A) Ukraine in the Black Sea Region.

Ukraine together with its South-Eastern neighbors - the Black Sea states, the Transcaucases, and Central Asia form the central part of the Rimland, which territorially embraces the Heartland. These states, along with Ukraine and the Baltic countries, hold eminently important positions in European and Eurasian geopolitical space. The region's strategic meaning is mainly due to the transportation corridors that pass through it. These connect European centers with resource rich countries of the Middle East and Central Asia and further lead to the large markets of highly-populated states in the Indian Ocean and Asian-Pacific area. On the other hand, the Black Sea region connects North-Eastern and Central Europe with countries on the Mediterranean rim, and forms a mutual zone of economic and political interests in Europe and Asia as a whole.
The geopolitical status of the Black Sea region and events that occur there hold a substantial significance for the historical fate of European nations. With dominant regional forces here ceasing to blockade the routes from Europe to the East, this region functions as a bridge rather than a barrier, and provides opportunities for the development of communications in a latitudinal direction. As a result, other, roundabout routes, mainly more risky seaways, lose their importance. These seaways were developed by western European states during the time of Tiurk-Islamic domination in the region, and ensured the emergence of modern European civilization. In Soviet times, Moscow's control over Eurasian routes did not promote the development of a transcontinental system of communications with outlets to the oceans. This also stimulated the development of roundabout sea and air communications. Central European non-sea states, such as Germany, are objectively interested in the absence of any blockading forces in this region. Such a state of affairs corresponds to Ukraine's interests, because as a European state it is imbued with general European interests, and as a regional state cannot have any global blockading intentions.

In the 19th-20th centuries socio-economic modernization contributed to the processes that led to the formation of national states in the Black Sea-Caspian Sea area. These were complex and difficult processes. Today the causes for local conflicts have not lost their actuality. Internal interethnic and interdenominational contradictions are compounded by external intervention. The overcoming of confrontational relations in this region can be achieved by the corresponding transformation of economic models of the region's states. However, these processes face significant resistance both from the Islamic population, guided by traditional Islamic values, as well as from certain strata of the population of post-socialist states, still significantly bound by the stereotypes of the former mentality. The problems related to uncontrolled migration, the growth of organized crime, and drug trafficking should also be mentioned here.

Ukraine's positioning in South-Central Europe, at the cross-roads of three great geopolitical masses - the Euro-Atlantic, Eurasian and Islamic, creates a unique civilizational space. This situation carries a certain advantage and also causes many significant problems. In any case, this positioning is decisive for the fate of Ukraine as a state.

The other decisive factor that influences the extraordinary significance of the region is the existence of giant oil and gas deposits in the area. Their development and supply to world markets should begin at the end of the century. As a result, the activity of powerful international oil and financial-industrial companies in the region has already commenced, combined with the simultaneous formation of new political unions, alliances and changes in the balance of power. The shift of NATO's Southern flank from the Mediterranean to the Black Sea is becoming more obvious. Growing Russian activity in the Transcaucases, the Caspian region, and in relations with Iran and Iraq is also testimony to this. In order to increase its presence and influence in the region, Washington has in the last months made significant concessions to Iran and Azerbaijan.

In the last while the West has shown increased interest in the region in connection with the exploitation of oil deposits in the Caspian Sea and the development of a trans-Asian network of transport and energy communications. The region's actual meaning for the RF also lies in its transit function. Today it is important for the RF as an area of extraction and supply of energy carriers, as a transit route, and as an energy source that unites the RF with the Middle East and the Mediterranean. Russian gas flows through Turkey via the territory of Moldova, Romania and Bulgaria.

The Black Sea region, and not the least Ukraine, encapsulates core transportation oil communication routes along the "East-West" axis as well as along "South-North" axis. It would be enough to mention that the use of Ukrainian territory more than halves the length of the oil transportation route from the Middle East (via Turkey and the Black Sea) to Europe. The Ukraine-Georgia transportation corridor is much shorter than alternative routes through Turkey or through Russia.

As a strategic route of energy carriers to Europe and taking into account Ukrainian processing capabilities, Ukraine has an opportunity to become a significant link in European economic security. With the activation of the Odesa oil terminal Ukraine will have considerable opportunities to regulate oil flows from the Middle East and Caspian area to Europe. Thus it will have an influence over the geopolitical balance of the entire Eurasian region. It is obvious that this set of circumstances can hardly satisfy, first of all, the Russian Federation, interested in the transportation of its own energy carriers to Europe. The introduction of an oil route via the Odesa terminal will cause the RF to lose its positions in the Middle East, to the benefit of Ukraine. This is possibly one of the reasons for RF policy activation in the region. At the same time, along with development of alternative routes, Ukraine is also interested in the transportation of Russian and Central Asian energy carriers through its territory, which demands a corresponding rapprochement with Russia.

In a sub-regional dimension Ukraine remains a great regional state with significant potential, which gives it an opportunity to conduct active policy concerning the realization of its own interests. As a strategic transit route of West-European petroleum-energy and raw materials supply, Ukraine becomes a center for the regulation of global geoeconomic concerns. Ukraine is interested both in the creation of favorable conditions for the transportation of energy and raw materials through its territory and in the development of alternative routes of their transportation. As a successor of the former USSR, its interests, goals and problems, particularly, in the Black Sea region, Ukraine has to play a significant role in the organization of a new system of regional order. The settling of conflicts in the Balkans, Transdniestria and the Caucasus is of vital importance for Ukraine as is the formation of models for equal partnership with Poland, Turkey, Russia and other powerful regional leaders in this part of the world.

However, it is evident that Ukraine has partly lost its positions here. Lost control over the Black Sea fleet, lost Balkan markets due to the shutdown of the Danube transportation network, difficulties with the development of a Caucasian energy transport corridor, the Odesa oil terminal etc. - all of the above could objectively decrease opportunities for Ukraine's regional leadership. It is important for Ukraine to strengthen its strategic positions in the Black Sea region, to form closer relations with the Balkan states and Caucasian countries, that also could have problems relating to the entry into regional security systems.

