Russian and American Press on Presidential Elections in Ukraine

As Suslov characterised the case, the Russian side took up risky measures too ensure that the U.S. is ready to cooperate only when the use force is in possibility. The conflict resolution in Kosovo has been understood as a Russian success, although overall the situationillustrated a shaky role of Russian diplomacy in the matters of international security. The precedent became important for the further negotiations and understanding of the conflicts in Georgia and Ukraine.

With the enlargement of NATO in 1994 and Yugoslavian crisis 1999, the relations between the U.S. and Russia turned into the phase of fundamental contradictions. While the U.S. is oriented on the export of democracy and acts as a global leader, Russia aims at a status of global power and ideological competitor for the U.S.

Independent Ukraine: political reforms, oligarchy and Euromaidan

First reforms for independent Ukraine

Since the dissolution of the Soviet Union up till now, the Ukraine has been simultaneously passing through several structural transformations: transition from the command-administrative to market economy; building new legal and economic institutions for the democratic regime; creating an ideology and cultural policy that would associate the Ukrainian population with the new state. As this scope of problems required vast political will and financial resource, the decision-making tended to be concentrated in the agency of a relatively small number of people - most definitively referred to as elites.

Proposing that the Ukrainian problems can be deciphered through the study of it's elites, Kopylev Kopylov, V. (1997). Elite research in Ukraine. In Elites in Transition (pp. 171-202). VS Verlag fьr Sozialwissenschaften, Wiesbaden. (2012) problematised that elites of the 1990s became a natural evil in the collective representation of the national populations. Commenting on the studies of elites of the time, he notes that there were no adequate academic association of key political positions with social development. It is explained with the fact that the Soviet Union ideology officially denied the existence of elite in any sense, paying attention to the Marxist “class struggle” and allocating positive meaning only to the proletariat class. In a neutral sense, however, elite can be defined as a necessary minority for the development of a social system. Having creative resources, elite groups are responsible for advances in science, technology, culture and knowledge-making.

The concentration of power concerned all post-Soviet countries where inexperienced nomenclature at once needed to compete, debate, conduct reforms and introduce novel cultural habits and meanings in substitution to the communist ideology. In the opposition to the Ukrainian retrograde party leaders, heavy industrialists and immobile military officers, the social system inertially generated a class of populist politicians, dissident opinion-leaders and enterprising managers. These two clusters have been variedly labelled in the scholarship: national communists (or “nomenklatura”, “old elite”) and national democrats (“new elites”, “party of power”). According to some available surveys, while 70% of new Russian elite derived from the layers of nomenclature, the Ukrainian elite comprised of old communists by 40%. As for the pre-revolutionary aristocracy, 1995 data Ibid. of the Ukraine's Who's Who suggests 2.46% (32 out of 1300 people) of aristocratic ancestry, for all others have been absorbed by Polish, Russian and Soviet rule. All of them, nevertheless, represented the former communist group that was peculiarly reconfigured in the new institutional conditions of the democratic state-building.

Illuminated by the formation of the new elites, not by appearance of new actors but rather of new functions the existing leaders acquired, reallocation of resources between the elite groups in the Ukraine continues to determine it's current economic, political and social decision-making.

As Janusz Syrmer of the Kyiv Centre for Social and Economic Research (CASE) arguedHunter, H., & Szyrmer, J. M. (2014). Faulty foundations: Soviet economic policies, 1928-1940 (Vol. 196). Princeton University Press., by the end of 1980s Ukrainian economy was already far from a stereotypical central planning and rather realised through the personalised quasi-markets. The resources were ineffectively and deceivingly allocated in all spheres of life from employment and taxation to customs and foreign operations. The necessity of economic reforms became evident even for the most conservative Communists. However, the preconditions were heavily manageable. The economic interests of the time are described as “rent-seeking”. The directors of state enterprises and local party leaders sought for the reforms as a chance to increase their wealth and power. Many then powerful groups followed narrow interests such as avoiding ideological restrictions on travelling abroad or ensuring the stability of their property rights. Syrmer criticised inheritors of communist regime for inability to explain the reforms to people and formulate an agenda for the full-fledged capitalistic economy. When Soviet Union ceased to exist, state property started to be collected by entrepreneurs and businessmen who actively cooperated and got protection from the same state officials as well as from the newly emerging criminal groups. In the beginning of the 1990s Ukraine entered a period of re-distributing land, property and finance among the nomenclature and new democratic elites.

After the referendum on the Ukrainian independence, the former ideologist of the Communist Party Leonid Kravchuk became a president. He took a role of keeping neutrality of communists and searching for a consensus among the regional elites, democratic activists and protesting working classes. Parliament entered a period of restructuration. The Communist Party of Ukraine was dramatically damaged - from 3.5 million members in 1985 to being banned after the putsch in 1991 and a re-registration of only 120 000 members in 1993. The party' assets have been nationalised for the sake of the Ukrainian independence and it's political influence significantly declined. The opposition consisted of the Union of Industrialists and Entrepreneurs from the Donetsk industrial region, the Rukh Party (subsequently, the People's Democratic Party and New Ukraine) and several nationalistic parties. The parliamentary work was spoiled by the absence of clear contribution limits for the political parties since 1993 and none of the parties' budgets has been published in the first post-Communist decade.

