A member of election commission stands among ballot boxes at a polling station in Kiev, Ukraine, on Sunday, May 25, 2014. Ukraine's critical presidential election got underway Sunday under the wary scrutiny of a world eager for stability in a country.

A member of election commission stands among ballot boxes at a polling station in Kiev, Ukraine, on Sunday, May 25, 2014. Ukraine's critical presidential election got underway Sunday under the wary scrutiny of a world eager for stability in a country.

On Sunday, in the first election since the toppling of the government, Ukrainians chose Petro Poroshenko as their next president. The country’s new leader—also known as the Chocolate King—is no stranger to Ukrainian politics. He supports the pro-Western agenda rejected by his predecessor, and in his first public statement, Poroshenko said his priority is putting an end to the chaos of the last six months. This will be no easy task. Poroshenko will contend with continued pressure from Russia, instability in eastern Ukraine and an interim government that many view as illegitimate. Diane and her guests discuss reaction to elections in Ukraine.

Guests

  • Steve Pifer senior fellow, Brookings Institution. He served as U. S. Ambassador to Ukraine from 1998 to 2000 in the Clinton administration.
  • David Herszenhorn correspondent, The New York Times
  • Anders Aslund senior fellow, Peterson Institute for International Economics
  • Andrei Sitov Washington bureau chief, Itar-Tass news agency of Russia.

Transcript

  • 10:06:53

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. In the Ukraine city of Donetsk, the military clashed with pro-Russian separatists in a battle for the city's airport. The fighting came one day after Ukrainians elected new president, Petrov Poroshenko. The election was seen by international observers as fair in the east it was marked by low turnout and intimidation.

  • 10:07:22

    MS. DIANE REHMHere to discuss the elections in Ukraine, Steve Pifer, former U.S. ambassador to Ukraine, Anders Aslund of the Peterson Institute for International Economics and Andrei Sitov of Itar-Tass news agency of Russia. But first, joining us by phone from Moscow, David Herszenhorn of the New York Times. David, I'm so glad you could be with us. Tell us about Ukraine's new president, Petrov Poroshenko. He held a press conference yesterday in Kiev. What did he have to say?

  • 10:08:02

    MR. DAVID HERSZENHORNWell, Petrov Poroshenko, as you've mentioned, is no stranger to Ukrainian politics. He served as the speaker of parliament as a long time lawmaker. He's served as foreign minister and as trade minister and has been working behind the scenes in a leadership role, really the most outspoken of the oligarch businessmen in Ukraine in favor of the uprising that ousted Viktor Yanukovych.

  • 10:08:22

    MR. DAVID HERSZENHORNWhat he said, having been elected in essentially a landslide was that his first order of business is trying to restore peace and security in the east. That will be very difficult. He wants his first trip to be out there. Of course, you need the airports up for him to be able to do that. Then, he wants to turn, of course, to this pro-European tract that Yanukovych had abandoned, finalizing the agreements with the EU that when Yanukovych backed away from that, of course, set off all this unrest in the first place.

  • 10:08:51

    MR. DAVID HERSZENHORNBeyond that, Poroshenko has to form a government that will be accepted by all of Ukraine and for now, he's going to keep the provisional government that we've seen, but that's another challenge in the days ahead.

  • 10:09:03

    REHMAnd David, tell us about the latest doubt of Donetsk where I gather a separatist had taken over the airport.

  • 10:09:16

    HERSZENHORNWell, I'm just back in Moscow from Kiev, from the capital, but we have colleagues that are in Donetsk where there was this fierce battle last night, yesterday over the airport, quite unsettling for the government to see armed separatists take control of the airport. They were then beaten back, quite a lot of casualties on the rebel side.

  • 10:09:34

    HERSZENHORNAnd I think what we're seeing is this last gasp. Obviously, Russia has said President Putin has indicated he's going to respect this election result. Negotiations will begin with Poroshenko and his team over what the future will look like. And for the separatists, of course, that's a message that their political support is being pulled out from under them.

  • 10:09:53

    HERSZENHORNAnd there seems to be a last push here for them to show, look, they're not happy about this. Putin doesn't necessarily control them. The unrest will continue as long as they can muster it, but it's not clear that it can go on much longer.

  • 10:10:03

    REHMBut will Putin back those separatists as long as they continue?

  • 10:10:11

    HERSZENHORNIt seems that it's convenient, obviously, from the Russians' negotiating stance to have this unrest continuing, but overt support really seems impossible at this point. There's some allegations that some military trucks that were participating in this action made it across the border from Russia. That's certainly possible.

  • 10:10:29

    HERSZENHORNBut what's more likely is that some sort of negotiation gets underway with the Kremlin's backing. Meanwhile, whatever unrest there is sort of strengthens the hand of the pro-Russian view as those negotiations go forward.

