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March 24, 2009

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Reference ID Created Released Classification Origin
09KYIV515 2009-03-24 15:37 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

DE RUEHKV #0515/01 0831537
P 241537Z MAR 09

C O N F I D E N T I A L SECTION 01 OF 03 KYIV 000515 
E.O. 12958: DECL: 03/23/2019 
REF: A. KYIV 0471 
     B. KYIV 0419 
1.  (C) A series of meetings between President Yushchenko and 
PM Tymoshenko focused on the economic crisis and IMF 
requirements for a second funding tranche have raised some 
hope of enhanced cooperation between the President and PM. 
Cabinet of Ministers contacts noted the joint March 23 
appearance by Yushchenko and Tymoshenko at an EU gas 
transportation conference in Brussels as a sign of 
cooperation, and described a "temporary cease fire" agreement 
between the two camps lasting until the July commencement of 
the Presidential campaign.  Tymoshenko and Yushchenko 
outwardly projected a united front in Brussels, agreeing on 
the need to reform the energy/gas sector and requesting aid 
to increase Ukraine's transshipment capacity.  Many 
politicians and political analysts remain skeptical of the 
potential for substantive cooperation, portraying the rift 
between the main protagonists as irreparable and the 
cooperation as superficial and intended solely to secure IMF 
funding. End Summary. 
Temporary Cease Fire 
2. (C) President Yushchenko and PM Tymoshenko met twice in 
early March (ref A) to discuss the economic crisis and IMF 
conditionalities.  Yushchenko also stated during a March 18 
visit to Brussels that Ukrainian leaders could unite to reach 
a national economic anti-crisis plan, but cautioned that it 
was not Brussels' role to forge a compromise: "I would not 
want people somewhere in Europe to give advice on what to do. 
That is humiliating. No one will solve this matter except 
Ukraine."  Scheduling difficulties have limited the number of 
meetings, but both sides have publicly restated their 
commitment to the process. 
3. (C) Ihor Zhovkva, DPM Nemyria's Chief of Staff, on March 
20 told us that the meetings between Yushchenko and 
Tymoshenko were largely symbolic, but did contain some 
substance, citing the agreement to jointly appear at the 
March 23 EU gas transport system donors' conference in 
Brussels.  Zhovkva also claimed that a "cease-fire agreement" 
had been reached between the two camps lasting until the 
start of the Presidential campaign in July.  Zhovkva 
ackowledged that the persistent bilateral engagement of the 
Ambassador and the multilateral engagement of the Group of 
Seven Ambassadors in urging unity between Tymoshenko and 
Yushchenko had helped propel them to the "cease fire." 
4. (C) The recent reintroduction by the Presidential 
Secretariat of treason accusations against Tymoshenko were 
ascribed by Zhovkva to attempts by Yushchenko Chief of Staff 
Baloha to undermine the cease-fire.  Tymoshenko would ignore 
the attacks and was willing to share the stage in Brussels 
even though it was the Cabinet of Ministers' staff who had 
done all the heavy lifting preparing the meetings, according 
to Zhovkva.  He said that the President always "swoops in for 
the credit" once he sees a positive outcome guaranteed, and 
that Tymoshenko was willing for this to happen on the IMF 
deal to secure a positive result. 
Brussels Show of Solidarity 
5. (SBU) Yushchenko and Tymoshenko presented a united front 
in Brussels at the March 23 EU gas transport system donor's 
conference.  They spoke informally both before and after his 
speech, and both were in synch in recognizing Ukraine's need 
to reform their energy/gas sector, and in calling for support 
from donors in increasing Ukraine's gas transit capacity by 
60 billion cubic meters. 
Friction Remains 
6. (C) The Brussels show of solidarity and any further 
potential cooperation on the economic crisis/IMF front is 
playing out against continued frictions elsewhere in the 
 - Gas: Yushchenko's public criticism of Tymoshenko's 
negotiated gas agreement with Moscow escalated with the March 
4 SBU raid on Naftohaz headquarters (ref B.) 
 - NSDC confrontation: During a mid-February NSDC meeting 
Yushchenko kept reporters in the room and attacked Tymoshenko 
