Blue &Yellow: Politics and Economics in Ukraine

Of these six political forces only Batkivshchina, if led by Tymoshenko, would be the real opposition in parliament. The US and EU demand not to imprison Tymoshenko and permit her to stand in elections therefore upsets the authorities plans for a managed democracy. Nevertheless, the authorities have a card up their sleeves against parties who attempt to be a real opposition by pressuring big business to not provide financial support (all Ukrainian parties are supported by big business). Batkivshchina, Kyiv insiders have told Jamestown, are in dire financial straits after big business deserted them.

 Taras Kuzio in the latest Eurasia Daily Monitor (Volume 8, Issue 175, sorry no link) on the Rada elections. For those wondering why the former prime minister is on trial, this helps explain it. Keeping her tied up legally will make it easier to maintain political control in Ukraine for the current president. Below Kuzio looks at the parties most likely to enter the next Rada.

Plans for parliament aim to ensure it is compliant and acts as a rubber stamp. Of the five political parties that are likely to enter parliament only one – Tymoshenko’s Batkivshchina (Fatherland) – will not be under their control:
1. Party of Regions and the Communist Party are traditional allies drawing on the same group of voters and regions.
2. Deputy Prime Minister Sergei Tigipko’s Silna Ukrayina (Strong Ukraine) party will merge with the Party of Regions. Tigipko came third with 13 percent in the 2010 elections, drawing on middle class young Ukrainians.
3. Front for Change, led by Arseniy Yatsenyuk, is in negotiations with Donetsk oligarch Rinat Akhmetov for a $140 million election war chest in return for 30 percent to 50 percent of the seats (Ukrayinska Pravda, September 2). Inside sources in Kyiv told Jamestown that Presidential Administration head Serhiy Levochkin and Akhmetov are in competition for Front for Change which will occupy Yushchenko’s Our Ukraine “constructive opposition” niche (Ukrayinska Pravda, July 19, 21, September 6, 22).
4. Batkivshchina will receive fewer seats than in 2007, when it obtained 31 percent, under a mixed election system. In the 2010 local elections Batkivshchina was obstructed from participating in two of its strongholds, Kyiv and Lviv. With Tymoshenko in jail, the authorities had planned to install Batkivshchina Luhansk deputy Natalia Korolevska as its new leader. Batkivshchina, like Front for Change, would have thereby been co-opted.
5. Svoboda (Freedom) nationalist party may enter parliament, if the threshold is not raised from 3 percent to 5 percent. There have long been rumors that Svoboda receives financing from the Party of Regions (see critical March and May reports by pro-Yanukovych American Institute Ukraine atwww.aminuk.org).

Some analysts have suggested that the real reason for the Tymoshenko trial and arrest is the price of gas. If the 2009 accords, in which Ukraine agreed to pay $450 for 1,000 cubic meters of gas for a 10-year period are declared illegal by a court, Ukraine might be in a position to renegotiate a more advantageous deal with Russia. Yanukovych desperately wants cheaper gas from the Russians. He has made several overtures to Moscow hoping to drive the price down, among them prolonging the Russia Black Sea Fleet base in Sevastopol for 25 years. While this got him a price reduction, the Kremlin has been unwilling to renegotiate the basic terms of the gas agreement.

 From Radio Free Europe, the trial of Yulia Tymoshenko continues along with the sideshow. So in order to get cheaper gas Yanukovych goes after is biggest opponent? The Economist presents other explanations for her prosecution.

One theory is that his government wants to test Europe's resolve on Ukraine, to see how far they can tilt towards authoritarianism before the so-called Deep and Comprehensive Free Trade Agreement, due to be signed later this year or early next, comes under threat.
An alternative view is that one of Mr Yanukovich's wealthy backers is insisting on Ms Tymoshenko's punishment. Some have mentioned Dmytro Firtash, co-owner of RosUkrEnergo, the intermediary company that Ms Tymoshenko cut out of gas dealings with Russia. There is no direct evidence for this, however.
Or perhaps it is simply about personal animosity. "At first they didn't arrest her because they knew [it] would have bad international implications", notes Volodymyr Fesenko, head of the Penta Center For Applied Political Studies, a think-tank. "But then it seems they just got too annoyed by the way she was behaving in court." Ms Tymoshenko was taken into custody on August 5th, six weeks into her trial.

