CEPI Ukraine Watch

Week of November 21–28

Photo: CreativeCommons/ Steve Evans

1. 12. 2014
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This is the latest in a series of CEPI weekly digest of notable local and international news and analyses covering the Ukraine crisis, all available in English. The CEPI Ukraine Watch focuses on domestic politics, reforms, energy and security developments. Published at www.cepolicy.org

 

The first session of the newly-elected parliament was held on November 27. Five parties formed the coalition with 302 votes creating a constitutional majority. InsiderLevy Bereg and Ukrainska Pravdahave published reports, from which reader can learn what is happening behind the flash of cameras. According to LigaBusinessInform Petro Poroshenko Block is trying to weaken its dependence on Yatseniuk’s Popular Front, by planning to cooperate with group of deputies led by Igor Eremeev.

This week Ukrainian media were speculating about growing tension between president Poroshenko and Dnepropetrovsk governor Igor Kolomoisky. Nevertheless capital.ua has argued that President is not (yet) interested to aggravate the relationship with the Dnepropetrovsk group.

1. POLITICAL DEVELOPMENT

Ukraine’s parliament opened for its inaugural session: A total of 419 new lawmakers were sworn in, including former pilot Nadiya Savchenko, who remains imprisoned in Russia. Savchenko, elected to parliament on the party list Batkivshchyna, signed her oath and passed it to Ukraine through her lawyer. For now, there are 8 factions in New Rada. The People’s Front faction includes 83 MPs led by Oleksandr Turchynov. Samopomich led by Oleh Bereziuk includes 32 MPs, the Radical Party faction has 22 MPs (faction leader – Oleh Liashko), Batkivshchyna 19 MPs (faction leader – Yulia Tymoshenko), and the Opposition Bloc includes 40 MPs (faction leader – Yuriy Boiko). The Bloc of Petro Poroshenko with 146 MPs is the biggest faction led by Yuriy Lutsenko. In addition, two deputy groups – Economic Development (led by Vitaly Homutynnik) and People’s Will – (led by Igor Eremeev) have been formed with 19 members each.

The parliamentary majority will include the factions of the Petro Poroshenko Bloc, the People’s Front, Samopomich, Oleh Liashko’s Radical Party and Batkivschyna[1]. The Verkhovna Rada has electedVolodymyr Hroisman of the Poroshenko Block as the chairman of the parliament of the 8th convocation (his short profile can be read here). Verkhovna Rada confirmed Arseniy Yatseniuk as prime minister by 341 votes. President Poroshenko said in his extraordinary address to Verkhovna Rada that Ukrainian language should be the only state language in Ukraine, but decentralization will make it possible to take into account language characteristics of regions[2]. Ukraine has no choice but to increase military spending to strengthen the country’s defence capabilities, Poroshenko also said[3] adding that Ukraine currently cannot do without conscription. ” Ukraine’s non-aligned status… could not have been able to guarantee our country’s security and territorial integrity Poroshenko said.“… we have decided to return to the course toward integration into the Euro-Atlantic security space,”he said. “It is necessary to achieve NATO membership criteria not in words but in deeds and through real work. Let’s be honest: we should take into consideration a very cautious attitude toward the matter by quite a large number of some of our foreign partners” Poroshenko said 100 percent of Ukrainians favoured a unitary state without federalisation. Full Presidents address can be read here. Poroshenko has also called for the introduction of amendments to Ukrainian legislation to allow foreigners hold senior positions in Ukraine[4] and has proposed appointing a foreigner as head of the National Anti-Corruption Bureau. President said he is convinced that reforms will enable Ukraine to apply for EU membership in five years[5].

Igor Palica will continue to serve as Odessa governor after being elected to the RADA on the Poroshenko Block ticket.

