- Gorshenin Institute
INTHESPOTLIGHT ©GorsheninInstituteMarch2015Allrightsreserved ISSUE51(214) 03/16/2015 INTHESPOTLIGHT ISSUE51(214) 03/16/2015 CONTENT 1.Topnews…page5 2.ArmedconflictinUkraine`seast…page5 Pro-Russianseparatistsmasstroopsalonglineofcontact Russiancontinuessendingweapons,troopstoDonbas Ukraineloses1,550soldiersduringantiterroristoperation,sayspresident Pro-RussianseparatistsuseprisonersforrecoveryoperationsatDonetsk airport-OSCE Pro-RussianseparatistsopenfireatrepresentativesofInternationalRedCross OSCEextendsmandateofmonitoringmissiontoUkraineforyear UkraineasksUNtosendpeacekeeperstoDonbas UkrainianpresidentlistsconditionsforholdingelectionsinDonbas 3.Internationalpolitical…page8 Ukraine-Russia UkrainiandoctorsexaminepilotinRussiancustody Crimeanissue RussianpresidentdiscussespreparationforCrimeanannexation Russialauncheslarge-scalemilitarydrillsinCrimea Crimeanauthoritiessentenceparticipantsinpro-Ukrainianrallytocommunity service Pro-UkrainianactivistarrestedinCrimea Crimeanlawenforcerssearchapartmentsofjournalists Ukraine-EU EUprolongssanctionsagainstRussianofficials,separatists UkrainianagrariansexhaustEUannualexportquotas Ukraine-USA Pentagon:nofinaldecisiononarmssuppliestoUkraine USAtoprovideUkrainewithadditionalnon-lethalaid 2 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 USAimposessanctionsonUkraine'sex-ministers,separatists Ukraine,USAsignagreementonassistanceinlawenforcement Ukraine-world Ukrainereportsonuseofhumanitarianaidfrompartnerstates 4.Domesticpolitical…page12 NSDCapprovesspecialself-governanceregulationsforcertainareasofDonbas Ukrainianpresidentvetoeslawrequiringcabinetapprovalofutilityrates Ukrainianpresidentokayshighersalariesforofficials,MPs YetanotherexplosionrocksOdessa ThreejudgesofKievPecherskyydistrictcourtsuspended Prosecutorspronouncefiveex-membersofparliament'stabulationcommission wanted FormerZaporizhzhyagovernorfounddead 5.Economy…page14 IMFboardapproves17.5bn-dollarloanforUkraine IMFexpectsUkrainetoreturntogrowthin2016 EuropeanParliamentcommitteesupportsmacro-financialaidtoUkraine SwedentoprovideUkrainewith100m-dollarinterest-freeloan FitchexpectsgrowthofUkraine'sforeignreserves FinanceMinistrylaunchesconsultationsonforeigndebtrestructuring Ukrainetobeginmassprivatizationin2015-financeminister Coreinflationacceleratesto33.2percent Bankslose350mdollarsinJanuary CourtreturnsZaporizhzhyaaluminumsmeltertostateownership 6.Energy…page16 Naftohaztransfersanothertrancheof15mdollarstoGazprom GermanRWEbecomeslargestwesternsupplierofnaturalgastoUkraine IMFgivesgreenlighttoselling1.69bndollarstoNaftohaz 3 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 Shell,Ukrhazvydobuvannyatoterminateenergyproductioncontract Ukrainecutsoffsubsidiestocoalindustry-energyminister 4 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 1.TOPNEWS Pro-Russianseparatistsmasstroopsalonglineofcontact RussiacontinuestosupplyweaponsandsoldierstoDonbas. YoucanfindmoredetailsinthesectionARMEDCONFLICTINUKRAINE'SEAST. RussianpresidenttalksaboutoperationonCrimeanannexation RussiacontinuestoviolatehumanrightsintheCrimeanpeninsula. YoucanfindmoredetailsinthesectionINTERNATIONALPOLITICAL. IMFapproves17.5bn-dollarloanforUkraine Kievhasalreadyreceivedthefirst5bn-dollartrancheoftheloan. YoucanfindmoredetailsinthesectionECONOMY. 2.ARMEDCONFLICTINUKRAINE'SEAST Pro-Russianseparatistsmasstroopsalonglineofcontact Pro-RussianrebelfightersandtheRussianmilitarycontinuetomasstroops alongallthekeydirectionsandalongthelineofcontact.Additionally,they continuetoredeploytheirunitsandmilitaryequipment,thepresscentreofthe Ukrainianantiterroristoperationhasreported. Inparticular,separatistshaveconcentratedtheirforcesnearthecitiesof Horlivka,Shchastya,StanytsyaLuhanska,Mariupol,Avdiyivka,Pisky, Dokuchayevsk,andShyrokino.Theyhavealsobeenactivelytransporting equipmentandartilleryammunitionthroughtheDebaltseverailwayhuband havebeenformingmilitaryunitsnearDonetsk. WeshallremindyouthatUkrainehaswithdrawnheavyweaponsfromtheline