The process of balancing between the communistic and market policies continued until a severe economic crisis of 1993. The Ukrainian economy was on the verge of collapse: the country's Gross National Product (GNP) dropped by 12,7% from 1990 to 1997. Without the legal base and public institutions, the Ukrainian people could not participate in the political process and rather tried to make up for a living. Due to hyperinflation, salaries and pensions were not enough to survive even for one week while small business faced stagnation because of the exceedingly high taxes. By 1998, for example, the so-called grey economy was estimated at 60% of GDP. During his presidency Kravchuk was unable to conduct economic reforms, being concerned about the unity of the country and it's international status. He organised the first diplomatic contacts with the U.S., through which the nuclear proliferation of the Ukraine has been exchanged on the financial support and security guarantees by the U.S., U.K. and Russia.

The next elected Ukrainian president Leonid Kuchma promised economic reforms and established firm relations both with the Western and Russian partners. Supported by the military-industrial complex, Kuchma started his campaign by standing on an active pro-Russian position, but towards the end of the first term his preferences shifted to the pro-Western foreign policy. His main contribution was to realise that the unity of the country can be achieved through the consensus between the most powerful businessmen. At the time of his presidency, emerging economic giants fought for the possibility to own the possibilities of trading Russian gas and control assets through illegal operations. It was Kuchma who created a precedent for consolidation business and political power and provided the extensive autonomy for the Dnepropetrovsk and Donetsk businessmen after the killing of Yevhen Shcherban in November 1996.

Kuchma conducted monetary reform trying to tackle the so-called quasi-currency when citizens used to pay to each other in kind instead of using valueless roubles or the certificates and coupons for economic exchange. Introduced in 1996, Hryvna was worth 3000 roubles and a dollar was worth 1.75 hryvna.

In this context, it is important that independent Ukraine gained extensive financial help from the U.S. foreign policy institutions both on the governmental and informal levels. Communist majority in the Ukrainian government officially refused to use the USAID consultancy for taxation and privatisation until 1995, but the overall support in all spheres of the Ukrainian life has been tremendous. The first taxation decree, for example, has been issued as early as in 1992, providing easier rules for the Western investors. As some of the work of the U.S. consultants in the Ukraine started later than in Russia, many initiatives were duplicated disregarding the specificity of the Ukrainian circumstances.

According to the USAID report which analysed the work of the Harvard Institute for International Development (HIID), it was George Soros and his Open Societies Institute that invited HIID to provide the expert assistance to the Ukrainian government in the critical time of economic reforms. In August 1995, the Governor of National Bank of Ukraine and Ukrainian Deputy Prime minister discussed the assistance with the representatives of World Bank, IMF and director of HIID Jeffry Sachs. The projects were implemented in several areas: (1) monetary reform and monetary management, (2) tax reform, (3) public administration of fiscal systems, (4) fiscal reform of social programs, (5) macroeconomic forecasting, (6) banking sector regulations, (7) enterprise payment reform, and (8) regional fiscal finance at the oblast (regional) level. The U.S. Treasury advisor was part of a working group consisting of the Vekhovna Rada and the State Tax Inspectorate (now the State Tax Administration). He told the USAID auditors that the best chance to succeed in Ukraine was to divide its work into five major areas of tax law: administrative provisions, value-added tax, enterprise profit (corporate income) taxes, personal property taxes, and excise taxes. What is indicative of the level of transparency of these activities, USAID found out in the interviews with the Ukrainian ministers that they had not knew about the approval of the project until May 1996.

As the U.S. ambassador in the Ukraine Steven Pifer toldPifer, S. (2017). The Eagle and the Trident: US--Ukraine Relations in Turbulent Times. Brookings Institution Press. in his memoires (2017), the Ukrainian tax code was so complex that no large company could be in full compliance. Pifer added that all businessmen who financially supported somebody other than Kuchma in election year of 1998 were likely to face tax audit. He illustrated it with the administrative pressure on the national television network STB which then made the American diplomats criticise the presidential elections in the Ukrainian press. Another of the first U.S.-supported initiatives concerned the increasingly corrupted energy sector. American assistants tried to increase transparency of the Ukrainian gas conversion, which was dominated by the economic groups and politicians such as the Ukrainian prime minister of the 1990s Pavlo Lazarenko. Together with Tymoshenko, Lazarenko developed the corporation United Energy Systems of Ukraine (YESU).

As ambassador Pifer recollected, the USAID programme proposed the conservation of energy by installing a gas meter in each flat. Although experts estimated that this and other measures could decrease the Ukrainian gas consumption by 40%, the Ukrainian government did not follow the advice.

As for the other projects, the assistance was largely provided on the basis of the non-governmental institutions (NGO's), such as National Democratic Institute (NDI), Internews Network and International Renaissance Foundation. Promotion of democratic values and civil society was realised through the media campaigns, educational programmes, organisational trainings and management of political parties. By the end of 1990s, the U.S. built a productive intellectual infrastructure that allowed to quickly achieve the results seen in 2004 when several millions of Ukrainians protested against undemocratic elections. Remarkably, two of the organisations responsible for the Ukrainian electoral process - the Committee of Voters of Ukraine and Central Voters Commission - function with financial support by the USAID. According to the reports, the activities included mobilisation of volunteers, observers and voters; trainings for party leaders and activists; exchanges of parliamentarians to the U.S congress for learning about electoral technologies, passing laws and building political coalitions. Importantly, the reports never inform of the concrete dealings with the political parties, aiming to provide an institutional grounding for the democratic political process as a whole.