  • 10:10:41

    REHMI know you were in Kiev covering the election. Why do you think voters supported Poroshenko by such a wide margin? What did they think of him?

  • 10:10:54

    HERSZENHORNWell, there are a lot of voters who are not thrilled to be voting for him, but they do want somebody that they see as a different face that can take them forward. His closest rival, Yulia Tymoshenko, is the former prime minister, obviously a nemesis of Yanukovych, but somebody's who's seen as really a veteran of the old system, even more a product of the old system than Poroshenko.

  • 10:11:15

    HERSZENHORNShe was prime minister twice. Obviously, was in jail on charges that the West see as trumped up. But what it seems voters were looking for is somebody, a business man, a manager who can take them forward. He's made a very strong message against corruption. There's a feeling that as a billionaire, he doesn't need to steal anything. He's wealthy enough.

  • 10:11:32

    HERSZENHORNHe has promised to continue this pro-European tract. But there are a lot of people who participated in the unrest and the uprising who think this is not enough of a change and that, in fact, they wish there were really new faces. There's some patience because of the unrest in the east that say there hasn't been time to make all of the changes they'd like.

  • 10:11:49

    HERSZENHORNSo it's been a mixed reaction. Some people very excited, say this is a victory to get Yanukovych out, others who say, you know, there really needs to be even further change going forward.

  • 10:11:58

    REHMWould you expect Vladimir Putin to meet with Poroshenko fairly soon?

  • 10:12:06

    HERSZENHORNWhat Poroshenko said at his news conference yesterday is that he expects to meet with the Russian leadership sometime in the first half of June. Now he didn't say Putin, but he did say that he and Putin have a long relationship and this is true. He has very long and deep business interests in Russia and so increasingly, we get the sense that the Kremlin thinks it can deal with Poroshenko.

  • 10:12:24

    HERSZENHORNThat if there's someone who can strike this balance between east and west, that can help get Ukraine out from in the middle of this, you know, big geopolitical tug of war, that Poroshenko may be the guy.

  • 10:12:34

    REHMDavid Herszenhorn of the New York Times, thank you so much for joining us.

  • 10:12:43

    HERSZENHORNThank you.

  • 10:12:44

    REHMAnd now, turning to you Steve Pifer, tell us about this new president of Ukraine, Poroshenko.

  • 10:12:54

    MR. STEVE PIFERWell, he's, I think, has a very good reputation, which was manifested in the vote that you saw where he won 54 percent of the vote. And I think that reflects several things. First of all, he had a message that was fairly appealing to the Ukrainian electorate talking about anti-corruption, pro-reform and also the pro-European course, while at the same time, saying he was prepared to deal with Russia.

  • 10:13:16

    MR. STEVE PIFERA second part of his appeal, I think, was a reputation as a pragmatist and Ukraine needs a pragmatic approach now. And then, third, he was the business man who was first out there supporting the protesters on (word?) at the end of last year and that gives him a lot of street credibility with the people who really were pushing really hard for change.

  • 10:13:36

    REHMBut doesn't he, himself, have ties to Russia?

  • 10:13:41

    PIFERWell, he has some ties to Russia, but that may not necessarily be a negative at this point. I mean, to the extent that he can work with Vladimir Putin and I think the jury's still out on whether we have seen or we will see a real change in the part of Russia's approach. But to the extent that he can work that relationship, at some point, if Ukraine wants to normalize its situation, it's going to have to normalize the relationship with Russia.

  • 10:14:04

    PIFERThe big question, though, to my mind still is are the Russians prepared to change course.

  • 10:14:08

    REHMSteve Pifer, he has served as U.S. ambassador to Ukraine from 1998 to 2000 in the Clinton administration. Anders Aslund, this is a man who's business ties are very much in Russia. How is that going to affect his efforts, for example, to turn toward the EU?

  • 10:14:39

    MR. ANDERS ASLUNDWell, I know Poroshenko quite well for the last decade or so and Poroshenko, as Steve said, he's a very sensible person. And I think that what Ukrainians wanted now is, apart from what Steve said, also a man that they know so that they don't get, so to say, the Mongolian candidate, a person who's taken over by some other person and they've also learned from Bjorn's revolution not to have a very poor executive as President Viktor Yushchenko turned out to be.

  • 10:15:11

    MR. ANDERS ASLUNDThey know that Poroshenko is a good executive. And, of course, what you -- a point is the big danger of a conflict of interest. And now, fortunately, in one of his first statements, Petrov Poroshenko said that he will sell his business. He, indeed, has a big chocolate factory in Lipetsk, a bit south of Moscow, and that would be a big problem.

  • 10:15:37

    MR. ANDERS ASLUNDThe Russians have imposed trade sanctions against him so that he can't export chocolate from Ukraine to Russia since August last year. And they have also frozen his funds, company funds he has in Russia, $80 million. This is no small business...