Since 1992, as a result of its inconsistent policies Ukraine misuses its real opportunity to obtain a leading place among regional transporters of "great oil", and risks to be excluded from this process. At the same time Russia has not only actively developed transportation corridors around Ukraine (Yamal - Poland - Europe), Baku - Novorossiisk, but has also actively and strongly defended its national interests. As a result, Ukraine remains in an energy blockade from all sides and has significantly lost the economic bases of its sovereignty and its geopolitical value for the West. Time passes quickly. If no radical decisions are made in the nearest months, Ukraine can lose its economic independence and will forever remain on the outskirts of Europe, a country of unfulfilled opportunities with a Russian noose around its neck.

The formation of BSEC. In conducting its own foreign policy, Ukraine today, basing itself on political and economic factors, aspires to create a multi-polar system of international cooperation. This system should ensure the state's stable political and economic security on account of the broadening of international contacts. It should not only stimulate Ukrainian integration into the world community but also promote the increase of Ukrainian influence in different regions, the development of trade and internal productivity, and a search for prospective markets. The system of Black Sea Economic Cooperation (BSEC) has been created for this purpose.
Present day relations with states of the Black Sea region within BSEC signify an important political precedent in the development of the regional system of security and cooperation.

At the same time regional states face problems and contradictions that have high conflict potential: Abkhazia, Karabakh, Chechnia, Bosnia, and even the Crimea. The formation of sub-regional security structures that would create a mutual base for cooperation is necessary in order to overcome these contradictions and to prevent the development of conflicts. The above-mentioned cooperation in this sphere would correspond to the interests of all regional states.

On June 25,1992 in Istanbul, the Presidents of Azerbaijan, Armenia, Bulgaria, Georgia, Moldova, Romania, Turkey, Ukraine and the Heads of government of Albania, Greece and the RF adopted the Bosporus caucus and signed the Declaration creating BSEC. It provided for the creation of favorable conditions for trade, industry, transportation, communications, science and technology, energy and agriculture, tourism and ecology. The goal was to exchange economic information, to create conditions for business contacts, to determine branch projects, etc.

According to plan, not only states of the Black Sea basin but also countries that have a direct interest in the Black Sea region can enter BSEC. BSEC is founded according to the principles of Helsinki's Final Act and subsequent documents, accepted on the highest level by the Organization for Security and Cooperation in Europe (OSCE) and, particularly, in the Paris Charter of a new Europe. The goal and principles established in the Declaration of BSEC completely correspond to the principles and main documents of the UN. The Declaration also emphasizes that membership in BSEC is not a barrier for participation in and cooperation with other regional and sub-regional organizations.

In geoeconomic terms, taking into account states that are involved in the BSEC system, this region is a sphere of gravitation of many countries that although not directly involved with the Black Sea basin, have substantial economic and transportation interests here. Iran, Macedonia, the Federal Republic of Yugoslavia and Uzbekistan have put forward applications to join BSEC. Austria, Italy, Israel, Egypt, Slovakia, Tunisia and Poland participate in the organization in the role of observers; Bosnia and Herzegovina, Kazakhstan, Cyprus, Jordan, Slovenia and Croatia have handed in applications to become observers.

Thus, a geography is present here that does not limit itself to just the Black Sea region but envelops a broad area from the Balkans to Central Asia and from the Baltic to the Arabic states. This territory unites European, Asian and North African countries, regardless of the heterogeneity and level of development of their civilizations. BSEC is a potentially capacious internal market with significant resources and scientific-technical potential, and can become a key center of trade between Europe, the Middle East and Asia. In practical terms this means the creation of a trans-regional integrative formation. This is also the first large integrative state formation corresponding to the post-confrontational stage of development of the world economy, which is able to unite countries with different political and economic orientations.

The end of the 20th century is marked by changes in the political and economic structures of Europe. These changes have led to the creation of sub-regional structures from the Baltic to the Black seas, that in a certain way have promoted the dismantling of the "iron curtain". Countries with a similar "post-communist" state of the economy and of politics have united themselves in these structures for the purpose of further integrating themselves into the European environment.

At the same time, the ineffectiveness of the resolution of economic and political problems in the framework of the CIS impels Ukraine to search for parallel forms of economic cooperation. At the same time processes of regional economic integration have dominated the development of the world economy over the last several decades. They determine the directions and priorities of the current state of the internationalization of economic life, forming an environment of global competition and influencing the strategic interests of countries and regions across the entire world. Thus, the BSEC system is indicative of the modern tendency in international economic cooperation.

The BSEC system could not have been formed in the time of global economic confrontation between the EC and the EEC, when the economy was more burdened with ideological and military factors rather than concerned with the pragmatic problems of the population. In the new circumstances, where states are faced with the task of economic and social modernization, the creation of new cooperatil systems is logically justified and corresponds to the core interests of regional countries.

The development of a system of Black Sea Economic Cooperation represents one of the important mechanisms for South-East European states achieving pan-European integration. It also fully corresponds to the national interests of Ukraine as Ukrainian integration into Europe has been established as the main strategic direction of its policy. In his speech during the "New Opportunities in the Black Sea Region" Conference (Istanbul, April 28, 1997), Ukrainian President L.D.Kuchma mentioned that the gradual augmentation of economic cooperation in the Black Sea region plays an important role not only in the resolution of problems of economic development of countries united by the BSEC idea, but to a great extent also promotes the intensification of general European integration. On the other hand, Ukraine's participation in various forms of European regional cooperation, in that number long-term and temporary sub-regional unions, in no way contradicts the economic interests of Ukraine as a member of BSEC.

The initiative to create a regional economic commonwealth belongs to Turkey. However, success in the actualization of this idea testifies to the interest of a large number of states in the formation of a new sub-regional structure of economic cooperation that unites Mediterranean, European and Asian countries, regardless of their political, social, and civilizational heterogeneity, the differences in their levels of development and their visions of the future. The region's countries are members of different political and economic state groups (NATO, the CIS, the EU etc.). Peculiar and profound social and economic transformations caused by changes in mentality and in general modes of orientation of the population have occurred in these countries. Even ten years ago it would have been difficult to imagine them together in one organization. However, in the conditions of the new geopolitical situation the Ankara initiative has found the corresponding support of these states.