Ideologically, the political landscape has been significantly transformed. The democracy assistance measures by the U.S. were supposed to form a public perception of the Ukraine as a member of international community. It positively affected those Ukrainians who were ready to take part in the political process without returning to the communistic past or supporting ultra-nationalistic forces. This concerned young layers of society as well: hundreds of Ukrainian schools increased workload for studying English language and many additional courses were prepared to make the Ukrainians able to express their civil position in English.

As Tsvetkova & Yarygin (2015) reported Цветкова, Н. (2015). Публичная дипломатия США. Международные процессы, 13(3), 121-133., in the USAID document of 2001 the then prime-minister Victor Yushchenko is positively described for his success in connecting the Ukrainian government and the U.S. think tanks with the help of the “Freedom House” fund. In 2004, NDI organised a special mission of observers who registered hundreds of violations on the presidential elections and significantly influenced the re-election process. On December 10, 2004, American MP Ron Poll stated that “probably tens of millions dollars have been spent on the election campaign of Yushchenko”. Later, U.S. press-secretary of the White House Scott McLellan noted that no money was sent directly to a particular candidate, but a “democratic process reflecting the interests of the Ukrainians” supported. Later the elected president Yushchenko denied the financial help from the U.S. partners, although he was affiliated with the U.S. as a member of the board of the U.S.-managed International Centre for Policy Studies in Kiev.

Still, it is difficult to precisely evaluate the scale of the U.S. participation in the Ukrainian decision-making. As American ambassador Steven Pifer noted, Americans could not influence the corrupt practices between the Ukrainian politicians and businessmen. Since 90s, the possibility to buy a place in the Rada or secure an MP's vote for a particular decision; customs bribery; ability to illegally win a tender for gas mining - all these options of organisation have been prevailing over the American willing to create a just and transparent democratic regime.

The situation with the Ukrainian economy in general is characterised by the recovery from the 1990s and showing economic growth up till 2010. Although it was organised on the principles of bureaucracy and corruption, the system began to work more effectively due to the basic consensus between the political and business elites. As a Polish researcher Olszanмski described the beginning of 2000's, the first generation of elites (e.g. Medvedchuk) was got rid of and new rules put in practice.

Political-economic landscape inUkraine

In order to understand the main principles of decision-making it is needed to look at the configuration of power according to the main Ukrainian resource-holders. As a Polish social scientist Slawomir Matuszak suggestedMatuszak, S. (2012). The oligarchic democracy. The influence of business groups on Ukrainian politics. Oњrodek Studiуw Wschodnich im. Marka Karpia. (2012), after the 1991 Ukrainian politics has been realising through the oligarchic system of relations that unavoidably contradicts to the standards of democracy and civil society. The system was firmly established during the Kuchma presidency of 1994-2004 and power distributed among the clans which work as informal networks of businessmen, managers, political leaders and parliamentarians. Characteristically, the business leaders usually do not identify themselves with political parties or ideas, so that their interests have been shifting only according to the current economic situation. It means that it is impossible to define an oligarch as either a pro-Western or pro-Russian subject. The main problem of the Ukraine, therefore, is that oligarchs sponsor politicians and the government in rule, but not the country's national strategic interests. Resources get re-directed among the higher levels of social hierarchy, so that general population suffers from poverty, injustice, lack of social guarantees and underemployment.

The system of the so-called oligarchic capitalism was established when the owners of resources united the capital and management by territorial or industrial factor. In the post-Soviet context, oligarchs are characterised by the several features: they accumulated power during the transformation of the political and economic system; they have informal network of relations through which political decisions are taken; they tend to monopolise their business and damage competition by illegal means; operations in acquiring property and sharing business interests are likely to have illegal components. The ethical concerns about the conflicts of interest, which do not necessarily mean the illegal character of activities, are relevant to all Ukrainian oligarchs without exception. The country's richest men have always held the highest political posts.

The analysis of the Ukrainian economic and political power by Matuszak suggests following the activities of three oligarchic centres: the Donetsk, the Dnipropetrovsk and Kiev clans. The additional centre of power is Galician clan which does not have competitive financial base, but remains ideologically important for the Western-oriented developments of the country. When the country was choosing between Yushchenko and Yanukovych in 2004, the number of conflicts of interests and business overlaps between the groups was large. Instead of following the chronological order, the sequences of relations are grouped by clans to illustrate the configuration of power up till the Ukrainian crisis in 2014-2019. According to Matuszak, the actuality of Kiev clan has been significantly decaying during the 2010s, so the following overview focuses on the three other clans. Kiev clan was associated with energy sector, banking and media and it's key figures are Victor Medvedchuk (former Kuchma's advisor), Hryhoriy and Ihor Surkis brothers (businessmen).

The Galician clan is located at the Western part of the country where the main is industry is agriculture. Although the population of the Western Ukraine had little contribution into the country's GDP (only 3-5%), the ideological influence of the clan in the government is tremendous. The clan has been influential in 1990-1995, when Ukrainian diasporas in the U.S. and Canada managed to influence the internal politics.

