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06KIEV335, UKRAINE: YANUKOVYCH DISCUSSES GAS DEAL, RELATIONS

January 26, 2006

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Reference ID Created Released Classification Origin
06KIEV335 2006-01-26 08:12 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv
This record is a partial extract of the original cable. The full text of the original cable is not available.

 

C O N F I D E N T I A L SECTION 01 OF 02 KIEV 000335 

SIPDIS 

DOC FOR CLUCYK 
DOE FOR LEKIMOFF 

E.O. 12958: DECL: 01/26/2016 
TAGS: PGOV PINR KDEM ETRD ENRG EPET UP WTO
SUBJECT: UKRAINE: YANUKOVYCH DISCUSSES GAS DEAL, RELATIONS 
WITH RUSSIA, U.S., WTO 

Classified By: Ambassador for reasons 1.4(a,b,d). 

1. (C) Summary:  In a January 24 meeting with opposition 
Party of Regions leader Viktor Yanukovych and Rada Deputy 
Taras Chornovil, EUR A/S Fried told Yanukovych the U.S. 
supported Ukraine and would work with whatever 
democratically-elected government the people of Ukraine 
chose.  The U.S. would judge any Ukrainian government by its 
actions and support for reform.  Fried expressed U.S. concern 
about the lack of transparency in the January 4 natural gas 
deal struck with Russia.  While we understood the nature of 
rhetoric during political campaigns, we expected that 
anti-U.S. sentiments should not become a campaign tool. 
Yanukovych said he shared U.S. concern about the gas deal, 
and asserted that Ukraine's approach would have been stronger 
if the parliament had been involved.  Yanukovych said there 
would be no change in relations with the EU, Russia, or the 
U.S. should his Party of Regions participate in a ruling 
coalition following March 26 parliamentary elections. 
Ukraine would follow its own national interests but would not 
view the West and Russia as opposing camps to play off one 
another.  On WTO, Yanukovych advocated a slower approach that 
would protect Ukraine's industry.  End summary. 

U.S. will work with democratically-elected government 
--------------------------------------------- -------- 

2. (C) On January 24, Assistant Secretary Daniel Fried, NSC 
Director Damon Wilson, and Ambassador met with opposition 
Party of Regions leader Viktor Yanukovych and Regions Party 
Deputy Taras Chornovil.  Fried delivered to Yanukovych the 
same message he had given to President Yushchenko, Prime 
Minister Yekhanurov, and ex-Yushchenko ally Yuliya 
Tymoshenko:  that the U.S. supported Ukraine and would work 
with whatever democratically-elected government the people of 
Ukraine chose, and that the U.S. would judge any Ukrainian 
government by its actions, including support for reform. 
Turning to the January 4 natural gas deal with Russia, Fried 
emphasized U.S. support for Ukraine and noted the Secretary's 
strong statements on Russian actions.  However, the U.S. had 
concerns about the lack of transparency and the role of 
RosUkrEnergo (RUE).  The U.S. hoped Ukraine's relations with 
Russia would be productive, but that Ukraine should be free 
to decide how to build its international relations as an 
independent country.  The U.S. understood campaigns 
and associated rhetoric, but Regions should take care not to 
make it anti-American. 

Yanukovych: Close to the U.S. on RosUkrEnergo 
--------------------------------------------- 