The Turkish project foresaw the modernization of the economies of member-states, which would give birth to a large market of countries with a population of over 330 million. Stress was to be placed on the development of an infrastructure that would help to make better use of the considerable scientific-technological potential present, to make more rational use of industrial and agricultural resources. On the other hand, BSEC also helped its members find additional opportunities for solving problems connected with the transition to free market relations.

The organization was created with the goal of integrating the Black Sea region into the world economy, in view of the principles of the market economy, democratic values, traditional links, geographical affinity and the complementary economies of states. The organization remains open to all interested states that recognize the principles of the BSEC Declaration. BSEC has provided for comprehensive multi- and bilateral cooperation in industry, agriculture, transportation, trade, communications, medicine, ecology, and tourism. Also supported have been free trade, private business, the free flow of capital, the creation of free economic zones, exchanges of new technologies, the real coordination of programs concerning protection of the Black Sea from pollution, the promotion of specific programs in the Black Sea zone of interest to BSEC.

The BSEC idea reflects the growing consciousness of the region's states of the particularities of their national and regional interests. It in no way competes with traditional regional economic structures. More accurately, what is taking place here is the creation of a complementary aspect of relations of different economic models. A new sphere of opportunity is being created, which would be difficult to recognize within old structures.

Thus, it is natural that in the search for new ways of realizing their national interests the new independent states have turned to the idea of strengthening economic cooperation with states of their nearest environment. In the Ukrainian, Moldovan and Caucasian cases this idea has found the most effective embodiment in the creation of BSEC. Newly emerged independent states have entered this system. It is their first attempt at organized integration without evident Russian domination, in contradistinction to the Economic Union based on the CIS. In addition, the participation of the RF as well as of the other former Soviet republics in BSEC will introduce certain peculiarities in the relations among its members.

The theory and practice of economic integration of other states testifies to the fact that the future development of BSEC is connected with certain difficulties. The Black Sea is a patent geographical factor that promotes regional integration. In all other aspects BSEC can be looked at in terms of potential. Almost all key disintegrative factors are present in this region - ranging from the political instability of its members and the incompatibility of their economic infrastructures to obvious socio-cultural distinctions and deep traditional conflicts between them as well as inside some of them. BSEC's integrative policy has to develop in a hostile environment (interethnic tensions in Georgia, conflicts between Armenia and Azerbaijan, historical hostility between Turkey and Armenia, mutual mistrust between Greece and Turkey, tense relations between Russia and some BSEC states - the former republics of the USSR).

At the same time let us recall the hardships postwar Europe had to face in the mapping out of its own integrative model. Problems here were even more acute, however the desire for peace and mutual cooperation overcame and now a consolidated and developed European community exists. It is necessary to take this experience into account when developing a process for Black Sea cooperation.

BSEC as a potential zone of free trade presents opportunities for the coordination of foreign political priorities and serious economic contradictions of regional states. Coordinated export-import policy can ensure a certain balance of interests within the framework of main priorities, despite differences in the foreign economic policies of BSEC members. However, it is problematic to achieve this within BSEC. The functions of foreign trade regulation among member-states act on different levels: on the national - in Albania, Bulgaria, Romania, Turkey, Ukraine; on the supranational - in Greece (as a member of the EU) and in the future - in member-states of the CIS. In addition, BSEC states are characterized by different levels, time concerns and intensities of participation in GATT/WTO. Substantial contradistinctions among key parameters of the investment climate complicate the development and realization of mutual investment projects within BSEC.

The union has set for itself numerous tasks to be solved, in connection with which the development of informational interaction between states of the region is extremely fruitful. The process of transformation to an information society is characterized by the rapid growth of the informational services part of the GNP. Society becomes increasingly open to information, while the presence of global telecommunications networks provides an opportunity for the organization of the informational services industry with practically no account of borders. Great opportunities come into being for industrially backward states to stand in one row with the countries-giants.

B) The Balkan Axis

Because of the peculiarities of its geopolitical situation, the Balkan peninsula was and remains in the focus of confrontation among different western and eastern states. All of Balkan history represents a conflict of national, ethnic and religious factors. It is worth underlining that Islam advanced onto Europe through the Balkans and it was here that it was stopped. Precisely this circumstance determined the formation of a special Balkan cultural, economic and political space.

The current geopolitical situation, which has come into form in the Balkans can be defined by the following characteristics:

· Two poles (Greece and Turkey), that vie to attract other states of the region to their orientation can be identified. Because of the insufficiency of their potential, neither state is able to aspire toward full-scale regional leadership. Neither is this promoted by their economic situations and by general European circumstances.

· The majority of post-communist states strive for entry into European and Euro-Atlantic structures. Other states, such as Ukraine and Moldova, follow principles of military-political neutrality. They participate in the "Partnership for Peace" program, but do not plan to enter military alliances in the nearest future.

· Global centers of power - the EU, the USA, and Russia actively influence regional processes.

· The transitional economic model predominates. The economy of post-communist states remain at the transformational stage, which demands the involvement of external investments. "Privatization by the nomenclature, a form of theft capitalism and corruption" are its important feature. (T.G.Eshar). · The prolonged preservation of an unstable internal state featuring ethnic collisions and economic and political instability. (The above corresponds not only to the countries of the former socialist system, but also to Greece, which has the intent to become a member of the EU Monetary Union. It will have to undergo serious economic transformation in order to achieve established criteria, which will probably lead to an increase in sociopolitical tensions.)

· The mixture in one region of several types of culture: the discrepancy between Eastern Orthodoxy, historically supported by the majority of the regional population, and Islam.

· The scarcity of energy resources among states in the region. Except for Albania, all regional countries have different levels of dependence on oil and gas imports.