2. SECURITY UPDATE

Prospect of Ukraine’s membership in NATO and EU: The question if Ukraine could join the European Union in the near future isn’t relevant yet, German Foreign Minister Steinmeier said. “Modernization of Ukraine will be a long-term project. Today, there is no point in speculating about an EU accession.”Asked whether Ukraine wanted to join NATO, President Poroshenko held out the prospect of a referendum in several years’ time, but said attempts to join now would cause “more harm than good”. Speaking to the German weekly magazine Der Spiegel, Steinmeier said “it is possible for NATO to have a partnership with Ukraine, but not membership.” NATO Secretary General Jens Stoltenbergsaid“Our policy is the same. The door is open for countries which fulfil the criteria for becoming NATO allies. That’s also valid for Ukraine.”  French Foreign Minister Laurent Fabius called Ukraine’s aspiration to join NATO problematic. It won’t be easy for Ukraine to join NATO said US State Department’s Victoria Nuland.

Lithuania to supply Ukraine with military aid – Poroshenko“We have agreed on supplies of concrete elements of concrete armaments for the Ukrainian armed forces,” Poroshenko said after talks with Lithuanian President Grybauskaite.  Lithuania may supply weapons to Ukraine as part of military aid it promised to Kiev, the Lithuanian defence minister told Reuters.

Kiev says Russia has 7,500 troops in Ukraine: Defence Minister Stepan Poltorak said that “the presence of 7,500 representatives of Russian armed forces in Ukraine destabilises the situation and prevents us from stabilising it.” Ukraine’s National Security and Defence Council confirmed thewithdrawal of part of Russian troops from the militant-controlled territory in eastern Ukraine, but notes that they are replaced with new forces coming from Russia. Foreign ministry spokesman told journalists that a total of 85 vehicles had been detected in the 5 columns that entered Izvaryne border crossing point from Russia.

Rebels urge UN to send peacekeepers into east Ukraine: The leadership of the self-proclaimed Donetsk People’s Republic said in a statement it was seeking “the intervention of a peacekeeping force that includes Russian representatives to control the implementation of existing agreements and help resolve the humanitarian and social situation”. There are currently between 15,000 and 20,000 armed rebels in the conflict zone, a Ukrainian military spokesman claimed, as well as “5,000 to 10,000 Russian professional soldiers who are present on Ukrainian territory”. EU adds 13 Ukrainian separatists, five organisations to sanctions list: EU states agreed to blacklist 13 new people and 5 entities over their actions in Ukraine. Full text of resolution can be read here.

OSCE mission in Ukraine includes 301 observers, 142 people work in Donetsk and Luhansk regions – Foreign Ministry: A total of 301 observers from 39 OSCE participating states worked in the mission as of November 17. Some 142 observers work in Donetsk and Luhansk regions, of which 11 people are citizens of Russia and the United States each, and 14 more represent Britain. In general, the composition of the mission, which has 336 employees, includes 30 U.S. citizens, 22 Britons, 19 Russians, 17 Germans, and 12 citizens of Sweden.

Belarus endorses demarcation of border with Ukraine: The Belarusian Council of Ministers has endorsed a Belarusian-Ukrainian intergovernmental agreement on the demarcation of the Belarusian-Ukrainian border.

Fourteen modern fighters join Russian Air Force regiment in Crimea: 10 Su-27SM and 4 Su-30M2 fighter aircraft arrived at the Belbek airfield in Sevastopol from the Krasnodar territory, November 26, TASS has reported.

General Breedlove has visited Ukraine for high level talks:  President Poroshenko and Prime Minister Yatseniuk met with NATO’s supreme allied commander in Europe, General Philip Breedlove todiscuss defence cooperation between U.S. and Ukraine.  “We are going to help Ukraine’s military to increase its capacities and capabilities through interaction with U.S. and European command,”Breedlove said, adding that it “will make them ever more interoperable with our forces.”[6] Breedlove has warned, that “the capabilities that are being installed in Crimea … are able to exert influence over the entire Black Sea… We are very concerned with the militarization of Crimea.”[7]

SBU arrests 668 people for separatism this year: advisor to the SBU chief Markiyan Lubkivsky –“since March this year, investigative security agencies have had more than 3,000 criminal proceedings initiated due to the crimes committed against the national security of Ukraine, against public safety and other crimes related to separatism and terrorism in south-eastern Ukraine and Crimea.” As part of these proceedings 967 persons had been declared suspects, 668 had been arrested and that 186 people had been put on the wanted list.