Political forces of the clan are: the pro-Yushchenko party Our Ukraine, bloc of Yulia Tymoshenko (the Batkivshchyna party), military-inspired “Freedom” of Oleg Tyagnibok and far-right Ukrainian Nationalist Assembly (UNA). The second period of influence has been after 2004, when most of the ministers represented the Galician clan, e.g. vice-premier minister Vasyunnik, minister of internal affairs Yuri Lutsenko, minister of education Ivan Vakarchuk, Bogdan Danilishin (economy), Arseny Yatsenuk (foreign relations).

In 2000, the Yushchenko lobby was supported by one of the richest oligarchs Petro Poroshenko, a holder of Ukrprominsvest and then a secretary of National Security and Defense Council (NSDC). Poroshenko owns the news channel 5 Kanal, KP media and the weekly Korrespondent.

The indicative case of what was happening then in the Ukrainian politics is how prime-minister Timoshenko fought with her political opponents. The largest state metallurgy plant of the region, Khyvorizhstal, was first sold to Akhmetov and Pinchuk for 800mln dollars, then renationalised and sold again to a French company Mittal Steel for 4.8 billion (2005). In contrast to such aggressive measures, Yushchenko tried to search for a compromise between the businessmen and politics, so that Tymoshenko left her post the same year. Pro-Yushchenko and pro-Tymoshenko camps have been competing until Yanukovych and his Party of Regions came into power in 2010.

The Dnipropetrovsk clan is also rooted back in the Soviet industrial production: the Yuzhmash plant and the cosmic rocket centre in Dnipropetrovsk, military plant in Zaporozhe.

The clan is represented by Ihor Kolomoisky, Hennadiy Bogolyubov (Privat Group, banking, airlines); Victor Pinchuk (metallurgy).As for their connections to politics,the Privat Group helped either Tymoshenko or Yushchenko disregarding the concrete political motivations. Pinchuk acquiredthe part of the YESU business of Lazarenko who was convicted of illegal operation in 2006.

Kolomoisky is known for his aggressive business behaviour and connections to criminal dealings. In 2008-2010, the Privat Group took over 46% of shares of the oil corporation Ukrtatnafta's from the Russian companies in Tatarstan. Since then, the Ukrainian oil refinery in Kremenchuk refused to get the needed amount of oil from Tatarstan and started to buy it in Azerbaijan. The Russian company LUKoil also faced the cut of supply from the Ukrainian side after this deal.

Furthermore, Kolomoisky blocked a bilateral agreement between the EU and Ukraine for the Common Aviation Area (ECAA) that could allow European operators to fly inside the country and make contracts with the Ukrainian airports. Although this initiative promised reduction of ticket prices and developing the avia-market outside the Ukraine, Kolomoisky avoided competition with the European operators.

Kolomoisky is believed to own Glavred, Profil, Telekritika, Izvestia, UNIAN and Gazeta po-kievski; 1+1 channel. Pinchuk has Novyi Kanal, ISTV, STB, M1 and M2; Fakty i Kommentarii, Delo, Invest Gazeta.

The Donetsk clan emerged in the 1950's when Aleksandr Zasyadko. Miniter of Coal Mining of the USSR managed to build a system of concentrating all financial resources in the Donbass area. The other economic industries of the area are metallurgy and chemical production. In 2006, the region had 43% out of all Ukrainian export.

The influential figures in the Donetsk clan are Rinat Akhmetov (System Capital Management, Management Assets company), Victor Pinchuk (Interpipe and Starlight Media), Boris Kolesnikov (food industry), Kluyev brothers (metallurgy, machine-building), Serhiy Taruta and Vitaliy Hayduk (Industrial Union of Donbass or ISD), Yuri Ivanyushchenko (media).

As ore mining was capitalised by Akhmetov's company Metinvest, it's competitor ISD was forced to buy raw materials from Russia and Brazil. ISD supported Yushchenko in 2004 and after his losing popularity - Tymoshenko. In 2009, the Industrial Union of Donbass was restructured to make Russian Swiss-based firm Carbofer hold 50%+2 shares of the RosUkrEnergo. In 2001, the governor of Donetsk Victor Yanukovych accumulated resources there to create a major political project Party of Regions that commanded over 40% of votes in the Ukrainian parliament for more than ten years since then. After Yushchenko came into power, the Party of Regions had over 700 000 members.

Since 2004, Naftogaz and Gazprom stopped using the previous intermediaries (Itera company and EuralTransGas) for their contracts. Instead, RosUkrEnergo (RUE) was created, shared between Gazprom (50%) and Ukraine-based owners Yuriy Boyko (director of Naftogaz in 2002-2005, Party of Regions MP since 2007), Dmytro Firtash (45% of shares), Serhiy Lyovochkin (former consultant of Kuchma, Party of Regions MP since 2007) and Ivan Fursin (5% of shares). It is assumed that Lyovochkin owned the shares of Fursin. They are known as the most pro-Russian political forces in the Ukraine. The RUE group and a subsidiary company UkrGaz-Energo became monopolists of the gas import, being able to control both regional gas supplies and exports.