"Only political motives could have played a role here," said Yushchenko, who was greeted by angry chants from Tymoshenko's supporters in the courtroom. "National interests were traded for political considerations."Yushchenko suggested that Tymoshenko, who was then preparing to run in the 2010 presidential elections, wanted to be seen as a "saviour" who ended a bitter pricing dispute with Moscow. The dispute led to Russia halting supplies to Ukraine, which caused shortages for customers across Europe.He also claimed Tymoshenko ignored Ukrainian interests for the sake of special relations with Russian leaders, saying: "Russia had to have a pliant pro-Russian leader

Via The Guardian, former President Yushchenko testifies against Yulia Tymoshenko. While they were both on the "Orange" side, the two constantly feuded for years. As noted in a previous post about the 2010  presidential election Yushchenko had already shifted his support to Yanukovych prior to the second round of the election. The same Yanukovych who signed that Crimean base deal lease with Russia after becoming president. The same Yanukovych accused of using heavy handed tactics against his opponents. 

A second member of Ukraine’s usually fractious political opposition also pivoted to support Ms. Tymoshenko on Monday. Arseniy P. Yatsenyuk, a 37-year-old former chairman of Parliament and foreign minister, attended the court on Monday to hear the motions for Ms. Tymoshenko’s release. He emerged to tell reporters that the trial was “a clear threat to Ukrainian democracy.”
“This is not just personal support for the former prime minister,” he said. “This is support to the institute of democracy that is opposition. This could happen to anyone in Ukraine’s political environment. We are here to support democracy.”
In another prominent show of support over the weekend, Vitali Klitschko, the World Boxing Council heavyweight champion and an upstart in Ukrainian politics, announced he would delay a title fight planned for September to draw attention to Ms. Tymoshenko’s arrest.

From the New York Times, Tymoshenko is still in jail. A blog post in The Economist notes that the former prime minister has been a difficult defendant, but "disrespectful courtroom behaviour hardly justified her arrest". Tymoshenko and her party have been on the defensive since Viktor Yanukovych succeed Viktor Yushchenko as president. While there have been protests against this, Yanukovych hasn't yielded. Ostensibly, she is being tried for abuse of power when she signed new gas contracts in 2009. However,  Taras Kuzio is correct in claiming that the president created a Yukos style political event whose target is former prime minister and her party.

While a few hundred of her supporters braved torrential rain on the streets of Kiev to express their solidarity, Tymoshenko used her oratory in the courtroom to berate Kyriyev, whom she denounced on Friday as a Yanukovich "puppet."
Refusing to stand to address the court, she told Kyriyev: "Since this is an ordered operation by the President, I permit myself to act toward the court as it does toward me. When the court becomes honorable, only then will I address you as 'Your Honor.'"

From Reuters, the ex-prime minister will be on trial for abuse of power. In The Guardian article on this case Tymoshenko continues her attack on Yanukovych, alleging that this is a political prosecution designed to weaken the opposition. Not mentioned in either article, Tymoshenko was also tried and jailed during the Kuchma presidency when her political patron fell foul of the president.

Anyone following this blog won't be surprised by these current events in Ukraine. The government will drag out this case until they are assured that the ex-prime minister's party poses no electoral danger.

Country asks for another IMF bailout, after screwing up the first one. There are few signs of spending coming under control. The neighbour which really holds the purse strings demands ever more privatisation. 

The economy’s still reeling from an attempted devaluation of the Belorussian rouble through the country’s various fragmented FX markets instead of in one go, leaving the country starved of foreign currency. Import prices have exploded. President Lukashenko has also exploded, generally in the direction of the Russians and his own officials, after bailout talks failed. So now it’s the IMF’s turn. 

 On top of the politics in the country Belarus now needs another bailout, according to FT Alphaville. While its southern neighbor seems to be recovering from its economic contraction, Belarus may be lurching into another one.

According to Reuters, Firtash agreed to reimburse some $2.5 billion to Gazprom and Naftogaz, the Ukraine state gas company. But Timoshenko claims that the gas was worth about $3.5 billion, leaving about $1 billion in profit. She claims that some of that went for mischief against Yanukovich's opposition, including herself. "Since taking power, the Yanukovich administration, aided and abetted by the defendants and other co-conspirators, have launched a wave of arrests and investigations aimed at plaintiff Timoshenko and her political allies in what most objective observers consider to be a concerted campaign to intimidate, suppress and ultimately eliminate any and all political opposition in Ukraine," the suit alleges.