  • 10:15:56

    REHMSo he's going to lose a lot of money in this deal.

  • 10:16:00

    ASLUNDWell, he is intent on selling it and I think that this is something that we have to check that he really does. He does intend to keep his television channel.

  • 10:16:12

    REHMAnd that is the voice of Anders Aslund. He's senior fellow at the Peterson Institute for International Economics. Andrei Sitov, is Poroshenko a person that Mr. Putin will work with?

  • 10:16:31

    MR. ANDREI SITOVYes, he is. President Putin has already said so himself when asked. On the other hand, when I look at this, I think his first task is to deal not with Putin. It is to deal with the people in his own country, in the east and south of his own country. And until and unless he does, nothing he works out with Putin will work for him. And, frankly, I'm a little uneasy being here as a Russian because in a way, it is an awful important, vitally important issue for Russia, unlike the United States, by the way.

  • 10:17:17

    MR. ANDREI SITOVBut on the other hand, Russia does not have direct presence there in the Ukraine, direct influence on the events in Ukraine and I guess your audience might have been better served by Ukrainian journalist speaking in my place.

  • 10:17:39

    REHMSo you feel that because of the disruption and perhaps the lack of support for Poroshenko in the east and south, he's going to have a very difficult time.

  • 10:17:56

    SITOVI'm pretty sure of that. The people in Donetsk and Luhansk have declared independence, have voted for independence. They disregarded President Putin's call to postpone the vote so they'll have their will and their say. And, again, unless and until the new government in Kiev finds a way to accommodate the interests of those regions and they are, which is vitally important, I think.

  • 10:18:29

    SITOVAnd this one, I can say, with full confidence, even if I'm Russian, until they stop shelling their own people and bombing their own people, any accommodation will be impossible.

  • 10:18:42

    REHMAndrei Sitov of Itar-Tass news agency of Russia. Short break, right back.

  • 10:20:01

    REHMAnd welcome back. We're talking in this hour about the elections on Sunday in Ukraine. Here with me is Steve Pifer. He is senior fellow at the Brookings Institutions. He served as U.S. Ambassador to Ukraine from 1998 to the year 2000. Anders Aslund is senior fellow at the Peterson Institute for International Economics. And Andrei Sitov, he's Washington bureau chief for the Itar-Tass news agency of Russia.

  • 10:20:43

    REHMSteve Pifer, you've heard what Andrei Sitov has to say. That is going to be extremely difficult for Poroshenko, especially given the disagreements not only with Mr. Putin, but from residents in the east and south. What do you make of that?

  • 10:21:07

    PIFERWell, first, I would disagree with Andrei on one point. I think, in fact, Russia has significant influence in eastern Ukraine. And one of the problems in the last several months is that Russia has not used that influence with the arms separatist to try to defuse the situation. So for example, yesterday the separatist attack at the Donetsk airport, the Ukrainian military defended and repulsed them. Today, Moscow is criticizing the Ukrainian military for taking action, but no criticism of the separatists who started the battle yesterday.

  • 10:21:37

    REHMAre the separatists actually pro-Russia or are they pro-Kremlin?

  • 10:21:43

    PIFERI think they're pro-Russian, but I think it's also important to understand that the armed separatists, I believe, reflect only a minority viewpoint in eastern Ukraine. The referenda that were conducted in Donetsk and Luhansk were fairly dubious. There was no observation of any kind. You had referenda taking place and people with -- guys with guns. And my guess is most of the population of eastern Ukraine that want to be in Ukraine, do not want independence, do not want to join Russia, simply stayed home.

  • 10:22:14

    PIFERAnd polls conducted by reputable Ukrainian organizations have shown that, well, in eastern Ukraine, the population is not comfortable with what happened at the end of February, how the government went down and how Mr. Yanukovych, the previous president, was replaced. They do show that 70 percent of the population want to remain in Ukraine.

  • 10:22:32

    REHMAnders.

  • 10:22:34

    ASLUNDYes, well, I can only agree with what Steve has said here. And of course, something that one can really demand from Russia is that it closes its border. As late as last Saturday, Ukrainian border services reported where five trucks and two cars were on demand across the border from Russia. The Ukrainian Russian border is very long and traditionally not defended. It's basically an open border and Russia has not tried to stop any traffic from their side.

  • 10:23:10

    ASLUNDOn Sunday, two days ago, the Battalion Vostok, which comes essentially from Chechnya that has been reinforced with some Ukrainian special forces from the east had a parade on the Central Square in Donetsk, at least 120 men coming in on six open trucks. This is military activity from Russia. And also we know the names of leaders of the military action in Ukraine and they are Russian citizens.