ofcontactinDonbasinlinewiththeMinskagreements.However,pro-Russian rebelforcesrefusedtoallowobserversofthespecialmonitoringmissionto UkraineoftheOrganizationforCooperationandSecurityinEurope(OSCE)to monitorthewithdrawalofheavyweaponsfromtheirside. Additionally,pro-Russianseparatistscontinuetoviolateacease-firebyshelling positionsoftheUkrainianantiterroristoperationforcesdozenstimesonadaily basis. PresidentofUkrainePetroPoroshenkoadmittedthefailureoftheMinsk accordsandcalledontheWesterncountriestostepuppressureonMoscow. Russiancontinuessendingweapons,troopstoDonbas TheUSStateDepartmenthasevidencethatRussiacontinuessendingheavy weaponstotheoccupiedterritoriesintheeastofUkraineandtomass 5 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 additionalforcesalongthestateborder,thespokespersonfortheUS DepartmentofState,JenPsaki,hassaid. Forhispart,NATOSecretary-GeneralJensStoltenbergalsoconfirmedthat RussiacontinuestosupplyweaponstoandtrainrebelforcesinDonbas. ThestaffoftheUkrainianantiterroristoperationreportedthattheselfproclaimedDonetskandLuhanskpeople'srepublicshaddeployedtwo30,00033,000-strongarmycorps,addingthatRussianmercenariesrepresented80-85 percentofthem. TheSecurityServiceofUkraine(SBU)saidthatRussianMaj-GenAleksey Zavizencoordinatedtheactionsofpro-RussianrebelforcesinDonbas. TheRoyalUnitedServicesInstituteforDefenceandSecurityStudiesreleaseda reportlastweekinwhichitpresentedevidencethattheRussianmilitaryhas beenactivelyparticipatinginthewarintheeastofUkrainesince14July2014. ItsexpertsbelievethatRussiamightsoonlaunchanewoffensiveonthe Ukrainianpositionsand,inparticular,onMariupol. ItshouldalsobenotedthatanotherhumanitarianconvoyfromtheRussian FederationarrivedinDonbason15March.Likethepreviouscargoes,the convoycrossedtheUkrainianborderillegally. Ukraineloses1,550soldiersduringantiterroristoperation,sayspresident Nearly1,550Ukrainiansoldiershavebeenkilledsincethebeginningofthe antiterroristoperationinDonbas,UkrainianPresidentPetroPoroshenkohas said. TheUkrainianheadofstatespecifiedthat1,230killedsoldiershadservedfor theArmedForcesofUkraine,132fortheNationalGuard,99hadworkedforthe InteriorMinistry,63fortheStateBorderService,sevenfortheSecurityService ofUkraine,and16fortheStateEmergenciesService. WewouldliketopointoutthattheUNhasestimatedthatmorethan6,000 peoplehadbeenkilledduringtheconflictinDonbas. Pro-RussianseparatistsuseprisonersforrecoveryoperationsatDonetsk airport-OSCE On11March,observersoftheOSCEspecialmonitoringmissiontoUkraine noticedduringavisittoDonetskairportthatpro-Russianrebelfighterswere usingUkrainianprisonerstocleanupdebrisandsearchforthedead. UkrainianPresidentPetroPoroshenkoaccusedpro-Russianseparatistsof inhumanetreatmentofUkrainianprisoners. Additionally,theUkrainianpresidentdecriedalackofprogresswiththeissueof releasingUkrainianprisoners. SBUchiefValentynNalyvaychenkosaidinaninterviewwiththeLB.uanews andanalysiswebsitethatthankstotheworkofthecentrefortheexchangeand 6 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 releaseofpeopleillegallydetainedbyrebelfightersorbytheRussianmilitary, theUkrainiangovernmenthadmanagedtofree2,480people. Pro-RussianseparatistsopenfireatrepresentativesofInternationalRed Cross On11March,pro-RussianrebelfightersusedsmallarmstoopenfireattheRed CrossmissionnearDonetsk.Nomedicalpersonnelwaskilled,thepresscentreof theantiterroristoperationhassaid. OSCEextendsmandateofmonitoringmissiontoUkraineforyear On12March,thepermanentcounciloftheOSCEdecidedtoextendthemandate ofthespecialmonitoringmissiontoUkraineby12monthsuntil31March2016. Themissionmightalsobeextendedfrom500to1,000peopleifneeded. TheUkrainianForeignMinistrysaidthatRussiacontinuedtoblockaproposal submittedbyUkraineandothercountriestoexpandtheOSCEmissiontothe Ukrainian-Russianborder. UkraineasksUNtosendpeacekeeperstoDonbas UkrainehassentUNSecretary-GeneralBanKi-moonapreliminaryrequestto sendapeacekeepingmissiontoDonbas,thepresscentreoftheUkrainianForeign Ministryreportedon13March. ThepresscentrealsosaidthatUkrainewouldsendanotherrequesttotheUN