International Information and Analytical Edition | Ukraine | The Kiev Times | June, 2012

During the football championship Euro-2012 Ukraine was discovered by the Europeans and at the same time remained a mystery: complete positivism from a fantastic atmosphere and the absolute lack of understanding of the causes of Ukrainians shortcomings

THIS IS OUR EURO!

In June 2012 the world turned up-side down for our country. Lviv resi-dents embraced the Portuguese, and in Donetsk the locals danced in the pouring rain with the French. On the

streets of Kharkov an orange mood was created by their football jer-seys of the marching Dutch. In Kiev the marching columns were yel-low, these were the Swedes. In this

colorful movement of football fans from Europe was a place for blue and yellow colors – the state flags of Ukraine on cars on the roads, the people dressed in the colors of the

football team! All of this festive ex-citement is shared with co-host Po-land of the Euro-2012 Our Euro!

On May, 23d the museum «Mys-tetskyi Arsenal» started the first Kiev biennale of contemporary art; ARSENALE 2012. It took organizers only eight months to prepare for AR-SENALE 2012. Usually preparation for such large scale exhibitions ev-ery two years requires 12 months or more. This leads to the assembly of installations partially without elec-tric lighting, belated presentations of video works, and getting custom clearance for separate exhibits liter-ally on the eve of the opening day. But still the global event has taken place. Its scope and success have stunned the most exacting experts of contemporary art. Even the worldly-wise artists and art critics couldn’t hide their amazement, because the level of the first Kiev biennale has been found to be unexpectedly high both by its artistic content and by the

decoration of the exhibition itself. «Biennale opening has attracted a large pool of foreign press and more than one and a half thousand guests. This is the audience, which determines the world art-tenden-cies. Many of the present curators and art critics have more than once lit the global stage. Perhaps, without such an important occasion as bien-

nale (for the world cultural life) these people would never have come to Ukraine. But today Kiev is recognized as one of the cultural centers of the world», says Natalia Zabolotnaya, or-ganizer of ARSENALE 2012, the Gen-eral Director of «Mystetskyi Arsenal» in a talk with The Kiev Times.

Interview with the First Deputy Prosecutor General of Ukraine

The sacramental phrase of Julius Caesar, said by him while cross-ing the river Rubicon – «Aleaiac-taest», today might well be used to understand the role and place of Ukraine in the modern worldTo its neighbors Ukraine is clearly a «chunk», which we are not willing to give, but no one is going to take it. Poland dreams about Ukraine, closely adjacent to its borders eco-nomically and politically. Germany sees Kiev as a buffer between Europe and Asia. Russia dreams of transpor-tation networks and an energy sec-tor, the EU is ready to seize the fi-nancial system of Ukraine. And fi-nally, the U.S. does not object to draw Kiev into the risky game called «missile defence».

The new Russian leadership headed by three time President Vladimir Putin will not miss the right moment and will do everything possible to restore the economic union of post-Soviet countries. Ukraine is the main goal of the project.Power in Russia has moved from Vladimir Putin ... to Vladimir Putin. The role of Prime Minister Dmitry Medvedev was revealed his visit 18-20 May, to the summit of the Group of Eight (G8) at Camp David in the United States. The Russian Prime Minister was remembered when he conveyed a letter from a «friend Vladimir» to U.S. President Barack Obama, in which the old/ new Russian President outlined his view on Russian-American relations.«When the wind of change blows some build walls others

build windmills», – this ancient oriental wisdom, Vladimir Putin well comprehends. He intends to review foreign policy and to derive maximum benefit from the crisis that has rocked the modern world order, Putin intends to extend the main efforts of Russian diplomacy to the post-Soviet space.

Norwegian city Drammen (Dram-men, NOR) 21-24 July held CSIO4*held next round of the Euro-pean Nations Cup League Promotion (2012 FEI Nations Cup Series Euro-pean Promotional League).Total during 2012 the League will hold 5 rounds of team competitions and the finals of the League, which is scheduled for 20-23 September 2012 in Barcelona, Spain 5*.The European Promotion League consists of 12 teams.In the fourth round (in Drammen) met representatives of 10 countries (Spain, Netherlands, Denmark, Nor-way, Ireland, Italy, Qatar, Finland, Sweden and Ukraine). Of these, only 8 completed the race.Ukrainian team, represented by Al-exander Onishchenko (President of Equestrian Federation, Ukraine), Catherine Offel, Bjorn Nagel and Cassio Rivetti won the first place. Under the Nations Cup rules the holder of the first place in each stage gets 10 points. In earlier start in the Linz-Ebelsberg 4 * (AUT) 10-13.05.2012 and Copenhagen 4 * (DEN) 17-20.05.2012 our team got first and second place and already has 17 points.Today Ukraine is the leader and heads the League, once again con-firming the status of one of the strongest teams in this sport. The second place goes to the represen-tatives of Denmark, and the third – to Spain.Winning the Nations Cup European League Promotion entitles the team to take part in the Champions Cup of Nations in 2013. Looking forward to opening in Barcelona.In August in London Equestrian Ukrainian team will take part in the Olympic Games.

Marius Klatt, Regional Manager Transfermarkt GmbH & Co, Kiev, Ukraine«My work involves review and cov-erage of world and European foot-ball events. I have been to many in-ternational football championships: World Championship in Berlin and the League Cup championships in Europe. I assure you, that the cham-pionship in Ukraine is organized well. When the stadiums were being built, I was in Ukraine. I was wor-ried a little, that they wouldn’t make them on time. Stadiums opened in a timely manner. Football matches, especially international, are almost always and everywhere accompa-nied by the slaughter between the fans, chaos and collapse. In Ukraine, everything went surprisingly peace-ful and quiet. People here are nice and friendly. And thank your news-paper for information about mod-ern Ukraine. In the West, it is not enough. We read The Kiev Times and learn about your country!»

With the fall of the Soviet Union, the time of the national republics had come. With it came an uncon-trollable desire for the new and the unknown. Business was one of those new things. Post-Soviet citizens were becoming more and more cap-italistic. National business, as a phe-nomenon, was being born. People had realized that being a good busi-nessman does not necessarily mean being smart and hardworking. Influ-ence and power became the keys to success. The raider attacks began, as any business idea through the use of power could easily be turned into ones property. The population experienced the rise of the spirit, as if the burden fell off their shoulders. People could earn money, do private business, not realizing that private business could again be divided with the government or become depen-dent on government.Today, Ukrainian business, in con-trast to our economy, almost keeps pace with global trends. Ukrainians have attracted foreign investment, begun cooperation with foreign partners, have been able to develop domestic manufacturing capacity, and have even gone to the IPO, to become more transparent and un-derstandable to European markets.Ukrainian business can be divided into two groups. In the first group are the companies that follow the principles of transparency and reli-ability. These companies always ful-fill their contractual obligations. In the second group are companies that do not try to meet their obligations to contractors. Companies in this group are doing their best to get hy-per-profits, even through deception and fraud.

«WE READ THE KIEV TIMES»

EUROZONE CRISIS

CUSTOMS SAYS WELCOME...

OSTAP STUPKA: PATRIOTISM – IT’S SPENDING MILLIONS ON A UKRAINIAN BLOCKBUSTER!

FINANCING OF THE UKRAINIAN BUSINESS: TO BE OR NOT TO BE?

KIEV MET THE LONG-EXPECTED «APOCALYPSE»

RENAT KUZMIN: ARE TIMOSHENKO, LAZARENKO AND KUCHMA MURDERERS?

UKRAINIAN NATIONAL TEAM WON THE CUP OF NATIONS

«ALEA IACTA EST» – THE DIE IS CAST

UNION RETURNS?

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THE KIEV TIMES | JUNE, 20122

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Euro-2012Undoubtedly, the main event in June for our country was the host-ing of Euro 2012. Ukraine has suc-cessfully coped with the tasks set by UEFA for the European Football Championship

Assessing this event on his per-sonal page on the Internet, Mykola Azarov Prime Minister of Ukraine wrote: «Yes, we have much to be proud of. Almost no one believed. Many people advised us to de-cline the undertaking. But we have not even thought about it. In diffi-cult financial and economic condi-tions, we were able to mobilize and fully prepare for EURO champion-ship. Ukraine fulfilled its obliga-tions, both honorable and sophis-ticated at the same time. The pres-ident and the government did ev-erything possible and impossible to carry out this sports festival, first of all – for the people of Ukraine!»

Back in 2009 the thought of the European championship being co-hosted in Ukraine was a big ques-tion. The Olympic Stadium refur-bishment was behind schedule, and the one in Lviv didn’t even fit into a schedule. A similar situation was with the airports in Kiev and Lviv. Thinking about infrastructure didn’t bring much joy.

In 2010 everything had changed radically. President Yanukovych promised Platini that there would be no more lapses in the schedule and that Ukraine would successfully pre-pare for hosting Euro-2012.

During this short period of time more had been built, than in the previous 20 years. The new termi-nal in Boryspil, airports in Donetsk, Lviv, and Kharkiv, lots of roads and interchanges were constructed, new high-speed trains were launched, hotels and hostels were built, large-scale infrastructure reconstruction was conducted. All this has created new standards and guidelines for Ukrainian cities that did not host the championship matches.

Many European politicians and heads of state have tried to politicize this event and use it to their advan-tage, blackmailing Ukraine with boy-cott. Political passions were pumped by Tymoshenko supporters inside the country.

Hopes of Euro-skeptics that Euro-2012 would fail did not material-ize. Hundreds of thousands of fans, who came to Ukraine, would not see here dictatorship, repression or any racial abuse. But what they did see was a beautiful country with friendly happy people. And the vast major-ity of fans have expressed regret that their friends, succumbed to a planned attack of the western pro-paganda on Ukraine, did not come.

Today we can say for sure that the boycott of the football championship in Ukraine failed.

It is regrettable that the Ukrainian team didn’t advance to the quarterfi-nals. Showing a good game, our team was the victim of the Hungarian judge, unable to notice a goal from a distance of 5 meters, scored against England, the goal which was no-ticed by all the spectators in the sta-dium and on television. But the good thing is that this uncounted goal put an end to the dispute, whether an electronic record of ball crossing the goal line is required. In this sense, the match Ukraine – England will be historic.

GTS and independenceApproved by the Cabinet, applica-

tion for the purchase of 27 billion cu-bic meters of natural gas from Gaz-prom in 2013, has caused dissat-isfaction among the leadership of Gazprom. It became obvious that a balanced policy pursued by the Gov-

ernment of Ukraine in this field, does not provide for the foreseeable fu-ture performance of contracts signed by Putin and Tymoshenko according to Putin’s scenario. It seems that the decision to reduce by one-third pur-chases of Russian gas has ripened, after fruitless negotiations, held in May at the informal summit of CIS countries, where our party insisted on the revision of the absurd price of gas.

According to the newspaper «Kommersant Ukraine», Mr. Miller does not exclude the possibility of legal recourse with Ukraine on this issue. However, I think the Russians understand that the trial could re-veal to the world the corrupt «under-side» of gas contracts, which would lead to full denunciation. Therefore, no one is in a hurry to address the court. The Russian side is concerned that the initiative in the gas strat-egy could escape from the Kremlin’s hands.

For Moscow, the gas issue is the main strategic direction of the country. Creation of a gas monop-oly means a serious support of the ruble as an international currency, increasing social standards of life in Russia, the strengthening of the army and the military-industrial complex of the country, as well as an effective mechanism in Russian geo-politics. Ukraine has a chance to fully experience this geopolitical mech-anism. This mechanism has also caused the EU to respect and listen to Russia, even in the matters of our gas disputes.

Today Ukraine has a serious con-cern, that with the creation of gas transportation consortium, there would be no place for our own nat-ural gas production. Russia would too quickly fill the pipes and storage volumes with expensive (for Ukraine $450) gas and force our customers to buy it, whereas the world mar-ket price for it is constantly drop-ping. How can the Ukrainian econ-omy compete in this case?

Therefore, the government is scru-pulously attentive to the creation of a consortium for the exploitation of the Ukrainian GTS.

Simultaneously, we continue to increase gas production, diversify its supply, and abandon the Russian one. Prior to 2030 we will reduce im-ports of Russian gas to 5 billion cu-bic meters. Prior to the signing of gas agreements between Tymosh-enko and Putin, the amount of gas imports amounted to 60 billion cu-bic meters.

The language issueHot debates in the Verkhovna Rada

regarding language law authoured by People’s deputies Kolesnichenko and Kivalov, vividly demonstrated the relevance of this issue for Ukraine. By gravitating to the Russian lan-guage, and political forces that rep-resent it in the government, the pub-lic no longer perceives that the gov-

ernment is engaging in economic matters. It seems that the time of Galician expansion and «language exports» to the whole Kievan Rus’ is coming to end.

The Lack of rights of indigenous Russian people of Ukraine, as well as the Crimean Tatars, is horrifying, outrageous, and may be a factor re-sulting in the street protests. In this case the consequences of rebellion in the region of Donetsk-Krivoy Rog and the Crimea will be far more seri-ous than Galician speeches made in defense of ‘mova’. Here is a fit say-ing: «A Russian man harnesses the horse slowly, but drives fast».

Let me remind you, the Russians at the root of the state-forming of the nation of Ukraine. History, writing, religion, language, the noble Rurik dynasty, the first code of laws «Rus-sian Truth» – all this is Kievan Rus’. Russian Orthodox hetmans – Khmel-nitsky, Vygovsky, Mazepa – they all dreamed of restoration of the Great Russia (Kievan Rus’) and the noble Russian (not Moscow) government within its borders, close to modern Ukraine.

Surprising is the fact of quietly re-naming of Rus’ into Ukraine at the beginning of the twentieth century. Under the guise of Lenin’s October Revolution of 1917, during the dis-tribution of the Russian lands to the Kaiser’s Germany for debts brought by financing the Bolsheviks, Gali-cians organized and led one of the Kiev government and our country was called Ukraine.

The idea of the Republic of Ukraine pleased Lenin. His representatives Lazar Kaganovich, and the head of CEC of Ukraine N. Skrypnyk planted forced Ukrainization in the Russian-speaking south and east of Ukraine under the leadership of Joseph Sta-lin.

Since independence in 1991 just like in 1917, we did not vote for the name of the country and the state language. Galicians skillfully im-posed «movne» (language) opin-ion on Leonid Kuchma. Kuchma had promised bilingualism to the peo-ple during his presidential election campaign. The Government has ad-opted the Main Law in one day un-der the threat of dissolution, there it adopted Ukrainian as the only state language.

Covered by joy and exultation of a new constitution the majority of voters did not immediately realize that they had lost their rights. Since then, Lviv Ukrainians became the tit-ular nation, and received, as carriers of a single national language, prefer-ences in government, media, educa-tion and other fields. A new wave of violent ukrainization in Ukraine be-gan. Today we, the Russians, I em-phasize to the nationalists, that Rus-sians comes from the word Rus’, are often reminded of Article 21 of Con-stitution of Ukraine «All human be-ings are free and equal in their dig-nity and rights...» We, the indige-nous Russians of Ukraine, the de-scendants of Kievan Rus’, will insist on the implementation of this arti-cle in our country. No micro-parties,

or hastily created forums of scien-tists and intellectuals to protect the «mova» (language) has any right to decide for the people how to live and what language to speak, since we did not vote for them in the first place..

According to the teaching of Christ, good triumphs over evil, truth beats a lie. Today we are at a histor-ical starting point, when the prom-ises of politicians to restore the rights of Russian in Ukraine, as well as the Crimean Tatars, will be ful-filled, while language election spec-ulations and false promises will go into the past.

The language law was passed in the first reading, the second read-ing will be heard in early July. Ap-parently, the political heat of sum-mer will not subside.

Every foreigner working in Ukraine, has gained the experi-ence of being in a business en-vironment that is different from the European one. Ukrainian busi-ness differs, with excellent pros-pects and daunting risks. Why is doing business in Ukraine so con-troversial?

The main risk, which an investor in any country carries, is the risk of no return on investment. Ukraine is not an exception in this regard. In March 2012 the rating agency S&P revised its sovereign credit ratings of Ukraine and lowered its forecast from «stable» to «negative». At the same time, short-term ratings in foreign and local currency were con-firmed at the level of B+/B. The Prime Minister of Ukraine Mykola Azarov criticized the downgrade. Neverthe-less, companies are always doomed to shoulder the risks of their country.

How does one recognize whether a company is creditworthy, and whether it is necessary to consider the political risks in any decision to cooperate or invest? The interna-tional community has long been ap-plying a clear and open process of verifying the credit worthiness of businesses. Ukraine is only beginning to implement this process just now.

Simple not-standard rules in Ukraine

As in any other country in the world, this procedure is as follows. A rating or information agency con-tacts a company or group of compa-nies with a request to provide stan-

dard information about their activ-ities. The agency must clearly ex-plain the purpose of such a request. A meeting with the managers of the company must be organized, and documentation proving the valid-ity of such actions should be pro-vided. On the basis of provided in-formation the Agency develops a so-called credit report with a specific credit opinions meant for the final recipient.

The consumers of credit reports are the major export credit agen-cies (ECAs), banks and exporters. They, first of all, want to understand whether a company is solvent and able to pay back its obligations on time and determine the maximum credit limit that can be provided to the company – the later is the most significant part of the credit report.

Taking into account the non-stan-dard provisions of Ukrainian ac-counting and the frequent under-statement of tax burdens by Ukrai-nian companies, the agency in charge of rating should make every effort to verify the data provided by the company. Only after a detailed examination, can the credit opinion be valid and practically risk-free for the client.

And one more important detail. When it comes to evaluating the creditworthiness of Ukrainian com-panies, such studies should be car-ried by local agencies having knowl-edge of the specifics of local (Ukrai-nian) accounting standards, legal aspects and other local features. In order to get an objective assessment of the creditworthiness in Ukraine, simple rules should be followed:- Contact specialized rating and in-formation agencies with extensive experience in the Ukrainian market- Be sure that the agency complies with all recognized international data collection and verification pro-cedures- Request a free sample credit report to see what information will be ob-tained as a result - Act on the basis of a bilateral con-tract, which establishes the legal ob-ligations.

Credibility is interdependent with trade finance, in particular, with the trade credit insurance. Import vol-umes increase, and Ukraine becomes a party to the process of trade financ-ing in the implementation of trade operations with foreign exporters. But when it comes to the insurance of trade operations between the ex-porter and Ukrainian companies, ECA, as a rule, consider such cases with caution. First, it is associated with high political risks in Ukraine and the international rankings of the

country. Second, the risk assessment of the region is quite complex, and often does not show an objective pic-ture. This is often complicated by the fact that the Ukrainian participants of trade contracts, which are subject to credit insurance, do not want to be transparent and open to the ECA and do not wish to be checked for credit-worthiness. This factor is sufficient to the ECA to not provide insurance coverage.

In other cases, the exporter, wish-ing it to remain unseen, contacts the ECA for information leading to the contracting of an international trade agreement, so that the importer has no idea of the interests of the ex-porter. In such cases, the Ukrainian importer refuses to undergo credit checks. For fear of, for example, raider attacks, in fact, it loses the op-portunity to expand its product port-folio, and therefore increase profits.

What are the advantages of trade credit insurance?

- Trade credit is the cheapest among all kind of loans issued and the procedure for obtaining it is also very simple

- The cost of trade credit is signifi-cantly lower than the cost of attract-ing financial credit

- Trade credit can reduce the pe-riod of the financial cycle of the en-terprise

According to Information-rating agency, Credo Line, the most im-port-oriented markets in Ukraine are: the food market, the construc-tion and construction materials mar-ket, heavy industry and mechanical engineering, agricultural market and retail. Leaders in the food mar-

ket are companies such as Confec-tionery Corporation Roshen, San-dora, Chumak, and Coca-Cola Bev-erages Ukraine Limited. Thus, the total import of Confectionery Corpo-ration Roshen in 2011 amounted to 1934 million UAH. The building ma-terials market is led by companies such as Epicentre K, Cersanit Invest, and Kiev Energy Construction Com-pany. Total imports of Epicentre K in 2011, totaled about 141 million UAH.

The heavy industry and engineer-ing industry are represented by such leaders as JSC Motor Sich, with a total volume of imports in 2011 amount-ing to 30,351 million UAH. Among other leaders in this sector are JSC Alchevsk Metallurgical Plant, PJSC Donetsk Electrometallurgical Plant and JSC Kryukov Rail-Carriage Plant.

These markets interest foreign ECAs and exporters in terms of trade credit insurance coverage most of all.

During Crises, all is thor-oughly thought through

After the collapse of the global economies much changed in all countries. Trade credit insurance has suffered particularly badly. The massive bankruptcy of the most sta-ble companies around the world, bil-lions of debtors, zero reserves, dam-aged reputations. ECAs started work-ing with new, thoroughly thought out concepts, developed new strate-gies and revised existing conditions.

For example, Euler Hermes offices around the world engage a com-pletely individual approach, which in this case corresponds to the same rules and the corporate map of coun-try risks. Each local office shall take into its decisions of individual insur-ance coverage, the limitations of each particular country. So, for example, the Italian offices of Euler Hermes of-ten refuse to enter into any transac-tion with Ukrainian companies, while the Polish offices are positive on the cooperation with Ukrainian business. At the same time, the world’s leading ECAs do not neglect the commercial benefits and are more likely to insure an operation with high credit limits, no matter which country the debtor is located in. On terms of personal initiative Credo Line has launched a project rating the international busi-ness reliability of Ukrainian import-ers, which aims to promote Ukrai-nian businesses. Due to this project, a large number of Ukrainian compa-nies will be able to be further evalu-ated and recognized by foreign part-ners.Katerina Bogdanenko,Director of Information and rating agency CREDO LINE,specially for The Kiev Times

HOT JUNE FINANCING OF THE UKRAINIAN BUSINESS: TO BE OR NOT TO BE?

When it comes to the insurance of trade operations export credit agencies consider such cases with caution

Alena Berezovskaya,Chief editor of The Kiev Times

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THE KIEV TIMES | JUNE, 2012 3

Three ways to change the Constitution

On 20 June, President of Ukraine Viktor Yanukovych held the first ses-sion of the Constitutional Assembly. It was attended by 72 out of 95 mem-bers. Those included leading scien-tists in the field of law, philosophy, economics, representatives of major trade unions, and more than 20 com-munity organizations. The meeting was also attended by three former presidents of Ukraine – Leonid Krav-chuk, Leonid Kuchma and Viktor Yushchenko. Opposition politicians have ignored the Assembly. The President believes that the opposi-tion will join the work of the Assem-bly after the elections. The nature of the constitutional amendments de-pends on the results of elections to the Verkhovna Rada on 29 October.

