The Kiev Times /June 2012/ by The Kiev Times

EUROZONE CRISIS

OSTAP STUPKA: PATRIOTISM – IT’S SPENDING MILLIONS ON A UKRAINIAN BLOCKBUSTER!

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CUSTOMS SAYS WELCOME...

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International Information and Analytical Edition | Ukraine | The Kiev Times | June, 2012

UKRAINIAN NATIONAL TEAM WON THE CUP OF NATIONS

THIS IS OUR EURO!

«WE READ THE KIEV TIMES»

During the football championship Euro-2012 Ukraine was discovered by the Europeans and at the same time remained a mystery: complete positivism from a fantastic atmosphere and the absolute lack of understanding of the causes of Ukrainians shortcomings

Norwegian city Drammen (Drammen, NOR) 21-24 July held CSIO4*held next round of the European Nations Cup League Promotion (2012 FEI Nations Cup Series European Promotional League). Total during 2012 the League will hold 5 rounds of team competitions and the finals of the League, which is scheduled for 20-23 September 2012 in Barcelona, Spain 5*. The European Promotion League consists of 12 teams. In the fourth round (in Drammen) met representatives of 10 countries (Spain, Netherlands, Denmark, Norway, Ireland, Italy, Qatar, Finland, Sweden and Ukraine). Of these, only 8 completed the race. Ukrainian team, represented by Alexander Onishchenko (President of Equestrian Federation, Ukraine), Catherine Offel, Bjorn Nagel and Cassio Rivetti won the first place. Under the Nations Cup rules the holder of the first place in each stage gets 10 points. In earlier start in the Linz-Ebelsberg 4 * (AUT) 1013.05.2012 and Copenhagen 4 * (DEN) 17-20.05.2012 our team got first and second place and already has 17 points. Today Ukraine is the leader and heads the League, once again confirming the status of one of the strongest teams in this sport. The second place goes to the representatives of Denmark, and the third – to Spain. Winning the Nations Cup European League Promotion entitles the team to take part in the Champions Cup of Nations in 2013. Looking forward to opening in Barcelona. In August in London Equestrian Ukrainian team will take part in the Olympic Games.

In June 2012 the world turned upside down for our country. Lviv residents embraced the Portuguese, and in Donetsk the locals danced in the pouring rain with the French. On the

streets of Kharkov an orange mood was created by their football jerseys of the marching Dutch. In Kiev the marching columns were yellow, these were the Swedes. In this

RENAT KUZMIN: ARE TIMOSHENKO, LAZARENKO AND KUCHMA MURDERERS?

KIEV MET THE LONG-EXPECTED «APOCALYPSE»

Interview with the First Deputy Prosecutor General of Ukraine Read on page 10

photo: Ukrainian News, Alexander Lobanov, meeting organizers, EP photobank

UNION RETURNS? The new Russian leadership headed by three time President Vladimir Putin will not miss the right moment and will do everything possible to restore the economic union of post-Soviet countries. Ukraine is the main goal of the project. Power in Russia has moved from Vladimir Putin ... to Vladimir Putin. The role of Prime Minister Dmitry Medvedev was revealed his visit 1820 May, to the summit of the Group of Eight (G8) at Camp David in the United States. The Russian Prime Minister was remembered when he conveyed a letter from a «friend Vladimir» to U.S. President Barack Obama, in which the old/ new Russian President outlined his view on Russian-American relations. «When the wind of change blows some build walls others

On May, 23d the museum «Mystetskyi Arsenal» started the first Kiev biennale of contemporary art; ARSENALE 2012. It took organizers only eight months to prepare for ARSENALE 2012. Usually preparation for such large scale exhibitions every two years requires 12 months or more. This leads to the assembly of installations partially without electric lighting, belated presentations of video works, and getting custom clearance for separate exhibits literally on the eve of the opening day. But still the global event has taken place. Its scope and success have stunned the most exacting experts of contemporary art. Even the worldlywise artists and art critics couldn’t hide their amazement, because the level of the first Kiev biennale has been found to be unexpectedly high both by its artistic content and by the

«ALEA IACTA EST» – THE DIE IS CAST

build windmills», – this ancient oriental wisdom, Vladimir Putin well comprehends. He intends to review foreign policy and to derive maximum benefit from the crisis that has rocked the modern world order, Putin intends to extend the main efforts of Russian diplomacy to the post-Soviet space. Read on page 8

The sacramental phrase of Julius Caesar, said by him while crossing the river Rubicon – «Aleaiactaest», today might well be used to understand the role and place of Ukraine in the modern world To its neighbors Ukraine is clearly a «chunk», which we are not willing to give, but no one is going to take it. Poland dreams about Ukraine, closely adjacent to its borders economically and politically. Germany sees Kiev as a buffer between Europe and Asia. Russia dreams of transportation networks and an energy sector, the EU is ready to seize the financial system of Ukraine. And finally, the U.S. does not object to draw Kiev into the risky game called «missile defence». Read on page 9

colorful movement of football fans from Europe was a place for blue and yellow colors – the state flags of Ukraine on cars on the roads, the people dressed in the colors of the

football team! All of this festive excitement is shared with co-host Poland of the Euro-2012 Our Euro! Read on page 4

Marius Klatt, Regional Manager Transfermarkt GmbH & Co, Kiev, Ukraine «My work involves review and coverage of world and European football events. I have been to many international football championships: World Championship in Berlin and the League Cup championships in Europe. I assure you, that the championship in Ukraine is organized well. When the stadiums were being built, I was in Ukraine. I was worried a little, that they wouldn’t make them on time. Stadiums opened in a timely manner. Football matches, especially international, are almost always and everywhere accompanied by the slaughter between the fans, chaos and collapse. In Ukraine, everything went surprisingly peaceful and quiet. People here are nice and friendly. And thank your newspaper for information about modern Ukraine. In the West, it is not enough. We read The Kiev Times and learn about your country!»

FINANCING OF THE UKRAINIAN BUSINESS: TO BE OR NOT TO BE?

decoration of the exhibition itself. «Biennale opening has attracted a large pool of foreign press and more than one and a half thousand guests. This is the audience, which determines the world art-tendencies. Many of the present curators and art critics have more than once lit the global stage. Perhaps, without such an important occasion as bien-

nale (for the world cultural life) these people would never have come to Ukraine. But today Kiev is recognized as one of the cultural centers of the world», says Natalia Zabolotnaya, organizer of ARSENALE 2012, the General Director of «Mystetskyi Arsenal» in a talk with The Kiev Times. Read on page 14

With the fall of the Soviet Union, the time of the national republics had come. With it came an uncontrollable desire for the new and the unknown. Business was one of those new things. Post-Soviet citizens were becoming more and more capitalistic. National business, as a phenomenon, was being born. People had realized that being a good businessman does not necessarily mean being smart and hardworking. Influence and power became the keys to success. The raider attacks began, as any business idea through the use of power could easily be turned into ones property. The population experienced the rise of the spirit, as if the burden fell off their shoulders. People could earn money, do private business, not realizing that private business could again be divided with the government or become dependent on government. Today, Ukrainian business, in contrast to our economy, almost keeps pace with global trends. Ukrainians have attracted foreign investment, begun cooperation with foreign partners, have been able to develop domestic manufacturing capacity, and have even gone to the IPO, to become more transparent and understandable to European markets. Ukrainian business can be divided into two groups. In the first group are the companies that follow the principles of transparency and reliability. These companies always fulfill their contractual obligations. In the second group are companies that do not try to meet their obligations to contractors. Companies in this group are doing their best to get hyper-profits, even through deception and fraud. Сontinued on page 2

THE KIEV TIMES | JUNE, 2012

Alena Berezovskaya, Chief editor of The Kiev Times

Euro-2012

Undoubtedly, the main event in June for our country was the hosting of Euro 2012. Ukraine has successfully coped with the tasks set by UEFA for the European Football Championship Assessing this event on his personal page on the Internet, Mykola Azarov Prime Minister of Ukraine wrote: «Yes, we have much to be proud of. Almost no one believed. Many people advised us to decline the undertaking. But we have not even thought about it. In difficult financial and economic conditions, we were able to mobilize and fully prepare for EURO championship. Ukraine fulfilled its obligations, both honorable and sophisticated at the same time. The president and the government did everything possible and impossible to carry out this sports festival, first of all – for the people of Ukraine!» Back in 2009 the thought of the European championship being cohosted in Ukraine was a big question. The Olympic Stadium refurbishment was behind schedule, and the one in Lviv didn’t even fit into a schedule. A similar situation was with the airports in Kiev and Lviv. Thinking about infrastructure didn’t bring much joy. In 2010 everything had changed radically. President Yanukovych promised Platini that there would be no more lapses in the schedule and that Ukraine would successfully prepare for hosting Euro-2012. During this short period of time more had been built, than in the previous 20 years. The new terminal in Boryspil, airports in Donetsk, Lviv, and Kharkiv, lots of roads and interchanges were constructed, new high-speed trains were launched, hotels and hostels were built, largescale infrastructure reconstruction was conducted. All this has created new standards and guidelines for Ukrainian cities that did not host the championship matches. Many European politicians and heads of state have tried to politicize this event and use it to their advantage, blackmailing Ukraine with boycott. Political passions were pumped by Tymoshenko supporters inside the country. Hopes of Euro-skeptics that Euro2012 would fail did not materialize. Hundreds of thousands of fans, who came to Ukraine, would not see here dictatorship, repression or any racial abuse. But what they did see was a beautiful country with friendly happy people. And the vast majority of fans have expressed regret that their friends, succumbed to a planned attack of the western propaganda on Ukraine, did not come. Today we can say for sure that the boycott of the football championship in Ukraine failed. It is regrettable that the Ukrainian team didn’t advance to the quarterfinals. Showing a good game, our team was the victim of the Hungarian judge, unable to notice a goal from a distance of 5 meters, scored against England, the goal which was noticed by all the spectators in the stadium and on television. But the good thing is that this uncounted goal put an end to the dispute, whether an electronic record of ball crossing the goal line is required. In this sense, the match Ukraine – England will be historic.

GTS and independence

Approved by the Cabinet, application for the purchase of 27 billion cubic meters of natural gas from Gazprom in 2013, has caused dissatisfaction among the leadership of Gazprom. It became obvious that a balanced policy pursued by the Gov-

ernment of Ukraine in this field, does not provide for the foreseeable future performance of contracts signed by Putin and Tymoshenko according to Putin’s scenario. It seems that the decision to reduce by one-third purchases of Russian gas has ripened, after fruitless negotiations, held in May at the informal summit of CIS countries, where our party insisted on the revision of the absurd price of gas. According to the newspaper «Kommersant Ukraine», Mr. Miller does not exclude the possibility of legal recourse with Ukraine on this issue. However, I think the Russians understand that the trial could reveal to the world the corrupt «underside» of gas contracts, which would lead to full denunciation. Therefore, no one is in a hurry to address the court. The Russian side is concerned that the initiative in the gas strategy could escape from the Kremlin’s hands. For Moscow, the gas issue is the main strategic direction of the country. Creation of a gas monopoly means a serious support of the ruble as an international currency, increasing social standards of life in Russia, the strengthening of the army and the military-industrial complex of the country, as well as an effective mechanism in Russian geopolitics. Ukraine has a chance to fully experience this geopolitical mechanism. This mechanism has also caused the EU to respect and listen to Russia, even in the matters of our gas disputes. Today Ukraine has a serious concern, that with the creation of gas transportation consortium, there would be no place for our own natural gas production. Russia would too quickly fill the pipes and storage volumes with expensive (for Ukraine $450) gas and force our customers to buy it, whereas the world market price for it is constantly dropping. How can the Ukrainian economy compete in this case? Therefore, the government is scrupulously attentive to the creation of a consortium for the exploitation of the Ukrainian GTS.

Simultaneously, we continue to increase gas production, diversify its supply, and abandon the Russian one. Prior to 2030 we will reduce imports of Russian gas to 5 billion cubic meters. Prior to the signing of gas agreements between Tymoshenko and Putin, the amount of gas imports amounted to 60 billion cubic meters.

The language issue

Hot debates in the Verkhovna Rada regarding language law authoured by People’s deputies Kolesnichenko and Kivalov, vividly demonstrated the relevance of this issue for Ukraine. By gravitating to the Russian language, and political forces that represent it in the government, the public no longer perceives that the gov-

ernment is engaging in economic matters. It seems that the time of Galician expansion and «language exports» to the whole Kievan Rus’ is coming to end. The Lack of rights of indigenous Russian people of Ukraine, as well as the Crimean Tatars, is horrifying, outrageous, and may be a factor resulting in the street protests. In this case the consequences of rebellion in the region of Donetsk-Krivoy Rog and the Crimea will be far more serious than Galician speeches made in defense of ‘mova’. Here is a fit saying: «A Russian man harnesses the horse slowly, but drives fast». Let me remind you, the Russians at the root of the state-forming of the nation of Ukraine. History, writing, religion, language, the noble Rurik dynasty, the first code of laws «Russian Truth» – all this is Kievan Rus’. Russian Orthodox hetmans – Khmelnitsky, Vygovsky, Mazepa – they all dreamed of restoration of the Great Russia (Kievan Rus’) and the noble Russian (not Moscow) government within its borders, close to modern Ukraine. Surprising is the fact of quietly renaming of Rus’ into Ukraine at the beginning of the twentieth century. Under the guise of Lenin’s October Revolution of 1917, during the distribution of the Russian lands to the Kaiser’s Germany for debts brought by financing the Bolsheviks, Galicians organized and led one of the Kiev government and our country was called Ukraine. The idea of the Republic of Ukraine pleased Lenin. His representatives Lazar Kaganovich, and the head of CEC of Ukraine N. Skrypnyk planted forced Ukrainization in the Russianspeaking south and east of Ukraine under the leadership of Joseph Stalin. Since independence in 1991 just like in 1917, we did not vote for the name of the country and the state language. Galicians skillfully imposed «movne» (language) opinion on Leonid Kuchma. Kuchma had promised bilingualism to the people during his presidential election campaign. The Government has adopted the Main Law in one day under the threat of dissolution, there it adopted Ukrainian as the only state language. Covered by joy and exultation of a new constitution the majority of voters did not immediately realize that they had lost their rights. Since then, Lviv Ukrainians became the titular nation, and received, as carriers of a single national language, preferences in government, media, education and other fields. A new wave of violent ukrainization in Ukraine began. Today we, the Russians, I emphasize to the nationalists, that Russians comes from the word Rus’, are often reminded of Article 21 of Constitution of Ukraine «All human beings are free and equal in their dignity and rights...» We, the indigenous Russians of Ukraine, the descendants of Kievan Rus’, will insist on the implementation of this article in our country. No micro-parties,

or hastily created forums of scientists and intellectuals to protect the «mova» (language) has any right to decide for the people how to live and what language to speak, since we did not vote for them in the first place.. According to the teaching of Christ, good triumphs over evil, truth beats a lie. Today we are at a historical starting point, when the promises of politicians to restore the rights of Russian in Ukraine, as well as the Crimean Tatars, will be fulfilled, while language election speculations and false promises will go into the past. The language law was passed in the first reading, the second reading will be heard in early July. Apparently, the political heat of summer will not subside.

From page 1 Every foreigner working in Ukraine, has gained the experience of being in a business environment that is different from the European one. Ukrainian business differs, with excellent prospects and daunting risks. Why is doing business in Ukraine so controversial? The main risk, which an investor in any country carries, is the risk of no return on investment. Ukraine is not an exception in this regard. In March 2012 the rating agency S&P revised its sovereign credit ratings of Ukraine and lowered its forecast from «stable» to «negative». At the same time, short-term ratings in foreign and local currency were confirmed at the level of B+/B. The Prime Minister of Ukraine Mykola Azarov criticized the downgrade. Nevertheless, companies are always doomed to shoulder the risks of their country. How does one recognize whether a company is creditworthy, and whether it is necessary to consider the political risks in any decision to cooperate or invest? The international community has long been applying a clear and open process of verifying the credit worthiness of businesses. Ukraine is only beginning to implement this process just now.

Simple not-standard rules in Ukraine

As in any other country in the world, this procedure is as follows. A rating or information agency contacts a company or group of companies with a request to provide stan-

country. Second, the risk assessment of the region is quite complex, and often does not show an objective picture. This is often complicated by the fact that the Ukrainian participants of trade contracts, which are subject to credit insurance, do not want to be transparent and open to the ECA and do not wish to be checked for creditworthiness. This factor is sufficient to the ECA to not provide insurance coverage. In other cases, the exporter, wishing it to remain unseen, contacts the ECA for information leading to the contracting of an international trade agreement, so that the importer has no idea of the interests of the exporter. In such cases, the Ukrainian importer refuses to undergo credit checks. For fear of, for example, raider attacks, in fact, it loses the opportunity to expand its product portfolio, and therefore increase profits. What are the advantages of trade credit insurance? - Trade credit is the cheapest among all kind of loans issued and the procedure for obtaining it is also very simple - The cost of trade credit is significantly lower than the cost of attracting financial credit - Trade credit can reduce the period of the financial cycle of the enterprise According to Information-rating agency, Credo Line, the most import-oriented markets in Ukraine are: the food market, the construction and construction materials market, heavy industry and mechanical engineering, agricultural market and retail. Leaders in the food mar-

When it comes to the insurance of trade operations export credit agencies consider such cases with caution dard information about their activities. The agency must clearly explain the purpose of such a request. A meeting with the managers of the company must be organized, and documentation proving the validity of such actions should be provided. On the basis of provided information the Agency develops a socalled credit report with a specific credit opinions meant for the final recipient. The consumers of credit reports are the major export credit agencies (ECAs), banks and exporters. They, first of all, want to understand whether a company is solvent and able to pay back its obligations on time and determine the maximum credit limit that can be provided to the company – the later is the most significant part of the credit report. Taking into account the non-standard provisions of Ukrainian accounting and the frequent understatement of tax burdens by Ukrainian companies, the agency in charge of rating should make every effort to verify the data provided by the company. Only after a detailed examination, can the credit opinion be valid and practically risk-free for the client. And one more important detail. When it comes to evaluating the creditworthiness of Ukrainian companies, such studies should be carried by local agencies having knowledge of the specifics of local (Ukrainian) accounting standards, legal aspects and other local features. In order to get an objective assessment of the creditworthiness in Ukraine, simple rules should be followed: - Contact specialized rating and information agencies with extensive experience in the Ukrainian market - Be sure that the agency complies with all recognized international data collection and verification procedures - Request a free sample credit report to see what information will be obtained as a result - Act on the basis of a bilateral contract, which establishes the legal obligations. Credibility is interdependent with trade finance, in particular, with the trade credit insurance. Import volumes increase, and Ukraine becomes a party to the process of trade financing in the implementation of trade operations with foreign exporters. But when it comes to the insurance of trade operations between the exporter and Ukrainian companies, ECA, as a rule, consider such cases with caution. First, it is associated with high political risks in Ukraine and the international rankings of the

ket are companies such as Confectionery Corporation Roshen, Sandora, Chumak, and Coca-Cola Beverages Ukraine Limited. Thus, the total import of Confectionery Corporation Roshen in 2011 amounted to 1934 million UAH. The building materials market is led by companies such as Epicentre K, Cersanit Invest, and Kiev Energy Construction Company. Total imports of Epicentre K in 2011, totaled about 141 million UAH. The heavy industry and engineering industry are represented by such leaders as JSC Motor Sich, with a total volume of imports in 2011 amounting to 30,351 million UAH. Among other leaders in this sector are JSC Alchevsk Metallurgical Plant, PJSC Donetsk Electrometallurgical Plant and JSC Kryukov Rail-Carriage Plant. These markets interest foreign ECAs and exporters in terms of trade credit insurance coverage most of all.

During Crises, all is thoroughly thought through

After the collapse of the global economies much changed in all countries. Trade credit insurance has suffered particularly badly. The massive bankruptcy of the most stable companies around the world, billions of debtors, zero reserves, damaged reputations. ECAs started working with new, thoroughly thought out concepts, developed new strategies and revised existing conditions. For example, Euler Hermes offices around the world engage a completely individual approach, which in this case corresponds to the same rules and the corporate map of country risks. Each local office shall take into its decisions of individual insurance coverage, the limitations of each particular country. So, for example, the Italian offices of Euler Hermes often refuse to enter into any transaction with Ukrainian companies, while the Polish offices are positive on the cooperation with Ukrainian business. At the same time, the world’s leading ECAs do not neglect the commercial benefits and are more likely to insure an operation with high credit limits, no matter which country the debtor is located in. On terms of personal initiative Credo Line has launched a project rating the international business reliability of Ukrainian importers, which aims to promote Ukrainian businesses. Due to this project, a large number of Ukrainian companies will be able to be further evaluated and recognized by foreign partners. Katerina Bogdanenko, Director of Information and rating agency CREDO LINE, specially for The Kiev Times

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photo: press-service

HOT JUNE

FINANCING OF THE UKRAINIAN BUSINESS: TO BE OR NOT TO BE?

