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 UKRAINIAN PRESIDENT PUTS FUTURE OF EUROPE IN HIS HANDS...SORT OF

Poroshenko wants to make it clear that Russia is shattering some delicate European glass.

The graphic design used on the cover of the Yalta European Strategy (YES) conference materials flashes on dozens of high-def TV monitors inside the Mystetskyi Arsenal, a Kyiv event center. It speaks volumes to what the Ukrainian government, and YES' billionaire organizer Viktor Pinchuk, want to get across.

Picture this, the map of Europe, North Africa and the Middle East made of glass. It's shattered. The starting point of this spiderweb of broken glass stems first from Crimea and then from eastern Ukraine where Russia is locked in a civil war with its former Soviet brothers.

At the conference opener on Friday, Ukrainian president Petro Poroshenko stayed on message: the future of Europe depends on what they do with Ukraine.

"Ukraine has been thinking of Europe and heading in that direction since 2013," he said in English to a gathering of 350 participants. Some argue it might have been even earlier. But all hell broke loose when ex-president Victor Yanukovych rejected an association agreement with the European Union in 2013. Protests began in Independence Square and another revolution was started. Yanukovych was ousted by a public who believed their president was working to benefit the Russians rather than the future of Ukraine. A pro-Western government was installed, Russia annexed Crimea, and Russian separatists began a civil war in at least four industrial zones along the eastern border. The region is responsible for roughly 25% of Ukraine's GDP. Poroshenko himself used to be a billionaire. He's not anymore.

Throughout his opening monologue, Poroshenko hammered on his message that Russia was working to destabilize Ukraine, and maybe even Western Europe. Poroshenko said Russian leader Vladimir Putin was sending troops - nicknamed the "Ninja Turtles" for their green helmets and masks - into Syria. The same "Ninja Turtles" were also reportedly seen in Crimea at the time when the autonomous government there opted to secede in March 16, 2014. The decision led to sanctions by the West and two failed peace agreements with Russia.

"Russia aggression against Ukrainian sovereignty has challenged the entire world," Poroshenko said. "Ukraine is stretching Russia's imperial visions further. A strong Ukraine is a corner stone of European stability and once that gets undermined, European security will be shattered."

A cease fire has been in place for two weeks in the regions of Donbas, Donetsk and Luhansk, where thousands have died and important economic infrastructure has been destroyed by shelling.

Poroshenko said that Friday was the first day in 18 months that there were no reports of war damage over a 24 hour period. He reiterated the fact that center-west Ukraine lives in a general sense of peace, there is a war going on in the east and Crimea remains occupied territory.

"We will increase our military budget next year with the sole goal to protect Ukraine from any aggression," he said. "The drama is not over. Russia has about 1,000 troops and countless artillery, like missiles and other heavy equipment at our gates and on our soil," he said, adding that he was cautiously optimistic that a diplomatic settlement was possible.

Economic Impact

The Ukrainian economy has contracted by at least 17% over the last 12 months. People here are poorer than they were before the Euro Maidan protests erupted in late 2013. Much of the country's industrial power remains in a civil war zone, and tourist economy Crimea is no longer part of Ukraine's payroll. The economy is reforming its tax code to make it more enticing to foreign investors. But with asset prices so low due to the crisis, Ukraine is not in a hurry to sell for pennies.

Ukraine is expected to pull out of recession in 2016, according to the World Bank. Ukraine's gross domestic product dropped 6.8% last year and the government has projected that it end this year down by 9%. Poroshenko said yet again that he hopes to get a free trade deal with Europe signed in January.

As a result of the dual economic and political crisis, public opinion polls suggest that Prime Minister Arseniy Yatsenyuk is on his way out. On the streets of Kyiv, people think that Mikheil Saakashvili, ex-president of Georgia and now governor of Odessa, wants to take his place.

Last week, a protester threw a hand grenade outside of the Parliament building at national guardsmen. Three of them were killed and dozens of people were injured. All of his makes Kyiv and Ukraine less palatable to investors, but perhaps more interesting to European politicians who see Ukraine as a possible powder keg.

"I recognize that the world has lots of problems, but believe me, from my experience with my daily communication with leaders of the European Union, Ukraine is still a top priority," Poroshenko said.

Ukraine's Yalta European Strategy conference has always had Europe on the agenda. The first conference was held in the city of Yalta, in Crimea, after the Second World War. Franklin Delano Roosevelt met there with Winston Churchill and Joseph Stalin. The meeting is more geopolitical than business focused. Historically, the conference has been one of the leading meetings on European security.

This year's panelists are nerve-wracked over Putin.

"Russia is putting pressure on a lot of the frameworks that were put in place in post-war Europe," said James Appathurai, deputy assistant secretary of NATO. "I dont want this to sound selfish, but I think we have to see NATO as a central area of stability and we have to help our partners who are under pressure from Russia. We want to help these countries stand on their own two feet, but that doesn't have to mean they have to move closer to the West."

In impassioned Q&A with Financial Times columnist Gideon Rachman, Poroshenko said the country was moving forward with political reforms, but warned that the recent cease fire might impede progress. If the future of European security is in Poroshenko and Ukraine's hands, then the future of Ukrainian security might be in Putin's. Much of Ukraine's future depends on Moscow and Kyiv leadership making amends.

For now, Poroshenko wants to make it clear that Russia is shattering some delicate European glass.

"Russian aggression against Ukraine has ruined the post-war security system of the United Nations," he said.

By Kenneth Rapoza, Forbes
 
 
 
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