  • 10:23:49

    ASLUNDIt's led by (unintelligible) in Donetsk. And most of these people that are named and know, they belong to nationalist -- hardcore nationalist Russian organizations. And they're known from Russia. They are known from Ukraine. So Russia is establishing its government-led known governmental organization so that it will have certain ability to deny what is happening. And they can let their nationalist opposition at home do whatever bad things they want in Ukraine.

  • 10:24:27

    REHMAndrei, what do you expect of Vladimir Putin to do next?

  • 10:24:35

    SITOVWell, you know, Vladimir Putin is a master at doing the unexpected. Generally speaking I think he will -- he has and he will defend the Russian interest with all means available to him. Unlike the American president who sets red lines and then fails to observe them, Putin does not set red lines. But when vital national interests of Russia are threatened then he takes decisive action and then he wins.

  • 10:25:16

    REHMAll right. But Mr. Putin has said he will acknowledge, he will recognize the election of Mr…

  • 10:25:26

    SITOVNo, he never said that. He only said that they will respect the will of the people, which is obviously a very important statement, mostly -- I would assume mostly morally important. I wish there was a similar recognition of the will of the people clearly expressed in Crimea by the American administration, the west in general but...

  • 10:26:00

    REHMAll right. Steve, do you want to comment?

  • 10:26:03

    PIFERWell, on the Crimea case, again, I think you had a referendum there that was very dubious. In fact, a member of Mr. Putin's human rights council put something out where he said, in fact only about 30 percent of the population of Crimea voted and only half of them voted to join Russia. So I think there's some real questions about how the Crimea referendum went down. And bear in mind, this was carried out in less than two weeks. So there really wasn't time for adequate preparation. A lot of serious questions about validity of that.

  • 10:26:33

    PIFERNow my guess is that in a real vote that a large number of people in Crimea might well have voted to join Russia or for greater autonomy. But I don't think we have a basis for that conclusion based on the referendum that the Russians conducted in Crimea in March.

  • 10:26:49

    REHMI'm sure you would agree with Andrei that Mr. Putin's actions are difficult to gauge or to predict. Anders, what do you see Mr. Putin doing next?

  • 10:27:06

    ASLUNDWell, I totally agree with Andrei about that that we never know what Putin will do next. So what we would expect from him is the unexpected. My guess is that he will turn to China. He will forget Ukraine. I was very struck in his big speech in St. Petersburg last week. He did not mention Crimea. He accepted it in two questions, but he did not bring up Crimea as a success of his own. So I think that he will quietly forget about Ukraine and try to do something more successful.

  • 10:27:40

    REHMYou...

  • 10:27:40

    SITOVI wanted to jump in here for a second because you asked about Putin and his intentions. Obviously I do not know this...

  • 10:27:49

    REHMNo one can.

  • 10:27:50

    SITOV...yes, I can only guess. But what I do know, what I'm observing because I read very carefully as I often say, all the politicians for me are transcripts. I read all the transcripts from Putin. And I do know for a fact, from what I read, is first of all he's very legalistic, very legal minded, very legalistic. He will stretch the law to the limit to defend the Russian interest but he will remain within the law.

  • 10:28:19

    SITOVAnd then second of all, in this situation, I think he regards himself as reacting. And I think myself and others regard him as reacting to provocation from the west.

  • 10:28:37

    REHMGo ahead, Anders.

  • 10:28:38

    ASLUNDYeah, let me just say that in annexing Crimea, President Putin violated at least half a dozen major international treaties that have been ratified. That's the UN Charter, it's the Helsinki Final Act, it is bilateral treaties waiver Ukraine. And after that, one wonders what's the value of the treaty waiver? President Putin, this is not legally...

  • 10:29:04

    SITOVI don't agree with that. I totally don't agree with that. There are different international norms in the UN Charter including in the very first chapter of the UN Charter the normal self determination.

  • 10:29:20

    REHMAll right. I don't want to go down that path at this point. My question to you Steve Pifer, how do you expect President Putin to regard the new president of Ukraine going forward? Will he continue to try to send perhaps provocateurs? Will he accept the election, and as Anders said, turn his face toward China?

  • 10:29:56

    PIFERWell it could be a very important step if Mr. Putin does intend to respect the will of the Ukraine voters that we saw on Sunday, where they overall voted for Mr. Poroshenko. And it would be a positive step if Russia would not engage Ukraine in a normal way. But I tend to be a little bit skeptical.

  • 10:30:14

    PIFERIf you go back, what really triggered, I think, the Russian decision to illegally occupy with its military force Crimea, was when they understood that the acting government that replaced President Yanukovych after he fled was pro-European Union, that it was going to go ahead and sign the association agreement. And I think that triggered Crimea, it triggered economic sanctions, it triggered Russia regime gas prices for Ukraine. And it triggered the armed separatists and support for the separatists in eastern Ukraine over the last six weeks.