· The formation of new transit corridors through the territory of regional countries. The disintegration of the USSR gave an opportunity for the formation of new trade routes uniting Eastern European and Eastern states. Bulgaria and Romania hold key positions for the transit of Russian gas to Greece, Macedonia and in the future, to Albania and by new gas pipelines to Italy.

Still at the development stage, regional interstate relations are based on a solid foundation of acting bilateral agreements. Fears that after the collapse of the socialist system states of the region will follow the example of Yugoslavia and will become involved in a maelstrom of uncontrolled regional wars have not materialized. The states have followed the general European line of the peaceful solution of emerging problems. Their bilateral relations have a generally smooth character, without aggressive attacks upon each other. Signed interstate agreements promote the development of political dialog and economic cooperation.

Radical political and economic changes are underway in all regional states except Greece. Potential instability caused, first of all, by economic backwardness, the complex ethnic composition of the population, and interstate relations is typical for the Balkan states as well as for the whole post-communist world. In general, regional states have backed away from the communist ideology that had complete control over state and social activity in the political and economic realms. At the same time regional transformational processes are far from their completion.

In view of the extremely complex and multi-systemic current Balkan reality, an analysis of the determination of Ukraine's place and role in this region demands in the least a brief review of the national interests and priorities of regional states as well as of the main external powers that participate in the formation of this reality. The Balkan Peninsula can, with a certain degree of relativity, be divided into two geostrategic regions: The northern zone (Romania, Slovenia, and Croatia) and the southern zone (Albania, Bosnia and Herzegovina, Bulgaria, Greece, Macedonia, the FRY, and Turkey). According to its sociopolitical, economic and ethnic characteristics the first zone approaches Central Europe and is oriented toward the comprehensive development of relations along the Central Europe - Adriatic - South Europe communicative line.

In the last while Romaniahas attempted to persuade NATO that it can become an important unifying link in the Balkans and that it is worthy of acceptance in NATO's new round of enlargement. All of this has forced Romania to put into motion its actions concerning the preparation of a Friendship, Neighborly Relations and Cooperation Treaty with Ukraine, that was signed by the Presidents of Ukraine and Romania on July 2, 1997.

Holding an important geostrategic position, Romania aspires to become a transit state for the transportation of Caspian oil and currently claims the role of a unifying link between the Caucasian region and Europe. Romania, which is situated on one of the oil transportation routes to the Balkans and further to Europe and Moldova have become mutually interested partners. Thus, Bucharest together with Kishinev intend to continue the axis of strategic partnership formed between Baku, Tbilisi and Kyiv.

Romania in NATO would represent the bloc's entry onto the west coast of the Black Sea and Bulgaria, and thus unity with the "enclaves" of Greece and Turkey. "Economic proof" was also shown in Bucharest: if the country enters NATO it will "join the team", causing western investments to flow. In any case, a serious change in the strategic situation and balance of power in Europe would be at hand.

In distinction to its policy toward Ukraine, the West is very attentive to Romania. Due to many reasons, however, the West's leadership disappoints Bucharest's most intense hopes. US President Bill Clinton considered it important to visit Bucharest immediately following the 1997 Madrid summit, calming his hosts with speeches that NATO's doors remain open to them.

The main priority of Sloveniaand Croatiais integration into all West-European and Atlantic structures. The as quick as possible attainment of status similar to that of the "Vishegrad four" is regarded to be their first priority.

Of the former Yugoslav republics Slovenia is today the closest to being accepted into the EU and NATO. This fact is undoubtedly one of the key factors that determines the pragmatic Slovene position.

The present situation shows that there are a number of problems to be solved in Croatia, among them, the return of Serbs to Serbian Kraina. Today as before the Serbian population in East Slovenia is under threat. An attempt by the Croatian government to resettle Serbs in other Croatian lands should not be excluded, despite the fact that the Erdut peace treaty allows Serb refugees the right to stay in the Srems-Bran district. In this case a new outward flow of the Serbian population can be expected. This is why lasting peace in the Balkans is impossible without a long-term solution of the Serbian question in Croatia.

Despite the unilateral recognition of Slovenia by Yugoslavia, officially Lublyana is not hurrying with the complete normalization of its relations with Yugoslavia. The reason for this, according to Slovene officials, is that unsolved issues concerning the division of the assets of the former Yugoslavia remain. However, led by pure economic interests, Slovene business circles are attempting to out-distance politicians in this matter.

The southern zone has largely maintained the set of characteristics that form part of the concept of "the Balkans": economic backwardness and an undeveloped infrastructure, internal political instability, a mixed ethnic complement of the population and highly tense interstate relations, fraught with the development of new conflicts. From this point of view worth mentioning is the almost complete correlation of internal and external threats to the security of these countries.

The Federal Republic of Yugoslavia (FRY). The crucial factor relating to the Serbian position in the Balkans is found in the deeply engrained stereotypes of influential political and cultural circles in the West. According to these, Serbs constitute the fore-post of Byzantine cultural and geopolitical space, and thereby a possible factor of Russian political and cultural influence in South and Eastern Europe.

The international community is today not ready to accept the disintegration of Serbia. That is the key factor in understanding the West's position concerning the President of Yugoslavia. As before, it regards the President to be a guarantor of the continuing peace process in Bosnia and Herzegovina.

The signing of the Dayton Accord opened practical opportunities in the search for a new concept of Yugoslav foreign policy, which would correspond to existent European realities. "A European orientation" is proclaimed to be the main direction of the foreign policy of the FRY, which in the long-term means entry into the EU and later, possibly into NATO.

The USA has already exerted serious influence on the regional situation for a lengthy period. In December, 1997 the USA made a unilateral decision to continue economic sanctions against Yugoslavia, which in the nearest future will complicate the restoration of the FRY's rights in various international organizations and institutions.
Another serious factor that influences the foreign policy of the FRY is the RF, whose interests in the Balkans have a constant character.

