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March 6, 2007

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Reference ID Created Released Classification Origin
07KYIV540 2007-03-06 15:34 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

DE RUEHKV #0540/01 0651534
P 061534Z MAR 07

C O N F I D E N T I A L SECTION 01 OF 03 KYIV 000540 
E.O. 12958: DECL: 03/06/2017 
REF: KYIV 332 
Classified By: Political Counselor Kent Logsdon for reasons 1.4(b,d) 
1. (C) Summary:  Seeking to gain public support from Germany 
for his government's goal of promoting Ukraine's integration 
with Europe, Prime Minister Viktor Yanukovych made a one-day 
working visit February 28 to Berlin, meeting with German 
Chancellor Angela Merkel and addressing a group of German 
businessman.  Although Yanukovych said Merkel had indicated 
that the "EU door" was "open for Ukraine," our German Embassy 
contacts in Kyiv confided that Merkel had said no such thing, 
but that she had refrained from directly contradicting her 
guest.  In addition, although Yanukovych said that he and 
Merkel had discussed the possibility of forming an energy 
"consortium," the word was not used during the meeting.  The 
energy relationship, however, had been an important topic. 
Merkel urged Yanukovych to drop grain export quotas, and 
Yanukovych indicated that the problem would be solved by 
March 20.  The next high-level contact between the two 
countries will likely occur with the German Minister of 
Economy's visit to Kyiv in May.  Although Ukrainian 
parliamentary speaker Moroz hoped to visit in March, the 
German Embassy notes that the visit might very well be 
2. (C) Comment:  Yanukovych successfully used this visit to 
Germany to push his Government's priority of enhancing 
Ukraine's relationship with the EU.  In public and private 
statements both at home and abroad, Yanukovych consistently 
reiterates his governemnt's commitment to Europe.  Most 
recently, in a letter of greetings to the March 2 "New 
Ukraine in a New Europe" conference in Kyiv, Yanukovych 
stated clearly that European integration was Ukraine,s top 
priority and furthermore claimed there was both 
government/elite and social consensus on this policy 
(implicitly implying that such a consensus did not exist on 
NATO).  Within the domestic political context, Yanukovych is 
using working visits such as this one to Germany to enhance 
public perceptions of his status as a foreign policy player 
alongside Ukrainian President Yushchenko as another tactic in 
their struggle for governmental control.  At the same time, 
however, these visits give Yanukovych the opportunity to hear 
directly from his Western interlocutors what steps they want 
him to take -- a valuable tool in encouraging Yanukovych and 
his government to make the right policy choices for Ukraine's 
European future.  End summary/comment. 
The EU Door Ajar? 
3. (C) The Ukrainian media generated a flurry of reporting on 
the joint press conference that Yanukovych and Merkel held 
after their lunch, with attention on Yanukovych's remarks 
that Merkel gave him "a signal that the door to the European 
Union is open for Ukraine and this will be expressed in a new 
agreement covering the next 10 years" (as quoted in 
Interfax).  During a March 2 meeting, German Embassy First 
Secretary Manuel Mueller said that Merkel had been flummoxed 
by the misstatement, since she had made no such remarks, but 
could not directly contradict her guest before media 
representatives.  In the press conference transcript that 
Mueller provided us, Merkel avoided directly refuting 
Yanukovych, noting that Yanukovych had indeed raised 
Ukraine's EU aspirations but that Germany preferred to 
concentrate on EU consolidation after the most recent round 
of expansion. 
4. (C) Consulting what appeared to be an official report from 
Berlin, Mueller said that, in his meeting with Merkel, 
Yanukovych had pressed for inclusion of an EU membership 
possibility in the EU-Ukraine "New Enhanced Agreement," but 
that Merkel had demurred, arguing that Ukraine instead should 
realize that the new agreement offered substantial and real 
benefits to Ukraine, going beyond the EU's agreement with 
Russia.  For the time being, the EU preferred for political 
expediency to remain silent on the question of Ukraine's 
possible membership. 
5. (SBU) Mueller noted that New Enhanced Agreement would 
incorporate an EU-Ukraine free trade agreement.  In response 
to our question, Mueller said the EU's mandate had authorized 
negotiation on a document that was titled "New Enhanced 
Agreement," but he did not rule out the possibility of some 
other title being hammered out in the end.  In any event, the 
EU had definitely ruled out Ukraine's proposal to call the 
new document an "Association Agreement," since "association" 
had, in EU parlance, a precise legal definition derived from 
Turkey and Croatia's status.  The first negotiations on the 
new enhanced agreement would take place on a working level 
KYIV 00000540  002 OF 003 
March 5 in Brussels. 
First Impressions 
6. (C) Mueller further commented that Yanukovych's visit had 
been held in "a good atmos
phere," with a frank exchange of 
positions.  (He later observed that Merkel and Yanukovych had 