aftertheVerkhovnaRadaapprovesacorrespondingproposal. TheRussianForeignMinistrysaidthattheRussianambassadortotheUNwould notsupportthesendingofapeacekeepingcontingenttoUkraineifaproposalto thiseffectisintroducedfortheconsiderationoftheUNSecurityCouncil. InFebruary,UkrainianForeignMinisterPavloKlimkinsenttheEUaletterwitha requestaboutthepossibilityofsendinganEUpeacekeepingmissiontoUkraine. UkrainianpresidentlistsconditionsforholdingelectionsinDonbas LocalelectionsinDonbaswouldbepossibleonlyafterpro-Russianrebelfighters satisfyrequirementssetforwardbytheOSCE,UkrainianPresidentPetro Poroshenkohassaid. Inparticular,hesaidthatallforeignmilitarycontingentshouldbewithdrawn fromtheeastofUkraine,thatbroadcastingofUkrainianmassmediaandthe activityofUkrainianpoliticalpartiesshouldberesumedthere. PoroshenkostressedthatDonbasshouldberepresentednotbysoldierswith weaponsbutbypeoplewhoaretrustedbythelocalpopulation. 7 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 3.INTERNATIONALPOLITICAL UKRAINE-RUSSIA UkrainiandoctorsexaminepilotinRussiancustody On14March,UkrainiandoctorsexaminedUkrainianMPNadiyaSavchenko,who isincustodyinMoscow. ThedoctorssaidthatSavchenko'sconditionissatisfactory.Theysubmittedtheir recommendationsforendingherhungerstrike. WeshallremindyouthatNadiyaSavchenkowentonhungerstrikeon15 December2014toprotestagainstherillegaldetentioninRussia.On5March 2015,shestartedtograduallyfinishherhungerprotestduetothedeterioration ofherhealth.However,afewdayslatersheaccusedRussiandoctorsofusing wrongmethodsforhelpingherfinishthehungerstrikeanddemandedtobe examinedbyUkrainianphysicians. CRIMEANISSUE RussianpresidentdiscussespreparationforCrimeanannexation On16March,theanniversaryofthepseudo-referendumonCrimea'saccessionto Russia,Russianmediashowedadocumentarycalled“Crimea.ThePathto Homeland”,inwhichRussianPresidentVladimirPutinadmittedthathe personallycontrolledtheannexationofthepeninsula. AccordingtotheRussianleader,theannexationofCrimeawasconductedalong withamilitaryoperationaimedatallegedlyprotectingthepeninsulafroma possiblemilitarytakeoverbyUkrainianparamilitaries.Putinsaidthattodisarm theUkrainianarmywithstrengthof20,000,RussiasenttotheCrimeanpeninsula itsofficersoftheMainIntelligenceDirectorateandMarineCorpsfightersunder theguiseofstrengtheningthesecurityoftheRussianbase. Also,theRussianpresidentsaidthatheconsideredthepossibilityofusing nuclearweaponsinthecaseofarmedconfrontationwithWesterncountriesin Crimea. TheUkrainianForeignMinistrysaidthatPutin'sstatementsinthefilmcouldbe seenasanadmissionofapre-plannedoccupationcampaign. Inhisturn,UkrainianPrimeMinisterArseniyYatsenyukaskedtheJustice MinistrytosendthefilmtotheHagueTribunalasevidenceofwhohadordered theRussianmilitarytooccupyUkrainianterritoryinCrimea. Russialauncheslarge-scalemilitarydrillsinCrimea Russiahasstartedlarge-scalemilitarydrillsat19trainingsiteslocatedinthe NorthCaucasianandSouthernFederalDistricts.Thelatterincludestheterritory ofannexedCrimea,theGermanbroadcasterDeutscheWellehasquotedthepress serviceofthedistrictsassaying. 8 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 Morethan8,000gunnerswilltakepartintheexercises.Additionally,1,500unitsof weapons,includingself-propelledartillerygunsHostaandmultiple-launchrocket systemsTornado-Gwillbeinvolvedinthedrills. NATOSecretary-GeneralJensStoltenberghassaidinaninterviewwithThe GuardianthatthealliancewasseriouslyconcernedwithdrillsofRussiansoldiers whichhaverecentlybecomemorefrequentaswellaswithanincreaseinthe RussianmilitarypresencealongtheNATOborders. Crimeanauthoritiessentenceparticipantsinpro-Ukrainianrallyto communityservice Afterarallyontheoccasionofthe201stbirthdayanniversaryofUkrainianwriter andpoetTarasShevchenkoinSimferopol'sGagarin'sparkon9March,theCrimean authoritiesdetaineditsorganizerLeonidKuzminaswellasactivistsVildar ShukurdzhyeyvandOleksandrKravchenko.Theywereaccusedofviolatingthe termsofholdingassemblies. On12March,Simferopol'sZaliznychnyycourtsentencedthedetainedto40hoursof