  • 10:30:44

    PIFERMr. Poroshenko has affirmed that he wants to do the association agreement with the European Union. So you don't see that change in Ukrainian policy and it's not clear to me then why Russia suddenly shifts. I hope Russia shifts its policy. I hope the Russians engage Kiev normally. I hope the Russians end their support for the separatists in Donetsk and Luhansk. But I think it's very much something that we have to see.

  • 10:31:06

    PIFERMr. Putin has said things in the past, for example on May 7 he said he was calling on the Russian military to withdraw from the Ukrainian border. He said the same thing on May 19. So the question was, did he misspeak on May 7? Did the Russian Army not obey him? You know, he has a credibility issue here and I think we have to see actions, not just the words.

  • 10:31:25

    REHMAnd in the meantime, will the U.S. and the west continue sanctions against Russia?

  • 10:31:34

    ASLUNDWell, clearly with sanctions that are in place already will continue. And in various ways, they will be strengthened. It's a clear (word?) both for the United States and the European Union that whatever company tries to develop Crimea under Russian occupation will be sanctioned. That costs a lot. And we can also see that the Russian growth forecast for this year have fallen by 2.5 percent of GDP in the last three months.

  • 10:32:07

    ASLUNDSo the cost to Putin and Russia, all the action in Ukraine has been very substantial. So I'm more optimistic. I think that...

  • 10:32:17

    REHMWhat about these sanctions, Andrei? To what extent are they hurting Russia?

  • 10:32:23

    SITOVThe sanctions that exist are just words, the sanctions that are threatened may be very harmful. Putin has acknowledge that we can both, both our sides, do a lot of harm economically to each other. And he asks why, why would anyone need this in this especially in this current crisis. In the economy where the American economy is sluggish and where, I think, most importantly the -- for me strangely, the more important election this past weekend was held in Europe, not in Ukraine.

  • 10:33:04

    SITOVAnd this election in Europe was anti-EU, was anti-IMF. It was anti-Ukraine. I want to stress this. This was anti-Ukraine. The EU does not want the -- a Ukrainian influx. The EU does not want to spend any more money than they can on helping Ukraine.

  • 10:33:30

    REHMCertainly an indication of a growing nationalism with that EU, with the European election.

  • 10:33:38

    PIFERVery much so and it's certainly very interesting. It was the far right elements in Europe that did very well. And interesting enough it's the far right elements that tend to be the most supportive of Russia. I guess I would disagree on the point about EU support for Ukraine. I think the European Union has been clear that it does not want to create a membership perspective for Ukraine. In part because Ukrainian is large. It's relatively poor. But there has been consistent support expressed by the leaders of the European Union for going forward with the association agreement. And that would be an important step.

  • 10:34:09

    REHMAnd you're listening to "The Diane Rehm Show." Anders, what do you make of this growing nationalism that seems to have been demonstrated with the European elections?

  • 10:34:25

    ASLUNDWell, first of all, I think it should be on the line that 70 percent of the votes were given to centrist establishment parties. So it was not a landslide. The same majority remains in Europe. It's true that there was an increase on the hard right and the dominant issue in Europe is immigration. And interestingly it's not immigration inside the European Union but it's the immigration from countries outside.

  • 10:34:56

    ASLUNDAnd I think that the establishment in Europe needs to think of an immigration policy that is acceptable to the population, the many changes that can be made within a democratic sensible range. But coming back to Ukraine, this was quite extraordinary that Ukraine managed to organize fully free and fair elections. And clearly the Ukrainians said, okay, Poroshenko is the best candidate. Let's get him through in the first round. We want to show that we are orderly and that we can elect a legitimate president.

  • 10:35:36

    REHMYou're disagreeing, Andrei.

  • 10:35:36

    SITOVI'm -- yes. I'm -- if there was something that I was really ashamed of when I looked at this was this utterly Soviet-type behavior from the Americans and the western Europeans in regard to the Ukrainian election. They claimed -- they still claim that an election inside a warring country is legitimate, fair and what not. Candidates who stood for president were physically intimidated and beaten. They had to withdraw some of them because of the threats from the far right in Ukraine. The far right that you say is associated with Putin.

  • 10:36:23

    SITOVActually in Ukraine, the far right is there -- are the troops who are fighting their own people for the far right ideology. But -- and then, the media. The media. When I was reading in the press here statements from politicians, western politicians saying that, yes, you know, when you bring in Russian language media, this may be democratic, you know, this may be justified. I can't believe my eyes.

  • 10:36:54

    REHMAll right. Anders. Excuse me. Anders.

  • 10:36:58

    ASLUNDWell, let me just respond on the two points. First, it was in Donetsk and Luhansk where terrorists stopped it. The Ukrainian government did not use force against the referendum on the 11th of May, which they could have done. So blame your own people and prohibiting Russian propaganda. Well, Nazi propaganda was prohibited after the Second World War and still is in Germany.

