How would you characterize a country whose favorite characters are those of Svetlakov, Galustyan and the brutal Pavel Volya?

Every 3-4 years there is a new social and cultural atmosphere, and consequently new programs rise to the top. Music programs aren’t popular at the moment. Society is tired of artificially constructed celebrities. Today it is time for nationwide creativity in TV shows.

In the Western TV format?

Yes, sure. But, Russian TV is just as creative. From an economic point of view, it is more profitable to buy a tested format which will start working immediately.

It is not a problem for society; it

The remote controls television. A person can switch channels on and on until something catches their attention opinion. As soon as the latter is lost, the meaning of the profession fades away.

Evgeniy Kiselev has stated several times that his Moscow colleagues can hardly imagine a country like Ukraine where political talk shows air live, and journalism is “characterized by uncritical adherence to the opposition”. How influential is television in forming public opinion?

Right! The official opinion

Vladimirovich has one particularly sharp response usually articulated with a cool smile: “As soon as I need your opinion you’ll be given one”.

What is public television, in your opinion?

YouTube. No matter how you put it, all the rest is either controlled by the government or big bucks.

How can public television exist in the professional world? It would be another attempt to disguise a personal opinion as a mass one.

is a problem for television. When the national flavor is lost, the trouble starts.

Has Russia lost it?

Everyone has.

So, the trouble starts tomorrow?

Not exactly. The society will experience in a generation, but broadcasters are facing it already.

Creative talent is rarely in demand.

One might think that Russia is all about the Russian view of

a TV show format and Ukraine is all about the European one.

In Russia, production quality is quite high, and in Ukraine – there is more quality in the content of the show. What is more important: format or content?

The way the viewer perceives it is most important.

Do viewers call the shots then?

A professional makes television for himself and for other professionals. Only a professional can be objective. The viewer does not care about the way television is made. How the program looks, and the quality of the participants are more important for the viewer.

A very diplomatic answer. Really though, who defines television: the viewer or the sponsor?

The broadcaster is led by his masters. The viewer cannot define television, he is a consumer. About 15 years ago I discovered the law of new television. Why did it become completely different so suddenly?

The remote came into the picture.

You have 100 channels, and as soon as you do not like something, you change the channel.

Television exists only to set a background. Right?

Music is dominated by rhythm and backing acoustics. The melody is not most important. The motif, metaphrase, and brand phrases put everything in its right place.

The same is true for television. It used to be melodic, nowadays it is rhythmic. Nowadays, viewers absorb the quantity of events, it used to be quality that they absorbed.

Where will this trend lead?

Ultimately – to internet television. Master mind gave us an opportunity to get familiar with global possession and exchange of information.

Today we drive an automobile that was invented in the 19th century. The basics of the motor have remained the same. Mass communication and information technologies have advanced much

15

further. Why? Because these types of technologies are harmless.

If all people were familiar with the secrets of thermonuclear fusion, they would probably destroy the planet.

Many would argue that information technologies are harmless.

I mean physically, in this case.

The energy of the information field is not destructive, even though it has consequences. The rise of the technology gave humanity a choice: you can look up the ideas of great thinkers, or you can upload directions to create explosives.

We are still stuck, at the basic technological level, in the 19th century. In the realm of information technology, we are firmly in the 21st century. As a person who graduated from the Moscow Institute of Electronic Technology, I understand that the skinny iPad bears knowledge that human beings were never intended to receive. We are having this conversation right now, and millions of information fields pass through us not even coming into contact with each other. How does it work? No physicist could ever answer that question.

What do you think about the clichés: “television is partisan”; “television is made for idiots”?

There are enough good channels.

In other words, 90% of the population eat salo, potatoes, and onions, choosing consumer channels.

You come home, kick back on the couch, turn on the TV and see pop stars, news, shows – the basics: salo, potatoes, and onions…

Kropivskiy on Kropivskiy My career began with occasional appearances on the A program of Sergey Antipov and Marta Mogilevskaya. In 1989, I created Slukhi, which aired on the First channel as a part of the 120 Minutes program. Our team was composed of Tatiana Vedeneeva, Alexander Panov, Elena Starostina and me. At the same time, I worked as a chief director at the Moscow Palace of Youth. It was the most advanced concert hall of the time.

We even managed to crack the average monthly event record of the concert hall Rossia, 29 to their 23. In the times of Gorbachev I was friends with Alla Pugacheva.

In 1990 “The Song of the Year” ceased to exist and we needed to come up with something new. Alla Borisovna received a call from the chief music editor of First channel, Leonid Sandler, and recommended me to him. We started off with the hit-parade “Ostankino” which replaced “The Song of the Year”.