According to some observers, the activity of the President to amend the Constitution is related to his in-tention to upturn the political re-forms of 2004, which limited the powers of the President and intro-duced a parliamentary-presidential ruling. The president was engaged in foreign policy and defense issues. He also had the right to veto. How-ever, the Verkhovna Rada had the constitutional majority (300 + 1 vote out of 450 deputies), and the law was signed by the speaker. Internal socio-economic policies were determined by the coalition government, which was shaped and controlled by the parliament. The only leverage the President had on the legislation and executive power is his right to dis-solve parliament if in his opinion it is not effective.

Others say that the presidential administration intends to introduce a parliamentary form of government, where the President is elected by the Verkhovna Rada. Both options are beneficial to the government if Pres-ident Yanukovych is not re-elected for the second term.

The third option – a consolidation of the existing presidential form of government, where the President forms the Cabinet of Ministers and directly controls its operation. «The legitimacy of the current presiden-tial constitution is low, since it was introduced in 2010 by the Constitu-tional Court. Constitutional reform, brought to a vote in parliament or a referendum, will enhance its legiti-macy»,- considers Igor Lavrinenko the Director of Analytical Depart-ment of the «Reform Club».

The French will regret

As a result of the presidential and parliamentary elections, the power in France has moved from center-right forces to the left.

The Socialist Party of France won a landslide victory in the parliamen-tary elections on June 17, having 280 seats. Non-party supporters of the Socialists and other left-wing par-ties – another 63. Thus, the left re-ceive an absolute majority (343 out of 577 seats) in the National Assem-bly, which has the final say in law making. Now, the new French Pres-ident Francois Hollande, socialist, gets strong support in parliament.

Sarkozy began losing the favor of voters almost immediately after his victory in May 2007. All too quickly his image of «people’s leader» was changed to «President for the rich». Sarkozy celebrated his triumph with the major sponsors of his campaign in a posh restaurant. Followed by

a cruise on the yacht of billionaire friend. He has almost become a star of show business and a regular at so-cial events. The French would put up with the eccentricities of the former President if he had succeeded in eco-nomic policy. The global crisis inter-fered.

Nicolas Sarkozy’s confidence rat-ing began dropping in autumn 2010, when he raised the retirement age from 60 to 62 years. The reform was very necessary but extremely unpop-ular. Back then the country experi-enced numerous strikes, rallies, pro-tests and riots with burning cars and smashing shop windows.

Sarkozy had tried to slightly raise his rating before the second round, when he moved to the extreme right-wing rhetoric. This way he hoped to attract voters of Marine Le Pen, who has not passed the second round. However, many did not believe Sar-kozy and voted for the Socialist Hol-lande.

The French will have the time and reason to regret their choice. Nicolas Sarkozy was not afraid of difficult de-cisions. His uncompromising stance on issues of pension reform, illegal immigration and the Islamization of France made him a leader capable of leading the country out of crisis.

The country’s losses from the im-plementation of Francois Hollande’s populist steps are already evident. Cancellation of pension reform in 2013 will cost the French € 1 bil-lion. The course of the collapse of the Franco-German tandem under-mines the strength of the European Union. According to observers, this is only the beginning.

Cases political and criminal

Case against former Ukrainian President Leonid Kuchma for in-volvement in the murder of journal-ist Georgy Gongadze has reached the Supreme Court of Ukraine. The Pros-ecutor’s Office of Ukraine received and appealed the decision to with-draw the charges of Pechersk dis-trict and Appellate courts of the city of Kiev.

Consideration of the complaint, scheduled for June 5, was postponed. The widow of the deceased journal-ist Miroslava Gongadze said that the court was allegedly pressured by the former President’s son-in-law Vik-tor Pinchuk. The accused, despite his high public position in the past, today is just a citizen of Ukraine. Al-though the prosecutor – the highest legal authority of the country, the judge still did not find the defendant guilty. It becomes obvious which side is trying to use political methods in litigation.

Kuchma’s case casts doubt on claims of political repression in Ukraine. However, political argu-ments, not legal grounds – is what the main line of defense in cases of ex-Prime Minister Yulia Tymosh-enko is built on. And it has been brought to international attention at the highest level. On the basis of allegations of political repression in Ukraine, not only her colleagues in the opposition party «Fatherland», but also the heads of a number of EU countries demand the release of Ty-

moshenko. Statements by heads of the General Prosecution of Ukraine concerning criminal evidence are not being taken into account.

Currently, the District Court of Kharkiv is considering the case against Tymoshenko of crimes com-mitted during her leadership of Uni-fied Energy Systems of Ukraine. She was also accused of involvement in the murder of businessman Eugene Shcherban.

According to the President of Ukraine Viktor Yanukovych, if the appeal to the European Court of Human Rights from Lawyers of Ty-moshenko may find procedural vio-lation, no violation of law will ever be found. He made this statement to the Bloomerg agency. He also said that he was convinced of Tymoshenko’s involvement in the murder case of Shcherban. The fact that this accu-sation is based on serious evidence was declared by Prosecutor General Renat Kuzmin the first deputy.

Reasons to agree that the Ukrai-nian government is trying to get rid from a serious political rival exist. However the grounds for criminal charges exist as well.

The Libyan revolutionary court

In Libya, a June 4th military court accused 24 citizens of CIS countries in aiding the regime of Muammar Khadafi, namely, the maintenance of military equipment that was used for the «destruction of the Libyan people». The most lenient sentence – 10 years, the most severe – life im-prisonment. 19 Ukrainians, 3 Belaru-sians and one Russian got 10 years of hard labor. Another Russian Vladimir Shadrov as the leader of the group received a life sentence.

Libya is paralyzed by chaos. The central government in the coun-try no longer exists. This territorial entity lives by the laws of civil war. City and tribal groups are fighting for pipelines, oil and gas fields, and ter-minals. One of the methods in this war – taking hostages. The members of the international organization Doctors Without Borders and human rights activists have long reported that field commanders keep thou-sands of prisoners in «private pris-ons» in inhuman conditions. They include not only Libyans, but mi-grant workers from different coun-tries. Africans worked mostly in law enforcement structures, for which they were branded «Gaddafi mer-cenaries killing the Libyan protest-ers». Immigrants from former So-viet countries were working in Libya in the professional maintenance of military equipment and oil and gas equipment, as well as doctors and medical personnel.

Kiev demands that Tripoli review the sentence and threatens sanc-tions. «The Libyan side had the basis for the claims, but the severity of the sentence does not match the depth of guilt. The fact that people were making money on the repair of mil-itary equipment does not put them on par with murderers. Cooperation with Libya will depend on the treat-ment of Ukrainians there», – said Oleg Voloshyn, Director of Informa-tion Policy Department of the MFA of Ukraine. New Libyan leader has no need of Ukrainian nurses, special-ists or weapons. They have different sponsors and different interests.

Under the pretext of rights protection

At the G20 summit in the town of Los Cabos, Mexico, June 18-19, Rus-sia’s President Vladimir Putin held talks with U.S. President Barack Obama.

«We talked about international issues, including Syria, and found many common points. We will con-tinue the dialogue on all issues», – Putin said. «We discussed strategic issues, including missile defense. We agreed to continue the discus-sion»- echoed Obama. On both is-sues, Moscow and Washington have not yet reached common agreement.

In relations with the U.S. Putin has learned the lessons of Libya. Russia abstained from the veto in the UN Security Council in exchange for the preservation of Russian interests in the country after the overthrow of Gaddafi. The West has violated the agreement. Contracts with Russian companies have been broken. Now in the Syrian conflict Putin intends to continue to resist U.S. attempts to weaken the position of President Bashar al-Assad. He will also oppose the U.S. missile defense system for preserving strategic security. In at-tempts to pressure the President of Russia, U.S. has resorted to its usual method – interference in the internal affairs of their opponents.

Congress is considering a draft «Magnitsky Law», which involves a ban on entry into the U.S. for Russian politicians, and freezes their bank accounts. Sergei Magnitsky, a part-ner of British firm Firestone Duncan, was arrested in 2008. He was accused in tax avoidance aid. 11 months later he died in the prison hospital, «Sail-or’s Silence» in Moscow. His death caused a wide resonance in Russian society. But the U.S. remembered the case 3 years later. Mass rallies in Rus-sia against Putin’s policy served as a pretext. However, during the third presidential term, Vladimir Putin in-tends to direct his main efforts to-ward foreign policy. In domestic pol-icy he is ready to the point liberaliza-tion. One step has already been made – Russia has returned to the election of governors.

The Russian president doesn’t mind reinforcement of the interna-tional position of the country with financial participation. At the G20 summit in Mexico, Putin said that Russia is ready to give the IMF up to $ 10 billion. In all other respects – he intends to implement systematic and fundamental interests of Russia. And there is no one to stop him in the current crisis.(more on Russian foreign policy in the CIS read on page 8)

Verkhovna Rada equaled the languages

On 5 June The Verkhovna Rada ad-opted the Law «On State Language Policy» in the first reading. The adoption was marked with a fight between deputies, an episode that

for several days made the top news on international television and the press.

The voting is promised in early July. The law defines the status of re-gional languages, which can be used along with the state in areas of com-pact residence of national minori-ties – at least 10% of the local pop-ulation. The free choice of language is guaranteed in education, science, culture, and court proceedings.

The status of the Ukrainian lan-guage does not change – it remains the state language. It is mandatory in use in the Armed Forces and other military formations, as well as in the activities of central governmental authorities: the meetings, official documents, and cartographic pub-lications.

The authors of the law, people’s deputies from the Party of Regions, claim that they protect the rights of national minorities, in particular, the Russian-speaking population of the South and East of the country. It was declared in the election program of the party in parliamentary elections.

Representatives of the opposition in parliament strongly opposed giv-ing Russian the status of regional language. They claim that after this law comes into force, it will super-sede the Ukrainian language in all spheres of public life. In response, the «Regionals» reminded critics that the law was passed in accor-dance with the European Charter for Regional and Minority Languages, which was ratified in 2003, under the support of «orange» Democrats and ardent Euro-integrators.

The Syrian scenario

Brutal violence in the Syrian vil-lage of al-Hula and al-Kubeyr in the first half of June has brought the Syr-ian conflict to a new level. All of the sides are driven into the deadlock and forced to make choices The fur-ther situation in Syria depends on the decision of each participant.

Syrian opposition calls to bomb the country. The head of the Syr-ian National Council Burhan Latrine said that «would welcome a mili-tary intervention of Arab countries in Syria, as it will stop the military actions of the troops of President Bashar al-Assad against the rebels and civilians». At least, he agreed to limit the movement in the airspace of Syria and the «buffer» zone on the border with Turkey, where the Syr-ian army cannot enter. In this case, the carnage in the countryside is in the interest of the opposition. On this basis, some observers began to talk about their involvement in the unrest.

Other forces in the region are pre-paring for a possible war. «Hamas» has escaped from a sinking ship, and its members have left the territory of Syria. Palestinian militants have re-placed their traditional patron Iran with Qatar. Hezbollah, which has re-mained under the protection of Iran, has not left Damascus, but is prepar-ing to transfer its missiles from Syria to southern Lebanon. For supporters of the war, the main problem is the unpreparedness of the West and its Persian Gulf monarchies.

The EU has not made a political decision to intervene. On the one hand, Syria is the only point where the forces of the United States and Western Europe will be able to repel the arrogant Iran, which could also send troops to Syria. And, obviously, the IRGC (Navy Islamic Revolution-

ary Guard Corps – the Armed Forces of Iran), will suffer significant losses. On the other hand, some European politicians, rethinking the experi-ence of Libya, do not want another costly war in the Arab world. Send-ing troops to Syria without UN Secu-rity Council authorization is risky – this may increase tension with Iran if Russia, as a member of the UN Secu-rity Council, does not give consent.

Syrian authorities are trying to hold their line. As the Western allies of opposition are in contemplation, Bashar al-Assad has the time to com-plete the civil war without the inter-vention of the European Union, the United States or Qatar. He intends to split the opposition, separate mod-erate forces, then destroy the main centers of resistance. With difficulty, but so far it has been working out.

Luxury tax – a short distance run

On June 20 the Verkhovna Rada received a bill on taxation of lux-ury goods. The initiative came from three parties at once – the govern-ment, the Communist Party (KPU) and the party «Fatherland». How-ever, deputies did not have them in the agenda of the plenary sessions and sent it to the relevant commit-tee.

The history of this tax begins with the adoption of the latest edition of the Tax Code in late 2010. The pro-posed Code contained the appropri-ate section. But lawmakers decided that the luxury tax will be a separate law. The solution is very question-able in terms of equality of citizens before the law. Ukraine definitely needs such tax. Experts are skeptical – the effect of it may be equal to zero.

Most luxury goods specified in the bill do not have the personified owner. «Only the regulation of tax on more than 200 square meters of housing may work. Planes, yachts, luxury cars, are usually on the bal-ance of legal entities rather then private individuals» – said Pavel Rozenko, the expert at the Razum-kov Center.

The government also does not ex-pect significant revenue. The Cabi-net of Ministers predicts that it will pull only 500 million UHR. If we con-sider that two years ago with the in-troduction of a luxury tax revenues expectation was 1.2 billion UHR, it becomes apparent at this time, it is rather «a step towards the voter».

Rates of taxation of luxury goods offered are much more liberal. In particular, the area of tax on private housing increased from 120 to 200 square meters. Authors also rejected the progressive tax scale. Appar-ently, in order not to hinder the eco-nomic development of the rich pop-ulation. After all, luxury tax may be seen by middle-class not as a stimu-lus, but rather a hindrance.

The opposition has already called the government bill a pre-election move. Only on the part of opposition it is an equal move. October 29 Par-liamentary elections are approach-ing. Pre-election campaigns of the participants changed into short dis-tance run, and everyone is in a hurry to have time to prove themselves in the fight against poverty and sup-posedly make the rich pay for the poor. An indifferent disappointed attitude to politics prevails in Ukrai-nian society. There is a need to step towards the mass electorate, includ-ing the floating voter. Such a step, according to political strategists, should be a luxury tax.

EVENTSDIGEST/EVENTS

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THE KIEV TIMES | JUNE, 20124 SOCIETY/EURO-2012

THIS IS OUR EURO!During the football championship Euro-2012 Ukraine was discovered by the Europeans and at the same time remained a mystery: complete positivism from a fantastic atmosphere and the absolute lack of understanding of the causes of Ukrainians shortcomings

In June 2012 the world turned upside down for our country. Lviv residents embraced the

Portuguese, and in Donetsk the lo-cals danced in the pouring rain with the French. On the streets of Khar-kov an orange mood was created by their football jerseys of the marching Dutch. In Kiev the marching columns were yellow, these were the Swedes. In this colorful movement of football fans from Europe was a place for blue and yellow colors – the state flags of Ukraine on cars on the roads, the people dressed in the colors of the football team! All of this festive ex-citement is shared with co-host Po-land of the 2012 European football championship. Our Euro!

Euro troublesThe leaders of the Ukrainian

Football Federation (UFF) preten-tiously called the preparation pe-riod of Ukraine for the continental championship, starting with the ap-proval of the Ukrainian-Polish pro-posal in April 2007 and all the way up to the beginning of the football tournament, the «five-year renais-

sance plan». That’s right – not yet a complete «Renaissance», but only a post-Soviet «five-year Plan». This is just seemingly pretentious. It was important to start somewhere. Ma-hatma Gandhi said: «If you want to change the future – change the pres-ent». This amazingly accurate Indian proverb echoes the motto of Euro 2012: «Creating history together». In order to create their own history, somewhat similar to the Cinderella fairy tale, Ukrainians, along with Poles, had to begin to change their own mindset.

Ukraine and Poland did not wait for the Union of European Football Associations (UEFA) for the form of television broadcasts of Euro 2012. On the contrary, at the initiative of the President of UFF Hryhoriy Surkis,

the host countries of the champion-ship, set out to organize the tourna-ment independently. The project was ambitious, perhaps inferior in scale just to the world football champion-ship and the Summer Olympics. For the first time in Eastern Europe, this has never been trusted to create an iconic sporting event. Truly – «Cour-age wins the cities!» Ukraine and Po-land, unlike Russia, joined the bat-tle. Our northern neighbor, at first willing to host Euro 2012, chose the 2014 Olympics instead, and has never applied for the European foot-ball championship. Only after the Russians realized the miscalcula-tions, they jumped at the chance to hold the World Cup 2018, and did not miss out. Russia formally applied for a tournament in May 2010. In De-cember of that year in Zurich, Swit-zerland the FIFA Executive Commit-tee granted Russia the world soccer tournament.

Do not forget that the Euro, which both host countries of the tourna-ment are so proud of, might not have taken place. Poland has its problems. The sports arenas for the Euro 2012

were opened by Poland with delays. They lacked workers. Instead of zloty from the European football champi-onship, Poles opted for a more hefty British pound. The Polish labor force went to London for the construction of the Olympic Games-2012. Ukraine was several times caught in situa-tions, when it could have lost the championship. In 2009, due to its

slow pace of preparation, UEFA se-riously considered unfair advantage in favor of Poland, and distribution of the host cities. And in 2011 they

wanted to take away the Champion-ship because of internal disagree-ments in the Ukrainian Football Fed-eration. In direct and indirect per-sistent attempts to shift Hryhoriy Surkis from the position of the pres-ident of UFFA, the League saw the intervention of «third parties» into the affairs of the federation. Yet the Ukrainian government and the UFF jointly defended the European foot-ball championship in our country.

Estimates SwellNot so long ago the President of

Ukraine, Viktor Yanukovych in an interview said, that when he came to power in 2010, he was advised to return the Euro 2012 at the dis-posal of UEFA. However, the Pres-ident declined the idea. According to his words, «he would not be for-given if he did». This tournament was needed in our country, despite not even millions, but billions of dol-lars in expenses for the preparation. But it was precisely the case when for success, that price does not matter!

Even according to preliminary cal-culations, it was clear that Euro 2012 is the most expensive in the history of European championships. Given the fact that, in the same year when Ukraine won the right to host the European football tournament, the global economic crisis hit, it turned

out that the countries and organiz-ers would exceed the original budget at least twice.

In comparison with the costs of

Euro 2004 in Portugal, the amount of 800 million euros and the joint ex-penses of Austria and Switzerland at the same tournament in 2008 of 700

million euros, Ukraine and Poland have spent incomparable amounts. But this is not as it seems.

Portugal, Austria and Switzerland, for its 700-800 million euros did not have to build airports, hotels, or con-struct new roads, or upgrade to the European standard of railway tracks. They had all of that functioning well in the past. For Western Europe the main item of expenditure has fallen to a sports component: the construc-tion of eight stadiums in Portugal and the reconstruction of the seven stadiums for Austria-Switzerland. Ukraine, largely due to inflation, spent almost 730 million euros only on construction of three new stadi-ums – more than Austria and Swit-zerland combined! Reconstruction of the National Sports Complex (NSC) «Olimpiyskiy» in Kyiv cost 500 mil-lion euros. Modernization of «Metal-ist» stadium in Kharkov was 45 mil-lion euros, and the construction of a new stadium «Lviv-Arena» in Lviv – 225 million euros. And this is de-spite the fact that the construction of a new 50 thousand seat «Donbass-Arena» stadium in Donetsk almost from scratch did not cost the State a penny – it was fully sponsored by the football club «Shakhtar», which has invested in a modern stadium in its hometown at the cost of 365 mil-lion euros. However, money invested

in the stadiums is peanuts compared to other expenditures!

During four years of preparation for the tournament an additional 4.1

billion euros has been spent for the development of infrastructure for the normal functioning of Euro 2012. Each Ukrainian host city opened new airport terminals, built additional runways and improved transport in-frastructure. At the same time, new intercity roads were constructed. Funds were allocated for the de-velopment of railways in Ukraine. In addition to the repair of railroad tracks, worth 320 million euros, 10 ultra-modern high-speed trains, the Hyundai Rotem, as well as 2 two-level trains Skoda Vagonka were purchased. This was done for com-

fort and fast transfers of fans to cit-ies where matches were held. Due to these trains, the traveling time from Kiev to Kharkov was reduced to three and a half hours, to Lviv – to four and a half hours, to Donetsk – up to five and a half hours. However, the tickets are more expensive than for the reg-ular Ukrainian trains – an increase from 220 to 350 UAH.

Poland has announced even higher expenses for Euro 2012 – 25 billion euros. Three quarters of this amount was spent on improving roads, 2.4 billion euros – on railway modern-izing, and 1.3 billion euros on each host city (as well as in Ukraine, there are four of them) – the construc-tion of stadiums and transport in-frastructure.

Not the best imageA much bigger problem than the

huge financial investment in Euro 2012 in Ukraine was the country’s negative image in Europe. Many Eu-ropeans, living on a «the further to the east, the more bears», were afraid to appear in a country of the former Soviet Union. For many others the major obstacle was the «black PR», thoroughly carried out in the me-dia (both national and foreign) with the filing of opposition politicians in Ukraine, as well as entire govern-ments of individual EU countries. Po-tential tourists were frightened with rampant banditry in the country, in-adequately aggressive law enforce-ment officers and even the AIDS ep-idemic. But an even greater stir was caused by court judgments of the po-litical opposition leaders – former Prime Minister Yulia Tymoshenko and former Interior Minister Yuriy Lutsenko. A Boycott of the European championship was threatened by the governments of England, Germany,

Spain, France, Holland, Belgium and Austria.

Campaigns against Euro 2012 in Ukraine even frightened off some teams participating the tournament. Among the eight teams, who were to hold the group stage matches in our country, only three, including our team, chose their base camps in Ukraine. The Swedes and the French turned out to be brave! Perhaps be-cause of the historical experience – both nations had to step on our land hundreds years ago during the mil-itary campaigns. All other teams chose to be based in Poland.

The main disappointment for some of the teams during Euro 2012 was the lack of adequate support of their fans at matches in Ukraine.