  • 10:37:28

    REHMAnders Aslund of the Peterson Institute. Short break here. When we come back we'll open the phones for your comments, questions. Stay with us.

  • 10:40:01

    REHMAnd welcome back as we talk about the elections on Sunday in Ukraine, which indeed did produce a winner. The question becomes how accepted that winner, Petro Poroshenko, is going to be. Not only by his own people within Ukraine, but from Russia, as well. Here's a question from Don, in Washington, D.C. He said, "Will the new oil deal with China, by Russia, have any impact on further sanctions against Putin?" Steve?

  • 10:40:51

    PIFERWell, my guess is that the Russians see this as an important deal. And it gives them the ability to diversify to whom they sell oil. But it also doesn't really -- I mean, it's actually based on natural gas, is the main focus here. But the fields that will be producing gas for China actually come from the eastern part of Russia, whereas that gas that goes to Europe still comes from the western Siberian fields. And as big as the deal was, it still amounts to an annual sale of gas to China that'll be only about 25 percent of what Russia now sells to Europe.

  • 10:41:29

    REHMAnd what about the upcoming gas bill that Ukraine owes Russia, Anders?

  • 10:41:38

    ASLUNDWell, I think that it will be paid. And the big questions is what…

  • 10:41:41

    REHMHow?

  • 10:41:43

    ASLUNDWell, Ukraine has got plenty of the financing, thanks to the $17 million loan from the International Monetary Fund, and even before that it had $15 billion of reserves. And what we're discussing here is about $2 billion of gas that -- it's not big. The issues are rather what will the prize be going forward? And my sense is that Russia had better be sensible and offer a reasonable price, but lower than it offers to Europe because the distance is much shorter.

  • 10:42:23

    ASLUNDRussia has it down from $268 for 1,000 cubic meters to $485 now. And this happened within a few days. You can't jump around with the prices, as this totally political fashion. Then nobody wants to buy from you.

  • 10:42:43

    SITOVRussia did not jump this way. Russia jumped the other way. The Ukrainians, a few years ago, signed the deal with Russia, agreeing to buy the gas for $400 something or whatever it is, how they count. Then the Russians gave them a huge discount once and again and again and again, that they didn't pay anyway. So what the Russians keep saying is we have a contract. And the contract needs to be fulfilled. And we are not obliged, under any law, to give discounts to people, especially who do not pay.

  • 10:43:22

    SITOVI can tell you a funny episode about this. After the end of the Cold War, for a few years, the Americans were paying rent of $2.50 per year for a big house in downtown Moscow for the residents of their ambassador, who Mr. Pifer probably knows about. And that was because that was the contract concluded with the Soviets before the Russians. And the Russians were very desperately in need of cash at that point. But they accepted this, because this was contract.

  • 10:43:58

    SITOVThe same goes with the Ukrainians. They signed the contract, they can -- the Russians, again, they say we can talk with them, but let them first pay the debts. And the debts are more than…

  • 10:44:08

    REHMAll right. Steve, do you want to comment?

  • 10:44:10

    PIFERWell, I think if you go back and if you look at Gazprom, that's the major Russian gas exporter to Europe, basically most major European consumers have renegotiated their contract prices with Gazprom over the last several years. And it does seem a little bit incongruous if Ukraine is paying $485 per 1,000 cubic meters of gas, whereas Germany, which is another 500 to 800 kilometers away, and therefore has higher transit costs, is paying only around $320 to $350 per 1,000 cubic meters.

  • 10:44:40

    REHMAll right. Let's open the phones. First, to Jim, in Canton, Ohio. You're on the air. Go right ahead, Jim.

  • 10:44:50

    JIMYes. Well, I have a two-parter. On RT News they said that there was no voting booths or any elections at all set up in the east, in Donetsk in particular. And I just wanted to know how they can gain legitimacy for their government in Kiev when no one in the East voted for them. And also, I'd like to know why we -- the news represents them as pro-Russian demonstrators or protestors.

  • 10:45:19

    JIMWhen in fact, you know, they're Ukrainians and they don't have a -- I think what they really are is they're anti-Fascists. They're opposed to the government that took power by fire-bombing buildings, storming buildings, killing the police and acting like Fascists, which is what they are. So it seems to me they should be called anti-Fascists.

  • 10:45:38

    REHMAll right. Thanks for calling. Go ahead, Anders.

  • 10:45:41

    ASLUNDWell, if it was about anti-Fascism then it would be good to have some Fascists. Otherwise, you can't really protest against Fascists. The two right-wing candidates in the election, got each less than 1 percent of the vote. So Ukraine has far less Fascists than most West European countries. Not to mention Russia.