Tymoshenko's lawsuit discussed at Oil and Glory, where one can find more details about the case.  The most interesting part is her allegation that the new administration choose to lose the Stockholm arbitration case.  A good post on the ongoing legal battle between the former prime minister and the current government.

If elections to the Verkhovna Rada were held in mid-April, five parties would have garnered enough votes to qualify for the parliament, i.e. the Party of Regions (13.9% of the vote), the Yulia Tymoshenko Bloc (10.6%), the Front for Change led by Arseniy Yatseniuk (7.1%), the Communist Party (3.2%), and the Udar (Strike) party led by Vitali Klitschko (3.1%), as can be seen from a nationwide public opinion poll of 1,020 respondents conducted by the Kyiv International Sociology Institute on April 8 to 18.

From Kyiv Post, of course Rada elections aren't scheduled for this year. 

The negative effects have included a more restrictive environment for the media, selective prosecution of opposition figures, worrisome instances of intrusiveness by the Security Service of Ukraine (SBU), widely criticized local elections in October 2010, a pliant parliament (Verkhovna Rada), and an erosion of basic freedoms of assembly and speech. Corruption remains a huge drain on the country,and there is significant room for the situation to get even worse.

From a Freedom House evaluation on Ukraine. Its not too long a read, but let me present some excerpts from the report below.

Elections & Reform

But credible observers in Ukraine are now concerned that his administration is acting to alter the electoral environment in ways that will prejudice the political prospects of independent and opposition forces and help to concentrate power in the hands of the ruling party, both in Kyiv and in the regions. These concerns center on three interrelated issues: a new electoral code, currently in preparation; the conduct of the 2010 local elections; and constitutional reform.

Political Persecution

Nonetheless, the government’s anticorruption campaign lacks credibility. Authorities point to the prosecution of former prime minister Tymoshenko and former interior minister Yuriy Lutsenko as a signal that corruption will not be tolerated and that politicians are not above the law. However, these cases are not focused on charges of personal enrichment, but rather on administrative abuses. The government is correct that the prosecutions send a strong signal, but that signal is actually a warning to other would be opposition figures not to challenge the authorities. 

Constitutional Reform

The Constitutional Court’s September 2010 decision to invalidate the 2004 constitutional amendments associated with the Orange Revolution raised both substantive and procedural red flags. Substantively, the ruling shifted power from the parliament back to the presidency, granting Yanukovych the same level of authority wielded by former president Kuchma. Moreover, in the run-up to the decision, four judges who opposed the nullification of the amendments resigned and were replaced with judges who backed it. The subsequent formation of a Constituent Assembly under the auspices of the president has hardly inspired confidence in future constitutional checks and balances. There were also concerns that the arrest of the son-in-law of the Constitutional Court’s chairman, combined with a criminal case against his daughter, represented a not-so-subtle form of  pressure on the court.

On a future virtual presidential candidate 

Many of the observers we heard from expressed fear that this strategy—disqualifying the opposition party best able to challenge the Party of Regions while facilitating the growth of a more extreme nationalist party—may be replicated on a national level. These observers point out that in the presidential election, which came after Tymoshenko had presided over a massive economic collapse and extraordinary divisions with the incumbent president, she lost to Yanukovych by just 3.48 percentage points. To ensure Yanukovych’s reelection, they argue, the Party of Regions is intent on having him faceoff against a fringe Ukrainian nationalist candidate, knowing that this will depress opposition turnout in the center and energize Yanukovych’s base in the east and south.

The case seeks to represent all Ukrainian people in a class action and was filed under U.S. racketeering law and the Alien Torts Statute, a law that allows foreigners seeking damages for violations of international human rights laws to sue in U.S. courts. The complaint seeks unspecified compensatory and punitive damages.

From Bloomberg emphasis mine, a PR stunt for the Ukrainian public and way of putting pressure on her enemies back home. I can't see this going far in U.S. courts, how can she represent all Ukrainian people?