DIGEST/EVENTS

THE KIEV TIMES | JUNE, 2012

EVENTS Three ways to change the Constitution

On 20 June, President of Ukraine Viktor Yanukovych held the first session of the Constitutional Assembly. It was attended by 72 out of 95 members. Those included leading scientists in the field of law, philosophy, economics, representatives of major trade unions, and more than 20 community organizations. The meeting was also attended by three former presidents of Ukraine – Leonid Kravchuk, Leonid Kuchma and Viktor Yushchenko. Opposition politicians have ignored the Assembly. The President believes that the opposition will join the work of the Assembly after the elections. The nature of the constitutional amendments depends on the results of elections to the Verkhovna Rada on 29 October. According to some observers, the activity of the President to amend the Constitution is related to his intention to upturn the political reforms of 2004, which limited the powers of the President and introduced a parliamentary-presidential ruling. The president was engaged in foreign policy and defense issues. He also had the right to veto. However, the Verkhovna Rada had the constitutional majority (300 + 1 vote out of 450 deputies), and the law was signed by the speaker. Internal socioeconomic policies were determined by the coalition government, which was shaped and controlled by the parliament. The only leverage the President had on the legislation and executive power is his right to dissolve parliament if in his opinion it is not effective. Others say that the presidential administration intends to introduce a parliamentary form of government, where the President is elected by the Verkhovna Rada. Both options are beneficial to the government if President Yanukovych is not re-elected for the second term. The third option – a consolidation of the existing presidential form of government, where the President forms the Cabinet of Ministers and directly controls its operation. «The legitimacy of the current presidential constitution is low, since it was introduced in 2010 by the Constitutional Court. Constitutional reform, brought to a vote in parliament or a referendum, will enhance its legitimacy»,- considers Igor Lavrinenko the Director of Analytical Department of the «Reform Club».

photo: press-service, manufacturers

The French will regret

As a result of the presidential and parliamentary elections, the power in France has moved from centerright forces to the left. The Socialist Party of France won a landslide victory in the parliamentary elections on June 17, having 280 seats. Non-party supporters of the Socialists and other left-wing parties – another 63. Thus, the left receive an absolute majority (343 out of 577 seats) in the National Assembly, which has the final say in law making. Now, the new French President Francois Hollande, socialist, gets strong support in parliament. Sarkozy began losing the favor of voters almost immediately after his victory in May 2007. All too quickly his image of «people’s leader» was changed to «President for the rich». Sarkozy celebrated his triumph with the major sponsors of his campaign in a posh restaurant. Followed by

a cruise on the yacht of billionaire friend. He has almost become a star of show business and a regular at social events. The French would put up with the eccentricities of the former President if he had succeeded in economic policy. The global crisis interfered. Nicolas Sarkozy’s confidence rating began dropping in autumn 2010, when he raised the retirement age from 60 to 62 years. The reform was very necessary but extremely unpopular. Back then the country experienced numerous strikes, rallies, protests and riots with burning cars and smashing shop windows. Sarkozy had tried to slightly raise his rating before the second round, when he moved to the extreme rightwing rhetoric. This way he hoped to attract voters of Marine Le Pen, who has not passed the second round. However, many did not believe Sarkozy and voted for the Socialist Hollande. The French will have the time and reason to regret their choice. Nicolas Sarkozy was not afraid of difficult decisions. His uncompromising stance on issues of pension reform, illegal immigration and the Islamization of France made him a leader capable of leading the country out of crisis. The country’s losses from the implementation of Francois Hollande’s populist steps are already evident. Cancellation of pension reform in 2013 will cost the French € 1 billion. The course of the collapse of the Franco-German tandem undermines the strength of the European Union. According to observers, this is only the beginning.

Cases political and criminal

Case against former Ukrainian President Leonid Kuchma for involvement in the murder of journalist Georgy Gongadze has reached the Supreme Court of Ukraine. The Prosecutor’s Office of Ukraine received and appealed the decision to withdraw the charges of Pechersk district and Appellate courts of the city of Kiev. Consideration of the complaint, scheduled for June 5, was postponed. The widow of the deceased journalist Miroslava Gongadze said that the court was allegedly pressured by the former President’s son-in-law Viktor Pinchuk. The accused, despite his high public position in the past, today is just a citizen of Ukraine. Although the prosecutor – the highest legal authority of the country, the judge still did not find the defendant guilty. It becomes obvious which side is trying to use political methods in litigation. Kuchma’s case casts doubt on claims of political repression in Ukraine. However, political arguments, not legal grounds – is what the main line of defense in cases of ex-Prime Minister Yulia Tymoshenko is built on. And it has been brought to international attention at the highest level. On the basis of allegations of political repression in Ukraine, not only her colleagues in the opposition party «Fatherland», but also the heads of a number of EU countries demand the release of Ty-

moshenko. Statements by heads of the General Prosecution of Ukraine concerning criminal evidence are not being taken into account. Currently, the District Court of Kharkiv is considering the case against Tymoshenko of crimes committed during her leadership of Unified Energy Systems of Ukraine. She was also accused of involvement in the murder of businessman Eugene Shcherban. According to the President of Ukraine Viktor Yanukovych, if the appeal to the European Court of Human Rights from Lawyers of Tymoshenko may find procedural violation, no violation of law will ever be found. He made this statement to the Bloomerg agency. He also said that he was convinced of Tymoshenko’s involvement in the murder case of Shcherban. The fact that this accusation is based on serious evidence was declared by Prosecutor General Renat Kuzmin the first deputy. Reasons to agree that the Ukrainian government is trying to get rid from a serious political rival exist. However the grounds for criminal charges exist as well.

The Libyan revolutionary court

In Libya, a June 4th military court accused 24 citizens of CIS countries in aiding the regime of Muammar Khadafi, namely, the maintenance of military equipment that was used for the «destruction of the Libyan people». The most lenient sentence – 10 years, the most severe – life imprisonment. 19 Ukrainians, 3 Belarusians and one Russian got 10 years of hard labor. Another Russian Vladimir Shadrov as the leader of the group received a life sentence. Libya is paralyzed by chaos. The central government in the country no longer exists. This territorial entity lives by the laws of civil war. City and tribal groups are fighting for pipelines, oil and gas fields, and terminals. One of the methods in this war – taking hostages. The members of the international organization Doctors Without Borders and human rights activists have long reported that field commanders keep thousands of prisoners in «private prisons» in inhuman conditions. They include not only Libyans, but migrant workers from different countries. Africans worked mostly in law enforcement structures, for which they were branded «Gaddafi mercenaries killing the Libyan protesters». Immigrants from former Soviet countries were working in Libya in the professional maintenance of military equipment and oil and gas equipment, as well as doctors and medical personnel. Kiev demands that Tripoli review the sentence and threatens sanctions. «The Libyan side had the basis for the claims, but the severity of the sentence does not match the depth of guilt. The fact that people were making money on the repair of military equipment does not put them on par with murderers. Cooperation with Libya will depend on the treatment of Ukrainians there», – said Oleg Voloshyn, Director of Information Policy Department of the MFA of Ukraine. New Libyan leader has no need of Ukrainian nurses, specialists or weapons. They have different sponsors and different interests.

Under the pretext of rights protection

At the G20 summit in the town of Los Cabos, Mexico, June 18-19, Russia’s President Vladimir Putin held talks with U.S. President Barack Obama. «We talked about international issues, including Syria, and found many common points. We will continue the dialogue on all issues», – Putin said. «We discussed strategic issues, including missile defense. We agreed to continue the discussion»- echoed Obama. On both issues, Moscow and Washington have not yet reached common agreement. In relations with the U.S. Putin has learned the lessons of Libya. Russia abstained from the veto in the UN Security Council in exchange for the preservation of Russian interests in the country after the overthrow of Gaddafi. The West has violated the agreement. Contracts with Russian companies have been broken. Now in the Syrian conflict Putin intends to continue to resist U.S. attempts to weaken the position of President Bashar al-Assad. He will also oppose the U.S. missile defense system for preserving strategic security. In attempts to pressure the President of Russia, U.S. has resorted to its usual method – interference in the internal affairs of their opponents. Congress is considering a draft «Magnitsky Law», which involves a ban on entry into the U.S. for Russian politicians, and freezes their bank accounts. Sergei Magnitsky, a partner of British firm Firestone Duncan, was arrested in 2008. He was accused in tax avoidance aid. 11 months later he died in the prison hospital, «Sailor’s Silence» in Moscow. His death caused a wide resonance in Russian society. But the U.S. remembered the case 3 years later. Mass rallies in Russia against Putin’s policy served as a pretext. However, during the third presidential term, Vladimir Putin intends to direct his main efforts toward foreign policy. In domestic policy he is ready to the point liberalization. One step has already been made – Russia has returned to the election of governors. The Russian president doesn’t mind reinforcement of the international position of the country with financial participation. At the G20 summit in Mexico, Putin said that Russia is ready to give the IMF up to $ 10 billion. In all other respects – he intends to implement systematic and fundamental interests of Russia. And there is no one to stop him in the current crisis. (more on Russian foreign policy in the CIS read on page 8)

Verkhovna Rada equaled the languages

On 5 June The Verkhovna Rada adopted the Law «On State Language Policy» in the first reading. The adoption was marked with a fight between deputies, an episode that

for several days made the top news on international television and the press. The voting is promised in early July. The law defines the status of regional languages, which can be used along with the state in areas of compact residence of national minorities – at least 10% of the local population. The free choice of language is guaranteed in education, science, culture, and court proceedings. The status of the Ukrainian language does not change – it remains the state language. It is mandatory in use in the Armed Forces and other military formations, as well as in the activities of central governmental authorities: the meetings, official documents, and cartographic publications. The authors of the law, people’s deputies from the Party of Regions, claim that they protect the rights of national minorities, in particular, the Russian-speaking population of the South and East of the country. It was declared in the election program of the party in parliamentary elections. Representatives of the opposition in parliament strongly opposed giving Russian the status of regional language. They claim that after this law comes into force, it will supersede the Ukrainian language in all spheres of public life. In response, the «Regionals» reminded critics that the law was passed in accordance with the European Charter for Regional and Minority Languages, which was ratified in 2003, under the support of «orange» Democrats and ardent Euro-integrators.

The Syrian scenario

Brutal violence in the Syrian village of al-Hula and al-Kubeyr in the first half of June has brought the Syrian conflict to a new level. All of the sides are driven into the deadlock and forced to make choices The further situation in Syria depends on the decision of each participant. Syrian opposition calls to bomb the country. The head of the Syrian National Council Burhan Latrine said that «would welcome a military intervention of Arab countries in Syria, as it will stop the military actions of the troops of President Bashar al-Assad against the rebels and civilians». At least, he agreed to limit the movement in the airspace of Syria and the «buffer» zone on the border with Turkey, where the Syrian army cannot enter. In this case, the carnage in the countryside is in the interest of the opposition. On this basis, some observers began to talk about their involvement in the unrest. Other forces in the region are preparing for a possible war. «Hamas» has escaped from a sinking ship, and its members have left the territory of Syria. Palestinian militants have replaced their traditional patron Iran with Qatar. Hezbollah, which has remained under the protection of Iran, has not left Damascus, but is preparing to transfer its missiles from Syria to southern Lebanon. For supporters of the war, the main problem is the unpreparedness of the West and its Persian Gulf monarchies. The EU has not made a political decision to intervene. On the one hand, Syria is the only point where the forces of the United States and Western Europe will be able to repel the arrogant Iran, which could also send troops to Syria. And, obviously, the IRGC (Navy Islamic Revolution-

ary Guard Corps – the Armed Forces of Iran), will suffer significant losses. On the other hand, some European politicians, rethinking the experience of Libya, do not want another costly war in the Arab world. Sending troops to Syria without UN Security Council authorization is risky – this may increase tension with Iran if Russia, as a member of the UN Security Council, does not give consent. Syrian authorities are trying to hold their line. As the Western allies of opposition are in contemplation, Bashar al-Assad has the time to complete the civil war without the intervention of the European Union, the United States or Qatar. He intends to split the opposition, separate moderate forces, then destroy the main centers of resistance. With difficulty, but so far it has been working out.

Luxury tax – a short distance run

On June 20 the Verkhovna Rada received a bill on taxation of luxury goods. The initiative came from three parties at once – the government, the Communist Party (KPU) and the party «Fatherland». However, deputies did not have them in the agenda of the plenary sessions and sent it to the relevant committee. The history of this tax begins with the adoption of the latest edition of the Tax Code in late 2010. The proposed Code contained the appropriate section. But lawmakers decided that the luxury tax will be a separate law. The solution is very questionable in terms of equality of citizens before the law. Ukraine definitely needs such tax. Experts are skeptical – the effect of it may be equal to zero. Most luxury goods specified in the bill do not have the personified owner. «Only the regulation of tax on more than 200 square meters of housing may work. Planes, yachts, luxury cars, are usually on the balance of legal entities rather then private individuals» – said Pavel Rozenko, the expert at the Razumkov Center. The government also does not expect significant revenue. The Cabinet of Ministers predicts that it will pull only 500 million UHR. If we consider that two years ago with the introduction of a luxury tax revenues expectation was 1.2 billion UHR, it becomes apparent at this time, it is rather «a step towards the voter». Rates of taxation of luxury goods offered are much more liberal. In particular, the area of tax on private housing increased from 120 to 200 square meters. Authors also rejected the progressive tax scale. Apparently, in order not to hinder the economic development of the rich population. After all, luxury tax may be seen by middle-class not as a stimulus, but rather a hindrance. The opposition has already called the government bill a pre-election move. Only on the part of opposition it is an equal move. October 29 Parliamentary elections are approaching. Pre-election campaigns of the participants changed into short distance run, and everyone is in a hurry to have time to prove themselves in the fight against poverty and supposedly make the rich pay for the poor. An indifferent disappointed attitude to politics prevails in Ukrainian society. There is a need to step towards the mass electorate, including the floating voter. Such a step, according to political strategists, should be a luxury tax.

SOCIETY/EURO-2012

THE KIEV TIMES | JUNE, 2012

THIS IS OUR EURO!

Euro troubles

The leaders of the Ukrainian Football Federation (UFF) pretentiously called the preparation period of Ukraine for the continental championship, starting with the approval of the Ukrainian-Polish proposal in April 2007 and all the way up to the beginning of the football tournament, the «five-year renais-

the host countries of the championship, set out to organize the tournament independently. The project was ambitious, perhaps inferior in scale just to the world football championship and the Summer Olympics. For the first time in Eastern Europe, this has never been trusted to create an iconic sporting event. Truly – «Courage wins the cities!» Ukraine and Poland, unlike Russia, joined the battle. Our northern neighbor, at first willing to host Euro 2012, chose the 2014 Olympics instead, and has never applied for the European football championship. Only after the Russians realized the miscalculations, they jumped at the chance to hold the World Cup 2018, and did not miss out. Russia formally applied for a tournament in May 2010. In December of that year in Zurich, Switzerland the FIFA Executive Committee granted Russia the world soccer tournament. Do not forget that the Euro, which both host countries of the tournament are so proud of, might not have taken place. Poland has its problems. The sports arenas for the Euro 2012

wanted to take away the Championship because of internal disagreements in the Ukrainian Football Federation. In direct and indirect persistent attempts to shift Hryhoriy Surkis from the position of the president of UFFA, the League saw the intervention of «third parties» into the affairs of the federation. Yet the Ukrainian government and the UFF jointly defended the European football championship in our country.

Estimates Swell

sance plan». That’s right – not yet a complete «Renaissance», but only a post-Soviet «five-year Plan». This is just seemingly pretentious. It was important to start somewhere. Mahatma Gandhi said: «If you want to change the future – change the present». This amazingly accurate Indian proverb echoes the motto of Euro 2012: «Creating history together». In order to create their own history, somewhat similar to the Cinderella fairy tale, Ukrainians, along with Poles, had to begin to change their own mindset. Ukraine and Poland did not wait for the Union of European Football Associations (UEFA) for the form of television broadcasts of Euro 2012. On the contrary, at the initiative of the President of UFF Hryhoriy Surkis,

were opened by Poland with delays. They lacked workers. Instead of zloty from the European football championship, Poles opted for a more hefty British pound. The Polish labor force went to London for the construction of the Olympic Games-2012. Ukraine was several times caught in situations, when it could have lost the championship. In 2009, due to its

Not so long ago the President of Ukraine, Viktor Yanukovych in an interview said, that when he came to power in 2010, he was advised to return the Euro 2012 at the disposal of UEFA. However, the President declined the idea. According to his words, «he would not be forgiven if he did». This tournament was needed in our country, despite not even millions, but billions of dollars in expenses for the preparation. But it was precisely the case when for success, that price does not matter! Even according to preliminary calculations, it was clear that Euro 2012 is the most expensive in the history of European championships. Given the fact that, in the same year when Ukraine won the right to host the European football tournament, the global economic crisis hit, it turned

Dutch fans were marching in Kharkov with «Thank you!» signs written in Ukrainian and Russian languages slow pace of preparation, UEFA seriously considered unfair advantage in favor of Poland, and distribution of the host cities. And in 2011 they

out that the countries and organizers would exceed the original budget at least twice. In comparison with the costs of

Euro 2004 in Portugal, the amount of 800 million euros and the joint expenses of Austria and Switzerland at the same tournament in 2008 of 700

in the stadiums is peanuts compared to other expenditures! During four years of preparation for the tournament an additional 4.1

billion euros has been spent for the development of infrastructure for the normal functioning of Euro 2012. Each Ukrainian host city opened new airport terminals, built additional runways and improved transport infrastructure. At the same time, new intercity roads were constructed. Funds were allocated for the development of railways in Ukraine. In addition to the repair of railroad tracks, worth 320 million euros, 10 ultra-modern high-speed trains, the Hyundai Rotem, as well as 2 twolevel trains Skoda Vagonka were purchased. This was done for com-

A much bigger problem than the huge financial investment in Euro 2012 in Ukraine was the country’s negative image in Europe. Many Europeans, living on a «the further to the east, the more bears», were afraid to appear in a country of the former Soviet Union. For many others the major obstacle was the «black PR», thoroughly carried out in the media (both national and foreign) with the filing of opposition politicians in Ukraine, as well as entire governments of individual EU countries. Potential tourists were frightened with rampant banditry in the country, inadequately aggressive law enforcement officers and even the AIDS epidemic. But an even greater stir was caused by court judgments of the political opposition leaders – former Prime Minister Yulia Tymoshenko and former Interior Minister Yuriy Lutsenko. A Boycott of the European championship was threatened by the governments of England, Germany,

fort and fast transfers of fans to cities where matches were held. Due to these trains, the traveling time from Kiev to Kharkov was reduced to three and a half hours, to Lviv – to four and a half hours, to Donetsk – up to five and a half hours. However, the tickets are more expensive than for the regular Ukrainian trains – an increase from 220 to 350 UAH. Poland has announced even higher expenses for Euro 2012 – 25 billion euros. Three quarters of this amount was spent on improving roads, 2.4 billion euros – on railway modernizing, and 1.3 billion euros on each host city (as well as in Ukraine, there are four of them) – the construction of stadiums and transport infrastructure.

Spain, France, Holland, Belgium and Austria. Campaigns against Euro 2012 in Ukraine even frightened off some teams participating the tournament. Among the eight teams, who were to hold the group stage matches in our country, only three, including our team, chose their base camps in Ukraine. The Swedes and the French turned out to be brave! Perhaps because of the historical experience – both nations had to step on our land hundreds years ago during the military campaigns. All other teams chose to be based in Poland. The main disappointment for some of the teams during Euro 2012 was the lack of adequate support of their fans at matches in Ukraine.

According to preliminary calculations, it was clear that Euro 2012 is the most expensive in the history of European Championships million euros, Ukraine and Poland have spent incomparable amounts. But this is not as it seems. Portugal, Austria and Switzerland, for its 700-800 million euros did not have to build airports, hotels, or construct new roads, or upgrade to the European standard of railway tracks. They had all of that functioning well in the past. For Western Europe the main item of expenditure has fallen to a sports component: the construction of eight stadiums in Portugal and the reconstruction of the seven stadiums for Austria-Switzerland. Ukraine, largely due to inflation, spent almost 730 million euros only on construction of three new stadiums – more than Austria and Switzerland combined! Reconstruction of the National Sports Complex (NSC) «Olimpiyskiy» in Kyiv cost 500 million euros. Modernization of «Metalist» stadium in Kharkov was 45 million euros, and the construction of a new stadium «Lviv-Arena» in Lviv – 225 million euros. And this is despite the fact that the construction of a new 50 thousand seat «DonbassArena» stadium in Donetsk almost from scratch did not cost the State a penny – it was fully sponsored by the football club «Shakhtar», which has invested in a modern stadium in its hometown at the cost of 365 million euros. However, money invested

Not the best image

photo: Andrey Gorb, Ukrainian News, UNIAN

n June 2012 the world turned upside down for our country. Lviv residents embraced the Portuguese, and in Donetsk the locals danced in the pouring rain with the French. On the streets of Kharkov an orange mood was created by their football jerseys of the marching Dutch. In Kiev the marching columns were yellow, these were the Swedes. In this colorful movement of football fans from Europe was a place for blue and yellow colors – the state flags of Ukraine on cars on the roads, the people dressed in the colors of the football team! All of this festive excitement is shared with co-host Poland of the 2012 European football championship. Our Euro!