  • 10:46:05

    REHMWhat about his point that there were no voting booths there?

  • 10:46:10

    PIFERThat's incorrect. In Donetsk (word?), Donetsk Province, about 1 in 6 precincts were actually able to go ahead and hold elections. The problem was that over the preceding couple of weeks the armed separatists were going in and intimidating people who ran the precincts, basically threatening their lives, smashing up some voting stations when they were set up, stealing ballots. So I think the government made a good faith effort to try to carry out the election in as much as possible in Donetsk and the other province Luhansk, but they were blocked by armed separatists.

  • 10:46:43

    REHMAll right. To Elmar, in Alexandria, Va. Hello there.

  • 10:46:51

    ELMARHi. I have -- thanks for taking my call. I have a question to the Russian representative here. I mean, I could have asked many questions about many untruths that Russian representative has said. But my main question is about the contradiction of what he said about the need to fulfill the contract and oblige by law on gas contract between Russia and Ukraine. How can Russia claim that it violated any norms of law and annex Ukrainian territory in Crimea? So how can Russia even talk about international law?

  • 10:47:31

    SITOVI think we raise this issue before with Aslund, with Mr. Aslund. There are different norms in international law. There is a norm of viability of our borders. There is also a norm of the right to self-determination. And that norm is in the charter of the United Nations. The legal norms -- and, again, I want to stress this. I think this is very important to understand. And my best advice to anyone who wants to get to the bottom of it, especially if they want to see the Russian point of this -- just read.

  • 10:48:11

    SITOVRead the transcripts from Putin. He has been talking about this in the past few days openly with journalists at least twice, at length. So please read him and he'll explain everything. But the norms are there. They are differently interpreted. According to the Russian point of view the norms are strictly observed.

  • 10:48:33

    REHMAll right. Steve?

  • 10:48:35

    PIFERYeah, I guess I would just disagree on the application of self-determination. I don't think that there's any internationally recognized right for a minority population to vote itself out of a state without any kind of limitations. And I think Andre would agree that certainly Russia did not accept that right for the Chechens when the Chechens tried to leave and the Russians fought two very bloody wars in the 1990s and the early 2000s to prevent that.

  • 10:49:00

    REHMNow, tell me what Mr. Poroshenko has to do to begin to get the Ukraine back on its economic equilibrium, Anders.

  • 10:49:14

    ASLUNDFirst, I think it needs to get a strong legal base for his government. And it needs to two things. Getting a new constitution, there are constitutional amendments on the way. And to dissolve his parliament that was elected in very disorderly fashion in October 2012.

  • 10:49:34

    REHMHow can he do that without causing even more upheaval?

  • 10:49:40

    ASLUNDHe needs to convince the parliament, the current parliament about this decision. That's the legal way of doing so. And then he needs to fight corruption. And this means to cut down a lot of regulations, red tape and the subsidies to companies that shouldn't be there, they're only being paid out in order to enrich the already rich. And fortunately now there are two big reform programs on the table. One is the IMF agreement. And the other is the Association agreement with the European Union that will be signed on the 27th of June.

  • 10:50:21

    REHMDo you expect that to happen, Steve?

  • 10:50:25

    PIFERThe…

  • 10:50:26

    REHMThe signing of the agreement with the E.U.

  • 10:50:29

    PIFERThe European Union has said that it wants to go forward with that signing and Mr. Poroshenko wants to do it. I think it's a positive step. And I hope it does go forward, but, again, that's going to be something that really is a trigger question in terms of how do the Russians react. Because, again, the Russians do not want to see Ukraine draw closer to the European Union, which moves Ukraine away from Russia's sphere of influence.

  • 10:50:51

    REHMAnd if you've got this parliament in place, how do you convince that parliament that they should resign?

  • 10:51:02

    PIFERWell, I think this is a question of basically looking at a new election as a way to renew their democratic mandrake. One of the problems that Ukraine had was at the end of February, after Mr. Yanukovych basically abdicated his presidency and fled the country, you then had the Ukrainian parliament act in an unusual circumstance. And it probably did not check every single box under the Ukrainian constitution. And therefore, with many people in eastern Ukraine there has been this cloud of illegitimacy.

  • 10:51:31

    PIFERI think Sunday's election and the election of Mr. Poroshenko by a clear majority in what most observers saw as a free and fair process that begins to remove some of that cloud. And if the Rada, Ukraine's parliament, now goes forward and has an early election, it also can reestablish its democratic legitimacy. And I think that would be good for the country.

  • 10:51:49

    REHMDo we have any idea where Mr. Yanukovych is?

  • 10:51:55

    SITOVMr. Yanukovych is in Rostov. And interestingly, he himself also said that he respects the will of his countrymen about this. But I also wanted to address the issue about the E.U. agreement and the reaction of Russia to that. The reaction of Russia is known very well. The reaction of Russia was explained to Yanukovych. It has been explained by Putin twice over the last few days. And in regards to the new government he says, "It affects our vital economic interests. We will have to defend our own domestic market."