According to preliminary calculations, it was clear that Euro 2012 is the most expensive in the history of European Championships

Dutch fans were marching in Kharkov with «Thank you!» signs written in Ukrainian and Russian languages

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THE KIEV TIMES | JUNE, 2012 5SOCIETY/EURO 2012

All caused by «black PR» toward our country. Among others, the United Kingdom was one of its victims. In Donetsk, during the first match of the England team against France, only five thousand British fans were at the stadium. Subsequently, these several thousands wondered: Who needed these political games! The French were even worse -with sup-porters, about a thousand! They both promised to expose at home this lie about Ukraine. «The information in the media has stopped many fans who wanted to come. It’s a shame, because the atmosphere here is re-ally fantastic», – The British news-paper The Independent quoted Bob Dickerson, a fan of the national team.

The sincerity and willingness of local residents to help fans was widely praised by foreign fans all over Ukraine – in Kiev by Swedes, in Lviv by the Germans and Portuguese, in Kharkov by the Dutch. Dutch fans, who due to the tournament schedule had to stay in Kharkov during all the matches, expressed their gratitude on self-made signs reading «Thank you, Ukraine!» in Russian and Ukrai-nian languages.

The atmosphere in Ukraine was significantly different from the sit-uation in Warsaw, where Polish and Russian fans had fights before and after the game of group «A». As a result, one person was killed, many ended up in the hospital and several

hundred – in police departments.The only thing foreign fans can-

not be convinced about, is the justi-fication of high prices in the Ukrai-nian hotels during Euro 2012. Not only our hotel prices soared during the tournament by almost ten times, but on top, fans were required to pay

for the so-called «package» – guar-anteed accommodation for 4-5 days. In June, the «package» cost was 900 euros and above! Accommodations in tent cities were much cheaper, starting from 40 euros, and hostels – from 10 euros.

Team of local scaleAs well as Ukraine, our team

turned out to be a mystery for the Europeans in the continental cham-pionships in football. Aside from the English team, where all the players were, without exception, present-ing the local national champion-ship, the Ukrainian national team under the leadership of head coach Oleg Blokhin has involved the least amount of players from abroad. Only two – Anatoliy Tymoshchuk of the German team «Bavaria» and Andriy Voronin of «Dynamo» Moscow. For

the most part, the Ukrainian football was known only through 35-year-old Andrei Shevchenko. He is one of the top world scorers, who used to play in the Italian team «Milan» and Eng-lish powerhouse «Chelsea». He re-ceived the «Golden Ball» for being the best football player in Europe.

In the first match for the Ukrai-nian national team at Euro 2012 Shevchenko, with his two sharp kicks and with his head brought Ukraine a victory over Sweden 2:1. «His two goals to the Swedes were great and led myself, the fans and coach Oleg Blokhin into ecstasy», – admired out-standing Argentinian Diego Mara-dona. In the following games Ukraine lost to France 0:2 and to England 0:1. In the last game our team sur-passed the expectations of its fans and struck the European football community. The victory of England has been disputable. One Goal in the gates of the English, scored by Marko Devic, and kicked out of the net by English defender John Terry, was not counted by the judge. A draw would have provided our team as a hostess, the way to the championship quarter final. One way or the other, our team

left the tournament. But Ukraine and Ukrainians have won their victory in Euro 2012.

Euro 2012 will end on July 1st with the final game at the Kiev NSK «Olimpiyskiy» where the winner will be announced. European fans, who were traveling to us with fears, are convinced that the bears do not walk in the cities, the police officers don’t grab people on the streets and don’t cast them into prisons, and the peo-ple in Ukraine are surprisingly ad-vanced carriers of European cul-ture. And this is everywhere: in the west, in the east, and in the capital. Fans from the old exemplary demo-cratic Europe – the Dutch, Germans, French and fans from other coun-tries, upon their return home will bring mostly positive impressions of their stay in our country. Ukraine, in its turn, proved that it is capable to deal with any project of a global scale. After Euro 2012 our country is unlikely to be refused the host-ing of the European championship in basketball in 2015. When Ukraine will be bidding to host the Winter Olympic Games 2022 in Lviv, it will be in a much more favorable posi-tion than it was four years ago. After Euro 2012 the image of our country will improve. Any speculations of na-tional and European politicians are powerless. Football Euro in Ukraine showed that sport is beyond politics.Ivan Chepurin

After Euro 2012 our country is unlikely to be refused the hosting of the Europeanchampionship in basketball in 2015

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This issue of the newspaper will be released as scheduled – a day before the final of Euro-2012. The schedule comes first. The final re-sults will be in the next issue, but for now, a brief review of the semi-finals of Euro-2012

European Football Champion-ship is predictable enough. However, there are exceptions. It is suffice to recall the story of the amazing foot-ball achievements: the unpredictable success of Russia and Turkey at Euro-2008, the Greek triumph at Euro-2004. EURO-2012 demonstrates that the favorites remain favorites.

Spain-Portugal. The match was to become the confrontation be-tween the best national team and the world’s best player in Europe – the Portuguese Cristiano Ronaldo.

«The Portuguese will be looking up to Ronaldo. He’s the best player in the world and will be happy to lead the team» – said in a BBC ra-dio broadcast football analyst Andy Bressel. «I am responsible for the outcome» – Ronaldo emphasized.

During the first half, Spanish team showed a nervous and constrained game. «Spain had a higher pace than normal, resulting in a lot of faults in passes», – commented during the match, expert Danny Mills, – it was impossible not to take into account the powerful pressure of the Portu-guese from the first minute».

Arbeloa and Iniesta were close to the goal but the ball stubbornly flew over the crossbar. Ronaldo came only once to kick from the vantage point, but the ball went past the bar.

And suddenly in the last 15 min-utes «The Red Fury» began to show the football everyone expected. «An amazing turn of events, the Spanish played out and controlled the second 15 minutes» – experts commented.

Perhaps, it was this last push that attracted the side of good fortune to Spanish during the penalty shootout. Spain became the third consecutive time finalist for the Euro.

Italy-Germany. The Italians, mul-tiple world champions, but only one times champions of Europe (1968) met with the German national team, which has not lost a single match in the qualification.

The first half forced the Germans to cry. Mario Balotelli was the author of two goals scored at intervals of 16 minutes. The Germans were at a loss.

The second half began with a kick at the gate of Gianluigi Buffon. Cap-tain of the Italians was magnificent. The stadium roared. In the 92nd minute Mesut Ozil performed a pen-alty at Buffon’s gate. It was too late.

Italian football veteran Paolo Rossi predicted: «Azzurrini» shows the best football of the tournament. Mid-field with Andrea Pirlo, Daniele De Rossi, Riccardo Montolivo and Clau-dio Marchisio is the strongest in the world. And the Germans? From 1970 to the present day, we constantly beat them».

Rossi’s prediction came to pass. It-aly reached the final of Euro 2012.

P.S. Germany has not passed the fi-nal, and Angela Merkel does need to fly to Ukraine))).

EURO-2012. IN ANTICIPATION OF THE FINAL

THE KIEV TIMES | JUNE, 20126

Ukraine intends to buy nat-ural gas in Germany. Such an agreement has been

reached between the government of the National Joint-Stock Com-pany (NAC) Naftogaz Ukraine and RWE (Rheinisch-Westfälisches Ele-ktrizitätswerk, which sales volumes of natural gas and has a 17% mar-ket share in Germany). Ukraine will buy gas not at a fixed price but in the spot market in small batches. The volume of purchases and price will be determined each time by the individual contracts. Yuriy Boyko, the Minister of Energy and Coal In-dustry of Ukraine told the agency Bloomberg, that this summer about 5 billion cubic meters of gas will ar-rive in Ukraine. In total, the volume of purchases will be about 10 bil-lion cubic meters. This is provided in the framework agreement be-tween NJSK Naftogaz of Ukraine and the German gas trader RWE Supply & Trading GmbH, which the parties signed in May this year. According to

experts, our country will be able to import from Europe up to 20 billion cubic meters of gas between 2015-2016. The gas will come from Eu-rope through Slovakia, and arrive in Ukraine on the Ukrainian gas trans-portation system (GTS). This means that the largest natural gas pipeline in eastern Europe, which is pumping Russian gas to Europe will be run-ning in reverse mode.

Will the leadership of Ukraine have enough political will to imple-ment such an ambitious project? Af-ter all, that will need not only solid financing, but the tactics and skill-ful foreign policy in relations with Russia and the EU. Close economic partnership with Russia is an objec-tive inevitability for Ukraine today. However, support for the European Union, European investment and access to markets is a trump card, which strengthens the position of Ukraine in negotiations with Russia on many issues.

Time bombIn 2009, the Ukrainian indus-

try received a painful blow. The im-port price of Russian natural gas in-creased by 94%. About 52% of the rates growth was due to inflation, the rest by a new contract for 10 years between NJSK Naftogaz of Ukraine and the Russian «Gazprom». The current agreement provides bind-ing the price to the price of fuel oil and gas oil on European exchanges. Fuel oil for our country is not the main type of fuel. Gas oil is widely used, perhaps, in the Carpathian re-gion and slightly less in other west-ern regions. The unreasonably high starting price of $ 450 remains un-changed, even if on the world mar-kets the price of oil is falling. The re-duction of domestic consumption is not the answer. The contract of 2009 obliges NJSK Naftogaz of Ukraine to purchase annually at least 33 billion cubic meters. If it is less then that the Ukrainian party is obliged to pay the fines.

The over-all gas consumption in Ukraine in 2011 was 54-billion cu-

bic meters. Of this amount, 19.2 bil-lion cubic meters was produced in Ukraine. Over the past three years the consumption patterns have not changed much. The general popula-tion and budget organizations con-sume about one third of the total amount, utilities – about 17%. More than 40% is consumed by Ukrainian industry. In the chemical industry, where gas is used as a raw mate-rial (80% of the production cost is in

gas). Gas is used to a lesser extent in metallurgy. Another 8% of the gas in Ukraine is lost in the pumping sta-tions through the GTS.

Since President Victor Yanukovich and team took the reins of power, the government Kiev has been negotiat-ing with the Russian government to revise the pricing principles for gas. There is no progress; the price of gas for Ukraine continues to grow. In the first quarter of 2011 it was $264. per thousand cubic meters in the sec-ond quarter it was about $297. In the third it was about $355. In the fourth – about $400. In the first quarter of 2012 natural gas was worth $416.per one thousand cubic meters in the second – $425. Eugene Baku-lin, Chairman of NJSK Naftogaz of Ukraine said that in the future, even a slight increase in prices for im-ported Russian gas is inevitable, and in the third quarter it will exceed 426 dollars.

By the end of 2012 the price of gas for the Ukrainian government will

provide a time bomb that will blow up its position in the parliamen-tary elections in October. On the one hand, Russia could inflate the price of gas which is already at an impossibly high level for the Ukrai-nian economy. On the other hand,

Western partners in the face of the IMF will continue to insist on rais-ing gas prices to the public (popu-lation). Ukrainian authorities face a tough need to engage without delay and in serious way the diversification of energy supplies. The government of Ukraine has different plans. What really can be done, and what cannot be afforded or cannot be done objec-tively?

Non-Russian import – Plans and Reality

Among the potential suppliers of gas to Ukraine, experts and offi-cials in the Cabinet of Ministers of Ukraine called on Azerbaijan, Qa-tar and the European Union, where a single energy market is formed.

It is possible to import gas from distant Qatar and relatively close Azerbaijan by tankers on the sea. To this end, Ukraine needs to build a LNG-terminal – a regasification plant for liquefied products. Accord-ing to preliminary estimates, the cost of construction of the terminal will be about 900 million euros. If the government, as planned, will form a pool of investors this summer, then this year construction of a terminal will begin in the port «Southern» near Odessa. Then in two years the terminal can accept tankers with liq-uefied gas. However, to transport gas through Ukraine a gas pipeline from the terminal in the «South» to the CTA has to be built. «Construction of the 80 km pipe will cost about 100 million Euros. This is not a commer-cial project, but infrastructure. Find-ing it difficult for investors», – says Dmitry Marunich, an expert from the

Center for Energy Studies. None of the members of the Cabinet of Min-isters has yet to announce a solution to this problem.

It is still in the planning stages. Will it be in the near or distant fu-ture? There is no clear plan of action, as how the imported liquefied natu-ral gas will be transported through Ukraine and at what price for the end customer. While the government of Ukraine has made a feasibility study

which is a concrete step to imple-ment this project; Azerbaijan and Qatar have already given prior con-sent so Kiev should take action. Suc-cess will depend on the government sequence of actions.

Another option to diversify en-ergy imports is voiced by Prime Min-ister Mykola Azarov. It involves the delivery of gas from Qatar through the same terminal on the Polish Bal-tic Sea, which should work in 2015. In this case, as well as the purchase of gas from Germany it necessary to run the reverse of the Ukrainian GTS. However, it is yet unknown the ex-tent of technical activities and the amount of investment necessary.

A more realistic of all the dubbed versions is the purchase of gas by the German company RWE. Although some experts warn that it is not fea-sible without the construction of in-terconnectors as additional capacity

in the Ukrainian gas transportation system that will run in reverse. Oth-ers disagree. «This can be done even without the construction of inter-connectors. Training will take sev-eral months» – said Mikhail Gon-char the director of Energy Programs Center «Nomos».

Previously, the possibility to buy gas in Europe for Ukraine was pre-vented by the intransigence of neighboring Slovakia. The pro-Rus-sian government in Bratislava has blocked the initiative of Ukraine concerning the transportation of oil through the pipeline «Odessa-Brody» and then on the «Druzhba» pipeline to the EU countries under President Victor Ushchenko. «Slo-vaks resistance was overcome thanks to U.S. pressure», – Mikhail Gonchar said. Now Slovakia has agreed to gas transit through its territory, and now there are no barriers to energy im-ports from Europe to Ukraine.

Domestic productionUkraine has large reserves of hy-

drocarbons, proven but still unde-veloped. The promising areas are located on land and offshore in the Black Sea. Exploration and produc-tion require billions of dollars of in-vestment, and private investment is needed as well as state funding.

Two transnational gas-oil com-panies Shell and Chevron are ready to invest in exploration and produc-tion of hydrocarbons in Yuzovsky (Kharkiv and Donetsk region) and Oleshskoy (Lviv and Ivano-Frankivsk region) areas. The companies have already paid for geological informa-tion, $1.88 million and $1.32 mil-lion correspondingly. Resources of the Yuzovsky area are estimated at 4.05 trillion. cubic meters of various types, and in the Oleshskoy area – 2.9 trillion. cubic meters of shale gas. In Kiev, a hope for relief from imports is associated with shale gas. An ex-ample from the United States ex-cites the imagination. Through this resource America, from 2008 to 2009 turned from imports and became an exporter of shale gas.

«While shale gas is surrounded by a lot of negative information, it is obvious that both areas are promis-ing. Especially Yuzovskya. But dur-ing their exploration there might be

problems due to the effects of mass hydraulic fracturing on the environ-ment» – admits Alexander Lukin the director of the Chernigov branch of the Ukrainian State Geological Pros-pecting Institute. Due to this tech-nology, to prevent the closure of cracks in the rock, hazardous sub-stances are used. This raises the risk of contamination of water sup-plies. The U.S. first faced the nega-tive consequences of the develop-ment of shale gas. And now, accord-ing to Lukin, the U.S. has developed technologies that allow one to avoid contamination of groundwater.

One of the factors that compli-cate the signing of production shar-ing agreement with the global giants of oil and gas production is the leg-islation of Ukraine. «Western compa-nies take commitments only on the first step to invest in the exploration of about $188 million, and want to protect their financial investments. Now the question of signing an addi-tional co-operative agreements has appeared», – said Dmitry Marunich. The work itself on the preparation and signing of production sharing agreement between the companies and the Government of Ukraine may take at least six months. And to reach the production volume of about 15

billion cubic meters, according to Marunich, will take the companies at least 15 years.

Another source of natural gas pro-duced domestically is the Black Sea shelf. The cost of drilling sub-sea wells is several times higher than the cost of on land so it cannot be done without major foreign inves-tors. For right now «Chernomorneft-egaz» produces state-owned hydro-carbons. By 2015, the company plans to increase output from the current 1.06 billion cubic meters per year to 3 billion cubic meters with two new units. But even this amount is insig-nificant compared to what is hidden in the depths.

«On the Ukrainian Black Sea shelf there are more discovered depos-its than in the other countries of the basin and there is much more to be discovered. State-owned companies simply do not have funds for their full development»- said Aleksander Lukin. Today, the Ukrainian govern-ment is actively seeking partners for the production of hydrocarbons on the shelf. In late May, the Cabinet of Ministers of Ukraine set out the con-ditions of competition at the conclu-sion of a production sharing agree-ment, which will be based in the Fo-ros and Scythian areas. In Ukraine

it will give the partners 70% of the extracted hydrocarbons. Within 10 days after signing an agreement the investor has to pay 300 million dol-lars for the right to mine. In addi-tion, NJSK Naftogaz of Ukraine rep-resentatives are in negotiations with StatOilHydro,one of the world lead-ers, concerning production on the Norwegian shelf. As potential part-ners to work this project, Naftogaz is considering the Brazilian company Petrobras, as well as British Petro-leum and ExxonMobil.

In the next few years main efforts of the Government of Ukraine will be directed to complete projects to supply the country with non-Russian gas. The Kiev Times interviewed ex-perts who agree that the only obsta-cle to this could be a lack of political will. And Kiev has it according to re-cent statements and decisions of the highest state officials.

«If Viktor Yanukovych allow mul-tinational companies to the hydro-carbon reserves in Ukraine, he will be able to retain the presidency for a second term» – says Igor Lavrinenko the director of the analytical depart-ment of the All-Ukrainian Public Or-ganization «Reformed Club».

Anwar Chernigovskiy

DIVERSIFICATION AS A REMEDY FOR FEARECONOMY/ENERGY

Ukraine faces the immediate necessity to get rid of dependence on Russian gas. Successful diversification of energy supplies will allow President Viktor Yanukovych to retain power for many more years

Ukraine faces the immediate necessity to get rid of dependence on Russian gas

In Kiev hopes for relief from imports are associated with shale gas

For gas supply from Europe a reverse mode in our gas transportation system needs to be turned

President of Ukraine Viktor Yanukovych and Chief Execu-tive Officer of Shell Peter Voser signed an agreement on joint production of hydrocarbons

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THE KIEV TIMES | JUNE, 2012 7

O Sport, You... debt?Ukraine is hosting EURO-2012. A

deeply positive fact is that Ukraine has built the necessary infrastruc-ture with its own money. The reason is not so much in the conscientious-ness of authorities, as in the dete-rioration of the situation in foreign markets, because foreign loans have become too expensive.

Greece, which hosted the summer Olympics in 2004, was driven more than 13 billion Euros into debt. This situation was worsened by the gov-ernment crisis management costs. Today the public debt of Greece is 165.3% of its GDP. It is twice as much as anywhere in Europe (82.5%): 9.1% in Greece and 4.5% in the EU. With these indicators Greece no longer meets the criteria for membership in the euro zone, where public debt must not exceed 60% of GDP and the budget deficit must not exceed 3%.

The IMF and the EU have repeat-edly provided funds to rescue Greece. The total amount of the package comes to 130 billion Euros. Despite the constant «last Chinese» (abso-lutely last) warnings, the European Central Bank (ECB) has not denied the Greeks installments on loans. However, despite the victory of the conservative party «New Democ-racy» (29.7% of the vote), a quarter of voters (26.9%) who voted for the radical coalition SYRIZA remain dis-satisfied with the economic prescrip-tions of Brussels. They support the calls by radicals to refuse EU fund-ing, and abandon the euro.

The apocalyptic consequences of the radicals do not stop. The leader of the Greek left-radical coalition SYRIZA Alexis Tsipras admits that if Greece leaves the euro zone, it could lead to the collapse of the currency bloc. Nevertheless, he insists that the conditions of financial assistance from the IMF and the EU for Greece are «barbaric and unjust». «We are talking about the war between the workers and bankers, and not about the war between the people of Eu-rope. We need a socially just Europe, otherwise we do not need it», – says Tsipras.

The population of Greece, al-though not being in favor of the euro, is in no hurry to abandon it. A recent survey in a number of EU countries has shown that people do not con-sider single currency to be a positive factor for their economies, but they

are not ready to return to national currencies either. In Greece, this par-adox is manifested most strongly. The Greeks claim that the European economic integration has weakened the country, but 71% of respondents adamantly support membership in the euro zone.

The main «apologist» of the dev-astating scenario, Nobel Laureate in Economics, an American Paul Krug-man, insists that the austerity mea-sures imposed by Brussels, hold back economic growth. And, in this case, Greece is better off leaving the euro zone.

In Western Europe, almost all politicians and economists stand against the collapse of the euro zone. «Greece leaving the euro zone would be a» worst case scenario» – believes the former head of the European Central Bank (ECB) Jean-Claude Trichet. Prime Minister of Luxem-

bourg, the head of the Eurogroup Jean-Claude Juncker has repeatedly affirmed that all the finance minis-ters of the euro area will continue to make efforts to keep Greece in the currency union. Although the UK has retained its pound, authorities fear the collapse of the euro zone, British Prime Minister David Cameron has already said that it is better if Greece stays in the euro zone.

Area of risk – all of EuropeGreece is not the only problem-

atic European economy. A few other states in the zone, burdened by debt, remain at risk. Spain has shown two consecutive quarters of declining GDP. Technically, this means a re-cession. In early June, Fitch gave a negative outlook for Spain, and dropped it three stages – from the «A» to «BBB». Fitch experts believe that Spain would be particularly vul-nerable to a new exacerbation of the crisis in the euro zone.

There are difficulties in Portu-gal, which is now supported by the IMF. Ireland’s budget deficit reached 13.1% of GDP. Today, about half of the EU countries have higher than recommended national debt.

The probability that by the end of the year at least one country leaves the euro area is 40.1%. This is evi-denced by betting options on inter-national markets. Bloomberg fore-casts the probability of euro zone break up by the end of 2013 at 60.8%, and by the end of 2014 – almost 65%.