SOCIETY/EURO 2012

THE KIEV TIMES | JUNE, 2012

photo: Andrey Gorb, UNIAN

EURO-2012. IN ANTICIPATION OF THE FINAL

All caused by «black PR» toward our country. Among others, the United Kingdom was one of its victims. In Donetsk, during the first match of the England team against France, only five thousand British fans were at the stadium. Subsequently, these several thousands wondered: Who needed these political games! The French were even worse -with supporters, about a thousand! They both promised to expose at home this lie about Ukraine. «The information in the media has stopped many fans who wanted to come. It’s a shame, because the atmosphere here is really fantastic», – The British newspaper The Independent quoted Bob Dickerson, a fan of the national team. The sincerity and willingness of local residents to help fans was widely praised by foreign fans all over Ukraine – in Kiev by Swedes, in Lviv by the Germans and Portuguese, in Kharkov by the Dutch. Dutch fans, who due to the tournament schedule had to stay in Kharkov during all the matches, expressed their gratitude on self-made signs reading «Thank you, Ukraine!» in Russian and Ukrainian languages. The atmosphere in Ukraine was significantly different from the situation in Warsaw, where Polish and Russian fans had fights before and after the game of group «A». As a result, one person was killed, many ended up in the hospital and several

hundred – in police departments. The only thing foreign fans cannot be convinced about, is the justification of high prices in the Ukrainian hotels during Euro 2012. Not only our hotel prices soared during the tournament by almost ten times, but on top, fans were required to pay

the most part, the Ukrainian football was known only through 35-year-old Andrei Shevchenko. He is one of the top world scorers, who used to play in the Italian team «Milan» and English powerhouse «Chelsea». He received the «Golden Ball» for being the best football player in Europe.

After Euro 2012 our country is unlikely to be refused the hosting of the European championship in basketball in 2015 for the so-called «package» – guaranteed accommodation for 4-5 days. In June, the «package» cost was 900 euros and above! Accommodations in tent cities were much cheaper, starting from 40 euros, and hostels – from 10 euros.

Team of local scale

As well as Ukraine, our team turned out to be a mystery for the Europeans in the continental championships in football. Aside from the English team, where all the players were, without exception, presenting the local national championship, the Ukrainian national team under the leadership of head coach Oleg Blokhin has involved the least amount of players from abroad. Only two – Anatoliy Tymoshchuk of the German team «Bavaria» and Andriy Voronin of «Dynamo» Moscow. For

In the first match for the Ukrainian national team at Euro 2012 Shevchenko, with his two sharp kicks and with his head brought Ukraine a victory over Sweden 2:1. «His two goals to the Swedes were great and led myself, the fans and coach Oleg Blokhin into ecstasy», – admired outstanding Argentinian Diego Maradona. In the following games Ukraine lost to France 0:2 and to England 0:1. In the last game our team surpassed the expectations of its fans and struck the European football community. The victory of England has been disputable. One Goal in the gates of the English, scored by Marko Devic, and kicked out of the net by English defender John Terry, was not counted by the judge. A draw would have provided our team as a hostess, the way to the championship quarter final. One way or the other, our team

left the tournament. But Ukraine and Ukrainians have won their victory in Euro 2012. Euro 2012 will end on July 1st with the final game at the Kiev NSK «Olimpiyskiy» where the winner will be announced. European fans, who were traveling to us with fears, are convinced that the bears do not walk in the cities, the police officers don’t grab people on the streets and don’t cast them into prisons, and the people in Ukraine are surprisingly advanced carriers of European culture. And this is everywhere: in the west, in the east, and in the capital. Fans from the old exemplary democratic Europe – the Dutch, Germans, French and fans from other countries, upon their return home will bring mostly positive impressions of their stay in our country. Ukraine, in its turn, proved that it is capable to deal with any project of a global scale. After Euro 2012 our country is unlikely to be refused the hosting of the European championship in basketball in 2015. When Ukraine will be bidding to host the Winter Olympic Games 2022 in Lviv, it will be in a much more favorable position than it was four years ago. After Euro 2012 the image of our country will improve. Any speculations of national and European politicians are powerless. Football Euro in Ukraine showed that sport is beyond politics. Ivan Chepurin

This issue of the newspaper will be released as scheduled – a day before the final of Euro-2012. The schedule comes first. The final results will be in the next issue, but for now, a brief review of the semifinals of Euro-2012 European Football Championship is predictable enough. However, there are exceptions. It is suffice to recall the story of the amazing football achievements: the unpredictable success of Russia and Turkey at Euro2008, the Greek triumph at Euro2004. EURO-2012 demonstrates that the favorites remain favorites. Spain-Portugal. The match was to become the confrontation between the best national team and the world’s best player in Europe – the Portuguese Cristiano Ronaldo. «The Portuguese will be looking up to Ronaldo. He’s the best player in the world and will be happy to lead the team» – said in a BBC radio broadcast football analyst Andy Bressel. «I am responsible for the outcome» – Ronaldo emphasized. During the first half, Spanish team showed a nervous and constrained game. «Spain had a higher pace than normal, resulting in a lot of faults in passes», – commented during the match, expert Danny Mills, – it was impossible not to take into account the powerful pressure of the Portuguese from the first minute». Arbeloa and Iniesta were close to the goal but the ball stubbornly flew over the crossbar. Ronaldo came only once to kick from the vantage point, but the ball went past the bar.

And suddenly in the last 15 minutes «The Red Fury» began to show the football everyone expected. «An amazing turn of events, the Spanish played out and controlled the second 15 minutes» – experts commented. Perhaps, it was this last push that attracted the side of good fortune to Spanish during the penalty shootout. Spain became the third consecutive time finalist for the Euro. Italy-Germany. The Italians, multiple world champions, but only one times champions of Europe (1968) met with the German national team, which has not lost a single match in the qualification. The first half forced the Germans to cry. Mario Balotelli was the author of two goals scored at intervals of 16 minutes. The Germans were at a loss. The second half began with a kick at the gate of Gianluigi Buffon. Captain of the Italians was magnificent. The stadium roared. In the 92nd minute Mesut Ozil performed a penalty at Buffon’s gate. It was too late. Italian football veteran Paolo Rossi predicted: «Azzurrini» shows the best football of the tournament. Midfield with Andrea Pirlo, Daniele De Rossi, Riccardo Montolivo and Claudio Marchisio is the strongest in the world. And the Germans? From 1970 to the present day, we constantly beat them». Rossi’s prediction came to pass. Italy reached the final of Euro 2012. P.S. Germany has not passed the final, and Angela Merkel does need to fly to Ukraine))).

ECONOMY/ENERGY

THE KIEV TIMES | JUNE, 2012

DIVERSIFICATION AS A REMEDY FOR FEAR Ukraine faces the immediate necessity to get rid of dependence on Russian gas. Successful diversification of energy supplies will allow President Viktor Yanukovych to retain power for many more years

kraine intends to buy natural gas in Germany. Such an agreement has been reached between the government of the National Joint-Stock Company (NAC) Naftogaz Ukraine and RWE (Rheinisch-Westfälisches Elektrizitätswerk, which sales volumes of natural gas and has a 17% market share in Germany). Ukraine will buy gas not at a fixed price but in the spot market in small batches. The volume of purchases and price will be determined each time by the individual contracts. Yuriy Boyko, the Minister of Energy and Coal Industry of Ukraine told the agency Bloomberg, that this summer about 5 billion cubic meters of gas will arrive in Ukraine. In total, the volume of purchases will be about 10 billion cubic meters. This is provided in the framework agreement between NJSK Naftogaz of Ukraine and the German gas trader RWE Supply & Trading GmbH, which the parties signed in May this year. According to

gas). Gas is used to a lesser extent in metallurgy. Another 8% of the gas in Ukraine is lost in the pumping stations through the GTS. Since President Victor Yanukovich and team took the reins of power, the government Kiev has been negotiating with the Russian government to revise the pricing principles for gas. There is no progress; the price of gas for Ukraine continues to grow. In the first quarter of 2011 it was $264. per thousand cubic meters in the second quarter it was about $297. In the third it was about $355. In the fourth – about $400. In the first quarter of 2012 natural gas was worth $416. per one thousand cubic meters in the second – $425. Eugene Bakulin, Chairman of NJSK Naftogaz of Ukraine said that in the future, even a slight increase in prices for imported Russian gas is inevitable, and in the third quarter it will exceed 426 dollars. By the end of 2012 the price of gas for the Ukrainian government will

President of Ukraine Viktor Yanukovych and Chief Executive Officer of Shell Peter Voser signed an agreement on joint production of hydrocarbons

experts, our country will be able to import from Europe up to 20 billion cubic meters of gas between 20152016. The gas will come from Europe through Slovakia, and arrive in Ukraine on the Ukrainian gas transportation system (GTS). This means that the largest natural gas pipeline in eastern Europe, which is pumping Russian gas to Europe will be running in reverse mode. Will the leadership of Ukraine have enough political will to implement such an ambitious project? After all, that will need not only solid financing, but the tactics and skillful foreign policy in relations with Russia and the EU. Close economic partnership with Russia is an objective inevitability for Ukraine today. However, support for the European Union, European investment and access to markets is a trump card, which strengthens the position of Ukraine in negotiations with Russia on many issues.

Time bomb

In 2009, the Ukrainian industry received a painful blow. The import price of Russian natural gas increased by 94%. About 52% of the rates growth was due to inflation, the rest by a new contract for 10 years between NJSK Naftogaz of Ukraine and the Russian «Gazprom». The current agreement provides binding the price to the price of fuel oil and gas oil on European exchanges. Fuel oil for our country is not the main type of fuel. Gas oil is widely used, perhaps, in the Carpathian region and slightly less in other western regions. The unreasonably high starting price of $ 450 remains unchanged, even if on the world markets the price of oil is falling. The reduction of domestic consumption is not the answer. The contract of 2009 obliges NJSK Naftogaz of Ukraine to purchase annually at least 33 billion cubic meters. If it is less then that the Ukrainian party is obliged to pay the fines. The over-all gas consumption in Ukraine in 2011 was 54-billion cu-

provide a time bomb that will blow up its position in the parliamentary elections in October. On the one hand, Russia could inflate the price of gas which is already at an impossibly high level for the Ukrainian economy. On the other hand,

Ukraine faces the immediate necessity to get rid of dependence on Russian gas Western partners in the face of the IMF will continue to insist on raising gas prices to the public (population). Ukrainian authorities face a tough need to engage without delay and in serious way the diversification of energy supplies. The government of Ukraine has different plans. What really can be done, and what cannot be afforded or cannot be done objectively?

Non-Russian import – Plans and Reality

Among the potential suppliers of gas to Ukraine, experts and officials in the Cabinet of Ministers of Ukraine called on Azerbaijan, Qatar and the European Union, where a single energy market is formed. It is possible to import gas from distant Qatar and relatively close Azerbaijan by tankers on the sea. To this end, Ukraine needs to build a LNG-terminal – a regasification plant for liquefied products. According to preliminary estimates, the cost of construction of the terminal will be about 900 million euros. If the government, as planned, will form a pool of investors this summer, then this year construction of a terminal will begin in the port «Southern» near Odessa. Then in two years the terminal can accept tankers with liquefied gas. However, to transport gas through Ukraine a gas pipeline from the terminal in the «South» to the CTA has to be built. «Construction of the 80 km pipe will cost about 100 million Euros. This is not a commercial project, but infrastructure. Finding it difficult for investors», – says Dmitry Marunich, an expert from the

In Kiev hopes for relief from imports are associated with shale gas bic meters. Of this amount, 19.2 billion cubic meters was produced in Ukraine. Over the past three years the consumption patterns have not changed much. The general population and budget organizations consume about one third of the total amount, utilities – about 17%. More than 40% is consumed by Ukrainian industry. In the chemical industry, where gas is used as a raw material (80% of the production cost is in

which is a concrete step to implement this project; Azerbaijan and Qatar have already given prior consent so Kiev should take action. Success will depend on the government sequence of actions. Another option to diversify energy imports is voiced by Prime Minister Mykola Azarov. It involves the delivery of gas from Qatar through the same terminal on the Polish Baltic Sea, which should work in 2015. In this case, as well as the purchase of gas from Germany it necessary to run the reverse of the Ukrainian GTS. However, it is yet unknown the extent of technical activities and the amount of investment necessary. A more realistic of all the dubbed versions is the purchase of gas by the German company RWE. Although some experts warn that it is not feasible without the construction of interconnectors as additional capacity

Center for Energy Studies. None of the members of the Cabinet of Ministers has yet to announce a solution to this problem. It is still in the planning stages. Will it be in the near or distant future? There is no clear plan of action, as how the imported liquefied natural gas will be transported through Ukraine and at what price for the end customer. While the government of Ukraine has made a feasibility study

in the Ukrainian gas transportation system that will run in reverse. Others disagree. «This can be done even without the construction of interconnectors. Training will take several months» – said Mikhail Gonchar the director of Energy Programs Center «Nomos». Previously, the possibility to buy gas in Europe for Ukraine was prevented by the intransigence of neighboring Slovakia. The pro-Russian government in Bratislava has blocked the initiative of Ukraine concerning the transportation of oil through the pipeline «OdessaBrody» and then on the «Druzhba» pipeline to the EU countries under President Victor Ushchenko. «Slovaks resistance was overcome thanks to U.S. pressure», – Mikhail Gonchar said. Now Slovakia has agreed to gas transit through its territory, and now there are no barriers to energy imports from Europe to Ukraine.

Domestic production

Ukraine has large reserves of hydrocarbons, proven but still undeveloped. The promising areas are located on land and offshore in the Black Sea. Exploration and production require billions of dollars of investment, and private investment is needed as well as state funding. Two transnational gas-oil companies Shell and Chevron are ready to invest in exploration and production of hydrocarbons in Yuzovsky (Kharkiv and Donetsk region) and Oleshskoy (Lviv and Ivano-Frankivsk region) areas. The companies have already paid for geological information, $1.88 million and $1.32 million correspondingly. Resources of the Yuzovsky area are estimated at 4.05 trillion. cubic meters of various types, and in the Oleshskoy area – 2.9 trillion. cubic meters of shale gas. In Kiev, a hope for relief from imports is associated with shale gas. An example from the United States excites the imagination. Through this resource America, from 2008 to 2009 turned from imports and became an exporter of shale gas. «While shale gas is surrounded by a lot of negative information, it is obvious that both areas are promising. Especially Yuzovskya. But during their exploration there might be

problems due to the effects of mass hydraulic fracturing on the environment» – admits Alexander Lukin the director of the Chernigov branch of the Ukrainian State Geological Prospecting Institute. Due to this technology, to prevent the closure of cracks in the rock, hazardous substances are used. This raises the risk of contamination of water supplies. The U.S. first faced the negative consequences of the development of shale gas. And now, according to Lukin, the U.S. has developed technologies that allow one to avoid contamination of groundwater. One of the factors that complicate the signing of production sharing agreement with the global giants of oil and gas production is the legislation of Ukraine. «Western companies take commitments only on the first step to invest in the exploration of about $188 million, and want to protect their financial investments. Now the question of signing an additional co-operative agreements has appeared», – said Dmitry Marunich. The work itself on the preparation and signing of production sharing agreement between the companies and the Government of Ukraine may take at least six months. And to reach the production volume of about 15

billion cubic meters, according to Marunich, will take the companies at least 15 years. Another source of natural gas produced domestically is the Black Sea shelf. The cost of drilling sub-sea wells is several times higher than the cost of on land so it cannot be done without major foreign investors. For right now «Chernomorneftegaz» produces state-owned hydrocarbons. By 2015, the company plans to increase output from the current 1.06 billion cubic meters per year to 3 billion cubic meters with two new units. But even this amount is insignificant compared to what is hidden in the depths. «On the Ukrainian Black Sea shelf there are more discovered deposits than in the other countries of the basin and there is much more to be discovered. State-owned companies simply do not have funds for their full development»- said Aleksander Lukin. Today, the Ukrainian government is actively seeking partners for the production of hydrocarbons on the shelf. In late May, the Cabinet of Ministers of Ukraine set out the conditions of competition at the conclusion of a production sharing agreement, which will be based in the Foros and Scythian areas. In Ukraine

it will give the partners 70% of the extracted hydrocarbons. Within 10 days after signing an agreement the investor has to pay 300 million dollars for the right to mine. In addition, NJSK Naftogaz of Ukraine representatives are in negotiations with StatOilHydro,one of the world leaders, concerning production on the Norwegian shelf. As potential partners to work this project, Naftogaz is considering the Brazilian company Petrobras, as well as British Petroleum and ExxonMobil. In the next few years main efforts of the Government of Ukraine will be directed to complete projects to supply the country with non-Russian gas. The Kiev Times interviewed experts who agree that the only obstacle to this could be a lack of political will. And Kiev has it according to recent statements and decisions of the highest state officials. «If Viktor Yanukovych allow multinational companies to the hydrocarbon reserves in Ukraine, he will be able to retain the presidency for a second term» – says Igor Lavrinenko the director of the analytical department of the All-Ukrainian Public Organization «Reformed Club». Anwar Chernigovskiy

photo: UNIAN

For gas supply from Europe a reverse mode in our gas transportation system needs to be turned

FINANCIAL SYSTEM/EUROZONE CRISIS

THE KIEV TIMES | JUNE, 2012

GREEK SYNDROME

The Greeks do not want to save money and require Brussels’ agreement with the IMF

«A bag is filled one bean at a time» – said the ancient Greeks, who today, have forgotten their old proverb. They are even willing to destroy the monetary union, just to not comply with its requirements and save money. What happens to the European economy in case Greece leaves the euro zone and how heavy will the blow of the EU fragmentation be to Ukraine? O Sport, You... debt?

The main «apologist» of the devastating scenario, Nobel Laureate in Economics, an American Paul Krugman, insists that the austerity measures imposed by Brussels, hold back economic growth. And, in this case, Greece is better off leaving the euro zone. In Western Europe, almost all politicians and economists stand against the collapse of the euro zone. «Greece leaving the euro zone would be a» worst case scenario» – believes the former head of the European Central Bank (ECB) Jean-Claude Trichet. Prime Minister of Luxem-

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closed and now there is the only resource of money – the population and this money cost a pretty penny for the banks. Is it good for the system? It is the right thing. Many people both in Ukraine and in Europe have lost their ability to value money and have given way to the illusions that financing is inexhaustible. But money is an exhaustible and expensive resource. The more financiers and their customers understand this, the lower the possibility that we would become a second Greece.

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ment. It’s impossible to lend money to borrowers who won’t be able to pay them back. Even if these borrowers are sovereign states.

The epoch of cheap money has gone

photo: OTB Bank press-service, UNIAN, Sergey Dolgov, Nobel Committee photobase

currency. If a country leaves the euro zone, the deposit will be transformed into the new currency, which will cause a difference in the value of money. The Euro, in a country where currency has devalued, may become weaker than the national currency. In the worst case scenario, the full collapse of the euro-zone, currencies will be ranked according to strength. Then, the place of cash in this coor-

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bourg, the head of the Eurogroup Jean-Claude Juncker has repeatedly affirmed that all the finance ministers of the euro area will continue to make efforts to keep Greece in the currency union. Although the UK has retained its pound, authorities fear the collapse of the euro zone, British Prime Minister David Cameron has already said that it is better if Greece stays in the euro zone.

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Greek lessons for Ukraine

Greece is not the only problematic European economy. A few other states in the zone, burdened by debt, remain at risk. Spain has shown two consecutive quarters of declining GDP. Technically, this means a recession. In early June, Fitch gave a negative outlook for Spain, and dropped it three stages – from the «A» to «BBB». Fitch experts believe that Spain would be particularly vulnerable to a new exacerbation of the crisis in the euro zone. There are difficulties in Portugal, which is now supported by the IMF. Ireland’s budget deficit reached 13.1% of GDP. Today, about half of the EU countries have higher than recommended national debt. The probability that by the end of the year at least one country leaves the euro area is 40.1%. This is evidenced by betting options on international markets. Bloomberg forecasts the probability of euro zone break up by the end of 2013 at 60.8%, and by the end of 2014 – almost 65%. In fact, the formal mechanism for the return to national currencies does not exist, which is necessary for the interchangeability of money. Money is the obligation of the banking system. In particular, the commitments of central bank money in the case of uniform currency (eg. bills) and commercial bank commitments in the case of commercial money (eg. deposits). Experts at Morgan Stanley remind us: the euro is an irreversible system, different forms of money are interchangeable, but once the reversibility is switched on, it changes everything. In this case, the money will become diverse. For example, if the euro is the federal currency, then deposits in the National Bank would be in national

Paul Krugman, American economist, the author of the idea of eurozone collapse

A half of EU is guilty National debt of the countries that voilate Maastricht Treaty standards, % of GDP

OPINIONS

Area of risk – all of Europe

are not ready to return to national currencies either. In Greece, this paradox is manifested most strongly. The Greeks claim that the European economic integration has weakened the country, but 71% of respondents adamantly support membership in the euro zone.