  • 10:52:34

    REHMSo what does that mean, Anders?

  • 10:52:37

    ASLUNDIt means that President Putin does not understand the rules of origin as they are defined in the World Trade Organization. This is simply an untrue statement that his advisor, Sergei Glazyev has made. And President Putin has repeated it. There will be no flood of cheap E.U. goods coming into Russia because of Ukraine signing the European Association agreement. Ukraine has a free trade agreement with Russia, which his not respected. This is just another free trade agreement.

  • 10:53:16

    REHMAnd you're listening to "The Diane Rehm Show." Steve, are you confident that that signing will go forward?

  • 10:53:27

    PIFERI think it will. I mean, Mr. Poroshenko wants to do it. The Ukrainian parliament supports it. And polls over the last year have shown a growing majority of Ukrainians want to draw closer to the European Union. And that really is motivated by two things. In Ukraine they look towards Europe, they look towards their neighbor, Poland, and they see rising living standards and they envy that.

  • 10:53:50

    PIFERBut I think almost more importantly is they look to Europe and they see this normal, bureaucratic rule of law. And for a country that has suffered a lot from corruption the last two decades, that's usually attractive.

  • 10:54:00

    REHMAll right. Let's take a caller in East Lansing, Mich. Hello, Daria, you're on the air.

  • 10:54:09

    DARIAThank you. Good morning. Thanks for taking my call.

  • 10:54:11

    REHMSure.

  • 10:54:12

    DARIAI would just like to mention, I think that the Russian-speaking East, I think that's sort of a misnomer. I've been an election monitor in Donetsk in 2004, and people do speak Russian, but they don't think of themselves as Russian. And I think once given a chance to vote in a fair election as to what country they want to belong to and who they consider themselves to be, I think they'll say they're citizens of Ukraine.

  • 10:54:40

    DARIAI think the Russian government did a better job of propaganda because they were prepared with their press releases. And I think a lot of the media bought the Russian Kool-Aid, that, you know, if the Russian-speaking East -- my own mother was born in the Donbas area. She considers herself Ukrainian. My first manager was Ukrainian. And I just don't see the East as being Russian.

  • 10:55:00

    REHMAll right. Thanks for your call. Go ahead, Anders.

  • 10:55:04

    ASLUNDYeah, no, indeed. I can only agree. It's interesting to see among those people who could vote in Luhansk and Donetsk, Peter Poroshenko won a big majority over the two Eastern candidates who were there.

  • 10:55:19

    REHMBut now, what about the violence that is continuing, that did occur late yesterday in Donetsk at the airport? Do you expect pockets of that to continue before this signing of the agreement?

  • 10:55:39

    PIFERWell, I fear that you will see some continuation of the violence. Although, I think it's important to bear in mind, that these really are pockets of violence. There are maybe 25 locations in Donetsk and Luhansk where the armed separatists have taken over key buildings or key facilities. But if you go three or four blocks away, life precedes pretty much normally.

  • 10:55:58

    PIFERSo the question is can -- and here, I think, if Mr. Putin really does want to respect the will of the Ukrainian people, will Russia use its influence with these groups to get them to disarm and leave the buildings and basically diffuse the situation, and allow the restoration of a normal, political process? Mr. Poroshenko has said that his first trip, once he becomes president of Ukraine, will be to travel to Donetsk and start that dialog. And it would surely be good to have that kind political dialogue, without the sort of fighting that these separatists have provoked.

  • 10:56:28

    SITOVDiane?

  • 10:56:28

    REHMBriefly, Andrei.

  • 10:56:30

    SITOVYes, very briefly, at these points. I strongly object to the description of "normalcy" in eastern Ukraine. You cannot speak of normalcy when in Odessa, the neo-Nazis, the extreme right, with troopers of the current regime burn down a building, killing about 100 people there. You cannot speak of normalcy when in Donetsk last night, they attacked from the air a medical truck and kill about 30 people…

  • 10:57:01

    REHMAll right.

  • 10:57:01

    SITOV…of their own people. This is not normalcy.

  • 10:57:02

    REHMWe'll have to leave it at that. Andrei Sitov of Itar-Tass News Agency of Russia. Anders Aslund of the Peterson Institute for International Economics. Steve Pifer of the Brookings Institution. He served as U.S. ambassador to Ukraine from 1998 to 2000. Thank you all so much. We'll be watching as event unfold.

  • 10:57:36

    PIFERThank you.

  • 10:57:37

    ASLUNDThank you.

  • 10:57:37

    SITOVThank you.

  • 10:57:38

    REHMAnd thanks all for listening. I'm Diane Rehm.

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