In fact, the formal mechanism for the return to national currencies does not exist, which is necessary for the interchangeability of money. Money is the obligation of the bank-ing system. In particular, the com-mitments of central bank money in the case of uniform currency (eg. bills) and commercial bank com-mitments in the case of commer-cial money (eg. deposits). Experts at Morgan Stanley remind us: the euro is an irreversible system, different forms of money are interchangeable, but once the reversibility is switched on, it changes everything. In this case, the money will become diverse. For example, if the euro is the fed-eral currency, then deposits in the National Bank would be in national

currency. If a country leaves the euro zone, the deposit will be trans-formed into the new currency, which will cause a difference in the value of money. The Euro, in a country where currency has devalued, may become weaker than the national currency. In the worst case scenario, the full collapse of the euro-zone, currencies will be ranked according to strength. Then, the place of cash in this coor-

dinate system becomes unclear. Af-ter all, they are obligations of an in-stitute, which no longer exists.

To be or not be «currency zoning in Europe»?

People would flee from weak to strong currency. Depositors will withdraw deposits from banks in countries that are considered to be weak, either to keep their savings in foreign currency, or put in banks of powerful states, like Germany or the Netherlands. And then todays erosion of deposits in Greece (25% from the end of 2009.) and Ireland (25% loss of almost all local and for-eign deposits) would seem a pitiful semblance of what might happen if Greece abandons the euro. And this would happen in many countries.

Unfortunately, the disintegration has already begun. In February 2012 the ECB allowed the central banks of seven euro zone countries to in-crease the amount of assets on the balance at their discretion. However, Citigroup’s chief economist Willem Beyter warns that this could lead to a repetition of the scenario of col-lapse of the ruble in the former So-viet Union. «The ECB is following the road, which leads the euro zone to complete fragmentation of the sin-gle monetary policy into the 17 dif-ferent national variations and, ul-timately, the fragmentation of the currency bloc into multitude of in-dependent national monetary re-gimes», – said Beyter.

Investors have turned their backs on Europe

Rating agencies were quick to warn investors about the dangers of work-ing in the euro zone. Back in January, the agency Standard & Poor’s down-graded the long-term credit ratings of the nine countries. Even Austria and France for the first time in many years, lost the highest credit rat-ing at ‘AAA’. This confirms that the euro zone still has not clearly dem-onstrated to the market, how it will overcome the ongoing, two year plus debt crisis. Soon after, the example of S&P was followed by the Fitch agency. Investors have turned their backs on Europe.

«There is a great likelihood of Greece leaving euro zone, which may lead to a spread of the crisis in the region. In addition, it is not clear whether Portugal is firm on its feet», – said Andrew Balls, the chief portfo-lio manager for European countries at Pacific Investment Management Co (PIMCO). PIMCO manages the world’s largest portfolio of bonds. Now, the company avoids investing in the debt securities of Greece, Ire-land and Portugal. It is beginning to be wary of Spanish, Italian, and French bonds as well as bonds from other leading European countries. Balls spoke about it openly.

The Chairman of the U.S. Federal Reserve System (FRS) Ben Bernanke, while recently making a report to the members of the Committee of Eco-

nomic Affairs of the U.S. Congress said that the crisis in the euro area creates significant risks for the U.S. economy. Moody’s Investors feared that the decline in Chinese exports to Europe threatens the credit rat-ings of the PRC. Analysts at Bank of America Merrill Lynch Global Re-search fear that if Greece leaves the euro zone, the price of Brent crude oil could fall to $ 60 per barrel in the next 18 months.

Ukrainian scenarioUkraine, where trade with the EU

accounts for about one third of to-tal foreign trade, also falls into the danger zone. Though Russian in-vestment company «Troika Dialog» keeps GDP growth in Ukraine in 2012 at 3%, it allows for the possibility of a downgrade revision. «If the macro-economic situation in Europe does not improve, it is possible that the Ukrainian economy at the end of this year will show very sluggish dynam-ics, and growth of about 2%» – com-pany experts said in late May.

A survey of Ukrainian business-men showed that they do not have a plan in case of the collapse of the euro area. They are not alone, how-ever. International experts say that

companies in Eastern Europe are least prepared for the collapse of the euro area and are the most suscep-tible to adverse effects. In particu-lar, 84% of top managers in the re-gion said that their business will feel the results of the collapse of the cur-rency union, and only 10% have a plan of action in this case.

The effect of the crisis on the fi-nancial system is already being felt. European banks paid dearly for Ukrainian financial institutions be-

fore the crisis and are now thinking about leaving the Ukrainian mar-ket. The possibility of selling their «daughters» in Eastern Europe was brought up back in 2010 said Chris-tian Conrad, the head of the Supervi-sory Board of Raiffeisen Zentralbank.

German Commerzbank is now ne-gotiating with the owner of Start-Holding Vadim Novinsky to sell its Ukrainian «daughter» Forum Bank. In late May, Swedbank sold the re-tail portfolio of nearly 2.5 billion UAH to Delta Bank. In early June, an-other Swedish Bank SEB was sold to the former head of UkrSibBank Alex-ander Adarich.

However, three Greek banks in Ukraine still feel confident enough – Piraeus Bank SA, Astra Bank and Universal Bank. They own very small market shares. According to the Na-tional Bank of Ukraine (NBU) on May 1, these banks accounted for only a 2.2% total share of the capital in the banking system. The share of the as-sets was 1.44%, liabilities – 1.48%, and the saving deposit of the popu-lation – only 1.2%.

With regard to the influence of Greco-European crisis on other sec-tors of the Ukrainian economy, the domestic businessmen confess that

starting from 2010 they no longer rely on the European markets and redirect trade flow to Russia. Un-tried Asia with billions of custom-ers attracts them more and more. A travel agencies dream, rumors about the Greek default keep spreading. In anticipation of a sharp drop in prices, Ukrainians are buying tickets to Greece like hot cakes. A crisis for some, and business for others.

Ilya Vinogorodsky

Greek lessons for Ukraine

Greg Krasnov, the General Director of Platinum Bank

Ukrainian banks have managed to considerably reduce their depen-dence on European financing; today it is very small. But the Eurozone cri-sis has virtually closed external fi-nancing markets for Ukraine. The only way to avoid the situation in the future is to systematically in-crease the investment attractiveness of Ukraine and its investment rating. This requires a dedicated introduc-tion of corresponding economic and political reforms.

The main lesson we have to learn from the European and Greek crisis is to conduct thorough risk-manage-

ment. It’s impossible to lend money to borrowers who won’t be able to pay them back. Even if these borrow-ers are sovereign states.

The epoch of cheap money has gone

Tamash Hack-Kovatch, the president of OTP Bank

The Euro zone crisis has consid-

erably changed the value of money. For several years of calm we got used to cheap money. And custom-ers have also got used to it. But the global financial crisis together with the Greek crisis, which has spread over the entirety of Europe, have fi-nally completed the epoch of cheap money. Interbank financing has

closed and now there is the only re-source of money – the population and this money cost a pretty penny for the banks. Is it good for the sys-tem? It is the right thing.

Many people both in Ukraine and in Europe have lost their ability to value money and have given way to the illusions that financing is inex-haustible. But money is an exhaust-ible and expensive resource. The more financiers and their custom-ers understand this, the lower the possibility that we would become a second Greece.

European banks may leave Ukraine

Oleg Ustenko, the Chief Executive officer of International Blazer Fund

Of course, the unsettled problems of Greece also negatively influence other European countries. Spain is triggering a program of collabo-ration with IMF and by this draws away the financial resource, which has been planned for assistance to third world countries and develop-ing markets including Ukraine.

Greece, according to our forecasts, shall leave Euro zone but will proba-bly do this gradually. Thereafter the default will be declared and all debts will be submitted for consideration to the Paris club of creditors. The European Central Bank will have to make investments thereby provok-ing the growth of inflation.

Together with the aforemen-tioned there will be devaluation of Euro, which to our forecasts will make 1,15 Euro per Dollar. Against this background the Ukrainian ex-port to European Union shall be re-duced. Now it takes 25% of the total export of our country. Direct foreign investments and the flow of private funds will also decrease.

The most probable and negative consequence of the Eurozone cri-sis aggravation will be reluctance of European banks to render assis-tance to their subsidiaries in other counties.

Thus the risk zone shall be ex-tended to the banks with European capital in Ukraine. As a result they may leave our country.

GREEK SYNDROME«A bag is filled one bean at a time» – said the ancient Greeks, who today, have forgotten their old proverb. They are even willing to destroy the monetary union, just to not comply with its requirements and save money. What happens to the European economy in case Greece leaves the euro zone and how heavy will the blow of the EU fragmentation be to Ukraine?

Today, about half of EU countries have national debt above the recommended level

Formal mechanism for return to national currencies doesn't exist

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ДИСТРИБЬЮТОР В УКРАИНЕ: ООО «ТРЕНД»83048, г. Донецк,проспект Титова,7

тел.(062) 311-17-04, тел/факс:(062) 311-32-50,e-mail: kosm@beautyperfection.com.ua

www:beautyperfection.com.ua

Paul Krugman, American economist, the author of the idea of eurozone collapse

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THE KIEV TIMES | JUNE, 20128

Power in Russia has moved from Vladimir Putin ... to Vladimir Putin. The role of

Prime Minister Dmitry Medvedev was revealed his visit 18-20 May, to the summit of the Group of Eight (G8) at Camp David in the United States. The Russian Prime Minister was remembered when he conveyed a letter from a «friend Vladimir»

to U.S. President Barack Obama, in which the old/ new Russian Presi-dent outlined his view on Russian-American relations.

«When the wind of change blows some build walls others build wind-mills», – this ancient oriental wis-dom, Vladimir Putin well compre-

hends. He intends to review foreign policy and to derive maximum bene-fit from the crisis that has rocked the modern world order, Putin intends to extend the main efforts of Russian diplomacy to the post-Soviet space.

The new Institute of Rus-sia’s monopoly.

For the first time after the colour revolutions in Georgia, Ukraine and Kyrgyzstan in 2003-2005. As far as Russia is concerned, nothing can prevent it from conducting a suc-cessful foreign policy in the former

Soviet Union. The European Union, which in the early 2000’s had an ac-tive influence on policy in the re-gion, now occupies the position of «active observer».

In Brussels, there are so many other problems that they were no longer willing to spend resources to weaken Russia’s influence in the post-Soviet region. The most pro-

found crisis of the economic sys-tem in the history of the European Union and the instability of the global economy have caused a fatal blow to the weakest countries in Eu-rope. Greece is on the brink of bank-ruptcy. Analysts do not rule out that it will be followed by Spain, Ireland

and Portugal. Not far behind them is Italy. In foreign policy, Brussels is forced to seek funds and political re-sources to guide in a safe direction the new democratic processes in North Africa. Tens of millions of Eu-ros go to the new «democratic» re-gimes in the Middle East. Probably tens of millions will go to stabilize the situation in Libya and Algeria. Moscow gets a chance to set a chic monopolistic influence on the post-Soviet countries.

The task of Russian diplomacy is to exploit the situation and secure

its supremacy in the region. This re-quires international institutions, led by Russia. The protracted global financial and economic crisis has pushed the Kremlin to the creation of the Eurasian Economic Union.

«The construction of the Customs Union and Single Economic Space provides the basis for the formation in the future of the Eurasian Eco-

nomic Union», – wrote the newspa-per «Izvestia» on the eve of the pres-idential election. «In Vladimir Putin – we offer a powerful model of su-pranational union, able to become one of the poles of the modern world and play an effective role «binding» Europe and the dynamic Asia-Pa-cific region».

«An Elite series of post-Soviet states realize that the potential of autonomous development has been exhausted. Integration processes are creating new opportunities to protect their national economies in a rather difficult time, which are projected to get worse», – said Rus-sian politician Konstantin Simonov. The political leaders of post-Soviet countries understand the vital im-portance of economic integration. However, Putin’s foreign policy in the region is likely to cause conflicts. Too complicated countries and too difficult relationships between them and Russia.

Hard-headed friendsIntegration with other countries

in the region will be none the less difficult. Armenia, in spite of the

close strategic relationship with Russia in its foreign policy has al-ways tried to maneuver between the power centers of the world and ben-efit in all areas – Moscow, Washing-ton, Brussels, Tbilisi, Tehran. Thus Armenia entered into the (CSTO Collective Security Treaty Organi-zation) for its own safety. Azerbai-jan, self-sufficient through the sale

of energy is no worse off without Russia. But the country’s leadership is working closely with the West so there is no an incentive for integra-tion associations with Russia. The participation of Georgia (which is in open confrontation with Russia) in any project of Moscow should not even be mentioned.

Another big problem waiting for Putin is Moldova. Moscow is anx-iously watching Moldova’s idea of unification with Romania – a so called unionism. The Unionists won’t agree to any integration with Moscow. In response, according to observers Moscow will use its in-fluence in Transnistria as a lever-age over Chisinau. The confronta-tion is unfolding. Without any con-

sultation with the Moldovian side, Moscow appointed Dmitry Rogozin a well-known political hawk, to be the Special Representative of the President of Russia on Transnistria.

Some observers do not rule out

that Putin may even support the se-cession of Transnistria. The prece-dent has already been set when the Kremlin took the sides of the un-recognized states in Georgia’s mil-itary conflict with North Ossetia and Abkhazia. Games of the Krem-lin with the Transnistrian separat-ists pose a serious threat to stabil-ity in the region, and, above all, the territorial integrity of neighboring Ukraine. If the Moldovan unionism cross the red lines and the Krem-lin gives the signal for separation of Transnistria, the rest of Moldova will go to Romania. This is the first step of denouncing the Soviet-Ro-manian agreement in 1940. Accord-ing to it, Romania gave its territo-

ries to the Soviet Union, some of which were included in the Ukrai-nian SSR. Then Romania can pres-ent territorial claims to Ukraine for the Ukrainian part of Bessarabia in Odessa region and northern Bukov-ina in Chernovtsy.

The starting point – Ukraine

For Vladimir Putin, Ukraine’s in-volvement in integration unions in the post-soviet area is the most im-portant task for his third term as a

president. Moscow hopes that the complication of relations between Kiev and Brussels will give the «Turkish syndrome» to the leader-ship of Ukraine.

Few politicians doubt that the Eu-ropean Union is not ready to give a signal of Ukraine’s membership-both now and in the near future And it’s not a question of which political party is in power. For the EU, Ukraine is too big and complicated a coun-try to integrate it into their ranks. On the other hand to give an official denial would be a strategic mistake. That’s why Brussels lures Kiev with small projects like the Eastern Part-nership to give Kiev conditions that will lead to new conditions.

Now the current Brussels require-ment without which «no European integration» will be done is the «right» parliamentary elections in autumn 2012. Likewise Brussels be-haves the same towards Turkey. As a result, Euro integration for Turkish politicians turned into Euroscepti-cism. Such sentiments have spread among the population. The same re-action to the «Brussels gingerbread» Moscow is expected from Ukraine.

The Russian leadership avoided drastic steps against Ukraine not to be caught interfering in internal af-fairs. President Vladimir Putin has demonstrated greater moderation than his predecessor Dmitry Med-vedev who has openly called Ty-moshenko’s case a political one. Pu-tin opposes any sanctions against Ukraine and offers the West a com-promise in Kiev’s respect. «If Yulia Tymoshenko considers it possible, and if the authorities of Ukraine and our Ukrainian partners will agree, we would be happy to take Julia Ty-moshenko to Russia for treatment at any time convenient for her and for the Ukrainian authorities and in any medical institution», – said the Rus-sian President recently.

At the same time Moscow makes full use of its gas-oil ratio to put pres-sure on Kiev to take concrete steps to

enter the Russian integration struc-tures. Only then can Ukraine expect a decrease in gas prices. Neither at-tempts of the Ukrainian leadership to denounce the gas deal, nor sym-bolic steps toward a friendly part-nership in a law of the Russian lan-guage will be accepted by the Krem-lin. Concrete steps from the Presi-dent of Ukraine Viktor Yanukovych are awaited. Vladimir Putin and his team realize that such successful conditions will not likely occur again in the medium term for the reinte-gration of the former Soviet Union and Ukraine in particular.Sergey Dolgov, Moscow,specially for The Kiev Times

The economic situation in Europe is reaching the bottom. Italy, Portugal,

Ireland and Spain are on the verge of bankruptcy. In mid-May the lat-ter even asked for loans from Euro-funds, which were created to help the least developed regions of the EU. According to experts, the salva-tion of the Spanish banking system will need 120 billion euros. The fi-nancial crisis in Greece is reflected in the economy across Europe.

For Brussels, the biggest difficulty with the Greek problem is not the large gap of external debt to GDP, or the absence of a real economy and not even the bloated social sphere. It is that Greeks refuse to take re-sponsibility for the situation in their country. Up until the global finan-cial crisis Greece had been living on loans for several years. In the cur-rent crisis, the necessity to start saving is an urgent, objective need for them. However, rather than ac-cepting the conditions of European Commission and, in exchange for loans start reducing budget costs, they are accusing Brussels in dicta-torship.

The leadership of the EU and the main donor in the EU, Germany, have repeatedly threatened to stop financial support for Greece. In May, the situation became dead-locked. SYRIZA, a coalition of left wing forces, won in the parliamen-tary elections. Their main slogan is stop the policy of saving and break the agreement with the IMF. While common sense has prevailed among

the Greeks, Brussels can not count on their compliance.

In the second round of parliamen-tary elections on June 17, the con-servative party New Democracy won. Party leader Antonis Samaras has said that the coalition govern-ment will abide by the agreements with foreign creditors. But a quar-ter of voters remain on the side of the radicals, who are lagging behind the leaders by less than 3% of the vote: 26.9% vs. 29.65%. The leader of

the SYRIZA Alexis Tsipras said that they remain in opposition. Conces-sions to the EU leaders still have to be made. The Greeks will continue to blackmail Brussels with civil un-rest, refusing to perceive threats at home. They have their own reasons.

Public instructive flogging failed

Expulsion of Greece and default of its economy will cost Europe 270 billion euros. 100 billion of these will have to be paid by German and French banks. However, few Europe-ans believe that Brussels is capable of any serious sanctions. Attempts by the EU to intimidate recalcitrance ended in complete failure.

Seeing as the younger members of the EU violate European laws, Brussels has decided to scare them. Hungary was chosen for the role of the victim. The country is not a part

of the euro zone, thus sanctions against the Hungarians would not particularly weaken the euro. How-ever, Budapest violates not only the fiscal discipline, but also the rights of its citizens. Hungarian Prime Minister Viktor Orban has actually imposed censorship on the media, and has put the Central Bank and the judicial system under the control of the ruling party. However, the big-gest challenge to the EU – the new constitution of Hungary. It suggests

the possibility of revising the post-war borders in Europe and provides a basis for territorial claims. And these are, in fact, actions aimed at split-ting the united European house.

Brussels has threatened to de-prive the Hungarians of transfers of funds. «If Hungary does not begin to carry out the budget for this year, at the beginning of the next one we may stop payments from the Cohe-sion Fund (a fund established for the development of Eastern European economies, in order to bring them to the level of the old members – Ed)», – said Deputy Chairman of the EU on Economic Affairs Commissioner Olli Rehn. Hungary was threatened with loan denial. According to the forecasts of financial analysts, with-out external borrowing the country might declare bankruptcy in the fall of 2012. Hungarian Prime Minister Orban has nevertheless gone on to

UNION RETURNS?

EUROPE AT THE BOTTOM

The new Russian leadership headed by three time President Vladimir Putin will not miss the right moment and will do everything possible to restore the economic union of post-Soviet countries. Ukraine is the main goal of the project

The European Union is in the deepest of its entire half-century history crisis – from the financial system to its social values. If Europe's leaders do not finda solution soon, the political processes taking place in Europe will bury the European integration

The Greeks will continue blackmailing Brussels with public unrest

INTERNATIONAL POLITICS/CIS COUNTRIES

Moscow gets a chance to set a chic monopoly influence on the post-Soviet countries

Moscow expects that the complication in relations between Kiev and Brussels will make the leadership of Ukraine have the «Turkish Syndrome»

The Kremlin has a brilliant chance to set a monopoly influence on the CIS

President Putin expects President Yanukovich’s steps toward economic integration with Russia

Spain is on the verge of bankruptcy, and even asked for money from eurofunds

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some compromises with Brussels and the experiment with flogging failed. New Europe has learned from it quite different lessons.

Young members of the EU re-garded the Hungarian case as an at-tempt by Old Europe to deprive the country its sovereignty. Poland took the side of Viktor Orban. «Although the position of the European Com-mission is legally justified, Poland gives its political support to the Hungarian government against ex-cessive pressure in Brussels», – said Polish Prime Minister Donald Tusk. The opposition supported the rul-ing party. Rallies in support of Hun-gary with the traditional burning of the EU flag took place in War-saw, Poznan and Gdansk. Obviously, in the future Brussels will abandon these kinds of sanctions, in order not to add to the split between Old and New Europe.

Discord in marital tandemPerhaps, the sanctions would not

have been needed if Brussels had had some informal tools to make the Greeks, Hungarians and other recal-citrants comply with European law. But the EU has remained without an effective governing body.

Franco-German partnership «Axis Berlin-Paris» had always stabilized

relations between the EU Member States. Now the double bed deco-rated with monogrammed words «Merkozi» is empty. Instead, the two-story wooden bunks were erected. The bottom is occupied by Fran-cois Hollande, and the top with the German Chancellor Angela Merkel, hissing threateningly: «Just dare to snore!». This cartoon describing the current state of Franco-German tan-dem was published by newspaper Fi-nancial Times Deutschland.

The most powerful country in Europe, Germany for a long time showed no political activity, so as not to cause a painful association with the World War II. The Germans shared the roles with the French: Berlin – a purse, Paris – a mega-phone. These two determined the main directions of economic, social and foreign policy of the EU. It is the Franco-German tandem which de-termined the way out of the finan-cial crisis in the euro zone as well as the solution of the Greek issue. Merkel and Sarkozy (their union got nickname «Merkozi») have devel-oped a joint fiscal pact, which in-troduces a regime of austerity in the euro area.

However, according to the results of the presidential election, Sarkozy lost his position. France’s new pres-

ident – socialist Francois Hollande went to a confrontation with Angela Merkel, and opposed the fiscal pact. «In every capital, on the other side of governments and heads of state, there are people who have now, due to us, found hope and want to do away with the policy of economy», – said Francois Hollande. French president-socialist calls to stimu-late the economy through foreign borrowing.

