PUTIN REACHES OUT TO UKRAINE, POLAND. After several weeks of pushing for a pipeline bypassing Ukraine, Putin said in Paris that Moscow has no intention of not using Ukraine's pipeline system to export Russian petroleum products, strana.ru reported on 31 October. Putin said that he and Ukrainian President Leonid Kuchma have agreed on that, but he said that the existing Ukrainian network was too small to carry all the gas the Europeans would need. In addition, Putin stressed how much the new pipelines would benefit Poland: "Can you imagine to have nothing and then have a billion fall from the sky?" Putin asked rhetorically. But even as Putin was making these comments, Deputy Prime Minister Viktor Khristenko said that "a pipeline route via the Baltic seabed and Finland to Europe would be much more logical than the Ukrainian route," gazeta.ru reported on 30 October.

End Note: GIVING SUBSTANCE TO THE UKRAINIAN-RUSSIAN 'STRATEGIC PARTNERSHIP'
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UKRAINIAN PROSECUTORS PROBE $4.6 MILLION BRIBE CASE. Deputy Prosecutor-General Mykola Obikhod told journalists on 6 November that Oleksandr Tymoshenko, the husband of Deputy Premier Yuliya Tymoshenko, has been accused of paying $4.6 million in bribes to former Prime Minister Pavlo Lazarenko, Interfax reported. Earlier, Oleksandr Tymoshenko, a member of the Unified Energy System (UES) Board, was arrested on charges of embezzlement (see "RFE/RL Newsline," 22 August 2000). Obikhod also said Yuliya Tymoshenko has been interrogated by Russian investigators who are looking into a case of the UES's bribing officials in the Russian Defense Ministry. Yuliya Tymoshenko headed the UES from 1995 to1997. She previously claimed that her husband's arrest was an act of "political revenge" against herself for seeking to curb shady operations and corruption in Ukraine's fuel and energy sector. JM

SOROS PRAISES UKRAINE'S DEVELOPMENT. U.S. financier George Soros said on 6 November that Ukraine's development has been hastened by improved cooperation between the president, prime minister, and parliamentary majority, AP reported. Soros arrived in Kyiv to review projects implemented by his Renaissance Foundation and take part in ceremonies marking the 10th anniversary of the foundation's work in Ukraine. "I was critical and I am happy to see the progress that was made since the [last] election, but I am concerned about the future of Ukraine, because it's very important," Soros commented after his meetings with President Leonid Kuchma and Premier Viktor Yushchenko. JM

GREEK FOREIGN MINISTER IN KYIV. Foreign Minister Anatoliy Zlenko and his Greek counterpart, Georgios Papandreou, signed agreements in Kyiv on 6 November on the avoidance of dual taxation as well as cooperation in merchant sea navigation and customs, Interfax reported. Papandreou commented that the two countries have not yet taken full advantage of their cooperation potential. Ukraine's trade turnover with Greece in the first six months of 2000 amounted to $63.3 million. JM

GIVING SUBSTANCE TO THE UKRAINIAN-RUSSIAN 'STRATEGIC PARTNERSHIP'

Ukraine's much-vaunted multi-vector foreign policy is again in flux following the dismissal last month of proWestern minister of foreign affairs, Borys Tarasiuk. Kyiv is finding it increasingly difficult to continue a foreign policy that recognizes both the U.S. and Russia as "strategic partners" but gives substance only to its partnership with the U.S. and NATO.

The strategic goals of Ukraine's Western-oriented multivector foreign policy are unlikely to be altered because they have majority support among the country's leadership. While Ukraine is proceeding with plans to upgrade the GUUAM alignment (composed of Georgia, Ukraine, Uzbekistan, Azerbaijan, and Moldova) into a fully fledged regional organization early next year, it released this summer a new plan for integration into the EU, and a new Ukraine-NATO Cooperation Program for 2001-2004 will shortly be unveiled. Support for CIS integration among the country's leadership is minimal.

There will nevertheless be short-term changes. Anatoly Zlenko, who was appointed as Tarasiuk's replacement, called upon his ministry to "change some tactical approaches in order to better tap the potential of Russian-Ukrainian cooperation." "We cannot proclaim a slogan and leave it unfulfilled," he added. For example, although both states signed a 10-year economic cooperation treaty in February 1998, the volume of bilateral trade has declined by half since 1996.

Zlenko, who was Ukrainian foreign minister from 1990 to1994, acknowledged the "low effectiveness of a purely declarative diplomacy" that Ukraine has conducted vis-a-vis Russia. Zlenko has been tasked with activating Ukraine's Russian policy. Not surprisingly, his first foreign trip was to Moscow.