publicservice. Thecourtruledthattheactivistswereguiltyofusingbannedsymbols-Ukraine's flag-whichwerenotindicatedinanapplicationforholdingtherally. WealsolearnedthatKuzminhadbeenfiredfromtheSimferopolschoolwherehe hadworkedasahistoryteacherdueto"notcorrespondingtotheoccupied position". On14March,KravchenkowasonceagaindetainedfordisplayingUkrainiansymbols inSimferopol. Pro-UkrainianactivistarrestedinCrimea On13March,Simferopol'sKievskyydistrictcourtissuedanordertoarrestCrimean TatarTalyataYunusovfortwomonths.Heisaccusedofparticipatinginarallyin supportofUkraine'sterritorialsovereignty,whichhadbeenheldneartheCrimean parliamentbuildingon26February2014. On6March,AsanCharukhovwasdetainedoverthesameissue.Hewasreleased aftermanyhoursofquestioning. TheRussianInvestigationCommitteelaunchedacriminalcaseagainstthedeputy chairmanoftheCrimeanTatarself-styledgovernmentMajlis,AkhtemChyyhoz, overtheorganizationofpublicdisturbanceson26February2014.Hewasdetained on29January. Weshallremindyouthaton26February2014,CrimeanTatarsblockedasessionof theCrimeanparliament.On27February,thebuildingoftheCrimeanparliament wasstormedbytheRussianspecialforces.Lawmakerswereescortedintothe sessionhall,whichputthebeginningoftheRussianoccupationofCrimea. Crimeanlawenforcerssearchapartmentsofjournalists On13March,theFederalSecurityServiceofRussia(FSB)searchedtheCrimean 9 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 apartmentoftheformereditoroftheCentreforJournalistInvestigations(CJI), AnnaAndriyevska,whonolongerlivesinCrimea. AndriyevskasaidthattheCrimeanauthoritieshadopenedacriminalcaseagainst heroverareportonvolunteersfightingfortheKrymbattalion,inwhichshehad allegedlycalledfortheoverthrowoftheoccupationgovernmentinCrimea. Thesameday,13March,FSBoperativessearchtheapartmentofanotherCJI journalistNataliyaKokorina,followingwhichshewasdetained.Shewasfreed aftersixhoursofquestioning. TheLB.uanewsandanalysiswebsitereportedthatRussiahadestablishedcontrol overalmostallCrimeanmassmedialastyear.Anumberofindependent journalistsandbloggerswereforcedtofleeCrimeabecauseofrepression,the websiteadded. UKRAINE-EU EUprolongssanctionsagainstRussianofficials,separatists On13March2015,theEUprolongeduntil15Septemberthesanctions(banonEU entry,freezeofassets)againstRussianofficialsandseparatistsfromtheselfproclaimedDonetskandLuhanskpeople'srepublics(DPRandLPR,respectively) duetotheiractionsunderminingUkraine'sterritorialintegrity. TheresolutiontothiseffectfollowsupontheCounciloftheEU'srespective decisionadoptedatthelevelofforeignministerson29January. Restrictivemeasuresapplyto150personsand37organizations.Thelistincludes Russiangovernmentmembers,MPs,businessmen,high-rankingrepresentativesof ministriesandoffices,andleadersofCrimea,theDPRandLPR. TheyalsoapplytocompaniesandorganizationsfromRussiaandCrimeaand militaryformationsfromtheself-proclaimedLPRandDPR. UkrainianagrariansexhaustEUannualexportquotas UkrainianagrarianshaveexhaustedtheirquotasonexportstotheEUfor2015 aheadofschedule,Ukraine'sDeputyAgrarianPolicyMinisterVladyslava Rutytskahassaid,accordingtoanInterfax-Ukrainereport. SherecalledthatUkrainewasallowedtoexport400,000tonnesofcorn,5,000 tonnesofhoney,and10,000tonnesofappleandgrapejuice.Sheaddedthatthe agrarianshadalsoexhaustedathree-monthquotaonpoultryexports(4,000 tonnes). UKRAINE-USA Pentagon:nofinaldecisiononarmssuppliestoUkraine TheUSAcontinuestoconsideranoptionofprovidingUkrainewitharms,nofinal decisionhasyetbeenmade,PentagonrepresentativeBrianMcKeonhassaid. AccordingtoWhiteHousespokesmanJoshEarnest,USPresidentBarackObama 10 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 hasnotsignedoffontheideaoflethalaidforUkraine,amidconcernsitwould spark"greaterbloodshed"inDonbas. TheGermanambassadortotheUSA,PeterWittig,earliersaidthatamonth ago,aftertalkingtoGermanChancellorAngelaMerkel,theUSpresident decidedagainstsendinglethalarmstoUkraine.Thetwoagreedthatitwas importantto"togivesomespaceforthosediplomatic,politicaleffortsthatwere underway". EuropeanCouncilPresidentDonaldTusksaidthattherewasnosingleopinion