Over 500 people dismissed from government under lustration law – Yatseniuk: “We have held several stages of lustration. During the first stage, about 40 senior government officials were dismissed from the Cabinet of Ministers of Ukraine. Now we have dismissed about 500 people – this is the second stage of lustration,” he said.

28,000 civil servants dismissed in Ukraine – Yatseniuk: The current government has dismissed 28,000 civil servants and cut funding for running the government by 10%.

SBU ends probe against 82 former high-ranking officials: The Security Service of Ukraine has finished the investigation with respect to 82 high-ranking officials and passed the materials to the Prosecutor General’s Office, SBU Chief Valentyn Nalyvaichenko has said.

Yatseniuk-led government allocates UAH 19 bln for army needs“UAH 19 billion is [an amount of money], which we managed to raise for the Armed Forces, army and National Guard,” Yatseniuk said.

Poroshenko had a telephone conversation with Russian President Putin on November 26: An administration representative said that Poroshenko had a hard talk with Putin in the presence of the ambassador. The Presidential Administration has denies, that Russian Ambassador Zurbov took part of conversation.

Ukraine getting $11million more in non-lethal support from Canada: Canadian Defence Minister Rob Nicholson said Canada is sending another shipment of non-lethal equipment to the Ukraine worth $11 million.

The International Advisory Panel which was set up by Secretary General of the Council of Europe to oversee the investigation into the violent incidents in Kyiv during the Maidan demonstrations between 30 November of last year and 22 February of this year provides an overview of its past and future work.

Ukrainian border guards not controlling over 400 kilometres of border with Russia: Ukrainian border guards do not currently control more than 400 kilometres of their country’s border with Russia, State Border Guard Service chief Nazarenko said. Ukraine digs over 130 km of anti-tank ditches along border with Russia: Ukrainian border guards continue to dig anti-tank ditches along the border with Russia. They have dug 135.54 kilometers of anti-tank ditches and built obstacles along 86.42 kilometers. The work is being done practically along the entire border with Russia and the administrative line with Crimea.

1,800 Ukrainians freed from militants: About 1,800 Ukrainians have been released from the captivity of Russian-backed insurgents, including 1,043 people freed with the support of the SBU’s Assistance Center for the release of hostages.

Overview of population displacement (as of 27 November 2014): As of November 27, estimated number of people living in conflict-affected areas is 5.2 million. 490,046 is number of internally displaced people (source: SES) and 545,613 people fled to neighbouring countries (of these, 444,895 have sought refuge in Russia). Graphical visualization can be seen here.

3. ECONOMY & REFORM EFFORTS

Kyiv ready to cooperate with CIS countries in economic issues, without politicizing this union – Foreign Ministry“Ukraine is interested in economic cooperation with CIS member states, based on the fact that it should not be depoliticized, should comply with the principles and rules of the WTO and should not contradict the provisions of the Association Agreement between Ukraine and the European Union,” Ministry of Foreign Affairs spokesman has said.

IMF mission finishes work in Kyiv: The mission of the IMF which arrived to Kyiv on November 11 has finished its work. IMF may continue discussions with Ukraine only after a new Cabinet of Ministers is set up[8].

Hungary, Sweden and Poland ratify Ukraine-EU Association Agreement: Parliaments of Hungary[9], Sweden[10] and Poland[11] have ratified the Association Agreement between Ukraine and the European Union.