Then I started working on the night channel Snovidenie. At 00:00 sharp it went out on First channel’s airwaves.

Later “The Song of the Year” was reborn; I began working with the International Group, which organized tours for Sting, Brian Adams, Rod Stewart, the Scorpions, and ZZ Top in Moscow. In my portfolio there are a dozen movies about such top-notch celebrities.

For the film One Day with Sting I was awarded with The Rose d’Or. Also, I got two Ovations awards, two TEFIs, two awards at Montreux, and The Golden Antenna.

Earlier you mentioned a social mandate, but it seems you have contradicted yourself.

Television is the product of professionals. The professional has to be responsible for his product.

When you are not ashamed of it, it can be of high quality.

So it’s a “chicken or the egg” question: television being the egg and society – the chicken?

Who is who?

The quality of television is defined by the economy. Earlier the audience was a faceless mass.

Today everything has changed.

“A person absorbs the quantity of events, earlier it was about quality”

Children’s quad bikes from USA Great deal of motoequipment and accessories

If I assume that Putin understood the power of laughter to manipulate people, would that be a huge mistake?

It is incorrect. I am sure he has nothing to do with content formation. Unless we are in

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16

THE YEAR OF SPEED

THE KIEV TIMES | DECEMBER 2013/JANUARY 2014

VIKTOR POSTELNIKOV: UKRAINE’S GEOPOLITICAL CHOICE AND ITS CAR INDUSTRY

By Andrey Tsar

The General director of the VIPOS group talks about the bleak relationships between business and government, and the secret of building a successful business model.

The search for a quality Ukrainian car What needs to be done in Ukraine for a competitive car to be produced here?

What does Africa have to do to grown corn like Ukraine? It’s a question from Khrushchev’s era. The Time of the automotive industry in Ukraine is gone.

Similarly, Ukraine doesn’t need to “produce” its own sushi, because the tradition came first from Japan.

Ukraine used to have powerful industrial potential, with excellent engineers, designers and developers.

This potential has been lost in practically every field of industry.

Is there any hope for recovery?

While we were assembling a car for Ostcar at one of our factories, we needed to create an emblem.

We looked for two months for a manufacturer to produce an emblem according to worldwide standards. We found one and had it produced. A year later, the coating had peeled off all of the emblems.

So if we can’t even produce a decent emblem, what can be said about the Ukrainian automotive industry as a whole?

When should Tariel Vasadze (CEO of Ukravto) have started thinking about these issues in order to create a decent Ukrainian car for 2013?

How have consumers of luxury high-performance cars reacted to the public’s push toward more “green” technologies?

The majority of those who have the means to purchase an expensive car respect ecology. Having a high socio-economic status comes from being conscious and having an awareness of current social trends.

If you are in business – and you want to stay in business – you have to have a view of the long-term, the future. You have to consider ecology, in some way, in order to maintain your status and/or business.

But isn’t it successful people who buy sports cars and pollute the most?

This is true, but you have to remember that sports cars are not used every day. The sports car is only an instrument for a 7-minute ride, like a trip on a ferris wheel, or any other novelty. You get your thrill and it’s enough!

What is the most dangerous means of transport, in terms of CO2 emissions?

Without a doubt, it’s public transport. It is owned by the government, meaning that this “junkyard” is in the hands of no one.

It is bitter to admit, but the worst owner is the state. Officials show a complete absence of consciousness and motivation. Certainly, there are many passenger cars, but private

pay a 10% duty and 20% valueadded tax on top. Question: where is the extra cost from? The added value, logically, originates at resale, not import! In a civilized world, the duty is 3-5%. And then VAT is to be paid at resale. VAT is one reason that the aviation and shipbuilding industries have failed.

Officials What difficulties arise when business interacts with government?

I divide the world into two categories: businesses/producers – any kind of business is in some way a producer – and gangs. By “gangs” I mean officials with various levels of authority. An official does not face costs which are compulsory for every business. His income depends on personal bonuses (corruption).

The court system also plays a role in this dynamic; with more complex legislation the window for corruption is wider.

The aviation business Forbes wrote about “apple” millionaire, Taras Barschovskiy: “Between his factories, Barschovskiy moves around in a burgundy “Eurocopter”.

The helicopter allows him to save time and to be completely involved in production processes”. Besides him, who else

The sports car is only an instrument for a 7-minute ride, like a trip on a ferris wheel, or any other novelty AvtoZAZ is a utopia and a gamble. A single company in one industry can’t drive the whole of the Ukrainian industrial economy. A basis for cooperation and investments from worldwide producers needs to be created to generate a new automotive branch, as it has ceased to exist in Ukraine since the breakup of the Soviet Union. He should have used the experience of AvtoZAZ of as a model. Their management was able to work with the Fiat company, and were successful because of it.