met for the first time.)  The major topics discussed had been 
Ukrainian domestic politics and the EU-Ukraine bilateral 
energy relationship.  On the political topic, Merkel had 
focused on Yanukovych's relationship with the presidency and 
the political opposition.  Yanukovych had presented himself 
in a statesmanlike way, avoiding criticism of either 
Ukrainian President Viktor Yushchenko or opposition leader 
Yuliya Tymoshenko.  Yanukovych told Merkel that minor 
irritants existed between himself and Yushchenko, but that 
both agreed on Ukraine's strategic direction. 
Energy, Trade, and NATO 
7. (C) On energy, Yanukovych stressed that Ukraine would 
remain an important transit country between Russia and the 
EU, but, in this role, it was committed not to create any 
problems.  He urged Germany to focus on investing to expand 
Ukraine's gas transit capacity and not devote resources to 
construction of a new pipeline under the Baltic Sea. 
Regarding oil transport, he argued the Baku-Tbilisi-Ceyhan 
pipeline could result in greater deliveries to Ukraine for 
transit further west.  Mueller stressed that, although 
subsequent media reports suggested an energy consortium had 
been discussed, the word had not been uttered during the 
Yanukovych-Merkel meeting.  Merkel suggested that Yanukovych 
raise energy-related proposals in detail during his meeting 
with the private sector, since the German government could 
not play a role in business investment decisions.  The issues 
would also be discussed in further detail during the German 
Minister of Economy's May visit to Kyiv. 
8. (C) Mueller commented that Ukrainian quotas on grain 
exports had been a key topic, taking up about 20 minutes of 
discussion.  Merkel had been very clear that they needed to 
be removed, causing Yanukovych to become somewhat defensive. 
He said the export controls had been implemented at the 
beginning of his tenure and needed to be reduced in a 
step-by-step fashion.  While Yanukovych did not make a clear 
statement, he implied the quotas would be completely 
abolished by March 20. 
9. (C) Merkel also pressed Yanukovych to implement an 
information campaign to inform the Ukrainian public about 
NATO.  Yanukovych noted that funding had been allocated for 
this purpose. 
Future Bilateral Contacts 
10. (C) Mueller noted that Yanukovych's visit had not been 
too different in tone or substance from Ukrainian President 
Yushchenko's February 8-10 visit to Berlin, but the German 
government felt now that it needed to touch base with both 
the President and Prime Minister to gauge the Ukrainian 
government position accurately.  In addition to the German 
Minister of Economy's May visit mentioned above, Mueller said 
parliament (Verkhovna Rada) speaker Oleksandr Moroz had 
planned also to travel to Germany in March, but Berlin would 
probably suggest a later timeframe so as to space out the 
visits of high-ranking Ukrainian officials.  Merkel herself 
planned to visit Kyiv in the second half of 2007 although an 
exact date had not yet been set.  The visit had originally 
been scheduled for 2006, but had been postponed because of 
the protracted delay in forming a new government. 
Gryshchenko's Addendum, Tarasyuk's Rebuttal 
11. (U) In public comments at the March 2 "New Ukraine in a 
New Europe" symposium, PM foreign policy adviser Kostyantin 
Gryshchenko, who had accompanied Yanukovych to Germany, 
expressed often held Ukrainian frustration with the EU when 
he said Ukraine desired to join the EU, but "the EU was not 
ready for this prospect."  He toed the Party of Regions party 
line that Ukraine would join NATO only after the Ukrainian 
public had signaled its readiness in a national referendum, 
citing the precedent of other European countries where 
referenda were held on important national questions. 
Although his presentation (perhaps deliberately) was vague 
and contradictory at times, Gryshchenko suggested that while 
European integration, with partnership and economic 
KYIV 00000540  003 OF 003 
integration with the EU, was a priority, concrete programs 
and cooperation in the field of security, rather than a NATO 
membership that would irritate Russia, made sense for Ukraine 
at the moment. 
12. (U) Former Foreign Minister Borys Tarasyuk, speaking 
immediately after Gryshchenko (also a former Ukrainian FM) 
strongly rebutted Gryshchenko's comments about NATO. 
Tarasyuk stressed the logic of the two recent waves of 
countries involved in EU expansion having gone through NATO 
membership first.  Tarasyuk also criticized the PM,s team 
for not delivering on Yanukovych,s Sept 14 promises at NATO 
to fund and run a public information campaign.  Former 
Ukrainian Ambassador to the U.S. Yuri Shcherbak also 
implicitly criticized Gryshchenko and others associated with 
Yanukovych when he contrasted the elite consensus in the 
1990s that Ukraine's western-oriented future lay with both 
the EU and the NATO with the newfound doubt on part of the 
political elite since the 2004 presidential election cycle 
about the Euro-Atlantic half of the equation.  The audience 
warmly clapped after Tarasyuk and Shcherbak finished, while 
applause after Gryshchenko had been sparse and polite. 
13. (U) Visit Embassy Kyiv's classified website: 




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