Yalta is a resort town in Crimea, on the Black Sea, which is best known as the setting for the Yalta Conference in 1945 where Churchill, Roosevelt and Stalin carved up post-war Europe. The conference was held at the Livadia Palace, former summer residence of the Romanovs; now a tourist attraction that competes with the equally palatial ‘dacha’ of Ukraine’s president Viktor Yanukovych, For the past ten years, Livadia has been the venue for the annual meeting of the Yalta European Strategy (it shortens nicely to YES), the brainchild of one of Ukraine’s wealthiest oligrachs, Viktor Pinchuk. Forbes List puts Pinchuk’s fortune at $3.8 billion; he is also married to the daughter of ex-president Leonid Kuchma, whose ten-year rule was brought to an end in 2004 by the uprising against corruption and election fraud that has become known as the Orange Revolution.
Viktor Pinchuk greeting Tony Blair and Bill Clinton. Past YES attendees have included: Recep Tayyip Erdogan, Gerhard Schroeder, Kofi Annan, Joschka Fischer, Condoleeza Rice, Dominique Strauss-Kahn, Richard Branson and Newt Gingrich. Photo: yes-ukraine.org
The Yalta European Strategy, founded in 2004 ostensibly as an international non-governmental organisation promoting closer ties between Ukraine and the EU, was intended to help launder the image of the president and his family in western eyes. Kuchma, after all, is suspected of ordering the kidnap and murder of journalist Georgy Gongadze in 2000; and Pinchuk acquired key industrial plants for a pittance when they were privatised. These sins could have damaged the ‘First Family’s’ prospects, so Pinchuk has re-invented himself as a philanthropist and euro-integrator.
The Yalta European Strategy… was intended to help launder the image of the president and his family in western eyes
The strategy has worked, and in ten years the YES meetings have become the major platform for discussion of Ukraine’s role in the world. Among the hundreds of guests this year was YES man, former British PM Tony Blair, a frequent visitor of the Pinchuks – last year he gave a lecture in the parliamentary constituency where a nominee of Pinchuk’s was a candidate. At the heart of this friendship is undoubtedly money: over the last two years Pinchuk has donated a million dollars to Blair’s Faith Foundation. Admittedly, this was only half of what he gave to Bill Clinton’s Global Initiative, but then for that money he got Hillary coming to stay as well.
Blair is not the only British politician who is a YES man. One of the guests at last year’s YES meeting was another ex-PM, Gordon Brown; and Stephen Byers, a former minister in the Blair government, (and one of the MPs implicated in the 2010 lobbying scandal) was Chairman of the YES board for a time. In fact, Pinchuk has many connections with the UK: earlier this year he filed a suit at the High Court in London against fellow oligarch Ihor Kolomoisky; among his friends are Elton John and Paul McCartney. He is newsworthy: five years ago people in Britain were shocked by the news that he had paid £80 million for a house in London, a world record price at the time. He has an impressive art collection, assembled with the help of close pal Jay Jopling: there is a sculpture by Antony Gormley at the entrance to his London pad; and works by Damien Hirst, one of which was on show at this year’s Yalta meeting, along with an installation by another British artist, Harland Miller.
The Tymoshenko problem
Pinchuk’s political activity has recently taken an unexpected turn: he is being forced, against his will, to come to the aid of his worst enemy, Yulia Tymoshenko. Back in the mid 90s, Pinchuk, rather unwillingly, became Tymoshenko’s business partner at the bidding of then Prime Minister Pavlo Lazarenko, who served an eight-year sentence in an American prison for money laundering. The partnership lasted less than a year, however, and they have been at loggerheads ever since. In 2001, Tymoshenko was held under arrest for a month and a half, at the order, she believes, of the Kuchma-Pinchuk family.
As Prime Minister, post-Orange Revolution, Tymoshenko’s first step was to order an examination of how Pinchuk had acquired his businesses
As Prime Minister, post-Orange Revolution, Tymoshenko’s first step was to order an examination of how Pinchuk had acquired his businesses; and he thereupon lost the country’s largest steel manufacturer, ‘Krivorozhstal,’ which was bought by another London resident, Lakshmi Mittal). Tymoshenko also tried, though unsuccessfully, to seize control of another industrial complex belonging to Pinchuk, which brought conflict within the ruling coalition to a head, and led to her dismissal by president Yushchenko in 2005. Pinchuk is also a media magnate, and over the years his TV channels and newspapers have lost no opportunity to snipe at Tymoshenko, but after her arrest in 2011 the unthinkable happened – Pinchuk’s political activities, both at Yalta and at the World Economic Forum in Davos, were suddenly focused on obtaining her release from prison.
Pinchuk has been hoisted by his own petard because the EU has made the signing of an Association Agreement with Ukraine conditional on her freedom. This historic ceremony is scheduled to take place at the EU Eastern Partnership Summit in Vilnius on 28-29th November; and the Yalta meeting this year was the last chance for the European establishment to convince Yanukovych not to pass up this historic political moment for his country. Hence the attendance in Yalta of both Stefan Füle, European Commissioner for Enlargement and European Neighbourhood Policy; and Dalia Grybauskaitė, president of Lithuania, the current holder of the EU presidency.
The lesser of two monsters
President Yanukovych was also a YES man this year; and he himself is going through some unexpected re-inventions. He was elected president on a pro-Russian ticket, and lost no time in suppressing democracy and bringing Moscow-style order to Ukraine, as well as boosting the legal status of the Russian language in his country. Russia, however, overdid its pressure on Yanukovych, when its fuel giant Gazprom refused to change the unfavourable gas supply contract he inherited from Tymoshenko; and when the Kremlin tried to bully Ukraine into joining its Customs Union, minutes after talks had stalled with the EU over the Association Agreement.