Apart from the need to give a new lease on life to Ukrainian-Russian relations, Tarasiuk's dismissal as foreign minister can be seen in the context of four other factors.

First, disillusionment with the West has been growing since Ukraine's chances of joining the EU were blocked. Although there is a non-leftist (but not necessarily proreform) majority in the parliament and a reformist, noncorrupt government, no financial assistance has been forthcoming this year from either the IMF or the World Bank. It is surprising that when Ukraine at last has a committed reformist government the IMF has declined to provide assistance.

Second, there are no longer any high-ranking officials in the presidential administration who are pro-Western. Anatoly Orel, a former long-standing Soviet career diplomat and the head of presidential administration's foreign policy department, is reportedly a pro-Russian "grey cardinal" who supported Russian demands that Tarasiuk be relieved of his post. In return for not taking a hard line on energy debts and the re-routing of pipelines, Russian officials have long urged that certain outspoken, pro-Western officials-- including Tarasiuk--be dismissed because they were not committed to a Russian-Ukrainian "strategic partnership."

Third, Ukrainian oligarchs who have acquired their wealth from illegal deals on Russian energy are blocking the re-routing of Ukrainian energy supplies from Russia via the Caucasus. Construction of the Odesa oil terminal, which was designed to import and refine Azeribaijani oil, was started in 1993 but has still not been completed. Ukrainian oligarchs can conduct their illicit energy deals only through cooperation with equally corrupt colleagues in Russia. Russia has turned down Ukrainian requests to install meters on the pipelines crossing its territory to prevent theft of Russian gas, which, according to Western diplomats in Kyiv, is taking place on either side of the Russian-Ukrainian border.

Indeed, Ukraine's oligarchs and their centrist "party of power" parliamentary factions, which control the parliamentary leadership, are hostile to the reformist government of Viktor Yushchenko because its reforms are undercutting their financial operations. While Ukraine's economy has grown this year for the first time since 1990, the government's reformist policies can also be considered to have contributed to the payment of all wage, pension, and social security arrears within nine months of the cabinet's having taken office. But President Leonid Kuchma has been noticeably reticent in supporting Yushchenko. If Kuchma were to remove him from office, the non-leftist majority in parliament would collapse: upwards of 100 of the 250 nonleftists in the parliament are pro-Yushchenko, but not proKuchma.

End Note: GIVING SUBSTANCE TO THE UKRAINIAN-RUSSIAN 'STRATEGIC PARTNERSHIP'
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GIVING SUBSTANCE TO THE UKRAINIAN-RUSSIAN 'STRATEGIC PARTNERSHIP'

Apart from the need to give a new lease on life to Ukrainian-Russian relations, Tarasiuk's dismissal as foreign minister can be seen in the context of four other factors.

RADIO FREE EUROPE/RADIO LIBERTY, PRAGUE, CZECH REPUBLIC

RFE/RL Poland, Belarus, and Ukraine Report Vol. 2, No. 41, 7 November 2000

A Survey of Developments in Poland, Belarus, and Ukraine by the Regional Specialists of RFE/RL's Newsline Team

BUZEK SKEPTICAL ABOUT BYPASS GAS PIPELINE. The 2 November "Gazeta Wyborcza" published an interview with Premier Jerzy Buzek about the recently discussed project to build a YamalEurope gas pipeline that would bypass Ukraine (see "RFE/RL Poland, Belarus, and Ukraine Report," 24 October 2000). Below are excerpts from that interview.

Gazeta Wyborcza: Was the government surprised by Gazprom's agreement with EU firms [to conduct a bypass pipeline feasibility study]?

Buzek: We were not surprised, we knew about the talks. ...The Polish government is closely watching the course of those negotiations, we have proposed a meeting of all interested parties to discuss the European system of gas deliveries. When it comes to details regarding the directions and methods of gas transit, the Polish government certainly will not miss the negotiations. Nothing will be decided about us without us.

Gazeta Wyborcza: For the time being, Poland is drawing no profits from Yamal gas transit. Russian President [Vladimir] Putin says Poland may earn $1 billion [annually] on gas transit by means of a new pipeline. Does your government has its own [profit] calculations?

Buzek: It is difficult to calculate profits from gas transit, I do not want to comment on that 1 billion. Along with obtaining transit revenues, it is equally important to strategically strengthen Poland as a country via which Europe receives gas. We are becoming an important link in the European system of security, balance, and stability. ...

Gazeta Wyborcza: Poland opposes bypassing Ukraine in this new pipeline project. However, there are opinions that we are engaging in the defense of Ukraine's interests more than Ukraine itself.