RUE group had decisive importance during the transition of power from Yushchenko to Yanukovych when there was an idea to integrate Party of Regions and Yulia Tymoshenko bloc. The idea was essentially to make the Ukraine a parliamentary republic, which reflected the balance of Akhmetov's business interests and political interests of Tymoshenko. When Yanukovych was a prime minister, Lyovochkin and Boyko worked in the government.

The positions of Firtash and Akhmetov strengthened during the presidency of Yanukovych. The energy minister Yuriy Boyko took control of the gas sector and Valeriy Horoshkovsky became the head of the Security Service and then was nominated first deputy prime minister.

From the legal point of view, the contract between Gazprom and Naftogaz allowed Firtash to get profits, directing the fuel to his chemical plants. In effect, Naftogaz competed with Otschem holding which was negative for the Ukrainian economy. Firtash and Gazprom have liquidated the RUE in 2014. As of 2019, Firtash was convicted of bribing Indian officials when his firm supposedly cooperated with McKinsey & Company to buy titan ore for Boeing. In the U.S. press these allegations are represented as an attempt of influence on Vladimir Putin who is often characterised as Firtash's close ally.

The largest privatisation done so far in the Ukraine is a sale of the Ukrtelecom company to the Austrian company EPIC in 2010. There are some assumptions in the web-media that initially Ukrtelecom was sold to either Oleksandr Yanukovych or Akhmetov. Another version, published in the Ukrainian press (Delo, 12.03.11), was that Lyovochkin was behind the Ukratelecom purchase.

As for the media ownership, Akhmetov has largest Ukrainian tabloid newspaper Segodny; TV-channel Ukraina. Hayduk and Taruta are in power of Evolution Media Holding (Komentarii Weekly, WeeklyUA, Economicheskie Izvestia and Expert weekly). Khoroshkovsky has several TV-channels: Inter, K1 and K2, NTN MTV Ukraine. Pinchuk owns: Novyi Kanal, ISTV, STB, M1 and M2.

The banking sector has a potential to be developed by the Russian investors. Currently, WTB, Prominvestbank and Alfa bank constitute around 10% of all sector. Apart from the two state-owned banks Oschadbank and Ukreximbank (15% together) there are Austrian (Raiffeisen Bank Aval), French (BNP Paribas-Ukrsibbank) and Italian (Unicredit-Ukrsocbank) contributions in amount of 12% of the banking sector. The Privat bank is an absolute leader in the area, with attempts by the Poroshenko government to nationalise it. By 2019, administrative court of Kyev decided that nationalisation was illegally organised and it's owner Kolomoisky might expect a significant compensation.

The oligarchy question has always been important for the Ukrainian foreign policy. One of the major issues of the Ukrainian economy is the country's industrial sector which has been a subject of disputes, blackmails and lawsuits with Russia for almost 30 years. While the Ukraine has always been dependent on oil and gas, Russia needs Ukrainian infrastructure to sell gas to the European countries. This sometimes strengthened the positive dispositions of the Ukrainian industrial owners to Russia. They tried to preserve their resources and face as little competition with the Russian business as possible.

Such cases as seizure of Tatneft by Kolomoisky or The Ilyich Steel and Iron Works by Akhmetov from Russia; Akhmetov's refusal to transit electricity to the EU by using Russian power grids - seem to be more economically-motivated rather t

Socio-political and economic preconditions of the Euromaidan

In this section, the events are not reported chronologically and different episodes from the foreign and domestic politics in the Ukraine are presented in order to show the process of the Ukrainian transition to the democratic state. Also, several indicative reports from the U,S, newspapers are taken to track the the policy-making around the country before the crisis of 2014. The expertise used is prepared by the Polish OSW centre for Eastern Studies as it seems to fit the academic standards of objectivity, presenting neutral evaluations on the activities from the conflicting sides in the Ukrainian conflict.

A critical attitude towards the political history in the contemporary Ukraine has been expressed in the collaborative writing Касьянов, Г. В., & Миллер, А. (2011). Россия-Украина. Как пишется история. Федеральное государственное бюджетное образовательное учреждение высшего образования Российский государственный гуманитарный университет. of the Ukrainian and Russian historians, Kasyanov & Miller (2011). According to their review of the Ukrainian cultural policy, the historical past has been inadequately articulated by the Ukrainian officials. Thus, Victor Yushchenko, the Ukrainian president in 2005-2010, recognised the events of the famine in 1932 (known as Holodomor in the English-language sources) as an act of genocide against the Ukrainian people. This interpretation can be seen as a uniting narrative to enhance the sense of being Ukrainian through the collective grief, compassion and pride for the heroic overcoming of the tragic events. In turn, such extremely controversial figures as Stepan Bandera and Roman Shukhevych have been officially proclaimed as heroes and were given the state awards. Being defined by many historians as supporters of the Nazi activities during the World War II, these figures were viewed in a positive way by the nationalistic movements. This subject did not strongly polarise the Ukrainian people, - in fact, the monuments to Bandera have been present in the Western part of the Ukraine for decades - but it negatively affected the relationships between the Ukraine and Russia. The Russian government officially expressed its disappointment about the Ukrainian cultural policies. What is also indicative of the historical discussion is that since 2013 Bandera and Shukhevych have become frequently recurring topics on the Russian TV talk-shows about the Ukrainian conflict.