3. (C) Yanukovych said he shared USG concerns about 
RosUkrEnergo's lack of transparency and unclear role in 
Ukraine's gas market.  He and the Party of Regions team first 
became concerned when they saw how excited the Russians were 
over the deal struck in early January with Ukraine. 
Yanukovych blamed what he called an "inexperienced" 
Yushchenko team for agreeing to permit RUE to be the sole 
seller of gas to Ukraine.  Relations with Russia were not 
simple, he said, and a team needed thorough preparation 
before entering into negotiations.  Claiming to have 
information on the conduct of negotiations, Yanukovych said 
the inexperienced Yushchenko team operated from a position of 
weakness.  A more experienced government would have consulted 
with Yanukovych and others in parliament, and would have 
united all political forces before entering negotiations, 
which might then have led to a "package" resolution.  In such 
a case, at minimum, the agreement resolving the gas crisis 
would have been transparent and understandable, he claimed. 
Yanukovych said he had reached out to Yushchenko to discuss 
the gas crisis, but had been told Yushchenko was unavailable. 
 The result of Yushchenko's "blunder" was a gas deal with no 
transparency and no legitimacy.  Worse, the gas issue was not 
resolved: "We will go back to this again," Yanukovych warned. 
 Yanukovych noted that he had learned through the media that 
Yushchenko and PM Yekhanurov had withdrawn their signatures 
from the September MOU with Yanukovych following the January 
10 Rada vote to dismiss the Yekhanurov government over the 
gas deal. 

No Change in Relations with EU, Russia, U.S. 
-------------------------------------------- 

4. (C) Yanukovych said there would be no change in Ukraine's 
relations with the EU, U.S. or Russia in the event the Party 
of Regions formed the government after the March 2006 
parliamentary elections.  Yanukovych emphasized (without 
elaboration) that a Regions government would uphold Ukrainian 
national interests.  He understood the importance of 
strategic relations with the U.S., and Regions stood for 
building strong relations with the EU in support of European 
integration and strong relations with Russia.  However, the 
West and Russia were not opposing camps between which Ukraine 
would choose.  Regions Party Deputy Taras Chornovil expressed 
concern over Ukraine's "geo-political orient
ation" under 
Yushchenko.  The GOU was issuing declarations "strictly" 
oriented to the West, but their actions were contrary to 
these declarations.  For example, the RUE gas deal benefited 
Russia but was hidden from the Rada and Western partners, 
Chornovil asserted. 

5. (C) Yanukovych told A/S Fried that he had held no 
consultations with Russians in the last year, except one 
meeting with Russian Ambassador to Ukraine Viktor 
Chernomyrdin.  Chernomyrdin had requested the meeting in 
January 2006 to ask if Yanukovych and Rada deputies from the 
Regions Party would support the motion to dismiss PM 
Yekhanurov's Cabinet.  Yanukovych said he told Chernomyrdin 
that Regions would support the government, if Yushchenko 
would recognize Regions as the opposition and reverse his 
disavowal of the Memorandum of Understanding signed in 
September to secure Rada approval for Yekhanurov as Prime 
Minister.  (Note:  Yanukovych's explanation does not sound 
quite right, as Yushchenko disavowed the September MOU only 
after the Rada voted January 10 to dismiss the Yekhanurov 
government, not before the vote.) 

Regions Approach to WTO: First Identify Our Interests 
--------------------------------------------- -------- 

6. (C) The Party of Regions' approach to the WTO would also 
be based upon "national interests," Yanukovych added, meaning 
the protection of national manufacturers and the "national 
market."  Ukrainian manufacturing was vulnerable, yet the GOU 
had not yet analyzed how WTO accession would affect it.  This 
was a mistake.  Regions, however, would consider WTO 
legislation after making clear what protections were required 
by Ukrainian industry. 

7. (C) Yanukovych said that Regions was ready to unite with 
other parties in an effort to improve the economy and living 
standards in Ukraine.  Regions had talked with voters, who 
said that whatever government won in March needed to govern 
efficiently and effectively.  Yanukovych now saw the need to 
discuss the process for uniting various parliamentary 
factions. 

Chornovil takes the blame 
------------------------- 

8. (C) Chornovil explained that during the 2004 presidential 
election, Yanukovych had had to "stand for Kuchma's sins." 
As Yanukovych's campaign director, Chornovil took 
responsibility for failing to distinguish his candidate from 
Kuchma's deeds.  The events of the past year -- for example, 
Yanukovych's willingness to enter the MOU with Yushchenko in 
September -- had shown Yanukovych to be different from 
Kuchma. 

9. (U) A/S Fried cleared this cable. 

10. (U) Visit Embassy Kiev's classified website: 
www.state.sgov.gov/p/eur/kiev. 
HERBST

 

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