Ukraine is hosting EURO-2012. A deeply positive fact is that Ukraine has built the necessary infrastructure with its own money. The reason is not so much in the conscientiousness of authorities, as in the deterioration of the situation in foreign markets, because foreign loans have become too expensive. Greece, which hosted the summer Olympics in 2004, was driven more than 13 billion Euros into debt. This situation was worsened by the government crisis management costs. Today the public debt of Greece is 165.3% of its GDP. It is twice as much as anywhere in Europe (82.5%): 9.1% in Greece and 4.5% in the EU. With these indicators Greece no longer meets the criteria for membership in the euro zone, where public debt must not exceed 60% of GDP and the budget deficit must not exceed 3%. The IMF and the EU have repeatedly provided funds to rescue Greece. The total amount of the package comes to 130 billion Euros. Despite the constant «last Chinese» (absolutely last) warnings, the European Central Bank (ECB) has not denied the Greeks installments on loans. However, despite the victory of the conservative party «New Democracy» (29.7% of the vote), a quarter of voters (26.9%) who voted for the radical coalition SYRIZA remain dissatisfied with the economic prescriptions of Brussels. They support the calls by radicals to refuse EU funding, and abandon the euro. The apocalyptic consequences of the radicals do not stop. The leader of the Greek left-radical coalition SYRIZA Alexis Tsipras admits that if Greece leaves the euro zone, it could lead to the collapse of the currency bloc. Nevertheless, he insists that the conditions of financial assistance from the IMF and the EU for Greece are «barbaric and unjust». «We are talking about the war between the workers and bankers, and not about the war between the people of Europe. We need a socially just Europe, otherwise we do not need it», – says Tsipras. The population of Greece, although not being in favor of the euro, is in no hurry to abandon it. A recent survey in a number of EU countries has shown that people do not consider single currency to be a positive factor for their economies, but they

European banks may leave Ukraine Greg Krasnov, the General Director of Platinum Bank Ukrainian banks have managed to considerably reduce their dependence on European financing; today it is very small. But the Eurozone crisis has virtually closed external financing markets for Ukraine. The only way to avoid the situation in the future is to systematically increase the investment attractiveness of Ukraine and its investment rating. This requires a dedicated introduction of corresponding economic and political reforms. The main lesson we have to learn from the European and Greek crisis is to conduct thorough risk-manage-

Tamash Hack-Kovatch, the president of OTP Bank The Euro zone crisis has considerably changed the value of money. For several years of calm we got used to cheap money. And customers have also got used to it. But the global financial crisis together with the Greek crisis, which has spread over the entirety of Europe, have finally completed the epoch of cheap money. Interbank financing has

Oleg Ustenko, the Chief Executive officer of International Blazer Fund

dinate system becomes unclear. After all, they are obligations of an institute, which no longer exists.

To be or not be «currency zoning in Europe»?

People would flee from weak to strong currency. Depositors will withdraw deposits from banks in countries that are considered to be weak, either to keep their savings in foreign currency, or put in banks of powerful states, like Germany or the Netherlands. And then todays erosion of deposits in Greece (25% from the end of 2009.) and Ireland (25% loss of almost all local and foreign deposits) would seem a pitiful semblance of what might happen if Greece abandons the euro. And this would happen in many countries. Unfortunately, the disintegration has already begun. In February 2012 the ECB allowed the central banks of seven euro zone countries to increase the amount of assets on the balance at their discretion. However, Citigroup’s chief economist Willem Beyter warns that this could lead to a repetition of the scenario of collapse of the ruble in the former Soviet Union. «The ECB is following the road, which leads the euro zone to complete fragmentation of the single monetary policy into the 17 different national variations and, ultimately, the fragmentation of the currency bloc into multitude of independent national monetary regimes», – said Beyter.

Investors have turned their backs on Europe

Rating agencies were quick to warn investors about the dangers of working in the euro zone. Back in January, the agency Standard & Poor’s downgraded the long-term credit ratings of the nine countries. Even Austria and France for the first time in many years, lost the highest credit rating at ‘AAA’. This confirms that the euro zone still has not clearly demonstrated to the market, how it will overcome the ongoing, two year plus debt crisis. Soon after, the example of S&P was followed by the Fitch agency. Investors have turned their backs on Europe. «There is a great likelihood of Greece leaving euro zone, which may lead to a spread of the crisis in the region. In addition, it is not clear whether Portugal is firm on its feet», – said Andrew Balls, the chief portfolio manager for European countries at Pacific Investment Management Co (PIMCO). PIMCO manages the world’s largest portfolio of bonds. Now, the company avoids investing in the debt securities of Greece, Ireland and Portugal. It is beginning to be wary of Spanish, Italian, and French bonds as well as bonds from other leading European countries. Balls spoke about it openly. The Chairman of the U.S. Federal Reserve System (FRS) Ben Bernanke, while recently making a report to the members of the Committee of Eco-

Of course, the unsettled problems of Greece also negatively influence other European countries. Spain is triggering a program of collaboration with IMF and by this draws away the financial resource, which has been planned for assistance to third world countries and developing markets including Ukraine. Greece, according to our forecasts, shall leave Euro zone but will probably do this gradually. Thereafter the default will be declared and all debts will be submitted for consideration to the Paris club of creditors. The European Central Bank will have to make investments thereby provoking the growth of inflation. Together with the aforementioned there will be devaluation of Euro, which to our forecasts will make 1,15 Euro per Dollar. Against this background the Ukrainian export to European Union shall be reduced. Now it takes 25% of the total export of our country. Direct foreign investments and the flow of private funds will also decrease. The most probable and negative consequence of the Eurozone crisis aggravation will be reluctance of European banks to render assistance to their subsidiaries in other counties. Thus the risk zone shall be extended to the banks with European capital in Ukraine. As a result they may leave our country.

nomic Affairs of the U.S. Congress said that the crisis in the euro area creates significant risks for the U.S. economy. Moody’s Investors feared that the decline in Chinese exports to Europe threatens the credit ratings of the PRC. Analysts at Bank of America Merrill Lynch Global Research fear that if Greece leaves the euro zone, the price of Brent crude oil could fall to $ 60 per barrel in the next 18 months.

Ukrainian scenario

Ukraine, where trade with the EU accounts for about one third of total foreign trade, also falls into the danger zone. Though Russian investment company «Troika Dialog» keeps GDP growth in Ukraine in 2012 at 3%, it allows for the possibility of a downgrade revision. «If the macroeconomic situation in Europe does not improve, it is possible that the Ukrainian economy at the end of this year will show very sluggish dynamics, and growth of about 2%» – company experts said in late May. A survey of Ukrainian businessmen showed that they do not have a plan in case of the collapse of the euro area. They are not alone, however. International experts say that

fore the crisis and are now thinking about leaving the Ukrainian market. The possibility of selling their «daughters» in Eastern Europe was brought up back in 2010 said Christian Conrad, the head of the Supervisory Board of Raiffeisen Zentralbank. German Commerzbank is now negotiating with the owner of StartHolding Vadim Novinsky to sell its Ukrainian «daughter» Forum Bank. In late May, Swedbank sold the retail portfolio of nearly 2.5 billion UAH to Delta Bank. In early June, another Swedish Bank SEB was sold to the former head of UkrSibBank Alexander Adarich. However, three Greek banks in Ukraine still feel confident enough – Piraeus Bank SA, Astra Bank and Universal Bank. They own very small market shares. According to the National Bank of Ukraine (NBU) on May 1, these banks accounted for only a 2.2% total share of the capital in the banking system. The share of the assets was 1.44%, liabilities – 1.48%, and the saving deposit of the population – only 1.2%. With regard to the influence of Greco-European crisis on other sectors of the Ukrainian economy, the domestic businessmen confess that

Today, about half of EU countries have national debt above the recommended level companies in Eastern Europe are least prepared for the collapse of the euro area and are the most susceptible to adverse effects. In particular, 84% of top managers in the region said that their business will feel the results of the collapse of the currency union, and only 10% have a plan of action in this case. The effect of the crisis on the financial system is already being felt. European banks paid dearly for Ukrainian financial institutions be-

starting from 2010 they no longer rely on the European markets and redirect trade flow to Russia. Untried Asia with billions of customers attracts them more and more. A travel agencies dream, rumors about the Greek default keep spreading. In anticipation of a sharp drop in prices, Ukrainians are buying tickets to Greece like hot cakes. A crisis for some, and business for others. Ilya Vinogorodsky

ДИСТРИБЬЮТОР В УКРАИНЕ: ООО «ТРЕНД» 83048, г. Донецк,проспект Титова,7 тел.(062) 311-17-04, тел/факс:(062) 311-32-50, e-mail: kosm@beautyperfection.com.ua www:beautyperfection.com.ua

INTERNATIONAL POLITICS/CIS COUNTRIES

THE KIEV TIMES | JUNE, 2012

UNION RETURNS?

The new Russian leadership headed by three time President Vladimir Putin will not miss the right moment and will do everything possible to restore the economic union of post-Soviet countries. Ukraine is the main goal of the project

ower in Russia has moved from Vladimir Putin ... to Vladimir Putin. The role of Prime Minister Dmitry Medvedev was revealed his visit 18-20 May, to the summit of the Group of Eight (G8) at Camp David in the United States. The Russian Prime Minister was remembered when he conveyed a letter from a «friend Vladimir»

Soviet Union. The European Union, which in the early 2000’s had an active influence on policy in the region, now occupies the position of «active observer». In Brussels, there are so many other problems that they were no longer willing to spend resources to weaken Russia’s influence in the post-Soviet region. The most pro-

its supremacy in the region. This requires international institutions, led by Russia. The protracted global financial and economic crisis has pushed the Kremlin to the creation of the Eurasian Economic Union. «The construction of the Customs Union and Single Economic Space provides the basis for the formation in the future of the Eurasian Eco-

close strategic relationship with Russia in its foreign policy has always tried to maneuver between the power centers of the world and benefit in all areas – Moscow, Washington, Brussels, Tbilisi, Tehran. Thus Armenia entered into the (CSTO Collective Security Treaty Organization) for its own safety. Azerbaijan, self-sufficient through the sale

found crisis of the economic system in the history of the European Union and the instability of the global economy have caused a fatal blow to the weakest countries in Europe. Greece is on the brink of bankruptcy. Analysts do not rule out that it will be followed by Spain, Ireland

nomic Union», – wrote the newspaper «Izvestia» on the eve of the presidential election. «In Vladimir Putin – we offer a powerful model of supranational union, able to become one of the poles of the modern world and play an effective role «binding» Europe and the dynamic Asia-Pacific region». «An Elite series of post-Soviet states realize that the potential of autonomous development has been exhausted. Integration processes are creating new opportunities to protect their national economies in a rather difficult time, which are projected to get worse», – said Russian politician Konstantin Simonov. The political leaders of post-Soviet countries understand the vital importance of economic integration. However, Putin’s foreign policy in the region is likely to cause conflicts. Too complicated countries and too difficult relationships between them and Russia.

of energy is no worse off without Russia. But the country’s leadership is working closely with the West so there is no an incentive for integration associations with Russia. The participation of Georgia (which is in open confrontation with Russia) in any project of Moscow should not even be mentioned. Another big problem waiting for Putin is Moldova. Moscow is anxiously watching Moldova’s idea of unification with Romania – a so called unionism. The Unionists won’t agree to any integration with Moscow. In response, according to observers Moscow will use its influence in Transnistria as a leverage over Chisinau. The confrontation is unfolding. Without any con-

that Putin may even support the secession of Transnistria. The precedent has already been set when the Kremlin took the sides of the unrecognized states in Georgia’s military conflict with North Ossetia and Abkhazia. Games of the Kremlin with the Transnistrian separatists pose a serious threat to stability in the region, and, above all, the territorial integrity of neighboring Ukraine. If the Moldovan unionism cross the red lines and the Kremlin gives the signal for separation of Transnistria, the rest of Moldova will go to Romania. This is the first step of denouncing the Soviet-Romanian agreement in 1940. According to it, Romania gave its territo-

The Kremlin has a brilliant chance to set a monopoly influence on the CIS

to U.S. President Barack Obama, in which the old/ new Russian President outlined his view on RussianAmerican relations. «When the wind of change blows some build walls others build windmills», – this ancient oriental wisdom, Vladimir Putin well compre-

Moscow expects that the complication in relations between Kiev and Brussels will make the leadership of Ukraine have the «Turkish Syndrome» hends. He intends to review foreign policy and to derive maximum benefit from the crisis that has rocked the modern world order, Putin intends to extend the main efforts of Russian diplomacy to the post-Soviet space.

The new Institute of Russia’s monopoly.

For the first time after the colour revolutions in Georgia, Ukraine and Kyrgyzstan in 2003-2005. As far as Russia is concerned, nothing can prevent it from conducting a successful foreign policy in the former

and Portugal. Not far behind them is Italy. In foreign policy, Brussels is forced to seek funds and political resources to guide in a safe direction the new democratic processes in North Africa. Tens of millions of Euros go to the new «democratic» regimes in the Middle East. Probably tens of millions will go to stabilize the situation in Libya and Algeria. Moscow gets a chance to set a chic monopolistic influence on the postSoviet countries. The task of Russian diplomacy is to exploit the situation and secure

Hard-headed friends

Integration with other countries in the region will be none the less difficult. Armenia, in spite of the

EUROPE AT THE BOTTOM The European Union is in the deepest of its entire half-century history crisis – from the financial system to its social values. If Europe's leaders do not find a solution soon, the political processes taking place in Europe will bury the European integration

Spain is on the verge of bankruptcy, and even asked for money from eurofunds

President Putin expects President Yanukovich’s steps toward economic integration with Russia

ries to the Soviet Union, some of which were included in the Ukrainian SSR. Then Romania can present territorial claims to Ukraine for the Ukrainian part of Bessarabia in Odessa region and northern Bukovina in Chernovtsy.

For Vladimir Putin, Ukraine’s involvement in integration unions in the post-soviet area is the most important task for his third term as a

enter the Russian integration structures. Only then can Ukraine expect a decrease in gas prices. Neither attempts of the Ukrainian leadership to denounce the gas deal, nor symbolic steps toward a friendly partnership in a law of the Russian language will be accepted by the Kremlin. Concrete steps from the President of Ukraine Viktor Yanukovych are awaited. Vladimir Putin and his team realize that such successful conditions will not likely occur again in the medium term for the reintegration of the former Soviet Union and Ukraine in particular. Sergey Dolgov, Moscow, specially for The Kiev Times

the Greeks, Brussels can not count on their compliance. In the second round of parliamentary elections on June 17, the conservative party New Democracy won. Party leader Antonis Samaras has said that the coalition government will abide by the agreements with foreign creditors. But a quarter of voters remain on the side of the radicals, who are lagging behind the leaders by less than 3% of the vote: 26.9% vs. 29.65%. The leader of

of the euro zone, thus sanctions against the Hungarians would not particularly weaken the euro. However, Budapest violates not only the fiscal discipline, but also the rights of its citizens. Hungarian Prime Minister Viktor Orban has actually imposed censorship on the media, and has put the Central Bank and the judicial system under the control of the ruling party. However, the biggest challenge to the EU – the new constitution of Hungary. It suggests

Moscow gets a chance to set a chic monopoly influence on the post-Soviet countries sultation with the Moldovian side, Moscow appointed Dmitry Rogozin a well-known political hawk, to be the Special Representative of the President of Russia on Transnistria. Some observers do not rule out

he economic situation in Europe is reaching the bottom. Italy, Portugal, Ireland and Spain are on the verge of bankruptcy. In mid-May the latter even asked for loans from Eurofunds, which were created to help the least developed regions of the EU. According to experts, the salvation of the Spanish banking system will need 120 billion euros. The financial crisis in Greece is reflected in the economy across Europe. For Brussels, the biggest difficulty with the Greek problem is not the large gap of external debt to GDP, or the absence of a real economy and not even the bloated social sphere. It is that Greeks refuse to take responsibility for the situation in their country. Up until the global financial crisis Greece had been living on loans for several years. In the current crisis, the necessity to start saving is an urgent, objective need for them. However, rather than accepting the conditions of European Commission and, in exchange for loans start reducing budget costs, they are accusing Brussels in dictatorship. The leadership of the EU and the main donor in the EU, Germany, have repeatedly threatened to stop financial support for Greece. In May, the situation became deadlocked. SYRIZA, a coalition of left wing forces, won in the parliamentary elections. Their main slogan is stop the policy of saving and break the agreement with the IMF. While common sense has prevailed among

president. Moscow hopes that the complication of relations between Kiev and Brussels will give the «Turkish syndrome» to the leadership of Ukraine. Few politicians doubt that the European Union is not ready to give a signal of Ukraine’s membershipboth now and in the near future And it’s not a question of which political party is in power. For the EU, Ukraine is too big and complicated a country to integrate it into their ranks. On the other hand to give an official denial would be a strategic mistake. That’s why Brussels lures Kiev with small projects like the Eastern Partnership to give Kiev conditions that will lead to new conditions. Now the current Brussels requirement without which «no European integration» will be done is the «right» parliamentary elections in autumn 2012. Likewise Brussels behaves the same towards Turkey. As a result, Euro integration for Turkish politicians turned into Euroscepticism. Such sentiments have spread among the population. The same reaction to the «Brussels gingerbread» Moscow is expected from Ukraine. The Russian leadership avoided drastic steps against Ukraine not to be caught interfering in internal affairs. President Vladimir Putin has demonstrated greater moderation than his predecessor Dmitry Medvedev who has openly called Tymoshenko’s case a political one. Putin opposes any sanctions against Ukraine and offers the West a compromise in Kiev’s respect. «If Yulia Tymoshenko considers it possible, and if the authorities of Ukraine and our Ukrainian partners will agree, we would be happy to take Julia Tymoshenko to Russia for treatment at any time convenient for her and for the Ukrainian authorities and in any medical institution», – said the Russian President recently. At the same time Moscow makes full use of its gas-oil ratio to put pressure on Kiev to take concrete steps to

The starting point – Ukraine

The Greeks will continue blackmailing Brussels with public unrest the SYRIZA Alexis Tsipras said that they remain in opposition. Concessions to the EU leaders still have to be made. The Greeks will continue to blackmail Brussels with civil unrest, refusing to perceive threats at home. They have their own reasons.

Public instructive flogging failed

Expulsion of Greece and default of its economy will cost Europe 270 billion euros. 100 billion of these will have to be paid by German and French banks. However, few Europeans believe that Brussels is capable of any serious sanctions. Attempts by the EU to intimidate recalcitrance ended in complete failure. Seeing as the younger members of the EU violate European laws, Brussels has decided to scare them. Hungary was chosen for the role of the victim. The country is not a part

the possibility of revising the postwar borders in Europe and provides a basis for territorial claims. And these are, in fact, actions aimed at splitting the united European house. Brussels has threatened to deprive the Hungarians of transfers of funds. «If Hungary does not begin to carry out the budget for this year, at the beginning of the next one we may stop payments from the Cohesion Fund (a fund established for the development of Eastern European economies, in order to bring them to the level of the old members – Ed)», – said Deputy Chairman of the EU on Economic Affairs Commissioner Olli Rehn. Hungary was threatened with loan denial. According to the forecasts of financial analysts, without external borrowing the country might declare bankruptcy in the fall of 2012. Hungarian Prime Minister Orban has nevertheless gone on to

photos: UNIAN, Sergey Dolgov, manufacturers

INTERNATIONAL POLITICS/THE EUROPEAN UNION

THE KIEV TIMES | JUNE, 2012

«ALEA IACTA EST» – THE DIE IS CAST

The sacramental phrase of Julius Caesar, said by him while crossing the river Rubicon – «Alea iacta est», today might well be used to understand the role and place of Ukraine in the modern world

o its neighbors Ukraine is clearly a «chunk», which we are not willing to give, but no one is going to take it. Poland dreams about Ukraine, closely adjacent to its borders economically and politically. Germany sees Kiev as a buffer between Europe and Asia. Russia dreams of transportation networks and an energy sector, the EU is ready to seize the financial system of Ukraine. And finally, the U.S. does not object to draw Kiev into the risky game called «missile defence». Why is Kiev today as a bride everyone wants, but no one marries?

Berlin was betting on the «orange», another Ukraine is not in demand

Orange European euphoria

some compromises with Brussels and the experiment with flogging failed. New Europe has learned from it quite different lessons. Young members of the EU regarded the Hungarian case as an attempt by Old Europe to deprive the country its sovereignty. Poland took the side of Viktor Orban. «Although the position of the European Commission is legally justified, Poland gives its political support to the Hungarian government against excessive pressure in Brussels», – said Polish Prime Minister Donald Tusk. The opposition supported the ruling party. Rallies in support of Hungary with the traditional burning of the EU flag took place in Warsaw, Poznan and Gdansk. Obviously, in the future Brussels will abandon these kinds of sanctions, in order not to add to the split between Old and New Europe.

photo: UNIAN, EU photobase

Discord in marital tandem

Perhaps, the sanctions would not have been needed if Brussels had had some informal tools to make the Greeks, Hungarians and other recalcitrants comply with European law. But the EU has remained without an effective governing body. Franco-German partnership «Axis Berlin-Paris» had always stabilized

Foundation, which is close to the party «Alliance ‘90/The Greens», speaking at a forum in Berlin, said: «It is unacceptable that the EU Eastern policy has led to a new division of Europe into zones of geopolitical influence».