A participant of the democracy promotion projects, Taras Kuzio, wroteKuzio, T. (2012). Russianization of Ukrainian National Security Policy under Viktor Yanukovych. The journal of Slavic military studies, 25(4), 558-581. in 2012, that the Yanukovych's Ukraine might pass through the process of “putinisation” for internal organs of the country and become an authoritarian state. This, however, can be regarded only as the theoretical assumption of what should have happened to strengthen the state and weaken the oligarchic structures. As Matuszak, whose report has been used to prepare the above overview of the Ukrainian oligarchy, suggested that the situation in the country would change only after similar cases initiated by Putin against the Russian magnates Boris Berezovsky and Mikhail Khodorkovsky. The chances of punishing oligarchs in the Ukraine for their criminal dealings, however, were evaluated as too low in the middle-term perspective just before the Euromaidan of 2014.

After Yanukovych became president, his family clan emerged as a new structure of power in the Ukraine. Together with the Party of Regions, he took power on an unprecedented scale and sharpened the situation between the government and oligarchic groups. In general, 2010-2013 was marked by the aggressive political activities towards businesses on behalf of Yanukovych. He discriminated every political-economic group except for his family clan and there were much more raiders and assets takeovers than before. The political power was divided between the representatives of Donetsk clan and RUE group (owned by Gazprom and Dmytro Firtash). For example, RosUkrEnergo managed to ask back the debt that had been taken from the company by Naftogaz in 2009. The decision of the international Ukrainian courts assumed returning 11 million cubic meters of gas and a penalty. Yanukovych did not manage to deprive Pinchuk and Kolomoysky of their economic power, although some attempts have been conducted.

The constitution was changed so that the president got extensive competences in terms of managing parliament and the key positions in the government were offered to several people less known before. To name the most important figures, Oleksandr Klimenko, who became the head of Tax Service, Ihor Kalinin (Security Service), Dmitry Salamatin (Ministry of Defense), Vitaliy Zakharchenko (Minister of Internal Affairs), Hennadiy Reznikov (Special Communication and Information Service). All of them left for Russia after the Euromaidan and got lawsuits from the new Ukrainian government. Kalinin had worked in Russia as a KGB officer and later in the SBU, while Salamatin had got a son-in-law Oleg Soskovets, who was a deputy prime minister of Russia in the 1990s. These ties, however, do not prove any interference on behalf of Russia in the Ukrainian domestic affairs. Also, a well-known political advisor Paul Manafort, who was sent to prison in the U.S. for his illegal activities during his work for the Donald Trump's 2016-electoral campaign, assisted Yanukovych, Akhmetov, Boris Kolesnikov, Andrey Kluev and Serhiy Tihipko. As an energy expert from the Ukrainian Razumkov Centre Volodymyr Omelchenko said to the Washington Post (WP) in 2012, “Russian intelligence agencies, working on behalf of Gazprom, have compiled dossiers on chief Ukrainian leaders in the event that blackmail is required”.

The pro-Western opposition included: Arseniy Yatsenyuk (Batkivshchina party), Vitaliy Klichko (UDAR party), Oleg Tyagnibok (Svoboda party), Yulia Tymoshenko, former minister of internal affairs Yuri Lutsenko and businessmen and politician Petro Poroshenko. According to the 2010 report of New York Times, Tymoshenko is consulted by the former firm of David Axelrod, who worked as a senior advisor for Obama administration. The Clinton consultant Mark J. Penn has been working for the team of Yushchenko who publicly supported Poroshenko during the Ukrainian presidential elections of 2019.

In the light of the following events, the radical right parties are worth mentioning as well: Yuriy Shukhevych, UNA (Ukrainian National Assembly, registered in 1997); All Ukrainian Freedom Union, Oleg Tyagnibok (registered since 1995); Congress of Ukrainian Nationalists, Stepan Bratsyun (since 1993), All-Ukrainian Party New Force, Nova Syla, Yuriy Zbitnev (since 1999); All-Ukrainian Political Party Brotherhood (since 2004).

The Polish researcher Olszanмski (2017) providedOlszaсski, T. A. (2017). A quarter-century of independent Ukraine. Dimensions of transformation. several points on the economic situation concerning the general population in the Ukraine. One of the most emphasised moments is that agriculture sector transited ineffectively, although it still has a potential to establish the Ukraine as a competitive market for the European integration. Nearly 71% of the Ukrainian land is agricultural. While the quarter of this territory belongs to the state, other land is distributed among 23 million private persons and 4.9 million users of public lands. The Western part of the country has around a third of the whole population, so that nearly 13 million of the Ukrainians live by agriculture. The problem is that private users have never had possibility to sell the land, establish the prices and rent or get the governmental funding and cultivate it by using modern technologies.