Fast cars and ecology You’ve demonstrated the ability to understand the consumer and catch their attention. How fast are you adapting to an era with electric and hybrid cars?

I believe that the notion of electric cars – and only electric cars – for transportation is a utopian dream. The main issues are associated with infrastructure, i.e., servicing, repair, and maintenance.

The optimal solution for this transitional period is a hybrid, which is equipped with 4 electric engines, powerful batteries, and a turbocharged petrol engine. You drive with the electrical power, and when it runs out the car switches to petroleum. An outstanding example is Fisker – the most hightech hybrid. There are only 5 or 6 of them in Ukraine, and we own four of them.

Are Ukrainian drivers ready for this transition to eco-friendly cars?

No, they aren’t ready yet. They need to understand why this transition is important and be motivated to make the change.

The majority of Ukrainians are not thinking about ecologically clean transport. However, I would note that lately the level of drivers’ consciousness has risen.

Incidentally, it’s worth noting that driving culture in Kiev roughly the same as in other European capitals.

transport damages the environment much less than old buses, diesel locomotives, electric and thermal power stations, and heating plants.

Does the predominance of Mercedes-Benz buses in Krakow, Poland mean that they care more about ecology?

There’s no need to stick to a specific brand. Our world has a great number of producers, whose products are equal to MercedesBenz. Newer cars will always be better for the environment than the cars of a previous generation.

Due to a competitive market and modern ecological requirements, producers are bound to use up to date technologies and knowledge.

The latest Scania buses will be more eco-friendly than the MercedesBenz models which preceded them, and newly-assembled Bogdan or

uses, and or what purposes, the helicopters that your company sells?

Helicopters were used in the agricultural, energy, security and police fields before. They were rarely used as a means of passenger transportation. As of today, its use in the agricultural sector is in high demand in Ukraine.

What is the level of infrastructure?

Aviation is failing. The traffic is minimal. Production and infrastructure were destroyed, as were business ties. The reason is simple – we don’t like to learn, we don’t like to study foreign experiences. A healthy taxation and finance climate are absent in Ukraine. I studied the use of helicopters in Los Angeles, at the McDouglas preparation center.

“I divide the world into two categories: businesses/producers and gangs of officials with various levels of authority”

100,000 citizens needs maybe 2-3 helicopters. From this you can draw its capacity.

Is helicopter business more successful in Russia?

Clearly. Russians have built many heliports! In cities with populations over 1 million citizens, there are 5-6 heliports. Each of them holds from 50 to 100 technical units.

Are you a pilot?

No. I am a gambler. If I start piloting, there will be problems.

On the geopolitical choice of Ukraine How will Ukraine’s foreign policy choice affect the country in general?

My attitude towards the Eurointegration is ambiguous. We aim for Europe, but we have no illusions. None of the documents talk about steps toward possible membership in the EU. It’s worth considering what we will bring to Europe. I think, after the signing of all necessary papers, there will be a lot of disappointment because we will be held to the stipulations of the agreement, which involve large investments. This is what Mr. Azarov is talking about, and he is right by saying that it will be an impossible amount of pressure for the economy.

What foreign policy choice is right for Ukraine in your opinion?

If we are talking about investment in production, it is necessary to look through markets where the products have been on sale for

AvtoZAZ is a utopia and a gamble. A single company in one industry can’t drive the whole of the Ukrainian industrial economy Etalon buses will be much more eco-friendly than a twenty-year-old Mercedes-Benz.

On logic Is it fair to tie customs taxes to the size of a sports car’s engine?

Customs taxes are based on the size of the engine, the argument being that CO2 emissions are greater with a bigger engine. It seems logical, but in fact is a bit misguided. Why doesn’t anyone talk about a car’s overall dimensions? It is simple – a premium-class car that is 6 meters long takes up 1.5 times more space than a class-A car with, which is less than 4 meters long.

What are a few constraints of business development that you can name?

VAT. Value-added tax? No. VAT is a tax that allows stealing, based on legal grounds. You import a boat,

An interesting discovery was that all the income of the helicopter industry of the USA comes from insurance. The insurance compensations allow for the maintenance of the aviation field; the whole society finances this industry.

Are there many helipads in Kiev?

Yes, there is a range of helipads which operate in Kiev. There are plans to build many heliports, and those of the PANH system (PANH – help of aviation to the public economy – Ed.) are in the process of being reequipped.