Another Ukraine is not required by Europe Tymoshenko’s trial as Europe’s pretext for harsh criticism of Kiev

I remember well the German euphoria of the first «orange» days. Berlin politicians were excitedly telling each other and the press about the orange spring, the young pro Western politicians coming to power, who will lead Ukraine to where it has a future. And the future of Ukraine, Berlin was sure about, is only in Europe. In 2004, the influential German newspaper «Berliner Zeitung» wrote that «the sympathy and support for the» orange revolution «does not necessarily mean support for individual candidates». But just two years later, the speaker of the faction of the party «Alliance ‘90/The Greens» in the Bundestag Raynder Steenbok, clearly bets only on the «orange». In his press release, he wrote: «We welcome the agreement of the three proWestern parties of «Orange Revolution» on creating coalition». And further: «The creation of an economically strong Ukraine, not only as a close partner to the eastern borders of the EU, but as part of united Europe, is in the interest of Europe». Brussels quickly began to build upon the old plans for rapid integration of Kiev into European structures. Europeans genuinely believed that Ukraine could now leave the field of attraction of Russia and nothing will prevent it to become at least an associate member of the European Community. Let us be honest, these dreams, for example in Berlin, were linked to two names – Yushchenko and Tymoshenko. Numerous plans of the Europeans, linking the program of the eastern partnership and association agreements, were quick to give Ukraine a real prospect of full EU membership. However, with the change of government in Kiev, the mood in Europe began to change. In Berlin there were rumors that Yanukovych and his team are not very much inclined towards the West. On the other hand, Russia has again begun to actively recruit Kiev to go to the east and enter the customs union, which further alarmed Brussels. Multimillion-dollar funds that had been planned as part of the Eastern Partnership have been virtually unused. The EU was clearly afraid to invest in Ukraine, and not wanting to quarrel with Russia. Ralph Fuchs, an expert from the German Heinrich Boell

Early last year, on the sidelines of the meeting concerning Ukraine, which took place in the Bundestag, the participants seriously discussed the possibility of exit from the process of signing an agreement on EUUkraine Association. Any excuse was necessary to freeze the process of signing and ratifying the Association Agreement. Ukrainian leaders willingly gave an excuse – it was the case of Yulia Tymoshenko. Experts, politicians, and parliament members eagerly seized the kindly offered hand, and the folding process of the dialogue with Kiev began. On the one hand, Ukraine on issues

relations between the EU Member States. Now the double bed decorated with monogrammed words «Merkozi» is empty. Instead, the twostory wooden bunks were erected. The bottom is occupied by Francois Hollande, and the top with the German Chancellor Angela Merkel, hissing threateningly: «Just dare to snore!». This cartoon describing the current state of Franco-German tandem was published by newspaper Financial Times Deutschland. The most powerful country in Europe, Germany for a long time showed no political activity, so as not to cause a painful association with the World War II. The Germans shared the roles with the French: Berlin – a purse, Paris – a megaphone. These two determined the main directions of economic, social and foreign policy of the EU. It is the Franco-German tandem which determined the way out of the financial crisis in the euro zone as well as the solution of the Greek issue. Merkel and Sarkozy (their union got nickname «Merkozi») have developed a joint fiscal pact, which introduces a regime of austerity in the euro area. However, according to the results of the presidential election, Sarkozy lost his position. France’s new pres-

The strengthening of nationalism is a ticking time bomb under the whole European project

of sovereignty and the development of state institutions and rapprochement with Europe has advanced further than any other post-Soviet state. On the other – Ukraine is severely criticized in Europe and especially in Germany, for the problems of democracy using as an example a criminal case of Yulia Tymoshenko. Interestingly, very few people argue about the nature of the case – whether Tymoshenko is guilty or not. For European observers, the mere presence of a legal precedent is important. The fact of the Tymoshenko trial is used as evidence of Ukraine deviation from democratic values. Sometimes they recall Yuriy Lutsenko, but since the former minister is practically unknown in Germany, it is not very productive to use his name for criticism of Kyiv. Outside observers do not want to know what Ukraine has done on its way to Europe. Without belittling the problematic nature of the criminal case, the interest of German media is concentrated on Tymoshenko’s cell, her illness, doctors from Berlin’s Charite hospital, and bruises on the body of former prime minister. Meanwhile, the association agreement is almost buried, and Chancellor Angela Merkel even refused to attend the opening of the European Football Championship. Without hesitation, Ukraine was «pushed» into the far corner of EU projects. One of the deputies of the Bundestag, with whom I had the opportunity to discuss this matter with confidentially said: «Don‘t you understand? The bet was on the orange, nobody needs the other Ukraine». However, Stephan Meister, an expert at the German Council on Foreign Relations, believes that sooner or later Ukraine will be in Europe.

«There is no alternative to this development. Plans for a joint future with China or Brazil, is nothing more than a Ukrainian «fata morgana», – he said.

drew from its plans to join NATO? First, there is no absolute clarity as to whether Kiev refused entry into NATO. On the one hand, Viktor Yanukovych said last year that Ukraine did not plan and does not intend to join NATO. «We were, are, and will be non-bloc country», – said Yanukovych. On the other hand, just recently, the First Vice Prime Minister of Ukraine Valery Khoroshkovsky said to Deputy NATO Secretary General Dirk Brengelmann that «Ukraine

army, without the millions and even billions of dollars of investment, the military value of Ukraine is not very large. The strategic benefits to be gained from Kiev are difficult to overestimate. «SMART DEFENCE» is a new global project of NATO, which was officially announced at the Chicago summit on May 21. According to NATO Secretary General Rasmussen, «Intelligent defense» presupposes the union of funds from the member states for the acquisition of the latest

ident – socialist Francois Hollande went to a confrontation with Angela Merkel, and opposed the fiscal pact. «In every capital, on the other side of governments and heads of state, there are people who have now, due to us, found hope and want to do away with the policy of economy», – said Francois Hollande. French president-socialist calls to stimulate the economy through foreign borrowing.

on the» growth pact «for Europe», – said German Foreign Minister Guido Westerwelle. However, Francois Hollande is actually ruining the Franco-German tandem. «Germany can not decide for the whole of Europe», – he said. «No more talks of a decent North and sinning South. Instead we see a Europe consisting of the countries with the character, history, strengths and weaknesses», – said

The radicalism rather than political correctness

«Missile defense», NATO and «Smart defence»

However, even if Europe refuses Ukraine, the United States is not willing to so easily give up plans to include Kiev in a number of its military and strategic allies. What alliance can we talk about after Ukraine withNATO Secretary General Anders Rasmussen wants to see Ukrainian military component in his ranks

French President Francois Hollande is ruining tandem «Paris-Berlin»

The Germans were shocked. They have spent so much effort to ensure that Europe has agreed at least to some common solution to the crisis, and now they are forced to abandon the Stability Pact. German leaders are trying to convince the new president of France not to denounce it and are willing to sign a new agreement on stimulation of the economy. «Now we will work together

will strengthen its cooperation with NATO taking into account the nonaligned status of our state». How can you not remember the unforgettable Viktor Chernomyrdin, who on one occasion said: «You know, Ukraine puts the vector so perpendicular, that no one can understand». Americans are not bothered with verbal somersaults of Ukrainian politicians. They want to see a Ukrainian military component in their ranks. Of course, they know that without the modernization of the Ukrainian

one of the leaders of the French Socialist Party, Arnaud Montebur. Apparently, France feels it is too tightly in the grasps of Berlin. Instead, the position of «second of two equal», she intends to head south and discourage the German superiority in the European Union. Analysts fear that the French ambition may be the last nail in the coffin of European integration.

models of military equipment, they cannot afford to buy and operate on their own, for joint use. This includes the creation of an entirely new system of monitoring the ground with AGS (Alliance Ground Surveillance), and a controversial missile defense project. What can Ukraine, struggling to solve its economic problems, give the U.S. and NATO in this project? No money, no new technologies in the military field. But hasty conclusions should not be made. The most valuable thing that Ukraine owns is its strategically important geographical position. It’s easy to start with Ukrainian radar located at Sevastopol in the Crimea and near the town of Mukachevo. Here, even without Western investments, benefits that United States will acquire are clearly visible. As soon as Kiev joins the missile defense project, NATO will, at virtually no cost, get control of airspace in the vicinity of the Russian Black Sea Fleet. Radar in Mukachevo will cover Hungary, Slovakia and Poland against Iranian missiles, as well as get control of the «Russian line». At the same time Ukraine will be given the dubious privilege to participate in the military plans of Washington and NATO, but will be drawn into a new political conflict with Moscow. «For courage» Kiev will be given huge loans, which may subsequently be used by NATO to buy unmanned aerial vehicles within the «intelligent defense» frame. Loans will have to be paid back – free cheese is only in a mouse trap. And, the fact that Ukraine in these plans would play the role of Azazel, sacrificed for the sins of others, will hardly be of any concern for the big neighbor from across the ocean, and military experts from Brussels.

I like to move it

There is no replacement for the Franco-German tandem. The crisis in the European Union is growing.

Nevertheless, Ukraine does have prospects in Europe. I am not referring to the European football championship, although I would have liked to. And it is not the first place among the European Parliaments with fist fights in the plenary sessions. Although the video about the massacre in the hall of the Verkhovna Rada was very popular in German political circles. I was even asked whether Klitschko brothers give advice to their Ukrainian counterparts. It turned out that Ukrainians occupied its place in Europe due to the song «I Like To Move It», which was posted on YouTube by Lviv music band Los Colorados. Fiery and funny polka was noticed by German director Detlev Buck, who suggested it as an anthem of the European Football Championship during the broadcasts on the second German television channel ZDF. So in the coming weeks, Ukraine is definitely in Europe. All Germany will listen to Ukrainian group, but unfortunately only in English. Alexander Sosnowski, a publicist, Berlin, specially for the Kiev Times

«European societies should be able to rely on strong social unity, which can only exist in a monocultural system» – a phrase of the manifesto of the Norwegian terror-

The European Union remains without an effective governing body There are no strong leaders the caliber of Helmut Kohl, while traditional European parties are experiencing a crisis of confidence. Closure of the political elite and the excessive political correctness has led to the fact that they broke away from the voters and no longer offer adequate solutions to their problems. Gradually, radicals have come to power in Europe – there is a new threat to the European project. Fringe parties, who are speculating on the memory of the greatness of the colonial past of Western Europe and the «golden ages» of Eastern Europe, are in the political forefront now. Their leaders are openly speaking about sore subjects for Europeans. The right-wing bet on the problem of migrants who are unwilling or unable to integrate into European society, turning entire cities into «little Pakistan» and «little Algeria». It turned out that the Nazis, in order to come out of the political ghetto, do not even need to change the ideological platform – it is enough to replace the Jews with Muslims. The call to bring order to migration, has found a broad response from the Europeans.

ist Anders Breivik, that many residents of Europe are ready to subscribe to. The strengthening of nationalism is a ticking time bomb under the whole European project. A united Europe was established as a universal solution to the problem of rivalries between European nations that have plagued the Old World for many centuries, and eventually led to two suicidal wars. There was the idea of a certain universal inhabitant – the European with shared liberal democratic values and the idea of a free market. The current financial crisis extensively eliminates these values. If radical governments come to power, while young members of the EU continue to persist in their unwillingness reduce budgets, the rejection of a common currency and the collapse of the Schengen area is not far off. The consequences can be sad. «No one should presume that half a century of peace in Europe is definite. If the euro falls, Europe falls. It should not be allowed»- says Angela Merkel. Sergey Dolgov from Brussels, specially for The Kiev Times

POLITICS/THE GENERAL PROSECUTION OF UKRAINE

THE KIEV TIMES | JUNE, 2012

RENAT KUZMIN: ARE TIMOSHENKO, LAZARENKO AND KUCHMA MURDERERS? Answering about the most frequent questions been asked, Renat Kuzmin, First Deputy Prosecutor General of Ukraine pondered for a second and said: The three most frequent questions combined into one would sound like: «Are Timoshenko, Lazarenko and Kuchma really murderers?»

tered a claim and ignominiously lost it. Three degrees of jurisdiction have considered her case groundless and confirmed my rightness, including the Superior Court of Ukraine. Alexander Seryy: Is Lutsenko also a criminal? Renat Kuzmin: Lutsenko is a thief and this is also established by two

or another person. It is no secret that there are few professionals in journalism. Any sphere is short of professionals. There are many doctors but very few good doctors. As well as lawyers... And when you meet professional journalist, you wish to work with him Let me /smiles/ ask you, the journal-

If a lawyer Vlasenko would call a donkey a plane, it (the donkey) would not fly into the sky inal and we have to agree with this. As formerly we have agreed when the court declared the third tour of the presidential elections. Do you remember? Alexander Seryy: But Vlasenko, the lawyer, affirms that the case is falsified. Renat Kuzmin: If Vlasenko will call donkey a plane, he (the donkey) will not fly to the sky. I repeat once more: Timoshenko is a criminal and this is established by the Ukrainian court. Ex-premier Lazarenko, her recent protector, is also a criminal and this is established by the American court. Full stop. Alexander Seryy: Are you not afraid that Julia Timoshenko will sue you for slander? Renat Kuzmin: No, I do not. Especially since she has already regis-

degrees of jurisdiction. He is acknowledged guilty in official malfeasance including theft of national property and this means that Lutsenko is a criminal and that’s all. No, not all. He is a thief who is trying to convince the international community that he is a victim of political repressions but not a criminal offender. By the way, like Timoshenko and Lazarenko. Alexander Seryy: You refuse interviews to many Ukrainian mass-media. What is the reason? Renat Kuzmin: I give interviews not when I am asked to, but when I wish to give them. Alexander Seryy: Good. When do you agree to give an interview? Renat Kuzmin: I agree to give an interview in case there is an internal feeling that it’s worth it to talk to one

ist, questions. Some kind of cross interview. Would you mind? /smiles again/. How do you think, who is a Journalist? Alexander Seryy: A journalist is a person who can provide information impartially. The reader has to have

of a negative or positive image for money, the right phenomenon? Alexander Seryy: The journalist states the facts by the «I write what I see» principle. And if he tries to stick the ordered result to a person he is interviewing… Prostitution exists in journalism too. Renat Kuzmin: What types of journalists are there in Ukraine? Alexander Seryy: Journalism is short of professionals and this is a pity. And until absolutely objective journalists appear, the yellow massmedia will prevail. But let me ask the questions. If you are pressed, what is your behavior? Renat Kuzmin: When I am pressed, I think first of all. And then react. Alexander Seryy: To make serious decisions for you is…?

Some politicians capitalize on conflict the right of his own opinion concerning the information. Renat Kuzmin: What do you think; can a journalist express his own opinion? Alexander Seryy: Yes, he can but only declaring that this is his personal opinion. The journalist can’t pass on his opinion as the opinion of the majority. Renat Kuzmin: Is a journalist, who carries out an order for the creation

Renat Kuzmin: … is to make important, sometimes vitally important decisions. And in the process to take responsibility for the results of such decisions. You have to be able to take the leadership in nonstandard situations and not to shift responsibility to anybody. Alexander Seryy: What is the main disappointment in your life? Renat Kuzmin: I have not had such disappointments to really shake me

up yet. Maybe it’s because I am always ready for everything. Ready twenty-four-hours. Alexander Seryy: What does your breakfast look like? Renat Kuzmin: I do not have breakfast usually. Nor do I have any cheerful morning rituals. The main task in the morning is to wake up. And this can be very hard! Alexander Seryy: How often do you think about work after awakening? Renat Kuzmin: Morning thoughts practically do not remain in my mind. But if work takes as considerable a part of life, as my work does, it is easy to imagine me thinking about my work any time of day. Alexander Seryy: Even the most self-possessed person can allow himself to... Renat Kuzmin: I do not know what the most self-possessed persons can do. I can allow myself almost everything except... Alexander Seryy: Are there things you will never allow yourself to do? Renat Kuzmin: To strike a woman, a child, a pet. Alexander Seryy: What is the men’s friendship for you? Renat Kuzmin: This is mutual liabilities without selfish motives. Alexander Seryy: Who are the controller and the judge in mutual liabilities? Renat Kuzmin: Conscience. Alexander Seryy: Any of your friends can have his own truth. How can one prove his rightness? Renat Kuzmin: Arguments are not of benefit. You can win an argument with your friend and lose this friend. Only a dialogue makes understanding possible. If people do not talk to each other, they often part. Alexander Seryy: What does your job mean for you? Renat Kuzmin: My job is something bigger than simply a job. I work not for wages. Alexander Seryy: What is your motivation then? Renat Kuzmin: My motivation is a sense of justice and rightness of the work I do. Alexander Seryy: What supports you in your work? Renat Kuzmin: The conscience of my own rightness and the correspondence of my work reflect the principles of justice and my internal beliefs. Alexander Seryy: What can you not allow yourself to do at work? Renat Kuzmin: At work I never allow myself what I can allow myself being not at work Alexander Seryy: A good boss is… Renat Kuzmin: … an effective manager, who tries to obtain assigned tasks and takes care of his inferiors.

Alexander Seryy: A good inferior is… Renat Kuzmin: … a worker who effectively execute tasks given by the boss and doesn’t make problems. Alexander Seryy: The main thing between manager and inferior is … Renat Kuzmin: … trust, reliability, discipline. Alexander Seryy: Discipline is based on … Renat Kuzmin: … on fair encouragement and a disciplinary system. Alexander Seryy: Discipline is destroyed by … Renat Kuzmin: … by encouragement of those who are not privy and punishment of those who are not guilty. Alexander Seryy: Have you been often unfairly punished? Renat Kuzmin: Such things happened. Alexander Seryy: Betrayal for you is … Renat Kuzmin: … going across to the enemy side, participation in a struggle against friend and ally. Alexander Seryy: What is the main thing in your life? Renat Kuzmin: Justice. I am sure that justice will triumph. Alexander Seryy: What intrigues you? Renat Kuzmin: … Starry sky. I often look at the starry sky. Alexander Seryy: Life indeed is… Renat Kuzmin: Once I congratulated a very respectable woman on her birthday and in my toast quoted some famous words of Faina Ranevskaya about what is life. After that my interlocutor hasn’t talked to me for three months. A sense of internal freedom like Ranevskaya has is not inherent in many people. That’s why I will not continue. Alexander Seryy: You are from Donetsk. It leaves its mark. Renat Kuzmin: I’m from Donetsk, but this means to me only the fact that I was born in Donetsk. Alexander Seryy: Does religion play an important role in your life? Renat Kuzmin: I believe in God, but faith is not a theme to discuss. It is not good when people turn faith into a public subject. Alexander Seryy: It is silly when... Renat Kuzmin: … something looks awkward. Foolish things can be cheerful, kind and even sweet. But they can be annoying, cruel and even dangerous too. When a man is soothing a woman says «you are my little fool», this can look nice. But when one calls a person, who is responsible for fates and lives, stupid, formulation sounds totally different. Alexander Seryy: To work with Victor Pshonka is... Renat Kuzmin: Is to work with him.

photo: Alexander Lobanov

lexander Seryy: What are the main three questions you are more often asked by journalists? Renat Kuzmin: These three questions are combined into one that sounds like: «Are Timoshenko, Lazarenko and Kuchma really murderers?» Alexander Seryy: And how do you reply? With the same one answer? Renat Kuzmin: The answer is the following: the Prosecutor General’s Office keeps information that Timoshenko, Lazarenko and Kuchma have a direct relationship to the murders. And now we are trying to collect sufficient proof that allows us to bring a charge against them. Alexander Seryy: Is that really Timoshenko? She is a woman actually. Renat Kuzmin: The biggest crimes in the world were made by women, because of women, and for women. By the way, the most cruel crimes too. Alexander Seryy: But the biggest feats also happened in the name of women. Renat Kuzmin: Julia Timoshenko is a special case from the point of view of ethical relations between man and woman and is plain from the legal point of view. She is a criminal that was established by two degrees of jurisdiction and now is serving her sentence of 7-years’ confinement. Alexander Seryy: But both the opposition and European politicians say that she isn’t guilty. Renat Kuzmin: Now what? Guilt and guiltlessness are determined by the court, not by opposition. The court concluded that she was a crim-

POLITICS/THE GENERAL PROSECUTION OF UKRAINE

THE KIEV TIMES | JUNE, 2012 Alexander Seryy: A country’s political situation always depends on... Renat Kuzmin: … on the government’s ability to rule a state. All other things are derivative from this. Today’s government has made much more for the country than all its leaders did during the entire period of Ukrainian independence. A little time will pass and this will become clear even to the most ardent foes of the current power... Actually I think they do understand this now. But only strong people can admit this. There are few such people, unfortunately. Alexander Seryy: I do not know an answer to the question... Renat Kuzmin: … what’s there /raising eyes to the top/. Actually I have never thought over this question. Alexander Seryy: Is it hard to live possessing huge information which you cannot share with anybody? Renat Kuzmin: More often people possessing such information are reserved. You probably noticed that people who keep secrets in the majority of cases are unsociable and uncommunicative. But there is another form of one’s internal world protection: commutability and liveliness because tomfoolery and boyishness protect hidden knowledge very well. Because this is a breach of the existing stereotypes. Alexander Seryy: The rest for you is... Renat Kuzmin: … possibility not to think about work. You need to give your brain and body something special to exclude thoughts about work themselves. Extreme sport, underground fighting, martial arts with their philosophy... In any case I am always looking for something that forces thoughts about work out of my mind. Alexander Seryy: Do you often use aikido tactics in your life? I mean using the attacker’s energy and directing this energy to him instead of replying with power to power. Renat Kuzmin: This is large skill. But the best way to win is to win without open confrontation. You need to be able to create conditions to force your opponent to give up without striking. The opponent has to refuse his aggressive plans, realizing the existing situation and evaluating possible risks. But in life, unfortunately, one has to apply aikido tactics. Well, this is when conflict has flared up already. Great commanders remained in peoples’ memory as the battle winners. Great thinkers and leaders who avoided open wars and conflicts were left behind peoples’ memory. Because nobody sees their victories. But they won and those were great victories. They provided prosperity; they avoided bloody wars and battles. Nobody had noticed that, except those chosen who understood what efforts were applied for this peace.