The Germans were shocked. They have spent so much effort to ensure that Europe has agreed at least to some common solution to the crisis, and now they are forced to abandon the Stability Pact. German leaders are trying to convince the new pres-ident of France not to denounce it and are willing to sign a new agree-ment on stimulation of the econ-omy. «Now we will work together

on the» growth pact «for Europe», – said German Foreign Minister Guido Westerwelle.

However, Francois Hollande is ac-tually ruining the Franco-German tandem. «Germany can not decide for the whole of Europe», – he said. «No more talks of a decent North and sinning South. Instead we see a Europe consisting of the coun-tries with the character, history, strengths and weaknesses», – said

one of the leaders of the French So-cialist Party, Arnaud Montebur. Ap-parently, France feels it is too tightly in the grasps of Berlin. Instead, the position of «second of two equal», she intends to head south and dis-courage the German superiority in the European Union. Analysts fear that the French ambition may be the last nail in the coffin of European in-tegration.

The radicalism rather than political correctness

There is no replacement for the Franco-German tandem. The crisis in the European Union is growing.

There are no strong leaders the cali-ber of Helmut Kohl, while traditional European parties are experiencing a crisis of confidence. Closure of the political elite and the excessive po-litical correctness has led to the fact that they broke away from the vot-ers and no longer offer adequate so-lutions to their problems. Gradually, radicals have come to power in Eu-rope – there is a new threat to the European project.

Fringe parties, who are speculat-ing on the memory of the greatness of the colonial past of Western Eu-rope and the «golden ages» of East-ern Europe, are in the political fore-front now. Their leaders are openly speaking about sore subjects for Eu-ropeans. The right-wing bet on the problem of migrants who are unwill-ing or unable to integrate into Eu-ropean society, turning entire cit-ies into «little Pakistan» and «little Algeria». It turned out that the Na-zis, in order to come out of the po-litical ghetto, do not even need to change the ideological platform – it is enough to replace the Jews with Muslims. The call to bring order to migration, has found a broad re-sponse from the Europeans.

«European societies should be able to rely on strong social unity, which can only exist in a mono-cultural system» – a phrase of the manifesto of the Norwegian terror-

ist Anders Breivik, that many res-idents of Europe are ready to sub-scribe to. The strengthening of na-tionalism is a ticking time bomb un-der the whole European project.

A united Europe was established as a universal solution to the prob-lem of rivalries between Euro-pean nations that have plagued the Old World for many centuries, and eventually led to two suicidal wars. There was the idea of a cer-tain universal inhabitant – the Eu-ropean with shared liberal demo-cratic values and the idea of a free market. The current financial crisis extensively eliminates these val-ues. If radical governments come to power, while young members of the EU continue to persist in their un-willingness reduce budgets, the re-jection of a common currency and the collapse of the Schengen area is not far off. The consequences can be sad. «No one should presume that half a century of peace in Europe is definite. If the euro falls, Europe falls. It should not be allowed»- says Angela Merkel.

Sergey Dolgov from Brussels,specially for The Kiev Times

To its neighbors Ukraine is clearly a «chunk», which we are not willing to give,

but no one is going to take it. Po-land dreams about Ukraine, closely adjacent to its borders economically and politically. Germany sees Kiev as a buffer between Europe and Asia. Russia dreams of transportation net-works and an energy sector, the EU is ready to seize the financial system of Ukraine. And finally, the U.S. does not object to draw Kiev into the risky game called «missile defence».

Why is Kiev today as a bride every-one wants, but no one marries?

Orange European euphoriaI remember well the German eu-

phoria of the first «orange» days. Ber-lin politicians were excitedly telling each other and the press about the orange spring, the young pro Western politicians coming to power, who will lead Ukraine to where it has a future. And the future of Ukraine, Berlin was sure about, is only in Europe. In 2004, the influential German news-paper «Berliner Zeitung» wrote that «the sympathy and support for the» orange revolution «does not nec-essarily mean support for individ-ual candidates». But just two years later, the speaker of the faction of the party «Alliance ‘90/The Greens» in the Bundestag Raynder Steenbok, clearly bets only on the «orange». In his press release, he wrote: «We wel-come the agreement of the three pro-Western parties of «Orange Revolu-tion» on creating coalition». And fur-ther: «The creation of an econom-ically strong Ukraine, not only as a close partner to the eastern borders of the EU, but as part of united Eu-rope, is in the interest of Europe».

Brussels quickly began to build upon the old plans for rapid integra-tion of Kiev into European structures. Europeans genuinely believed that Ukraine could now leave the field of attraction of Russia and nothing will prevent it to become at least an as-sociate member of the European Community. Let us be honest, these dreams, for example in Berlin, were linked to two names – Yushchenko and Tymoshenko. Numerous plans of the Europeans, linking the pro-gram of the eastern partnership and association agreements, were quick to give Ukraine a real prospect of full EU membership. However, with the change of government in Kiev, the mood in Europe began to change. In Berlin there were rumors that Yan-ukovych and his team are not very much inclined towards the West. On the other hand, Russia has again be-gun to actively recruit Kiev to go to the east and enter the customs union, which further alarmed Brussels. Mul-timillion-dollar funds that had been planned as part of the Eastern Part-nership have been virtually unused. The EU was clearly afraid to invest in Ukraine, and not wanting to quar-rel with Russia. Ralph Fuchs, an ex-pert from the German Heinrich Boell

Foundation, which is close to the party «Alliance ‘90/The Greens», speaking at a forum in Berlin, said: «It is unacceptable that the EU East-ern policy has led to a new division of Europe into zones of geopolitical influence».

Another Ukraine is not required by Europe

Early last year, on the sidelines of the meeting concerning Ukraine, which took place in the Bundestag, the participants seriously discussed the possibility of exit from the pro-cess of signing an agreement on EU-Ukraine Association. Any excuse was necessary to freeze the process of signing and ratifying the Associ-ation Agreement. Ukrainian lead-ers willingly gave an excuse – it was the case of Yulia Tymoshenko. Ex-perts, politicians, and parliament members eagerly seized the kindly offered hand, and the folding pro-cess of the dialogue with Kiev began. On the one hand, Ukraine on issues

of sovereignty and the development of state institutions and rapproche-ment with Europe has advanced fur-ther than any other post-Soviet state. On the other – Ukraine is severely criticized in Europe and especially in Germany, for the problems of de-mocracy using as an example a crimi-nal case of Yulia Tymoshenko. Inter-estingly, very few people argue about the nature of the case – whether Ty-moshenko is guilty or not. For Euro-pean observers, the mere presence of a legal precedent is important. The fact of the Tymoshenko trial is used as evidence of Ukraine devia-tion from democratic values. Some-times they recall Yuriy Lutsenko, but since the former minister is practi-cally unknown in Germany, it is not very productive to use his name for criticism of Kyiv. Outside observers do not want to know what Ukraine has done on its way to Europe. With-out belittling the problematic nature of the criminal case, the interest of German media is concentrated on Tymoshenko’s cell, her illness, doc-tors from Berlin’s Charite hospital, and bruises on the body of former prime minister. Meanwhile, the as-sociation agreement is almost bur-ied, and Chancellor Angela Merkel even refused to attend the opening of the European Football Champi-onship. Without hesitation, Ukraine was «pushed» into the far corner of EU projects.

One of the deputies of the Bunde-stag, with whom I had the opportu-nity to discuss this matter with con-fidentially said: «Don‘t you under-stand? The bet was on the orange, nobody needs the other Ukraine». However, Stephan Meister, an ex-pert at the German Council on For-eign Relations, believes that sooner or later Ukraine will be in Europe.

«There is no alternative to this de-velopment. Plans for a joint future with China or Brazil, is nothing more than a Ukrainian «fata morgana», – he said.

«Missile defense», NATO and «Smart defence»

However, even if Europe refuses Ukraine, the United States is not will-ing to so easily give up plans to in-clude Kiev in a number of its military and strategic allies. What alliance can we talk about after Ukraine with-

drew from its plans to join NATO? First, there is no absolute clarity as to whether Kiev refused entry into NATO. On the one hand, Viktor Ya-nukovych said last year that Ukraine did not plan and does not intend to join NATO. «We were, are, and will be non-bloc country», – said Yanu-kovych. On the other hand, just re-cently, the First Vice Prime Minis-ter of Ukraine Valery Khoroshkovsky said to Deputy NATO Secretary Gen-eral Dirk Brengelmann that «Ukraine

will strengthen its cooperation with NATO taking into account the non-aligned status of our state». How can you not remember the unforgettable Viktor Chernomyrdin, who on one occasion said: «You know, Ukraine puts the vector so perpendicular, that no one can understand».

Americans are not bothered with verbal somersaults of Ukrainian pol-iticians. They want to see a Ukrainian military component in their ranks. Of course, they know that without the modernization of the Ukrainian

army, without the millions and even billions of dollars of investment, the military value of Ukraine is not very large. The strategic benefits to be gained from Kiev are difficult to overestimate. «SMART DEFENCE» is a new global project of NATO, which was officially announced at the Chi-cago summit on May 21. According to NATO Secretary General Rasmussen, «Intelligent defense» presupposes the union of funds from the member states for the acquisition of the latest

models of military equipment, they cannot afford to buy and operate on their own, for joint use. This includes the creation of an entirely new sys-tem of monitoring the ground with AGS (Alliance Ground Surveillance), and a controversial missile defense project. What can Ukraine, struggling to solve its economic problems, give the U.S. and NATO in this project? No money, no new technologies in the military field. But hasty conclusions should not be made. The most valu-able thing that Ukraine owns is its strategically important geographical position. It’s easy to start with Ukrai-nian radar located at Sevastopol in the Crimea and near the town of Mu-kachevo. Here, even without West-ern investments, benefits that United States will acquire are clearly visible. As soon as Kiev joins the missile de-fense project, NATO will, at virtu-ally no cost, get control of airspace in the vicinity of the Russian Black Sea Fleet. Radar in Mukachevo will cover Hungary, Slovakia and Poland against Iranian missiles, as well as get control of the «Russian line». At the same time Ukraine will be given the dubious privilege to participate in the military plans of Washington and NATO, but will be drawn into a new political conflict with Mos-cow. «For courage» Kiev will be given huge loans, which may subsequently be used by NATO to buy unmanned aerial vehicles within the «intelli-gent defense» frame. Loans will have to be paid back – free cheese is only in a mouse trap. And, the fact that Ukraine in these plans would play the role of Azazel, sacrificed for the sins of others, will hardly be of any con-cern for the big neighbor from across the ocean, and military experts from Brussels.

I like to move itNevertheless, Ukraine does have

prospects in Europe. I am not refer-ring to the European football cham-pionship, although I would have liked to. And it is not the first place among the European Parliaments with fist fights in the plenary sessions. Al-though the video about the massa-cre in the hall of the Verkhovna Rada was very popular in German politi-cal circles. I was even asked whether Klitschko brothers give advice to their Ukrainian counterparts. It turned out that Ukrainians occupied its place in Europe due to the song «I Like To Move It», which was posted on YouTube by Lviv music band Los Colorados. Fiery and funny polka was noticed by German director Detlev Buck, who suggested it as an anthem of the European Football Champi-onship during the broadcasts on the second German television channel ZDF. So in the coming weeks, Ukraine is definitely in Europe. All Germany will listen to Ukrainian group, but unfortunately only in English.Alexander Sosnowski, a publicist, Berlin, specially for the Kiev Times

«ALEA IACTA EST» – THE DIE IS CASTThe sacramental phrase of Julius Caesar, said by him while crossing the river Rubicon – «Alea iacta est», today might well be used to understand the role and place of Ukraine in the modern world

The European Union remains without an effective governing body

The strengthening of nationalism is a ticking time bomb under the whole European project

INTERNATIONAL POLITICS/THE EUROPEAN UNION

Berlin was betting on the «orange», another Ukraine is not in demand

NATO Secretary General Anders Rasmussen wants to see Ukrainian military component in his ranks

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Answering about the most frequent questions been asked, Renat Kuzmin, First Deputy Prosecutor General of Ukraine pondered for a second and said: The three most frequent questions combined into one would sound like: «Are Timoshenko, Lazarenko and Kuchma really murderers?»

Alexander Seryy: What are the main three questions you are more often asked by

journalists?Renat Kuzmin: These three ques-tions are combined into one that sounds like: «Are Timoshenko, Laz-arenko and Kuchma really murder-ers?»Alexander Seryy: And how do you reply? With the same one answer?Renat Kuzmin: The answer is the following: the Prosecutor General’s Office keeps information that Ti-moshenko, Lazarenko and Kuchma have a direct relationship to the murders. And now we are trying to collect sufficient proof that allows us to bring a charge against them.Alexander Seryy: Is that really Ti-moshenko? She is a woman actually.Renat Kuzmin: The biggest crimes in the world were made by women, because of women, and for women. By the way, the most cruel crimes too.Alexander Seryy: But the biggest feats also happened in the name of women. Renat Kuzmin: Julia Timoshenko is a special case from the point of view of ethical relations between man and woman and is plain from the le-gal point of view. She is a criminal that was established by two degrees of jurisdiction and now is serving her sentence of 7-years’ confinement.Alexander Seryy: But both the op-position and European politicians say that she isn’t guilty.Renat Kuzmin: Now what? Guilt and guiltlessness are determined by the court, not by opposition. The court concluded that she was a crim-

inal and we have to agree with this. As formerly we have agreed when the court declared the third tour of the presidential elections. Do you re-member?Alexander Seryy: But Vlasenko, the lawyer, affirms that the case is fal-sified.Renat Kuzmin: If Vlasenko will call donkey a plane, he (the donkey) will not fly to the sky. I repeat once more: Timoshenko is a criminal and this is established by the Ukrainian court. Ex-premier Lazarenko, her recent protector, is also a criminal and this is established by the American court. Full stop.Alexander Seryy: Are you not afraid that Julia Timoshenko will sue you for slander?Renat Kuzmin: No, I do not. Espe-cially since she has already regis-

tered a claim and ignominiously lost it. Three degrees of jurisdiction have considered her case groundless and confirmed my rightness, including the Superior Court of Ukraine.Alexander Seryy: Is Lutsenko also a criminal?Renat Kuzmin: Lutsenko is a thief and this is also established by two

degrees of jurisdiction. He is ac-knowledged guilty in official mal-feasance including theft of national property and this means that Lut-senko is a criminal and that’s all. No, not all. He is a thief who is trying to convince the international commu-nity that he is a victim of political repressions but not a criminal of-fender. By the way, like Timoshenko and Lazarenko.Alexander Seryy: You refuse inter-views to many Ukrainian mass-me-dia. What is the reason?Renat Kuzmin: I give interviews not when I am asked to, but when I wish to give them.Alexander Seryy: Good. When do you agree to give an interview?Renat Kuzmin: I agree to give an in-terview in case there is an internal feeling that it’s worth it to talk to one

or another person. It is no secret that there are few professionals in jour-nalism. Any sphere is short of pro-fessionals. There are many doctors but very few good doctors. As well as lawyers... And when you meet pro-fessional journalist, you wish to work with him Let me /smiles/ ask you, the journal-

ist, questions. Some kind of cross in-terview. Would you mind? /smiles again/. How do you think, who is a Journalist?Alexander Seryy: A journalist is a person who can provide information impartially. The reader has to have

the right of his own opinion concern-ing the information.Renat Kuzmin: What do you think; can a journalist express his own opinion?Alexander Seryy: Yes, he can but only declaring that this is his per-sonal opinion. The journalist can’t pass on his opinion as the opinion of the majority.Renat Kuzmin: Is a journalist, who carries out an order for the creation

of a negative or positive image for money, the right phenomenon?Alexander Seryy: The journalist states the facts by the «I write what I see» principle. And if he tries to stick the ordered result to a person he is interviewing… Prostitution exists in journalism too.Renat Kuzmin: What types of jour-nalists are there in Ukraine?Alexander Seryy: Journalism is short of professionals and this is a pity. And until absolutely objective journalists appear, the yellow mass-media will prevail. But let me ask the questions. If you are pressed, what is your behavior?Renat Kuzmin: When I am pressed, I think first of all. And then react.Alexander Seryy: To make serious decisions for you is…?

Renat Kuzmin: … is to make impor-tant, sometimes vitally important decisions. And in the process to take responsibility for the results of such decisions. You have to be able to take the leadership in nonstandard situ-ations and not to shift responsibility to anybody.Alexander Seryy: What is the main disappointment in your life?Renat Kuzmin: I have not had such disappointments to really shake me

up yet. Maybe it’s because I am al-ways ready for everything. Ready twenty-four-hours.Alexander Seryy: What does your breakfast look like?Renat Kuzmin: I do not have break-fast usually. Nor do I have any cheer-ful morning rituals. The main task in the morning is to wake up. And this can be very hard!Alexander Seryy: How often do you think about work after awakening?Renat Kuzmin: Morning thoughts practically do not remain in my mind. But if work takes as consider-able a part of life, as my work does, it is easy to imagine me thinking about my work any time of day.Alexander Seryy: Even the most self-possessed person can allow himself to...Renat Kuzmin: I do not know what the most self-possessed persons can do. I can allow myself almost every-thing except...Alexander Seryy: Are there things you will never allow yourself to do?Renat Kuzmin: To strike a woman, a child, a pet.Alexander Seryy: What is the men’s friendship for you?Renat Kuzmin: This is mutual lia-bilities without selfish motives.Alexander Seryy: Who are the con-troller and the judge in mutual lia-bilities?Renat Kuzmin: Conscience.Alexander Seryy: Any of your friends can have his own truth. How can one prove his rightness?Renat Kuzmin: Arguments are not of benefit. You can win an argument with your friend and lose this friend. Only a dialogue makes understand-ing possible. If people do not talk to each other, they often part.Alexander Seryy: What does your job mean for you?Renat Kuzmin: My job is something bigger than simply a job. I work not for wages.Alexander Seryy: What is your mo-tivation then?Renat Kuzmin: My motivation is a sense of justice and rightness of the work I do.Alexander Seryy: What supports you in your work?Renat Kuzmin: The conscience of my own rightness and the correspon-dence of my work reflect the princi-ples of justice and my internal be-liefs.Alexander Seryy: What can you not allow yourself to do at work?Renat Kuzmin: At work I never al-low myself what I can allow myself being not at workAlexander Seryy: A good boss is…Renat Kuzmin: … an effective man-ager, who tries to obtain assigned tasks and takes care of his inferiors.

Alexander Seryy: A good inferior is…Renat Kuzmin: … a worker who ef-fectively execute tasks given by the boss and doesn’t make problems.Alexander Seryy: The main thing between manager and inferior is …Renat Kuzmin: … trust, reliability, discipline.Alexander Seryy: Discipline is based on …Renat Kuzmin: … on fair encour-agement and a disciplinary system.Alexander Seryy: Discipline is de-stroyed by …Renat Kuzmin: … by encourage-ment of those who are not privy and punishment of those who are not guilty.Alexander Seryy: Have you been of-ten unfairly punished?Renat Kuzmin: Such things hap-pened.Alexander Seryy: Betrayal for you is …Renat Kuzmin: … going across to the enemy side, participation in a struggle against friend and ally.Alexander Seryy: What is the main thing in your life?Renat Kuzmin: Justice. I am sure that justice will triumph.Alexander Seryy: What intrigues you?Renat Kuzmin: … Starry sky. I often look at the starry sky.Alexander Seryy: Life indeed is… Renat Kuzmin: Once I congratu-lated a very respectable woman on her birthday and in my toast quoted some famous words of Faina Ranevs-kaya about what is life. After that my interlocutor hasn’t talked to me for three months. A sense of internal freedom like Ranevskaya has is not inherent in many people. That’s why I will not continue.Alexander Seryy: You are from Do-netsk. It leaves its mark.Renat Kuzmin: I’m from Donetsk, but this means to me only the fact that I was born in Donetsk.Alexander Seryy: Does religion play an important role in your life?Renat Kuzmin: I believe in God, but faith is not a theme to discuss. It is not good when people turn faith into a public subject. Alexander Seryy: It is silly when...Renat Kuzmin: … something looks awkward. Foolish things can be cheerful, kind and even sweet. But they can be annoying, cruel and even dangerous too. When a man is sooth-ing a woman says «you are my little fool», this can look nice. But when one calls a person, who is responsi-ble for fates and lives, stupid, formu-lation sounds totally different.Alexander Seryy: To work with Vic-tor Pshonka is...Renat Kuzmin: Is to work with him.

If a lawyer Vlasenko would call a donkey a plane, it (the donkey) would not fly into the sky

RENAT KUZMIN: ARE TIMOSHENKO, LAZARENKO AND KUCHMA MURDERERS?

POLITICS/THE GENERAL PROSECUTION OF UKRAINE

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THE KIEV TIMES | JUNE, 2012 11

Alexander Seryy: A country’s polit-ical situation always depends on...Renat Kuzmin: … on the govern-ment’s ability to rule a state. All other things are derivative from this. Today’s government has made much more for the country than all its leaders did during the entire pe-riod of Ukrainian independence. A little time will pass and this will be-come clear even to the most ardent foes of the current power... Actu-ally I think they do understand this now. But only strong people can ad-mit this. There are few such people, unfortunately.Alexander Seryy: I do not know an answer to the question...Renat Kuzmin: … what’s there /rais-ing eyes to the top/. Actually I have never thought over this question.Alexander Seryy: Is it hard to live possessing huge information which you cannot share with anybody?Renat Kuzmin: More often people possessing such information are re-served. You probably noticed that people who keep secrets in the ma-jority of cases are unsociable and un-communicative. But there is another form of one’s internal world protec-tion: commutability and liveliness because tomfoolery and boyishness protect hidden knowledge very well. Because this is a breach of the exist-ing stereotypes.Alexander Seryy: The rest for you is...Renat Kuzmin: … possibility not to think about work. You need to give your brain and body something spe-cial to exclude thoughts about work themselves. Extreme sport, under-ground fighting, martial arts with their philosophy... In any case I am always looking for something that forces thoughts about work out of my mind.Alexander Seryy: Do you often use aikido tactics in your life? I mean us-ing the attacker’s energy and direct-ing this energy to him instead of re-plying with power to power.Renat Kuzmin: This is large skill. But the best way to win is to win without open confrontation. You need to be able to create conditions to force your opponent to give up without striking. The opponent has to refuse his aggressive plans, realiz-ing the existing situation and evalu-ating possible risks. But in life, unfortunately, one has to apply aikido tactics. Well, this is when conflict has flared up already. Great commanders remained in peoples’ memory as the battle win-ners. Great thinkers and leaders who avoided open wars and conflicts were left behind peoples’ memory. Be-cause nobody sees their victories. But they won and those were great victories. They provided prosperity; they avoided bloody wars and bat-tles. Nobody had noticed that, except those chosen who understood what efforts were applied for this peace.

