SEGREi SECfl ECf' THE PABIDENT HAS SEUP l 4 qs THE' WHITE HOUSE WASHINGTON February 20 1996 MEETING WITH UKRAINIAN PRESIDENT LEONID KUCHMA DATE February 21 1996 LOCATION Oval Office TIME 11 0 0 a m DECLASSIFIED PER E O 13526 l D u - 011 3-1 - '- t 1 g ir FROM ANTHONY L KEY OBJECTIVES • Underscore support for an independent prosperous and sovereign Ukraine • Stress the need to stay with reform to achieve Ukraine's aspiration of a stable polity integrated into Europe and • Propose a 1996 bilateral agenda focused on delivering results II BACKGROUND Kuchma is in Washington to receive an award from Freedom House He requested this meeting to seek your help as he faces growing regional and domestic tensions Kuchma fears social dislocation will cause a political backlash at home while he faces Russian pressure to bend to CIS integration You will be able to offer tangible support $330 million in grants and a trade and investment package of $860 million Note during your May '95 visit to Kiev you committed the United States to providing $150 million in trade investment package Since last May we have been able t o increase this commitment to the figures shown Kuchma's Perspective Your Agenda -- Affirming Ukraine We recommend you underscore U S support for Ukraine's independence and prosperity You c an praise Kuchma's success in promoting integration as key to enhancing Ukraine's security Reform Kuchrna needs to hear again from you that reform is fundamental to creating a stable polity and consolidating Ukraine's integration with Europe He also needs assurance that good economics is good politics adherence to a strong reform prograra will help Ukraine get through the economic contraction experienced by every post-communist regime SEGRET Reason 1 5 d Declassify On 2 16 06 SEGRE7F From the Nunn-Lugar collection of the National Security Archive I SECRE'1' SEGREl'· Easing the pace of reform would only drag out the pain and hardship that underlie Ukraine's current political malaise Kuchma wants to put in place a new constitution that institutionalizes a strong presidency before his extraordinary interim powers expire in June Agrarian labor and industrial factions meanwhile want Kuchma to suspend Ukraine's IMF program and threaten to hold the constitution hostage Should the IMF program fail Kuchma would lose $1 2 billion from the IFis and more from bilateral donors Kuchma secured agreement with the IMF earlier this month to restart the program in April once the Rada passes the 1996 budget The Vice President will focus on energy issues but Kuchma may raise it with you as well Severe winter cold and a just-resolved coal miners' strike plunged Ukraine into an energy crisis last week Russia disconnected Ukraine from the joint power grid when surging Ukrainian electricity demand threatened the operational safety of nuclear plants Energy Russia and the CIS In addition Kuchma will likely accuse Russia practices e g excise taxes on complain that Yeltsin has yet to Kiev to energy politics of discriminatory trade imports from Ukraine and make an official visit to Bilateral Agenda We recommend you propose to Kuchma a new theme for our 1996 bilateral agenda implementation delivering results The Ukrainians continue to seek new agreements as proof of our partnership Instead we should focus on delivering the concrete results Kuchma needs to sustain political support III PARTICIPANTS u s The President The Vice President Secretary Christopher Secretary Rubin Anthony Lake Leon Fuerth Laura Tyson William Miller GECRE'i' Ukraine President Kuchma National Security Advisor Horbulin Vice Prime Minister Shpek Foreign Minister Udevenko Minister for Foreign Economic Relations Trade Osyaka Ambassador Shcherbak Interpreter SEeRE'f From the Nunn-Lugar collection of the National Security Archive Ukraine took great strides toward economic stabilization in the first half of 1995 but performance slipped badly in the second half as Kuchma's level of engagement declined ' •· -SECR SECRE r Chip Blacker Interpreter IV PRESS PLAN Pool spray at beginning of meeting Points at Tab Bl V SEQUENCE Attachments Tab A Points to be Made Tab B Points for Pool Spray Tab C Bios SEeREl' From the Nunn-Lugar collection of the National Security Archive After opening with a strong affirmation of U S support for Ukraine we suggest you stress that consolidating reform supports Kuchma's political aspirations integration with Europe economic growth at home