Alexander Seryy: «In 2003 I headed the public prosecutor’s office in Kyiv. This was...» Renat Kuzmin: … unexpected. That was a hard pre-election period. For me that was an unexpected appointment and I had not been prepared for it at all. And then everybody remembers – orange revolution, debauchery of pseudo-democracy, and collapse of all universal values and their substitution by cynical and mendacious declarations. Now justice is being restored. Very slowly but confidently. Alexander Seryy: Ukraine today is… Renat Kuzmin: … millions of people with an absolutely different history, culture, and language broken up to a great number of various groups. All of these groups have their truth. And unfortunately these people still are not united into one team with a common patriotic idea. Perhaps we are on the way to this. And, God grant us, we will live till the moment when we all, being so different, unpredictable, and competitive with each other, will be united in a common desire of our common goal. Alexander Seryy: What is patriotism? Renat Kuzmin: And for you? Alexander Seryy: Patriotism? This is honest attitude to the history of the place you have born and live now. Patriotism is honest attitude and responsibility to this place, these people, and this history. Renat Kuzmin: You mean that patriotism is honesty? Alexander Seryy: Honest attitude and responsibility. Renat Kuzmin: Honesty and responsibility? These are subjective notions. What do you think; can Lviv and Donetsk patriots have the same idea of patriotism? Alexander Seryy: Yes, they can...If Lviv and Donetsk patriots will have the same principles of honesty and the same system of values. If you ask Lviv and Donetsk patriots: «What is your attitude to the Ukrainian language? », opinions will differ. But if you ask a Ukrainian citizen who lives in Lviv and a Ukrainian citizen who lives in Donetsk: «What is your attitude to the Ukrainian state? », opinions will be similar. To my mind, the Ukrainian state is the only thing that can unite this country. Language won’t do this. Only the state, which unites and is responsible for those whom it unites and which gives its citizens the possibility to live normal life. Normal life in a moral sense. I think we do not have political power to declare such a system of values yet. For some reason we always slide to the language. I know for sure that German citizens – Bavarian and Cologne residents – speak very different dialects. I know that residents of different cantons of Switzerland live extremely comfortably because they say proudly: «I am

the citizen of Switzerland! ». German say: «I am the citizen of Germany! ». Last week I visited Russia and heard the same words from Russians: «I am the citizen of Russia! ». They love their country and are proud of it. As for Ukraine, part of the population says that we are citizens of Ukraine because we are Ukrainians and declare the second part of the Ukrainian population non-citizens of Ukraine only because they speak the Russian language. Here is the main internal problem. When this problem will be solved through mutual respect to the state, through citizen’s institutes, I think that then the situation will become slightly more optimistic. Renat Kuzmin: In the Soviet period I learned as a pioneer and Komsomol member that «Patriotism is love to Motherland». At that time we had one Soviet Motherland. Then everybody understood that we all – Ukrainians, Russians, Kazakhs, Turkmen – are citizens of one great country. We could chaff on citizens of another nationality but without spite, because every nation has its peculiarities. And we served in a Soviet army. We were united by love to our Motherland. We proudly said: «I am from USSR! ». We were citizens of one country – powerful, strong, with its problems and shortcomings, of course. But we were united by the idea. And to return to your question, what do you think; Motherland for Lviv resident and for

Donetsk resident is the same notion? Or are they different motherlands? Alexander Seryy: I was born in Lviv, as you remember, and have been living in Donetsk since I was 20 years old. I conjecture why Lviv resident do not love Donetsk resident so much. Because Donetsk residents have different life values, than Lviv residents have. Lviv residents always have to prove something to somebody. This has been happening for many centuries. Historically Lviv residents of different epochs were fighting against various conquerors: Polish, Hungarian, Czech, Australian, and German. The fact is that aboriginals of medieval capital of Galichina even lived behind fortification. For them there was only one street – Ruska. Beautiful Lviv and its culture were found by Poles and Australians. Those people who are living in Lviv today have a very indirect relationship to historical Lviv culture and architecture. They settled in Lviv much later. That is why Lviv residents under their own inertia continue to prove something all the time. There is a very strong spirit of protest in the city. Lviv always had active political elite. A Donetsk resident is different. He does not prove – he works. Donetsk residents work a lot. A Donetsk resident has a somewhat different at-

titude to his motherland. For the Donetsk resident the motherland is Donbas and then – Ukraine. For the Lviv resident the motherland is Ukraine, though in his own Lviv idea. The Lviv resident is ready to sacrifice the interests of the residents of Donbas, Crimea and Transcarpathia for his Ukraine. Renat Kuzmin: I am a resident of Donetsk who lives in Kyiv. You are a resident of Lviv who lives in Donetsk. Why does nobody raise such topics in the press? But they are discussed in society, in stores, in public prosecutor’s office and in kitchens. All Western journalists together with ours ask only about Timoshenko, Lazarenko and Kuchma. They are interested only in speculative topics. What is our national idea? Let’s talk about patriotism! What can unite Lviv and Donetsk Ukrainians? Lviv and Donetsk miners can be united by their profession. How to unite other people? Alexander Seryy: Only the attitude to the country itself can unite it. The country will unite when people will stop to call them residents of Donetsk, Lviv and Kyiv and say: «We are the citizens of Ukraine». A Dusseldorf resident and his centuries-old opponent a Cologne resident on hearing German anthem will stand up and proudly say: «We are the citizens of Germany». We cannot do this. We say Cossacks, residents of Lviv, residents of Donetsk, Regionals,

BUTers, Our Ukrainians but not «the Citizens of Ukraine». As soon as we will restore this high status, as soon as citizens of a United Kingdom will ask to grant them Ukrainian citizenship /smile/, everything will change.

People want a sanguineous life. People seek out contacts. The Internet is full of friendly Lviv and Donetsk residents. Donetsk companies make business in Truskavets; Lviv companies make it in Gorlovka. People, who work for these companies and differ from each other, don’t feel any discomfort at all. But there is a section of politicians, whose main agenda is conflict. This group, resting upon committed mass-media, in every possible way, popularizes conflict. Politics without conflict stops to be commercially sound business for them. We have to create history and not to let it take its course. Formerly, Stalin personally watched the musical film «Pig tender and herdsman». This film was an original anthem to the labor force that the country extremely needed. The head of state watched the film as it contained not only actors’ performing, but a large ideology for the country. The country received the ideology on which economy was based. Trust me, this ideology did not interfere – queues to cinemas were real. It’s possible to recreate the Ukrainian state beginning from the recreation of its culture, and history. Not the farfetched version but actual history. Today information rules the world. Information is becoming more important and expensive like it’s never been before. Arabic revolutions, American flash mobs, coloured revolutions... The state has to create itself. It has to show the world its image. Fistfights in the Ukrainian parliament are very strange component of the state’s image. Renat Kuzmin: I consider the Ukrai-

The best way to win is to win without engaging in an open confrontation Having become the citizen of Ukraine, a person has to then receive a huge amount of possibilities: to live, study, travel, receive treatment, create and feed his family, have variety in everyday life, educate his children any place of the world. Only then we shall become a part of the larger world. Renat Kuzmin: And what shall we do with the existing state of affairs? The Lviv resident shouts that he is the resident of Lviv; the Ternopol resident shouts that he is the resident of Ternopol; the Donetsk resident shouts that he is the resident of Donetsk. But nobody shouts that he is a Ukrainian. How can we change this? Who can we turn to and what can we do in such situation? Alexander Seryy: I am a resident of Lviv. Half of my family lives in Lviv. For many years we were experiencing a period of morbid confrontation. But is seems that today Ukrainians are really tired of politics.

nian consolidation in a slightly different way. Imagine yourself in a Ukraine, which has: The best education in the world. The most effective public health care. There are no poor people. There is no corruption. These tasks I would set to the country. These four tasks can remove all our distinctions. Is this real? Alexander Seryy: It seems to me that still nowhere in the world has corruption been totally defeated. How can we do this in Ukraine? Renat Kuzmin: It is necessary to start from something. We have to stop, dissemble, and take a reference point. Let’s assume that on the 1st of January 2013 all Ukrainian citizens have to declare all their property. From this moment talks about this property’s origin are stopped. Let us act on the premise that a person possesses his property legally, if the fact of its criminal origin wasn’t

proved. From this moment it is necessary to set up a full control of taxpayers’ income and charges. This is the first step. Now the plot thickens. Alexander Seryy: Is there a guarantee that this information won’t be used against people who trusted the state in case of a change in authority? Renat Kuzmin: We need tools and laws that exclude such a possibility. Prosecutor, yardman, prime minister or journalist – everybody has to be equal towards the state and report to the society about his income and charges. You will say that it is impossible. I affirm that it is possible. During the four years of the Great Patriotic War our people had been fighting against fascism, overcoming hunger, cold, poverty, death and we won. This also seemed impossible. But we did it! And we can definitely fight corruption! Alexander Seryy: Well, let us leave politics. Who is the real man? Renat Kuzmin: He is specialist in his field, a first-class professional, possessing a single combat art or having a perfect knowledge of some weapon, playing a music instruments, kind, fair, non-greedy, with a good sense of humor. All the others will cling stick to such a man and will supplement him. Alexander Seryy: Who is the real woman? Renat Kuzmin: She is a woman who is considered real by her beloved man. Alexander Seryy: It is unfair. Men have more conditions. Renat Kuzmin: But men have more responsibility too. Women are always little girls, even if they are big bosses. Alexander Seryy: Whom do you never argue with? Renat Kuzmin: With women. And children. They can do everything (laughing). Alexander Seryy: Everything? Renat Kuzmin: Well, almost everything. Alexander Seryy: The main task of a man in his family is… Renat Kuzmin: … to provide for the safety and material well being of his family. Alexander Seryy: And women? Renat Kuzmin: All the rest. Alexander Seryy: I know that your first education is in journalism. Are you going to write? Renat Kuzmin: Yes, I am going to. But later. Now I do not have time for creativity. Alexander Seryy: But you find time to teach in University. Renat Kuzmin: This is different. I like to teach students and I know how to do this. I am teaching, working as a professor and find time for this. True, with difficulty. But life is just begining... Interviewed by Alexander Seryy

THE KIEV TIMES | JUNE, 2012

POLITICS/POWER

CUSTOMS SAYS WELCOME... WELCOME – EUROPE! The adoption of the new Customs Code will accelerate the creation of a free trade zone with the European Union

n June 1, a new Customs Code, which was adopted by Parliament in March 2012, came into force. The document preparation was hard and long. Many articles of the code have been rewritten after the President’s veto. The first changes to the code have been made just a week after the document came into force. However it is already clear that the work was not in vain. According to the Permanent Representative of the International Monetary Fund (IMF) in Ukraine Max Alier, the adoption of the new Customs Code is one of the greatest achievements of Ukraine in recent years. «The Fund sees and recognizes the significant achievements that have been made in Ukraine. The IMF hopes that the new Customs Code will be much more effective than the one the country has worked with before»- he said on June 5 at the round table «Financial Stability in Ukraine: key challenges of the 2nd half» organized by the League of Financial Development with the support of USAID’s project The development of financial sector FINREP. The Customs Code was approved by the head of the IMF mission Christopher Jarvis, who has worked in Ukraine 21-28 May 2012. He noted that the updated customs regulations should promote the growth of government revenues. According to Oleksandr Dorohovskiy, the First Deputy Chairman of State Customs Service of Ukraine, «for the first time in a more than 20year history, we have a legal foundation that is close to the international and European standards and regulations. He said, «With full responsibility I declare: June 1st is the beginning of the «new history» in businesses-customs relations. With the new Customs Code a new stage of development for the customs system, as well as for all foreign economic activity, will begin».

Entrepreneurs were relieved

Throughout the spring customs officers were actively preparing for the new Code to come into force. The «fashion» companies disappeared from the market brokerage services. These companies had a monopoly or a privileged position in processing highly liquid products from the list of so-called group ‘A’: shoes, clothing, fabrics, furniture, etc. At the customs terminals in sea check points there are no longer employees of the SBU. According to importers, cases of extortion by customs officers and the facts of unwarranted delay in the processing of imports virtually disappeared. Freight forwarders admit that the work with the internal transit has improved; goods are moved from the border checkpoints to internal customs by the documents of delivery control. These are the first positive results of the new Customs Code.

The procedure of customs clearance of goods is now closer to European standards

The main innovation of the code is reduction of documents required for clearance. Now there are only three of them: the customs declaration, invoice and the declaration of customs value. Previously, importers were forced to prepare entire folders of documents including cost price calculations. The time of customs clearance is significantly reduced (from 24 to 4) and the post-audit control is introduced. The new Customs Code introduced a number of provisions that are well known to European businessmen. In particular a network of authorized operators of economic activities and the major importers is formed in Ukraine. If they follow the rules of international trade they have the right to import goods under the simplified procedures. The fines for entrepreneurs’s failure are canceled. The importer is able to amend the customs declaration under the supervision of an inspector. Customs has introduced a new system of risk analysis and management, which should put the end for total inspection of all importers. Checks will be selective by risk factors, for example, if the sender is not a typical country such as the import of bananas from Finland or gas from Cyprus. But that accounts for a tiny part of traffic through customs, the 95% of goods are processed under the simplified procedure. To minimize the smuggling, the Code adopts the European practice of post-audit control when importers are checked after import of goods into the country. In this case the terms and condi-

tions of such checks are coordinated with the Tax Code. The progressive steps were taken to facilitate customs clearance. In particular, now the declarant is entitled to carry out customs clearance of goods at any customs authority.

ers. The Code increases the limit of duty free import of goods into the territory of Ukraine by physical entities from 200 to 500 euros at land borders and 1,000 euros for border checkpoints at airports. Provided that the tourist does not cross the

From June 1 the new history in the «businesses – customs» relationship begins The rules and clear grounds for refusal of customs clearance are described in the Code. And what really leads this document to the European standards, is the fact that it provides opportunities for importers to declare the goods prior to their arrival to Ukraine. Moreover, from now on, the date and time of filing the customs declaration can be entered into an electronic system. If the terms of customs clearance are violated, the customs officials are personally liable for that. There are some positive moments in the new Customs Code for travel-

border more than once in ten days, and imports no more than 50 kg of luggage. Products, the total cost of which exceeds 10 thousand euros, are subject to written declaration with the filing of customs declarations.

More order and control for officials

Recent changes to the Customs Code were voted in Parliament on 7 June and now are ready to be signed by the President. They aim to improve the process of application, the correction of the customs value of

goods and control over the determination of this value. These changes suggest that if the customs authority has decided to revise the customs value of goods, that the declarant or an authorized person adjust it is not a mandatory order, but voluntary. If the declarant cannot provide the required additional documents to confirm the value of the declared goods, he is entitled to put this product into free circulation not later than 10 days, under the condition of providing guarantees. The differentiation in terms in which citizens were allowed to temporarily import into the customs territory of Ukraine personal transportation was cancelled. Due to the new code duty-free shops can function only in the international crossing points of Ukraine and international air flights or water transport of commercial purposes. Thus the new Customs Code solves the most sensitive issues in customs. It establishes a clear set of minimum

sibility of custom officials for the delay and the illegal actions of the inspectors. It is possible that the introduction of the new Customs Code into everyday life of the Ukrainian customs will not be easy. Customs officials from the highest to the lowest level are so fused with their nearly most «bread winning place» among state officials, that most likely sabotaging will become their first sincere response. However, the process is irreversible. The Customs Code puts a legislative foundation of destruction of the years of established and coordinated corruption schemes of Ukrainian customs. The introduction of the new Customs Code is likely to entail the dismissal of employees in middle and lower levels. In the current economic situation, it would be «natural selection» of those who are unable to adapt to the demand of time. Old customs corruption impedes the foreign economic cooperation of Ukraine as well as the entire econ-

The new Customs Code has laid a mechanism of destruction for corruption schemes necessary documents for customs clearance and determines the customs value, simplifies custom procedures and reduces time of registration to four hours. But one of the most important points for entrepreneurs and the most progressive for the Customs Service of Ukraine is the introduction of the financial respon-

omy. The new rules of the Ukrainian Customs create the preconditions of the transition from long talks about free trade with the European Union to specific agreements. Ukraine has made its move, now it’s your turn, gentlemen, European Commission officials and foreign businessmen! Vasiliy Yatsenko

CRIMINAL PROCEDURAL INTEGRATION INTO towards international law. Thoroughly and comprehensively the principles of international cooperation in criminal proceedings are disclosed.

Guarantees of reciprocity

he president of Ukraine Viktor Yanukovych is considering a new edition of the Criminal Procedure Code (hereinafter – CPC), adopted in Parliament on April 13. But the head of state is in no hurry to sign it. He said that he will pass it to international experts to assess compliance with democratic norms. Only after this

examination, does he intend to sign such an important human rights law. The new Code of Criminal Procedure will enter into force November 19, 2012 and will be an innovation in the criminal process in Ukraine. It contains many new features. First of all, the law makes the rights of the defense and prosecution equal. The document has made a serious step

The section on international cooperation in the new Code of Criminal Procedure is supplemented by new regulations, terms and definitions. It clearly describes the process of international cooperation, as well as identifies specific measures to provide legal assistance to foreign countries. The new version of the CPC provides for principles of international legal assistance to states Ukraine has no relevant agreements with. In these countries such cooperation will be based on the principles of reciprocity. This means that if Ukraine sends a request to the State, it gives written assurance that in the future it shall also consider the request of said State to provide similar legal aid.

Extradition

The new Code of Criminal Procedure governs the thorough prosecution, detention, arrest and extradition of foreign nationals. It more widely, compared to current law, interprets the term «extradition» . In

the new Code of Criminal Procedure «extradition» means that the Ukrainian state transfers a foreign citizen, to the jurisdiction of the requesting state, where the foreign national is wanted for criminal prosecution or execution of sentence. Extradition also includes locating a person to be extradited in the territory of the State, and his very surrender. Before

is granted (Article 576 in the new Criminal Procedure Code and Article 454 in the current). If prior to the surrender of said person to Ukraine he commits another crime, but it is not specified in the request, then the prosecution for this crime in Ukraine, or the execution of a sentence of the court can be done only after approval of the competent au-

With respect to an alien, measure that does not involve retention in custody can be applied the decision to grant a surrender is made, circumstances that may prevent this shall be examined. The innovation is that the prosecutor who supervises the legality of pre-trial investigation, has the authority to prepare an application for a requested person in Ukraine and extends the list of documents that are attached in addition to this request for information about the statute of limitations. The new Code confirmed provisions from the current CPC, that a person surrendered to Ukraine may be held in our country to await justice, or in respect to a sentence, the sentence can be executed only for those crimes for which extradition

thority of a foreign state, which has granted the person to Ukraine. And if the person has committed a crime after the surrender to Ukraine, the consent of a foreign state is not required. Also the retention time of the extradited person in custody in the state which Ukraine asked to extradite, as well as the time of his move to a place of punishment, shall be counted to the total term of imprisonment. During an extradition procedure a foreigner is usually kept in custody as a precautionary measure – the so-called arrest for extradition purposes. If according to the current code, it lasts 18 months, in the new version – no more than 12 months.

During this period, the judge, in the territorial jurisdiction of which the person remains in custody, at the request of the prosecutor at least once every 2 months checks grounds for a person’s further detention or release. If a judge receives a complaint from a foreigner who is detained or from his legal counsel, the judge is obliged to check the availability of grounds for release at least once a month. Another innovation – a simplified procedure for extradition from Ukraine. It is used in case of a written consent of the foreigner to extradition, and if the application has been issued in the presence of his counsel and approved by the investigating judge. With the simplified procedure there is no need to check whether there are obstacles to extradition. If a foreign person in the request does not give consent to his extradition, then the usual procedure is applied. A person with refugee status or who needs extra protection, or if he is already granted temporary protection in Ukraine, cannot be surrendered to the State he fled from. Nor can it be granted to the State, where his health, life or freedom would be threatened on race, on the grounds of religion, ethnicity, nationality, membership of a partic-

photo: UNIAN, Attorneys association «National Legal Chamder»

The new Criminal Procedure Code is tightly integrated into the international cooperation and provides broad protection rights to foreign nationals, at the same time simplifying the transfer of Ukrainian citizens to domestic law enforcement agencies

THE KIEV TIMES | JUNE, 2012

OPINIONS The less corruption in customs – the lower import prices

Oleg Sheiko, a financial analyst, one of the co-authors of the Customs Code In general, the new Customs Code is aimed at creating conditions for a civilized legal international trade. It involves the presumption of innocence of declarants that provides them and customs authorities with equal rights. The Code aims to unite all the procedural issues of customs in one document. Such codification is convenient for the government as well as for entrepreneurs. Progressive steps to improve the investment climate are the new rules of the Code, due to which damage to a company from wrongful acts of the employees of the customs authority during the check-up shall be compensated from the state budget. The Code helps to reduce corruption component in the customs work. For example, the creation of «single window» and the use of electronic declaration and computer technology. In this way the direct contact between businessmen and customs officers has been eliminated. Treatment of violators will become lenient. Penalties are suggested to become the most unified, simple and predictable – under the principle «prevention is better than punishment». I anticipate that the new Code with the latest amendments coming into force will provide a significant increase in foreign economic activity of Ukraine and state

POLITICS/POWER revenues, at the same time reducing smuggling and corruption at the border. Less corrupt payments means we can expect lower prices for some imported consumer goods.