Alexander Seryy: «In 2003 I headed the public prosecutor’s office in Kyiv. This was...»Renat Kuzmin: … unexpected. That was a hard pre-election period. For me that was an unexpected appoint-ment and I had not been prepared for it at all. And then everybody remem-bers – orange revolution, debauchery of pseudo-democracy, and collapse of all universal values and their sub-stitution by cynical and mendacious declarations. Now justice is being re-stored. Very slowly but confidently.Alexander Seryy: Ukraine today is…Renat Kuzmin: … millions of people with an absolutely different history, culture, and language broken up to a great number of various groups. All of these groups have their truth. And unfortunately these people still are not united into one team with a com-mon patriotic idea.Perhaps we are on the way to this. And, God grant us, we will live till the moment when we all, being so differ-ent, unpredictable, and competitive with each other, will be united in a common desire of our common goal.Alexander Seryy: What is patrio-tism?Renat Kuzmin: And for you?Alexander Seryy: Patriotism? This is honest attitude to the history of the place you have born and live now. Patriotism is honest attitude and re-sponsibility to this place, these peo-ple, and this history.Renat Kuzmin: You mean that pa-triotism is honesty?Alexander Seryy: Honest attitude and responsibility.Renat Kuzmin: Honesty and re-sponsibility? These are subjective notions. What do you think; can Lviv and Donetsk patriots have the same idea of patriotism?Alexander Seryy: Yes, they can...If Lviv and Donetsk patriots will have the same principles of honesty and the same system of values. If you ask Lviv and Donetsk patriots: «What is your attitude to the Ukrainian lan-guage? », opinions will differ. But if you ask a Ukrainian citizen who lives in Lviv and a Ukrainian citizen who lives in Donetsk: «What is your atti-tude to the Ukrainian state? », opin-ions will be similar.To my mind, the Ukrainian state is the only thing that can unite this country. Language won’t do this. Only the state, which unites and is responsible for those whom it unites and which gives its citizens the pos-sibility to live normal life. Normal life in a moral sense.I think we do not have political power to declare such a system of values yet. For some reason we al-ways slide to the language.I know for sure that German citizens – Bavarian and Cologne residents – speak very different dialects. I know that residents of different cantons of Switzerland live extremely comfort-ably because they say proudly: «I am

the citizen of Switzerland! ». German say: «I am the citizen of Germany! ». Last week I visited Russia and heard the same words from Russians: «I am the citizen of Russia! ». They love their country and are proud of it.As for Ukraine, part of the popu-lation says that we are citizens of Ukraine because we are Ukrainians and declare the second part of the Ukrainian population non-citizens of Ukraine only because they speak the Russian language. Here is the main internal problem. When this problem will be solved through mu-tual respect to the state, through cit-izen’s institutes, I think that then the situation will become slightly more optimistic.Renat Kuzmin: In the Soviet period I learned as a pioneer and Komso-mol member that «Patriotism is love to Motherland». At that time we had one Soviet Motherland. Then every-body understood that we all – Ukrai-nians, Russians, Kazakhs, Turkmen – are citizens of one great country. We could chaff on citizens of another na-tionality but without spite, because every nation has its peculiarities. And we served in a Soviet army. We were united by love to our Motherland. We proudly said: «I am from USSR! ». We were citizens of one country – pow-erful, strong, with its problems and shortcomings, of course. But we were united by the idea. And to return to your question, what do you think; Motherland for Lviv resident and for

Donetsk resident is the same notion? Or are they different motherlands?Alexander Seryy: I was born in Lviv, as you remember, and have been liv-ing in Donetsk since I was 20 years old. I conjecture why Lviv resident do not love Donetsk resident so much. Because Donetsk residents have dif-ferent life values, than Lviv residents have. Lviv residents always have to prove something to somebody. This has been happening for many cen-turies.Historically Lviv residents of dif-ferent epochs were fighting against various conquerors: Polish, Hungar-ian, Czech, Australian, and German. The fact is that aboriginals of medi-eval capital of Galichina even lived behind fortification. For them there was only one street – Ruska.Beautiful Lviv and its culture were found by Poles and Australians. Those people who are living in Lviv today have a very indirect relation-ship to historical Lviv culture and ar-chitecture. They settled in Lviv much later.That is why Lviv residents under their own inertia continue to prove something all the time. There is a very strong spirit of protest in the city. Lviv always had active political elite.A Donetsk resident is different. He does not prove – he works. Donetsk residents work a lot. A Donetsk res-ident has a somewhat different at-

titude to his motherland. For the Donetsk resident the motherland is Donbas and then – Ukraine. For the Lviv resident the motherland is Ukraine, though in his own Lviv idea. The Lviv resident is ready to sacrifice the interests of the residents of Don-bas, Crimea and Transcarpathia for his Ukraine.Renat Kuzmin: I am a resident of Donetsk who lives in Kyiv. You are a resident of Lviv who lives in Donetsk. Why does nobody raise such topics in the press? But they are discussed in society, in stores, in public prosecu-tor’s office and in kitchens.All Western journalists together with ours ask only about Timoshenko, Lazarenko and Kuchma. They are interested only in speculative topics.What is our national idea? Let’s talk about patriotism! What can unite Lviv and Donetsk Ukrainians? Lviv and Donetsk miners can be united by their profession. How to unite other people?Alexander Seryy: Only the atti-tude to the country itself can unite it. The country will unite when peo-ple will stop to call them residents of Donetsk, Lviv and Kyiv and say: «We are the citizens of Ukraine».A Dusseldorf resident and his cen-turies-old opponent a Cologne resi-dent on hearing German anthem will stand up and proudly say: «We are the citizens of Germany». We cannot do this. We say Cossacks, residents of Lviv, residents of Donetsk, Regionals,

BUTers, Our Ukrainians but not «the Citizens of Ukraine».As soon as we will restore this high status, as soon as citizens of a United Kingdom will ask to grant them Ukrainian citizenship /smile/, every-thing will change.

Having become the citizen of Ukraine, a person has to then receive a huge amount of possibilities: to live, study, travel, receive treatment, create and feed his family, have vari-ety in everyday life, educate his chil-dren any place of the world. Only then we shall become a part of the larger world.Renat Kuzmin: And what shall we do with the existing state of affairs? The Lviv resident shouts that he is the resident of Lviv; the Ternopol resident shouts that he is the resi-dent of Ternopol; the Donetsk resi-dent shouts that he is the resident of Donetsk. But nobody shouts that he is a Ukrainian. How can we change this? Who can we turn to and what can we do in such situation?Alexander Seryy: I am a resident of Lviv. Half of my family lives in Lviv. For many years we were experienc-ing a period of morbid confrontation. But is seems that today Ukrainians are really tired of politics.

People want a sanguineous life. Peo-ple seek out contacts. The Internet is full of friendly Lviv and Donetsk residents. Donetsk companies make business in Truskavets; Lviv compa-nies make it in Gorlovka. People, who work for these companies and differ from each other, don’t feel any dis-comfort at all.But there is a section of politicians, whose main agenda is conflict. This group, resting upon committed mass-media, in every possible way, popularizes conflict. Politics with-out conflict stops to be commercially sound business for them.We have to create history and not to let it take its course. Formerly, Sta-lin personally watched the musi-cal film «Pig tender and herdsman». This film was an original anthem to the labor force that the country ex-tremely needed. The head of state watched the film as it contained not only actors’ performing, but a large ideology for the country. The country received the ideology on which econ-omy was based. Trust me, this ideol-ogy did not interfere – queues to cin-emas were real.It’s possible to recreate the Ukrai-nian state beginning from the rec-reation of its culture, and history. Not the farfetched version but ac-tual history. Today information rules the world. Information is becoming more important and expensive like it’s never been before. Arabic revolu-tions, American flash mobs, coloured revolutions... The state has to create itself. It has to show the world its im-age. Fistfights in the Ukrainian par-liament are very strange component of the state’s image.Renat Kuzmin: I consider the Ukrai-

nian consolidation in a slightly dif-ferent way. Imagine yourself in a Ukraine, which has: The best education in the world.The most effective public health care.There are no poor people.There is no corruption.These tasks I would set to the coun-try. These four tasks can remove all our distinctions. Is this real?Alexander Seryy: It seems to me that still nowhere in the world has corruption been totally defeated. How can we do this in Ukraine?Renat Kuzmin: It is necessary to start from something. We have to stop, dissemble, and take a refer-ence point. Let’s assume that on the 1st of January 2013 all Ukrainian cit-izens have to declare all their prop-erty. From this moment talks about this property’s origin are stopped. Let us act on the premise that a per-son possesses his property legally, if the fact of its criminal origin wasn’t

proved. From this moment it is nec-essary to set up a full control of tax-payers’ income and charges. This is the first step. Now the plot thickens.Alexander Seryy: Is there a guar-antee that this information won’t be used against people who trusted the state in case of a change in au-thority? Renat Kuzmin: We need tools and laws that exclude such a possibility. Prosecutor, yardman, prime minis-ter or journalist – everybody has to be equal towards the state and report to the society about his income and charges. You will say that it is impos-sible. I affirm that it is possible. Dur-ing the four years of the Great Patri-otic War our people had been fight-ing against fascism, overcoming hunger, cold, poverty, death and we won. This also seemed impossible. But we did it! And we can definitely fight corruption!Alexander Seryy: Well, let us leave politics. Who is the real man?Renat Kuzmin: He is specialist in his field, a first-class professional, possessing a single combat art or having a perfect knowledge of some weapon, playing a music instru-ments, kind, fair, non-greedy, with a good sense of humor. All the others will cling stick to such a man and will supplement him.Alexander Seryy: Who is the real woman?Renat Kuzmin: She is a woman who is considered real by her be-loved man.Alexander Seryy: It is unfair. Men have more conditions.Renat Kuzmin: But men have more responsibility too. Women are al-ways little girls, even if they are big bosses.Alexander Seryy: Whom do you never argue with?Renat Kuzmin: With women. And children. They can do everything (laughing).Alexander Seryy: Everything?Renat Kuzmin: Well, almost every-thing.Alexander Seryy: The main task of a man in his family is…Renat Kuzmin: … to provide for the safety and material well being of his family.Alexander Seryy: And women?Renat Kuzmin: All the rest.Alexander Seryy: I know that your first education is in journalism. Are you going to write?Renat Kuzmin: Yes, I am going to. But later. Now I do not have time for creativity.Alexander Seryy: But you find time to teach in University.Renat Kuzmin: This is different. I like to teach students and I know how to do this. I am teaching, work-ing as a professor and find time for this. True, with difficulty. But life is just begining...Interviewed by Alexander Seryy

POLITICS/THE GENERAL PROSECUTION OF UKRAINE

The best way to win is to win without engaging in an open confrontation

THE KIEV TIMES | JUNE, 201212

On June 1, a new Customs Code, which was adopted by Parliament in March

2012, came into force. The docu-ment preparation was hard and long. Many articles of the code have been rewritten after the President’s veto. The first changes to the code have been made just a week after the doc-ument came into force. However it is already clear that the work was not in vain. According to the Permanent Representative of the International Monetary Fund (IMF) in Ukraine Max Alier, the adoption of the new Customs Code is one of the greatest achievements of Ukraine in recent years. «The Fund sees and recognizes the significant achievements that have been made in Ukraine. The IMF hopes that the new Customs Code will be much more effective than the one the country has worked with be-fore»- he said on June 5 at the round table «Financial Stability in Ukraine: key challenges of the 2nd half» orga-nized by the League of Financial De-velopment with the support of US-AID’s project The development of fi-nancial sector FINREP.

The Customs Code was approved by the head of the IMF mission Christopher Jarvis, who has worked in Ukraine 21-28 May 2012. He noted that the updated customs regula-tions should promote the growth of government revenues.

According to Oleksandr Doro-hovskiy, the First Deputy Chairman of State Customs Service of Ukraine, «for the first time in a more than 20-year history, we have a legal founda-tion that is close to the international and European standards and regula-tions. He said, «With full responsi-bility I declare: June 1st is the begin-ning of the «new history» in busi-nesses-customs relations. With the new Customs Code a new stage of de-velopment for the customs system, as well as for all foreign economic ac-tivity, will begin».

Entrepreneurs were relieved

Throughout the spring customs officers were actively preparing for the new Code to come into force. The «fashion» companies disappeared from the market brokerage services. These companies had a monopoly or a privileged position in processing highly liquid products from the list of so-called group ‘A’: shoes, cloth-ing, fabrics, furniture, etc. At the cus-toms terminals in sea check points there are no longer employees of the SBU. According to importers, cases of extortion by customs officers and the facts of unwarranted delay in the processing of imports virtually dis-appeared. Freight forwarders admit that the work with the internal tran-sit has improved; goods are moved from the border checkpoints to in-ternal customs by the documents of delivery control. These are the first positive results of the new Customs Code.

The main innovation of the code is reduction of documents required for clearance. Now there are only three of them: the customs decla-ration, invoice and the declaration of customs value. Previously, im-porters were forced to prepare en-tire folders of documents including cost price calculations. The time of customs clearance is significantly re-duced (from 24 to 4) and the post-au-dit control is introduced.

The new Customs Code introduced a number of provisions that are well known to European businessmen. In particular a network of authorized operators of economic activities and the major importers is formed in Ukraine. If they follow the rules of in-ternational trade they have the right to import goods under the simplified procedures. The fines for entrepre-neurs’s failure are canceled. The im-porter is able to amend the customs declaration under the supervision of an inspector.

Customs has introduced a new system of risk analysis and man-agement, which should put the end for total inspection of all importers. Checks will be selective by risk fac-tors, for example, if the sender is not a typical country such as the import of bananas from Finland or gas from Cyprus. But that accounts for a tiny part of traffic through customs, the 95% of goods are processed under the simplified procedure. To mini-mize the smuggling, the Code adopts the European practice of post-audit control when importers are checked after import of goods into the coun-try. In this case the terms and condi-

tions of such checks are coordinated with the Tax Code.

The progressive steps were taken to facilitate customs clearance. In particular, now the declarant is en-titled to carry out customs clearance of goods at any customs authority.

The rules and clear grounds for re-fusal of customs clearance are de-scribed in the Code. And what really leads this document to the European standards, is the fact that it provides opportunities for importers to de-clare the goods prior to their arrival to Ukraine. Moreover, from now on, the date and time of filing the cus-toms declaration can be entered into an electronic system. If the terms of customs clearance are violated, the customs officials are personally lia-ble for that.

There are some positive moments in the new Customs Code for travel-

ers. The Code increases the limit of duty free import of goods into the territory of Ukraine by physical en-tities from 200 to 500 euros at land borders and 1,000 euros for border checkpoints at airports. Provided that the tourist does not cross the

border more than once in ten days, and imports no more than 50 kg of luggage. Products, the total cost of which exceeds 10 thousand euros, are subject to written declaration with the filing of customs declara-tions.

More order and control for officials

Recent changes to the Customs Code were voted in Parliament on 7 June and now are ready to be signed by the President. They aim to im-prove the process of application, the correction of the customs value of

goods and control over the determi-nation of this value. These changes suggest that if the customs author-ity has decided to revise the customs value of goods, that the declarant or an authorized person adjust it is not a mandatory order, but voluntary.

If the declarant cannot provide the required additional documents to confirm the value of the declared goods, he is entitled to put this prod-uct into free circulation not later than 10 days, under the condition of providing guarantees.

The differentiation in terms in which citizens were allowed to tem-porarily import into the customs ter-ritory of Ukraine personal transpor-tation was cancelled. Due to the new code duty-free shops can function only in the international crossing points of Ukraine and international air flights or water transport of com-mercial purposes.

Thus the new Customs Code solves the most sensitive issues in customs. It establishes a clear set of minimum

necessary documents for customs clearance and determines the cus-toms value, simplifies custom pro-cedures and reduces time of regis-tration to four hours. But one of the most important points for entrepre-neurs and the most progressive for the Customs Service of Ukraine is the introduction of the financial respon-

sibility of custom officials for the de-lay and the illegal actions of the in-spectors.

It is possible that the introduction of the new Customs Code into every-day life of the Ukrainian customs will not be easy. Customs officials from the highest to the lowest level are so fused with their nearly most «bread winning place» among state officials, that most likely sabotaging will be-come their first sincere response. However, the process is irreversible.

The Customs Code puts a legisla-tive foundation of destruction of the years of established and coordinated corruption schemes of Ukrainian customs. The introduction of the new Customs Code is likely to entail the dismissal of employees in middle and lower levels. In the current eco-nomic situation, it would be «natu-ral selection» of those who are un-able to adapt to the demand of time. Old customs corruption impedes the foreign economic cooperation of Ukraine as well as the entire econ-

omy. The new rules of the Ukrainian Customs create the preconditions of the transition from long talks about free trade with the European Union to specific agreements. Ukraine has made its move, now it’s your turn, gentlemen, European Commission officials and foreign businessmen!Vasiliy Yatsenko

The president of Ukraine Viktor Yanukovych is con-sidering a new edition of

the Criminal Procedure Code (here-inafter – CPC), adopted in Parlia-ment on April 13. But the head of state is in no hurry to sign it. He said that he will pass it to international experts to assess compliance with democratic norms. Only after this

examination, does he intend to sign such an important human rights law.

The new Code of Criminal Proce-dure will enter into force November 19, 2012 and will be an innovation in the criminal process in Ukraine. It contains many new features. First of all, the law makes the rights of the defense and prosecution equal. The document has made a serious step

towards international law. Thor-oughly and comprehensively the principles of international coopera-tion in criminal proceedings are dis-closed.

Guarantees of reciprocityThe section on international co-

operation in the new Code of Crim-inal Procedure is supplemented by new regulations, terms and defini-tions. It clearly describes the pro-cess of international cooperation, as well as identifies specific mea-sures to provide legal assistance to foreign countries.

The new version of the CPC pro-vides for principles of international legal assistance to states Ukraine has no relevant agreements with. In these countries such coopera-tion will be based on the principles of reciprocity. This means that if Ukraine sends a request to the State, it gives written assurance that in the future it shall also consider the re-quest of said State to provide simi-lar legal aid.

ExtraditionThe new Code of Criminal Proce-

dure governs the thorough prose-cution, detention, arrest and extra-dition of foreign nationals. It more widely, compared to current law, in-terprets the term «extradition» . In

the new Code of Criminal Procedure «extradition» means that the Ukrai-nian state transfers a foreign citizen, to the jurisdiction of the requesting state, where the foreign national is wanted for criminal prosecution or execution of sentence. Extradition also includes locating a person to be extradited in the territory of the State, and his very surrender. Before

the decision to grant a surrender is made, circumstances that may pre-vent this shall be examined.

The innovation is that the prose-cutor who supervises the legality of pre-trial investigation, has the au-thority to prepare an application for a requested person in Ukraine and extends the list of documents that are attached in addition to this re-quest for information about the stat-ute of limitations.

The new Code confirmed provi-sions from the current CPC, that a person surrendered to Ukraine may be held in our country to await jus-tice, or in respect to a sentence, the sentence can be executed only for those crimes for which extradition

is granted (Article 576 in the new Criminal Procedure Code and Arti-cle 454 in the current). If prior to the surrender of said person to Ukraine he commits another crime, but it is not specified in the request, then the prosecution for this crime in Ukraine, or the execution of a sen-tence of the court can be done only after approval of the competent au-

thority of a foreign state, which has granted the person to Ukraine. And if the person has committed a crime after the surrender to Ukraine, the consent of a foreign state is not re-quired. Also the retention time of the extradited person in custody in the state which Ukraine asked to extradite, as well as the time of his move to a place of punishment, shall be counted to the total term of im-prisonment.

During an extradition procedure a foreigner is usually kept in cus-tody as a precautionary measure – the so-called arrest for extradition purposes. If according to the current code, it lasts 18 months, in the new version – no more than 12 months.

During this period, the judge, in the territorial jurisdiction of which the person remains in custody, at the re-quest of the prosecutor at least once every 2 months checks grounds for a person’s further detention or re-lease. If a judge receives a complaint from a foreigner who is detained or from his legal counsel, the judge is obliged to check the availability of grounds for release at least once a month.

Another innovation – a simpli-fied procedure for extradition from Ukraine. It is used in case of a writ-ten consent of the foreigner to ex-tradition, and if the application has been issued in the presence of his counsel and approved by the inves-tigating judge. With the simplified procedure there is no need to check whether there are obstacles to ex-tradition. If a foreign person in the request does not give consent to his extradition, then the usual proce-dure is applied.

A person with refugee status or who needs extra protection, or if he is already granted temporary pro-tection in Ukraine, cannot be sur-rendered to the State he fled from. Nor can it be granted to the State, where his health, life or freedom would be threatened on race, on the grounds of religion, ethnicity, na-tionality, membership of a partic-

CUSTOMS SAYS WELCOME... WELCOME – EUROPE!

CRIMINAL PROCEDURAL INTEGRATION INTO

The adoption of the new Customs Code will accelerate the creation of a free trade zone with the European Union

The new Criminal Procedure Code is tightly integrated into the international cooperation and provides broad protection rights to foreign nationals, at the same time simplifying the transfer of Ukrainian citizens to domestic law enforcement agencies

With respect to an alien, measure that does not involve retention in custody can be applied

From June 1 the new history in the «businesses – customs» relationship begins

The new Customs Code has laid amechanism of destruction for corruptionschemes

POLITICS/POWER

The procedure of customs clearance of goods is now closer to European standards

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THE KIEV TIMES | JUNE, 2012 13

ular social group or political views. Exception – when Ukraine has a co-operation agreement with the State requesting extradition. If such cir-cumstances do not exist, the Pros-ecutor General of Ukraine at the re-quest of a foreign state requests to conduct pre-trial investigation ac-cording to Ukrainian legislation. If there are no grounds for postpon-ing surrender to the foreign state, and the decision comes into force, the central organ of state power in Ukraine passes the execution of the surrender to the competent author-ities of Ukraine.

