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July 27, 2007

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Reference ID Created Released Classification Origin
07KYIV1826 2007-07-27 13:32 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

DE RUEHKV #1826/01 2081332
P 271332Z JUL 07

C O N F I D E N T I A L SECTION 01 OF 02 KYIV 001826 
E.O. 12958: DECL: 07/25/2017 
Classified By: Acting Political Counselor Michael Uyehara for reasons 1 
1 Summary.  President Yushchenko and Hungarian Prime Minister 
Ferenc Gyurcsany's two meetings, during Yushchenko's July 
10-11 state visit to Hungary and Gyurcsany's July 27 visit 
Mukacheve in the Ukrainian Carpathian region, indicates 
warming relations and follows on expanding bilateral trade. 
The pace of high-level bilateral interactions has picked up 
in 2007, beginning with Gyurcsany's and Yushchenko's January 
14 meeting in Zakarpattia Oblast and followed by Prime 
Minister Yanukovych's March 6 working visit to Budapest. 
Hungarian President Laszlo Solyom's state visit to Ukraine, 
planned for 2008, will round out the exchange of visits. 
With trade growing at a 30% annual rate (approaching two 
billion dollars a year) and with ongoing strong Ukrainian 
investment in Hungary, the outlook for continued robust 
economic interaction is strong.  Hungary provides 
considerable support to Ukraine's 150,000 ethnic Hungarians 
and would like to see more Ukrainian support of Hungarian 
schools and recognition of Hungarian university degrees.  The 
two countries realize that the welfare of ethnic Hungarians 
in Ukraine is an important factor in their relations; a 
bilateral committee meets regularly to address issues faced 
by their respective ethnic minorities.  The Hungarian Charge 
d'Affaires in Kyiv said his country is a strong supporter of 
Ukraine's EU aspirations and together with Poland and 
Lithuania form a pro-Ukraine "troika" within the EU.  End 
2. (U) We met with Ukrainian Hungarians Society Director 
Tibor Vass on June 15, Hungarian Embassy Charge d'Affairs 
Laszlo Horvath on July 17, and the Acting Head of the State 
committee on Nationalities and Religions Heorhiy Popov on 
July 25 to obtain an overview of Ukraine-Hungary relations in 
the wake of Yushchenko's state visit. 
Shared History and Increasing Economic Interaction 
--------------------------------------------- ----- 
3. (U) Ukraine shares a short 64 mile border with Hungary and 
ties over more than a millennium.  In 895 AD, the seven 
Magyar tribes crossed the Verecke pass in the Carpathian 
Mountains and conquered what is now Hungary.  When President 
Solyom visits Ukraine in 2008, he will dedicate a memorial to 
that event at the pass.  Much of western Ukraine was part of 
the Austria-Hungarian empire before the outbreak of the First 
World War.  Zakarpattia, where 97% of Ukraine's 150,000 
ethnic Hungarians live, wound up as part of Czechoslovakia at 
the outbreak of the Second World War, and was incorporated 
into the Soviet Union shortly after the German surrender in 
1945.  Popov, who is also co-chairman of the Mixed 
Ukrainian-Hungarian Commission for the Rights of National 
Minorities, noted that there are only 6,000 ethnic Ukrainians 
in Hungary. 
4. (U) According to the World Trade Atlas, Ukraine imported 
$802 million of goods and services in 2006 from Hungary (a 
24% increase over 2005), while exporting $946 million (a 37% 
increase over 2005), making Hungary Ukraine's 14th largest 
source of imports and 8th largest export destination. 
Ukraine exports chemicals and pharmaceuticals, pulp and 
paper, and radio and electronic equipment to Hungary and 
imports grain, oil and oil products, lumber and lumber 
products, textiles, and electronic equipment.  In addition to 
substantial official trade, the border region is the scene of 
a lively smuggling operation that provides income to an 
estimated 100,000 people (reftel). 
5. (U) Horvath said that Yushchenko visited the 
Ukrainian-owned Dunaferr steelworks while on the state visit 
to highlight Ukrainian investment in Hungary.  Horvath also 
mentioned that Ukraine's Ferrexpo is planning to construct a 
