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11 April, 2012  ▪  Bohdan Tsioupine

Khoroshkovsky in London: Kyiv Can Deal with Moscow

Participating in a London round-table, Deputy Prime Minister Valeriy Khoroshkovsky used his impeccable manners and good command of English to try to present a very positive picture of Ukraine in the world's financial capital

James Sherr, senior fellow at Chatham House, the Royal Institute of International Affairs, has been talking to a surprisingly large number of official guests from Kyiv these days. He has fixed opinions on Ukrainian officials who come to London to explain official Kyiv policies and divides them into two categories: 1) Those who really cannot understand why the West is bothering them about the need for reform, true democracy and the rule of law and 2) Those who understand, but try to find excuses and get out of the fix.

Sherr, who chaired the discussion in Chatham House on 2 April in which Deputy Prime Minister Valeriy Khoroshkovsky participated, has not said whom he puts in either category, but he had a separate meeting with Ukrainian Foreign Minister Kostiantyn Hryshchenko the same day. The British analyst has also mentioned a previous conversation with Deputy Prosecutor General Renat Kuzmin.

Like other Ukrainian officials, Khoroshkovsky spoke with Sherr about the recently initialled Association Agreement with the EU; he said it indicated the progress Ukraine has made on its way toward European integration. Khoroshkovsky said he believes this agreement and one on a free trade zone with the EU should be signed and enter the ratification stage in December 2012.

NO CUSTOMS UNION WITH RUSSIA

When asked about Ukraine’s foreign policy issues, Khoroshkovsky gave much less ambiguous answers than Hryshchenko. Several hours earlier in London, Hryshchenko was asked by the British about the prospects of Ukraine’s participation in the Russia-dominated Customs Union. He offered vague diplomatic phrases about “seeking a formula” and “the need to remember that Russia is soon going to join the WTO”.

In contrast, Khoroshkovsky said that Ukraine’s membership in the Customs Union is impossible at present, but cooperation with Russia and other post-Soviet countries is necessary. However, Kyiv will cooperate with them only as long as it does not contradict the principles of European integration.

THE TYMOSHENKO ISSUE

Despite being as open as he was in London, Khoroshkovsky (like other Ukrainian officials) avoided mentioning Yulia Tymoshenko by name until it was absolutely necessary. Initially, he tried to skirt the issue by admitting that dialogue with the EU has been “overshadowed by objective and subjective circumstances” in high-profile trials in Ukraine. He argued that the fact of Tymoshenko’s imprisonment is a legal consequence of applying effective Ukrainian laws.

When asked about a possible way out of this situation, he smiled painfully and tried to convince the audience that a solution is being sought, but “it is impossible to change the law over just one person”. Someone noted that there is a pro-government majority in the Ukrainian parliament. Khoroshkovsky’s answer brought forth incredulous looks in the audience: the majority is not all that reliable, he said, because “The communists do not always vote as they are asked”.

At the discussion table, a comment was addressed to Khoroshkovsky: whatever excuses the Ukrainian government has and no matter how much it cites the investigation against former prime minister of Iceland, the West is quite cognisant of the fact that a former rival of the current Ukrainian president ended up behind bars almost immediately after the presidential election was held in Ukraine. No explanations or references to an imperfect legal system carry any credibility against the background of more charges being brought against Tymoshenko and Yuriy Lutsenko.

COME TO OUR ELECTIONS

“We are already very late with many reforms,” Khoroshkovsky admitted in London. “Another delay will be caused by the election campaign, because politicians will be thinking about being elected rather than implementing reforms”.

However, participants were not as interested in the perennial problem of balancing short-term populism and long-term political plans as they were in the ability of the current Ukrainian government to hold a fair and transparent parliamentary election in the autumn.

Khoroshkovsky said he believed that if there are any problems, majority districts will be the biggest concern. In order to prove that official Kyiv is interested in maintaining European standards, the deputy prime minister emphasised that Ukraine will welcome all observers without exception during the elections. He also urged foreigners to come as early as possible and watch not only the voting process itself but also the campaign. “We would like the parliamentary election to be judged not only based on the results. There will always be a losing side claiming the election was unfair. We want to show that equal conditions and opportunities will be created for all political forces”.

ANYTHING TO OFFER TO THE RUSSIANS?

London is closely watching Ukraine’s energy affairs. Even though Britain is not buying Russian gas directly and hopes to avoid having to do so in the future, the danger of disrupted Russian gas deliveries to European markets affects the interests of all Europeans.

A pointed comment made by a specialist on Russia received nods from energy specialists and analysts from London investment banks: “You are demanding a smaller price of gas from the Russians. That is understandable. But it appears from London that Russia has driven Ukraine into a corner on all issues and does not see any need to concede. True, Germany has obtained a much lower gas price, but its market is competitive, so Gazprom was forced to make concessions. What you have in Ukraine is an inefficient monopoly. Moscow will not cut the price just like that. What can you offer the Russians?”

Khoroshkovsky tried to convince his audience that the Ukrainian government is aware of the complexity of the economic problems that demand immediate resolution. “We need to make up our minds about the gas transportation system. We cannot simply sit on the pipeline and wait”, he said half-jokingly, “It is about involving all parties, including Russia as the supplier of gas and Europe as a gas consumer”.

“Also, Russia is very interested in access to Ukraine’s energy market,” Khoroshkovsky said. He added that a reform of the energy and land markets must drive Ukraine’s economy in the near future.

The audience listened to him intently. “All of this sounds fine,” one roundtable participant said as he was packing his briefcase when Khoroshkovsky and the Ukrainian delegation had already left. “But when the Lithuanians say they will build a liquefied gas terminal because they are sick of being dependent on Gazprom, I believe that they will do it. On the other hand, how many times has Ukraine spoken about diversifying its energy supply? It could be a decisive factor in its gas price negotiations with Russia now”.


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