Having failed to answer a question correctly in Russian, I get it repeated in broken, angry English. The interrogating KGB officer pushes me against a filing cabinet. "Where are y'fRRROM?" England, I say, cowering. He prods me in the chest, hard. "You are English? English spy! English spy!" In another "scene", a KGB doctor forces me to strip to the waist, in front of the other participants. "Jacket off! Shirt off! Strip to waist! Quick! Quick!" She sits me down on a stool, grabs a clump of cotton wool, douses it in alcohol, and sets it alight. This is then dropped in a glass jar and applied to my bare shoulders: known as "fire cupping", it was supposed to draw out disease through the skin.

 This is not someone recounting their time in the Soviet Union but a journalist visiting 1984: Survival Drama in a Soviet Bunker. Its located in Lithuania. On the other hand in Ukraine it appears that their focusing on the  happy moments living in a totalitarian regime.   

Under the Kharkiv agreements of April 21, 2010, Russia granted Ukraine a 30 percent discount on the price of gas, relative to the January 2009 agreement concluded by the Tymoshenko government. In return for the favor, Yanukovych agreed with Russian President Dmitry Medvedev to prolong the stationing of Russia’s Black Sea Fleet on Ukraine’s territory until well into the 2040’s.

That discount notwithstanding, the gas price per one thousand bcm is rebounding to levels that hurt Ukraine’s inefficient steel and chemical industries. After a fleeting drop from $306 in the first quarter of 2010 to $233 in the second quarter (an immediate result of the Kharkiv agreements), the price rose to $249 in the third quarter, $252 in the fourth, $264 in the first quarter of 2011, $295 in this year’s second quarter, and is forecast at $300 on an annualized basis in 2011. The main factor behind the upward curve is the peg of the gas price to the cost of the oil products basket. The latter’s cost surge is attributed to the Arab turmoil, among other factors (Interfax-Ukraine, April 14, 21).

Excerpt from Eurasia Daily Monitor (Volume 8, Issue 79, "Yanukovych seeks new gas discount from Moscow", no link). The agreement was rubbish, [1]. The Russians received an amazing deal while the Ukrainians received a "discount". They had the punitive gas price set up by the 2009 agreement reduced, but accepted a 25 year lease on the Russian Crimea  naval base in exchange. One year later and another deal is needed to fix a deal that was meant to fix the 2009 deal.

Dershowitz said Monday that he was drawn to the case by a recording that prosecutors say incriminates former President Leonid Kuchma. A voice on the tape that sounds like Kuchma's is heard complaining about journalist Heorhiy Gongadze and suggesting that someone "deal" with the problem.Gongadze was kidnapped in September 2000 and his headless body was later discovered outside Kiev, the Ukrainian capital. Kuchma has denied any involvement."A main point is that he is a victim of a manufactured tape, that nobody can be confident that the recording is authentic," Dershowitz said in an interview with The Associated Press. "And there is nothing worse than being a victim of false evidence."

The owner of the Kyiv Post, a Ukrainian English-language newspaper, Mohammad Zahoor, wants to sell the newspaper for $2.4 million as it is not profitable, the Kommersant Ukraine wrote on Thursday.
"I am a businessman, not a politician. This business [the Kyiv Post] brings me no political dividends, but only a monthly loss of $80,000. We are still subsidizing the Kyiv Post, but it cannot last forever," Zahoor told the newspaper.
According to him, he is ready to sell the newspaper for $2.4 million, the businessmen derived this figure basing on the price he paid for the Kyiv Post in 2009, and the funds he has invested into its development since.

Via Interfax-Ukraine, why did he purchase KP in 2009 if it was a money loser?

Unemployment in Ukraine increased by more than 13% over January 1 through March 1, 2011, President of the Ukrainian League of Industrialists and Entrepreneurs (ULIE) Anatoliy Kinakh said at a meeting on April 15.

In particular, this happened due to worsening of work conditions for the self-employed due to the adoption of some provisions of the Tax Code, he said.
"Unfortunately, our forecasts came true: over the first three months of the current year the level of joblessness in Ukraine increased by 13.2%, as of March 1, compared to January 1. This is a very negative tendency," he said.

As I noted in a previous post, official unemployment was very low after the economy contracted in Ukraine.  While "worsening of work conditions" may contribute to the higher unemployment changes, I'm skeptical that its the only factor. Are the changes in the tax code simply shedding light on the unemployment that was already there?