On April 1, 1998 the Security Council of the UN voted for the establishment of an embargo on weapons supply to the Federal Republic of Yugoslavia "in order to promote the achievement of peace and stability in Kosovo". The accepted resolution calls on the Yugoslav government to urgently take all necessary steps in order to achieve a political solution of the Kosovo problem, by way of dialog and the fulfillment of the decisions of the Contact Group. At the same time, this document proposes to the leaders of Kosovo's Albanians the denunciation of all terrorist acts and is remindful that all groups of the Albanian community must attempt to reach their goals through exclusively peaceful means.

Albania, of course, will not remain indifferent to any conflict in Kosovo, as this country dreams about reuniting with its numerous compatriots on the territory of the FRY. Macedonia, with its considerable Albanian population can also become involved in the crisis and it is possible that Turkey, Greece and Bulgaria would enter the fray. Turkey undoubtedly aspires to internationalize the Islamic national minorities on the territory of the FRY, Bosnia, and Bulgaria and to strengthen its influence in the south of the Balkans.

The involvement of other European states such as Italy, France and also of the USA in the conflict cannot be excluded. The conflict itself would develop into a purely religious one, a confrontation of Orthodoxy with the Muslim world.

Albaniahas repeatedly announced that it would not remain indifferent in the case of an escalation of the conflict in Kosovo, providing its compatriots with moral and material aid, as well as with weaponry if the need arises. At the same time it is necessary to take into account that Kosovo Albanians, who after the fall of the communist regime in Tirana had an opportunity to establish closer relations with their compatriots abroad, do not hurry to declare slogans of reunification. The two branches of the Albanian nation have for a long time lived under different political roofs and in different economic conditions, and today they significantly differ in their evaluations of a future existence in one state. Tirana's government supports the separatist tendencies of Albanians not only in Kosovo but also in neighboring states, thinking about the creation of a "Greater Albania". This cannot but worry Athens, Belgrade's historical ally.

Macedoniais struggling to earn international recognition but to a certain extent is being blocked by Greece. Paroxysms of Greek nationalism linger since the 1920's, when many Greeks deported from Turkey were settled in the Greek part of Macedonia. Since that time Greece has defended the official position that the entire population of this part of Macedonia is Greek. Greek Macedonians who do not agree with this view are forced to emigrate. It is this Macedonian Diaspora that is the main source of Macedonian extremism (particularly, financial), that still maintains the dream of a "Greater Macedonia" that would include a part of Greece.

At present Macedonia has gained the official name of "The Former Yugoslavian Republic of Macedonia". Official Skopje, having realistically evaluated the situation that has arisen in the Balkans, has allowed for the disposition of a US military contingent on its territory.

At the end of June - beginning of July, 1993 300 American marines arrived in Macedonia under the banner of a UN peacemaking mission.

In the opinion of the Director of Belgrade's Institute for International Policy and Economy, Dushan Simich, Washington in this way has driven a wedge into the sphere of interests of three main Balkan powers: the Islamic, Russian and European (German). Simich believes that among the USA's global interests are the prevention of a real rebirth of Russia from communist ashes, and the curbing of the spread of the "Islamic threat".

Bosnia and Herzegovina (BaH). The current conflict within BaH between representatives of the main national-religious groups (Croats, Muslims and Serbs) began in March 1992 after the EU recommended referendum on independence had taken place.

During the war Bosnia persistently called on the USA to unilaterally cancel the embargo on weapons supply, and despite sanctions, consistently armed itself. In practice, US, WEU and NATO forces did not fulfill their function of enforcing the embargo of BaH. Moreover, beginning in 1994, an active supply of weapons and military machinery stimulated the Muslim offensive. On December 20, 1996, operation "Mutual Guard" began in Bosnia under the aegis of NATO and according to the mandate of the UN Security Council. It represented the second stage of international peacemaking concerning the realization of the Dayton Accord.

Confederate Bosnia remains no more than a symbol, despite elections to its highest governmental bodies, held in September 1996. Interethnic tension has not ceased. As earlier, Serbs, Croats and Muslims do not feel a strong urge to live together.

In order to influence the configuration of regional powers Greece and Turkey are attempting to establish friendly relations with other Balkan states. Despite these attempts, however, as of this time no regional pro-Greek and pro-Turkish mini-blocs have been formed. Other countries of the region do not participate in the contradictions that continue without end between Greece and Turkey. Romania distances itself both from Greece and Turkey. At first Bulgaria held more of a pro-Greek policy, however after the coming to power of right-centrists it has started to maintain better relations with Turkey. More balanced relations with Greece as well as with Turkey have replaced the pro-Greek inclination.

Greeceholds a key position in the south of the Balkans. Its most serious contradictions in bilateral relations arise with its simultaneously single neighbor and NATO partner, Turkey. It is sufficient to remember that over the last years Ankara and Athens have several times found themselves on the brink of war. Relations between these two states are determined by four main problems: Cyprus, the Aegean Sea, the Turkish minorities in West Phrakia and Constantinople's patriarchate in Turkey.

The Republic of Cyprus. The Zurich-London treaty of 1959 defined its state system and constitution. Great Britain, Greece and Turkey became guarantors of this process, with London maintaining two military bases - Deckely and Ackroti, where approximately 4000 English military personnel are deployed. In December 1963 an armed conflict between the Greek and Turkish populations of the island occurred. According to the March 4 resolution of the Security Council, UN military forces were deployed on the island. One third of Cyprus is under Turkish administration. In 1975 leaders of the Turkish community proclaimed the establishment of the Turkish federative state. The Turkish republic of Northern Cyprus was created in 1983. It remains unrecognized in the world. These actions have complicated the island's situation even more, and its situation remains unresolved. It is possible that in the future Turkey will attempt to incorporate the Turkish Republic of Northern Cyprus into the mainland. All of the above does not promote the elimination of the center of tensions between Greece and Turkey.

It bears underlining that the absence of military parity between Ankara and Athens has a special influence on the development of Greek-Turkish relations. In circumstances where Turkish leaders declare their readiness to deploy armed forces in reply to the "illegal actions" of Greece, Turkey's quadruple military advantage over Greece prevails as the main argument in the contradiction. Because of this reason the possibility of conflict remains.