Looking for the problems in the agriculture sector, noted that organisation of land ownership was made up by the former nomenklatura and that many new agricultural companies entered the grey economy. Kolkhoz enterprises were formally changed into the so-called collective agricultural enterprises (CAE) and very few farmers could leave them to manage an independent farm. Individuals just did not have any possibilities to use modern technological facilities, get the access to the market and compete with the larger enterprises. After the land reform of 2001, seven million people should have gained rights for 28 million hectares. However, the actual land ownership has not been organised. When the Kuchma's government issued land ownership certificates (pai), only 6% of shares got into hands of the future farmers while the rest was taken by the agricultural companies. The reason was that very small number of CAE could create manageable conditions for leaving the collective enterprises. During the whole transition period, the state policy was constantly issuing the decrees on the procedures for such regulations as: distribution of land and property pais, methodology of defining concrete land pieces and sharing the assets between large agricultural producers. The policy disbalanced the economic infrastructure, because the farms have been supported by the state. The dependency on subsidies, bank credits and loans from the government was so stable that there was no possibility to develop the sector. Another popular measure was “borrowing” from the farmers by not paying the salary to farmers. Regional authorities, in turn, toughly opposed the land privatisation.

The reason of the failed privatisation, therefore, was that CAE collected great many debts. According to the Ukrainian law, the agricultural producers in debt cannot leave the collective enterprises. The state, banks and contractors, wrote off the debts and provided new credits and subsidies for the non-reliable and politically-affiliated companies. The decision of 2001 has been delayed on the premises of unprepared legal conditions (absence of the land cadastre register and the mortgage bank) and a reasonable awareness about the threat that all land would be bought by the foreign firms. The so-called moratorium on land sale continues to stress the Ukrainian economy from unpredictable and dramatic consequences.

As a result, agriculture holdings develop their own businesses and ignore the economy of the regional populations which are struggling to make up for a living. It became typical for the Ukrainians to search for a work in neighboring European countries. In 2014, the data for several years showed that the number of people involved in individual agricultural production shortened from 2.2 million to 500 thousand, as more than three hundred of villages have ceased to exist.

Given that the country's economy was dependent on the loans from IMF from the very beginning, foreign companies have been given access to invest in the Ukrainian lands. IMF lobbies the liberalisation of trade and openly declares that access should be opened to the international players on a large scale. However, even up till now the presence of the Western firms is tremendous. The “Trigon Agri” company, for example, entered the Ukraine and began farming activities in Kharkov since 2006. It's land area is relatively small (52 000 ha), but the shareholders include British company JPM Chase (9.5%); Swedbank (9.4%); Finnish UB Securities (7.9%); Belgian Euroclear Bank (6.6%); and the U.S. JP Morgan Clearing Corp (6.2%). Another company by a participant of the privatisation management in the post-Soviet space of 1990s George Rohr and NCH capital owns 450 000 ha of the Ukrainian farmland. As he explained, the investors lease the land, expecting to buy it after the Ukrainian government would cancel the work of the moratorium.

All foreign firms together own 1 600 179 hectares: Public Investment Fund (PIF) Saudi Al Rajhi Group, Almarai Co (33 000 ha); Russian company Renaissance Group (250,000 ha), Serbian MK Group (50,000), Swiss Glencore Xstrata PLC (80,000); Cypriot Sintal Agriculture Plc (146,800); Swedish Agrokultura AB (68,700); French AgroGeneration (120,000); Kernel Holding S.A. Luxembourg (405,000); MCB Agricole Austria (96,000); Mriya Agro Holding Public Limited Cyprus (298,000).

In January 2014, when protests in the Ukraine were tense already, the U.S.-based company Cargill bought a 5% share in the largest Ukrainian agricultural player UkrLandFarming (670 000 ha) owned by a billionaire Oleg Bakhmatyuk. https://www.newcoldwar.org/who-owns-agricultural-land-in-ukraine/

Regarding the major business players, tax payments have been avoided through the offshore zones and fake foreign investments organised by the oligarchs themselves. Apart from the fact that billions of dollars left the country every year, it is impossible to define the origins of the finance returned to the country through the nets of pseudo-companies and fake owners. Tax maidan of 2010 also may be treated as an indication of large societal problems that promise political destabilisation.

Overall, the roots of the conflict started in the Ukraine in 2013 lie primarily in the economic sphere that dominates both internal and foreign politics of the country. Before looking into the political details, it is worth noticing that the very process of preparation for the political changes has started long before the radicalisation of the conflict. The involvement of the Ukrainian protest majority in political matters was realised through the extensive net of the non-governmental organisations (NGO) which cooperated with regional and municipal authorities. Thus, it is possible to see a dependency in that the level of trust to the officials in the Ukraine has been getting lower in comparison to the trust to the NGO with neutral position and access to resources. According to the USAID, in 2008-2011 the knowledge of Ukrainians about the existence of NGOs sufficiently grew from 15% to 58% of the population. In 2012, the process of registering NGO's has been made simpler: they got a right to operate in the whole country irrespectively to the local registration and conduct commercial activities more easily. According to the data of 2013 by the Democratic Initiatives Foundation in Kyiv, the top three directions of the NGO activities preferred by the citizens were: social issues (“help to socially underprivileged groups”, 57% of respondents), the legal support (50%) and control of the actions of political authorities (45%). The information support in the media has been extensive and the 2013-2014 mobilisation of the Ukrainians for the protests relied on the civil society activities as well as promotion of the democratic values through the NGOs.