rolled steel plant in north-east Hungary "on a greenfield 
site."  He remarked that there have been discussions about 
constructing a Hungarian-owned one billion cubic meter 
underground gas storage facility on Ukrainian territory and 
construction of small hydro-electric power stations on the 
Tysa river.  Horvath said that there is not much Hungarian 
investment in Ukraine but was optimistic about continued 
Ukrainian investment in his country. 
Hungart Focuses on Protecting Ukraine's Ethnic Hungarians 
--------------------------------------------- ------------ 
6. (U) Although Hungary has s fairly small population 
compared to Ukraine (10 million verses 46 million), it has an 
impressive diplomatic presence here, maintaining consulates 
in Uzhhorod and Berehove in addition to an embassy in Kyiv 
KYIV 00001826  002 OF 002 
that together issue over 200,000 visas a year.  Hungary takes 
a strong interest in the welfare of the ethnic Hungarians in 
Ukraine and goes to great lengths to help them preserve their 
identity; they are entitled to a Hungarian identity card 
which gives the holder rights to many of the benefi
ts of 
citizenship, including access to higher education at 
Hungarian universities.  Hungary also issues them a "national 
visa" that is good for five years instead of the usual 
one-year term.  Hungary provides financial support to the 70 
Hungarian language schools in Zakarpattia and support to many 
of the municipalities with a high proportion of ethnic 
Hungarian residents. 
7. (C) Although the Mixed Ukrainian-Hungarian Commission for 
the Rights of National Minorities meets regularly to address 
problems faced by ethnic Ukrainians in Hungary and ethnic 
Hungarians in Ukraine, both Horvath and Vass complained about 
the lack of state funding for Hungarian language schools (a 
complaint that Popov dismissed); the difficulties that ethnic 
Hungarian students face when they take Ukrainian language 
university entrance examinations; and bureaucratic hurdles 
faced by Ukrainian graduates of Hungarian universities in 
getting their degrees officially recognized here.  Horvath 
and Vass both noted that there had been considerable 
immigration to Hungary by young Ukrainians of Hungarian 
decent.  Vass estimated that 10,000 ethnic Hungarians had 
left Ukraine for Hungary between 1991 and 2001 when the last 
official census was taken.  Horvath was concerned that the 
rising standard of living in Hungary would continue to tempt 
many ambitious young Ukrainians of Hungarian origin to leave. 
Hungary is a Strong Supporter of Ukraine's EU Aspirations 
--------------------------------------------- ------------ 
8. (C) We noticed several events during Yushchenko's state 
visit related to the 1956 intervention by Soviet troops in 
Hungary and asked Horvath if the memory of this tragedy has 
been an impediment to better relations.  Horvath said the 
gestures Yushchenko make during his trip were appreciated but 
said "they were his idea" and in general Hungarians do not 
blame Ukrainians for what happened.  Horvath said that "you 
don't hear much about relations between Hungary and Ukraine 
because there are no problems."  He noted that Hungary is an 
active supporter of Ukraine within the EU and together with 
Lithuania and Poland form a pro-Ukraine "troika." 
9. (C) Horvath noted that little progress had been made on 
the 2007 Action Plan that was signed on March 6 during 
Yanukovych's visit.  Horvath did not expect much to be 
accomplished on the Action Plan -- which addressed many of 
the issues that are of concern to ethnic Hungarians here -- 
before the September 30 Verkhovna Rada elections which he 
hoped would bring in "a new government."  Both Horvath and 
Vass lamented the fact that the ethnic Hungarian community 
was politically divided between The Party of Hungarians of 
Ukraine and the Democratic Party of Hungarians of Ukraine, 
which was partly responsible for the absence of an ethnic 
Hungarian in the Rada. 
10. (U) Visit Embassy Kyiv's classified website: 




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