Customs officials receive better control, and business people receive more rights

Vitaly Khomutynnyk, MP from the Party of Regions, the head of the Verkhovna Rada Committee on Finance, banking, tax and customs policy Total, taking into account the proposals of the President, Customs Code introduced 148 amendments. These amendments provide for the transfer of authority to issue orders of the regulatory nature from the State Customs Service to the Ministry of Finance of Ukraine. This document also makes the procedure to determine the customs value of goods more transparent, at the same time extending declarants’ opportunities to assert their rights in disputes with customs authorities. The new Customs Code is close to European and world standards, and provides significant simplification of customs control and customs clearance of goods. It’s coming into force will be in the interests of domestic and foreign businesses, as well as in the interests of the state. The Cabinet of Ministers is developing a separate draft law, which will help to strengthen discipline among the customs officers. It will describe the procedure for compensation for damage caused to the person and his property by unlawful decisions, actions or inaction of customs authorities, organizations or officials. Each inspector will be aware that damages caused by his illegal actions will be covered out of his pocket.

«HONEY IS SWEET BUT THE BEE STINGS»

The customs control will become easier for tourists

Ukrainian customs officers are torn between two fires: the requirement of the President to bring the customs system into line with European standards and the selfish desire to continue making money off of entrepreneurs. The result of this internal struggle was a sharp increase in pressure on businesses in anticipation of the new Code coming into force, as well as the sabotaging of many new procedures of the Customs Code

Customs officers, knowing that after June 1, they cannot manipulate the customs value of goods, rushed ahead to raise several times the rates of customs value and extended them, not only for consumer goods, but also for industrial machinery, construction machinery, and raw materials. In March 2012, new levels of customs value were established. As a result, the tax base of imported goods rose by 3.5 times the former amount, and sometimes up to 10 times compared to February 2012. In this regard, Customs has taken a firm position. And the availability of a comprehensive package of authentic documents on the import transaction does not guarantee the entrepreneurs that the goods will be cleared at customs at the price actually paid. There have been cases where the importer presented the original export declaration, all the necessary certificates, and original bank documents on the transfer of

currency, bills, certified not only by customs, but even the Ukrainian consulate abroad. Nothing worked – the customs value was still raised. Once again, the cargo container traffic through the largest Ukrainian ports Odessa and Illichivsk fell sharply. Before the crisis in 2008 one port on average exported up to 800 containers per day. From the beginning of the crisis in the autumn of that same year until March 2012 – only half of that. From March 2012 – only 100-150 containers per day. In the first days of the new procedures in determining the customs value, no more than 10 containers per day were leaving each port! Only with the new Customs Code coming into force on 1 June, did the situation return to normal. More than 90% of goods are processed using the «first method», that is, the contract value. However, the image of Ukraine has been permanently damaged. Back in October 2011, the government introduced a simplified procedure for preliminary documentary control. It suggested that quarantine services transfer their powers to customs officers. Only now the customs officials were not prepared to simplify the procedures of customs and other controls at the border. Because of this, in practice, if the simplification did happen, it did not happen everywhere. In some checkpoints ccustoms personnel could not cope with the new functions. Some customs officers at the border started to require entrepreneurs to have approval from regional quarantine authorities. Many customs points do not have the technical possibilities to transfer the necessary documents in electronic form. Forwarders have had to travel to the border to deliver hard copies of certified documents. A similar profanation of reform happened with electronic declarations. This time it was the fault of the tax service. Due to the lack of coordination between different agencies, electronic declaration in Ukraine remains at the level of the «Stone Age». With fear, eentrepreneurs are moving to new standards of working with customs. The whole effect of simplifying registration is offset by the serious costs to bring the customs electronic document in accordance with the requirements of other appropriate agencies. Institutions of the tax administra-

tion and banking divisions continue to require a certified hard copy of cargo customs declarations from the subjects of foreign economic activities. But it exists only in electronic form! The procedure for certification of hard copy simply does not exist! At different customs points the procedure is different! And such a simple procedure takes much more time than the actual customs clearance. There have been cases whenn it took a whole month for a customs declaration to be approved. Many customs points issue a certification of state customs declaration from the perspective of temporary standards that are set in the law at the citizens requests. It requires a formal request to the office, a visit by the customs head or his deputy, inspection of the declaration at the point, and much more.

Due to the inability and unwillingness, customs officers sabotage the innovations Hopefully, after a while all these inconsistencies will be eliminated. Customs inspectors will undergo rrefresher courses and will be prepared to work under the new Customs Code. At the moment, due to inability and unwillingness, some customs officers are actually sabotaging many procedures of this document. Classic example – the abolition of compulsory certification of most imported goods. Recently, the list of

imported goods subject to mandatory certification has been significantly reduced. At the same time, when the description of the goods in the customs declaration is formally identical to their description in the List of goods not subject to certification, but its characteristics (technical, chemical composition, etc.) do not coincide with the one specified in the List, the customs officers demanded an additional declaration of conformity. In other words, a document that would have confirmed that sugar is sugar, and a toy is a toy. Since customs officers do not possess the knowledge and skills of experts on standardization, in practice it turned out that whether this was necessary or not, customs officers sent the importer for the document, which would explain if the declared goods are subject to certification or not. As a result, there can be a situation where the list of goods is subject to mandatory certification has declined; but at the same time, another list of the same goods requiring the declaration of conformity has increased. So here is what is called a profanation of Ukrainian customs reforms. One document, even if perfect, will not significantly change the situation, unless the consciousness of the officials change, and the new principles of work are implemented not only at customs, but in all related departments. Igor Lavrinenko, director of the analytical department of the All-Ukrainian Public Organization «Reform Club», specially for The Kiev Times

INTERNATIONAL LAW ular social group or political views. Exception – when Ukraine has a cooperation agreement with the State requesting extradition. If such circumstances do not exist, the Prosecutor General of Ukraine at the request of a foreign state requests to conduct pre-trial investigation according to Ukrainian legislation. If there are no grounds for postponing surrender to the foreign state, and the decision comes into force, the central organ of state power in Ukraine passes the execution of the surrender to the competent authorities of Ukraine. Also, this document provides that the transfer of a person from Ukraine takes place within 15 days of the established date for submission. This period may be extended to 30 days. By the end of this term, the

person shall be released from custody. If the competent authority of a foreign country for reasons beyond his control cannot accept such a person, the central body of Ukraine sets a new date of transfer. For professionals it is clear that the new Code of Criminal Procedure substantially upgraded extradition.

Rights of foreign citizens in Ukraine extended

The new Criminal Procedure Code has several advantages over the current one, in particular Article 581. It provides for the rights of persons whose extradition is sought from the Ukrainian state. If the person, whose extradition is sought from Ukraine, does not speak the official language, the person has the right to use the services of an interpreter, to make

an application, to file petitions and speak in court in his language. Foreign citizens have the right to get a translation of the sentence and decisions of the central body of Ukraine in the language that was used during the trial. While in custody in Ukraine, foreign citizens can meet with representative of the diplomatic embassy or consulate of their country. Quite interesting is the position of aliens who reside in Ukraine, but have committed an offense abroad and are wanted by a foreign state. Law enforcement officers who carry out the detention of such persons shall inform the prosecutor, in whose jurisdiction the detention takes place. They must also provide a copy of the arrest report with information about the motives and reasons for detention. The prosecutor checks the legality of

tion of foreign citizens to the Prosecutor General’s Office or the Ministry of Justice of Ukraine, who in their turn inform the Ministry of Foreign Affairs and the competent authority of a foreign state within three days. If, within 60 hours of detention a foreign national was not brought before the investigating judge to consider an application for interim measures or choosing extradition arrest, he has to be immediately released. Also when arrested in Ukraine, the alien shall be released, if there are circumstances in which extradition is not carried out. The new Code of Criminal Procedure clearly states the position of the temporary arrest of a foreign citizen in the territory of Ukraine. He may be detained for a maximum of 40 days (unless, of course, another term is stipulated by the international treaties) before a request for

photo: UNIAN, Igor Lavrinenko

The new Criminal Procedure Code provides for rights of persons whose extradition is sought in Ukraine

Alexander Landik’s extradition from Russia to Ukraine

Italian authorities did not extradite Arsen Avakov, the former governor of Kharkiv region of Ukraine

detention and informs the prosecutor of the territorial-administrative unit – the Autonomous Republic of Crimea, region, cities of Kyiv or Sevastopol. The next higher authority prosecutors (the Crimea, regions, cities of Kyiv and Sevastopol) within 60 hours report on the deten-

extradition granted. In case the request is not granted within 40 days detainee must be released immediately. The investigating judge may choose with respect to a foreign citizen a softer precautionary measure than detention. But only if there are

Ukrainian court has acquitted an Israeli surgeon Michael Zis, who was charged with illegal organ transplants

circumstances that are guaranteed to prevent escape, and taking into account the age and health of the detainee, as well as the presence of family and dependents. Precautionary measures can be selected if the punishment threatens the health and life of the convicted person. Also if there is evidence that earlier, in the commitment of other crimes the precautionary measures were applied and were not violated. In general, the new Code of Criminal Procedure is more advanced, compared with the current. The old Criminal Procedure Code was adopted during the Soviet era, and even the changes that were made in it sometimes failed to make it relevant to real life. The new Code in detail discloses many concepts, lists

rights and powers of the parties of the proceedings, which excludes the ambiguous interpretation of its provisions. Another advantage of the new Code over the old one is the introduction of the investigating judge. This judge is selected or appointed by judge officials with qualifications necessary for the job. According to some experts, the new Code of Criminal Procedure will cause a revolution in the criminal process in Ukraine. However, whether they are right or not, can only be told after its application. Only practice can show the advantages and disadvantages of the new law. Anna Samoilenko, head of the lawyers association The National Law Chamber, specially for The Kiev Times

CULTURE/KIEV BIENNALE

THE KIEV TIMES | JUNE, 2012

KIEV MET THE LONG-EXPECTED «APOCALYPSE» The first biennale of contemporary art ARSENALE 2012 has provided Kiev with the status of one of the world’s cultural centers

Irrational enthusiasm plus 50% of state money

Events like ARSENALE 2012 are often called «Olympics» because of the analogy with the established regularity and representation of participants from all over the world: from New Zealand and Hong Kong to Kazakhstan and Norway. In this case «sport parallel» is more obvious.

is being reconsidered», said Zabolotnaya at the opening. She told how the leaders of the Ministry of Culture of Ukraine, the Kiev City State Administration, and the State Department of Administration have understood and, at last, were carried away by this ambitious project and rendered their support. The State’s financial investment to biennale ARSENALE 2012 makes up half of the $5m. spent on organizing the exhibition. In comparison, the cost of the fourth Moscow biennale in autumn 2011 cost more than $2 m. But budget of ARSENALE 2012 Exposition of the world art star, Chinese artist Ai Weiwei «Circle of Animals»

Kiev biennale. Thus «Double game» has united works of 25 Ukrainian artists and 13 Polish ones. «Even in the parallel program you feel like a part of large art-performance, which is taking place in Kiev and all over Ukraine», says young Ukrainian artist Alexandra Zhumaylova-Dmitrovskaya to The Kiev Times. During three weeks Alexandra has been painting the walls of the Mystetskyi Arsenal Gallery. At the conclusion of biennale her work will be painted over to bring the gallery back to its original appearance. The act of creation and self-destruction contains the sense of «contemporary art» (modern art). «Life with all its bustle and unpredictability is a part of the modern art. This is what I wanted to show in my works», explains Alexandra.

Wider and deeper than Venice is considerably lower than organizational cost of the largest art-exhibition of 2012 dOCUMENTA (13) in German city of Kassel, which began June. However, this event takes place only once in five years. And the last one in 2007 required $25,7 m. half of which came from federal and local budgets. In Ukraine such a large scale event at this high level became possible due to the synthesis of irrational enthusiasm and charisma of the Director of «Mystetskyi Arsenal» Natalia Zabolotnaya. As the main organizer she managed with great effort to get a commitment from the Ukrainian authorities to conduct biennale in Kiev. It is seen as an additional measure to add to the popularity of the EURO-2012 football championship. The guarantees of state to finance

Today, Asian artists dictate the major trends in contemporary art Kiev biennale wouldn’t take place if the Ukrainian state budget hadn’t assigned means for repair and reconstruction of «Mystetskyi Arsenal» in the preparation for EURO-2012. About 25 thousand square meters of renovated exhibition space have become one of the best exhibition sites in the world. This fact inspired Natalia Zabolotnaya, the General Director of the museum, to organize the contemporary art biennale. «Kiev biennale demonstrates how the Ukrainian government has changed its attitude to supporting modern art and how its importance for our country

OPINIONS East meets West

Helga Prignity-Poda, the curator of contemporary art museum Martin-Gropius-Bau, Berlin I admire the boldness and courage of the organizers: they have managed in such a short period of time to make this large scale event that meets the highest world standards. I did not expect that there would the possibility

His track record contains the management of 17th biennale in Sydney, which from the moment of its establishment in 1973 became one of the brightest art-events of today. In recent years, David Elliot has been working in the countries of Southeast and Central Asia. Today he passionately studies works of modern artists from exotic countries like Uzbekistan and Mongolia. Elliot continues to work on the creation of the modern art-center in Hong Kong. A frantic rush during preparation of the first Kiev biennale brought an outstanding Englishman several

one half of ARSENALE 2012 also served as an argument that convinced that most venerable curator, David Elliot, to get down to the first Kiev biennale organization.

Healthy shock of Mister Elliot

David Elliot is one of the most successful curators of contemporary art. He was head of the Oxford museum for twenty years; found and led museums of contemporary art in Tokyo, Stockholm and Istanbul; and has been the curator at the most innovative exhibitions and museums. to create such an up-to-date exhibition art-space in Ukraine. Due to my work and family circumstances I spend half of my life in Istanbul. I can say that the level of the Kiev biennale is much higher than that in Istanbul. Definitely ARSENALE 2012 is a peculiar phenomenon for the world exhibition artmovement. Kiev is a striking city. Its cultural heritage is close to Byzantine art. This can be seen immediately in architecture, museums, and works of the Ukrainian artists. Here East meets Wets. I received added evidence that European culture was deeper and wider that it was previously represented in Eastern Europe. When I arrived, it was interesting to look at what our mass-media have been saying about Ukraine: the lack of democracy, political repressions... I did not see anything like this at all. No exacerbation, no pressure and resentment. I have already written my daughter that we have to make a trip to Kiev together.

months of extreme pressure. Surely or the first time he has encountered such phenomenon like payment by certificate of the work performed. Owing to these rules 50% of Kiev biennale financing, promised by the state, began to arrive after the exhibition opening and continue to arrive even now. Though, Elliot has never doubted the correctness of the decision he made. After having signed the contract he left Kiev to visit other Ukrainian regions looking for works of modern Ukrainian artists for the exhibition, to absorb them into the Ukrainian art-space. According to his words, he experienced a healthy cultural shock. A shock, because Ukrainian artists almost never exhibit abroad, and when it happens, it is only under the guise of other countries’ galleries. They then have to create their works in an informational and cultural vacuum, and yet they are very relevant to the world art-scene. «In Ukraine, in this «national ghetto», as I call it, David has found and introduced many young artists, whom he is going to exhibit at global exhibitions», says Natalia Zabolotnaya. «Besides, extreme rejuvenates», noted Mister Elliot. The majority of the Ukrainian artists are represented on ARSENALE 2012 in the art-festival’s parallel program. «Double game» is the largest project created by Ukrainian and Polish curators. Contrary to the confidential agreement, limiting number of the local masters to such an international art-forums, Elliot considerably widened the representation of the Ukrainian artists at the

Arts unites, but modern is impossible without old

Olivia Tsorn, the vice-president of the New museum of ancient and the most ancient history, Berlin The building of «Mystetskyi Arsenal» is really impressive. It is ironic that initially it has been build not for the museum, and this is good. From one side its halls are huge and mon-

The basis of Kiev art-performance is the model of the oldest biennale in the world – the Venice biennale (which was established in 1895). The uniqueness is that expositions

«The best of times, the worst of times – rebirth and apocalypse in contemporary art» is the title of the Kiev biennale’s main project. It has

art» is under house arrest for political reasons. Equally impressive are the works of Japanese Yaoya Kusami entitled «Traces of eternity». Many

The scope and success of the first Biennale in Kiev has stunned the most demanding connoisseurs of modern art united 250 of the most topical works of contemporary art masters from 30 countries of the world. David Elliot has merged four topics: «Indefatigable spirit» – a view to the means by which we derive strength from religion, myths and notion of the Universe; «In the name of order» – investigation of how government under pretence of rationalism tries to dominate; and topics «Flash» and «Restless dream» – a premonition of unavoidable catastrophe. «David Elliot has merged diametrically opposite positions. He has presented the entire palette of contemporary art to let every visitor find something close and clear for himself», explains Elena Sadykova, the curator of Berlin

Ukrainian artist Alexandra Zhumaylova-Dmitrovskaya painted the walls of Small Gallery for three weeks

are displayed not just in one exhibition complex, but are scattered all over the city. ARSENALE 2012 has gone further. Art-projects within the parallel program can be visited not only in different parts of Kiev, but in Kharkov, Odessa, Dnepropetrovsk and Kherson, where there are 45 installations and expositions. The majority of them are works of the Ukrainian artists.

White Square Gallery. The British curator has brought to Kiev many works of Asian artists. In many ways these are they who set the main tendencies and new directions of contemporary art development. Special attention has to be paid to the exposition of The Chinese master Ai Waiwai «Circle of animals». At home the globally recognized master of «contemporary

umental; from the other side they are ascetic, modest and come to the background. Since contemporary art is strange, large and attracts attention by its singularity, in these walls exhibits are revealed and the entire exhibition blossoms. For me, as a specialist of ancient art, modern art is no less interesting than ancient Egyptian relics. There is no sense to separate the art to old with modern. Arts unites, but no modern art is possible without knowledge of the old. Today the popularity is growing for exhibitions, which combine historical artworks or classic pictorial artworks with separate works of modern artists. Or the entire exhibitions are integrated into regular expositions in the historical museums and galleries of classic pictorial art. Such investments of art nouveau into the classic allow the viewer to realize what art itself is. Kiev is a fantastically beautiful city! This is truly the mother of the country, which is incomparable with many cities in the world.

Ideal curator is a cosmopolitan

Elena Sadykova, the art historian, White Square Gallery, Berlin

people will remember work of Hindu Jitish Kallat whose project was an installation based on the theme of a letter from Gandhi to Hitler.