Bulgaria. At present, the sphere of interaction of Bulgaria and Greece with other regional states concerning the provision of security, the development of cooperation, and of good-neighborly relations on the Balkan peninsula is on the increase, as is cooperation between Bulgaria and the RF.

According to the results of March 1998 negotiations between the Head of the Board of the Russian Stock Enterprise "Gazprom" and the Vice-President of the Bulgarian government, "Gazprom" will ensure a gradual increase in the general amount of Russian gas supply to Bulgaria that will total 8 billion cubic meters per year in the year 2010. Meanwhile, the Bulgarian Stock Company "Bulgargas" will ensure the transit of 18.7 billion cubic meters of Russian gas through Bulgaria to third countries, of which 14 billion cubic meters will go to Turkey.

Bulgaria and Greece are planning the construction of the Burgas (Bulgaria) - Alexandrupolis (Greece) oil pipeline. It is of strategic importance for the economic development of both states and for Bulgarian and Greek participation in geopolitical plans of energy supply to Europe.

Local non-formal unions of countries have been formed in the Balkans. Members of the North Atlantic Alliance are particular leaders of these groups, which relatively speaking, oppose each other. The "Turkish bloc", which presently holds the initiative, includes Albania. The pro-Greek group consists of the FRY and Bulgaria. Romania cooperates with these states but does not wish to worsen its relations with Turkey and France.

Foreign powers in the Balkans. Germany has not been too evident in implementing its grand policy in the Balkans and has conducted its line carefully, if successively and persistently. It has gradually became "a presence" in the Balkans, becoming a member of the Contact Group, participating in rapid deployment forces, and by having the governor of Mostar as its representative.

German actions in the Balkans have demonstrated its equivocal policy: on the one hand it is a supporter of peace, cooperation and a champion of ensuring European security. On the other hand it is attempting to revive the geopolitical principles of the Mitteleuropa concept, to master with the help of its powerful economy territories that had been lost during the two World Wars. Germany has included Croatia and Slovenia in the sphere of its interests and has taken control of international cross-roads in ensuring access to the Adriatic and Mediterranean seas. This is the reason behind its support of Croatia, in terms of weapons supply and defense from sanctions.

A unified Germany makes a claim for the leading role in European political and economic life. Germany is today developing into the most powerful political factor in Europe.

In practice, Slovenia, Croatia, and Hungary have already entered the orbit of German policy, and Romania and Bulgaria are gravitating toward it. It seems that Germany already in 1990 understood that movement toward the West is closed to it. This is why it is attempting to "reanimate" its former allies of World War II.

On May 30, 1992 the government of the RF announced its intention of doing everything possible in order to improve its traditional ties of friendship with Yugoslav nations. At the same time Russia voted for international sanctions against the FRY. In September 1992 the Minister of Foreign Affairs of the RF explained the Russian position concerning the Yugoslav crisis. According to it, Russia stands for the inviolability of external borders and for a moratorium on changes in the international borders of the former Yugoslavia, and also for the non-recognition of territorial division through forceful means.

It bears noting that during this period Russian policy in the Balkans could be characterized as being ambiguous. Moreover, Russian policy did not promote the establishment of peace in the Balkans. It was clear as early as 1992 that Russia's unconditional political and economic support of Serbia would serve Russian interests much better than a policy of appeasement and a loss if face in the Balkans.

Regardless of the future for a final solution of the Bosnian conflict, the presence of Allied forces corresponds to USinterests as it reinforces NATO's leading position in the ensuring of European security and underlines the ineffectiveness of the OSCE and the UN against the background of NATO military coordination.

A closer look at American actions shows an interesting detail: Slavs, particularly Serbs, have never been supported by Washington under the banner of its geopolitical interests in the regions. To this day American politicians equate Serbs with the last stronghold of socialism in the Balkans, which is to be annihilated.

It seems that Washington is still afraid of Russia and its influence on Belarus' and Ukraine. This is why the weakening of Slavic domination in post-Soviet space and also in the Balkans, where Russia's role has always been large, is one of the most important components of Washington's foreign policy. Following the above, the US has developed a long-term program to gain mastery in the Balkans. The US has already "put into production" projects of international regional cooperation and is attempting to ensure its control over this important region.

US strategy is directed toward filling the political space created after the collapse of the USSR and the WPT. The strategic direction of the filling of political space through the Balkans (Macedonia, Bosnia) and the Black Sea through to the Near and Middle East and the gaining of mastery over the Transcaucases is already in evidence.

Various mechanisms for the "disciplining" of the Balkans exist. However, most visible among them are efforts to use economic cooperation and political pressure in order to encourage the Balkans toward greater cooperation, in this way placing them under strategic control.

The Vatican made a significant contribution toward the collapse of socialism in Eastern Europe. It is now attempting to widen the sphere of Catholic influence in the Balkans, where Eastern Orthodoxy has been traditionally strong. Rome has always regarded the union of Catholic Croatia and Slovenia with Orthodox Serbia to be unacceptable.

It is a given that NATO's operation in Bosnia was successful not in terms of the establishment of a stable peace that is not yet present, but in terms of effective actions through force, an active "enforcement of peace". Operation SFOR in Bosnia demonstrated:

· the indispensability of NATO as an active mechanism in the provision of military security in Europe as a whole, and in separate sub-regions that exist outside of the bloc's zone of responsibility;

· proof that Europe is not able to ensure its own security without US military participation, which Washington is only prepared to embark upon within a NATO coordinated framework.

Today, the West, in our opinion, is attempting to pull the Balkan states into the orbit of its influence. In terms of geopolitics this means the creation of a single NATO belt from the Atlantic to the Persian Gulf, through the Balkans and the Middle East. The activation of cooperation with "potential NATO members" Romania and Bulgaria is in NATO plans. This ensures the Alliance's access to the Black Sea and the surrounding of the FRY by NATO and pro-NATO countries.

After the disintegration of the former SFRY, one of the largest and strategically important South-Eastern European countries, the Balkans resembled an area that had recently experienced a difficult political earthquake. Smoke still emerges from the powder-barrel ignited by the war in former Yugoslav republics as if for the last time warning the Balkan nations as well as the centers of world power.