and her gas deal with Moscow. Tymoshenko left the meeting and 
launched a counterattack in front of reporters on the 
KYIV 00000515  002 OF 003 
 - Treason Charges: A Presidential Secretariat deputy in 
mid-March relaunched accusations of treason against 
Tymoshenko. SBU Head Nalyvaichenko has publicly stated that 
no evidence had been found to support these charges. 
 - Nemyria in Brussels: On direct orders from President 
Yushchenko DPM Nemyria was not granted access to NATO 
headquarters for the March 5 NATO-Ukraine Commission meeting. 
 - Impeachment of Yushchenko: The possibility of a move in 
the Rada to start impeachment proceedings against Yushchenko 
continue to be raised by BYuT MPs. 
Observers Remain Skeptical 
7.  (C) A sampling of Rada members we contacted were 
uniformly unimpressed by the recent meetings.  Mykola 
Katerynchuk, Head of the European Party i
n the pro-coalition 
wing of the OU-PSD, told us that "I wish there was real 
cooperation going on, but on a positive note it does put 
Yushchenko and Tymoshenko in a room together, something that 
hasn't happened in a long time."  Kyrill Kulykov, 
pro-coalition OU-PSD MP, was less charitable, evaluating the 
recent  Yushchenko/Tymoshenko meetings as "photo ops 
constructed for the IMF."   The view from across the aisle 
was similarly skeptical, with Ostap Semerak, BYuT MP, stating 
that "no real cooperation was occurring because the President 
was figuring out how to keep Tymoshenko from getting any 
credit if the IMF team came back or the economy improved." 
8.  (C) Leading political analysts also discounted the 
potential for substantive cooperation. Viktor Nebozhenko, who 
runs a leading political analysis shop, told us that 
irrespective of any signs of cooperation in Brussels the 
gloves would come off as soon as the IMF released its next 
tranche, "when the IMF funds hit the National Bank the 
impeachment and treason issues will flame back to life -- 
there is no real cooperation possible."   Mykhaylo 
Pohrebybsky, Director of the Kyiv Centre for Political 
Research and Conflict Studies, believes that Yushchenko will 
not enter the upcoming Presidential race and is now focused 
on damaging Tymoshenko's chances of succeeding him. 
Yushchenko plans to run for President again in five years and 
prefers a weak successor, possibly former Rada Speaker 
Yatsenyuk, according to Pohrebybsky. 
World Bank Shares Skepticism 
9. (C) World Bank Senior Economist and acting Country 
Director, Pablo Saavedra, told us that "even if Tymoshenko 
wants to take measures to address the crisis, she won't do it 
because she would expose herself to the President's 
criticism."   He noted that the political situation "is 
getting awful," with both the President and PM afraid to step 
forward.  Yushchenko repeats that "a better budget is needed 
to solve the crisis," thereby transferring responsibility to 
the PM, according to Saavedra.  Regarding the weekly 
anti-crisis meetings, Saavedra indicated that, to his 
knowledge, there have been three -- two focused on producing 
the IMF letter of intent, "which was to check box for the 
IMF," and a third which the PM did not attend (Embassy note: 
The PM was in France and therefore unable to attend the third 
meeting. End Note.)  Saavedra concluded that the President 
and PM "can't get out of this situation - they are locked up 
- politics always trump cooperation." 
10. (C) The tentative steps at cooperation begun by the 
anti-crisis meetings and carried over into the March 23 joint 
appearance in Brussels underline that Yushchenko and 
Tymoshenko are still capable of dealing with each other when 
overriding economic interests are at stake.  The overriding 
economic interest today is reengaging the IMF so that the 
second tranche of the standby loan can be disbursed.  By 
March 31 the government and president must agree on a package 
of IMF-required legislative changes, submit it to the 
Verhovna Rada, and get it passed.  If they do, the IMF team 
will return to Kyiv, complete their assessment and recommend 
disbursing the second tranche.  The international community 
should continue to encourage the president and prime minister 
to cooperate on this task. 
KYIV 00000515  003 OF 003 




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