intheEUregardingarmssuppliestoUkrainethereforeitwasuptoeach countrytodecide. AccordingtoPresidentPetroPoroshenko,Ukrainehascontractswith11 membersoftheEUonsupplyofarms,includingthelethalones. HeisconfidentthatWesternpartnerswillprovideUkrainewithlethalarmsand slapnewsanctionsonRussiashoulditstepupitsaggressioninDonbas. USAtoprovideUkrainewithadditionalnon-lethalaid KievwillshortlyreceivefromWashingtondrones,nightvisiondevices,counterbatteryradars,communicationsystemsandotherequipmentaswellas230 militaryvehiclesworth75mdollars,theUkrainianpresidentialpressservice saidon11March2015. AFPquotedanofficialsourceintheWhiteHouseassayingthattheUS governmentdecidedtosupplyUkrainewithdronesandHumveearmouredcars. USAimposessanctionsonUkraine'sex-ministers,separatists On11March2015,theUSDepartmentoftheTreasuryexpandedthesanction listtoincludeformerUkrainianprimeministersMykolaAzarovandSerhiy Arbuzov,formerHealthMinisterRayisaBohatyryovaandanumberofproRussianseparatists. ThesanctionswerealsointroducedagainsttheEurasianYouthUnionandthe RussianNationalCommercialBank. Ukraine,USAsignagreementonassistanceinlawenforcement KievandWashingtonsignedanagreementonreformingUkraine'slawenforcementbodieson13March2015. USambassadortoUkraineGeoffreyPyattsaidthat16.77mdollarswouldbe spentonthereformoftheInteriorMinistry,9.4mdollarsonthereformof criminaljustice,includingontheAnticorruptionBureau. TheFBIandtheUSDepartmentofJusticewillhelpUkrainetoreformits Prosecutor-General'sOffice. Theagreementwillalsofacilitatecooperationbetweentheborderservicesof thetwocountries. 11 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 UKRAINE-WORLD Ukrainereportsonuseofhumanitarianaidfrompartnerstates On12March2015,theUkrainianDefenceMinistrypublishedareportonthe useofhumanitarianaidreceivedfrompartnerstates. ThedonorsincludedCanada(whichsuppliedaidworth20mdollars),theUSA (15.5mdollars),Poland(5.5mdollars),Australia(2.3mdollars),GreatBritain (1.8mdollars),Slovakia(632,000dollars),Norway(630,000dollars),France (600,000dollars)andtheNetherlands(500,000dollars). By10March,Ukrainianshavetransferred155.51mhryvnyas(6.5mdollars)to theaccountsoftheDefenceMinistrywithintheHelptheUkrainianArmydrive. 4.DOMESTICPOLITICAL NSDCapprovesspecialself-governanceregulationsforcertainareasof Donbas On12March2015,theNationalSecurityandDefenceCouncilofUkraine approvedaresolutiontodefinethebordersofcertaindistrictsinDonetskand Luhanskregionswherespecialself-governanceregulationsareplannedtobe introduced. UkrainianPresidentPetroPoroshenkosaidthatthebordersofthesedistricts werestipulatedintheMinskaccords. Ukrainianpresidentvetoeslawrequiringcabinetapprovalofutilityrates PresidentPetroPoroshenkohasvetoedthebillobligingtheNational RegulatoryCommissionforEnergyandUtilitiestosettariffsongasand electricityatalevelwhichislowerthantheeconomicallyjustifiableoneupon approvaloftheCabinetofMinisters. Ukrainianpresidentokayshighersalariesforofficials,MPs On13March2015,PresidentPetroPoroshenkosignedadecreecancellinga caponsalariesforpublicofficials,budget-paidemployees,NationalBankof Ukrainestaff,MPsandprosecutorsasof1April. YetanotherexplosionrocksOdessa Nocasualtieswerereportedafteranexplosivedevicedetonatedoutsidethe officeoftheSelf-HelppartyinOdessaon12March2015. Policeareinvestigatingitasaterroristact. TheSecurityServiceofUkraine(SBU)detainedtwosuspectedorganizersofthe explosion. ThreejudgesofKievPecherskyydistrictcourtsuspended On10March2015,theSupremeQualificationCommissionofJudgessuspended 12 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 KievPecherskyydistrictcourtjudgesSerhiyVovk,ViktorKytsyukandOksana Tsarevychfortwomonthsbecauseofcriminalproceedingstheyarefacing. On11March,acourtinVinnytsyaruledthatTsarevychshouldbereleasedonher ownrecognizanceandwearananklemonitor.Sheshouldreporttoaprosecutor's officeforquestioningonfirstcall. On13March,thesamecourtchosethesamemeasureofrestraintforKytsyuk. ThecasesarebeingheardinVinnytsyabecausetheProsecutor-General'sOffice (PGO)haslittletrustinKiev-basedcourts. Earlier,theKievHolosiyivskyydistrictcourtrefusedtohaveVovkarrested. ThePGOopenedanothercriminalcaseagainstVovksuspectinghimofunfreezing theaccountsofformerAgrarianPolicyMinisterMykolaPrysyazhnyukinthe summer2014. Prosecutorspronouncefiveex-membersofparliament'stabulation commissionwanted On13March2014,theProsecutor-General'sOffice(PGO)hasservednoticesof suspicionofcommittingcrimesandputonawantedlistanumberofMPs,who weremembersofparliament'stabulationcommission,includingVolodymyr Demydko,AndriyPinchuk,StanislavSkubashevskyy,YaroslavSukhyyand OleksandrZubchevskyy. Apre-trialinvestigationwasopenedintotheorganizationandholdingofthe parliamentvoteontheso-called16January2014"dictatorshiplaws". ThepressserviceofthePartyofRegionsreportedthatDemydkofellintoacoma. ThePGOearlierservedanex-MPandsecretaryofparliament'stabulation commission,SerhiyHordiyenko,withanoticeofsuspicion.On10March,the KievPecherskyydistrictcourtgrantedhimbailof97,000hryvnyas(about4,000 dollars)asalternativetohavinghimarrested.Thebailwasdepositedthesame day. On16January2014,theUkrainianparliamentpassedanumberoflaws significantlylimitingcitizens'rightsandfreedoms.Membersofpro-government factionsvotedbyashowofhandswithoutdiscussingthelawsorcountingthe votes.ThisescalatedtheconfrontationandenragedtheMaydanprotesters.The lawswereannulledafterthenPresidentViktorYanukovychfledthecountry. FormerZaporizhzhyagovernorfounddead AformermemberofthePartyofRegionsandex-governorofZaporizhzhya Region,OleksandrPeklushenkowasfounddeadon12March2015.Policesaid agunwoundpointedtosuicide. Peklushenkowasonawrittenpledgenottoleaveafterhewasnotifiedofbeing suspectedoforganizingthedispersalofEuro-Maydanpro-democracyprotestsin Zaporizhzhyain2014. 13 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 MykhayloChechetovandStanislavMelnyk,alsoformermembersoftheParty ofRegions,andMykolaSerhiyenko,aformerfirstdeputydirector-generalof theUkrainianrailwaycompanyUkrzaliznytsya,committedsuicidesrecently. AseniorprosecutorofOdessa'sMalynovskyydistrict,SerhiyMelnychuk,died afterfallingoutofahigh-riseon14March. 5.ECONOMY IMFboardapproves17.5bn-dollarloanforUkraine TheExecutiveBoardoftheInternationalMonetaryFundon11Marchapproved anewfour-yearextendedprogramme(ExtendedFundFacility)forUkraine worthatotalof17.5bndollars.Thenewprogrammereplacestheprevious stand-byarrangement. On13March,theIMFdisbursedtoKievthefirsttrancheof5bndollars.The NationalBankused2.5bndollarsoftheamounttoreplenishtheforeign exchangereserves. AccordingtotheIMF,Ukrainein2015mayreceive16.3bndollarsfromexternal sources,including10bndollarsfromtheIMF,1.8bndollarsfromtheEuropean Union,and2bndollarsfromtheUnitedStates. TheamountofannualtranchesthatUkrainemayreceivefromtheIMFduring 2016-18,providedthattheUkrainiangovernmentimplementsaprogrammeof reforms,willbe2.5bndollars. IMFexpectsUkrainetoreturntogrowthin2016 AccordingtotheInternationalMonetaryFund,Ukraine'srealGDPthisyearwill declineby5.5percent,withinflationreaching27percentduetothedevaluation ofhryvnyaandincreaseinnaturalgasandheatingtariffs.Thecountry'spublic debtwillreach94percentofGDP. However,theIMFexpectsthattheUkrainianeconomywillgrowby2percent alreadyin2016,projectingaverageannualGDPgrowthat4percentthereafter. Thecurrentaccountdeficitin2016-18shouldstabilizeat1.25percent.By2018, inflationwillfalltoasingle-digitlevel,andthenationaldebtwillbereducedto 71percentofGDPby2020. Inaddition,accordingtoIMFestimates,therateoftheUkrainiancurrency againsttheUSdollarshouldreachUAH/USD23.8bytheendof2020. EuropeanParliamentcommitteesupportsmacro-financialaidtoUkraine TheEuropeanParliamentForeignAffairsCommitteeon9Marchsupportedthe EuropeanCommission'sproposaltoprovidemacro-financialassistancetoKiev intheamountof1.8bneuros. TheEuropeanParliamentwillconsidertheproposalataplenarysessionon25 March. 