Do you see a future of expansion in the helicopter market?

The helicopter market is large, but it will not become an alternative to the aviation business. An average city needs to provide medical services, and provide ecological controls. A city with a population of

decades, where there are consumer traditions and established ties.

These are the markets of the CIS and third-world countries, which we have now effectively lost thanks to the efforts of Russia. Russian society is not the right model for us.

Ukrainian values, cultural heritage and traditions are more akin to the European mentality. We need to move towards Europe, but do it competently, deliberately, and in a civilized manner. In my opinion, the mistake our president made was not holding a referendum, nor carrying out a detailed analysis of the pros and cons of both sides, which would allow for the selection of the right course for Ukraine. After all, it is not only Yanukovych, Azarov or the Cabinet of Ministers who are going to Europe, it is the whole society.

How will Euro-integration impact the automotive business?

Do not expect anything good. The

loans that are offered to Ukrainian businesses are not a knot, or even a loop, but more like mortal injections. Once the markets are open, European business with its traditions of crediting their own banks at 3-4% will come in. It is not difficult for Europe to absorb a 46-million- person market.

Ukrainian business will not be competitive for these companies anymore.

On individuality What are you life values and philosophy?

What does philosophy study?

The laws of nature and societal development. I’ll emphasize the word “nature”, because nature is the beginning of everything. In general I value harmony.

What are the components of your harmony?

Inner comfort. With time you get tired of adjusting to this world.

From business, and needless to say, from life, you need to get satisfaction.

On cars and business Your business consists of 12 units. What was the strategy, from a global perspective?

In my life I build everything systematically, long-term, and independent of others. As a rule, a person is either a leader or a follower. I consider myself a leader.

Leadership qualities are not learned – they are given by nature, or not given at all. The influence of others should not be fundamental. A great manager needs to have great deputies. Also, I do not aim for unachievable goals.

Why did you choose the automotive business in particular?

Honestly, it happened by accident. The first cars, Chevrolet Best Express, we brought in as early as 1989. Later, I was noticed

by Volkswagen, which was looking for partners to organize business in Ukraine. Volkswagen had a set of particular demands that we’ve managed to efficiently meet. This was the beginning of a successful collaboration.

What is the secret to finding a successful business model?

To be successful in business you need to perform every task at 100%. Not 99%, or even 101%, but 100%. At first, when a partner, who has proven himself to be a market leader, dictates the rules, you follow them. It’s not wise to look for paths to optimization or price reduction. Second, “love your partner as you love yourself”, as the Bible says. In my interviews I often say that German management is

the best! After working with Audi, it is possible to shift to any kind of business and still be confident in your success.

What is the role of automobiles in your life?

As for any other boy, my having my own car was a dream. This was a ZAZ 968M, in my case. I remember how my dad bought a FIAT abroad; he needed permission from the Communist Party. He purchased this car without permission and was fined. The FIAT was sold and the ZAZ was bought, and after a couple of years – a Zhiguli. I also have special feelings for Volga – this was my first grown-up car.

Out of all the cars you have owned, is there one standout?

Each one was the best one at the time. However, with every car the love becomes duller. At the moment my favorite is the Audi A8, 4.2, turbocharged diesel.

Do you drive?

Yes, I love it (smiling). I rarely use a driver.

Are you aggressive behind the wheel?

No. I don’t like predators or aggression. I drive fast, but calmly.

My route from Kiev to Odessa takes 2.5 hours, and is done without a hint of aggression.

If Ukraine were connected with Europe by a highway, which car would you choose for your first trip?

I would choose a Lamborghini.

Except for my daily routine, every car has its purpose. I love Lamborghini, however, because of the “waters” and roads that define the bleak state of Ukrainian roads, it’s more a risk than a pleasure.

Info :

Viktor Postelnikov.

General Director of “VIPOS” group.

In 20 years, all the companies that are part of “VIPOS” have been market leaders in their respective fields.

Automotive group “VIPOS” – official dealer of Lamborghini in Ukraine “Vipcar” – official dealer of Bentley and Spyker in Ukraine.

“Redcar” – official importer of Ferrari in Ukraine.

“VIPOS Air” – representative of helicopter equipment MD Helicopters in Ukraine.

“Automotive factory VIPOS” – major components assembly of automobiles.

“Audi Center VIPOS”, “Audi Center Khmelnitskiy”, “Tavrida Motors” – official dealers of Audi in Ukraine.

German Motors – official dealer of Volkswagen.

“Dolina” – heliport for businessaviation.