Also, this document provides that the transfer of a person from Ukraine takes place within 15 days of the established date for submis-sion. This period may be extended to 30 days. By the end of this term, the

person shall be released from cus-tody. If the competent authority of a foreign country for reasons beyond his control cannot accept such a per-son, the central body of Ukraine sets a new date of transfer. For profes-sionals it is clear that the new Code of Criminal Procedure substantially upgraded extradition.

Rights of foreign citizens in Ukraine extended

The new Criminal Procedure Code has several advantages over the cur-rent one, in particular Article 581. It provides for the rights of persons whose extradition is sought from the Ukrainian state. If the person, whose extradition is sought from Ukraine, does not speak the official language, the person has the right to use the services of an interpreter, to make

an application, to file petitions and speak in court in his language. For-eign citizens have the right to get a translation of the sentence and deci-sions of the central body of Ukraine in the language that was used dur-ing the trial.

While in custody in Ukraine, for-eign citizens can meet with repre-sentative of the diplomatic embassy or consulate of their country.

Quite interesting is the position of aliens who reside in Ukraine, but have committed an offense abroad and are wanted by a for-eign state. Law enforcement offi-cers who carry out the detention of such persons shall inform the pros-ecutor, in whose jurisdiction the de-tention takes place. They must also provide a copy of the arrest report with information about the mo-tives and reasons for detention. The prosecutor checks the legality of

detention and informs the prose-cutor of the territorial-administra-tive unit – the Autonomous Repub-lic of Crimea, region, cities of Kyiv or Sevastopol. The next higher au-thority prosecutors (the Crimea, re-gions, cities of Kyiv and Sevastopol) within 60 hours report on the deten-

tion of foreign citizens to the Prose-cutor General’s Office or the Minis-try of Justice of Ukraine, who in their turn inform the Ministry of Foreign Affairs and the competent authority of a foreign state within three days.

If, within 60 hours of detention a foreign national was not brought be-fore the investigating judge to con-sider an application for interim mea-sures or choosing extradition arrest, he has to be immediately released. Also when arrested in Ukraine, the alien shall be released, if there are circumstances in which extradition is not carried out.

The new Code of Criminal Proce-dure clearly states the position of the temporary arrest of a foreign cit-izen in the territory of Ukraine. He may be detained for a maximum of 40 days (unless, of course, another term is stipulated by the interna-tional treaties) before a request for

extradition granted. In case the re-quest is not granted within 40 days detainee must be released immedi-ately.

The investigating judge may choose with respect to a foreign cit-izen a softer precautionary measure than detention. But only if there are

circumstances that are guaranteed to prevent escape, and taking into account the age and health of the detainee, as well as the presence of family and dependents. Precaution-ary measures can be selected if the punishment threatens the health and life of the convicted person. Also if there is evidence that earlier, in the commitment of other crimes the precautionary measures were applied and were not violated.

In general, the new Code of Crim-inal Procedure is more advanced, compared with the current. The old Criminal Procedure Code was ad-opted during the Soviet era, and even the changes that were made in it sometimes failed to make it rel-evant to real life. The new Code in detail discloses many concepts, lists

rights and powers of the parties of the proceedings, which excludes the ambiguous interpretation of its provisions. Another advantage of the new Code over the old one is the introduction of the investigating judge. This judge is selected or ap-pointed by judge officials with qual-ifications necessary for the job.

According to some experts, the new Code of Criminal Procedure will cause a revolution in the criminal process in Ukraine. However, whether they are right or not, can only be told after its application. Only practice can show the advantages and disad-vantages of the new law.Anna Samoilenko, head of the lawyers association The National Law Chamber,specially for The Kiev Times

The less corruption in customs – the lower import prices

Oleg Sheiko, a financial analyst, one of the co-authors of the Customs Code

In general, the new Customs Code is aimed at creat-ing conditions for a civilized legal international trade. It involves the presumption of innocence of declarants that provides them and customs authorities with equal rights. The Code aims to unite all the procedural issues of customs in one document. Such codification is con-venient for the government as well as for entrepreneurs.

Progressive steps to improve the investment climate are the new rules of the Code, due to which damage to a company from wrongful acts of the employees of the customs authority during the check-up shall be compen-sated from the state budget.

The Code helps to reduce corruption component in the customs work. For example, the creation of «single window» and the use of electronic declaration and com-puter technology. In this way the direct contact between businessmen and customs officers has been eliminated. Treatment of violators will become lenient. Penalties are suggested to become the most unified, simple and pre-dictable – under the principle «prevention is better than punishment».

I anticipate that the new Code with the latest amend-ments coming into force will provide a significant in-crease in foreign economic activity of Ukraine and state

revenues, at the same time reducing smuggling and cor-ruption at the border. Less corrupt payments means we can expect lower prices for some imported consumer goods.

Customs officials receive better control, and business people receive more rights

Vitaly Khomutynnyk, MP from the Party of Regions, the head of the Verkhovna Rada Committee on Fi-nance, banking, tax and customs policy

Total, taking into account the proposals of the Presi-dent, Customs Code introduced 148 amendments. These amendments provide for the transfer of authority to is-sue orders of the regulatory nature from the State Cus-toms Service to the Ministry of Finance of Ukraine. This document also makes the procedure to determine the customs value of goods more transparent, at the same time extending declarants’ opportunities to assert their rights in disputes with customs authorities.

The new Customs Code is close to European and world standards, and provides significant simplification of customs control and customs clearance of goods. It’s coming into force will be in the interests of domestic and foreign businesses, as well as in the interests of the state.

The Cabinet of Ministers is developing a separate draft law, which will help to strengthen discipline among the customs officers. It will describe the proce-dure for compensation for damage caused to the per-son and his property by unlawful decisions, actions or inaction of customs authorities, organizations or offi-cials. Each inspector will be aware that damages caused by his illegal actions will be covered out of his pocket.

Customs officers, knowing that after June 1, they can-not manipulate the customs value of goods, rushed ahead to raise several times the rates of customs value and extended them, not only for consumer goods, but also for industrial machinery, construction machinery, and raw materials. In March 2012, new levels of customs value were established. As a result, the tax base of im-ported goods rose by 3.5 times the former amount, and sometimes up to 10 times compared to February 2012. In this regard, Customs has taken a firm position. And the availability of a comprehensive package of authen-tic documents on the import transaction does not guar-antee the entrepreneurs that the goods will be cleared at customs at the price actually paid.

There have been cases where the importer presented the original export declaration, all the necessary certif-icates, and original bank documents on the transfer of

currency, bills, certified not only by customs, but even the Ukrainian consulate abroad. Nothing worked – the customs value was still raised.

Once again, the cargo container traffic through the largest Ukrainian ports Odessa and Illichivsk fell sharply. Before the crisis in 2008 one port on average exported up to 800 containers per day. From the beginning of the cri-sis in the autumn of that same year until March 2012 –only half of that. From March 2012 – only 100-150 con-tainers per day. In the first days of the new procedures in determining the customs value, no more than 10 con-tainers per day were leaving each port! Only with the new Customs Code coming into force on 1 June, did the situation return to normal. More than 90% of goods are processed using the «first method», that is, the contract value. However, the image of Ukraine has been perma-nently damaged.

Back in October 2011, the government introduced a simplified procedure for preliminary documentary con-trol. It suggested that quarantine services transfer their powers to customs officers. Only now the customs of-ficials were not prepared to simplify the procedures of customs and other controls at the border. Because of this, in practice, if the simplification did happen, it did not happen everywhere. In some checkpoints ccustoms personnel could not cope with the new functions. Some customs officers at the border started to require entre-preneurs to have approval from regional quarantine au-thorities. Many customs points do not have the technical possibilities to transfer the necessary documents in elec-tronic form. Forwarders have had to travel to the border to deliver hard copies of certified documents. A similar profanation of reform happened with electronic decla-rations. This time it was the fault of the tax service. Due to the lack of coordination between different agencies, electronic declaration in Ukraine remains at the level of the «Stone Age». With fear, eentrepreneurs are moving to new standards of working with customs.

The whole effect of simplifying registration is offset by the serious costs to bring the customs electronic doc-ument in accordance with the requirements of other ap-propriate agencies. Institutions of the tax administra-

tion and banking divisions continue to require a certi-fied hard copy of cargo customs declarations from the subjects of foreign economic activities. But it exists only in electronic form! The procedure for certification of hard copy simply does not exist! At different customs points the procedure is different! And such a simple pro-cedure takes much more time than the actual customs clearance. There have been cases whenn it took a whole month for a customs declaration to be approved. Many customs points issue a certification of state customs declaration from the perspective of temporary standards that are set in the law at the citizens requests. It requires a formal request to the office, a visit by the customs head or his deputy, inspection of the declaration at the point, and much more.

Hopefully, after a while all these inconsistencies will be eliminated. Customs inspectors will undergo rre-fresher courses and will be prepared to work under the new Customs Code. At the moment, due to inability and unwillingness, some customs officers are actually sabo-taging many procedures of this document.

Classic example – the abolition of compulsory cer-tification of most imported goods. Recently, the list of

imported goods subject to mandatory certification has been significantly reduced. At the same time, when the description of the goods in the customs declaration is formally identical to their description in the List of goods not subject to certification, but its characteris-tics (technical, chemical composition, etc.) do not coin-cide with the one specified in the List, the customs offi-cers demanded an additional declaration of conformity. In other words, a document that would have confirmed that sugar is sugar, and a toy is a toy.

Since customs officers do not possess the knowledge and skills of experts on standardization, in practice it turned out that whether this was necessary or not, cus-toms officers sent the importer for the document, which would explain if the declared goods are subject to certifi-cation or not. As a result, there can be a situation where the list of goods is subject to mandatory certification has declined; but at the same time, another list of the same goods requiring the declaration of conformity has in-creased. So here is what is called a profanation of Ukrai-nian customs reforms.

One document, even if perfect, will not significantly change the situation, unless the consciousness of the officials change, and the new principles of work are im-plemented not only at customs, but in all related de-partments.Igor Lavrinenko, director of the analytical department of the All-Ukrainian Public Organization «Reform Club»,specially for The Kiev Times

INTERNATIONAL LAW

«HONEY IS SWEET BUT THE BEE STINGS»

OPINIONS

Ukrainian customs officers are torn between two fires: the requirement of the President to bring the customs system into line with European standards and the selfish desire to continue making money off of entrepreneurs. The result of this internal struggle was a sharp increase in pressure on businesses in anticipation of the new Code coming into force, as well as the sabotaging of many new procedures of the Customs Code

Due to the inability and unwillingness, customs officers sabotage the innovations

The new Criminal Procedure Code provides for rights of persons whose extradition is sought in Ukraine

POLITICS/POWER

The customs control will become easier for tourists

Alexander Landik’s extradition from Russia to Ukraine

Italian authorities did not extradite Arsen Avakov, the former governor of Kharkiv region of Ukraine

Ukrainian court has acquitted an Israeli surgeon Michael Zis, who was charged with illegal organ transplants

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THE KIEV TIMES | JUNE, 201214

«Who would ever guess that bien-nale would come

to Kiev? Yet it all seems true: with global stars’ works of art and works of the most fashionable and top-ical authors in the world. Here you will find the newest tendencies and trends of contemporary art – from mature Englishmen to exotic Asians. And the most interesting fact is that David Elliot is the curator himself».

This quiet exchange of views be-tween a Russian-speaking art critic from Berlin and a Kieviate artist from Prague, (where she moved to find work ten years ago) makes you believe that some wonderful and in-credible things have been happen-ing– and it is all right here!

On May, 23d the museum «Mys-tetskyi Arsenal» started the first Kiev biennale of contemporary art; ARSENALE 2012. It took organizers only eight months to prepare for AR-SENALE 2012. Usually preparation for such large scale exhibitions ev-ery two years requires 12 months or more. This leads to the assembly of installations partially without elec-tric lighting, belated presentations of video works, and getting custom clearance for separate exhibits liter-ally on the eve of the opening day. But still the global event has taken place. Its scope and success have stunned the most exacting experts of contemporary art. Even the worldly-wise artists and art critics couldn’t hide their amazement, because the level of the first Kiev biennale has been found to be unexpectedly high both by its artistic content and by the decoration of the exhibition itself.

«Biennale opening has attracted a large pool of foreign press and more than one and a half thousand guests. This is the audience, which determines the world art-tenden-cies. Many of the present curators and art critics have more than once lit the global stage. Perhaps, without such an important occasion as bien-nale (for the world cultural life) these people would never have come to Ukraine. But today Kiev is recognized as one of the cultural centers of the world», says Natalia Zabolotnaya, or-ganizer of ARSENALE 2012, the Gen-eral Director of «Mystetskyi Arsenal» in a talk with The Kiev Times.

Irrational enthusiasm plus 50% of state money

Events like ARSENALE 2012 are often called «Olympics» because of the analogy with the established reg-ularity and representation of partic-ipants from all over the world: from New Zealand and Hong Kong to Ka-zakhstan and Norway. In this case «sport parallel» is more obvious.

Kiev biennale wouldn’t take place if the Ukrainian state budget hadn’t assigned means for repair and recon-struction of «Mystetskyi Arsenal» in the preparation for EURO-2012. About 25 thousand square meters of renovated exhibition space have be-come one of the best exhibition sites in the world. This fact inspired Nata-lia Zabolotnaya, the General Direc-tor of the museum, to organize the contemporary art biennale. «Kiev bi-ennale demonstrates how the Ukrai-nian government has changed its at-titude to supporting modern art and how its importance for our country

is being reconsidered», said Zabo-lotnaya at the opening. She told how the leaders of the Ministry of Culture of Ukraine, the Kiev City State Ad-ministration, and the State Depart-ment of Administration have under-stood and, at last, were carried away by this ambitious project and ren-dered their support.

The State’s financial investment to biennale ARSENALE 2012 makes up half of the $5m. spent on orga-nizing the exhibition. In comparison, the cost of the fourth Moscow bien-nale in autumn 2011 cost more than $2 m. But budget of ARSENALE 2012

is considerably lower than organi-zational cost of the largest art-exhi-bition of 2012 dOCUMENTA (13) in German city of Kassel, which began June. However, this event takes place only once in five years. And the last one in 2007 required $25,7 m. half of which came from federal and lo-cal budgets.

In Ukraine such a large scale event at this high level became possible due to the synthesis of irrational en-thusiasm and charisma of the Direc-tor of «Mystetskyi Arsenal» Natalia Zabolotnaya. As the main organizer she managed with great effort to get a commitment from the Ukrainian authorities to conduct biennale in Kiev. It is seen as an additional mea-sure to add to the popularity of the EURO-2012 football championship.

The guarantees of state to finance

one half of ARSENALE 2012 also served as an argument that con-vinced that most venerable curator, David Elliot, to get down to the first Kiev biennale organization.

Healthy shock of Mister Elliot

David Elliot is one of the most suc-cessful curators of contemporary art. He was head of the Oxford museum for twenty years; found and led mu-seums of contemporary art in To-kyo, Stockholm and Istanbul; and has been the curator at the most in-novative exhibitions and museums.

His track record contains the man-agement of 17th biennale in Sydney, which from the moment of its es-tablishment in 1973 became one of the brightest art-events of today. In recent years, David Elliot has been working in the countries of South-east and Central Asia. Today he pas-sionately studies works of modern artists from exotic countries like Uz-bekistan and Mongolia. Elliot con-tinues to work on the creation of the modern art-center in Hong Kong.

A frantic rush during preparation of the first Kiev biennale brought an outstanding Englishman several

months of extreme pressure. Surely or the first time he has encountered such phenomenon like payment by certificate of the work performed. Owing to these rules 50% of Kiev bi-ennale financing, promised by the state, began to arrive after the exhi-bition opening and continue to ar-rive even now. Though, Elliot has never doubted the correctness of the decision he made.

After having signed the contract he left Kiev to visit other Ukrainian regions looking for works of modern Ukrainian artists for the exhibition, to absorb them into the Ukrainian art-space. According to his words, he experienced a healthy cultural shock. A shock, because Ukrainian artists almost never exhibit abroad, and when it happens, it is only un-der the guise of other countries’ gal-leries. They then have to create their works in an informational and cul-tural vacuum, and yet they are very relevant to the world art-scene.

«In Ukraine, in this «national ghetto», as I call it, David has found and introduced many young artists, whom he is going to exhibit at global exhibitions», says Natalia Zabo-lotnaya. «Besides, extreme rejuve-nates», noted Mister Elliot.

The majority of the Ukrainian art-ists are represented on ARSENALE 2012 in the art-festival’s parallel program. «Double game» is the larg-est project created by Ukrainian and Polish curators. Contrary to the con-fidential agreement, limiting num-ber of the local masters to such an international art-forums, Elliot con-siderably widened the representa-tion of the Ukrainian artists at the

Kiev biennale. Thus «Double game» has united works of 25 Ukrainian art-ists and 13 Polish ones.

«Even in the parallel program you feel like a part of large art-perfor-mance, which is taking place in Kiev and all over Ukraine», says young Ukrainian artist Alexandra Zhu-maylova-Dmitrovskaya to The Kiev Times. During three weeks Alexan-dra has been painting the walls of the Mystetskyi Arsenal Gallery. At the conclusion of biennale her work will be painted over to bring the gal-lery back to its original appearance. The act of creation and self-destruc-tion contains the sense of «contem-porary art» (modern art). «Life with all its bustle and unpredictability is a part of the modern art. This is what I wanted to show in my works», ex-plains Alexandra.

Wider and deeper than Venice

The basis of Kiev art-performance is the model of the oldest biennale in the world – the Venice biennale (which was established in 1895). The uniqueness is that expositions

are displayed not just in one exhi-bition complex, but are scattered all over the city. ARSENALE 2012 has gone further. Art-projects within the parallel program can be visited not only in different parts of Kiev, but in Kharkov, Odessa, Dnepropetrovsk and Kherson, where there are 45 in-stallations and expositions. The ma-jority of them are works of the Ukrai-nian artists.

«The best of times, the worst of times – rebirth and apocalypse in contemporary art» is the title of the Kiev biennale’s main project. It has

united 250 of the most topical works of contemporary art masters from 30 countries of the world. David Elliot has merged four topics: «Indefatiga-ble spirit» – a view to the means by which we derive strength from reli-gion, myths and notion of the Uni-verse; «In the name of order» – in-vestigation of how government un-der pretence of rationalism tries to dominate; and topics «Flash» and «Restless dream» – a premonition of unavoidable catastrophe. «David El-liot has merged diametrically oppo-site positions. He has presented the entire palette of contemporary art to let every visitor find something close and clear for himself», explains Elena Sadykova, the curator of Berlin

White Square Gallery. The British curator has brought to

Kiev many works of Asian artists. In many ways these are they who set the main tendencies and new direc-tions of contemporary art develop-ment. Special attention has to be paid to the exposition of The Chi-nese master Ai Waiwai «Circle of an-imals». At home the globally rec-ognized master of «contemporary

art» is under house arrest for polit-ical reasons. Equally impressive are the works of Japanese Yaoya Kusami entitled «Traces of eternity». Many

people will remember work of Hindu Jitish Kallat whose project was an installation based on the theme of a letter from Gandhi to Hitler.

ARSENALE 2014 – to be or not to be

Organizers estimate that around 300 thousand visitors will see the ex-positions of ARSENALE 2012 which runs until 31 June. Such numbers of guests is usual for the Venice bien-nale, the oldest in the world. But cost of entrance tickets to the main expo-sition in «Mystetskyi Arsenal» (50-70 Hr.) does not compensate for the cost of organizing the event. But contem-porary art biennales are never com-pensated. They are initially alien to any commercial undertakings which helps keep constant public interest in these kinds of events.

The question remains open: would the Ukrainian government agree to sponsor the next ARSENALE 2012 without having something like Euro 2012 at hand? Given the success of the first Kiev biennale, organiz-ers, art critics, and sponsors unani-mously talk about inevitability of the next biennale. «Apparently, since the first biennale has been organized in unprecedentedly short terms and in the result was an unexpectedly stun-ning success; the second, and all the more the third and the fourth bien-nale in Kiev are inevitable. Now we are witnesses to Kiev being estab-lished as one more international cul-tural «Mecca», Helga Printz the cura-tor of contemporary art museum of Martin-Gropius-Bau Berlin told the The Kiev Times.

Perhaps today’s contemporary art biennale ARSENALE 2012 shall re-main a one-time event. However it’s possible that international exhibi-tions in «Mystetskyi Arsenal» will be held in the future – even with one or two years’ delay. It’s clear that the first Kiev biennale has achieved its main task. «Biennale in Kiev Arsenal confirms the status of Ukraine as a country which values, supports and protects freedom and exposure of contemporary art», says the leading world curator and the most compe-tent contemporary art expert – Mis-ter David Elliot. Roman Bryl

East meets West

Helga Prignity-Poda, the curator of contemporary art museum Mar-tin-Gropius-Bau, Berlin

I admire the boldness and courage of the organizers: they have managed in such a short period of time to make this large scale event that meets the highest world standards. I did not ex-pect that there would the possibility

to create such an up-to-date exhibi-tion art-space in Ukraine.

Due to my work and family cir-cumstances I spend half of my life in Istanbul. I can say that the level of the Kiev biennale is much higher than that in Istanbul. Definitely AR-SENALE 2012 is a peculiar phenom-enon for the world exhibition art-movement.

Kiev is a striking city. Its cultural heritage is close to Byzantine art. This can be seen immediately in ar-chitecture, museums, and works of the Ukrainian artists. Here East meets Wets. I received added evi-dence that European culture was deeper and wider that it was previ-ously represented in Eastern Europe.

When I arrived, it was interesting to look at what our mass-media have been saying about Ukraine: the lack of democracy, political repressions... I did not see anything like this at all. No exacerbation, no pressure and re-sentment. I have already written my daughter that we have to make a trip to Kiev together.