Yanukovych has been accused of using money earmarked for Euro 2012 to help fund his many residencies in Ukraine. Photo (c) Ukrainska pravda
In his YES speech at Yalta, Yanukovych said that ‘Ukraine is squeezed between two large monsters, the EU and Russia. We are made aware of this every day.’ But in the end, forced to choose, he has decided to go with the Euro-monster. In the middle of September, at a meeting with the ruling Party of Regions (which is pro-Russian), he nevertheless persuaded them to embrace integration with Europe. His political allies are now in unanimous support of legislation that will enable the signing of the Association Agreement, while his opponents have been dealt with in his usual authoritarian manner: a Communist proposal for a referendum was thrown out by a court loyal to the president; and Igor Markov, an MP from the pro-Russia Rodina [Motherland] Party was excluded from parliament when the police suddenly discovered voting irregularities in his constituency (a year after the elections). Opposition parties in parliament have also supported the new legislation. Arseny Yatseniuk, Yulia Tymoshenko’s successor as leader of the ‘Fatherland’ Party, the second largest in parliament, announced in Yalta that he and Yanukovych have concluded the ‘temporary truce’ needed for the signing of the EU agreement.
In his speech at Yalta Yanukovych said that ‘Ukraine is squeezed between two large monsters, the EU and Russia.
All well and good, except that there is still no solution to the Tymoshenko problem. At Yalta two years ago, Yanukovych promised to amend Ukraine’s law so as to de-criminalise abuse of power, her alleged offence. But this has not happened, despite the West’s continuing insistence on her release and exoneration. A European parliamentary observation mission consisting of ex-Polish President Aleksander Kwasniewski (who, conveniently, is also now Chair of YES’s board) and ex-European Parliament President Pat Cox, has been working since 2012 to find a compromise, and has proposed that the ex-PM, who has a debilitating spinal problem, be sent to Germany for treatment, an initiative supported by Chancellor Angela Merkel. Speaking last week, Kwasniewski hoped that Tymoshenko would herself be a speaker at the 2014 YES conference….
Whether deliberately or not, Kwasniewski has brought all Yanukovych’s fears to the surface. The Ukrainian president is less interested in keeping Tymoshenko in jail than in keeping her out of Ukrainian politics. The only reason she is not in a Berlin clinic today is that there is no formula to guarantee her exit from the political stage. She has not convicted of any crime in Germany, so there is nothing to stop her being politically active there, giving interviews and meeting her political allies. Moreover, after her treatment is finished she may want to return to Ukraine before the 2015 presidential election. What could Yanukovych do then? To arrest her again would be to give the opposition the upper hand in the election campaign.
The Ukrainian president is less interested in keeping Tymoshenko in jail than in keeping her out of Ukrainian politics
Sources close to the president say that he already gave Tymoshenko the chance to leave the country and avoid prison. In March 2011, her travel ban was lifted to allow her to visit Brussels for the summit of the European People’s Party, the major European political party of the centre-right; she still returned to Ukraine to face arrest and trial.
LilliPutin v. Yanukovych
If Viktor Yanukovych and Yulia Tymoshenko were previously in a one to one face-off, a third party has now entered the game – Vladimir Putin in Moscow. Since August, the Kremlin has been waging an open trade war with Ukraine, trying to dissuade Kiev from signing the free trade zone clause that forms part of the EU Association Agreement. As a result, Ukrainian goods have been left to pile up at its border with Russia for weeks, and chocolates made by its ‘Roshen’ company have been officially declared unfit for consumption in Russia, just as Georgian wines and Borzhomi mineral water were outlawed in their time. This blackmailing strategy has backfired: at his pro-Europe meeting with the Party of Regions, the nearly two-metre tall giant Yanukovych, who as a young man served two prison sentences for assault, described the trade sanctions as a humiliation, and made it clear he was not going to be ordered about by the diminutive LilliPutin.
The Russian government ignored last week’s YES meeting – even its ambassador stayed away. However, there was a token Russian presence in the form of Sergei Glazyev, a Putin adviser on Customs Union issues, who, while more or less admitting that the anti-EU campaign in Ukraine was sponsored by Russia, didn’t mince his words as he forecast ‘political and social unrest’ for Ukraine. ‘The living standard will decline dramatically … there will be chaos.’ Glazyev also accused Ukraine’s rulers of putting pressure on its MPs: ‘If you are sure that there is support for an association with the EU, then why threaten the MPs who want to take it to the Constitutional Court?’ he asked; rich, coming from an envoy of Putin, who killed off parliamentary government in Russia. Needless to say, the other YES delegates were not impressed. Indeed, as he left Yalta, Yanukovych might well have thanked the Kremlin for helping him wriggle out of a seemingly disastrous situation. In his years in power, Ukraine’s president has managed to completely ruin his reputation: his European colleagues boycotted his presidential summit and the Euro-2012 football championship; and US president Barack Obama confined his contact with Yanukovych to strictly formal handshakes.
Thanks to Moscow, albeit not as they had planned, Yanukovych has been given a new lease on political life; he has the chance to reconnect with the West, almost with a clean slate. What this will do to his chances in the 2015 election is another matter: sign an Association Agreement, and he has to free Yulia Tymoshenko; free her, and he might find that he has released the genie out of the bottle; and, as we all know, you cannot squeeze the toothpaste back into the tube after you have squeezed it out.
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