Buzek: It is obvious that we are most concerned about our own interests and security. However, independent, democratic, and developing Ukraine is an element of our national security. On the other hand, it is true that we need to hear Ukraine's strong voice in this matter.

Gazeta Wyborcza: There are links between capitals and people in Gazprom and Ruhrgas, a German firm. We buy almost all of our gas from Gazprom. Almost all the gas that transits our territory is received by Ruhrgas. Does Poland not feel besieged by Russia and Germany?

Buzek: Not at all. If gas supplies from the East to the West are increased, we will gain from this, our geographical location will become a source of our strength.

UKRAINE

MORE HEADACHES FOR YUSHCHENKO, KUCHMA. Some Ukrainian media have suggested that there is a full-scale cabinet crisis in Ukraine and that radical decisions in Kyiv are imminent.

Last week, Council of National Security and Defense chief Yevhen Marchuk announced that the government presented "unreliable" data on the situation in the energy and fuel sector. Marchuk said that in an earlier report to the parliament, Deputy Prime Minister Yuliya Tymoshenko overstated the level of cash revenues in the energy sector as well as the amount of fuel stored for this winter. Tymoshenko previously claimed to have raised the level of cash payments to some 70 percent of the energy sector. According to Marchuk, a large part of the revenues was made up of credits granted by banks to state enterprises under pressure from the government. Premier Viktor Yushchenko said he does not share Marchuk's conclusions, adding that they are "insincere." Yushchenko even threatened his resignation over that controversy. "If my mission here [as prime minister] is deemed to be ineffective, then let it be undertaken by someone else," Interfax quoted Yushchenko as saying.

Tymoshenko told STB Television on 4 November that Marchuk's report is politically motivated. "I understand very well who is today working in the fuel and energy complex. I want to say that the talk of my dismissal...began practically from the first day of my work in the cabinet. But I think that I have achieved positive results as the leader [of the fuel and energy sector] and I have no reason to resign. I will never leave the government [of my own volition]," Tymoshenko declared.

One of the piquant and simultaneously unclear circumstances of the controversy is the fact that Marchuk's report was signed by several ministers, including Fuel and Energy Minister Serhiy Yermilov. It is publicly known that Yermilov is unhappy with Tymoshenko's reform in the energy and fuel sector, but his endorsement of Marchuk's conclusions affects not only Tymoshenko but also Yushchenko. Tymoshenko's possible dismissal by Kuchma would almost certainly entail the resignation of Yushchenko.

Time will tell whether Kuchma will risk such a radical cabinet reshuffle. But one thing is certainly clear: for the Western financial organizations that are waiting to see results in Ukraine's reformist effort, Yushchenko's ouster is certainly not the kind of action they hope to see.

"None of the neighboring countries -- except, perhaps, Russia -- has as huge an army as Belarus (if seen in terms of the country's population) does. I live beside a military town, so I know very well the real combat readiness of our [brave] warriors. They do not drive tanks or armored personnel carriers because there's no fuel. They do not launch missiles because this is too costly. They do not fire from submachine guns because they need to economize on cartridges. They loiter about, half-hungry, dressed in anything they think suitable -- because there's not enough money for standard uniforms. Whom do we want to fool with this 100,000-strong army? And the main thing -- against whom are we getting ready to fight? Against Poland or Lithuania, which are backed by NATO? Or, maybe, against Ukraine, a no less beggarly country than ours?" -- Mikola Sinyuha from Lida Raion, Hrodna Oblast, in a letter to RFE/RL's Belarusian Service. Quoted on 26 October.

"Today we must rise up and drive away this fascism of the 20th century -- the International Monetary Fund -- from Ukraine!" -- Volodymyr Marchenko, a leader of the ultra-left Progressive Socialist Party of Ukraine, during a rally on 29 October. Quoted by Interfax.

"Give back [our] savings [lost after the USSR breakup] according to the exchange rate in 1991-1992: 1,000 rubles = $1,785 + moral damages." -- A placard at a rally organized by the Progressive Socialist Party of Ukraine on 29 October. Quoted by Interfax.

"Closer to winter, we may find it completely impossible to breathe -- because of the concentration of gas in the atmosphere." -- The Internet newsletter "Ukrayinska pravda" on 1 November, commenting on the current Ukrainian-Russian standoff over gas transit and supplies.

"RFE/RL Poland, Belarus, and Ukraine Report" is prepared by Jan Maksymiuk on the basis of a variety of sources including reporting by "RFE/RL Newsline" and RFE/RL's broadcast services. It is distributed every Tuesday.