"He liked to listen to Arab music on an old cassette player," she recalls, and was "obsessive about his outfits," adding that during trips through poverty-stricken African countries, "he would fling money and candy out the window of his armored limousine to children who ran after our motorcade." 

Even so, Balinskaya is careful to remind readers that there are a lot of silly rumors flying around about Qaddafi, denouncing as "nonsense" suggestions that his fantastically beautiful Ukrainian medical staff also served as a harem. 

"The truth is that Papik was much more discreet than his friend, the womanizer Silvio Berlusconi," she says, explaining that he only hired pretty Ukrainian women because he simply "liked to be surrounded by beautiful things and people."

From Radio Free Europe, the tidbits provided about Qaddafi in the article are few. It simply reinforces the idea that he was a world-class megalomaniac.

The Melnychenko tapes have stirred anxiety in many corners of Kyiv, where they have the potential to spawn a host of additional cases. Numerous officials, including current Prime Minister Mykola Azarov and parliament speaker Volodymyr Lytvyn, are allegedly implicated in the recordings, captured in conversations revealing a massive web of corruption and criminal activities.  

Prosecutors have indicated they are not pursuing charges against Lytvyn, who as speaker holds immunity that Kuchma doesn't. But many observers -- including Melnychenko himself -- believe Lytvyn, who once served as Kuchma's chief of staff, played a critical role in the killing. 

Emphasis mine, I suppose this is one way to keep someone in line, by showing him what happens when you step out of line (and immunity).

But Russia last week upped the pressure in its attempts to trump months-long EU talks by saying it could offer Ukraine an annual $8 billion discount on gas supplies, setting the stage for a tug-of-war between Brussels and Moscow for Ukraine's allegiance. 

Ukraine's choice is about more than trade: It is seen as crucial in deciding the geopolitical path of this former Soviet republic of 45 million, wedged between Russia and Europe. 

A free-trade agreement with the EU is seen as a stepping stone to deeper integration with the 27-nation bloc; joining the customs union with Russia, Belarus and Kazakhstan would rule out an EU deal and tie it to fellow former Soviet states.

From Wall Street Journal, others [1,2] have written about Russia's attempt to persuade Ukraine to drop a free trade agreement with the European Union.  This persuasion involves threats that a EU trade agreement would cost Ukraine economically.  EU data on Ukraine trade (2009 figures) shows that the "EU27" is the biggest trade partner for Ukraine, with Russia second. However, a custom union with Russia would end EU talks.  Putin is forcing Ukraine to choose between two different options. I'd say that getting a gas "discount" is not worth the price for Ukraine. This discount could easily be removed if Ukraine and Russia get into a disagreement in the future. In fact there should be an asterisk attached to the proposed discount...

* Contingent on Ukraine's good behavior as determined by Russia

Leader of the Batkivschyna party and former Ukrainian Prime Minister Yulia Tymoshenko has said that the situation in Ukraine is "explosive."
When asked during an interview with the EuroNews TV channel if the situation in Ukraine is "explosive or revolutionary," Tymoshenko said: "Yes. When people are brought to despair, and there is no other way left apart from the revolution, then the countries can actually explode."

As match tickets go on sale on March 1st, the country is pouring more and more money into getting its much-delayed infrastructure projects finished on time. The urgency has only increased the opacity, says Serhiy Leshchenko of the news website Ukrainska Pravda. Describing the tournament as "a Bermuda triangle into which state funds disappear", he says the authorities are simply "handing out all the contracts to their friends and families' companies".

According to Leshchenko, one firm called Altcom is making as much as 640 million euros from various road and airport projects, as well as the stadium in Lviv. These roads are among the most expensive in the world. It's not clear who ultimately owns Altcom.

Kiev's Olympic stadium re-development could also turn out to be the most expensive ever, with a price tag of 300 million euros widely expected to rise. Much of that work is being undertaken by AK engineering, a firm Leshchenko identifies as being connected with Ukraine's Deputy Prime Minister, Borys Kolesnykov. Kolesnykov firmly rejects the allegations, but Leshchenko says the documents he submitted are unconvincing.

From France 24, Ukraine will be busy building for the Euro 2012. While the event and the spending connected to it will contribute to economic growth, the money seems to be going to a small group.