EU supports Decentralisation and Regional Policy reforms in Ukraine with €55 millions: Commissioner for European Neighbourhood Policy and Enlargement Negotiations, Johannes Hahn, and Valery Pyatnitsky, Acting Minister of Economic Development and Trade of Ukraine, signed Financing Agreement to launch a new programme “Support to Ukraine’s Regional Policy”. The programme will support Ukraine’s Decentralisation and Regional Policy reforms with 55 million euros. The EU funds will support the implementation of the State Regional Development Strategy 2020, which was approved by the Government of Ukraine on 6th August this year.

US to provide $34.4 million of additional technical aid to Ukraine: US government will provide an additional technical aid of $34.4 million to Ukraine, including $11 million for the improvement of the anticorruption and election laws, $6.6 million for support of small and medium-sized companies by local authorities and $5 million for the increase of agricultural production.

EU to give Ukraine 500 million euro as macro-financial assistance in December 2014: The EU plans to provide 500 million euro as macro-financial assistance to Ukraine in December this year, EU Commissioner for European Neighborhood Policy and Enlargement Negotiations Johannes Hahn has said. The European Union has no intentions to revise the Association Agreement with Ukraine, Hahn said[12]EU Commissioner Hahn said he plans to visit Ukraine every three months: “I would like to be here every three months in order to follow the process of concrete implementation of the reform agenda.” Novoe Vremja has published interview with Hahn, which can be read here.

Russia’s Medvedev and Ukraine’s Yatseniuk discuss economic ties by phone – Russian government: Medvedev and Yatseniuk discussed financial and economic relations between Russia and Ukraine, the press service added, without elaborating.

Forecast for deficit of Ukraine’s state budget in 2014 increased by 29% – Finance Ministry: The actual deficit of the national budget in 2014 is expected to total Hr 88.375 billion, which is 28.9% more than the ceiling figure stipulated in the law on the national budget for the current year (Hr 68.564 billion).

4. ENERGY UPDATE

Ukraine gas stocks down 14 percent since start of heating season:  Ukraine’s gas reserves have fallen 14 percent since the start of the heating season in late October. Actual state of natural gas reserves in Ukraine’s gas storage facilities can be checked out here.

Russian coal shipments to DTEK, Centrenergo suspended – Energy Minister: Russian Railways officials issued verbal directives banning deliveries of Russian coal to Ukraine, the Interfax-Ukrayina reported, citing the press service of DTEK. The holding reported it learned of the ban from its suppliers. Centrenergo confirmed in its press release that coal supplies from Russia have been recently interrupted, with suppliers referring to force majeure[13]. This week, the Cabinet of Ministers has included anthracite in the list of goods that are subject to licensing when exported[14].

Energy Community Secretariat and the energy reforms coalition discusses Ukraine’s progress in acquis implementation: In a meeting with experts and civil society organisation representatives from Ukraine, united as the Energy Reforms Coalition, the Energy Community Secretariat discussed how implementation of the EU energy rules provides a solution to the energy security dilemma which embraces Ukraine. Roman Nitsovych from the DiXi Group presented the most recent analytical report “Ukraine and Energy Community: it’s high time?” 

Gazprom to Supply Gas to Ukraine Only with Debts Paid Off by End of 2014:  Gazprom will not supply gas to Ukraine if it fails to clear its debts by the end of 2014, a top Gazprom executive told Sputnik.

Hungary not to restart gas flows to Ukraine before filling up storages – minister: Hungary will not be able to restore reverse natural gas flows to Ukraine before filling up its own storage units, Development Minister Miklós Seszták said. Last week Hungary’s Foreign Minister Péter Szijjártó said that as soon as the Hungarian-Slovak gas interconnector starts commercial operation (which is due early next year), Hungary will once again have the opportunity to supply natural gas to Ukraine.

