HomeAnalyticsDaily Highlights: 01/09/2014

Daily Highlights: 01/09/2014

Military positions of Ukrainian Armed Forces in Donbass got extremely complicated but state leadership declines to introduce the martial law, neither in selected region, nor throughout the country. Europe does recognize that conflict in eastern Ukraine is not going to dissolve by itself and further sanctions are needed, but is not ready to limit or stop energy supplies from Russia, or provide Ukraine with arms to fight the aggression.

Ukraine

●      After speaking to parliamentary fractions leaders President Poroshenko decided not to introduce martial law neither in selected regions, nor in the whole country, as long as «the situation is complex, but controlled».
●      Verkhovna Rada elections law won’t be changed. That means elections will be conducted under the existing mixed scheme with closed party lists.
●      Classes reopened in schools around Ukraine as the educational year have just started, except schools on the territories, seized by DPR and LPR terrorists.
●      Strong administrative measures from National Bank have led to the strengthening of Ukrainian Hryvnya: 13.10 UAH/USD (+50 cop), 17.29 UAH/EUR (+64 cop), 3.55 UAH/10 RUR (+20 cop).

War in Ukraine

●      Ukrainian army retreats on all fronts. After 4 months of fighting, Luhans’k airport have been left, as well as Maryinka, Krasnogorivka. Retreat is ongoing from Lagutine, Savur-Mohyla and Amvrosyivka. Fights have been going on in Avdiivka, Slovyans’k, Stanitsya Luhans’ka, Debaltseve, Svitlodars’k, Snizhne, Novoazovs’k. The corridor connecting terrorists of DPR and LPR “republics” has reopened due to recent retreats.
●      As per experts opinion, defeat of Ukrainian army in Ilovays’k is being related to the direct Russian invasion in Ukraine, that Ukrainian army haven’t been ready for, including from the arms standpoint.
●      Center of war prisoners exchange informed that as per their data, around 680 Ukrainian military personnel are being kept as prisoners of war by LPR, DPR and Russian army. Conditions of keeping them are satisfactory, but attempts to convert them to the other side are usual.
●      As per NSDC assessment, Russian invasion forces in Ukraine are numbering around 10-15 thousands of troops, those that that do not hide their Russian army status. Overall, around 45 thousands of Russian soldiers are engaged in the conflict.
●      Luhans’k, Donets’k and Gorlivka are being continuously intensively shelled.

International

●      Another round  of contact group meeting to resolve the situation in Donbass, held in Minsk, including OSCE representative, Russian Ambassador to Ukraine Zurabov and ex-President of Ukraine Kuchma, haven’t been successful, as Russian troops advanced in eastern Ukraine. Representatives of DPR and LPR terrorist organizations have been invited to the meetings.
●      Multinational military exercises of NATO, aimed to rehearse joint operations, started in Latvia. Similar exercises will start on September 3 in Czech Republic.
●      President Putin recognized as reasonable to sign the agreement with Armenia on joining the Eurasian economic union.
●      Ukrainian Minister of Foreign Affairs Klimkin stressed that Russia declines any consultations between the Budapest memorandum participants, who guaranteed territorial integrity of Ukraine in exchange of giving up the country’s nuclear status.
●      Russian President Putin, speaking over the phone with the Euro Commission representative Barroso, responded to the possibility of new EU sanctions with «readiness to cease Kyiv in two weeks».
●      Russia and China started construction of the gaz pipeline «Power of Siberia» with maximum annual capacity of 38 bln. cubic meters. Estimated launch timing is in 4-6 years.
●      Due to the situation in Ukraine, Poland is starting to form a volunteer National Guards units with up to 5 thousands man.
●      Australia plans to raise the question of Russia exclusion from G20 during the nearest session of the organizations’ meeting if connections with terrorists who’ve shot the MH17 flight are confirmed.
●      US started to chair the UN Security Council as per rotation schedule.
●      British Prime Minister Cameroon stressed, that the best support for Ukraine from the side of the EU will be financial and technical aid without arms supply, and creation of an anti-Putin coalition in Europe and America for further strong sanctions. As rumored in media, European Union could ban Russia from using SWIFT international bank transfer system, but reductions of oil and natural gas purchases aren’t on the agenda. German Chancellor Merkel also supported strengthening sanctions against Russia, butt stressed that Germany doesn’t see the conflict resolution in a military way. US Senate Representative of External Affairs Mendez, who’ve recently officially visited Ukraine, called situation in eastern Ukraine a military invasion and urged the need of arms supplies to Ukraine, as well as harder sanctions against Russia.

Trends

●      As per opinion of E.on CEO, Russia depends on Europe more that Europe depends on Russia, therefore Russia will not terminate natural gas supplies to the EU, as reorientation of oil and natural gas sales to other regions is a very complicated process.

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