Russia, Ukraine Seek to Smooth Tensions at Summit Amid Violence

RUSSIAN President Boris Yeltsin and his Ukrainian counterpart, Leonid Kravchuk, will hold their first tete-a-tete in several months today at the Black Sea resort of Dagomys.

The summit agenda is crowded with issues that have been sources of growing tension in the relations between the two neighbors. From the use of the ruble to the future of the Black Sea Fleet, the two largest of the former Soviet republics are still wrestling with how to divide the legacy of the collapsed Soviet Union.

The meeting takes place amid rising tensions between Russia and two other former Soviet republics, Georgia and Moldova. The Russian government has issued stern warnings that it might intervene militarily in ethnic conflicts in those states.

In Moldova, the Romanian majority is pitted against separatist Russians in heavy fighting involving the 14th Russian Army. And in Georgia, Russian Army units have been involved defending minority Ossetians against attack by Georgian forces.

At an emergency parliament session yesterday, Moldovan President Mircea Snegur assailed Russia for seeking to become the "policeman" of the Commonwealth of Independent States, the loose confederation of former Soviet republics. The prospect of Russian intervention in the name of defending the Russian minority or Russian "strategic interests" is sure to cause tremors in Ukraine, where almost one-fifth of the population is Russian-speaking.

Both Russia and Ukraine have tried to set a low-key tone for the Dagomys summit. "We shall try to settle the most burning problems and perhaps sign some documents," Yeltsin told reporters Sunday. "We must live in peace with Ukraine, there's no doubt about that. There are differences of view ... but they should be discussed calmly, in a business-like manner."

"Russia only has to take one step toward Ukraine - to recognize it as an equal state," Ukrainian President Kravchuk said in an interview published June 19 in the Nezavisimaya Gazeta newspaper. "Then there will not be a single difficult issue between Russia and Ukraine.... Our ideal is that Russia and Ukraine have the same relations as exist between the United States and Canada."

According to an agenda released by the Ukrainian government, the summit is expected to focus on economic relations. The most urgent issue concerns the continued use of the ruble by Ukraine and the handling of the eventual introduction of a Ukrainian national currency. Settlement of debts between Ukrainian and Russian enterprises and agreements on the price and volume of trade between the two tightly-interlinked economies are also on the agenda.

The Russian government plans to begin making the ruble exchangeable for dollars and other "hard" currencies, on July 1. Eventual full convertibility, a key part of the overall Russian reform policies, is dependent on curbing the supply of rubles in order to restore its value and dampen nearly 1,000 percent inflation.

SIDE from Estonia, which began issuing its own money this weekend, all the former Soviet republics still use the ruble. On the advice of the International Monetary Fund, Russia has announced its intention to force other ruble users to accept the tight controls of the Russian Central Bank, in effect forcing Russian austerity policies on them as well.

In a decree issued last Saturday, the Russian government abolished the single ruble zone and demanded that negotiations with the other republics be concluded within two months to establish new rules for payments between them. The Russians accuse the other governments of uncontrolled expansion of the ruble supply by issuing credits to state enterprises and others.

"This is our response to credit emission measures recently taken by Ukraine and other states," deputy finance minister Andrei Vavilov told the official Itar-Tass news agency. "If Russia did not retaliate, all goods would be swept away from our national market within months."

The Russian move may accelerate Ukrainian plans to issue its own currency, currently expected to take place later this fall. In the meantime, the Ukrainian government has put into circulation coupons which are used in parallel with rubles and are designed to keep Ukrainian goods, mostly foodstuffs, within the country.

The economic issues, though they are more crucial in the long run, may be eclipsed at the Dagomys meeting by the contentious issue of how to divide the Black Sea Fleet of the former Soviet Navy. The Fleet is stationed mostly in Ukrainian ports and headquartered in the Crimean port of Sevastopol. The Fleet issue has become intertwined with the status of the largely Russian-populated Crimea, which was formally part of the Russian Federation until 1954 when it was transferred to Ukraine.

Russian nationalists have made no secret of their desire to have the Crimea returned to Russian jurisdiction. Russian Vice President Alexander Rutskoi, a former Afghan war hero and a voice for nationalist views within the Russian government, vowed in a recent television appearance that the Russian flag "must not be lowered" on the Fleet.

"The Crimea," he added, "must never be allowed to be Ukrainian, because from time immemorial it has been Russian land and it is soaked with the blood of our ancestors."

Ukrainian President Kravchuk insists that Crimea is not an issue for talks with Russia because it is an internal Ukrainian problem.

In his newspaper interview, Kravchuk warned that any effort to inflame this issue could "lead to grave consequences." The former Communist turned Ukrainian nationalist said that "relations are being aggravated both by Russian national-patriots and Ukrainian nationalists."

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