Maidan

France obviously still has little affection for Ukrainians. Perhaps too many there cannot forget that thanks to the Central Rada and its German alliance, and then to Petliura, who overthrew Hetman Skoropadsky after he had agreed repayment of Ukraine's portion of the tsarist debt to France, French capitalists and industrialists and part of the middle-class, lost all their money in 1919. For those who don't know, on September 26, 1918, the Hetman's Council of Ministers promised an advance o¬n the Tsarist coupons for the bonds held in Ukrainian banks before November 3, 1918. The Hetman had managed to get Ukraine's Russian industrialists (PROTOFIS) to put up the money. But the bondholders never received anything thanks to Petliura's successful offensive. Germany agreed to cancel its debts to Russia at Rapallo (1922).

Any economic history book has the figures:

By 1914 the total Russian state debt was 8,800,000,000 gold roubles. The foreign part of this was 4,229,000,000 o¬n January 1, 1914, or between 30 to 48 per cent of the total. France, Imperial Russia's
ally, held four fifths of its debt. Of a foreign industrial investment of some two billion roubles, France furnished nearly a third.

According to the Soviet Government at the 1922 Genoa Conference, the total external national debt (state and government-guaranteed loans) had amounted by the year 1914 to 6330 million gold roubles. France's share was 3786 million in credits. By 1915 Russian joint-stock companies had received 1940 million roubles in foreign investments – of that France provided 594 million roubles.

In 1919, as the French government centralized the claims related to French interests in Russia, 1.6 million investors filed forms. Furthermore, France centralized most Russian financial assets at the
beginning of the twentieth century and approximately 40% to 45% of Russian sovereign debts. According to the Office National des Valeurs Mobilières, the amounts invested in tsarist Russian shares and bonds
before WWI reached 15 to 18 billion francs.

The Bolsheviks repudiated all loans in 1918. But what has Mr. PUTIN been doing the last 12 months in France? We already know about the millions he paid Germans a few years ago, and how Herr Schroeder is now enjoying directorship in a Russian gas company. What remains to be discovered is whether more money has been going from Russian accounts into French accounts to pay off the old debt.

An agreement signed by then Russian Prime Minister Chernomyrdin o¬n May 26 1996 said neither Russia nor France would claim debts accumulated before May 1945. Russia also agreed to pay France $400
million in eight $50 million semi-annual payments, to put an end to financial disagreement between the countries. The payments began being made in 1997. The French Association of Russian Bond Holders (AFPER), which represents about 13,000 French citizens who still own stock issued by tsarist Russian companies was displeased, and claim it covers o¬nly government and not private losses. It protested the
agreement but a court concluded that the Russian government had immunity granted by the 1996 bilateral agreement. (http://english.mn.ru/english/issue.php?2004-3-20) Has Mr. Putin kindly seen to paying these people?

The French decision is particularly tragic in light of Julia Tymoshenko's recent political shift from centre-left social-democratic positions, to a centre-right Christian- democratic o¬ne. She undoubtedly had Ukraine's interests at heart hoping her new allies would help the country's EU /NATO bid. Perhaps she should have offered to pay-off the French bond-holders instead.

Stephen Velychenko, CERES Associate; Research Fellow,Chair of
Ukrainian Studies; Munk Center, University of Toronto