COHFIDi TTI 7U 1174 THE WHITE HOUSE WASHINGTON DECLASSIFIED PER E O 13526 0 0 '-· 0 1 i -M l'·1 0 1 'J 0 l SUBJECT Meeting with Ukrainian President Leonid Kuchma U PARTICIPANTS U S tH1 The President The Vice President Warren M Christopher Secretary of State Robert E Rubin Secretary of the Treasury Anthony Lake Assistant to the President for National Security Affairs Laura D Tyson Assistant to the President for Economic Policy William G Miller U S Ambassador to Ukraine Coit D Blacker Notetaker Marta Zielyk Interpreter Ukraine Leonid D Kuchma President Hennady Udovenko Minister for Foreign Affairs Roman V Shpek Vice Prime Minister Volodymyr Horbulin Secretary of the National Security Council Serhiy Osyka Minister for Foreign Economic Relations and Trade Yuri Shcherbak Notetaker Mykhailo Skuratovsky Interpreter DATE TIME AND PLACE February 21 1996 11 15 a m -12 10 p m EST Oval Office The President Welcome Mr President I would like to spend most of our time today listening to you but first let me thank you for your support in Bosnia and Slavonia I know you discussed this with Secretary Perry during his visit to Kiev in January We appreciate your support it means a great deal to us U €0Ni'IDENTIAL Classified by Andrew Sens Reason 1 5 d Declassify On 2 22 06 From the Nunn-Lugar collection of the National Security Archive MEMORANDUM OF CONVERSATION COtffI DEM'f IA 2 President Kuchma Thank you for those words I am confident due to assurances from Russian Deputy Foreign Minister Ivanov and others that President Yeltsin will visit Ukraine and that this visit will not be connected to the Black Sea Fleet issue I'm now certain that Yeltsin will be coming to Kiev in the near future to sign the Agreement on Friendship and Cooperation This will influence positively relations between our two countries and Yeltsin's campaign for re-election I think the majority of people in Ukraine and Russia are opposed to any aggravation of the situation between our two countries But extremist forces in Russia are trying to use the Black Sea Fleet issue to obstruct relations and Yeltsin's visit U I appreciate your words because we know that Yeltsin has a tough time ahead If the elections in Russia were held today Yeltsin would lose I think there should be no illusions about this But he has time I think this time can be used to galvanize the state apparatus and to secure the support of others in the former Soviet Union It also won't help Yeltsin's campaign for the Russians to apply outside pressure on Ukraine The expression of anti-Ukraine sentiments has resulted in the defeat of several Russian parliamentarians who espouse such views Rf' Recognizing that our time is short I would like to inform you about the situation in Ukraine relations between Ukraine and Russia and the situation in the CIS U Regarding the situation in Ukraine we evaluate it as medium -three balls no more This rather mediocre mark which we give to our domestic situation is caused by a number of outside forces This stands in contrast to Poland Hungary and the Baltic states where they evaluate their situations by reference to domestic conditions It is different for Ukraine and Russia this difference is connected to our histories and to our family and cultural ties U We have stabilized our own domestic situation through strict monetary control we financed our expenses last year without hyper-inflation We managed to liberalize our trade activities which resulted in an influx of foreign investment We have proposed an increase in real wages Bank deposit rates have started to decrease And the decline in industrial output has been cut by two-thirds These are but the first steps on the macroeconomic level we need to take corresponding steps on the microeconomic level Y CONFIDENTIAL From the Nunn-Lugar collection of the National Security Archive This morning before the start of our meeting I called Boris Yelts'in and urged him to support your reform efforts and your independence and stressed to him the importance of equal evenhanded relations between Russia and Ukraine U CONFIDEHTIAI 3 This relates also to privatization We have managed to do a lot on this front The government's share of the economy now stands at 62 percent We have privatized 38 000 enterprises in the last year But all of this will amount to zero if it is not supported by a major investment effort starting with the energy sector I had good talks with Mr Gore on this issue U The Vice President Chernomyrdin said to President Yeltsin when somebody proposed the creation of another Gore-Chernomyrdin-like commission you' 11 need another Chernomyrdin President Kuchma You will have long breaks between GoreChernomyrdin sessions so you can do this second commission The Vice President President Kuchma iJz1 Let's discuss it U Mr President why delay Let's agree now The President We'll have to give this a little time The Vice President is the most overworked Vice President in U S history President Kuchma coming over The Vice President works for everyone Okay I can be involved in your election by We can work out an arrangement one that U President Kuchma All the problems Ukraine confronts should be supported in concrete ways not just by plans and commitments For example we worked out the electricity economy with the World Bank Then came the coal strike and then the suspension of mazut deliveries from Russia And then delays in the payment of the fourth trance from the IMF All our efforts have been reduced to nil confidence has been eroded ¢ The situation in Ukraine is related to political developments in Russia Unfortunately the left forces in Russia are better organized than the democratic forces It is the same in Ukraine There are so many democratic factions that they are difficult to -GONFIDEH'%'IM From the Nunn-Lugar collection of the National Security Archive We need serious long-term support for the reorganization of our agricultural and energy sectors A joint U S -Ukraine commission is required I'm glad that Mr Gore supports this I have just had an idea on this issue This joint commission should be headed SY Mr Gore and the President of Ukraine What do you think e1 -€0tffI E Hi