14 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 ThenewassistanceprogrammewillbethethirdprogrammeforUkraine.Itis expectedthattheaidwillbedisbursedinthreetranches,withthefirsttwo cominginthesecondhalfof2015andthethirdarrivinginearly2016. UnderthefirsttwoprogrammesKievhasalreadyreceived1.36bneurosofthe totalamountof1.61bneuros.Theremaining250meuroswillbetransferredin thenearfuture. SwedentoprovideUkrainewith100m-dollarinterest-freeloan TheSwedishgovernmenthasdecidedtoextenda100mloantoUkraine,with interestpaymentscoveredbytheSwedishside,UkrainianPresidentPetro Poroshenkohassaid. Inaddition,accordingtohim,theUkraine-Swedencooperationprogramme projects175mdollarstobeallocatedtotheUkrainiansideovertheperiodof sevenyears. FitchexpectsgrowthofUkraine'sforeignreserves AccordingFitchRatings,aglobalratingagency,Ukraine'sinternationalreserves underfavourableconditionscanreach13bndollarsthisyearagainstthecurrent 5.6bndollars. Thecountry'scentralbankisexpectingitsreservestogrowto17bndollarsby theendof2015throughtheimplementationofreformsandthankstothe provisionoffinancialassistancebyinternationalpartners. FinanceMinistrylaunchesconsultationsonforeigndebtrestructuring TheFinanceMinistrywillbeginconsultationswithexternalcreditorsonpublic debtrestructuringon13March,FinanceMinisterNatalieJareskohassaid. Accordingtoher,theFinanceMinistryintendstorestructuretheEurobondsof Oshchadbank(SavingsBank),Ukreximbank,UkrzaliznytsyaandthecityofKiev. ItisalsoplannedtorestructurethepubliclyguaranteeddebtofUkravtodor, state-runcompanyUkrmedpostachanddesignbureauPivdenne. Ukrainehopestorestructure15bndollarsindebt. TheInterfax-Ukrainenewsagencyreported,citingitssources,thatduringthe consultationswithexternalcreditors,theFinanceMinistryplanstodiscussall possiblerestructuringoptions,includingextensionofdebtmaturity,decreasein couponpaymentsandprincipal. Itshouldbenotedthatthecabinethasestablishedanewpositionof commissionerforpublicdebtmanagement. Ukrainetobeginmassprivatizationin2015-financeminister ThisyearUkrainewillbeginlarge-scaleprivatizationofstate-owned enterprises,FinanceMinisterNatalieJareskohassaid. 15 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 Accordingtoher,thereare3,300state-ownedenterprisesinUkraine,mostof whichareunprofitable. Coreinflationacceleratesto33.2percent Accordingtothestatestatisticsservice,thecoreconsumerpriceindexin Ukraine(excludingCrimeaandtheantiterroristoperationzone)inFebruary 2015increasedby5.4percentagainstthepreviousmonthascomparedto2.6 percentmonth-on-monthgrowthseeninJanuary2015. Sincetheyear'sbeginning(JanuaryandFebruary),coreinflationwas29.7 percentcomparedtothesameperiodofthelastyear. Bankslose350mdollarsinJanuary AccordingtotheNationalBank,lossesofUkrainianbanksinJanuary2015 amountedto8.5bnhryvnyas(354mdollars). Thebanks'assetsinJanuaryfellby0.84percentcomparedwiththebeginning oftheyearto1.31tnhryvnyas(54.58bndollars). CourtreturnsZaporizhzhyaaluminumsmeltertostateownership TheSupremeCourtofUkraineon12Marchissuedadecisionthatupholdsthe lawfulnessofthedemandsputforwardbytheProsecutor-General'sOffice regardingthereturntothestateofa68.01-percentstakeinZaporizhzhya AluminumPlant. ItshouldberecalledthatinFebruary2001theStatePropertyFundofUkraine andcompanyAvtoVAZ-Investconcludedacontractforthesaleoftheplant's shares,accordingtowhich,inadditiontopayingthepriceoftheshares,the buyer'swasobligedtorepaytheprivatizedcompany'sdebts.However,asnoted bytheProsecutor-General'sOffice,thebuyerhasfailedtofulfilitsinvestment obligationtothestatewithregardstothedebtrepayment. TheplantwasownedbyRussianoligarchOlegDeripaska. 6.ENERGY Naftohaztransfersanothertrancheof15mdollarstoGazprom State-runenergycompanyNaftohazUkrayinyon12Marchtransferredto Russia'sGazpromanotherprepaymentof15mdollarsfornaturalgassupplies inMarch. Withtheaccountofthisamount,theUkrainiansidehastransferredtothe Russiangasmonopolyatotalof60mdollarsforgasdeliveriesinMarch. Asreported,Naftohazrefusedfrommakinglargeprepaymenttranchesafter Gazpromstartedtoarbitrarilysupplynaturalgastothemilitantsoftheself- 16 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 proclaimedDonetskandLuhanskpeople'srepublicsunderthecontractwith Naftohaz. RussianFinanceMinisterAlexanderNovaksaidthatGazpromhasagreedto