ARSENALE 2014 – to be or not to be

Organizers estimate that around 300 thousand visitors will see the expositions of ARSENALE 2012 which runs until 31 June. Such numbers of guests is usual for the Venice biennale, the oldest in the world. But cost of entrance tickets to the main exposition in «Mystetskyi Arsenal» (50-70 Hr.) does not compensate for the cost of organizing the event. But contemporary art biennales are never compensated. They are initially alien to any commercial undertakings which helps keep constant public interest in these kinds of events. The question remains open: would the Ukrainian government agree to sponsor the next ARSENALE 2012 without having something like Euro 2012 at hand? Given the success of the first Kiev biennale, organizers, art critics, and sponsors unanimously talk about inevitability of the next biennale. «Apparently, since the first biennale has been organized in unprecedentedly short terms and in the result was an unexpectedly stunning success; the second, and all the more the third and the fourth biennale in Kiev are inevitable. Now we are witnesses to Kiev being established as one more international cultural «Mecca», Helga Printz the curator of contemporary art museum of Martin-Gropius-Bau Berlin told the The Kiev Times. Perhaps today’s contemporary art biennale ARSENALE 2012 shall remain a one-time event. However it’s possible that international exhibitions in «Mystetskyi Arsenal» will be held in the future – even with one or two years’ delay. It’s clear that the first Kiev biennale has achieved its main task. «Biennale in Kiev Arsenal confirms the status of Ukraine as a country which values, supports and protects freedom and exposure of contemporary art», says the leading world curator and the most competent contemporary art expert – Mister David Elliot. Roman Bryl We were looking for the modern curator who wasn’t up in the clouds, understood tradition and innovation, and who has worked not only in Eastern Europe. David Elliot has become the ideal candidacy. Kiev biennale has shown how the European curator skillfully united absolutely different art-positions. Eastern Europe of the 70-80s and today. David always is in search. This is the guarantee of the grandiose success of his projects. As for the professional sphere, David is very exacting to himself. Not considering himself a specialist of Ukrainian art, one of the most status curators in the world and recognized expert of contemporary art has found an ideal solution. Choosing works of Ukrainian artists David has accentuated the positions that were clear for him as for the representative of western culture and acceptable for the comprehension of a cosmopolitan viewer. Thereby he has shown the world Ukrainian contemporary art in a favorable light.

photo: Alexander Lobanov, Martin-Gropius-Bau Museum, Ancient and Prehistory New Museum, White Square Gallary, Berlin

«W

ho would ever guess that biennale would come to Kiev? Yet it all seems true: with global stars’ works of art and works of the most fashionable and topical authors in the world. Here you will find the newest tendencies and trends of contemporary art – from mature Englishmen to exotic Asians. And the most interesting fact is that David Elliot is the curator himself». This quiet exchange of views between a Russian-speaking art critic from Berlin and a Kieviate artist from Prague, (where she moved to find work ten years ago) makes you believe that some wonderful and incredible things have been happening– and it is all right here! On May, 23d the museum «Mystetskyi Arsenal» started the first Kiev biennale of contemporary art; ARSENALE 2012. It took organizers only eight months to prepare for ARSENALE 2012. Usually preparation for such large scale exhibitions every two years requires 12 months or more. This leads to the assembly of installations partially without electric lighting, belated presentations of video works, and getting custom clearance for separate exhibits literally on the eve of the opening day. But still the global event has taken place. Its scope and success have stunned the most exacting experts of contemporary art. Even the worldlywise artists and art critics couldn’t hide their amazement, because the level of the first Kiev biennale has been found to be unexpectedly high both by its artistic content and by the decoration of the exhibition itself. «Biennale opening has attracted a large pool of foreign press and more than one and a half thousand guests. This is the audience, which determines the world art-tendencies. Many of the present curators and art critics have more than once lit the global stage. Perhaps, without such an important occasion as biennale (for the world cultural life) these people would never have come to Ukraine. But today Kiev is recognized as one of the cultural centers of the world», says Natalia Zabolotnaya, organizer of ARSENALE 2012, the General Director of «Mystetskyi Arsenal» in a talk with The Kiev Times.

«Arsenale» area was one of the finest art venues in the world

CULTURE/KIEV BIENNALE/ART

THE KIEV TIMES | JUNE, 2012

ARSENALE 2012: MISSION POSSIBLE

The first Kiev biennale of contemporary art has accomplished its mission. For the first time Ukraine has extensively represented its art to the world; Kiev has been acknowledged as one the world cultural centers. The result: – a culmination of a professional team’s huge work – ARSENALE 2012 – has taken its place

atalia Zabolotnaya, ARSENALE 2012 commissioner and the General Director of «Mystetskyi Arsenal» in an exclusive interview for The Kiev Times has talked the efforts taken by Ukraine to achieve this great project; which was done in collaboration with legendary David Elliot; and with the President’s support for the grandiose art-future of Ukraine. Natalia, how did you manage to convince David Elliot to become curator of the First Kiev biennale? David Elliot is a great figure on the global level. He has many regalia and successful projects. I understood that as the main curator he would provide ARSENALE 2012 with half of its success. After our proposition David kept still for about a month. Then we invited him to Kiev to visit «Mystetskyi Arsenal». David was impressed by the expositional space, although it was still a building site without floors and communication systems. But David as a professional immediately evaluated all the benefits and gave his consent to be the curator of ARSENALE 2012. What in the project was most important for Mister Elliot? That our state had confirmed to provide 50% of the financing. Because the rule is that biennale’s international status is possible only with state support. In addition, David had been acquainted with the Ukrainian postSoviet art-scene already. He was curating the large art project «After the wall» with participation of Ukrainian artists («After the Wall» which took place in 1999 in Berlin, Munich, and Stockholm – editor.). I thought that the high artistic potential of the Ukrainian biennale would be very important for him.

Did the government meet its engagements for ARSENALE 2012 financing and organization? State boats sway very slowly. Financing arrived in pursuit of the opening of the project. We’re in a time-frame and need to operate without losses. We need to return owners their precious works represented on biennale. This is a long and expensive procedure to send the works of artists to 30 countries around the world. Did the President support the project personally? Yes, he did! We have really felt the state support after the President’s corresponding order. After that we have been listened to and heard. Michael Kulinyak and Alexander Popov were the first to respond to the idea of the biennale project. The Minister of culture has taken interest in the possibility to represent Ukrainian art within the frameworks of a high international format and to introduce something fresh into the Ukrainian cultural environment. It was decisive for the Head of the Kiev City State Administration that ARSENALE 2012 would become a large-scale art project of the capital with serious cultural dominance against the background of the EURO-2012 sports event. Did you manage to attract private sponsors? Sponsorship is the problem today in Ukraine. There is no systematic support of cultural and art projects. Alas! This sphere is out of rich people’s interests. The First Kiev biennale is conducted without general and official sponsors. That’s why it’s important to mention those who have first supported ARSENALE 2012 and given their helping hand. Igor Voronov is the largest (and practically the only) sponsor of

Ukrainian contemporary art. From his foundation he designated funds to start the organizational process that allowed the signing contracts with the curator, and the design company, and to promote the ARSENALE brand in the global press. Also we’re very obliged to the Peter Poroshenko Charity fund, which has helped us with the edition of the First Kiev biennale catalogue. Our catalogue is an art object in itself. The event shall pass, but this important and beautiful document shall be preserved in leading libraries, museums, galleries, and art-centers of the world! Are you counting on the Second Kiev biennale being more readily supported by sponsors? I hope so. The organizational process of the first biennale was full of holes. However ARSENALE 2012 really is an historical event for the country. Great is always seen from a distance. Now we are being discussed around the world. I’m sure that the government and representatives of large business shall evaluate the cogency of this project for their personal image and the Ukrainian image as a whole. Ideally next time it shall be possible to attract many more interested people and organizations to biennale. By that time, hopefully, the state shall simplify the financing procedure. How did you manage to organize such scale event in just 8 months? I admit that an extremely short timetable was the main trouble for us. In (other parts of the) world the practical organization of a biennale usually takes two years. (Smiling) The project is sophisticated in itself. Imagine conducting negotiations with artists – 100 stars of the global art-scene from 30 countries;

then insurance, transportation, logistics, technical support, and much more. We concluded about 400 contracts in two months. That’s why it is a double pleasure that ARSENALE 2012 received so high a rating from specialists in different countries. David Elliot said: «Natalia, how can this be possible in such a short period»? Yes! Even David wanted to postpone the opening. Because three weeks before the cherished date only a part of the exhibits had arrived in Kiev. But guests from various countries had already been invited; the foreign mass-media had received four thousand press releases from us. The main thing is that ARSENALE 2012 had been entered into the calendar of the world’s art-events for the year. Almost simultaneously with the Kiev biennale there was Documenta13 in Kassel Germany, Manifesta in Genk Belgium, as well as the Bucharest and Berlin biennales. It was too late to back off. We could do nothing else but to make the impossible-possible. David has remained satisfied with the results in spite of the extreme conditions during the preparation period. He has fallen extremely in love with his brainchild and after the opening he was wandering over the halls and taking pictures. What does «Mystetskyi Arsenal» expect after the First Ukrainian biennale completion? We have great plans for the future. The first task for us and the state is to complete the reconstruction of «Mystetskyi Arsenal» – the largest Ukrainian museum project. Since biennale has made it wellknown in the world, we cannot put it aside any longer. ARSENALE 2012 has been at-

tended by the heads of the most famous museums of Paris, Berlin, Florence, London, and New York. Now we’re negotiating with them concerning the possibility to organize exhibitions of the world’s art masterpieces in Kiev in 2015-2020. For that «Mystetskyi Arsenal» has to correspond with international standards regarding expositions and the preservation of works of art. What is Natalia Zabolotnaya dreaming about?

My cherished dream is to open a renovated «Mystetskyi Arsenal» with an exhibition of the world famous artist Kazimir Malevich. The last and the only exhibition of Malevich took place in 1929. Many of our contemporaries do not even know that he was born in our city. We are going to fix this. I also believe that the largest museum complex in Eastern Europe «Mystetskyi Arsenal» shall soon become boasted of by every Ukrainian. Interviewed by Roman Bryl

CHARMING AND DELIGHTFUL

photo: National Cultural-Art and Museum Complex «Mystetskyi Arsenal», orginizers of International Jazz Fest «DoDj»

Chris Botti is one of the best trumpeters in the world, an amazing songwriter, and charismatic actor. He has recently given a concert in Kiev – a city that has fallen into a deep in love with Chris Botti. He flew to Ukraine at the invitation of Alexander Seryy, president of the Jazz Festival DoDj by one of the best trumpeters in the world, an amazing songwriter and charismatic actor, Chris Botti. His concert was recently held in Kiev – a city that has fallen into a deep love with Chris Botti. Chris Botti has arrived in Ukraine at the invitation of Alexander Seryy, president of the Jazz Festival DoDj. Long before the beginning of the show outside the capital’s concert hall, fans were looking for available tickets. The hall hosted a most diverse audience: jazz school students and bankers, pop diva and the U.S. ambassador to Ukraine, popular showmen, and picturesque group of German Ukrainians who came specially from Berlin to the concert of Chris Botti. The concert was honored by the presence of the deputies, leaders of the Kiev region and influential German politicians. The show began in a crowded hall. Impeccably elegant, Chris Botti appeared on the stage after a brief announcement, and the audience literally drowned him in applause. Out of the 14 pieces that were performed, the most part were of a lyrical nature.

Chris Botti is winner of the «Grammy Awards», an American trumpeter, composer, best-selling U.S. musician, owner of a unique sound, who began his career as a musician of Sting's band

ummer 2012 in the minds of the Europeans is associated with the EURO 2012. The media is filled with information about the football forum, and even politics has gone to the backburner. But life goes on. And there are other sports, life in towns and cities, the problems of aviation, local wars in the east, the political intrigues of

the powerful... Praise God, life has music. One would want more music, but there is never enough of it. Radio in the car, mobile phone, bar. Different music sounds everywhere, but in recent years in the most unexpected places, one can hear music, that can be classified as jazz. Very often in various places around the world one can hear sensual music played

However, there were funky tunes, and even an instrumental rock ballad. Chris Botti conducted the concert himself, announcing musicians of his star band and special guests. The first special guest was the

Ukrainian violinist Assia Ahhat. Chris Botti talked about the joint concerts performed with Assia in October and December 2011on the west coast of the United States and how Assia Ahhat has become a part

of his team. Assia Ahhat and Chris Botti performed several lyrical pieces from the new program. Chris Botti gave Assia Ahhat white roses from the son of a violinist, who was sitting with his father and Assia’s husband Igor Balenko in the first row. Another special guest was Lisa Fisher, owner of a fantastic voice, a favorite singer of the Rolling Stones leader Mick Jagger. The very first song performed by Lisa Fischer caused a strong reaction of the hall. Vocalists of such a class are a rarity not only in Ukraine but also in the world. The culmination of the concert was a song preformed by Chris Botti, Assia Ahhat, Lisa Fisher, and the band was. The ending of almost a two-hour concert was graced with a solo, while the audience held its breath, enjoying the music of the great musician. Appearing on the stage again, Chris Botti read from a note in Russian: «I’ll be back!» – And stood long on stage, bowing gratefully. Kiev will be waiting for you, charming and delightful Chris Botti!

THE KIEV TIMES | JUNE, 2012

CULTURE/CINEMA

OSTAP STUPKA: PATRIOTISM – IT’S SPENDING MILLIONS ON A UKRAINIAN BLOCKBUSTER!

- Ostap, the main question, of course, is about the films «Match» and «We’re from the future – 2». Did you deliberately agree to these roles? - Every nation has its negative and positive sides. I don’t intentionally expose any- I just do my acting work, and try to convincingly show the character of my hero. And, it seems, I do it well. Here actors do not choose the roles. You can choose when you are offered not five, by one hundred and fifty scripts. - The part of goalkeeper Ranevich in the «Match» was performed by Bezrukov. Who of Ukrainian actors do you think would manage to play this role better, simply because of a better understanding of the nature of a Kievan? - In Ukraine today, no one is engaged in promotion and support of our actors. Only in unison there are loud shouts that «Moskali» (Muscovites) shoot ideological movies about us. And what do they do for the development of Ukrainian cinema? Nothing. There is only joint production, and even so, as a rule, sponsored by the Russians. So there is no reason to resent that the films are

not the right ones and Russians play Kievans. Where is our Ukrainian historical film? Let say about the same UPA? And what a rich historical material on hand! You know, those who fall into aggression or hysteria after the preview of a Russian film about our country, are no more patriotic than I am. Let them do at least something in the cinema first. When there were plans to shoot «Taras Bulba» in Ukraine, the plan was to invite Gerard Depardieu for the leading role! And these plans never happened. And the Russians have started and shot. Each nation has its «bad guys». Let the Russians show negative Ukrainians. Why don’t we make our version about us being white and fluffy! Who prevents us from doing it? - Do you like playing negative characters? Are they closer to you; are they easier to play, or the opposite? - They are more difficult to play – and therefore more interesting. The goodies are straight and, as a material for the actor’s work, somewhat simple. I want the intrigue, anguish, drama. For an actor it is important for the character to require a complete transformation. For being in

Bohdan Stupka is laconic in his son’s work assessment

be a successful business. We don’t even have a production school. After all, there is a separate profession – finding funding for projects. There is another separate profession- making films, and then there is directing, acting, and so on. In Ukraine, these professions do not cross – hence

The negative characters are complicated, and therefore more interesting for me reality a different man, get into the skin of the opposite character and play convincingly. And if it is followed with the cry «sold to the Moskali!», then it was performed well! Especially since the yells come from a handful of people. They are less in number than thoughtful and creative people. My attitude to homeland and people did not get worse after these roles. - As a viewer, do you enjoy these films? - It is obvious that they are not masterpieces. Still in the movie «We’re from the future – 2». I have a great episode. I am an actor and ideological moments do not bother me. Speaking about «Match» I have a lot of questions. At the premiere in Moscow I was angry – my role was greatly edited. Deshchenya – is a collective image of the average inhabitant of Kiev during Nazi occupation. The material filmed was enough three hours and twenty minutes. Then it becomes clear what kind of person it is. In the full version Nazis drag him to the execution in the final. I am looking forward to the release of the full four-part version of the film. Hopefully, the Ukrainian audience will soon be able to see the picture, for example, on Inter (a television channel). - In your opinion, why is Ukrainian cinema not developing? - The fact is, rich people are not ready to invest in a movie. No one in Ukraine believes either businesses or government, that the movie can

there’s no cinema. I am convinced that we need private investment. How much can the state give- ten, twenty million grivna at the most? That’s not sufficient to produce a large scale film. Can you just imagine how one could make the film Aeneid by Kotlyarevsky. With the flying gods, battles over the Mediterranean. Three-hour blockbuster! We possess rich historical and cultural material: Zaporozhian Cossacks, Baturin, the Carpathians. In folk mysticism alone we can shoot a full series. But this would require hundreds of millions and not in local currency. - Do you think the school of social realism, from which Ukrainian cinema evolved, is completely losing its relevance? - Our cinema school is lost. Look at what is going on at Dovzhenko Film Studio: the biggest studio premises in Europe are leased to little firms. In Soviet times, being a student, I witnessed movie shooting in Dovzhenko. Behind each door there was a group working on the film. And no one taught the language of the voicing. Back then, the movies were voiced in Russian and Ukrainian. Now Dovzhenko Film Studio has passed away. Without the slightest prospect of revival. So much for patriotism. - Maybe the revival of Ukrainian cinema has to start with author (art) cinema? Works of many of our talented filmmakers win at international festivals.

- We all make author films, because there is no financing for any other type. The author cinema can not strengthen the patriotic spirit. Its only viewers are visitors of premiere and festival screenings. It is necessary to make commercial films that would raise finance. Yet another task is to accustom audience to this kind of cinema. - Cinema – it’s artfully edited good story. In the preparation stage is a film about the last days of Taras Shevchenko in Kazakhstan. There will be chases, shooting, love, fire, fighting, dueling, and gauntlets. This film will be expensive, but it will be interesting to the viewer. It will also be co-production. Kazakhstan has

or how to put together the ideas that flash in me. The theater is much easier. Here millions are not needed – you can simply meet with the director and stage a play. Robert Sturua (Georgian theater director, who in 2003 staged the tragedy of Oedipus the King at the Franko National Academic Theater – Ed.), while rehearsing «Oedipus the King», told the legend how the director profession was born. In ancient Greece, when acting was first beginning, there was nobody who could look from the side and say what is good and what is not. Then the actors chose the most untalented actor, seated him in the hall and said, look and comment. I really liked it.

My father is very laconic – «well done» or «not well done». Just like that already agreed to cooperate, so we are now looking for funding. Russia and Poland might join, as there are roles of Russian officers, and the Poles – the poet’s friends. - A blockbuster about Kobzar with Ostap Stupka playing the main character? - Yes, I’ll play Shevchenko. So I don’t play only «bad guys» but also national heroes. That’s what I was trained to do, to play different characters. - Was the script was written specially for you? - Yes. The director Aleksandr Denisenko immediately gave me the main character. He has had this idea of me playing Taras for three or four years. - Have you ever thought of making a movie? Would you like to try the role of the director? - If I had three hundred million dollars, I would have found a director and said that I am ready to play in a certain movie. Directing – is a different profession. I am an actor and do not understand how to make a shot

- Working in theater and cinema, what is more important? - I like to combine work in theater, cinema and on television. Although perhaps I’m more of a theater actor. But I love a good transformation in a movie: it’s more complicated than in the theater. On stage, the role is being played from start to finish, and you go to climax at the finale. And in movies, you can start shooting from the last scene. Then you sit and ponder how to play the first scene, which will be filmed at the end of the whole shooting period. In movies, the integrity of the hero is hard to convey. - Do the performed roles affect your character, your destiny? - The role should be easy to enter and exit. I’ve played Smerdyakov (based on Dostoevsky’s novel «The Brothers Karamazov» – Ed.), so should I hang myself after the play? There are actors who shake after the curtain drops. I try not to extrapolate the experience of the negative emotions of my heroes onto myself or others. This is the art of acting: techniques, multiplied by your emotions, your soul and imagination. Each artist must have a secret transforma-

tion button: turn it on, play, bow – and turn it off. - How is your professional relationship with your father? Has Bohdan Stupka encouraged your acting career, sought continuity? - The idea of becoming an actor came to me sometime in the seventh grade. I skipped classes to teach the monologues. Father did not know anything. I wanted to achieve something on my own. When he accidentally learned from a colleague that I was entering the theater institute (in 1988. O.S. entered the Kiev State Karpenko – Kary Institute of Theatrical Art- Ed.), he asked me to read the program at home for him. I refused, explaining that the selection committee has enough listeners. The first time my father saw me on stage was at the winter session. My friend and I played joyful and sad monkeys. I played the sad one, and brought my father to tears. He was laughing so much that he almost fell from his seat. Later he said: «I never thought that you could do this». In general, he is very laconic – «well done» or «not well done». But that’s enough to understand. I just do the same. - Has your son secretly started acting as well? - No, Dima is different – he talks a lot about the work. Already in the fifth grade, his grandfather moved him from the secondary school into a children’s art academy. Then there were the Theatrical Institute and the Institute of Culture. Dima always asks, consults, and performs for me and his grandfather: behold and wonder. He can discuss the script, Where I grew silent, kept everything inside and did everything quietly. - You slowly but steadily pursued your goal? - I still keep pursuing my high goal. And walk with confidence... But that’s another topic. Interviewed by Petr Kukhovsky

photo: UNIAN

stap Stupka – is an actor, whose work in theater and cinema is equally significant, which is rare. People’s Artist of Ukraine, the star of the Ivan Franko National Academic Drama Theatre, which is headed by his father, prominent actor Bohdan Stupka, Ostap has played over thirty interesting and diverse roles in the theater: Gogol’s Khlestakov, poetic Lukash from «Lіsova Pisnya». His filmography counts about 20 films starting from 1985. But the real fame to Ostap Stupka was brought by his latest roles in the sensational Russian films «We’re from the future – 2» and «Match». Ukrainian elite perceived these films ambiguously. Ministry of Culture did not recommend the release of «We’re from the future – 2» in Ukraine, attributing to it «provocative content and appeal to ethnic hatred». Remember, Ostap Stupka played the role of the commander of the UPA (Ukrainian insurgent army) in the film. Then there was the second notorious Russian historical picture Match» about a football match in the summer of 1942 in occupied Kiev, where the main role was performed by Sergey Bezrukov. This film has caused an even greater resonance and alarmed the Ukrainian audience. In the media there were calls by politicians and the nationalminded Ukrainians to ban the film. In «Match», Ostap Stupka played the role of policeman Dashchenya, a tragicomic Ukrainian. Ostap Stupka told The Kiev Times about how he assesses his outrageous characters, his attitude to the ideology and historical truth in cinema, about spending millions on Ukrainian blockbusters, as well as about Kobzar.