The trade deal with Ukraine, which both sides want to sign later this year, will ease trade barriers and bring the former Soviet state a step closer towards eventual EU membership. The branding issue has been one of the hardest for the Ukrainians to accept, said Mr Teixeira. Government ministers have now accepted that it is the end of the road for shampanskoye, but other Ukrainians are not convinced.
"I haven't heard about this, but I can't imagine anyone is going to stop calling it shampanskoye," said Marina, a cashier at a Kiev supermarket.

From The Independent, a victory for President Yanukovych, if its signed.

The IMF is adopting a tough but correct position. Ukraine’s state budget deficit last year exceeded the 5.5 percent of GDP agreed with the IMF, VAT is not refunded automatically despite Azarov's promises, and the cabinet has not yet submitted a pension reform bill to parliament although it had promised the IMF that it would do so by January. Deputy Prime Minister, Serhy Tyhypko, who is in charge of pension reform, forecast last month that parliament would pass a pension reform bill in March (UNIAN, January 18). The pension reform will be unpopular as it provides, as the IMF insisted, for hiking the retirement age for women from the current 55 to 60 years within the next ten years and for male civil servants from 60 to 62 years.
The cabinet is even more reluctant to increase household gas prices from April 2011, also as promised to the IMF last year, in order to reduce the deficit of the state-owned oil and gas company, Naftohaz Ukrainy. First Deputy Prime Minister, Andry Klyuyev, told a press conference on February 2 that the cabinet was against raising natural gas prices for households in either April or May. Klyuyev said this would be discussed with the IMF (UNIAN, February 2). The previous 50 percent price increase last August was welcomed by the IMF, but it was not enough to cover the difference between the high prices that Naftohaz pays for Russian gas and the low prices for which it is obliged to sell gas at home

A  large excerpt from Eurasia Daily Monitor (no link) volume 8 issue 28,  "Kyiv holds fresh talks with the IMF", " . Inflation slowed down to 8.2%. according to Bloomberg.

“Especially in the last five years, there was this impression in society that people in government were essentially immune from prosecution,” the Ukrainian foreign minister, Kostyantyn Gryshchenko, said in an interview. “We need to send a serious signal to society that this behavior is unacceptable.”

But the United States and its European allies appear increasingly skeptical of the government’s motives. Western diplomats pointed out that when the Orange side was in charge in Kiev it could have easily gone after Mr. Yanukovich with the same prosecutorial fervor but instead left him alone.

They noted that the audit by the American firms looked only at Ms. Tymoshenko’s tenure, not at the years when Mr. Yanukovich was in the government before becoming president.

"I really was in Georgia," Chernovetsky said during a 45-minute interview on Channel 5. He noted that he'd carried on fulfilling his duties from abroad. "They brought me documents to sign," he said, appearing to confirm earlier local press reports that papers were being flown out for his signature. Political analysts have their own theories about his temporary disappearance, and all are connected to attempts by Ukrainian President Viktor Yanukovych's government to consolidate power in the country by sidelining officials not allied to the ruling party and launching investigations against former officials from the previous government, a move criticized by both U.S. and European Union officials.

Well, the mayor has returned from Georgia. according to Time. However, his marginalization by the central government will go on.

Ukrainian Prime Minister Mykola Azarov has asked Head of Kyiv City State Administration Oleksandr Popov to tell Kyiv residents why Mayor Leonid Chernovetsky is not at work.

"Oleksandr Pavlovych [Popov], is he [Chernovetsky] on vacation? And who is suffering due to his absence? Do Kyivans want him to come back? They dream of it. Be sure to find the mayor and tell him that all Kyivans miss him, want to see him very much and are asking him to get to work," he told First Vice-Premier Andriy Kliuyev and the head of Kyiv City State Administration.

Ukraine’s state debt, including guarantees, jumped 36.4 percent in 2010 as the government borrowed from the International Monetary Fund and sold bonds to cover the budget deficit and help state-owned companies.

The total debt surged to $52.3 billion as of end 2010, compared with $39.8 billion a year ago, the Kiev-based Finance Ministry said today in a statement on its website.

Via Bloomberg, I wonder how much of that debt is related to financing Euro 2012? On a related note, FIFA warned state authories to not remove the current head of the FFU, Hrigory Surkis, before 2012.

