SIGNPOST: Ukraine turns towards Russia

By bne IntelliNews February 1, 2007

Ben Aris in Berlin -

Ukrainian President Viktor Yushchenko will be in Moscow at the end of the month as a series of events has forced him to tilt his country's foreign policy back towards Russia.

The president's chief of staff, Viktor Baloga, arrived in Moscow Wednesday to prepare the ground, meeting with his opposite number Sergei Sobyanin, as well as Russian Security Council Secretary Igor Ivanov and Deputy Foreign Affairs Minister Grigory Karasin.

Kyiv has been making consolatory gestures to Moscow for several months as Yushchenko's EU membership project loses steam.

The EU has failed to come out strongly in support of Kyiv's bid to join the club, weakening Yushchenko's hand and forcing him to look to Russia, still Ukraine's biggest trading partner. The EU has now lost the initiative to Moscow and the best that Olli Rehn, the EU enlargement commissioner, could manage at a meeting last month was to say "never, say never." Given such lukewarm sentiment, Kyiv has turned to the open arms of its obvious regional partner – Russia.

Baloga agreed on the outlines of a bilateral action plan for 2007-08 at his meetings Wednesday and a detailed draft will be ready for presidential signatures by the start of March in time for Yushchenko's visit.

Nuclear agenda

No mention of energy cooperation was made in the press releases, but it will certainly be high on the agenda. Cooperation in the exploitation of Ukraine's rich uranium ore deposits will also be a topic, as well as some way to ease tension in the Crimea where the Russian navy is still stationed.

The focus of energy relations between the two countries has shifted from oil and gas to nuclear power, where Kyiv has a much better hand to play. This week has seen a number of nuclear power-related announcements: Russia's Rosenergoatom and Ukraine's National Nuclear Energy Generating Company (NNEGC), or Energoatom, signed off on a cooperation deal for 2007 that covers cooperation in nuclear power station security and handling spent nuclear fuel, among other things.

Fuel and Energy Minister Yuriy Boyko said this week that Ukraine would double uranium extraction this year, which prompted the Russians to invite Ukraine to participate in a planned uranium-enrichment project in Russia.

"We view Ukraine's participation as a very positive move," said the head of Russia's Federal Service for Ecological, Technological and Nuclear Monitoring (Rostekhnadzor), Konstantin Pulikovskiy.

"Ukraine's participation in the project is being discussed unofficially, official talks have not started yet," he added.

And Ukraine's Energoatom managed to cut an attractive deal with Russia’s nuclear fuel company TVEL in the middle of January for the supply of Russian fuel rods, holding down price hikes this year to about 40% despite expectations of the market price rising 120%.

Yushchenko's trip will probably also bring in trade deals. This week Ukrainian Economics Minister Vladimir Makukha said he hopes bilateral trade will exceed last year's $23bn.

Cozying up

A warming of ties has been on the cards for a while now as Prime Minister Viktor Yanukovych continues to make inroads into Yushchenko's grip on foreign policy. Under the constitutional changes that came into force at the start of this year, the president should have the right to pick the foreign minister and so control policy. However, this week Yanukovych successfully orchestrated the ousting of Yushchenko's foreign minister, Boris Tarasyuk, who is known for his vehemently anti-Russian stance.

With this political coup, Yanukovych is set to take effective control of the foreign policy portfolio, along with almost all the important portfolios in Ukraine's government. Yushchenko conceded defeat in the almost comical tussle over the post – cabinet members came to blows two weeks ago when physically barring Tarasyuk from a meeting – by accepting Tarasyuk's resignation this week.

"Here's the keys back for the foreign ministry"

The acting foreign affairs minister is Tarasyuk's top deputy Vladimir Ogryzko and a leading candidate to replace him. However, Yanukovych's ruling coalition is likely to push former foreign affairs minister Konstantin Grishchenko as its candidate of choice, who is currently an advisor to Yanukovych and served as ambassador to the US under former president Leonid Kuchma. Grishchenko is considered to be pro-Russian.

Tarasyuk's departure also pours cold water over the prospects for faster EU integration at a meeting with the so-called EU Troika, slated for February 6. At that meeting, Tarasyuk was due to represent Ukraine in talks with Brussels on increasing cooperation. A new "advanced" integration deal between the EU and Ukraine is on the agenda, but the meeting is now widely expected to be called off.

However, closer cooperation with the EU is still possible, as it remains a popular idea with most Ukrainian people and even Yanukovych has committed himself to closer cooperation. The change is that the whole process will be significantly slowed. At the same time membership of NATO, another of Yushchenko's pet programmes that is not at all popular with Ukrainians, will also certainly stall completely.

Deputies from the pro-presidential party Our Ukraine have already publicly admitted defeat. The Russian daily Kommersant reported deputies form the party as saying this week that "the president is on his own. No one is going to back his foreign policy tack anymore."

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