Presidential Party Quits Ruling Coalition in the Ukraine

Ukrainian President Viktor Yushchenko’s party officially pulled out of the ruling pro-Western coalition on Wednesday amid a government dispute over presidential powers and the Georgia-Russia conflict. The Our Ukraine party’s decision was reached on Tuesday night after lawmakers voted to reduce the president’s powers, and was officially announced to parliament on Wednesday morning. Yushchenko earlier accused Prime Minister Yuliya Timoshenko of “treason and political corruption” over her failure to back the president in his support for Georgia and condemnation of Russia in the recent conflict over South Ossetia. The premier is widely expected to run against Yushchenko at the next presidential election. The decision was approved late on Tuesday by 39 out of 64 party members, and will come into force in 10 days, the Ukrainian Pravda news website said, citing a party official.

The new laws adopted by parliament on Tuesday stripped the president of his veto on prime ministerial candidates, and facilitated the procedure for impeaching the president. Ms Timoshenko’s party was accused of siding with Russia by refusing to condemn the Russia’s move last week to recognise South Ossetia and Abkhazia as independent countries. Opposition leader Viktor Yanukovich backed Russia’s decision. After the coalition split comes into effect, Ukrainian lawmakers will have 30 days to form a coalition government. If they fail to do so, the president will have the right to dissolve the parliament. Mr Yanukovich, the Ukraine’s pro-Russian former prime minister, the head of the Party of Regions, said that he does not rule out the possibility of forming a parliamentary majority with the Yuliya Timoshenko Bloc.

3 September 2008

RIA-Novosti

http://en.rian.ru/world/20080903/116506588.html

Editor’s Note:

This is das ende for Yushchenko. Everyone is worried over his barmy plan to subject the entire government to an “investigation” by his CIA-trained secret police in a Stalinist-style display of paranoia, and his worst mistake was to focus his attention on Yuliya Timoshenko. Indeed, she is ambitious, scheming, and the worst land-shark in this particular thicket. However, she is also the most competent, capable, and effective politician in the region (the two statements are not contradictory at all). She would form a coalition with Yanukovich just to utz Yushchenko.

Yushchenko is the only reliably pro-American politician available for the neocons. Sounds like Georgia, no? Bush supports two of the most unstable men on the post-Soviet space in an attempt to wrest these areas out of the Russian orbit. However, to do so, you need to have cool heads and good-sense at the helm, and such is lacking in Georgia and the Ukraine. Yushchenko and Saakashvili have torpedoed all of the neocon plans, and it couldn’t have happened to nicer folks, kids. The neocons attempted to pull one over on the world to prove how “powerful” the USA is, and how the entire world has to bow to it and kiss its posterior and smile. Well, there is a God!

Look for screams from all the usual suspects such as Vladimir Socor, Ariel Cohen, William Kristol, David Frum, Max Boot, and all the other neocon punks. It’s not going to affect the outcome, in any event. I do daresay that I am ENJOYING seeing the neocons hoist on their own petard! The samogonshchiki are on the run, and one hopes that we’ll be able to chase the lot of ‘em out of town. Then, maybe good-sense shall reign again…

BMD

EU and Russia: Signals for Cooperation Instead Of Sanctions

On 1 September, the European Union (EU) held an emergency summit on relations with Russia after the war in South Ossetia. As it is Russia’s biggest trade partner, the EU refrained from imposing any economic sanctions on it. Europe depends too much on Russian energy sources, and the leading Western companies are highly interested in expanding their business in Russia.

Nevertheless, economic sanctions against Russia had been seriously discussed shortly before. Poland, for instance, suggested rather tough financial and economic measures against Russia. Its draft resolution said that the EU should consider the Russian market unstable and full of risks and recommend major businessmen to reduce investment into Russia. Another proposal was to limit some Russia-exported goods, such as metals and fertilizer. Finally, the EU could advise European banks not to re-credit Russian banks and companies. But, the biggest consumers of Russian hydrocarbons, Italy, Germany, and France, expressed themselves against any economic sanctions. This is not surprising; the EU accounts for 50 percent of Russia’s foreign trade, most of which consists of energy supplies. Today, Russia provides the EU with a third of its oil and 40 percent of its gas.

The EU summit watered down its resolution, which does not say a word about economic sanctions against Russia because of its armed conflict with Georgia. This may be considered a diplomatic victory for Russia. Instead, the document says that Russia-EU relations should be substantially revised, and that they “have reached a crossroads”. The EU leaders instructed their bureaucrats to search for alternative energy sources in order to reduce dependence on Russia. This is not the first time they have been faced with this task, but it has not yet been resolved. Britain and Poland, the main advocates of a tough line towards Russia, had to settle for the document’s statement that “meetings on the negotiation of the Partnership and Cooperation Agreement will be postponed”. But, these meetings had already been delayed for the last year-and-a-half because of the stubborn position taken by such EU members as Poland and Lithuania, and resumed only this summer. In any event, the agreement on partnership and cooperation with Europe plays a symbolic role, and is not all-important for Russia.

At the same time, Italy, France, and Germany declared unanimously that isolating Russia was not an option, and that it is necessary to continue dialogue with it. German Chancellor Angela Merkel said that the last EU resolution on Russia signalled the need for an alliance. Economic contacts between Europe and Russia cannot be broken, primarily because business in the West and the rest of the world is vitally interested in the rapidly developing Russian market. Major European and world carmakers who conduct business in Russia through their European subsidiaries are looking to expand their Russian operations further. All forecasts predict that this year Russia will leave Germany behind and become the world’s biggest car market. TNK-BP, the daughter of the British oil giant, is going through a difficult period, but, BP still intends to develop its business in Russia. The optimism of European investors and exporters is shared by their American colleagues. Last week, the US National Council on International Trade Development, which unites more than 300 companies, urged President George W. Bush not to impose any economic sanctions against Russia. Also, last week, PepsiCo purchased Lebedyansky, Russia’s biggest juice producer. Incidentally, agreement on this deal was reached in the spring, so, the US company had plenty of time to ponder the wisdom its investment.

Needless to say, the conflict in South Ossetia dealt certain damage to foreign investment in Russia. Finances were the hardest hit, since they are more susceptible to speculations. Between eight and twenty billion dollars (201.881-504.782 billion roubles. 5.549-13.872 billion euros. 4.513-11.282 billion UK pounds) left Russia during the conflict, first of all from its stock market. Some three to four billion dollars (75.705-100.94 billion roubles. 2.081-2.774 billion euros. 1.692-2.256 billion UK pounds) followed suit a week later. Experts maintain that no fundamental changes have taken place in the Russian economy. The leading Russian companies continue to be highly profitable, and now there is an opportunity to buy into them (relatively) cheaply. Most likely, foreign investors will return to the Russian stock market by the end of the year.

2 September 2008

Oleg Mityayev

RIA-Novosti

http://en.rian.ru/analysis/20080902/116491004.html