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09KYIV38, GAS CRISIS: ORANGE RIVALS APPEAR UNITED

January 8, 2009

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Reference ID Created Released Classification Origin
09KYIV38 2009-01-08 16:59 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

O 081659Z JAN 09
FM AMEMBASSY KYIV
TO SECSTATE WASHDC IMMEDIATE 6996
INFO CIS COLLECTIVE
NATO EU COLLECTIVE

C O N F I D E N T I A L KYIV 000038 
 
 
E.O. 12958: DECL: 01/08/2019 
TAGS: PREL ETRD RS UP
SUBJECT: GAS CRISIS: ORANGE RIVALS APPEAR UNITED 
 
Classified By: Ambassador William Taylor; reasons: 1.4 (b/d). 
 
Summary 
------- 
 
1. (C) Thus far at least, Orange rivals PM Tymoshenko and 
President Yushchenko have shown a unified front in the face 
of the gas crisis with Russia.  They signed off on a joint 
statement January 1 and sent a unified team, with a 
pre-agreed upon position, to Brussels January 8 for talks 
with Gazprom and the EU.  Even opposition Party of Regions 
leader Yanukovych has, to date, been restrained in criticism. 
 Meanwhile, a GOU leader on Russia policy regards Putin's 
actions as visceral -- and ultimately self-defeating.  End 
Summary. 
 
Leaving Differences at the Pipeline's edge (for now)... 
--------------------------------------------- ---------- 
 
2. (C)  Deputy PM Nemyria, in a conversation with the 
Ambassador January 7, remarked that PM Tymoshenko and 
President Yushchenko were "on the same page" regarding the 
gas crisis.  Nemyria would lead a team to Brussels January 8 
that included Presidential Advisor for Energy Security 
Sokolovskiy and DFM Yelisieiv as well as Oleh Dubyna, 
Naftohaz Chairman.  The Presidency and Cabinet of Ministers 
had agreed on a negotiating position -- conveyed as well in a 
joint letter Nemyria said they would present to European 
Commission President Barroso -- with three main points: 
 
-- Russia must immediately resume gas flow. 
-- EU representatives should take part in talks. 
-- EU technicians should be deployed at borders to monitor 
gas flows. 
 
3. (C) While he did not elaborate, Nemyria did admit that 
Yushchenko had undercut negotiations with the Russians on 
December 31 by calling back the Ukrainian team. 
 
4. (SBU) Following the failure of the two sides to reach 
agreement, Tymoshenko and Yushchenko issued a joint statement 
January 1 outlining a common GOU position.  A fundamental 
point was that with the fall in the price of oil, Gazprom's 
earlier offer of $250 tcm was at or near market level while 
the existing transit fee of $1.7 was half that of the Central 
European market. 
 
Yanukovych Quiescent - thus far 
------------------------------- 
 
5. (SBU) Opposition Party of Regions leader Viktor 
Yanukovych, who has long criticized Orange forces for 
ineptitude in their handling of relations with Russia, has 
remained largely silent thus far regarding the gas crisis. 
While lambasting the government -- Tymoshenko in particular 
-- for incompetence on the economy in a TV interview January 
6, Yanukovych did not offer any specific criticism of the 
government's handing of the gas crisis.   He called only for 
early Rada attention to the matter. 
 
Thoughts on Putin 
----------------- 
 
6. (C) Konstantin Gryshenko, First Deputy Secretary of the 
National Security and Defense Council who serves concurrently 
as Ambassador to Russia, contacted the Ambassador January 7. 
Gryshenko predicted that the gas crisis would get even more 
unpleasant before it is over.  As made clear from Putin's 
performance in his carefully-staged TV interviews with 
Gazprom's Miller, the decision to cut off the gas was clearly 
Putin's.  Gryshenko termed it an act of "political 
emotionalism" designed to show "who has the stick." 
 
7. (C) Gryshenko predicted Putin's visceral reaction would 
scare European consumers and result in "big trouble" for 
Russia by encouraging the Europeans to seek other long-term 
sources of supply.  This would hurt Ukraine in the long-run 
too "because we need the transit revenues." 
 
Comment 
------- 
 
8. (C) The Rada comes back in session January 13, so the 
hiatus in criticism from the Party of Regions (and others) 
may soon come to an end.  Nonetheless, the cooperation to 
date on this issue between bitter rivals Tymoshenko and 
Yushchenko, and their teams, has been notable.  It follows a 
common position in December when the two rivals sent a joint 
letter to the IMF seeking flexibility in the IMF program. 
How long this newfound unity will last (if it lasts at all) 
is an open question, but, as Samuel Johnson said, "nothing 
focuses the mind like a hanging." 
 
TAYLOR

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