Over 300 criminal cases on corruption have been opened against current officials, according to the presidential administration.

"Criminal cases have been opened against over 350 high ranking officials appointed after [Ukrainian President Viktor] Yanukovych came to power," Deputy Presidential Administration Head Hanna Herman said on Channel 5 on Sunday evening.

At the same time she noted that there are no reports about this in the mass media as the press "is not intenerated in this."

Herman said that, the mass media, including the foreign media, publish reports in the interests of people "who try to benefit from this, who try to excuse their crimes, [their] violations of the law, with some political reasons." 

From Interfax-Ukraine, the simple answer is that  the Tymoshenko's govrnment were not the sole source of corruption in Ukraine.

According to the IMF, Ukraine as of January 6, 2011, ranked second in terms of its liabilities due to the IMF since August 2010.The IMF's No. 1 debtor is Romania with SDR 9.8 billion, and third place is occupied by Greece with SDR 9.13 billion.As of the beginning of 2011, Ukraine accounted for two out of every nine dollars of all the countries' debts to the fund under standard loan programs, according to the IMF

From Interfax-Ukraine, I believe that the article misses an important distinction between Ukraine, Romania, and Greece. Greece (and Ireland)  has been bailed out by the EU under its throw-lots-of-euros-at-the-problem program, while Ukriane and Romania have not.

There are those who will instinctively dislike Shakhtar because they are oligarch-driven, but it is hard to believe any oligarch has driven his club was well as Rinat Akhmetov. He has shown great patience, giving Mircea Lucescu six years to construct a squad that plays intelligent, attacking football, and has supplanted Dynamo Kyiv as Ukraine's pre-eminent team, winning four of the past six titles.

Leader of the Batkivschyna All-Ukrainian Association and former prime minister Yulia Tymoshenko has said that she has been placed under a taboo on all Ukraine's central television channels, except Channel 5 and TVi, Channel 5 reported.

 That's certainly a possibility. As Yuriy Lutsenko discovered, Yanukovych is focused on shutting down the opposition through legal and administrative means. Taras Kuzio makes clear in this article for Radio Free Europe, if the new government were committed to anti-corruption it would have conducted a broader audit by a more impartial auditor.

The October 2010 audit could not be classified as impartial, as it was undertaken by a law firm (Trout Catcheris) that represents Donetsk oligarch Renat Akhmetov in the United States. The audit team included Kroll Associates, who was hired in 2002 by Viktor Pinchuk, Serhiy Tihipko, and the Trudova Ukrayina Party (now renamed Silna Ukrayina) to cover up Kuchma's alleged involvement in the disappearance and murder of journalist Heorhiy Gongadze.

Moreover -- especially since Yanukovych was elected president -- no court trial or criminal investigation could be fair and in accordance with the rule of law. Ukraine's judicial system became even more corrupt during Yushchenko's presidency than it was previously. The independence of the judicial system under Yanukovych has ended.

Instead it used the audit as an excuse to weaken Tymoshenko and her allies.  This year will test how committed the EU is to democracy in Ukraine or will it allow the country to slide into authoritarianism in the name of friendly relations?

Two years ago, five of the ten new East European members of the European Union – the three Baltic states, Hungary, and Romania – appeared to be devastated by the global financial crisis. Social unrest, huge devaluations, and populist protests loomed.

And then nothing. Today, all of these countries are returning to financial health and economic growth without significant disruption. No country has even changed its exchange-rate regime. Old Europe should learn from New Europe’s untold success.

First, a bit of rubbish. Anders Aslund writing on the eastern Europe states who, he claims, have been successful in dealing with the economic crisis. Curiously he doesn't mention Ukraine, probably because its currency collapsed and its economy sharply contracted. Aslund also forgets to mention the IMF, its boosted resources for combating the crisis or even the EU's bailout of Ireland and Greece.

As Paul Krugman recently posted about Estonia, success is a relative term. 

But the cost of the adventure so far has included a Depression-level slump: GDP is growing again, but only after falling 18 percent. The IMF projections only go out to 2015 — and even then, the Fund expects GDP still to be below its 2007 level. Unemployment, having risen to almost 18 percent, is expected to remain above 10 percent into 2014.