Arts unites, but modern is impossible without old

Olivia Tsorn, the vice-president of the New museum of ancient and the most ancient history, Berlin

The building of «Mystetskyi Arse-nal» is really impressive. It is ironic that initially it has been build not for the museum, and this is good. From one side its halls are huge and mon-

umental; from the other side they are ascetic, modest and come to the background. Since contemporary art is strange, large and attracts atten-tion by its singularity, in these walls exhibits are revealed and the entire exhibition blossoms.

For me, as a specialist of ancient art, modern art is no less interest-ing than ancient Egyptian relics. There is no sense to separate the art to old with modern. Arts unites, but no modern art is possible with-out knowledge of the old. Today the popularity is growing for exhibitions, which combine historical artworks or classic pictorial artworks with sepa-rate works of modern artists. Or the entire exhibitions are integrated into regular expositions in the histori-cal museums and galleries of clas-sic pictorial art. Such investments of art nouveau into the classic allow the viewer to realize what art itself is.

Kiev is a fantastically beautiful city! This is truly the mother of the country, which is incomparable with many cities in the world.

Ideal curator is a cosmopol-itan

Elena Sadykova, the art historian, White Square Gallery, Berlin

We were looking for the modern curator who wasn’t up in the clouds, understood tradition and innovation, and who has worked not only in East-ern Europe. David Elliot has become the ideal candidacy. Kiev biennale has shown how the European cura-tor skillfully united absolutely differ-ent art-positions. Eastern Europe of the 70-80s and today.

David always is in search. This is the guarantee of the grandiose suc-cess of his projects. As for the pro-fessional sphere, David is very ex-acting to himself. Not considering himself a specialist of Ukrainian art, one of the most status curators in the world and recognized expert of contemporary art has found an ideal solution. Choosing works of Ukrainian artists David has accen-tuated the positions that were clear for him as for the representative of western culture and acceptable for the comprehension of a cosmopol-itan viewer. Thereby he has shown the world Ukrainian contemporary art in a favorable light.

KIEV MET THE LONG-EXPECTED «APOCALYPSE»The first biennale of contemporary art ARSENALE 2012 has provided Kiev with the status of one of the world’s cultural centers

OPINIONS

CULTURE/KIEV BIENNALE

Today, Asian artists dictate the major trends in contemporary art

The scope and success of the first Biennale in Kiev has stunned the most demanding connoisseurs of modern art

«Arsenale» area was one of the finest art venues in the world

Exposition of the world art star, Chinese artist Ai Weiwei «Circle of Animals»

Ukrainian artist Alexandra Zhumaylova-Dmitrovskaya painted the walls of Small Gallery for three weeks

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THE KIEV TIMES | JUNE, 2012 15

Natalia Zabolotnaya, AR-SENALE 2012 commis-sioner and the General

Director of «Mystetskyi Arsenal» in an exclusive interview for The Kiev Times has talked the efforts taken by Ukraine to achieve this great proj-ect; which was done in collabora-tion with legendary David Elliot; and with the President’s support for the grandiose art-future of Ukraine.

Natalia, how did you manage to convince David Elliot to become curator of the First Kiev bien-nale?

David Elliot is a great figure on the global level. He has many rega-lia and successful projects. I under-stood that as the main curator he would provide ARSENALE 2012 with half of its success. After our prop-osition David kept still for about a month. Then we invited him to Kiev to visit «Mystetskyi Arsenal». David was impressed by the expositional space, although it was still a build-ing site without floors and commu-nication systems. But David as a professional immediately evaluated all the benefits and gave his consent to be the curator of ARSENALE 2012.

What in the project was most im-portant for Mister Elliot?

That our state had confirmed to provide 50% of the financing. Be-cause the rule is that biennale’s in-ternational status is possible only with state support.

In addition, David had been ac-quainted with the Ukrainian post-Soviet art-scene already. He was curating the large art project «Af-ter the wall» with participation of Ukrainian artists («After the Wall» which took place in 1999 in Berlin, Munich, and Stockholm – editor.). I thought that the high artistic poten-tial of the Ukrainian biennale would be very important for him.

Did the government meet its en-gagements for ARSENALE 2012 financing and organization?

State boats sway very slowly. Fi-nancing arrived in pursuit of the opening of the project. We’re in a time-frame and need to operate without losses. We need to return owners their precious works repre-sented on biennale. This is a long and expensive procedure to send the works of artists to 30 countries around the world.

Did the President support the project personally?

Yes, he did! We have really felt the state support after the President’s corresponding order. After that we have been listened to and heard. Michael Kulinyak and Alexander Popov were the first to respond to the idea of the biennale project. The Minister of culture has taken interest in the possibility to repre-sent Ukrainian art within the frame-works of a high international format and to introduce something fresh into the Ukrainian cultural environ-ment. It was decisive for the Head of the Kiev City State Administra-tion that ARSENALE 2012 would be-come a large-scale art project of the capital with serious cultural domi-nance against the background of the EURO-2012 sports event.

Did you manage to attract private sponsors?

Sponsorship is the problem today in Ukraine. There is no systematic support of cultural and art projects. Alas! This sphere is out of rich peo-ple’s interests. The First Kiev bien-nale is conducted without general and official sponsors. That’s why it’s important to mention those who have first supported ARSE-NALE 2012 and given their helping hand. Igor Voronov is the largest (and practically the only) sponsor of

Ukrainian contemporary art. From his foundation he designated funds to start the organizational process that allowed the signing contracts with the curator, and the design company, and to promote the AR-SENALE brand in the global press. Also we’re very obliged to the Pe-ter Poroshenko Charity fund, which has helped us with the edition of the First Kiev biennale catalogue. Our catalogue is an art object in itself. The event shall pass, but this impor-tant and beautiful document shall be preserved in leading libraries, museums, galleries, and art-centers of the world!

Are you counting on the Second Kiev biennale being more readily supported by sponsors?

I hope so. The organizational pro-cess of the first biennale was full of holes. However ARSENALE 2012 really is an historical event for the country. Great is always seen from a distance. Now we are being dis-cussed around the world. I’m sure that the government and represen-tatives of large business shall eval-uate the cogency of this project for their personal image and the Ukrai-nian image as a whole.

Ideally next time it shall be pos-sible to attract many more inter-ested people and organizations to biennale. By that time, hopefully, the state shall simplify the financ-ing procedure.

How did you manage to organize such scale event in just 8 months?

I admit that an extremely short timetable was the main trouble for us. In (other parts of the) world the practical organization of a biennale usually takes two years. (Smiling)

The project is sophisticated in it-self. Imagine conducting negotia-tions with artists – 100 stars of the global art-scene from 30 countries;

then insurance, transportation, lo-gistics, technical support, and much more. We concluded about 400 con-tracts in two months. That’s why it is a double pleasure that ARSENALE 2012 received so high a rating from specialists in different countries.

David Elliot said: «Natalia, how can this be possible in such a short period»?

Yes! Even David wanted to post-pone the opening. Because three weeks before the cherished date only a part of the exhibits had ar-rived in Kiev. But guests from vari-ous countries had already been in-vited; the foreign mass-media had received four thousand press re-leases from us. The main thing is that ARSENALE 2012 had been entered into the calendar of the world’s art-events for the year. Al-most simultaneously with the Kiev biennale there was Documenta13 in Kassel Germany, Manifesta in Genk Belgium, as well as the Bucharest and Berlin biennales. It was too late to back off. We could do nothing else but to make the impossible-possi-ble.

David has remained satisfied with the results in spite of the extreme conditions during the preparation period. He has fallen extremely in love with his brainchild and after the opening he was wandering over the halls and taking pictures.

What does «Mystetskyi Arsenal» expect after the First Ukrainian biennale completion?

We have great plans for the fu-ture. The first task for us and the state is to complete the reconstruc-tion of «Mystetskyi Arsenal» – the largest Ukrainian museum project. Since biennale has made it well-known in the world, we cannot put it aside any longer.

ARSENALE 2012 has been at-

tended by the heads of the most famous museums of Paris, Berlin, Florence, London, and New York. Now we’re negotiating with them concerning the possibility to orga-nize exhibitions of the world’s art masterpieces in Kiev in 2015-2020. For that «Mystetskyi Arsenal» has to correspond with international stan-dards regarding expositions and the preservation of works of art.

What is Natalia Zabolotnaya dreaming about?

My cherished dream is to open a renovated «Mystetskyi Arsenal» with an exhibition of the world fa-mous artist Kazimir Malevich. The last and the only exhibition of Male-vich took place in 1929. Many of our contemporaries do not even know that he was born in our city. We are going to fix this.

I also believe that the largest mu-seum complex in Eastern Europe «Mystetskyi Arsenal» shall soon be-come boasted of by every Ukrainian.Interviewed by Roman Bryl

ARSENALE 2012: MISSION POSSIBLE The first Kiev biennale of contemporary art has accomplished its mission. For the first time Ukraine has extensively represented its art to the world; Kiev has been acknowledged as one the world cultural centers. The result: – a culmination of a professional team’s huge work – ARSENALE 2012 – has taken its place

CULTURE/KIEV BIENNALE/ART

Summer 2012 in the minds of the Europeans is associated with the EURO 2012.

The media is filled with informa-tion about the football forum, and even politics has gone to the back-burner.

But life goes on. And there are other sports, life in towns and cities, the problems of aviation, local wars in the east, the political intrigues of

the powerful... Praise God, life has music.

One would want more music, but there is never enough of it. Radio in the car, mobile phone, bar. Different music sounds everywhere, but in re-cent years in the most unexpected places, one can hear music, that can be classified as jazz. Very often in various places around the world one can hear sensual music played

by one of the best trumpeters in the world, an amazing songwriter and charismatic actor, Chris Botti.

His concert was recently held in Kiev – a city that has fallen into a deep love with Chris Botti.

Chris Botti has arrived in Ukraine at the invitation of Alexander Seryy, president of the Jazz Festival DoDj.

Long before the beginning of the show outside the capital’s concert hall, fans were looking for available tickets.

The hall hosted a most diverse audience: jazz school students and bankers, pop diva and the U.S. am-bassador to Ukraine, popular show-men, and picturesque group of Ger-man Ukrainians who came specially from Berlin to the concert of Chris Botti. The concert was honored by the presence of the deputies, lead-ers of the Kiev region and influen-tial German politicians.

The show began in a crowded hall. Impeccably elegant, Chris Botti ap-peared on the stage after a brief an-nouncement, and the audience liter-ally drowned him in applause. Out of the 14 pieces that were performed, the most part were of a lyrical nature.

However, there were funky tunes, and even an instrumental rock bal-lad. Chris Botti conducted the con-cert himself, announcing musicians of his star band and special guests.

The first special guest was the

Ukrainian violinist Assia Ahhat. Chris Botti talked about the joint concerts performed with Assia in October and December 2011on the west coast of the United States and how Assia Ahhat has become a part

of his team. Assia Ahhat and Chris Botti performed several lyrical pieces from the new program. Chris Botti gave Assia Ahhat white roses from the son of a violinist, who was sit-ting with his father and Assia’s hus-band Igor Balenko in the first row.

Another special guest was Lisa Fisher, owner of a fantastic voice, a favorite singer of the Rolling Stones leader Mick Jagger. The very first song performed by Lisa Fischer caused a strong reaction of the hall. Vocalists of such a class are a rarity not only in Ukraine but also in the world.

The culmination of the con-cert was a song preformed by Chris Botti, Assia Ahhat, Lisa Fisher, and the band was. The ending of almost a two-hour concert was graced with a solo, while the audience held its breath, enjoying the music of the great musician.

Appearing on the stage again, Chris Botti read from a note in Rus-sian: «I’ll be back!» – And stood long on stage, bowing gratefully.Kiev will be waiting for you, charming and delightful Chris Botti!

CHARMING AND DELIGHTFULChris Botti is one of the best trumpeters in the world, an amazing songwriter, and charismatic actor. He has recently given a concert in Kiev – a city that has fallen into a deep in love with Chris Botti. He flew to Ukraine at the invitation of Alexander Seryy, president of the Jazz Festival DoDj

Chris Botti is winner of the «Grammy Awards», an American trumpeter, composer, best-selling U.S.

musician, owner of a unique sound, who began his career as a musician of Sting's band

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THE KIEV TIMES | JUNE, 201216

Ostap Stupka – is an actor, whose work in theater and cinema is equally signifi-

cant, which is rare. People’s Artist of Ukraine, the star of the Ivan Franko National Academic Drama The-atre, which is headed by his father, prominent actor Bohdan Stupka, Ostap has played over thirty inter-esting and diverse roles in the the-ater: Gogol’s Khlestakov, poetic Lu-kash from «Lіsova Pisnya». His film-ography counts about 20 films start-ing from 1985.

But the real fame to Ostap Stupka was brought by his latest roles in the sensational Russian films «We’re from the future – 2» and «Match».

Ukrainian elite perceived these films ambiguously. Ministry of Cul-ture did not recommend the release of «We’re from the future – 2» in Ukraine, attributing to it «provoc-ative content and appeal to ethnic hatred». Remember, Ostap Stupka played the role of the commander of the UPA (Ukrainian insurgent army) in the film.

Then there was the second no-torious Russian historical picture Match» about a football match in the summer of 1942 in occupied Kiev, where the main role was per-formed by Sergey Bezrukov. This film has caused an even greater res-onance and alarmed the Ukrainian audience. In the media there were calls by politicians and the national-minded Ukrainians to ban the film. In «Match», Ostap Stupka played the role of policeman Dashchenya, a tragicomic Ukrainian.

Ostap Stupka told The Kiev Times about how he assesses his outra-geous characters, his attitude to the ideology and historical truth in cin-ema, about spending millions on Ukrainian blockbusters, as well as about Kobzar.

- Ostap, the main question, of course, is about the films «Match» and «We’re from the future – 2». Did you deliberately agree to these roles?

- Every nation has its negative and positive sides. I don’t intentionally expose any- I just do my acting work, and try to convincingly show the character of my hero. And, it seems, I do it well. Here actors do not choose the roles. You can choose when you are offered not five, by one hundred and fifty scripts.

- The part of goalkeeper Ranevich in the «Match» was performed by Bezrukov. Who of Ukrainian ac-tors do you think would manage to play this role better, simply be-cause of a better understanding of the nature of a Kievan?

- In Ukraine today, no one is en-gaged in promotion and support of our actors. Only in unison there are loud shouts that «Moskali» (Musco-vites) shoot ideological movies about us. And what do they do for the de-velopment of Ukrainian cinema? Nothing. There is only joint produc-tion, and even so, as a rule, spon-sored by the Russians. So there is no reason to resent that the films are

not the right ones and Russians play Kievans.

Where is our Ukrainian historical film? Let say about the same UPA? And what a rich historical material on hand! You know, those who fall into aggression or hysteria after the preview of a Russian film about our country, are no more patriotic than I am. Let them do at least something in the cinema first.

When there were plans to shoot «Taras Bulba» in Ukraine, the plan was to invite Gerard Depardieu for the leading role! And these plans never happened. And the Russians have started and shot.

Each nation has its «bad guys». Let the Russians show negative Ukraini-ans. Why don’t we make our version about us being white and fluffy! Who prevents us from doing it?

- Do you like playing negative characters? Are they closer to you; are they easier to play, or the op-posite?

- They are more difficult to play – and therefore more interesting. The goodies are straight and, as a mate-rial for the actor’s work, somewhat simple. I want the intrigue, anguish, drama. For an actor it is important for the character to require a com-plete transformation. For being in

reality a different man, get into the skin of the opposite character and play convincingly. And if it is fol-lowed with the cry «sold to the Mos-kali!», then it was performed well! Especially since the yells come from a handful of people. They are less in number than thoughtful and creative people. My attitude to homeland and people did not get worse after these roles.

- As a viewer, do you enjoy these films?

- It is obvious that they are not masterpieces. Still in the movie «We’re from the future – 2». I have a great episode. I am an actor and ide-ological moments do not bother me. Speaking about «Match» I have a lot of questions. At the premiere in Mos-cow I was angry – my role was greatly edited. Deshchenya – is a collective image of the average inhabitant of Kiev during Nazi occupation. The material filmed was enough three hours and twenty minutes. Then it becomes clear what kind of person it is. In the full version Nazis drag him to the execution in the final.

I am looking forward to the release of the full four-part version of the film. Hopefully, the Ukrainian audi-ence will soon be able to see the pic-ture, for example, on Inter (a televi-sion channel).

- In your opinion, why is Ukrai-nian cinema not developing?

- The fact is, rich people are not ready to invest in a movie. No one in Ukraine believes either businesses or government, that the movie can

be a successful business. We don’t even have a production school. Af-ter all, there is a separate profession – finding funding for projects. There is another separate profession- mak-ing films, and then there is directing, acting, and so on. In Ukraine, these professions do not cross – hence

there’s no cinema.I am convinced that we need pri-

vate investment. How much can the state give- ten, twenty million grivna at the most? That’s not sufficient to produce a large scale film. Can you just imagine how one could make the film Aeneid by Kotlyarevsky. With the flying gods, battles over the Med-iterranean. Three-hour blockbuster! We possess rich historical and cul-tural material: Zaporozhian Cos-sacks, Baturin, the Carpathians. In folk mysticism alone we can shoot a full series. But this would require hundreds of millions and not in lo-cal currency.

- Do you think the school of social realism, from which Ukrainian cinema evolved, is completely los-ing its relevance?

- Our cinema school is lost. Look at what is going on at Dovzhenko Film Studio: the biggest studio prem-ises in Europe are leased to little firms. In Soviet times, being a stu-dent, I witnessed movie shooting in Dovzhenko. Behind each door there was a group working on the film. And no one taught the language of the voicing. Back then, the movies were voiced in Russian and Ukrai-nian. Now Dovzhenko Film Studio has passed away. Without the slight-est prospect of revival. So much for patriotism.

- Maybe the revival of Ukrainian cinema has to start with author (art) cinema? Works of many of our talented filmmakers win at international festivals.

- We all make author films, be-cause there is no financing for any other type. The author cinema can not strengthen the patriotic spirit. Its only viewers are visitors of pre-miere and festival screenings. It is necessary to make commercial films that would raise finance. Yet another task is to accustom audience to this kind of cinema.

- Cinema – it’s artfully edited good story. In the preparation stage is a film about the last days of Taras Shevchenko in Kazakhstan. There will be chases, shooting, love, fire, fighting, dueling, and gauntlets. This film will be expensive, but it will be interesting to the viewer. It will also be co-production. Kazakhstan has

already agreed to cooperate, so we are now looking for funding. Rus-sia and Poland might join, as there are roles of Russian officers, and the Poles – the poet’s friends.

- A blockbuster about Kobzar with Ostap Stupka playing the main character?

- Yes, I’ll play Shevchenko. So I don’t play only «bad guys» but also national heroes. That’s what I was trained to do, to play different char-acters.

- Was the script was written spe-cially for you?

- Yes. The director Aleksandr Denisenko immediately gave me the main character. He has had this idea of me playing Taras for three or four years.

- Have you ever thought of making a movie? Would you like to try the role of the director?

- If I had three hundred million dollars, I would have found a director and said that I am ready to play in a certain movie. Directing – is a differ-ent profession. I am an actor and do not understand how to make a shot

or how to put together the ideas that flash in me. The theater is much eas-ier. Here millions are not needed – you can simply meet with the direc-tor and stage a play.

Robert Sturua (Georgian theater director, who in 2003 staged the tragedy of Oedipus the King at the Franko National Academic Theater – Ed.), while rehearsing «Oedipus the King», told the legend how the direc-tor profession was born. In ancient Greece, when acting was first begin-ning, there was nobody who could look from the side and say what is good and what is not. Then the ac-tors chose the most untalented ac-tor, seated him in the hall and said, look and comment. I really liked it.

- Working in theater and cinema, what is more important?

- I like to combine work in theater, cinema and on television. Although perhaps I’m more of a theater actor. But I love a good transformation in a movie: it’s more complicated than in the theater. On stage, the role is be-ing played from start to finish, and you go to climax at the finale. And in movies, you can start shooting from the last scene. Then you sit and pon-der how to play the first scene, which will be filmed at the end of the whole shooting period. In movies, the in-tegrity of the hero is hard to convey.

- Do the performed roles affect your character, your destiny?

- The role should be easy to en-ter and exit. I’ve played Smerdya-kov (based on Dostoevsky’s novel «The Brothers Karamazov» – Ed.), so should I hang myself after the play? There are actors who shake after the curtain drops. I try not to extrapolate the experience of the negative emo-tions of my heroes onto myself or others. This is the art of acting: tech-niques, multiplied by your emotions, your soul and imagination. Each art-ist must have a secret transforma-

tion button: turn it on, play, bow – and turn it off.

- How is your professional rela-tionship with your father? Has Bo-hdan Stupka encouraged your act-ing career, sought continuity?

- The idea of becoming an actor came to me sometime in the seventh grade. I skipped classes to teach the monologues. Father did not know anything. I wanted to achieve some-thing on my own. When he acciden-tally learned from a colleague that I was entering the theater institute (in 1988. O.S. entered the Kiev State Karpenko – Kary Institute of Theat-rical Art- Ed.), he asked me to read the program at home for him. I re-fused, explaining that the selection committee has enough listeners. The first time my father saw me on stage was at the winter session. My friend and I played joyful and sad monkeys. I played the sad one, and brought my father to tears. He was laughing so much that he almost fell from his seat. Later he said: «I never thought that you could do this».

In general, he is very laconic – «well done» or «not well done». But that’s enough to understand. I just do the same.

- Has your son secretly started act-ing as well?

- No, Dima is different – he talks a lot about the work. Already in the fifth grade, his grandfather moved him from the secondary school into a children’s art academy. Then there were the Theatrical Institute and the Institute of Culture. Dima al-ways asks, consults, and performs for me and his grandfather: behold and wonder. He can discuss the script, Where I grew silent, kept everything inside and did everything quietly.

- You slowly but steadily pursued your goal?

- I still keep pursuing my high goal. And walk with confidence... But that’s another topic.Interviewed by Petr Kukhovsky

OSTAP STUPKA: PATRIOTISM – IT’S SPENDING MILLIONS ON A UKRAINIAN BLOCKBUSTER!

The negative characters are complicated, and therefore more interesting for me

My father is very laconic – «well done» or «not well done». Just like that

CULTURE/CINEMA

Bohdan Stupka is laconic in his son’s work assessment

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