Energoatom, TVEL sign supplementary agreement on nuclear fuel supplies in 2015-2016: Energoatom and Russia’s TVEL have signed a supplementary agreement on supplies of Russian nuclear fuel for Ukrainian nuclear power plants in 2015-2016. In addition to Russian fuel, Yuzhnoukrainsk Nuclear Power Plant also uses fuel from U.S. Westinghouse.

Gas from Lithuanian LNG terminal could be supplied to Ukraine from 2018: Ukraine could receive gas from LNG terminal in Klaipeda since 2018, Lithuanian Minister of Energy Rokas Masiulis said.

Ukraine’s Deputy Energy Minister Ulyda dismissed for approving electricity imports from Russia: Deputy Minister of Energy and Coal Industry of Ukraine Vadym Ulyda has been dismissed for giving permission for the electricity imports from Russia.

Ukraine, Slovakia working on expansion of technical possibilities for gas reverse supplies -Ukrtransgaz: The first stage of construction of new border gas metering station Budince to import natural gas to Ukraine has started.

State energy companies stop activity in anti-terrorist operation zone: Energy and Coal Industry Ministry on November 28 stops the financial and business activity of state enterprises located in the area of the anti-terrorist operation in eastern Ukraine.

Energy ministry decides to conduct off-schedule audit of Naftogaz in case on purchase of drilling rigs for Chornomornaftogaz (“Boyko towers”):  The goal is to define the correspondence to Ukrainian law, legal documents when Naftogaz Ukrainy made decisions in 2010-2011 to provide two interest-free loans to Chornomornaftogaz to buy two modern self-elevating floating drilling rigs worth UAH 6.443 billion. The opposition accused former energy and coal industry minister Yuriy Boiko of corruption when the rigs were bought.

Slovakia’s Eustream offers alternative to South Stream pipeline, not bypassing Ukraine: Eustream is proposing a new pipeline to carry natural gas from Western Europe to Balkans. The project would ensure countries such as Bulgaria and Serbia can receive gas even if Russian supplies via Ukraine are disrupted. The Slovak operator proposes gas be piped from western European hubs via Slovakia’s existing system into Ukraine and then into Romania and on to Bulgaria.

Government again obliges energy companies – over 150 industrial enterprises – to buy gas only from Naftogaz: The Cabinet of Ministers of Ukraine has doubled the number of industrial enterprises, which are obliged to buy gas this winter exclusively from Naftogaz to 152.

5. VISEGRAD NEWS AND VIEWS

PISM: Is the Eastern Partnership Weakening? The Consequences of the EU Institutions’ Power Shift to Neighbourhood Policy
OSW: The Ukrainian coalition agreement
Lessons Ukraine can learn from Visegrad countries
Ukrajinci môžu dostať zo Slovenska ešte viac plynu, jeho šetreniu sa však nevyhnú
Czech President: Ukraine has to move to neutrality and ‘Finlandization’
Czech ministers criticize president’s pro-Russian stance on Ukraine
Naftogaz: Kapacita vojanského plynovodu sa navýši o ďalších 30 %
Interview with Mikulas Dzurinda
Slovak economist criticizes Ukraine’s bloated public expenditures, corrupt taxation
Interview with Ivan Mikloš

Noteworthy Resources

Will the prohibition to foreign owned airlines to operate in Ukraine fly?
Lazarenko’s stolen millions to be divided between US and Antigua banks
Federation Council passes law to create free economic zone in Crimea, Sevastopol
Merkel Said to Reject Ukraine NATO Bid
BE Berlin Economics: Towards a modern SME policy in Ukraine
Putin’s allies channelled billions to Ukraine oligarch
Many Germans support tougher stance on Russia
Interview with Semen Semchenko, newly elected MP and commander of Donbas battalion
Interview with Alexander Lukyanchenko, the mayor of Donetsk
Interview with Luhansk Governor Hennady Moskal

Food for Thought

Spiegel Report: Summit of Failure: How the EU Lost Russia over Ukraine


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