excludethevolumesdeliveredtotheDonetskandLuhanskpeople'srepublics fromtheoverallbilltoNaftohaz,butwillissuethebillforsuchsupplieslater. ThenextgastalksbetweenUkraineandRussiawiththemediationofthe EuropeanUnionarescheduledfor20March. GermanRWEbecomeslargestwesternsupplierofnaturalgastoUkraine GermancompanyRWEwasthelargestwesternsupplierofnaturalgasto Ukrainein2014,selling1.71bncu.m.offuel,newsandanalysiswebsite THEINSIDER.uahasreported,citingdataobtainedfromtheCustomsService andthestate-runenergycompanyNaftohazUkrayiny. FrenchGDFSUEZdelivered1.07bncu.m.ofgas,Norway'sStatoilsupplied535m cu.m.,andGermanE.ONpumped378mcu.m.toUkraine. UkrainealsopurchasedminoramountsfromGermanTrailstone,Advanced EnergyTrading,Romania'sGlobalNRG,Switzerland'sAxpoTrading,DufEnergy Traiding,andCyprus'sOstchem. However,thelargestsupplierwasRussianGazpromwith7.96bncu.m., accountingforabout70percentofthegasdeliveriestoUkraine. Atthesametime,NaftohazUkrayinyheadAndriyKobolevpredictsthatthe shareofgasimportedfromRussiabytheendof2015willnotexceed40percent ofthetotalsupply.Heexplainedthatthiswillbepossiblethroughincreased reversed-flowgassuppliesfromtheEUandreductionofgasconsumptioninthe country. ItshouldbenotedthatrecentlyUkrainehassignificantlyreducednaturalgas importsfromHungary. IMFgivesgreenlighttoselling1.69bndollarstoNaftohaz Overthefirsthalfof2015,theNationalBankofUkrainewillbeabletosell 1.69bndollarsdirectlytothestate-runenergycompanyNaftohazUkrayinyto ensurecriticalimportsbythecompany,accordingtothenewEFFprogramme forUkraineapprovedbytheIMF. However,theprogrammelimitstheamountofdomestictreasurybondsthatthe centralbankcanpurchaseforthepurposeofrecapitalizingNaftohaztothe following:17.2bnhryvnyas(717mdollars)bytheendofMarch,26.1bn hryvnyas(1.09bndollars)bytheendofJune,28.3bnhryvnyas(118bndollars) bytheendofSeptemberandDecember. 17 ©GorsheninInstituteMarch2015Allrightsreserved INTHESPOTLIGHT ISSUE51(214) 03/16/2015 Shell,Ukrhazvydobuvannyatoterminateenergyproductioncontract Dutch-BritishcorporationShellandstate-runUkrhazvydobuvannyaareplanningto terminatetheagreementonjointexplorationandproductionofhydrocarbonsintwo wellsinKharkivRegion,accordingtoastatementmadebyShellon12March. Accordingtothereport,thepartieshavecompletedtheexplorationworks.Basedon theirfindings,itwasdecidedthatfurtherworkundertheprojectisnoteconomically feasible. EarlierShellwithdrewfromthetalksonnaturalgasproductioninSkyfskafield(the BlackSeashelf).Inaddition,thecompanyhasfailedtostartoperationsinYuzivska fieldduetothefightinginDonbas. Ukrainecutsoffsubsidiestocoalindustry-energyminister Thenationalbudgetfor2015containsnoarticlesonsubsidiestothecoalindustry, EnergyMinisterVolodymyrDemchyshynhassaid. Accordingtohim,withoutsuchsubsidies,theonlywaytosupporttheindustryisto attractforeigninvestment.Certaininvestmentagreementshavebeenreachedwith China,whichwillprovide3.6bndollarsforcompletingconstructionofcoalmines, upgradingthermalpowerplantsandreplacingnaturalgaswithotherenergy sources,theministersaid. FoundedinJuly2010,GorsheninWeeklyisaweeklydigestofexpertanalysiscovering themostimportantpolitical,socialandeconomiceventsinUkraine.Itisthekey sourceofinformationaboutopinionpollscarriedoutbytheGorsheninInstituteas wellasthebestprofessionalcommentariesonrecentdevelopments. GorsheninWeeklyisavailableinRussianandEnglish. GorsheninWeeklyhasover700subscribersintheEU,theUSA,Russia,Ukraineand othercountries.Itsregularcustomersarerepresentativesoftheembassies,the EuropeanCommission,theEuropeanParliament,theUSDepartmentofState,leading internationalanalyticalcentres,Ukrainianandinternationalmassmedia. IfyouwishtosubscribetoGorsheninWeeklypleasesendyourrequesttothefollowing e-mailaddress:[email protected]. Ourcontactinformation: 18bMalaZhytomyrskast., Kiev01001,Ukraine +380442304962 +380442304966f [email protected] Formoreinformationpleasevisitourwebsite http://gorshenin.eu/ 18 ©GorsheninInstituteMarch2015Allrightsreserved
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