Several remarks on the development of the conflict

In July 2013, Putin celebrated 1025 years of Christianity in the Ukraine and maintained that cultural and spiritual ties between the countries should not be less important than economic and political ones. The patriarch Kirill formulated an ideological example of the very popular topic that fits a notion of “clash of civilizations”, like it is considered in the geopolitical literature. Commenting on the secular values, he warned that legislative efforts to legalise same-sex marriage in Europe posed a grave threat to Russia:

a very dangerous apocalyptic symptom, and we must do everything so that sin is never validated by the laws of the state in the lands of Holy Rus, because this would mean that the people are starting on the path of self-destruction”. (New York Times 28.06.13)

Among the major political reasons of Euromaidan is a gradually evolving clash between the Western democracy agenda and Russian activities to influence the CIS (Commonwealth of Independent States) zone. The process was built around the Association Agreement (AA) between the EU and Ukraine which is a part of the Eastern Partnership integrative project.

In the first year of his presidency Yanukovych's government used the American auditors and the investigative firm of Kroll Inc. that proved financial violations at the transfer of natural gas assets by Tymoshenko during her work as a prime minister. It was this case that the U.S. and European authorities used for pressuring the Ukrainian government to fulfil the conditions of the association with the EU. The European Council (EC) required three steps for the association: “reliable electoral system”, prevention of “selective justice” through a judicial reform and the improvement of “deteriorating business and investment climate”. In particular, the EC agreement required to start of the constitutional reform and release then imprisoned Yulia Tymoshenko.

David Cadier from the London School of Economics and Political Science commented on the Ukrainian situation in 2013:

“By playing the two regional actors off one another, Yanukovych had aimed to raise the stakes and maximise its potential advantages and benefits; neither by originally indicating his readiness to sign the Association Agreement nor by eventually rejecting it did the former President make a definite choice. Rather than as an agenda for reform or an embracement of the European model, he seemed solely interested in the AA for financial reasons and `as a means of continuing its balancing act between the EU and Russia.”

It is also important to stress that the Association was not the same as the widely-pronounced in the media “euro-integration” of Ukraine. How Ukrainian protesters saw it was most often stated as sharing European values as well as introducing visa-free regime with the European countries. Apart from the financial aid and sectorial access to the EU internal market, Eastern Partnership involves the greatest asset for the EU in the form of a Deep and Comprehensive Free Trade Agreement (DCFTA). This initiative was treated as a great perspective in terms of economic development but it also required “enormous effort in terms of technical and legislative harmonization with the EU acquis communautaire, which governments of the region are often reluctant to bear if they judge the potential benefits insufficient”.

By the end of 2012 Ukraine's foreign trade constituted 36,3% with the countries of the Eurasian Customs Union (ECU) and 29,2% with the EU countries. The association deal meant that the large share of Ukrainian economy should have been immediately re-structured which was impossible by the end of 2013. In fact, EU membership supposed stopping the special trade agreements with the ECU countries as well as entrance of the uncompetitive Ukraine into the European market. This fact is of paramount importance, because many Ukrainians did not realise it when participating in protests.

While negotiations on the both integrative processes have been balancing until the political crisis in December 2013, Ukrainian oligarchs made several major dealings with the business partners from abroad. In summer 2013, Akhmetov and Pinchuk initiated a lawsuit against the Ukraine for the nationalisation of the Kryviy Rih Steel Mill in 2005. The largest Ukrainian metallurgy plant had been bought by them for 800mln and then re-sold for 4.8 billion to the world's leading steel producer ArcellorMittal company.

Remarkably, two first mentions of Poroshenko in the U.S. press are informative about the political situation. The NYT op-ed by a famous Harvard professor Niall Ferguson (02.10.13) discusses strong opposition of Putin to the Ukrainian membership in the EU. He reports that on the recent Valdai forum, Putin's economic advisor Glazyev talked to Poroshenko in “an astonishingly undiplomatic debate”. Ferguson wrote that the difficulties of Roshen company on the territory of Russia is an example of losses that the Ukraine would have after associating with the EU. The later publication of 30.10.13 reports on Poroshenko company in detail, describing his trouble in Russia as a background in the trade war opposition “ECU vs. EU”.

Protests in Kiev started on November 21, when Yanukovych announced he would not sign a trade agreement with Europe but would pursue closer economic ties with Russia instead. On 17 of December, Vladimir Putin and Victor Yanukovych agreed that Russia buys 15 billion of euro obligations issued by the Ukrainian state. The same day, Gazprom and Naftogaz signed a contract lowering the price of 1 thousand cubic meters of gas by around a third (from 400$ to 268,5$). According to the Western plans, IMF should have give the Ukraine a loan of the same amount.

On 13 December, Rinat Akhmetov and a onetime ally of Yanukovych issued a statement supporting protesters, calling for clarity from the government about its position on Europe: "That peaceful people have come out for peaceful protests shows that Ukraine is a free democratic country," Mr. Akhmetov said. "From that path Ukraine will not swerve. And it's great. But that in recent days these people have suffered - that's unacceptable".

After violence turned to shootings in the centre in Kiev the military activities by the voluntarily participating military groups has started in several Eastern regions of the Ukraine. The so-called separatists of Donetsk and Luhansk republics have been backed by the commercial military contractors (e.g. Wagner Group), someof them tied to the Russian government and others to Ihor Kolomosky.