NT IAL 4 organize We have a saying in Ukraine for every two Ukrainians there are three hetmen chieftains U21' Even our Rada chairman has come out against the reform course saying he had no conflict with the Communist Party of Ukraine on this issue So you can see this is all part of a pre-planned attack ¢ Any delay in our payments to Russia gives the Russians an opportunity to change their behavior toward us And honestly there can be no doubt that this amounts to a trade war between Ukraine and Russia The IMF understands this I hope Mr Camdessus has the chance to discuss this with the Russians when he is in Moscow t e1 The Russians use their idea of a customs union as a precondition for discussions with CIS countries -- as a kind of shield behind which they pressure others It isn't direct political pressure because that has failed But their support for a customs union is politically motivated The establishment of a customs union would encourage the disappearance of internal borders and border guards and create a new external border at the frontiers of the CIS What then would be the difference between this and the old Soviet Union It would be even worse in fact this new union would be more Russo-centric 91' Their behavior is quite clear They have imposed new duties on 108 commodities that are critical to Ukraine we are less concerned about the prices than we are about advance payments This will turn Ukraine into an unprofitable market for Russian exporters With his latest decree Yeltsin has introduced new excise duties on Ukrainian imports which will cost us $500 million Yeltsin won't accomplish anything with this move it will only promote illegal trade through Poland or someplace else Jl'f While declaring in public their friendship and love the Russians are doing everything possible to suppress us and drive us to our knees Any delays in our cooperation with the IMF the World Bank and other creditors will only exacerbate our situation The Russians provoked the strikes by Ukraine's coal miners they sent representatives to virtually all Ukraine's mines But then the Russian miners refused to strike Our miners however were on -€0NJ i'IE EM'fIAL From the Nunn-Lugar collection of the National Security Archive Regarding the situation in the CIS I am confident that all the countries will continue as independent states -- as long as Ukraine does Thus we feel now vigorous pressure from the Russians they un_derstand how important Ukraine is in this regard We can withstand this pressure as long as Ukraine gets stronger every day economically U CONFIDEWI'IAI 5 strike until February 19 Immediately then the Russians disconnected us from our joint electrical system forcing us to use more natural gas The frequency of our power plants dropped below 49 3 percent which is the level needed to function We had to shut down one-half of our enterprises fJ21 On elections in Russia and Ukraine I would anticipate worse results than we expect to see in the United States I can imagine that adherence to democratic principles in Ukraine could result in the return of Ukraine to the communist path of development In Russia it is possible that events may make it possible for Yeltsin to win Whatever the outcome of elections there needs to be a clear understandable policy regulating relations between Russia and Ukraine U21 The Russians need urgently to solve the problem of Chechnya The full extent of the problem is being hidden by the media The situation of the common people the impact of the war on their lives is very much worse than portrayed J21 There are very few ways to solve this problem I have told Yeltsin I can see only two leave Chechnya entirely or deport the Chechen population much as Stalin did in 1943 I don't see any other way any other solution The whole nation is fighting there Also on elections I don't see any profit in building up the notion of Russian Communist Party leader Zyuganov as a social democrat For example Mr Tikhonov the Communist Party official responsible for CIS relations went to Crimea last week where he declared the absence of any problem between Russia and Ukraine because Crimea belongs to Russia He said the same about the status of the Black Sea Fleet Should the Russian communists win in June they would have to settle up their campaign accounts by denationalizing or reappropriating parts of Russian industry JZ1 The President Yeltsin said that the Black Sea Fleet issue is moving that there will be a mutually satisfactory resolution of the issue ¢ President Kuchrna CGHPIDEM'f IAL What do you mean U From the Nunn-Lugar collection of the National Security Archive Russia wants Ukraine within the Russian control structure Russian attitudes today are completely different from just one year ago In fact this change in attitude is the direct result of the Russian 2erspective that we are beginning to make progress on our own if 6 -emJFIDENTIM The President That the resolution would be to both sides' advantage U President Kuchma In fact 90 percent of the issue is settled There is only one rema1n1ng issue the leasing of Ukrainian territory for use by Russia's part of the fleet We can't afford to provide this at no cost We have decided U Secretary Christopher I regret that we will have to bring this meeting to an end We will have an opportunity to continue the discussion in Kiev in March and when the President is in Moscow in April U I would like to discuss the Moscow meeting U The President Tell me what you would like to discuss and I'll raise it with Yeltsin when we talk again ¢ President Kuchma I would ask that you make Chernobyl a separate agenda item in Moscow ¢ The President Nods his assent I'm delighted to see you I know it's a difficult time for you We have a list of what we might be able do We'll do whatever we can to help we'll do the very best we can Unfortunately elections make it even harder to do things there's even less time U President Kuchma in your election The President Let me wish you one thing if I may U Thank you President Kuchma U Thank you U End of Conversation COHFIDEWfIAL success From the Nunn-Lugar collection of the National Security Archive President Kuchma