At present the Balkan region has become much more vulnerable than it had been at the beginning of this decade. New contradictions were added to those that were inherited, while old problems remain far from being solved. The fact that the whole Balkan region suffers from the still existent international sanctions against Yugoslavia is of no less importance. Nevertheless, with the cessation of the war in Bosnia and Herzegovina and the improvement of relations between former Yugoslav republics, the situation has been moving toward the better. The readiness of Balkan states to embark on the process of overcoming old confrontations has recently become more evident.

At present, after the disintegration of the WPT has altered the balance of power in the region, stability in SEE is supported by the involvement of states in the process of general European security. Common aspirations of political élites in post-communist countries of the region for full-fledged membership in pan-European political, economic and military institutions is a dominant factor of geopolitical direction and is considered as a national state interest. The existing unidimensionality reduces the intensity of internal regional relations and creates shared regional stability.

Ukraine and the Balkans. Countries of the South-Western direction hold an important place in Ukrainian foreign policy interests. Ukraine can have an influence in this region, but without economic support this will remain only a desirable opportunity. Diplomatically achieved successes should be supported by economic actions.

The role of raw materials and consumer goods in Ukraine's export scheme to the countries of the region remains important. Ukraine has a positive trade balance with Black Sea states, which attests to the future of this direction of foreign trade relations.

Ukraine could activate the Balkan direction of its policy, relying on the development of bilateral relations with those regional states, whose foreign political, economic and defense aspirations objectively coincide with Ukraine's interests. The economic aspects of Ukrainian interaction with states of the Balkan peninsula are the most predictable, first of all, because of the objectivity of economic laws that do not depend on the subjective wishes and actions of politicians.

It can be asserted that the future of the development of Ukrainian-Balkan relations appears in a favorable light, and has the potential to positively influence the development of Balkan states. The reason for this is not only the fact that these relations have been rather active in the past few decades. Such confidence is dictated by the Balkan economic situation that will remain stable in the nearest future. Sooner or later Balkan politicians will have to agree that at the present stage states of the former CMEA and countries that have become independent are the best business partners for each other. This can be explained by the following reasons:

· opportunities to restore former mutually beneficial economic ties remain;

· an approximately similar and rather low general technological level of basic industrial branches;

· difficulties in accessibility to western markets. These difficulties will probably decrease with the development of integrative processes within the framework of the European Union;

· the necessity to protect the interests of domestic producers from western expansion. Many sectors of the economy in different Balkan states already feel significant difficulties in selling their goods even in their own countries.

The process of establishing new and of restoring old interrupted ties and multilateral cooperation on the territory of former Yugoslavia, in the Balkans, the South and Central Europe is long and complex. Only gradual steps are possible, while quick decisions are impossible because of a large number of reasons. Balkan involvement in European integrative processes plays an important role in this process. The above-mentioned region cannot and should not close itself within a narrow framework of exclusively Balkan cooperation. Being an important part of European civilization, the Balkans function as the geographical, transportation, historical, and religious link that unites Europe with the Middle East.

c) The Caucasian Region. The Formation
of the GUAM System.

Ukraine has significant transportation-energy interests in the Caucasian region and plays an important role in the strengthening of international cooperation and in the intensification of integrative processes. The national interests of such countries as Ukraine, Georgia, Moldova and Azerbaijan in large measure coincide with each other. This coincidence of interests led to the declaration in Strasbourg in October 1997 of the creation of a new regional bloc known under the conditional name of GUAM (Georgia, Ukraine, Azerbaijan, Moldova).

GUAM is a formation of equal post-Soviet countries with similar political and economic orientations. As such the newly formed bloc differs from the BSEC system that unites states with different levels of social and economic development, and from the CIS, where Russian domination is clearly evident. The creation of GUAM is indicative of the formation of new structures of economic and political interest within the CIS.

The CIS, in fact, already has a bipolar structure: pro-Russian states and those that aspire toward independent development and conduct independent foreign policy. GUAM plus the Central Asian states will number nine countries of the CIS that support the idea of the creation of new equal and mutually beneficial structures of cooperation. The states of the Baltic-Black Sea Alliance should be added to this list. In general, it can be asserted that GUAM is the response of a group of independent states to the claims presented in a well known RF document concerning the political course of relations with CIS states.

The geopolitical situation of GUAM states, their historical ties, and cooperation within the framework of BSEC and the CIS resolutely dictate to them the need to strengthen economic and political relations of special partnership on the regional level and in the solution of international problems. The positions of GUAM states concerning key issues of foreign policy coincide with each other.

The mutual economic interestsof GUAM states are mainly concentrated on two issues - the transportation of Caspian energy carriers and the building of new transit routes through the Caucasian region. The planning, construction and exploitation of transport communications from oil-gas deposits in Azerbaijan, Turkmenistan, Kazakhstan and Uzbekistan make the Transcaucasian Black Sea region appear extremely attractive. Today the idea of a Transcaucasian transportation corridor has obtained real significance. On the other hand, the Black Sea region, and in that number the Transcaucasus, has considerable importance as a market for Ukrainian goods.

Ukraine is an important strategic transit route of energy carriers to European states. This together with its processing abilities gives Ukraine the opportunity of becoming an essential link in the economic security of Europe. The use of Ukrainian territory more than halves the length of the oil transportation route from the Middle East to Europe. The Ukraine-Georgia oil supply transportation corridor is much shorter than any alternative route. Profits from the transit of energy carriers from the Caspian region to Europe will allow Ukraine to compensate expenditures for its import and to solve its own energy problems.

Ukraine has put forward a proposition about a trilateral Ukraine-Georgia-Azerbaijan agreement concerning the creation of a Transcaucasian transportation corridor. The creation of a single transportation line that will serve passengers and freight traffic and will unite Baku, Tbilisi, Poti, Odesa and Kyiv is foreseen. In December 1996 the "Illichevsk (Odesa) - Poti" ferry crossing was opened, which created new opportunities for an increase in the level of the exchange of goods between Ukraine and the Caucasian states. Potential freight traffic in both directions is foreseen to total 1 million tons. The crossing becomes an important part of the TRACECA transportation corridor.

