12 November 2014
Dmitry Firtash interview to ‘Handelsblatt’
Mr Firtash, you own a few plants in eastern Ukraine, where hostilities take place and in Crimea. Are they still operating?
I couldn’t even imagine that it will come to war in Ukraine and annexation of Crimea. Our chemical plant in Severodonetsk, which is under control of Ukrainian forces, will soon be able to operate again if a stable power supply will be provided. According to separatists’ leaders, we are able to resume operation of our plant in Horlivka, where separatists control the situation. But the plant was destroyed during bombardment. Moreover, its territory is mined and no one knows exactly where the bombs are planted. Perhaps, this is because I have never paid anything to separatists. Besides, there is no electricity there and we cannot use gas.
Ukrainian government forbade chemical enterprises to use gas due to its shortage before winter.
You had been dealing with gas trade for a long time. Can Ukraine go through winter after concluding a gas contract with Russia?
It will be very difficult: agreed gas volume is hardly enough to go through winter. But I don’t understand our government. It refused to sign this agreement with Gazprom in April but signed just the same agreement now. Can we call it a ‘win’? It’s populism, pure and simple.
What is about your enterprises in Crimea?
Titanium plant in Crimea continues to operate but the situation is getting worse because Ukraine cut off water supply of the peninsula. Federation of Employers of Ukraine strongly opposes this. People in Crimea don’t have to become victims of the conflict between two countries.
But Russia annexed Crimea. Will you be able to keep control of your enterprises?
Our gas distribution companies have been already seized. I don’t know about the future of titanium plant. But new government will have to provide its employees with jobs as well. We, Ukrainian businessmen, oppose the government’s decision to withdraw investments from Crimea. Instead of ‘seizing and sharing’ we should think about development of cooperation.
Are you still committed to Ukraine’s European orientation?
We are interested in association with the EU, but at the same time Russia’s concerns have to be considered. Our economies are closely related to each other.
How do you assess economic situation in Ukraine?
It is disastrous! GDP has decreased by 10% this year. Our currency hryvnia has lost 60% of its value. Banking system is experiencing considerable difficulties. Public debt is increasing rapidly and soon will amount to 70% of GDP. We cannot constantly beg for money! We need a new government which will finally guarantee economic growth.
What has to be done for it?
Completing an association agreement, Europe and Ukraine underestimated Russia’s reaction. They thought Russia would watch silently. As a result, it came to confrontation which we are witnessing now: Ukraine has become a battlefield between the West and Russia. But Ukraine should become kind of a ‘bridge’, a factor for resolution of the conflict.
How can it happen?
Ukraine exports one-third of its products to the EU and one-third – to Russia. We should not lose this market! Each of three partners has to make his contribution to common cause: Russia has energy resources, Ukraine has capabilities of their transit, and the EU has money and technology. We should create a united market from the EU, Ukraine and Russia with its Customs Union. It is the only possibility if Europe intends to remain a key role in the world in future.
It is a fiction, isn’t it?
Businessmen need long-term plans, they need to realize their ideas in order to develop their enterprises. But European money itself cannot save Ukraine: we should achieve development of our own economy, otherwise we will be in trouble.
What exactly should happen in Ukraine?
We need federalism by example of Germany, we need parliamentary republic instead of present fight between President Poroshenko and Prime Minister Yatsenyuk that just harms everybody. Besides, Ukraine has to remain an independent state: to be a ‘bridge’, not a battlefield.
What can you say about prospects for foreign investors?
Ukraine is a typical agrarian country: 15 million of its citizens live in countryside. Up to now 30% of products have been being lost due to poor yield and bad logistics. We can see new opportunities in this area because Ukraine owns over 30% of the whole world chernozem and it used to be a European breadbasket.
But most investors don’t trust Ukraine. How are you going to change it?
In order to change it we jointly with Germany plan to implement a guarantee fund of the total over USD 500 million. Ukrainian magnates including Rinat Akhmetov, Victor Pinchuk and me will invest their own money. In that way we will give a signal to investors that their funds will be safe.
By the way, what is about your personal security? The USA demands your extradition from Austria in connection with legal investigation of corruption.
I didn’t commit any offences and I am not guilty of anything. Besides, I think the USA has already understood it as well. I like Austria. I feel comfortable to manage my group of companies from here. But, of course, it’s a pity I cannot go to my homeland.
What can you say about current article in Die Presse newspaper about pre-arranged attempt at you?
Europe needs transparent rules to provide energy security. I owned a company in Hungary that dealt with gas supplies. It became a victim of criminals: USD 250 million was stolen there. I work closely with Hungarian government. Obviously, people who ordered an attempt at me are trying to hinder the investigation. But I’m sure Hungarian law-enforcement authorities will investigate these offences.
Mr Firtash, thank you very much for the interview.