Opportune directions for economic cooperation also include: the development of investment activity among GUAM states, the creation of mutual enterprises dealing with machine-building, energy and transport, and the processing of agricultural goods. In the future a regional zone of economic cooperation, self-sufficient in a number of aspects, can be created within GUAM.

The second sphere of cooperation within GUAM is represented by the regional security and stability problem. The realization of large-scale projects demands the formation of sub-regional security structures that could create a collective platform for cooperation in this sphere, with a maximal taking into account interests of all regional states.

Each of the GUAM states faces conflict situations that to a large extent have a common background and are inspired by a single external source (Abkhazia, the Crimea, Upper Karabakh, Transdniestria). A similarity in security problems causes the mutual gravitation of countries toward each other. The creation of GUAM provides new opportunities for the solution of present conflicts through mutual efforts, in a situation where the intervention of international structures is blocked by the RF.

The present level of development of interstate contacts is also an important reason for the formation GUAM.

The most developed relations within GUAM exist between Ukraineand Georgia. Russian politicians regard the signing of the Treaty on Friendship, Cooperation and Mutual Aid between Ukraine and Georgia (April 1993) to be the most serious step in the establishment of horizontal relations between post-Soviet countries.

In economic terms, romanticism and a certain euphoria in these relations are replaced by effective economic cooperation, the realization of wide-scale interstate projects and the practical political support of one another's positions in the international arena.

According to sociological surveys, only every third Georgian citizen sees the future of his state in connection with the RF, while two out of three respondents express sympathetic attitudes toward Ukraine. At present, Georgia appears as Ukraine's best bet for a partner in the Transcaucases, that will later support Ukraine's interests not only in the Caucasus but in the entire Black Sea region.

The instability of the political situation in this country, especially in Abkhazia, can cause damage to Ukrainian interests in the region. Standing by Georgia, Ukraine in whatever way becomes involved in regional conflict. At present, however, Kyiv does not maintain direct contact with Abkhazia, as it does not possess sufficient levers for politically influencing both conflicting sides. Ukraine stresses its hope for the preservation of peace in the Caucasus and advocates the quickest solution of the Abkhazian problem.

Ukraine-Azerbaijan. Azerbaijan's interest in Ukraine's goods and political support is an important factor in the intensification of cooperation between the two states. A dialog concerning the possibility of the common extraction of gas and oil deposits, partially in Ukraine, and also concerning the routes for their transportation through Ukraine, has begun. Azerbaijani experts have immense experience in oil and gas extraction both on land and on sea. They have expressed a will to help Ukraine in the development of its part of the Black Sea shelf. Azerbaijan shows considerable interest in the oil-gas extraction equipment made in Ukraine, which it could obtain in exchange for oil products.

Ukraine stays for the preservation of Azerbaijan's integrity, which automatically places it in confrontation with Armenia and the RF on the issue of Upper Karabakh. The RF here supports its strategic ally Armenia, where approximately 20,000 Russian 4th Army troops are stationed. The RF has provided Armenia with one billion dollars worth of weaponry. On the other hand, Armenia has made public information according to which Azerbaijan in 1993-1996 "illegally obtained" a large amount of weaponry, in part from Ukraine.

Ukraine-Moldova. Relations between the two states are determined by similar geopolitical conditions, common borders, interconnected economies, and by traditional historical, cultural and kinship ties. Both states follow the principle of military-political neutrality. A solid normative-law base has been created in the sphere of trade-economic relations. The further trend of economic harmonization is mentioned in the Declaration on the Main Principles of a Bilateral Customs Union, signed on March 11, 1997.

Moldova satisfies its domestic demands on account of the supply of mainly Russian oil and gas. Its joining of GUAM is also determined by its aspirations to diversify its own energy policy. A well-arranged transit of goods through Ukraine and Romania is very important for the Moldovan economy. Common economic interests provide for the development of cooperation in the joint exploitation of Danube ports, in the creation of effective frontier cross-points, and in the construction of modern roads and railways.

A closely related Ukrainian and Moldovan population, with similar economic, cultural, legislative and social problems, resides in border territories. Ukraine as well as Moldova is interested in the creation of so-called "Euro-regions", ruled by common bodies responsible for the solution of emerging problems.

The Transdniestrian conflict has to a certain extent been solved by the signing on May 8, 1997 of the Memorandum about the normalization of relations between Moldova and the Transdniestria. This document was signed by Ukrainian President L.Kuchma, in his capacity as a mediator. Ukraine acts as a state-guarantor of peace in Transdniestria. A decision has been made to involve the Ukrainian military in peacemaking activity in Transdniestria and to include Ukraine in the United Control Committee.

In adherence to the Helsinki Act and norms of international law, Ukraine maintains the position of nonintervention in the internal affairs of neighboring countries and supports the principle of the absolute respect of the territorial integrity and sovereignty of Moldova within the borders of the former MSSR. The disposition of an Operative Group of Russian Military Forces (OGRT) numbering approximately 3500-3700 men in Transdniestria remains as a serious problem. Ukraine is interested in the quick withdrawal of the OGRF and especially in the liquidation of the ammunition store on the territory of Transdniestria.

Many problems emerge in connection with existent border centers of tension. A huge quantity of poorly controlled weaponry creates ready conditions for their penetration into Ukraine, Also possible is the flow of refugees, great migrations of population, etc. Approximately 300,000 ethnic Ukrainians live in Transdniestria. They require the support and special attention of the Ukrainian state.

The formation of GUAM with the relative leadership of Ukraine and the support of other states that understand all of the advantages and benefits of the establishment of regional groups based on the principles of equality and mutual support signals the beginning of new extremely important integrative processes on the territory of the former USSR.

With the goal of ensuring the security interests of GUAM it is sensible to work on the creation of joint peacemaking formations, and to put forward the initiative for the holding of joint training in the framework of the NATO "Partnership for Peace" program.